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Proposed Rule2023-07974

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

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Published

May 5, 2023

Issuing agencies

Environmental Protection Agency

Abstract

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

Full Text

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[Federal Register Volume 88, Number 87 (Friday, May 5, 2023)]
[Proposed Rules]
[Pages 29184-29446]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07974]

[[Page 29183]]

Vol. 88

Friday,

No. 87

May 5, 2023

Part II

Environmental Protection Agency

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40 CFR Parts 85, 86, 600, et al.

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

Federal Register / Vol. 88, No. 87 / Friday, May 5, 2023 / Proposed
Rules

[[Page 29184]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, 600, 1036, 1037, and 1066

[EPA-HQ-OAR-2022-0829; FRL 8953-03-OAR]
RIN 2060-AV49

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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

DATES:
Comments: Written comments must be received on or before July 5,
2023.
Comments on the information collection provisions submitted to the
Office of Management and Budget (OMB) under the Paperwork Reduction Act
(PRA) are best assured of consideration by OMB if OMB receives a copy
of your comments on or before June 5, 2023.
Public Hearing: EPA will announce information regarding the public
hearing for this proposal in a supplemental Federal Register document.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2022-0829, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>
(our preferred method). Follow the online instructions for submitting
comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#ccade1ada2a8e1bee188a3afa7a9b88ca9bcade2aba3ba">[email&#160;protected]</a>. Include Docket ID No. EPA-
HQ-OAR-2022-0829 in the subject line of the message.
<bullet> Mail: U.S. Environmental Protection Agency, EPA Docket
Center, OAR, Docket EPA-HQ-OAR-2022-0829, Mail Code 28221T, 1200
Pennsylvania Avenue NW, Washington, DC 20460.
<bullet> Hand Delivery or Courier (by scheduled appointment only):
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Avenue NW, Washington, DC 20004. The Docket Center's hours of
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal
Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Michael Safoutin, Office of
Transportation and Air Quality, Assessment and Standards Division
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann
Arbor, MI 48105; telephone number: (734) 214-4348; email address:
<a href="/cdn-cgi/l/email-protection#a9fac8cfc6dcddc0c787e4c0c2cce9ccd9c887cec6df">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

A. Public Participation

Written Comments

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

Public Hearing

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

B. Does this action apply to me?

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

------------------------------------------------------------------------
NAICS codes Examples of potentially
Category \A\ affected entities
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Industry....................... 336111 Motor Vehicle
336112 Manufacturers.

[[Page 29185]]

Industry....................... 811111 Commercial Importers of
811112 Vehicles and Vehicle
811198 Components.
423110
Industry....................... 335312 Alternative Fuel
811198 Vehicle Converters.
Industry....................... 333618 On-highway medium-duty
336120 engine & vehicle
336211 (8,501-14,000 pounds
336312 GVWR) manufacturers.
------------------------------------------------------------------------
\A\ North American Industry Classification System (NAICS).

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

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

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

Table of Contents

I. Executive Summary
A. Purpose of This Proposed Rule and Legal Authority
B. Summary of Proposed Light- and Medium-Duty Vehicle Emissions
Programs
C. Summary of Emission Reductions, Costs, and Benefits
D. What are the alternatives that EPA is considering?
II. Public Health and Welfare Need for Emission Reductions
A. Climate Change From GHG Emissions
B. Background on Criteria and Air Toxics Pollutants Impacted by
This Proposal
C. Health Effects Associated With Exposure to Criteria and Air
Toxics Pollutants
D. Welfare Effects Associated With Exposure to Criteria and Air
Toxics Pollutants Impacted by the Proposed Standards
III. EPA Proposal for Light- and Medium-Duty Vehicle Standards for
Model Years 2027 and Later
A. Introduction and Background
B. Proposed GHG Standards for Model Years 2027 and Later
C. Proposed Criteria and Toxic Pollutant Emissions Standards for
Model Years 2027-2032
D. Proposed Modifications to the Medium-Duty Passenger Vehicle
Definition
E. What alternatives did EPA consider?
F. Proposed Certification, Compliance, and Enforcement
Provisions
G. Proposed On-Board Diagnostics Program Updates
H. Coordination With Federal and State Partners
I. Stakeholder Engagement
IV. Technical Assessment of the Proposed Standards
A. What approach did EPA use in analyzing potential standards?
B. EPA's Approach to Considering the No Action Case and
Sensitivities
C. How did EPA consider technology feasibility and related
issues?
D. Projected Compliance Costs and Technology Penetrations
E. Sensitivities--LD GHG Compliance Modeling
F. Sensitivities--MD GHG Compliance Modeling
V. EPA's Basis That the Proposed Standards Are Feasible and
Appropriate Under the Clean Air Act
A. Overview
B. Consideration of Technological Feasibility, Compliance Costs
and Lead Time
C. Consideration of Emissions of GHGs and Criteria Air
Pollutants
D. Consideration of Impacts on Consumers, Energy, Safety and
Other Factors
E. Selection of Proposed Standards Under CAA 202(a)
VI. How would this proposal reduce GHG emissions and their
associated effects?
A. Estimating Emission Inventories in OMEGA
B. Impact on GHG Emissions
C. Global Climate Impacts Associated With the Proposal's GHG
Emissions Reductions
VII. How would the proposal impact criteria and air toxics emissions
and their associated effects?
A. Impact on Emissions of Criteria and Air Toxics Pollutants
B. How would the proposal affect air quality?
VIII. Estimated Costs and Benefits and Associated Considerations
A. Summary of Costs and Benefits
B. Vehicle Cost and Fueling Impacts
C. U.S. Vehicle Sales Impacts
D. Greenhouse Gas Emission Reduction Benefits
E. Criteria Pollutant Health and Environmental Benefits
F. Other Impacts Including Maintenance and Repair
G. Energy Security Impacts
H. Employment Impacts
I. Environmental Justice
J. Additional Non-Monetized Considerations Associated With
Benefits and Costs: Energy Efficiency Gap
IX. Consideration of Potential Fuels Controls for a Future
Rulemaking
A. Impacts of High-Boiling Components on Emissions
B. Survey of High-Boiling Materials in Market Gasoline
C. Sources of High-Boiling Compounds in Gasoline Production and
How Reductions Might Occur
D. Methods of Compliance Determination
E. Structure and Costs of Standards
F. Estimated Emissions and Air Quality Impacts
X. Statutory and Executive Order Reviews
A. Executive Order 12866: ``Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review''
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: ``Federalism''
F. Executive Order 13175: ``Consultation and Coordination With
Indian Tribal Governments''
G. Executive Order 13045: ``Protection of Children From
Environmental Health Risks and Safety Risks''
H. Executive Order 13211: ``Energy Effects''
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
J. Executive Order 12898: ``Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations''

[[Page 29186]]

XI. Statutory Provisions and Legal Authority

I. Executive Summary

A. Purpose of This Proposed Rule and Legal Authority

1. Proposal for Light- and Medium-Duty Multipollutant Standards for
Model Years 2027 and Later
The Environmental Protection Agency (EPA) is proposing
multipollutant emissions standards for light-duty passenger cars and
light trucks and Class 2b and 3 vehicles (``medium-duty vehicles'' or
MDVs) under its authority in section 202(a) of the Clean Air Act (CAA),
42 U.S.C. 7521(a). The proposed program would establish new, more
stringent vehicle emissions standards for criteria pollutant and
greenhouse gas (GHG) emissions from motor vehicles for model years
(MYs) 2027 through 2032.
Section 202(a) requires EPA to establish standards for emissions of
air pollutants from new motor vehicles which, in the Administrator's
judgment, cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare. Standards under
section 202(a) take effect ``after such period as the Administrator
finds necessary to permit the development and application of the
requisite technology, giving appropriate consideration to the cost of
compliance within such period.'' Thus, in establishing or revising
section 202(a) standards designed to reduce air pollution that
endangers public health and welfare, EPA also must consider issues of
technological feasibility, the cost of compliance, and lead time. EPA
also may consider other factors, and in previous vehicle standards
rulemakings, as well as in this proposal, has considered the impacts of
potential standards on emissions of air pollutants and associated
public health and welfare effects, impacts on the automotive industry,
impacts on the vehicle purchasers/consumers, oil conservation, energy
security and other energy impacts, safety, and other relevant
considerations.
EPA has conducted outreach with a wide range of interested
stakeholders to gather input which we have considered in developing
this proposal, and we will continue to engage with the public and all
interested stakeholders as part of our regulatory development process.
2. Why does EPA believe the proposed standards are appropriate under
the CAA?
i. Need for Continued Emissions Reductions Under 202(a) of the Clean
Air Act
In 2014, EPA finalized criteria pollutant standards for light-duty
vehicles (``Tier 3'') that were designed to be implemented alongside
the GHG standards for light-duty vehicles that EPA had adopted in 2012
for model years 2017-2025.\1\ In 2020, EPA revised the GHG standards
that had previously been adopted for model years 2021-2026,\2\ and in
2021, EPA proposed and finalized a rulemaking (the ``2021 rulemaking'')
\3\ that again revised GHG standards for light-duty passenger cars and
light trucks for MYs 2023 through 2026, setting significantly more
stringent standards for those MYs than had been set by the 2020
rulemaking, and somewhat more stringent than the standards adopted in
2012.
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\1\ 79 FR 23414, April 28, 2014, ``Control of Air Pollution From
Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards.
\2\ 85 FR 24174, April 30, 2020, ``The Safer Affordable Fuel-
Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger
Cars and Light Trucks.''
\3\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
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Despite the significant emissions reductions achieved by these and
other rulemakings, air pollution from motor vehicles continues to
impact public health, welfare, and the environment. On August 5, 2021,
Executive Order 14037, ``Strengthening American Leadership in Clean
Cars and Trucks,'' directed the Administrator to consider beginning
work on a rulemaking to establish new multi-pollutant emissions
standards, including both criteria pollutant and GHG emissions, for
light- and medium-duty vehicles beginning with MY 2027 and extending
through and including at least MY 2030. The Administrator determined
that there was a need to begin work on such a rulemaking and
accordingly is issuing this proposal.
Motor vehicle emissions contribute to ozone, particulate matter
(PM), and air toxics, which are linked with premature death and other
serious health impacts, including respiratory illness, cardiovascular
problems, and cancer. This air pollution affects people nationwide, as
well as those who live or work near transportation corridors. In
addition, there is consensus that the effects of climate change
represent a rapidly growing threat to human health and the environment,
and are caused by GHG emissions from human activity, including motor
vehicle transportation. Recent trends and developments in emissions
control technology, including vehicle electrification and other
advanced vehicle technologies, indicate that more stringent emissions
standards are feasible at reasonable cost and would achieve significant
improvements in public health and welfare. Addressing these public
health and welfare needs will require substantial additional reductions
in criteria pollutants and GHG emissions from the transportation
sector.
Addressing the public health impacts of criteria pollutants
(including particulate matter (PM), ozone, nitrogen oxides
(NO<INF>X</INF>), and carbon monoxide (CO)) will require continued
reductions in these pollutants from the transportation sector. In 2023,
mobile sources will account for approximately 54 percent of
anthropogenic NO<INF>X</INF> emissions, 5 percent of anthropogenic
direct PM<INF>2.5</INF> emissions, and 19 percent of anthropogenic
volatile organic compound (VOC) emissions.4 5 6 Light- and
medium-duty-vehicles will account for approximately 20 percent, 19
percent, and 41 percent of 2023 mobile source NO<INF>X</INF>,
PM<INF>2.5</INF>, and VOC emissions, respectively.4 5 6 The
benefits of reductions in criteria pollutant emissions accrue broadly
across many populations and communities. There are currently 15
PM<INF>2.5</INF> nonattainment areas with a population of more than 32
million people \7\ and 57 ozone nonattainment areas with a population
of more than 130 million people. The importance of continued reductions
in these emissions is detailed at length in Section II.
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\4\ U.S. Environmental Protection Agency (2021). 2016v1 Platform
(<a href="https://www.epa.gov/air-emissions-modeling/2016v1-platform">https://www.epa.gov/air-emissions-modeling/2016v1-platform</a>).
\5\ U.S. Environmental Protection Agency (2021). 2017 National
Emissions Inventory (NEI) Data. <a href="https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data">https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data</a>.
\6\ U.S. Environmental Protection Agency (2021). MOVES 3.0.1.
<a href="https://www.epa.gov/moves">https://www.epa.gov/moves</a>.
\7\ The population total is calculated by summing, without
double counting, the 1997, 2006 and 2012 PM<INF>2.5</INF>
nonattainment populations contained in the Criteria Pollutant
Nonattainment Summary report (<a href="https://www.epa.gov/green-book/green-book-data-download">https://www.epa.gov/green-book/green-book-data-download</a>).
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The transportation sector is the largest U.S. source of GHG
emissions, representing 27.2 percent of total GHG emissions.\8\ Within
the transportation sector, light-duty vehicles are the largest
contributor, at 57.1 percent, and thus comprise 15.5 percent of total
U.S. GHG emissions,\9\ even before considering the contribution of
medium-duty Class 2b

[[Page 29187]]

and 3 vehicles which are also included under this rule. GHG emissions
have significant impacts on public health and welfare as evidenced by
the well-documented scientific record and as set forth in EPA's
Endangerment and Cause or Contribute Findings under section 202(a) of
the CAA.\10\ Additionally, major scientific assessments continue to be
released that further advance our understanding of the climate system
and the impacts that GHGs have on public health and welfare both for
current and future generations, as discussed in Section II.A, making it
clear that continued GHG emission reductions in the motor vehicle
sector are needed to protect public health and welfare.
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\8\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-
2020 (EPA-430-R-22-003, published April 2022).
\9\ Ibid.
\10\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15,
2016.
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In addition to and separate from this proposal, the Administration
has recognized the need for action to address climate change. Executive
Order 14008 (``Tackling the Climate Crisis at Home and Abroad,''
January 27, 2021) recognizes the need for a government-wide approach to
addressing the climate crisis, directing Federal departments and
agencies to facilitate the organization and deployment of such an
effort. On April 22, 2021, the Administration announced a new target
for the United States to achieve a 50 to 52 percent reduction from 2005
levels in economy-wide net greenhouse gas pollution in 2030, consistent
with the goal of limiting global warming to no more than 1.5 degrees
Celsius by 2050 and representing the U.S. Nationally Determined
Contribution (NDC) under the Paris Agreement. These actions, while they
do not inform the standards proposed here, serve to underscore the
importance of the EPA's Clean Air Act authority to address pollution
from motor vehicles.
Also separately from this proposal, the Administration has
recognized the recent industry advancements in zero-emission vehicle
technologies and their potential to bring about dramatic reductions in
emissions. Executive Order 14037 (``Strengthening American Leadership
in Clean Cars and Trucks,'' August 5, 2021) identified a goal for 50
percent of U.S. new vehicle sales to be zero-emission vehicles by 2030.
Congress passed the Bipartisan Infrastructure Law (BIL) \11\ in 2021,
and the Inflation Reduction Act (IRA) \12\ in 2022, which together
provide further support for a government-wide approach to reducing
emissions by providing significant funding and support for air
pollution and GHG reductions across the economy, including
specifically, for the component technology and infrastructure for the
manufacture, sales, and use of electric vehicles.
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\11\ Public Law 117-58, November 15, 2021.
\12\ Public Law 117-169, August 16, 2022.
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These industry advancements in the production and sales of zero-
and near-zero emission vehicles are already occurring both domestically
and globally, due to significant investments from automakers, greatly
increased acceptance by consumers, and added support from Congress,
state governments, the European Union and other countries. EPA
recognizes that these industry advancements, along with the additional
support provided by the BIL and the IRA, represent an important
opportunity for achieving the public health goals of the Clean Air Act.
As the term ``zero-emission vehicle'' suggests, these cars and trucks
have zero GHG and criteria pollutant emissions from their tailpipes,
which can represent significant reductions over current emissions
(particularly for GHG). In part because this technology reduces both
GHG and criteria pollutant emissions, EPA finds it appropriate to set
new standards for model years after 2026 for both criteria pollutants
and GHG at this time, rather than continuing its prior approach of
coordinating the standards but setting them in separate regulatory
actions. Although EPA is proposing to set GHG and criteria pollutant
standards in a single rulemaking, these standards are being proposed to
meet distinct needs for control of distinct pollutants based on EPA's
assessment of the available control technologies for those pollutants,
recognizing that some of the available control technologies may
overlap.
Likewise, it is important to recognize that, despite this
anticipated growth in zero-emission vehicles, many internal combustion
engine (ICE) vehicles will continue to be sold during the time frame of
the rule and will remain on the road for many years afterward. In
addition, some vehicle manufacturers have made public statements \13\
that some portion of their light-duty sales will remain ICE-based for
the foreseeable future, predominantly in large SUVs and pickup trucks.
EPA anticipates that a compliant fleet under the proposed standards
will include a diverse range of technologies, including higher
penetrations of advanced gasoline technologies as well as zero-emission
vehicles. It is therefore important to consider the environmental and
other implications of the ICE portion of the fleet.
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\13\ Gastelu, G., ``General Motors President says `the ICE age
is not over' amid shift to EVs,'' Fox Business, November 17, 2022.
Accessed on November 29, 2022 at <a href="https://www.foxbusiness.com/lifestyle/general-motors-president-ice-age-evs">https://www.foxbusiness.com/lifestyle/general-motors-president-ice-age-evs</a>.
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The Administrator finds that the standards proposed herein are
consistent with EPA's responsibilities under the CAA and appropriate
under CAA section 202(a). EPA has carefully considered the statutory
factors, including technological feasibility and cost of the proposed
standards and the available lead time for manufacturers to comply with
them. Based on our analysis, it is our assessment that the proposed
standards are appropriate and justified under section 202(a) of the
CAA. Our analysis for this proposal supports the preliminary conclusion
that the proposed standards are technologically feasible and that the
costs of compliance for manufacturers would be reasonable. The proposed
standards would result in significant reductions in emissions of
criteria pollutants, GHGs, and air toxics, resulting in significant
benefits for public health and welfare. We also estimate that the
proposal would result in reduced vehicle operating costs for consumers
and that the benefits of the proposed program would significantly
exceed the costs.
ii. Recent and Ongoing Advancements in Technology Enable Further
Emissions Reductions
In designing the scope, structure, and stringency of the proposed
standards, the Administrator considered previous rulemakings, as well
as the increasing availability of vehicle technologies that can be
utilized by manufacturers to further reduce emissions. This proposal
continues EPA's longstanding approach of establishing an appropriate
and achievable trajectory of emissions reductions by means of
performance-based standards, for both criteria pollutant and GHG
emissions, that can be achieved by employing feasible and available
emissions-reducing vehicle technologies for the model years for which
the standard will apply.
CAA section 202(a) directs EPA to regulate emissions of air
pollutants from new motor vehicles and engines, which in the
Administrator's judgment cause or contribute to air pollution that may
reasonably be anticipated to endanger public health or welfare. While
standards promulgated pursuant to CAA section 202(a) are based on
application of technology, the statute does not specify a particular
technology or technologies that must be used to set such standards;
rather, Congress has authorized and directed EPA to adapt its standards
to emerging technologies.

[[Page 29188]]

Thus, as with prior rules, EPA is assessing the feasibility of new
standards in light of current and anticipated progress by automakers in
developing and deploying new technologies. The levels of stringency in
this proposal continue the trend of increased emissions reductions
which have been adopted by prior EPA rules. The Tier 3 standards
achieved reductions of up to 80 percent in tailpipe criteria pollutant
emissions by treating the engine and fuel as an integrated system and
requiring cleaner fuel as well as improved catalytic emissions control
systems. Compliance with the EPA GHG standards over the past decade has
been achieved predominantly through the application of advanced
technologies to internal-combustion engine (ICE) vehicles. In that same
time frame, as the EPA GHG standards have increased in stringency,
automakers have relied to a greater degree on a range of
electrification technologies, including hybrid electric vehicles (HEVs)
and, in recent years, plug-in electric vehicles (PEVs) which include
plug-in hybrid electric vehicles (PHEVs) and battery-electric vehicles
(BEVs). As these technologies have been advancing rapidly in just the
past several years, and battery costs have continued to decline,
automakers have begun to include BEVs and PHEVs as an integral and
growing part of their current and future product lines, leading to an
increasing diversity of these clean vehicles planned for high-volume
production. As a result, zero- and near-zero emission technologies are
more feasible and cost-effective now than at the time of prior
rulemakings.
These industry developments in vehicle electrification are driven
by a number of factors, including the need to compete in a diverse
market, as zero-emission transportation policies continue to be
implemented across the world. An increasing number of U.S. states have
taken actions to shift the light-duty fleet toward zero-emissions
technology. In 2022, California finalized the Advanced Clean Cars II
rule \14\ that will require, by 2035, all new light-duty vehicles sold
in the state to be zero-emission vehicles,\15\ with New
York,16 17 Massachusetts,18 19 and Washington
state \20\ following suit, likely to be followed by Oregon and Vermont
as well.\21\ Several other states may adopt similar provisions as
members of the International Zero-Emission Vehicle Alliance.\22\ In
addition to the U.S., auto manufacturers also compete in a global
market that is becoming increasingly electrified. Globally, at least 20
countries, as well as numerous local jurisdictions, have announced
targets for shifting all new passenger car sales to zero-emission
vehicles in the coming years, including Norway (2025); Austria, the
Netherlands, Denmark, Iceland, India, Ireland, Israel, Scotland,
Singapore, Sweden, and Slovenia (2030); Canada, Chile, Germany,
Thailand, and the United Kingdom (2035); and France, Spain, and Sri
Lanka (2040).23 24 25 26 Many of these announcements extend
to light commercial vehicles as well, and several also target a shift
to 100 percent all-electric medium- and heavy-duty vehicle sales
(Norway targeting 2030, Austria 2035, and Canada and the United Kingdom
2040).
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\14\ California Air Resources Board, ``California moves to
accelerate to 100% new zero-emission vehicle sales by 2035,'' Press
Release, August 25, 2022. Accessed on Nov. 3, 2022 at <a href="https://ww2.arb.ca.gov/news/california-moves-accelerate-100-new-zero-emission-vehicle-sales-2035">https://ww2.arb.ca.gov/news/california-moves-accelerate-100-new-zero-emission-vehicle-sales-2035</a>.
\15\ State of California Office of the Governor, ``Governor
Newsom Announces California Will Phase Out Gasoline-Powered Cars &
Drastically Reduce Demand for Fossil Fuel in California's Fight
Against Climate Change,'' Press Release, September 23, 2020.
\16\ New York State Senate, Senate Bill S2758, 2021-2022
Legislative Session. January 25, 2021.
\17\ Governor of New York Press Office, ``In Advance of Climate
Week 2021, Governor Hochul Announces New Actions to Make New York's
Transportation Sector Greener, Reduce Climate-Altering Emissions,''
September 8, 2021. Accessed on September 16, 2021 at <a href="https://www.governor.ny.gov/news/advance-climate-week-2021-governor-hochul-announces-new-actions-make-new-yorks-transportation">https://www.governor.ny.gov/news/advance-climate-week-2021-governor-hochul-announces-new-actions-make-new-yorks-transportation</a>.
\18\ <a href="http://Boston.com">Boston.com</a>, ``Following California's lead, state will
likely ban all sales of new gas-powered cars by 2035,'' August 27,
2022. Accessed November 3, 2022 at <a href="https://www.boston.com/news/local-news/2022/08/27/following-californias-lead-state-will-likely-ban-all-sales-of-new-gas-powered-cars-by-2035/">https://www.boston.com/news/local-news/2022/08/27/following-californias-lead-state-will-likely-ban-all-sales-of-new-gas-powered-cars-by-2035/</a>.
\19\ Commonwealth of Massachusetts, ``Request for Comment on
Clean Energy and Climate Plan for 2030,'' December 30, 2020.
\20\ Washington Department of Ecology, ``Washington sets path to
phase out gas vehicles by 2035,'' Press Release, Sept. 7, 2022.
Accessed on Nov. 3, 2022 at <a href="https://ecology.wa.gov/About-us/Who-we-are/News/2022/Sept-7-Clean-Vehicles-Public-Comment">https://ecology.wa.gov/About-us/Who-we-are/News/2022/Sept-7-Clean-Vehicles-Public-Comment</a>.
\21\ Associated Press, ``17 states weigh adopting California's
electric car mandate,'' September 3, 2022. Accessed on November 4,
2022 at <a href="https://apnews.com/article/technology-california-clean-air-act-vehicle-emissions-standards-eebb48c13e24835f2c5b9cb56796182a">https://apnews.com/article/technology-california-clean-air-act-vehicle-emissions-standards-eebb48c13e24835f2c5b9cb56796182a</a>.
\22\ ZEV Alliance, ``International ZEV Alliance Announcement,''
Dec. 3, 2015. Accessed on July 16, 2021 at <a href="http://www.zevalliance.org/international-zev-alliance-announcement/">http://www.zevalliance.org/international-zev-alliance-announcement/</a>.
\23\ Environment and Climate Change Canada, ``Achieving a Zero-
Emission Future for Light-Duty Vehicles: Stakeholder Engagement
Discussion Document December 17,'' EC21255, December 17, 2021.
Accessed on February 13, 2023 at <a href="https://www.canada.ca/content/dam/eccc/documents/pdf/cepa/achieving-zero-emission-future-light-duty-vehicles.pdf">https://www.canada.ca/content/dam/eccc/documents/pdf/cepa/achieving-zero-emission-future-light-duty-vehicles.pdf</a>.
\24\ International Council on Clean Transportation, ``Update on
the global transition to electric vehicles through 2019,'' July
2020.
\25\ International Council on Clean Transportation, ``Growing
momentum: Global overview of government targets for phasing out new
internal combustion engine vehicles,'' posted 11 November 2020,
accessed April 28, 2021 at <a href="https://theicct.org/blog/staff/global-ice-phaseout-nov2020">https://theicct.org/blog/staff/global-ice-phaseout-nov2020</a>.
\26\ Reuters, ``Canada to ban sale of new fuel-powered cars and
light trucks from 2035,'' June 29, 2021. Accessed July 1, 2021 from
<a href="https://www.reuters.com/world/americas/canada-ban-sale-new-fuel-powered-cars-light-trucks-2035-2021-06-29/">https://www.reuters.com/world/americas/canada-ban-sale-new-fuel-powered-cars-light-trucks-2035-2021-06-29/</a>.
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Together, the countries that through mid-2022 had set a target of
100 percent light-duty zero-emission vehicle sales by 2035 represented
at least 25 percent of today's global light-duty vehicle market.\27\ In
addition, in February 2023 the European Union gave preliminary approval
to a measure to phase out sales of ICE passenger vehicles in its 27
member countries by 2035.28 29 In 2021, BEVs and PHEVs
together already comprised about 18 percent of the new vehicle market
in Western Europe,\30\ led by Norway which reached 64.5 percent BEV and
86.2 percent combined BEV and PHEV sales in 2021, increasing to 79.3
percent BEV and 87.8 percent combined BEV and PHEV sales in
2022.31 32 33
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\27\ International Energy Agency, ``Global EV Outlook 2022,'' p.
57, May 2022. Accessed on November 18, 2022 at <a href="https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf">https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf</a>.
\28\ Reuters, ``EU approves effective ban on new fossil fuel
cars from 2035,'' October 28, 2022. Accessed on Nov. 2, 2022 at
<a href="https://www.reuters.com/markets/europe/eu-approves-effective-ban-new-fossil-fuel-cars-2035-2022-10-27/">https://www.reuters.com/markets/europe/eu-approves-effective-ban-new-fossil-fuel-cars-2035-2022-10-27/</a>.
\29\ Reuters, ``EU lawmakers approve effective 2035 ban on new
fossil fuel cars,'' February 14, 2023. Accessed on February 26, 2023
at <a href="https://www.reuters.com/business/autos-transportation/eu-lawmakers-approve-effective-2035-ban-new-fossil-fuel-cars-2023-02-14/">https://www.reuters.com/business/autos-transportation/eu-lawmakers-approve-effective-2035-ban-new-fossil-fuel-cars-2023-02-14/</a>.
\30\ Ewing, J., ``China's Popular Electric Vehicles Have Put
Europe's Automakers on Notice,'' New York Times, accessed on
November 1, 2021 at <a href="https://www.nytimes.com/2021/10/31/business/electric-cars-china-europe.html">https://www.nytimes.com/2021/10/31/business/electric-cars-china-europe.html</a>.
\31\ Klesty, V., ``With help from Tesla, nearly 80% of Norway's
new car sales are electric,'' Reuters, accessed on November 1, 2021
at <a href="https://www.reuters.com/business/autos-transportation/tesla-pushes-norways-ev-sales-new-record-2021-10-01/">https://www.reuters.com/business/autos-transportation/tesla-pushes-norways-ev-sales-new-record-2021-10-01/</a>.
\32\ Norwegian Information Council for Road Traffic (OFV), ``New
car boom and electric car record in September,'' October 1, 2021,
accessed on November 1, 2021 at <a href="https://ofv.no/aktuelt/2021/nybil-boom-og-elbilrekord-i-september">https://ofv.no/aktuelt/2021/nybil-boom-og-elbilrekord-i-september</a>.
\33\ Holland, M., '' Norway's EV Sales Explode Ahead Of Policy
Changes,'' CleanTechnica, January 4, 2023. Accessed on February 22,
2023 at <a href="https://cleantechnica.com/2023/01/04/norways-ev-sales-explode-ahead-of-policy-changes/">https://cleantechnica.com/2023/01/04/norways-ev-sales-explode-ahead-of-policy-changes/</a>.

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[[Page 29189]]

Recent trends in market penetration of zero and near-zero emission
vehicles suggest that demand for these vehicles in the U.S. is rapidly
increasing. Even under current standards, the production of new PEVs
(including both BEVs and PHEVs) is growing rapidly and roughly doubling
every year, projected to be 8.4 percent of U.S. light-duty vehicle
production in MY 2022, up from 4.4 percent in MY 2021 and 2.2 percent
in MY 2020.\34\ In 2022, BEVs alone accounted for about 807,000 U.S.
new car sales, or about 5.8 percent of the new light-duty passenger
vehicle market, up from 3.2 percent BEVs the year before.\35\ In
California, new light-duty zero-emission vehicle (ZEV) sales in 2022
reached 18.8 percent of all new cars, up from 12.4 percent in 2021 and
more than twice the share from 2020.\36\
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\34\ Environmental Protection Agency, ``The 2022 EPA Automotive
Trends Report: Greenhouse Gas Emissions, Fuel Economy, and
Technology since 1975,'' EPA-420-R-22-029, December 2022.
\35\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\36\ California Energy Commission, ``New ZEV Sales in
California'' online dashboard, viewed on February 13, 2023 at
<a href="https://www.energy.ca.gov/data-reports/energy-almanac/zero-emission-vehicle-and-infrastructure-statistics/new-zev-sales">https://www.energy.ca.gov/data-reports/energy-almanac/zero-emission-vehicle-and-infrastructure-statistics/new-zev-sales</a>.
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Before the Inflation Reduction Act (IRA) became law, analysts were
already projecting that significantly increased penetration of plug-in
electric vehicles would occur in the United States and in global
markets. For example, in 2021, IHS Markit predicted a nearly 40 percent
U.S. PEV share by 2030.\37\ More recent projections by Bloomberg New
Energy Finance suggest that under current policy and market conditions,
and prior to the IRA, the U.S. was on pace to reach 40 to 50 percent
PEVs by 2030.\38\ When adjusted for the effects of the Inflation
Reduction Act, this estimate increases to 52 percent.\39\ Another study
by the International Council on Clean Transportation (ICCT) and Energy
Innovation that includes the effect of the IRA estimates that the share
of BEVs will increase to 56 to 67 percent by 2032.\40\ These
projections typically are based on assessment of a range of existing
and developing factors, including state policies (such as the
California Advanced Clean Cars II program and its adoption by Section
177 states); although the assumptions and other inputs to these
forecasts vary, they point to greatly increased penetration of
electrification across the U.S. light-duty fleet in the coming years,
without specifically considering the effect of increased emission
standards under this proposed rule.
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\37\ IHS Markit, ``US EPA Proposed Greenhouse Gas Emissions
Standards for Model Years 2023-2026; What to Expect,'' August 9,
2021. Accessed on March 9, 2023 at <a href="https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html">https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html</a>. The table indicates 32.3% BEVs
and combined 39.7% BEV, PHEV, and range-extended electric vehicle
(REX) in 2030.
\38\ Bloomberg New Energy Finance (BNEF), ``Electric Vehicle
Outlook 2022,'' Long term outlook economic transition scenario.
\39\ Tucker, S., ``Study: More Than Half of Car Sales Could Be
Electric By 2030,'' Kelley Blue Book, October 4, 2022. Accessed on
February 24, 2023 at <a href="https://www.kbb.com/car-news/study-more-than-half-of-car-sales-could-be-electric-by-2030/">https://www.kbb.com/car-news/study-more-than-half-of-car-sales-could-be-electric-by-2030/</a>.
\40\ International Council on Clean Transportation, ``Analyzing
the Impact of the Inflation Reduction Act on Electric Vehicle Uptake
in the US,'' ICCT White Paper, January 2023. Available at <a href="https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf">https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf</a>.
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These trends echo an ongoing global shift toward electrification.
Global light-duty passenger PEV sales (including BEVs and PHEVs)
reached 6.6 million in 2021, bringing the total number of PEVs on the
road to more than 16.5 million globally.\41\ For fully-electric BEVs,
global sales rose to 7.8 million in 2022, an increase of about 68
percent from the previous year and representing about 10 percent of the
new global light-duty passenger vehicle market.42 43 Leading
sales forecasts predict that BEV sales will continue to accelerate
globally in the years to come. For example, in June 2022, Bloomberg New
Energy Finance predicted that global sales will rise to 21 million in
2025 (implying an annual growth rate of about 39 percent from 2022),
with total global vehicle stock reaching 77 million BEVs by 2025 and
229 million BEVs by 2030.\44\
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\41\ International Energy Agency, ``Global EV Outlook 2022,'' p.
107, May 2022. Accessed on November 18, 2022 at <a href="https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf">https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf</a>.
\42\ Boston, W., ``EVs Made Up 10% of All New Cars Sold Last
Year,'' Wall Street Journal, January 16, 2023.
\43\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\44\ Bloomberg NEF, ``Net-Zero Road Transport By 2050 Still
Possible, As Electric Vehicles Set To Quintuple By 2025,'' June 1,
2022. Accessed on February 21, 2023 at <a href="https://about.bnef.com/blog/net-zero-road-transport-by-2050-still-possible-as-electric-vehicles-set-to-quintuple-by-2025/">https://about.bnef.com/blog/net-zero-road-transport-by-2050-still-possible-as-electric-vehicles-set-to-quintuple-by-2025/</a>.
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The year-over-year growth in U.S. PEV sales suggests that an
increasing share of new vehicle buyers are concluding that a PEV is the
best vehicle to meet their needs. Many of the zero-emission vehicles
already on the market today cost less to operate than ICE vehicles,
offer improved performance and handling, have a driving range similar
to that of ICE vehicles, and can be charged at a growing network of
public chargers as well as at home.45 46 47 48 49 50 PEV
owners often describe these advantages as key factors motivating their
purchase.\51\ A 2022 survey by Consumer Reports shows that more than
one third of Americans would either seriously consider or definitely
buy or lease a BEV today, if they were in the market for a vehicle.\52\
Given that most consumers are currently much less familiar with BEVs
than with ICE vehicles, this share is likely to rapidly grow as
familiarity increases in response to increasing numbers of BEVs on the
road and growing visibility of charging infrastructure. Most PEV owners
who purchase a subsequent vehicle choose another PEV, and often express
resistance to returning to an ICE vehicle after experiencing PEV
ownership.53 54
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\45\ Department of Energy Vehicle Technologies Office,
Transportation Office, Transportation Analysis Fact of the Week
#1186, ``The National Average Cost of Fuel for an Eletric Vehicle is
about 60% Less than for a Gasoline Vehicle,'' May 17, 2021.
\46\ Department of Energy Vehicle Technologies Office,
Transportation Office, Transportation Analysis Fact of the Week
#1190, ``Battery-Electric Vehicles Have Lower Scheduled Maintenance
Costs than Other Light-Duty Vehicles,'' June 14, 2021.
\47\ International Council on Clean Transportation, ``Assessment
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the
United States in the 2022-2035 Time Frame,'' October 2022.
\48\ Consumer Reports, ``Electric Cars 101: The Answers to All
Your EV Questions,'' November 5, 2020. Accessed June 8, 2021 at
<a href="https://www.consumerreports.org/hybrids-evs/electric-cars-101-the-answers-to-all-your-ev-questions/">https://www.consumerreports.org/hybrids-evs/electric-cars-101-the-answers-to-all-your-ev-questions/</a>.
\49\ Department of Energy Vehicle Technologies Office,
Transportation Analysis Fact of the Week #1253, ``Fourteen Model
Year 2022 Light-Duty Electric Vehicle Models Have a Driving Range of
300 Miles or Greater,'' August 29, 2022.
\50\ Department of Energy Alternative Fuels Data Center,
Electric Vehicle Charging Station Locations. Accessed on May 19,
2021 at <a href="https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC">https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC</a>.
\51\ Hardman, S., and Tal, G., ``Understanding discontinuance
among California's electric vehicle owners,'' Nature Energy, v.538
n.6, May 2021 (pp. 538-545).
\52\ Consumer Reports, ``More Americans Would Buy an Electric
Vehicle, and Some Consumers Would Use Low-Carbon Fuels, Survey
Shows,'' July 7, 2022. Accessed on March 8, 2023 at <a href="https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578/">https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578/</a>.
\53\ Muller, J., ``Most electric car buyers don't switch back to
gas,'' <a href="http://Axios.com">Axios.com</a>. Accessed on February 24, 2023 at <a href="https://www.axios.com/2022/10/05/ev-adoption-loyalty-electric-cars">https://www.axios.com/2022/10/05/ev-adoption-loyalty-electric-cars</a>.
\54\ Hardman, S., and Tal, G., ``Understanding discontinuance
among California's electric vehicle owners,'' Nature Energy, v.538
n.6, May 2021 (pp. 538-545).
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Recent literature indicates that consumer affinity for PEVs is
strong. A recent study utilizing data from all new light-duty vehicles
sold in the U.S. between 2014 and 2020, focused on comparisons of BEVs
with their closest ICE counterparts, found that BEVs are

[[Page 29190]]

preferred to the ICE counterpart in some segments.\55\ In addition,
when comparing all BEV sales with sales of the closest ICE
counterparts, BEVs attain a market share of over 30 percent, which is
significantly greater than the BEV market share among all vehicles.\56\
This suggests that the share of PEVs in the marketplace is, at least
partially, constrained due to the lack of offerings needed to convert
existing demand into market share.\56\ However, the number and
diversity of electrified vehicle models is rapidly increasing.\56\ For
example, the number of PEV models available for sale in the U.S. has
more than doubled from about 24 in MY 2015 to about 60 in MY 2021, with
offerings in a growing range of vehicle segments.\57\ Recent
announcements indicate that this number will increase to more than 80
models by MY 2023,\58\ and more than 180 models by 2025.\59\
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\55\ Gillingham, K., van Benthem, A., Weber, S., Saafi, D., He,
X. ``Has Consumer Acceptance of Electric Vehicles Been Increasing:
Evidence from Microdata on Every New Vehicle Sale in the United
States.'' American Economic Association: Papers & Proceedings, 2023,
forthcoming. <a href="https://resources.environment.yale.edu/gillingham/GBWSH_ConsumerAcceptanceEVs.pdf">https://resources.environment.yale.edu/gillingham/GBWSH_ConsumerAcceptanceEVs.pdf</a>.
\56\ Muratori et al., ``The rise of electric vehicles--2020
status and future expectations,'' Progress in Energy v3n2 (2021),
March 25, 2021. Accessed July 15, 2021 at <a href="https://iopscience.iop.org/article/10.1088/2516-1083/abe0ad">https://iopscience.iop.org/article/10.1088/2516-1083/abe0ad</a>.
\57\ <a href="http://Fueleconomy.gov">Fueleconomy.gov</a>, 2015 Fuel Economy Guide and 2021 Fuel
Economy Guide.
\58\ Environmental Defense Fund and M.J. Bradley & Associates,
``Electric Vehicle Market Status--Update, Manufacturer Commitments
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
\59\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
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According to the U.S. Bureau of Labor Statistics, growth in PEV
sales is driven in part by growing consumer demand and growing
automaker commitments to electrification and will be further supported
by policy measures including the Bipartisan Infrastructure Law and the
Inflation Reduction Act.\60\ As the presence of PEVs in the fleet
increases, consumers are encountering PEVs more often in their daily
experience. Many analysts believe that as PEVs continue to increase
their market share, PEV ownership will continue to broaden its appeal
as consumers gain more exposure and experience with the technology and
with the benefits of PEV ownership,\61\ with some analysts suggesting
that a ``tipping point'' for PEV adoption may then
result.62 63 64
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\60\ U.S. Bureau of Labor Statistics, ``Charging into the
future: the transition to electric vehicles,'' Beyond the Numbers
v12 n4, February 2023. Available at: <a href="https://www.bls.gov/opub/btn/volume-12/charging-into-the-future-the-transition-to-electric-vehicles.htm">https://www.bls.gov/opub/btn/volume-12/charging-into-the-future-the-transition-to-electric-vehicles.htm</a>.
\61\ Jackman, D.K., K.S. Fujita (LBNL), H.C. Yang (LBNL), and M.
Taylor (LBNL). Literature Review of U.S. Consumer Acceptance of New
Personally Owned Light-Duty (LD) Plug-in Electric Vehicles (PEVs).
U.S. Environmental Protection Agency, Washington, DC Available at:
<a href="https://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=353465">https://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=353465</a>.
\62\ Car and Driver, ``Electric Cars' Turning Point May Be
Happening as U.S. Sales Numbers Start Climb,'' August 8, 2022.
Accessed on February 24, 2023 at <a href="https://www.caranddriver.com/news/a39998609/electric-car-sales-usa/">https://www.caranddriver.com/news/a39998609/electric-car-sales-usa/</a>.
\63\ Randall, T., ``US Crosses the Electric-Car Tipping Point
for Mass Adoption,'' <a href="http://Bloomberg.com">Bloomberg.com</a>, July 9, 2022. Accessed on
February 24, 2023 at <a href="https://www.bloomberg.com/news/articles/2022-07-09/us-electric-car-sales-reach-key-milestone">https://www.bloomberg.com/news/articles/2022-07-09/us-electric-car-sales-reach-key-milestone</a>.
\64\ Romano, P., ``EV adoption has reached a tipping point.
Here's how today's electric fleets will shape the future of
mobility,'' Fortune, October 11, 2022. Accessed on February 24, 2023
at <a href="https://fortune.com/2022/10/11/ev-adoption-tesla-semi-tipping-point-electric-fleets-future-mobility-pasquale-romano/">https://fortune.com/2022/10/11/ev-adoption-tesla-semi-tipping-point-electric-fleets-future-mobility-pasquale-romano/</a>.
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While the retail price of PEVs is typically higher than for
comparable ICE vehicles at this time, the price difference is widely
expected to narrow or disappear, particularly for BEVs, as the cost of
batteries and other components fall in the coming years.\65\ Among the
many studies that address cost parity of BEVs vs. ICE vehicles, an
emerging consensus suggests that purchase price parity is likely to
occur by the mid-2020s for some vehicle segments and models, and for a
broader segment of the market on a total cost of ownership (TCO)
basis.66 67 By some accounts, a compact car with a
relatively small battery (for example, a 40 kWh battery and
approximately 150 miles of range) may already be possible to produce
and sell for the same price as a compact ICE vehicle.\68\ For larger
vehicles and/or those with a longer range (either of which call for a
larger battery), many analysts expect examples of price parity to
increasingly appear over the mid- to late-2020s. Assessments of price
parity often do not include the effect of various state and Federal
purchase incentives. For example, the Clean Vehicle Credit provides up
to $7,500, under the Inflation Reduction Act, effectively making some
BEVs more affordable to buy and operate today than comparable ICE
vehicles. Many expect TCO parity to precede price parity by several
years, as it accounts for the reduced cost of operation and maintenance
for BEVs.69 70 For example, Kelley Blue Book already
estimates that the vehicle with lowest TCO in both the full-size pickup
and luxury car classes of vehicle is a BEV.71 72 TCO parity
is of particular interest to commercial and fleet operators, for whom
lower TCO is a compelling business consideration.
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\65\ International Council on Clean Transportation, ``Assessment
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the
United States in the 2022-2035 Time Frame,'' October 2022.
\66\ International Council on Clean Transportation, ``Assessment
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the
United States in the 2022-2035 Time Frame,'' October 2022.
\67\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\68\ Walton, R., ``Electric vehicle models expected to triple in
4 years as declining battery costs boost adoption,''
<a href="http://UtilityDive.com">UtilityDive.com</a>, December 14, 2020.
\69\ International Council on Clean Transportation, ``Assessment
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the
United States in the 2022-2035 Time Frame,'' October 2022.
\70\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\71\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Full-
size Pickup Truck selected (Ford F-150 Lighting is lowest TCO).
Accessed on February 28, 2023 at <a href="https://www.kbb.com/new-cars/total-cost-of-ownership/">https://www.kbb.com/new-cars/total-cost-of-ownership/</a>.
\72\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Luxury
Car selected (Polestar 2 and Tesla Model 3 are lowest TCO). Accessed
on February 28, 2023 at <a href="https://www.kbb.com/new-cars/total-cost-of-ownership/">https://www.kbb.com/new-cars/total-cost-of-ownership/</a>.
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A proliferation of announcements by automakers in the past two
years signals a rapidly growing shift in product development focus
among automakers away from internal-combustion technologies and toward
electrification. For example, in January 2021, General Motors announced
plans to become carbon neutral by 2040, including an effort to shift
its light-duty vehicles entirely to zero-emissions by 2035.\73\ In
March 2021, Volvo announced plans to make only electric cars by
2030,\74\ and Volkswagen announced that it expects half of its U.S.
sales will be all-electric by 2030.\75\ In April 2021, Honda announced
a full electrification plan to take effect by 2040, with 40 percent of
North American sales expected to be fully electric or fuel cell
vehicles by 2030, 80 percent by 2035 and 100 percent by 2040.\76\ In
May 2021, Ford announced that they expect 40 percent of their global
sales will be all-electric by 2030.\77\ In June 2021, Fiat announced

[[Page 29191]]

a move to all electric vehicles by 2030, and in July 2021 its parent
corporation Stellantis announced an intensified focus on
electrification across all of its brands.78 79 Also in July
2021, Mercedes-Benz announced that all of its new architectures would
be electric-only from 2025, with plans to become ready to go all-
electric by 2030 where possible.\80\ In December 2021, Toyota announced
plans to introduce 30 BEV models by 2030.\81\ Figure 1, taken from work
by the Environmental Defense Fund and ERM, illustrates how these and
other announcements mean that virtually every major manufacturer of
light-duty vehicles is already planning to introduce widespread
electrification across their global fleets in the coming years.\82\
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\73\ General Motors, ``General Motors, the Largest U.S.
Automaker, Plans to be Carbon Neutral by 2040,'' Press Release,
January 28, 2021.
\74\ Volvo Car Group, ``Volvo Cars to be fully electric by
2030,'' Press Release, March 2, 2021.
\75\ Volkswagen Newsroom, ``Strategy update at Volkswagen: The
transformation to electromobility was only the beginning,'' March 5,
2021. Accessed June 15, 2021 at <a href="https://www.volkswagen-newsroom.com/en/stories/strategy-update-at-volkswagen-the-transformation-to-electromobility-was-only-the-beginning-6875">https://www.volkswagen-newsroom.com/en/stories/strategy-update-at-volkswagen-the-transformation-to-electromobility-was-only-the-beginning-6875</a>.
\76\ Honda News Room, ``Summary of Honda Global CEO Inaugural
Press Conference,'' April 23, 2021. Accessed June 15, 2021 at
<a href="https://global.honda/newsroom/news/2021/c210423eng.html">https://global.honda/newsroom/news/2021/c210423eng.html</a>.
\77\ Ford Motor Company, ``Superior Value From EVs, Commercial
Business, Connected Services is Strategic Focus of Today's
`Delivering Ford+' Capital Markets Day,'' Press Release, May 26,
2021.
\78\ Stellantis, ``World Environment Day 2021--Comparing
Visions: Olivier Francois and Stefano Boeri, in Conversation to
Rewrite the Future of Cities,'' Press Release, June 4, 2021.
\79\ Stellantis, ``Stellantis Intensifies Electrification While
Targeting Sustainable Double-Digit Adjusted Operating Income Margins
in the Mid-Term,'' Press Release, July 8, 2021.
\80\ Mercedes-Benz, ``Mercedes-Benz prepares to go all-
electric,'' Press Release, July 22, 2021.
\81\ Toyota Motor Corporation, ``Video: Media Briefing on
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed
on December 14, 2021 at <a href="https://global.toyota/en/newsroom/corporate/36428993.html">https://global.toyota/en/newsroom/corporate/36428993.html</a>.
\82\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
[GRAPHIC] [TIFF OMITTED] TP05MY23.004

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

[[Page 29192]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.005

Globally and domestically, these ongoing announcements indicate a
strong industry momentum toward electrification that is common to every
major manufacturer. Given the breadth of these announcements, it is
instructive to consider the penetrations of PEVs that they imply when
taken collectively.
Table 1 compiles public announcements of U.S. and global
electrification targets to date by major manufacturers. Assuming that
the MY 2022 U.S. sales shares for each manufacturer were to persist in
2030, these targets would collectively imply a U.S. PEV sales share
approaching 50 percent in 2030 (48.6 percent), consisting primarily of
BEVs.

Table 1--Example of U.S. Electrified New Sales Percentages Implied by OEM Announcements for 2030 or Before
--------------------------------------------------------------------------------------------------------------------------------------------------------
Implied OEM
Share of total Stated EV contribution to
2022 U.S. sales rank OEM 2022 U.S. share in 2030 Powertrain \3\ 2030 total PEV
sales \1\ (%) \2\ (%) market share (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... General Motors............. 16.4 50 PEV 8.2
2....................................... Toyota..................... 15.4 \4\ 33 BEV 5.1
3....................................... Ford....................... 13.1 50 BEV 6.5
4....................................... Stellantis................. 11.2 50 BEV 5.6
5....................................... Honda...................... 7.2 40 BEV 2.9
6....................................... Hyundai.................... 5.7 50 BEV 2.8
7....................................... Nissan..................... 5.3 40 BEV 2.1
8....................................... Kia........................ 5.0 45 BEV 2.3
9....................................... Subaru..................... 4.1 40 BEV 1.6
10...................................... Volkswagen, Audi........... 3.6 50 BEV 1.8
11...................................... Tesla...................... 3.4 100 BEV 3.4
12...................................... Mercedes-Benz.............. 2.6 100 BEV 2.6
13...................................... BMW........................ 2.6 50 BEV 1.3
14...................................... Mazda...................... 2.1 25 BEV 0.5
15...................................... Volvo...................... 0.8 100 BEV 0.8
16...................................... Mitsubishi................. 0.6 50 PEV \5\ 0.3
17...................................... Porsche.................... 0.5 80 BEV 0.4
18...................................... Land Rover................. 0.4 60 BEV 0.3
19...................................... Jaguar..................... 0.07 100 BEV 0.7
20...................................... Lucid...................... 0.02 100 BEV 0.02
----------------------------------------------------------------------------------
Total............................... ........................... 100.0 .............. .............................. 48.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ 2022 U.S. sales shares based on data from Ward's Automotive Intelligence.
\2\ Where a U.S. target was not specified, the global target was assumed for the U.S.
\3\ PEV = combination of BEV and PHEV. PEV and BEV may include fuel cell electric vehicles (FCEV).
\4\ Based on announced goal of 3.5 million BEVs globally in 2030, divided by 10.5 million vehicles sold in 2022.
\5\ Announcement includes unspecified amount of HEVs.
A version of this table with supporting citations for each automaker announcement, and the raw data with additional tabulations, are available in the
Docket.\83\

[[Page 29193]]

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

\83\ See Memo to Docket ID No. EPA-HQ-OAR-2022-0829 titled
``Electrification Announcements and Implied PEV Penetration by
2030.''
---------------------------------------------------------------------------

As seen in Figure 3, an analysis by the International Energy Agency
similarly concludes that the 2030 U.S. zero-emission vehicle sales
share collectively implied by such announcements (``range of OEM
declarations'') would amount to nearly 50 percent if not more, far
exceeding the 20 percent that IEA considers sufficient to meet existing
U.S. policies and regulations (``Stated Policies'' scenario).\84\
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\84\ International Energy Agency, ``Global EV Outlook 2022,'' p.
107, May 2022. Accessed on November 18, 2022 at <a href="https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf">https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf</a>.
[GRAPHIC] [TIFF OMITTED] TP05MY23.006

Fleet electrification plans are not limited to light-duty vehicles.
Numerous commitments to purchase all-electric medium-duty delivery vans
have been announced by large fleet owners including FedEx,\85\
Amazon,\86\ and Walmart,\87\ in partnerships with various OEMs. For
example, Amazon has deployed thousands of electric delivery vans in
over 100 cities, with the goal of 100,000 vans by 2030. Many other
fleet electrification commitments that include large numbers of medium-
duty and heavier vehicles have been announced by large corporations in
many sectors of the economy, including not only retailers like Amazon
and Walmart but also consumer product manufacturers with large delivery
fleets (e.g. IKEA, Unilever), large delivery firms (e.g. DHL, FedEx,
USPS), and numerous firms in many other sectors including power and
utilities, biotech, public transportation, and municipal fleets across
the country.\88\ As another example, Daimler Trucks North America
announced in 2021 that it expected 60 percent of its sales in 2030 and
100 percent of its sales by 2039 would be zero-emission.\89\
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\85\ BrightDrop, ``BrightDrop Accelerates EV Production with
First 150 Electric Delivery Vans Integrated into FedEx Fleet,''
Press Release, June 21, 2022.
\86\ Amazon Corporation, ``Amazon's Custom Electric Delivery
Vehicles from Rivian Start Rolling Out Across the U.S.,'' Press
Release, July 21, 2022.
\87\ Walmart, ``Walmart To Purchase 4,500 Canoo Electric
Delivery Vehicles To Be Used for Last Mile Deliveries in Support of
Its Growing eCommerce Business,'' Press Release, July 12, 2022.
\88\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\89\ Carey, N., ``Daimler Truck `all in' on green energy as it
targets costs,'' May 20, 2021.
---------------------------------------------------------------------------

These announcements and others like them continue a pattern over
the past several years in which most major manufacturers have taken
steps to aggressively invest in zero-emission technologies and reduce
their reliance on the internal-combustion engine in various markets
around the globe.90 91 According to one analysis, 37 of the
world's automakers are planning to invest a total of almost $1.2
trillion by 2030 toward electrification,\92\ a large

[[Page 29194]]

portion of which will be used for construction of manufacturing
facilities for vehicles, battery cells and packs, and materials,
supporting up to 5.8 terawatt-hours of battery production and 54
million BEVs per year globally.\93\ Similarly, an analysis by the
Center for Automotive Research shows that a significant shift in North
American investment is occurring toward electrification technologies,
with $36 billion of about $38 billion in total automaker manufacturing
facility investments announced in 2021 being slated for
electrification-related manufacturing in North America, with a similar
proportion and amount on track for 2022.\94\ For example, in September
2021, Toyota announced large new investments in battery production and
development to support an increasing focus on electrification,\95\ and
in December 2021, announced plans to increase this investment.\96\ In
December 2021, Hyundai closed its engine development division at its
research and development center in Namyang, South Korea in order to
refocus on BEV development.\97\ In summer 2022, Hyundai invested $5.5
billion to fund new battery and electric vehicle manufacturing
facilities in Georgia, and recently announced a $1.9 billion joint
venture with SK to fund additional battery manufacturing in the
U.S.98 99
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\90\ Environmental Defense Fund and M.J. Bradley & Associates,
``Electric Vehicle Market Status--Update, Manufacturer Commitments
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
\91\ International Council on Clean Transportation, ``The end of
the road? An overview of combustion-engine car phase-out
announcements across Europe,'' May 10, 2020.
\92\ Reuters, ``A Reuters analysis of 37 global automakers found
that they plan to invest nearly $1.2 trillion in electric vehicles
and batteries through 2030,'' October 21, 2022. Accessed on November
4, 2022 at <a href="https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/">https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/</a>.
\93\ Reuters, ``Exclusive: Automakers to double spending on EVs,
batteries to $1.2 trillion by 2030,'' October 25, 2022. Accessed on
November 4, 2022 at <a href="https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/">https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/</a>.
\94\ Center for Automotive Research, ``Automakers Invest
Billions in North American EV and Battery Manufacturing
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at
<a href="https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/">https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/</a>.
\95\ Toyota Motor Corporation, ``Video: Media briefing &
Investors briefing on batteries and carbon neutrality''
(transcript), September 7, 2021. Accessed on September 16, 2021 at
<a href="https://global.toyota/en/newsroom/corporate/35971839.html#presentation">https://global.toyota/en/newsroom/corporate/35971839.html#presentation</a>.
\96\ Toyota Motor Corporation, ``Video: Media Briefing on
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed
on December 14, 2021 at <a href="https://global.toyota/en/newsroom/corporate/36428993.html">https://global.toyota/en/newsroom/corporate/36428993.html</a>.
\97\ Do, Byung-Uk, Kim, Il-Gue, ``Hyundai Motor closes engine
development division'', The Korea Economic Daily, December 23, 2021.
Accessed on November 29, 2022 at <a href="https://www.kedglobal.com/electric-vehicles/newsView/ked202112230013">https://www.kedglobal.com/electric-vehicles/newsView/ked202112230013</a>.
\98\ Velez, C. ``Hyundai and SK On to bring even more EV battery
plants to U.S.'' CBT News, November 29, 2022. Accessed on November
29, 2022 at <a href="https://www.cbtnews.com/hyundai-and-sk-on-to-bring-even-more-ev-battery-plants-to-u-s/">https://www.cbtnews.com/hyundai-and-sk-on-to-bring-even-more-ev-battery-plants-to-u-s/</a>.
\99\ Lee, J., Yang, H. ``Hyundai Motor, SK On sign EV battery
supply pact for N. America'', Reuters, November 29, 2022. Accessed
on November 29, 2022 at <a href="https://www.reuters.com/business/autos-transportation/hyundai-motor-group-sk-ev-battery-supply-pact-n-america-2022-11-29/">https://www.reuters.com/business/autos-transportation/hyundai-motor-group-sk-ev-battery-supply-pact-n-america-2022-11-29/</a>.
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On August 5, 2021, many of these automakers, as well as the
Alliance for Automotive Innovation, expressed continued commitment to
their announcements of a shift to electrification, and expressed their
support for the goal of achieving 40 to 50 percent sales of zero-
emission vehicles by 2030.\100\ In September 2022, jointly with the
Environmental Defense Fund, General Motors announced a set of
recommendations that ``seek to accelerate a zero-emissions, all-
electric future for passenger vehicles in model year 2027 and beyond,''
including a recommendation that EPA establish standards to achieve at
least a 60 percent reduction in GHG emissions (compared to MY 2021) and
50 percent zero-emitting vehicles by MY 2030, and that standards be
consistent with eliminating tailpipe pollution from new passenger
vehicles by 2035. GM and EDF further recommended that the EPA standards
extend at least through MY 2032, and that EPA should consider adoption
through 2035.\101\
---------------------------------------------------------------------------

\100\ The White House, ``Statements on the Biden
Administration's Steps to Strengthen American Leadership on Clean
Cars and Trucks,'' August 5, 2021. Accessed on October 19, 2021 at
<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/05/statements-on-the-biden-administrations-steps-to-strengthen-american-leadership-on-clean-cars-and-trucks/">https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/05/statements-on-the-biden-administrations-steps-to-strengthen-american-leadership-on-clean-cars-and-trucks/</a>.
\101\ Environmental Defense Fund, ``GM and EDF Announce
Recommended Principles on EPA Emissions Standards for Model Year
2027 and Beyond,'' Press Release, September 20, 2022.
---------------------------------------------------------------------------

Investments in PEV charging infrastructure have grown rapidly in
recent years and are expected to continue to climb. According to
BloombergNEF, annual global investment was $62 billion in 2022, nearly
twice that of the prior year, and while about 10 years was needed for
cumulative investment to total $100 billion, a total of $200 billion
could be reached in just three more years.\102\ U.S. infrastructure
spending has also grown quickly. Combined investments in hardware and
installation for U.S. home and public charging ports was over $1.2
billion in 2021, nearly a three-fold increase from 2017.\103\
---------------------------------------------------------------------------

\102\ BloombergNEF, ``Next $100 Billion EV-Charger Spend to be
Super Fast,'' January 20, 2023. Accessed March 6, 2023, at <a href="https://about.bnef.com/blog/next-100-billion-ev-charger-spend-to-be-super-fast/">https://about.bnef.com/blog/next-100-billion-ev-charger-spend-to-be-super-fast/</a>.
\103\ BloombergNEF, ``Zero-Emission Vehicles Factbook A
BloombergNEF special report prepared for COP27,'' November 2022.
Accessed March 4, 2023, at <a href="https://www.bloomberg.com/professional/download/2022-zero-emissions-vehicle-factbook/">https://www.bloomberg.com/professional/download/2022-zero-emissions-vehicle-factbook/</a>.
---------------------------------------------------------------------------

The U.S. government is making large investments in infrastructure
through the Bipartisan Infrastructure Law \104\ and the Inflation
Reduction Act.\105\ However, we expect that private investments will
also play a critical role in meeting future infrastructure needs.
Private charging companies have already attracted billions globally in
venture capital and mergers and acquisitions.\106\ In the United
States, there was $200 million or more in mergers and acquisition
activity in 2022 \107\ indicating strong interest in the future of the
charging industry. And Bain projects that by 2030, the U.S. market for
electric vehicle charging will be ``large and profitable'' with both
revenue and profits estimated to grow by a factor of twenty relative to
2021.\108\ Automakers, electric companies, charging network providers,
and retailers are among those who have made significant commitments to
expand charging infrastructure in the coming years.\109\ See Section
IV.C.4 of this document and DRIA Chapter 5 for a discussion of public
and private infrastructure investments.
---------------------------------------------------------------------------

\104\ <a href="https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf">https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf</a>.
\105\ <a href="https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf">https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf</a>.
\106\ Hampleton, ``Autotech & Mobility M&A market report
1H2023''. Accessed March 4, 2023, at <a href="https://www.hampletonpartners.com/fileadmin/user_upload/Report_PDFs/Hampleton-Partners-Autotech-Mobility-Report-1H2023-FINAL.pdf">https://www.hampletonpartners.com/fileadmin/user_upload/Report_PDFs/Hampleton-Partners-Autotech-Mobility-Report-1H2023-FINAL.pdf</a>.
\107\ St. John, A. et al., ``Automakers need way more plug-in
stations to make their EV plans work. That has sparked a buying
frenzy as big charging players gobble up smaller ones,'' Insider,
November 4, 2022. Accessed March 4, 2023, at <a href="https://www.businessinsider.com/ev-charging-industry-merger-acquisition-meet-electric-vehicle-demand-2022-11">https://www.businessinsider.com/ev-charging-industry-merger-acquisition-meet-electric-vehicle-demand-2022-11</a>.
\108\ Zayer, E. et al., ``EV Charging Shifts into High Gear,''
Bain & Company, June 20, 2022. Accessed March 4, 2023, at <a href="https://www.bain.com/insights/electric-vehicle-charging-shifts-into-high-gear/">https://www.bain.com/insights/electric-vehicle-charging-shifts-into-high-gear/</a>.
\109\ Joint Office of Energy and Transportation, ``Private
Sector Continues to Play Key Part in Accelerating Buildout of EV
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at
<a href="https://driveelectric.gov/news/#private-investment">https://driveelectric.gov/news/#private-investment</a>.
---------------------------------------------------------------------------

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

[[Page 29195]]

fundamental role in meeting previous standards will continue to play an
important role going forward as they remain key to reducing the
criteria and GHG emissions of ICE, mild hybrid (MHEV), and strong HEV
powertrains as well as PHEVs. The proposed standards will also provide
regulatory certainty to support the many private automaker
announcements and investments in zero-emission vehicles that have been
outlined in the preceding paragraphs. In developing the proposed
standards, EPA has also considered many of the key issues associated
with growth in penetration of zero-emission vehicles, including
charging infrastructure, consumer acceptance, critical minerals and
mineral security, and others, as well as the need to consider emissions
from the many ICE vehicles that will enter the fleet during this time.
We discuss each of these issues in more detail in respective sections
of the Preamble and Draft Regulatory Impact Analysis (DRIA).
iii. The Bipartisan Infrastructure Law and Inflation Reduction Act
A particular consideration with regard to the increased penetration
of zero-emission vehicle technology is Congress' recent passage of the
Bipartisan Infrastructure Law (BIL) \110\ and the Inflation Reduction
Act (IRA).\111\ These measures represent significant Congressional
support for investment in expanding the manufacture, sale, and use of
zero-emission vehicles by addressing elements critical to the
advancement of clean transportation and clean electricity generation in
ways that will facilitate and accelerate the development, production
and adoption of zero-emission technology during the time frame of the
rule.
---------------------------------------------------------------------------

\110\ <a href="https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf">https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf</a>.
\111\ <a href="https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf">https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf</a>.
---------------------------------------------------------------------------

The BIL became law in November 2021 and includes a wide range of
programs and significant funding for infrastructure investments, many
of which are oriented toward reducing GHG emissions across the U.S.
transportation network, upgrading power generation infrastructure, and
making the transportation infrastructure resilient to climate impacts
such as extreme weather. Notably, in support of light-duty zero-
emissions transportation the BIL included $7.5 billion in funding for
installation of public charging and other alternative fueling
infrastructure. This will have a major impact on feasibility of PEVs
across the U.S. by improving access to charging and other
infrastructure, and it will further support the Administration's goal
of deploying 500,000 PEV chargers by 2030. It also includes $5 billion
for electrification of school buses through the Clean School Bus
Program, providing for further reductions in emissions from the heavy-
duty sector.112 113 To help ensure that clean vehicles are
powered by clean energy, it also includes $65 billion to upgrade the
power infrastructure to facilitate increased use of renewables and
clean energy.
---------------------------------------------------------------------------

\112\ <a href="https://www.epa.gov/cleanschoolbus">https://www.epa.gov/cleanschoolbus</a>. Accessed February 14,
2023.
\113\ U.S. EPA, ``EPA Clean School Bus Program Second Report to
Congress,'' EPA 420-R-23-002, February 2023.
---------------------------------------------------------------------------

The IRA became law in August 2022, bringing significant new
momentum to clean vehicles (PEVs and FCEVs) through measures that
reduce the cost to purchase and manufacture them, incentivize the
growth of manufacturing capacity and onshore sourcing of critical
minerals needed for their manufacture, incentivize buildout of public
charging infrastructure for PEVs, and promote modernization of the
electrical grid that will power them. It includes significant purchase
incentives of up to $7,500 for new clean vehicles (Clean Vehicle
Credit, IRS 30D) and up to $4,000 for used vehicles (IRS 25E), which
will have a strong impact on affordability of these vehicles for a wide
range of customers. These incentives extend not only to light-duty
vehicles but also to commercial purchase of light- and medium-duty
vehicles, with a credit of up to $40,000 for the latter (Commercial
Clean Vehicle Credit, IRS 45W). Manufacturer production tax incentives
of $35 per kilowatt-hour (kWh) for U.S. production of battery cells,
$10 per kWh for U.S. production of modules, and 10 percent of
production cost for U.S.-made critical minerals and battery active
materials (Production Tax Credit, IRS 45X), will significantly reduce
the manufacturing cost of these components, further reducing PEV and
FCEV cost for consumers. In addition, the IRA includes significant tax
credits for certain charging infrastructure equipment, and sizeable
incentives for investment in and production of clean electricity.
With respect to sourcing of critical minerals and building a secure
supply chain for clean vehicles, the IRA also includes provisions that
will greatly reduce reliance on foreign imports by strongly supporting
the continued development of a domestic or North American supply chain
for these critical products. Manufacturers who want their customers to
take advantage of the Clean Vehicle Credit must meet a gradually
increasing requirement for sourcing of critical minerals and battery
components from U.S. or free-trade countries, and cannot utilize
content acquired from foreign entities of concern. Manufacturer
eligibility for the Production Tax Credit for cells and modules is
conditioned on their manufacture in the U.S., as is eligibility for the
10 percent credit on the cost of producing critical minerals and
battery active materials. Manufacturers are already taking advantage of
these opportunities to improve their sales and reduce their production
costs by securing eligible sources of critical mineral content and
siting new production facilities in the
U.S.114 115 116 117 118 119 120 121 122 There is a
coordinated effort by Executive Branch agencies, including the
Department of Energy and the National Laboratories, to provide guidance
and resources and to administer funding to support this collective
effort to further develop a robust supply chain for clean vehicles and
the infrastructure that will support them.123 124 125
Section IV.C.6 of this

[[Page 29196]]

Preamble and Chapters 3.1.3.2 and 3.1.3.3 of the DRIA discuss these
provisions and measures in more detail.
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\114\ Green Car Congress, ``Ford sources battery capacity and
raw materials for 600K EV annual run rate by late 2023, 2M by end of
2026; adding LFP,'' July 22, 2022.
\115\ Ford Motor Company, ``Ford Releases New Battery Capacity
Plan, Raw Materials Details to Scale EVs; On Track to Ramp to 600K
Run Rate by '23 and 2M+ by '26, Leveraging Global Relationships,''
Press Release, July 21, 2022.
\116\ Green Car Congress, ``GM signs major Li-ion supply chain
agreements: CAM with LG Chem and lithium hydroxide with Livent,''
July 26, 2022.
\117\ Grzelewski, J., ``GM says it has enough EV battery raw
materials to hit 2025 production target,'' The Detroit News, July
26, 2022.
\118\ Hall, K., ``GM announces new partnership for EV battery
supply,'' The Detroit News, April 12, 2022.
\119\ Hawkins, A., ``General Motors makes moves to source rare
earth metals for EV motors in North America,'' TheVerge, December 9,
2021.
\120\ Piedmont Lithium, ``Piedmont Lithium Signs Sales Agreement
With Tesla,'' Press Release, September 28, 2020.
\121\ Subramanian, P., ``Why Honda's EV battery plant likely
wouldn't happen without new climate credits,'' Yahoo Finance, August
29, 2022.
\122\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in
US for EV Batteries,'' Press Release, November 22, 2022.
\123\ Executive Order 14017, Securing America's Supply Chains,
February 24, 2021. <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/</a>.
\124\ The White House, ``FACT SHEET: Biden-Harris Administration
Driving U.S. Battery Manufacturing and Good-Paying Jobs,'' October
19, 2022. Available at: <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/19/fact-sheet-biden-harris-administration-driving-u-s-battery-manufacturing-and-good-paying-jobs/">https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/19/fact-sheet-biden-harris-administration-driving-u-s-battery-manufacturing-and-good-paying-jobs/</a>.
\125\ Department of Energy, ``Biden Administration, DOE to
Invest $3 Billion to Strengthen U.S. Supply Chain for Advanced
Batteries for Vehicles and Energy Storage,'' February 11, 2022.
Available at: <a href="https://www.energy.gov/articles/biden-administration-doe-invest-3-billion-strengthen-us-supply-chain-advanced-batteries">https://www.energy.gov/articles/biden-administration-doe-invest-3-billion-strengthen-us-supply-chain-advanced-batteries</a>.
---------------------------------------------------------------------------

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

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

EPA is proposing emissions standards for both light-duty and
medium-duty vehicles. The light-duty vehicle category includes
passenger cars and light trucks consistent with previous EPA criteria
pollutant and GHG rules. In this rule, heavy-duty Class 2b and 3
vehicles are referred to as ``medium-duty vehicles'' (MDVs) to
distinguish them from Class 4 and higher vehicles that remain under the
heavy-duty program. EPA has not previously used the MDV nomenclature,
referring to these larger vehicles in prior rules as light-heavy-duty
vehicles,\126\ heavy-duty Class 2b and 3 vehicles,\127\ or heavy-duty
pickups and vans.\128\ In the context of this rule, the MDV category
includes primarily large pickups and vans with a gross vehicle weight
rating (GVWR) of between 8,501 and 14,000 pounds and excludes vehicles
used primarily as passenger vehicles (medium-duty passenger vehicles,
or MDPVs).
---------------------------------------------------------------------------

\126\ 66 FR 5002, January 18, 2001.
\127\ 79 FR 23414, April 28, 2014.
\128\ 76 FR 57106, September 15, 2011.
---------------------------------------------------------------------------

The proposed program consists of several key elements: More
stringent emissions standards for criteria pollutants, more stringent
emissions standards for GHGs, changes to certain optional credit
programs, durability provisions for light-duty electrified vehicle
batteries and warranty provisions for both electrified vehicles and
diesel engine-equipped vehicles, and various improvements to several
elements of the existing light-duty program that will also apply to the
proposed program.
The levels of stringency proposed in this rule for both light- and
medium-duty vehicles continue the trend over the past fifty years for
criteria pollutants, and over the past decade for GHGs, of EPA
establishing numerically lower emissions standards based on continued
advancements in emissions control technology that make it possible to
achieve important emissions reductions at a reasonable cost. While
EPA's feasibility assessments in past rulemakings were predominantly
based on advancements in ICE technologies that provided incremental
emissions reductions, in this proposal EPA's technology feasibility
assessment includes the increasing availability of zero and near-zero
tailpipe emissions technologies, including PEVs, as a cost-effective
compliance technology. The technological feasibility of PEVs is further
bolstered by the economic incentives provided in the IRA and the auto
manufacturers' stated plans for producing significant volumes of zero
and near-zero emission vehicles in the timeframe of this rule. Because
of this increased feasibility of zero and near-zero tailpipe emissions
technologies, EPA believes it is appropriate to propose over the six-
year timeframe of these standards even lower emissions standards than
has been possible in past rulemakings.
1. GHG Emissions Standards
EPA is proposing more stringent GHG standards for both light-duty
vehicles and medium-duty vehicles for MYs 2027 through 2032. EPA also
seeks comment on whether the standards should continue to increase in
stringency for future years, such as through MY 2035. For light-duty
vehicles, EPA is proposing standards that would increase in stringency
each year over a six-year period, from MYs 2027-2032. The proposed
standards are projected to result in an industry-wide average target
for the light-duty fleet of 82 grams/mile (g/mile) of CO<INF>2</INF> in
MY 2032, representing a 56 percent reduction in projected fleet average
GHG emissions target levels from the existing MY 2026 standards.
For medium-duty vehicles, EPA is proposing to revise the existing
standard for MY 2027 given the increased feasibility of GHG emissions
reducing technologies in this sector in this time frame. EPA's proposed
standards for MDVs would increase in stringency year over year from MY
2027 through MY 2032. When phased in, the MDV standards are projected
to result in an average target of 275 grams/mile of CO<INF>2</INF> by
MY 2032, which would represent a reduction of 44 percent compared to
the current MY 2026 standards.
The light-duty CO<INF>2</INF> standards continue to be footprint-
based, with separate standards curves for cars and light trucks. EPA
has updated its assessment of the footprint standards curves to reflect
anticipated changes in the vehicle technologies that we project will be
used to meet the standards. EPA also has assessed ways to ensure future
fleet mix changes do not inadvertently provide an incentive for
manufacturers to change the size or regulatory class of vehicles as a
compliance strategy. EPA is proposing to revise the footprint standards
curves to flatten the slope of each curve and to narrow the numerical
stringency difference between the car and truck curves. The medium-duty
vehicle standards continue to be based on a work-factor metric designed
for commercially-oriented vehicles, which reflects a combination of
payload, towing and 4-wheel drive equipment.
EPA has reassessed certain credit programs available under the
existing GHG programs in light of experience with the program
implementation to date, trends in technology development, recent
related statutory provisions, and other factors. EPA is proposing to
revise the air conditioning (AC) credits program in two ways. First,
for AC system efficiency credits under the light-duty GHG program, EPA
is proposing to limit the eligibility for these voluntary credits for
tailpipe CO<INF>2</INF> emissions control to ICE vehicles starting in
MY 2027 (i.e., BEVs would not earn AC efficiency credits because even
without such credits they would be counted as zero g/mi CO<INF>2</INF>
emissions for compliance calculations). Second, EPA is proposing to
remove refrigerant-based AC provisions for both light- and medium-duty
vehicles because, under a separate rulemaking, EPA has proposed to
disallow the use of high global warming potential refrigerants under
the American Innovation and Manufacturing (AIM) Act of 2020.
EPA is also proposing to sunset the off-cycle credits program for
both light and medium-duty vehicles as follows. First, EPA proposes to
phase out menu-based credits by reducing the menu credit cap year-over-
year until it is fully phased out in MY 2031. Specifically, EPA is
proposing a declining menu cap of 10/8/6/3/0 g/mile over MYs 2027-2031
such that MY 2030 would be the last year manufacturers could generate
optional off-cycle credits. Second, EPA proposes to eliminate the 5-
cycle and public process pathways starting in MY 2027. Third, EPA
proposes to limit eligibility for off-cycle credits only to vehicles
with tailpipe emissions greater than zero (i.e., vehicle equipped with
IC engines) starting in MY 2027.
EPA is not reopening its averaging, banking, and trading
provisions, which continue to be a central part of its fleet average
standards compliance program and which help manufacturers to employ a
wide range of compliance

[[Page 29197]]

paths. EPA is also not proposing to restore multiplier incentives for
BEVs, PHEVs and fuel cell vehicles, which currently end after MY 2024
under existing regulations. EPA is proposing to revise multiplier
incentives currently in place for MDVs through MY 2027, established in
the heavy-duty Phase 2 rule, to end the multipliers a model year
earlier, in MY 2026. EPA is also proposing that the requirement for
upstream emissions accounting for BEVs and PHEVs as part of a
manufacturer's compliance calculation, which under the current
regulations would begin in MY 2027, would be removed under the proposed
program; thus, BEVs would continue to be counted as zero grams/mile in
a manufacturer's compliance calculation as has been the case since the
beginning of the light-duty GHG program in MY 2012.
Finally, EPA also is proposing changes to the provisions for small
volume manufacturers (i.e., production of less than 5,000 vehicles per
year) to transition them from the existing approach of unique case-by-
case alternative standards to the primary program standards by MY 2032,
recognizing that additional lead time is appropriate given their
challenges in averaging across limited product lines.
2. Criteria Pollutant Standards
EPA is proposing more stringent emissions standards for criteria
pollutants for both light-duty and medium-duty vehicles for MYs 2027-
2032. For light-duty vehicles, EPA is proposing non-methane organic
gases (NMOG) plus nitrogen oxides (NO<INF>X</INF>) standards that would
phase-down to a fleet average level of 12 mg/mi by MY 2032,
representing a 60 percent reduction from the existing 30 mg/mi
standards for MY 2025 established in the Tier 3 rule in 2014. For
medium-duty vehicles, EPA is proposing NMOG+NO<INF>X</INF> standards
that would require a fleet average level of 60 mg/mi by MY 2032,
representing a 66 percent to 76 percent reduction from the Tier 3
standards of 178 mg/mi for Class 2b vehicles and 247 mg/mi for Class 3
vehicles. EPA is proposing cold temperature (-7 [deg]C)
NMOG+NO<INF>X</INF> standards for light- and medium-duty vehicles to
ensure robust emissions control over a broad range of operating
conditions.
For both light-duty and all medium-duty vehicles, EPA is proposing
a particulate matter (PM) standard of 0.5 mg/mi and a requirement that
the standard be met across three test cycles, including a cold
temperature (-7 [deg]C) test. This proposed standard would revise the
existing PM standards established in the 2014 Tier 3 rule. Through the
application of readily available emissions control technology and
requiring compliance across the broad range of driving conditions
represented by the three test cycles, EPA projects the standards will
reduce tailpipe PM emissions from ICE vehicles by over 95 percent. In
addition to reducing PM emissions, the proposed standards would reduce
emissions of mobile source air toxics.
EPA is also proposing requirements to certify compliance with
criteria pollutants standards for medium-duty vehicles with high gross
combined weight rating (GCWR) under the heavy-duty engine program,
changes to medium-duty vehicle refueling emissions requirements for
incomplete vehicles, and several NMOG+NO<INF>X</INF> provisions aligned
with the CARB Advanced Clean Cars II program for light-duty vehicles.
EPA is proposing changes to the carbon monoxide and formaldehyde
standards for light- and medium-duty vehicles, including at -7 [deg]C.
EPA is also proposing to eliminate commanded enrichment for ICE-powered
vehicles for power and component protection. Averaging, banking, and
trading provisions may be employed within the new program, and with
certain limitations, credits may be transferred from the Tier 3 program
to provide manufacturers with flexibilities in developing compliance
strategies.
In addition to these proposals, EPA is seeking comment on potential
future gasoline fuel property standards aimed at further reducing PM
emissions, for consideration in a possible subsequent rulemaking, which
could provide an important complement to the vehicle standards being
proposed in the current action. The proposed emissions standards for
new vehicles in model years 2027 and later would achieve significant
air quality benefits. However, there is an opportunity to further
reduce PM emissions from the existing vehicle fleet, the millions of
vehicles that will be produced during the phase-in period of the
proposed vehicle standards, as well as millions of nonroad gasoline
engines, through changes in market fuel composition. Although EPA has
not undertaken sufficient analysis to propose changes to fuel
requirements under CAA section 211(c) in this rulemaking and considers
such changes beyond the scope of this rulemaking, EPA has begun to
consider the possibility of such changes and, in Section IX, EPA
describes and requests comment on various aspects of a possible future
rulemaking aimed at further PM reductions from these sources via
gasoline fuel property standards.
3. Electrified Vehicle Battery Durability and Warranty Provisions
As described in more detail in Section III.F.2, the importance of
battery durability in the context of BEVs and PHEVs as an emission
control technology is well documented and has been cited by several
authorities in recent years. Recognizing that electrified vehicles are
playing an increasing role in automakers' compliance strategies, that
their durability and reliability are important to achieving the
emissions reductions projected by this proposed program, and that
emissions credit calculations are based on mileage over a vehicle's
full useful life, EPA is proposing new battery durability requirements
for light-duty and medium-duty BEVs and PHEVs. In addition, the agency
is proposing revised regulations which would include BEV and PHEV
batteries and associated electric powertrain components under existing
emission warranty provisions. Relatedly, EPA is also proposing the
addition of two new grouping definitions for BEVs and PHEVs (monitor
family and battery durability family), new reporting requirements, and
a new calculation for the PHEV charge depletion test to support the
battery durability requirements. The background and content of the
proposed battery durability and warranty provisions are outlined in
Section III.F.2 of this Preamble and are detailed in the regulatory
text.
4. Light-Duty Vehicle Certification and Testing Program Improvements
EPA is proposing various improvements to the current light-duty
program in order to clarify, simplify, streamline and update the
certification and testing provisions for manufacturers. These proposed
improvements include: Clarification of the certification compliance and
enforcement requirements for CO<INF>2</INF> exhaust emission standards
found in 40 CFR 86.1865-12 to more accurately reflect the intention of
the 2010 light-duty vehicle GHG rule; a revision to the In Use
Confirmatory Program (IUCP) threshold criteria; changes to the Part 2
application; updating the On Board Diagnostics (OBD) program to the
latest version of the CARB OBD regulation and the removal of any
conflicting or redundant text from EPA's OBD requirements; streamlining
the test procedures for Fuel Economy Data Vehicles (FEDVs);
streamlining the manufacturer conducted confirmatory

[[Page 29198]]

testing requirements; updating the emissions warranty for diesel
powered vehicles (including Class 2b and 3 vehicles) by designating
major emissions components subject to the 8 year/80,000 mile warranty
period; making the definition of light-duty truck consistent between
programs; and miscellaneous other amendments. EPA is also proposing to
add a new monitoring and warranty requirement for gasoline particulate
filters (GPFs). These improvements and changes are described in more
detail in Sections III.F and III.G.

C. Summary of Emission Reductions, Costs, and Benefits

This section summarizes our analysis of the proposal's estimated
emission impacts, costs, and monetized benefits, which is described in
more detail in Sections V through VIII of this preamble. EPA notes
that, consistent with CAA section 202, in evaluating potential
standards we carefully weigh the statutory factors, including the
emissions impacts of the standards, and the feasibility of the
standards (including cost of compliance in light of available lead
time). We monetize benefits of the proposed standards and evaluate
other costs in part to enable a comparison of costs and benefits
pursuant to E.O. 12866, but we recognize there are benefits that we are
currently unable to fully quantify. EPA's practice has been to set
standards to achieve improved air quality consistent with CAA section
202, and not to rely on cost-benefit calculations, with their
uncertainties and limitations, as identifying the appropriate
standards. Nonetheless, our conclusion that the estimated benefits
considerably exceed the estimated costs of the proposed program
reinforces our view that the proposed standards are appropriate under
section 202(a).
The proposed standards would result in net reductions of emissions
of GHGs and criteria air pollutants in 2055, considering the impacts
from light- and medium-duty vehicles, power plants (i.e., electric
generating units (EGUs)), and refineries. Table 2 shows the GHG
emission impacts in 2055 while Table 3 shows the cumulative impacts for
the years 2027 through 2055. We show cumulative impacts for GHGs as
elevated concentrations of GHGs in the atmosphere are resulting in
warming and changes in the Earth's climate. Table 4 shows the criteria
pollutant emissions impacts in 2055. As shown in Table 5, we also
predict reductions in air toxic emissions from light-and medium-duty
vehicles. We project that GHG and criteria pollutant emissions from
EGUs would increase as a result of the increased demand for electricity
associated with the proposal, although those projected impacts decrease
over time because of projected increases in renewables in the future
power generation mix. We also project that GHG and criteria pollutant
emissions from refineries would decrease as a result of the lower
demand for liquid fuel associated with the proposed GHG standards.
Sections VI and VII of this preamble and Chapter 9 of the DRIA provide
more information on the projected emission reductions for the proposed
standards and alternatives.

Table 2--Projected GHG Emission Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
[Million metric tons]
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery * Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2............................. -440 16 0 -420 -47
CH4............................. -0.0088 0.00038 0 -0.0084 -45
N2O............................. -0.0077 0.00003 0 -0.0077 -41
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.

Table 3--Projected Cumulative GHG Emission Impacts Through 2055 From the Proposed Rule, Light-Duty and Medium-
Duty
[Million metric tons]
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery * Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2............................. -8,000 710 0 -7,300 -26
CH4............................. -0.16 0.035 0 -0.12 -17
N2O............................. -0.14 0.0045 0 -0.13 -25
----------------------------------------------------------------------------------------------------------------

Table 4--Projected Criteria Air Pollutant Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
[U.S. tons]
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
PM2.5........................... -9,800 1,500 -6,900 -15,000 -35
NOX............................. -44,000 2,600 -25,000 -66,000 -41
VOC............................. -200,000 1,000 -21,000 -220,000 -50
SOX............................. -2,800 1,600 -11,000 -12,000 -42
CO *............................ -1,800,000 0 0 -1,800,000 -49
----------------------------------------------------------------------------------------------------------------
* EPA did not have data available to calculate CO impacts from EGUs or refineries.

[[Page 29199]]

Table 5--Projected Air Toxic Impacts From Vehicles in 2055 From the
Proposed Rule, Light-Duty and Medium-Duty
[U.S. tons]
------------------------------------------------------------------------
Pollutant Vehicle Vehicle (%)
------------------------------------------------------------------------
Acetaldehyde............................ -840 -49
Acrolein................................ -55 -48
Benzene................................. -2,900 -51
Ethylbenzene............................ -3,400 -50
Formaldehyde............................ -510 -49
Naphthalene............................. -100 -51
1,3-Butadiene........................... -340 -51
15 Polyaromatic Hydrocarbons............ -5 -78
------------------------------------------------------------------------

The GHG emission reductions would contribute toward the goal of
holding the increase in the global average temperature to well below 2
[deg]C above pre-industrial levels, and subsequently reduce the
probability of severe climate change related impacts including heat
waves, drought, sea level rise, extreme climate and weather events,
coastal flooding, and wildfires. People of color, low-income
populations and/or indigenous peoples may be especially vulnerable to
the impacts of climate change (see Section VIII.I.2).
The decreases in vehicle emissions would reduce traffic-related
pollution in close proximity to roadways. As discussed in Section
II.C.8, concentrations of many air pollutants are elevated near high-
traffic roadways, and populations who live, work, or go to school near
high-traffic roadways experience higher rates of numerous adverse
health effects, compared to populations far away from major roads. An
EPA study estimated that 72 million people live near truck freight
routes, which includes many large highways and other routes where
light- and medium-duty vehicles operate.\129\ Our consideration of
environmental justice literature indicates that people of color and
people with low income are disproportionately exposed to elevated
concentrations of many pollutants in close proximity to major roadways
(see Section VIII.I.3.i).
---------------------------------------------------------------------------

\129\ U.S. EPA (2021). Estimation of Population Size and
Demographic Characteristics among People Living Near Truck Routes in
the Conterminous United States. Memorandum to the Docket.
---------------------------------------------------------------------------

We expect that increases in criteria and toxic pollutant emissions
from EGUs and reductions in petroleum-sector emissions could lead to
changes in exposure to these pollutants for people living in the
communities near these facilities. Analyses of communities in close
proximity to these sources (such as EGUs and refineries) have found
that a higher percentage of communities of color and low-income
communities live near these sources when compared to national averages
(see Section VIII.1.3.ii).
The changes in emissions of criteria and toxic pollutants from
vehicles, EGUs, and refineries would also impact ambient levels of
ozone, PM<INF>2.5</INF>, NO<INF>2</INF>, SO<INF>2</INF>, CO, and air
toxics over a larger geographic scale. As discussed in Section VII.B,
we expect that in 2055 the proposal would result in widespread
decreases in ozone, PM<INF>2.5</INF>, NO<INF>2</INF>, CO, and some air
toxics, even when accounting for the impacts of increased electricity
generation. We expect that in some areas, increased electricity
generation would increase ambient SO<INF>2</INF>, PM<INF>2.5</INF>,
ozone, or some air toxics. However, as the power sector becomes cleaner
over time, these impacts would decrease. Although the specific
locations of increased air pollution are uncertain, we expect them to
be in more limited geographic areas, compared to the widespread
decreases that we predict to result from the reductions in vehicle
emissions.
EPA estimates that the total benefits of this proposal far exceed
the total costs. The present value of monetized benefits range from
$350 billion to $590 billion, with pre-tax fuel savings providing
another $450 billion to $890 billion. The present value of vehicle
technology costs range from $180 billion to $280 billion, while the
present value of repair and maintenance savings are estimated at $280
billion to $580 billion. The results presented here project the
monetized environmental and economic impacts associated with the
proposed program during each calendar year through 2055. Table 6
summarizes EPA's estimates of total costs, savings, and benefits. Note
EPA projects lower maintenance and repair costs for several advanced
technologies (e.g., battery electric vehicles) and those societal
maintenance and repair savings grow significantly over time, and by
2040 and later are larger than our projected new vehicle technology
costs.
The benefits include climate-related economic benefits from
reducing emissions of GHGs that contribute to climate change,
reductions in energy security externalities caused by U.S. petroleum
consumption and imports, the value of certain particulate matter-
related health benefits, the value of additional driving attributed to
the rebound effect, and the value of reduced refueling time needed to
refuel vehicles. Between $63 and $280 billion of the present value of
total monetized benefits through 2055 (assuming a 7 percent and 3
percent discount rate, respectively, as well as different long-term PM-
related mortality risk studies) are attributable to reduced emissions
of criteria pollutants that contribute to ambient concentrations of
smaller particulate matter (PM<INF>2.5</INF>). PM<INF>2.5</INF> is
associated with premature death and serious health effects such as
hospital admissions due to respiratory and cardiovascular illnesses,
nonfatal heart attacks, aggravated asthma, and decreased lung function.
The proposed program would also have other significant social benefits
including $330 billion in climate benefits (with the average SC-GHGs at
a 3 percent discount rate which is the rate used in past GHG rules when
we speak of a single value for simplicity in presentation).\130\
---------------------------------------------------------------------------

\130\ Climate benefits are monetized using estimates of the
social cost of greenhouse gases (SC-GHG), which in principle
includes the value of all climate change impacts (both negative and
positive), however in practice, data and modeling limitations
naturally restrain the ability of SC-GHG estimates to include all
the important physical, ecological, and economic impacts of climate
change, such that the estimates are a partial accounting of climate
change impacts and will therefore, tend to be underestimates of the
marginal benefits of abatement. See Chapter 10 of the DRIA for a
full discussion of the SC-GHG estimates and the important
considerations and limitations associated with its use.
---------------------------------------------------------------------------

The analysis also includes estimates of economic impacts stemming
from additional vehicle use from increased

[[Page 29200]]

rebound driving, such as the economic damages caused by crashes,
congestion, and noise. See Chapter 10 of the DRIA for more information
regarding these estimates.
Note that some non-emission costs are shown as negative values in
Table 6. Those entries represent savings but are included as costs
because, traditionally, categories such as repair and maintenance have
been viewed as costs of vehicle operation. Where negative values are
shown, we are estimating that those costs are lower in the proposal
than in the no-action case. Congestion and noise costs are attributable
to increased congestion and roadway noise resulting our assumption that
drivers choose to drive more under the proposal versus the No Action
case. Those increased miles are known as rebound miles and are
discussed in Section VIII.
Similarly, some of the traditional benefits of rulemakings that
result in lower fuel consumption by the transportation fleet, i.e., the
non-emission benefits, are shown as negative values. Our past GHG rules
have estimated that time spent refueling vehicles would be reduced due
to the lower fuel consumption of new vehicles; hence, a benefit.
However, in this analysis, we are estimating that refueling time would
increase somewhat due to our assumptions for mid-trip recharging events
for electric vehicles. Therefore, the increased refueling time
represents a disbenefit (a negative benefit) as shown. As noted in
Section VIII and in DRIA Chapter 4, we consider our refueling time
estimate to be dated considering the rapid changes taking place in
electric vehicle charging infrastructure driven largely by the
Bipartisan Infrastructure Law and the Inflation Reduction Act, and we
request comment and data on how our estimates could be improved.

Table 6--Monetized Discounted Costs, Benefits, and Net Benefits of the Proposed Program for Calendar Years 2027
Through 2055, Light-Duty and Medium-Duty
[Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
CY 2055 PV, 3% PV, 7% EAV, 3% EAV, 7%
----------------------------------------------------------------------------------------------------------------
Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs....................... 10 280 180 15 15
Repair Costs................................... -24 -170 -79 -8.9 -6.5
Maintenance Costs.............................. -51 -410 -200 -21 -16
Congestion Costs............................... 0.16 2.3 1.3 0.12 0.11
Noise Costs.................................... 0.0025 0.037 0.021 0.0019 0.0017
Sum of Non-Emission Costs...................... -65 -290 -96 -15 -7.8
----------------------------------------------------------------------------------------------------------------
Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings........................... 93 890 450 46 37
EVSE Port Costs................................ 7.1 120 68 6.2 5.6
Sum of Fuel Savings less EVSE Port Costs....... 86 770 380 40 31
----------------------------------------------------------------------------------------------------------------
Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits........................... 0.31 4.8 2.7 0.25 0.22
Refueling Time Benefits........................ -8.2 -85 -45 -4.4 -3.6
Energy Security Benefits....................... 4.4 41 21 2.2 1.7
Sum of Non-Emission Benefits................... -3.6 -39 -21 -2 -1.7
----------------------------------------------------------------------------------------------------------------
Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average..................................... 15 82 82 5.4 5.4
3% Average..................................... 38 330 330 17 17
2.5% Average................................... 52 500 500 25 25
3% 95th Percentile............................. 110 1,000 1,000 52 52
----------------------------------------------------------------------------------------------------------------
Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020......... 16-18 140 63 7.5 5.1
PM2.5 Health Benefits--Pope III et al., 2019... 31-34 280 130 15 10
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................ 180-200 1,400 610 74 48
With Climate 3% Average........................ 200-220 1,600 850 85 60
With Climate 2.5% Average...................... 210-230 1,800 1,000 93 67
With Climate 3% 95th Percentile................ 280-290 2,300 1,500 120 95
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
The criteria pollutant benefits associated with the standards presented here do not include the full
complement of health and environmental benefits that, if quantified and monetized, would increase the total
monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
range. The present and equivalent annualized value of net benefits for a 3 percent discount rate reflect
benefits based on the Pope III et al. study while the present and equivalent annualized values of net benefits
for a 7 percent discount rate reflect benefits based on the Wu et al. study.

[[Page 29201]]

EPA estimates the average upfront per-vehicle cost to meet the
proposed standards to be approximately $1,200 in MY 2032, as shown in
Table 7.\131\ We discuss per-vehicle cost in more detail in Section
IV.C and DRIA Chapter 13. While the average purchase price of vehicles
is estimated to be higher, this is attributable to the larger share of
BEVs relative to ICE vehicles. However, after considering purchase
incentives and their lower operating costs relative to ICE vehicles,
BEVs are estimated to save vehicle owners money over time. For example,
a BEV owner of a model year 2032 sedan, wagon, crossover or SUV would
save more than $9,000 on average on fuel, maintenance, and repair costs
over an eight-year period (the average period of first ownership)
compared to a gasoline vehicle. A BEV pickup truck owner would save
even more--about $13,000. We discuss ownership savings and expenses in
more detail in DRIA Chapter 4.
---------------------------------------------------------------------------

\131\ Unless otherwise specified, all monetized values are
expressed in 2020 dollars.

Table 7--Average Incremental Vehicle Cost by Reg Class, Relative to the No Action Scenario
[2020 Dollars]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Cars.............................. $249 $102 $32 $100 $527 $844
Trucks............................ 891 767 653 821 1,100 1,385
Total............................. 633 497 401 526 866 1,164
----------------------------------------------------------------------------------------------------------------

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

D. What are the alternatives that EPA is considering?

1. Description of the Alternatives
EPA is seeking comment on three alternatives to its proposed
standards. Alternative 1 is more stringent than the proposal across the
MY 2027-2032 time period, and Alternative 2 is less stringent. The
proposal as well as Alternatives 1 and 2 all have a similar
proportional ramp rate of year over year stringency, which includes a
higher rate of stringency increase in the earlier years (MYs 2027-2029)
than in the later years. Alternative 3 achieves the same stringency as
the proposed standards in MY 2032 but provides for a more consistent
rate of stringency increase for MY 2027-2031.
The Alternative 1 projected fleet-wide CO<INF>2</INF> targets are
10 g/mi lower on average than the proposed targets; Alternative 2
projected fleet-wide CO<INF>2</INF> targets averaged 10 g/mi higher
than the proposed targets.\132\ While the 20 g/mi range of stringency
options may appear fairly narrow, for the MY 2032 standards the
alternatives capture a range of 12 percent higher and lower than the
proposed standards in the final year. Our goal in selecting the
alternatives was to identify a range of stringencies that we believe
are appropriate to consider for the final standards because they
represent a range of standards that are anticipated to be feasible and
are highly protective of human health and the environment.
---------------------------------------------------------------------------

\132\ For reference, the targets at a footprint of 50 square
feet were exactly 10 g/mi lower and greater for the alternatives.
---------------------------------------------------------------------------

While the proposed standards, Alternative 1 and Alternative 2 all
have a larger increase in stringency between MY 2026 and MY 2027,
Alternative 3 was constructed with the goal of evaluating roughly equal
reductions in absolute g/mi targets over the duration of the program
while achieving the same overall targets by MY 2032. This has the
effect of less stringent year-over-year increases in the early years of
the program.
EPA is soliciting comment on all of the model year standards of
Alternatives 1, 2, and 3, and standards generally represented by the
range across those alternatives. EPA anticipates that the appropriate
choice of final standards within this range will reflect the
Administrator's judgments about the uncertainties in EPA's analyses as
well as consideration of public comment and updated information where
available. However, EPA proposes to find that standards substantially
more stringent than Alternative 1 would not be appropriate because of
uncertainties concerning the cost and feasibility of such standards.
EPA proposes to find that standards substantially less stringent than
Alternative 2 or 3 would not be appropriate because they would forgo
feasible emissions reductions that would improve the protection of
public health and welfare.
Table 8, Table 9 and Table 10 compare the projected fleet average
targets for cars, trucks, and the combined fleet, respectively, across
the proposed standards and the three alternatives for model years 2027-
2032.\133\ Table 11 compares the relative percentage year-over-year
reductions of the proposed standards and the three alternatives.
---------------------------------------------------------------------------

\133\ In these tables, and throughout this proposal, the MY 2026
targets have been adjusted to reflect differences in off-cycle and
AC credits between the 2021 Rule and this proposal. This is
explained in greater detail in III.B.2.iv.

Table 8--Comparison of Proposed Car Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
Proposed stds Alternative 1 Alternative 2 Alternative 3
Model year CO2 (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)

[[Page 29202]]

2030............................................ 91 81 100 99
2031............................................ 82 72 92 86
2032 and later.................................. 73 63 83 73
% reduction vs. 2026............................ 52% 59% 46% 52%
----------------------------------------------------------------------------------------------------------------

Table 9--Comparison of Proposed Truck Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
Proposed stds Alternative 1 Alternative 2 Alternative 3
Model year CO2 (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)

----------------------------------------------------------------------------------------------------------------
2026 adjusted................................... 207 207 207 207
2027............................................ 163 153 173 183
2028............................................ 142 131 152 163
2029............................................ 120 110 130 144
2030............................................ 110 100 121 126
2031............................................ 100 90 111 107
2032 and later.................................. 89 78 99 89
% reduction vs. 2026............................ 57% 62% 52% 57%
----------------------------------------------------------------------------------------------------------------

Table 10--Comparison of Proposed Combined Fleet Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
Proposed stds Alternative 1 Alternative 2 Alternative 3
Model year CO2 (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)

----------------------------------------------------------------------------------------------------------------
2026 adjusted................................... 186 186 186 186
2027............................................ 152 141 162 165
2028............................................ 131 121 141 148
2029............................................ 111 101 122 132
2030............................................ 102 92 112 115
2031............................................ 93 83 103 99
2032 and later.................................. 82 72 92 82
% reduction vs. 2026............................ 56% 61% 50% 56%
----------------------------------------------------------------------------------------------------------------

Table 11--Combined Fleet Year-Over-Year Decreases for Proposed Standards and Alternatives
----------------------------------------------------------------------------------------------------------------
Proposed Stds Alternative 1 Alternative 2 Alternative 3
Model year CO2 (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)
(%) (%) (%) (%)
----------------------------------------------------------------------------------------------------------------
2027............................................ -18 -24 -13 -11
2028............................................ -13 -14 -13 -10
2029............................................ -15 -16 -14 -11
2030............................................ -8 -9 -8 -12
2031............................................ -9 -10 -8 -15
2032............................................ -11 -13 -10 -17
Average YoY..................................... -13 -15 -11 -13
----------------------------------------------------------------------------------------------------------------

The proposed standards will result in industry-wide average GHG
emissions target for the light-duty fleet of 82 g/mi in MY 2032,
representing a 56 percent reduction in average emission target levels
from the existing MY 2026 standards established in 2021. Alternative 1
is projected to result in an industry-wide average target of 72 grams/
mile (g/mile) of CO<INF>2</INF> in MY 2032, representing a 61 percent
reduction in projected fleet average GHG emissions target levels from
the existing MY 2026 standards. Alternative 2 is projected to result in
an industry-wide average target of 92 g/mile of CO<INF>2</INF> in MY
2032, which corresponds to a 50 percent reduction in projected fleet
average GHG emissions target levels from the existing MY 2026
standards. Like the proposed standards, Alternative 3 is projected to
result in an industry-wide average target of 82 g/mile of
CO<INF>2</INF> in MY 2032, which corresponds to a 56 percent reduction
in projected fleet average GHG emissions target levels from the
existing MY 2026 standards.
Table 12 gives a comparison of average incremental per-vehicle
costs for the proposed standards and the alternatives. As shown, the
2032 MY industry average vehicle cost increase (compared to the No
Action case) ranges from approximately $1,000 to $1,800 per vehicle for
the alternatives, compared to $1,200 per vehicle for the proposed
standards. These projections represent compliance costs to the industry
and are not the same as the costs experienced by the consumer when
purchasing a new vehicle. For

[[Page 29203]]

example, the costs presented here do not include any state and Federal
purchase incentives that are available to consumers. Also, the
manufacturer decisions for the pricing of individual vehicles may not
align exactly with the cost impacts for that particular vehicle. After
considering purchase incentives and their lower operating costs
relative to ICE vehicles, BEVs are estimated to save vehicle owners
money over time. For example, under the proposed standards, a BEV owner
of a model year 2032 sedan, wagon, crossover or SUV would save more
than $9,000 on average on fuel, maintenance, and repair costs over an
eight-year period (the average period of first ownership) compared to a
gasoline vehicle. A BEV pickup truck owner would save even more--about
$13,000. Consumer savings would be similar to those of the proposal
under Alternative 3, somewhat higher under Alternative 1, and somewhat
lower under Alternative 2. We discuss ownership savings and expenses
under the proposed standards in more detail in DRIA Chapter 4.

Table 12--Comparison of Projected Incremental Per-Vehicle Costs Relative to the No Action Scenario
[2020 Dollars]
----------------------------------------------------------------------------------------------------------------
Proposed stds Alternative 1 Alternative 2 Alternative 3
Model year $/vehicle $/vehicle $/vehicle $/vehicle
----------------------------------------------------------------------------------------------------------------
2027............................................ $633 $668 $462 $189
2028............................................ 497 804 355 125
2029............................................ 401 1,120 353 45
2030............................................ 526 1,262 337 250
2031............................................ 866 1,565 718 800
2032............................................ 1,164 1,775 1,041 1,256
----------------------------------------------------------------------------------------------------------------

2. Projected Emission Reductions From the Alternatives

Table 13--Projected GHG Emission Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
[Million metric tons]
----------------------------------------------------------------------------------------------------------------
Net impact
Pollutant Vehicle EGU Refinery * Net impact (%)
----------------------------------------------------------------------------------------------------------------
Alternative 1
----------------------------------------------------------------------------------------------------------------
CO2............................................ -480 18 0 -460 -52
CH4............................................ -0.0096 0.00043 0 -0.0092 -49
N2O............................................ -0.0084 0.000034 0 -0.0083 -44
----------------------------------------------------------------------------------------------------------------
Alternative 2
----------------------------------------------------------------------------------------------------------------
CO2............................................ -400 14 0 -380 -43
CH4............................................ -0.0081 0.00035 0 -0.0078 -42
N2O............................................ -0.0072 0.000027 0 -0.0072 -38
----------------------------------------------------------------------------------------------------------------
Alternative 3
----------------------------------------------------------------------------------------------------------------
CO2............................................ -440 16 0 -420 -47
CH4............................................ -0.0088 0.00039 0 -0.0084 -45
N2O............................................ -0.0078 0.00003 0 -0.0077 -41
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.

Table 14--Projected Cumulative GHG Emission Impacts Through 2055 From the Proposed Rule, Light-Duty and Medium-
Duty
[Million metric tons]
----------------------------------------------------------------------------------------------------------------
Net impact
Pollutant Vehicle EGU Refinery Net impact (%)
----------------------------------------------------------------------------------------------------------------
Alternative 1
----------------------------------------------------------------------------------------------------------------
CO2............................................ -8,900 780 0 -8,100 -29
CH4............................................ -0.17 0.039 0 -0.13 -18
N2O............................................ -0.15 0.005 0 -0.14 -27
----------------------------------------------------------------------------------------------------------------
Alternative 2
----------------------------------------------------------------------------------------------------------------
CO2............................................ -7,200 630 0 -6,600 -23
CH4............................................ -0.14 0.032 0 -0.11 -15
N2O............................................ -0.13 0.004 0 -0.12 -23
----------------------------------------------------------------------------------------------------------------

[[Page 29204]]

Alternative 3
----------------------------------------------------------------------------------------------------------------
CO2............................................ -7,800 670 0 -7,100 -25
CH4............................................ -0.15 0.033 0 -0.12 -16
N2O............................................ -0.13 0.0042 0 -0.13 -24
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.

Table 15--Projected Criteria Air Pollutant Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
[U.S. tons]
----------------------------------------------------------------------------------------------------------------
Net impact
Pollutant Vehicle EGU Refinery Net impact (%)
----------------------------------------------------------------------------------------------------------------
Alternative 1
----------------------------------------------------------------------------------------------------------------
PM2.5.......................................... -9,800 1,700 -7,600 -16,000 -37
NOX............................................ -47,000 2,800 -27,000 -71,000 -44
VOC............................................ -230,000 1,100 -23,000 -250,000 -55
SOX............................................ -3,000 1,900 -12,000 -13,000 -46
CO *........................................... -2,000,000 0 0 -2,000,000 -55
----------------------------------------------------------------------------------------------------------------
Alternative 2
----------------------------------------------------------------------------------------------------------------
PM2.5.......................................... -9,800 1,400 -6,200 -15,000 -34
NOX............................................ -41,000 2,400 -22,000 -61,000 -38
VOC............................................ -190,000 950 -19,000 -200,000 -45
SOX............................................ -2,500 1,500 -9,500 -11,000 -38
CO *........................................... -1,600,000 0 0 -1,600,000 -45
----------------------------------------------------------------------------------------------------------------
Alternative 3
----------------------------------------------------------------------------------------------------------------
PM2.5.......................................... -9,800 1,500 -6,900 -15,000 -35
NOX............................................ -44,000 2,600 -25,000 -66,000 -41
VOC............................................ -200,000 1,000 -21,000 -220,000 -50
SOX............................................ -2,800 1,700 -11,000 -12,000 -42
CO *........................................... -1,800,000 0 0 -1,800,000 -50
----------------------------------------------------------------------------------------------------------------
* EPA did not have data available to calculate CO impacts from EGUs or refineries.

Table 16--Projected Air Toxic Impacts From Vehicles in 2055 From the
Proposed Rule, Light-Duty and Medium-Duty
[U.S. tons]
------------------------------------------------------------------------
Pollutant Vehicle Vehicle (%)
------------------------------------------------------------------------
Alternative 1
------------------------------------------------------------------------
Acetaldehyde............................ -920 -53
Acrolein................................ -60 -52
Benzene................................. -3,200 -56
Ethylbenzene............................ -3,700 -55
Formaldehyde............................ -550 -53
Naphthalene............................. -110 -56
1,3-Butadiene........................... -370 -56
15 Polyaromatic Hydrocarbons............ -5 -80
------------------------------------------------------------------------
Alternative 2
------------------------------------------------------------------------
Acetaldehyde............................ -780 -45
Acrolein................................ -51 -44
Benzene................................. -2,600 -47
Ethylbenzene............................ -3,100 -46
Formaldehyde............................ -470 -45
Naphthalene............................. -95 -47
1,3-Butadiene........................... -310 -47

[[Page 29205]]

15 Polyaromatic Hydrocarbons............ -5 -77
------------------------------------------------------------------------
Alternative 3
------------------------------------------------------------------------
Acetaldehyde............................ -850 -49
Acrolein................................ -55 -48
Benzene................................. -2,900 -51
Ethylbenzene............................ -3,400 -50
Formaldehyde............................ -510 -49
Naphthalene............................. -100 -51
1,3-Butadiene........................... -340 -51
15 Polyaromatic Hydrocarbons............ -5 -78
------------------------------------------------------------------------

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

Table 17--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 1 for Calendar Years 2027
through 2055, Light-Duty and Medium-Duty
[Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
CY 2055 PV, 3% PV, 7% EAV, 3% EAV, 7%
----------------------------------------------------------------------------------------------------------------
Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs....................... 11 330 220 17 18
Repair Costs................................... -26 -180 -82 -9.3 -6.7
Maintenance Costs.............................. -57 -450 -220 -24 -18
Congestion Costs............................... 0.11 3.5 2.2 0.18 0.18
Noise Costs.................................... 0.0017 0.055 0.034 0.0028 0.0027
Sum of Non-Emission Costs...................... -71 -300 -82 -15 -6.7
----------------------------------------------------------------------------------------------------------------
Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings........................... 100 990 510 51 41
EVSE Port Costs................................ 7.1 120 68 6.2 5.6
Sum of Fuel Savings less EVSE Port Costs....... 95 870 440 45 36
----------------------------------------------------------------------------------------------------------------
Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits........................... 0.22 6.5 3.9 0.34 0.32
Refueling Time Benefits........................ -8.8 -90 -47 -4.7 -3.8
Energy Security Benefits....................... 4.8 46 23 2.4 1.9
Sum of Non-Emission Benefits................... -3.8 -38 -20 -2 -1.6
----------------------------------------------------------------------------------------------------------------
Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average..................................... 16 91 91 6 6
3% Average..................................... 41 360 360 19 19
2.5% Average................................... 57 560 560 27 27
3% 95th Percentile............................. 120 1,100 1,100 58 58
----------------------------------------------------------------------------------------------------------------
Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020......... 16-18 150 66 7.7 5.3
PM2.5 Health Benefits--Pope III et al., 2019... 32-35 290 130 15 11
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................ 200-210 1,500 660 80 52
With Climate 3% Average........................ 220-240 1,800 930 93 65
With Climate 2.5% Average...................... 240-260 2,000 1,100 100 73

[[Page 29206]]

With Climate 3% 95th Percentile................ 300-320 2,500 1,700 130 100
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
The criteria pollutant benefits associated with the standards presented here do not include the full
complement of health and environmental benefits that, if quantified and monetized, would increase the total
monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
percent values use the Wu values.

Table 18--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 2 for Calendar Years 2027
Through 2055, Light-Duty and Medium-Duty
[Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
CY 2055 PV, 3% PV, 7% EAV, 3% EAV, 7%
----------------------------------------------------------------------------------------------------------------
Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs....................... 8.8 230 140 12 12
Repair Costs................................... -22 -160 -74 -8.3 -6
Maintenance Costs.............................. -47 -370 -180 -19 -14
Congestion Costs............................... 0.064 0.74 0.48 0.039 0.039
Noise Costs.................................... 0.001 0.012 0.0078 0.00064 0.00064
Sum of Non-Emission Costs...................... -60 -300 -110 -16 -8.7
----------------------------------------------------------------------------------------------------------------
Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings........................... 84 790 400 41 33
EVSE Port Costs................................ 7.1 120 68 6.2 5.6
Sum of Fuel Savings less EVSE Port Costs....... 77 680 330 35 27
----------------------------------------------------------------------------------------------------------------
Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits........................... 0.17 2.4 1.5 0.12 0.12
Refueling Time Benefits........................ -7.6 -79 -41 -4.1 -3.3
Energy Security Benefits....................... 3.9 37 19 1.9 1.5
Sum of Non-Emission Benefits................... -3.5 -39 -21 -2 -1.7
----------------------------------------------------------------------------------------------------------------
Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average..................................... 13 74 74 4.9 4.9
3% Average..................................... 34 290 290 15 15
2.5% Average................................... 47 450 450 22 22
3% 95th Percentile............................. 100 900 900 47 47
----------------------------------------------------------------------------------------------------------------
Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020......... 15-17 140 61 7.2 4.9
PM2.5 Health Benefits--Pope III et al., 2019... 30-33 270 120 14 10
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................ 160-180 1,300 550 68 44
With Climate 3% Average........................ 180-200 1,500 780 78 54
With Climate 2.5% Average...................... 200-210 1,700 930 85 61
With Climate 3% 95th Percentile................ 250-270 2,100 1,400 110 86
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
The criteria pollutant benefits associated with the standards presented here do not include the full
complement of health and environmental benefits that, if quantified and monetized, would increase the total
monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
percent values use the Wu values.

[[Page 29207]]

Table 19--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 3 for Calendar Years 2027
Through 2055, Light-Duty and Medium-Duty
[Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
CY 2055 PV, 3% PV, 7% EAV, 3% EAV, 7%
----------------------------------------------------------------------------------------------------------------
Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs....................... 11 270 170 14 14
Repair Costs................................... -24 -170 -77 -8.6 -6.3
Maintenance Costs.............................. -51 -390 -190 -20 -15
Congestion Costs............................... 0.11 1.5 0.82 0.078 0.066
Noise Costs.................................... 0.0016 0.024 0.013 0.0012 0.0011
Sum of Non-Emission Costs...................... -64 -290 -95 -15 -7.8
----------------------------------------------------------------------------------------------------------------
Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings........................... 93 850 430 45 35
EVSE Port Costs................................ 7.1 120 68 6.2 5.6
Sum of Fuel Savings less EVSE Port Costs....... 86 740 360 38 29
----------------------------------------------------------------------------------------------------------------
Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits........................... 0.21 3.2 1.8 0.17 0.15
Refueling Time Benefits........................ -8.2 -83 -43 -4.3 -3.5
Energy Security Benefits....................... 4.4 40 20 2.1 1.6
Sum of Non-Emission Benefits................... -3.6 -39 -21 -2.1 -1.7
----------------------------------------------------------------------------------------------------------------
Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average..................................... 15 80 80 5.3 5.3
3% Average..................................... 38 320 320 17 17
2.5% Average................................... 52 490 490 24 24
3% 95th Percentile............................. 110 970 970 51 51
----------------------------------------------------------------------------------------------------------------
Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020......... 16-18 140 62 7.3 5.0
PM2.5 Health Benefits--Pope III et al., 2019... 31-34 280 120 14 10
----------------------------------------------------------------------------------------------------------------
Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................ 180-190 1,300 580 71 46
With Climate 3% Average........................ 200-220 1,600 820 82 57
With Climate 2.5% Average...................... 210-230 1,800 990 90 64
With Climate 3% 95th Percentile................ 270-290 2,200 1,500 120 91
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
The criteria pollutant benefits associated with the standards presented here do not include the full
complement of health and environmental benefits that, if quantified and monetized, would increase the total
monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
percent values use the Wu values.

II. Public Health and Welfare Need for Emission Reductions

A. Climate Change From GHG Emissions

Elevated concentrations of GHGs have been warming the planet,
leading to changes in the Earth's climate including changes in the
frequency and intensity of heat waves, precipitation, and extreme
weather events, rising seas, and retreating snow and ice. The changes
taking place in the atmosphere as a result of the well-documented
buildup of GHGs due to human activities are changing the climate at a
pace and in a way that threatens human health, society, and the natural
environment. While EPA is not making any new scientific or factual
findings with regard to the well-documented impact of GHG emissions on
public health and welfare in support of this rule, EPA is providing
some scientific background on climate change to offer additional
context for this rulemaking and to increase the public's understanding
of the environmental impacts of GHGs.
Extensive additional information on climate change is available in
the scientific assessments and the EPA documents that are briefly
described in this section, as well as in the technical and scientific
information supporting them. One of those documents is EPA's 2009
Endangerment and Cause or Contribute Findings for Greenhouse Gases
Under section 202(a) of the CAA (74 FR 66496, December 15, 2009). In
the 2009 Endangerment Finding, the Administrator found under section
202(a) of the CAA that elevated atmospheric concentrations of six key
well-mixed GHGs--CO<INF>2</INF>, methane (CH4), nitrous oxide (N2O),
HFCs, perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--``may
reasonably be anticipated to endanger the public health and welfare of
current and future generations'' (74 FR 66523). The 2009 Endangerment
Finding, together with

[[Page 29208]]

the extensive scientific and technical evidence in the supporting
record, documented that climate change caused by human emissions of
GHGs threatens the public health of the U.S. population. It explained
that by raising average temperatures, climate change increases the
likelihood of heat waves, which are associated with increased deaths
and illnesses (74 FR 66497). While climate change also increases the
likelihood of reductions in cold-related mortality, evidence indicates
that the increases in heat mortality will be larger than the decreases
in cold mortality in the U.S. (74 FR 66525). The 2009 Endangerment
Finding further explained that compared with a future without climate
change, climate change is expected to increase tropospheric ozone
pollution over broad areas of the U.S., including in the largest
metropolitan areas with the worst tropospheric ozone problems, and
thereby increase the risk of adverse effects on public health (74 FR
66525). Climate change is also expected to cause more intense
hurricanes and more frequent and intense storms of other types and
heavy precipitation, with impacts on other areas of public health, such
as the potential for increased deaths, injuries, infectious and
waterborne diseases, and stress-related disorders (74 FR 66525).
Children, the elderly, and the poor are among the most vulnerable to
these climate-related health effects (74 FR 66498).
The 2009 Endangerment Finding also documented, together with the
extensive scientific and technical evidence in the supporting record,
that climate change touches nearly every aspect of public welfare \134\
in the U.S., including: Changes in water supply and quality due to
changes in drought and extreme rainfall events; increased risk of storm
surge and flooding in coastal areas and land loss due to inundation;
increases in peak electricity demand and risks to electricity
infrastructure; and the potential for significant agricultural
disruptions and crop failures (though offset to some extent by carbon
fertilization). These impacts are also global and may exacerbate
problems outside the U.S. that raise humanitarian, trade, and national
security issues for the U.S. (74 FR 66530).
---------------------------------------------------------------------------

\134\ The CAA states in section 302(h) that ``[a]ll language
referring to effects on welfare includes, but is not limited to,
effects on soils, water, crops, vegetation, manmade materials,
animals, wildlife, weather, visibility, and climate, damage to and
deterioration of property, and hazards to transportation, as well as
effects on economic values and on personal comfort and well-being,
whether caused by transformation, conversion, or combination with
other air pollutants.'' 42 U.S.C. 7602(h).
---------------------------------------------------------------------------

In 2016, the Administrator issued a similar finding for GHG
emissions from aircraft under section 231(a)(2)(A) of the CAA.\135\ In
the 2016 Endangerment Finding, the Administrator found that the body of
scientific evidence amassed in the record for the 2009 Endangerment
Finding compellingly supported a similar endangerment finding under CAA
section 231(a)(2)(A), and also found that the science assessments
released between the 2009 and the 2016 Findings ``strengthen and
further support the judgment that GHGs in the atmosphere may reasonably
be anticipated to endanger the public health and welfare of current and
future generations'' (81 FR 54424).
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\135\ ``Finding that Greenhouse Gas Emissions From Aircraft
Cause or Contribute to Air Pollution That May Reasonably Be
Anticipated To Endanger Public Health and Welfare.'' 81 FR 54422,
August 15, 2016. (``2016 Endangerment Finding'').
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Since the 2016 Endangerment Finding, the climate has continued to
change, with new observational records being set for several climate
indicators such as global average surface temperatures, GHG
concentrations, and sea level rise. Additionally, major scientific
assessments continue to be released that further advance our
understanding of the climate system and the impacts that GHGs have on
public health and welfare both for current and future generations.
These updated observations and projections document the rapid rate of
current and future climate change both globally and in the
U.S.136 137 138 139
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\136\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
<a href="https://nca2018.globalchange.gov">https://nca2018.globalchange.gov</a>.
\137\ Roy, J., P. Tschakert, H. Waisman, S. Abdul Halim, P.
Antwi-Agyei, P. Dasgupta, B. Hayward, M. Kanninen, D. Liverman, C.
Okereke, P.F. Pinho, K. Riahi, and A.G. Suarez Rodriguez, 2018:
Sustainable Development, Poverty Eradication and Reducing
Inequalities. In: Global Warming of 1.5 [deg]C. An IPCC Special
Report on the impacts of global warming of 1.5 [deg]C above pre-
industrial levels and related global greenhouse gas emission
pathways, in the context of strengthening the global response to the
threat of climate change, sustainable development, and efforts to
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner,
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C.
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X.
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T.
Waterfield (eds.)]. In Press. <a href="https://www.ipcc.ch/sr15/chapter/chapter-5">https://www.ipcc.ch/sr15/chapter/chapter-5</a>.
\138\ National Academies of Sciences, Engineering, and Medicine.
2019. Climate Change and Ecosystems. Washington, DC: The National
Academies Press. <a href="https://doi.org/10.17226/25504">https://doi.org/10.17226/25504</a>.
\139\ NOAA National Centers for Environmental Information, State
of the Climate: Global Climate Report for Annual 2020, published
online January 2021, retrieved on February 10, 2021, from <a href="https://www.ncdc.noaa.gov/sotc/global/202013">https://www.ncdc.noaa.gov/sotc/global/202013</a>.
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B. Background on Criteria and Air Toxics Pollutants Impacted by This
Proposal

1. Particulate Matter
Particulate matter (PM) is a complex mixture of solid particles and
liquid droplets distributed among numerous atmospheric gases which
interact with solid and liquid phases. Particles in the atmosphere
range in size from less than 0.01 to more than 10 micrometers ([mu]m)
in diameter.\140\ Atmospheric particles can be grouped into several
classes according to their aerodynamic diameter and physical sizes.
Generally, the three broad classes of particles include ultrafine
particles (UFPs, generally considered as particles with a diameter less
than or equal to 0.1 [mu]m [typically based on physical size, thermal
diffusivity or electrical mobility]), ``fine'' particles
(PM<INF>2.5</INF>; particles with a nominal mean aerodynamic diameter
less than or equal to 2.5 [mu]m), and ``thoracic'' particles
(PM<INF>10</INF>; particles with a nominal mean aerodynamic diameter
less than or equal to 10 [mu]m). Particles that fall within the size
range between PM<INF>2.5</INF> and PM<INF>10</INF>, are referred to as
``thoracic coarse particles'' (PM<INF>10-2.5</INF>, particles with a
nominal mean aerodynamic diameter greater than 2.5 [mu]m and less than
or equal to 10 [mu]m). EPA currently has NAAQS for PM<INF>2.5</INF> and
PM<INF>10</INF>.\141\
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\140\ U.S. EPA. Policy Assessment (PA) for the Review of the
National Ambient Air Quality Standards for Particulate Matter (Final
Report, 2020). U.S. Environmental Protection Agency, Washington, DC,
EPA/452/R-20/002, 2020.
\141\ Regulatory definitions of PM size fractions, and
information on reference and equivalent methods for measuring PM in
ambient air, are provided in 40 CFR parts 50, 53, and 58. With
regard to NAAQS which provide protection against health and welfare
effects, the 24-hour PM<INF>10</INF> standard provides protection
against effects associated with short-term exposure to thoracic
coarse particles (i.e., PM<INF>10-2.5</INF>).
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Most particles are found in the lower troposphere, where they can
have residence times ranging from a few hours to weeks. Particles are
removed from the atmosphere by wet deposition, such as when they are
carried by rain or snow, or by dry deposition, when particles settle
out of suspension due to gravity. Atmospheric lifetimes are generally
longest for PM<INF>2.5</INF>, which often remains in the atmosphere for
days to weeks before being removed by wet or dry deposition.\142\ In
contrast, atmospheric lifetimes for UFP and PM<INF>10-2.5</INF> are
shorter. Within hours, UFP

[[Page 29209]]

can undergo coagulation and condensation that lead to formation of
larger particles in the accumulation mode, or can be removed from the
atmosphere by evaporation, deposition, or reactions with other
atmospheric components. PM<INF>10-2.5</INF> are also generally removed
from the atmosphere within hours, through wet or dry deposition.\143\
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\142\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
\143\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
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Particulate matter consists of both primary and secondary
particles. Primary particles are emitted directly from sources, such as
combustion-related activities (e.g., industrial activities, motor
vehicle operation, biomass burning), while secondary particles are
formed through atmospheric chemical reactions of gaseous precursors
(e.g., sulfur oxides (SO<INF>X</INF>), nitrogen oxides (NO<INF>X</INF>)
and volatile organic compounds (VOCs)). From 2000 to 2021, national
annual average ambient PM<INF>2.5</INF> concentrations have declined by
over 35 percent,\144\ largely reflecting reductions in emissions of
precursor gases.
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\144\ See <a href="https://www.epa.gov/air-trends/particulate-matter-pm25-trends">https://www.epa.gov/air-trends/particulate-matter-pm25-trends</a> for more information.
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There are two primary NAAQS for PM<INF>2.5</INF>: An annual
standard (12.0 micrograms per cubic meter ([mu]g/m\3\)) and a 24-hour
standard (35 [mu]g/m\3\), and there are two secondary NAAQS for
PM<INF>2.5</INF>: An annual standard (15.0 [mu]g/m\3\) and a 24-hour
standard (35 [mu]g/m\3\). The initial PM<INF>2.5</INF> standards were
set in 1997 and revisions to the standards were finalized in 2006 and
in December 2012 and then retained in 2020. On January 6, 2023, EPA
announced its proposed decision to revise the PM NAAQS.\145\
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\145\ <a href="https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm">https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm</a>.
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There are many areas of the country that are currently in
nonattainment for the annual and 24-hour primary PM<INF>2.5</INF>
NAAQS. As of August 31, 2022, more than 19 million people lived in the
4 areas that are designated as nonattainment for the 1997
PM<INF>2.5</INF> NAAQS. Also, as of August 31, 2022, more than 31
million people lived in the 14 areas that are designated as
nonattainment for the 2006 PM<INF>2.5</INF> NAAQS and more than 20
million people lived in the 5 areas designated as nonattainment for the
2012 PM<INF>2.5</INF> NAAQS. In total, there are currently 15
PM<INF>2.5</INF> nonattainment areas with a population of more than 32
million people.\146\ The proposed standards would take effect beginning
in MY 2027 and would assist areas with attaining the NAAQS and may
relieve areas with already stringent local regulations from some of the
burden associated with adopting additional local controls. The rule
would also assist counties with ambient concentrations near the level
of the NAAQS who are working to ensure long-term attainment or
maintenance of the PM<INF>2.5</INF> NAAQS.
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\146\ The population total is calculated by summing, without
double counting, the 1997, 2006 and 2012 PM2.5 nonattainment
populations contained in the Criteria Pollutant Nonattainment
Summary report (<a href="https://www.epa.gov/green-book/green-book-data-download">https://www.epa.gov/green-book/green-book-data-download</a>).
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2. Ozone
Ground-level ozone pollution forms in areas with high
concentrations of ambient NO<INF>X</INF> and VOCs when solar radiation
is strong. Major U.S. sources of NO<INF>X</INF> are highway and nonroad
motor vehicles, engines, power plants and other industrial sources,
with natural sources, such as soil, vegetation, and lightning, serving
as smaller sources. Vegetation is the dominant source of VOCs in the
U.S. Volatile consumer and commercial products, such as propellants and
solvents, highway and nonroad vehicles, engines, fires, and industrial
sources also contribute to the atmospheric burden of VOCs at ground-
level.
The processes underlying ozone formation, transport, and
accumulation are complex. Ground-level ozone is produced and destroyed
by an interwoven network of free radical reactions involving the
hydroxyl radical (OH), NO, NO<INF>2</INF>, and complex reaction
intermediates derived from VOCs. Many of these reactions are sensitive
to temperature and available sunlight. High ozone events most often
occur when ambient temperatures and sunlight intensities remain high
for several days under stagnant conditions. Ozone and its precursors
can also be transported hundreds of miles downwind, which can lead to
elevated ozone levels in areas with otherwise low VOC or NO<INF>X</INF>
emissions. As an air mass moves and is exposed to changing ambient
concentrations of NO<INF>X</INF> and VOCs, the ozone photochemical
regime (relative sensitivity of ozone formation to NO<INF>X</INF> and
VOC emissions) can change.
When ambient VOC concentrations are high, comparatively small
amounts of NO<INF>X</INF> catalyze rapid ozone formation. Without
available NO<INF>X</INF>, ground-level ozone production is severely
limited, and VOC reductions would have little impact on ozone
concentrations. Photochemistry under these conditions is said to be
``NO<INF>X</INF>-limited.'' When NO<INF>X</INF> levels are sufficiently
high, faster NO<INF>2</INF> oxidation consumes more radicals, dampening
ozone production. Under these ``VOC-limited'' conditions (also referred
to as ``NO<INF>X</INF>-saturated'' conditions), VOC reductions are
effective in reducing ozone, and NO<INF>X</INF> can react directly with
ozone, resulting in suppressed ozone concentrations near NO<INF>X</INF>
emission sources. Under these NO<INF>X</INF>-saturated conditions,
NO<INF>X</INF> reductions can actually increase local ozone under
certain circumstances, but overall ozone production (considering
downwind formation) decreases and even in VOC-limited areas,
NO<INF>X</INF> reductions are not expected to increase ozone levels if
the NO<INF>X</INF> reductions are sufficiently large--large enough to
become NO<INF>X</INF>-limited.
The primary NAAQS for ozone, established in 2015 and retained in
2020, is an 8-hour standard with a level of 0.07 ppm.\147\ EPA
announced that it will reconsider the decision to retain the ozone
NAAQS.\148\ EPA is also implementing the previous 8-hour ozone primary
standard, set in 2008, at a level of 0.075 ppm. As of August 31, 2022,
there were 34 ozone nonattainment areas for the 2008 ozone NAAQS,
composed of 141 full or partial counties, with a population of more
than 90 million, and 49 ozone nonattainment areas for the 2015 ozone
NAAQS, composed of 212 full or partial counties, with a population of
more than 125 million. In total, there are currently, as of August 31,
2022, 57 ozone nonattainment areas with a population of more than 130
million people.\149\
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