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Rule2024-06809

Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles-Phase 3

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Published

April 22, 2024

Effective

June 21, 2024

Issuing agencies

Environmental Protection Agency

Abstract

The Environmental Protection Agency (EPA) is promulgating new greenhouse gas (GHG) emissions standards for model year (MY) 2032 and later heavy-duty highway vehicles that phase in starting as early MY 2027 for certain vehicle categories. The phase in revises certain MY 2027 GHG standards that were established previously under EPA's Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles--Phase 2 rule ("HD GHG Phase 2"). This document also updates discrete elements of the Averaging Banking and Trading program, including providing additional flexibilities for manufacturers to support the implementation of the Phase 3 program balanced by limiting the availability of certain advanced technology credits initially established under the HD GHG Phase 2 rule. EPA is also adding warranty requirements for batteries and other components of zero-emission vehicles and requiring customer-facing battery state-of- health monitors for plug-in hybrid and battery electric vehicles. In this action, we are also finalizing additional revisions, including clarifying and editorial amendments to certain highway heavy-duty vehicle provisions and certain test procedures for heavy-duty engines.

Full Text

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<title>Federal Register, Volume 89 Issue 78 (Monday, April 22, 2024)</title>
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[Federal Register Volume 89, Number 78 (Monday, April 22, 2024)]
[Rules and Regulations]
[Pages 29440-29831]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06809]

[[Page 29439]]

Vol. 89

Monday,

No. 78

April 22, 2024

Part II

Environmental Protection Agency

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40 CFR Parts 86, 1036, 1037, et al.

Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase 3;
Final Rule

Federal Register / Vol. 89, No. 78 / Monday, April 22, 2024 / Rules
and Regulations

[[Page 29440]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86, 1036, 1037, 1039, 1054, and 1065

[EPA-HQ-OAR-2022-0985; FRL-8952-02-OAR]
RIN 2060-AV50

Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase
3

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is promulgating new
greenhouse gas (GHG) emissions standards for model year (MY) 2032 and
later heavy-duty highway vehicles that phase in starting as early MY
2027 for certain vehicle categories. The phase in revises certain MY
2027 GHG standards that were established previously under EPA's
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and
Heavy-Duty Engines and Vehicles--Phase 2 rule (``HD GHG Phase 2'').
This document also updates discrete elements of the Averaging Banking
and Trading program, including providing additional flexibilities for
manufacturers to support the implementation of the Phase 3 program
balanced by limiting the availability of certain advanced technology
credits initially established under the HD GHG Phase 2 rule. EPA is
also adding warranty requirements for batteries and other components of
zero-emission vehicles and requiring customer-facing battery state-of-
health monitors for plug-in hybrid and battery electric vehicles. In
this action, we are also finalizing additional revisions, including
clarifying and editorial amendments to certain highway heavy-duty
vehicle provisions and certain test procedures for heavy-duty engines.

DATES: This final rule is effective on June 21, 2024. The incorporation
by reference of certain material listed in this rule is approved by the
Director of the Federal Register beginning June 21, 2024. The
incorporation by reference of certain other material listed in this
rule was previously approved by the Director of the Federal Register as
of March 27, 2023.

ADDRESSES:
Docket: EPA has established a docket for this action under Docket
ID No. EPA-HQ-OAR-2022-0985. Publicly available docket materials are
available either electronically at <a href="http://www.regulations.gov">www.regulations.gov</a> or in hard copy
at Air and Radiation Docket and Information Center, EPA Docket Center,
EPA/DC, EPA WJC West Building, 1301 Constitution Ave. NW, Room 3334,
Washington, DC. For further information on EPA Docket Center services
and the current status, please visit us online at <a href="http://www.epa.gov/dockets">www.epa.gov/dockets</a>.
Public Participation: Docket: All documents in the docket are
listed on the <a href="http://www.regulations.gov">www.regulations.gov</a> website. Although listed in the
index, some information is not publicly available, e.g., confidential
business information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and will be publicly available
only in hard copy form through the EPA Docket Center at the location
listed in the ADDRESSES section of this document.

FOR FURTHER INFORMATION CONTACT: Brian Nelson, Assessment and Standards
Division, Office of Transportation and Air Quality, Environmental
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105;
telephone number: (734) 214-4278; email address: <a href="/cdn-cgi/l/email-protection#442a2128372b2a6a26362d252a042134256a232b32">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Does this action apply to me?

This action relates to companies that manufacture, sell, or import
into the United States new heavy-duty highway vehicles and engines.
This action also relates to state and local governments. Potentially
affected categories and entities include the following:
[GRAPHIC] [TIFF OMITTED] TR22AP24.000

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities potentially affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your entity is regulated by this action, you should carefully examine
the applicability criteria found in 40 CFR parts 86, 1036, 1037, 1039,
1054, and 1065.\1\ If you have questions regarding the applicability of
this action to a particular entity, consult the person listed in the
FOR FURTHER INFORMATION CONTACT section.
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\1\ See 40 CFR 1036.1 through 1036.15 and 1037.1 through
1037.15.
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What action is the agency taking?

The Environmental Protection Agency (EPA) is promulgating new GHG
standards for model year (MY) 2032 and later heavy-duty highway
vehicles that phase in starting as early MY 2027 for certain vehicle
categories. The phase in revises certain MY 2027 GHG standards that
were established previously under EPA's Greenhouse Gas Emissions and
Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and
Vehicles--Phase 2 rule. We believe these ``Phase 3'' standards are
appropriate and feasible considering lead time, costs, and other
factors. EPA also finds that it is appropriate (1) to limit the
availability of certain advanced technology credits initially
established under the HD GHG Phase 2 rule, and (2) to include
additional flexibilities for manufacturers in applying credits from
these incentives in the early model years of this Phase 3 program. EPA
is also adding warranty requirements for batteries and other components
of zero-emission vehicles and requiring customer-facing battery state-
of-health monitors for plug-in hybrid and battery electric vehicles. We
are also finalizing

[[Page 29441]]

revisions and clarifying and editorial amendments to certain highway
heavy-duty vehicle provisions of 40 CFR part 1037 and certain test
procedures for heavy-duty engines in 40 CFR parts 1036 and 1065. We
also note that EPA included in this action's notice of proposed
rulemaking (hereafter referred to as the ``HD GHG Phase 3 NPRM'') a
proposal to revise its regulations addressing preemption of state
regulation of new locomotives and new engines used in locomotives;
those revisions were finalized in a separate action on November 8,
2023.2 3
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\2\ Notice of Proposed Rulemaking for Greenhouse Gas Emissions
Standards for Heavy-Duty Vehicles--Phase 3. 88 FR 25926, April 27,
2023.
\3\ Final Rulemaking for Locomotives and Locomotive Engines;
Preemption of State and Local Regulations. 88 FR 77004, November 8,
2023.
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What is the agency's authority for taking this action?

Clean Air Act (CAA) section 202(a), 42 U.S.C. 7521(a), requires
that EPA establish emission standards for air pollutants from new motor
vehicles or new motor vehicle engines, which, in the Administrator's
judgment, cause or contribute to air pollution that may reasonably be
anticipated to endanger public health or welfare. The Administrator has
found that GHG emissions from highway heavy-duty vehicles and engines
cause or contribute to air pollution that may endanger public health or
welfare. Therefore, the Administrator is exercising his authority under
CAA section 202(a)(1)-(2) to establish standards for GHG emissions from
highway heavy-duty vehicles. See section I.D of this preamble for more
information on the agency's authority for this action.

Did EPA conduct a peer review before issuing this action?

This regulatory action is supported by influential scientific
information. EPA, therefore, conducted peer review in accordance with
the Office of Management and Budget's (OMB) Final Information Quality
Bulletin for Peer Review. First, we conducted a peer review of the
underlying data and algorithms in MOVES4 that served as the basis for
MOVES4.R3 used to estimate the emissions impacts of the final
standards. In addition, we conducted a peer review of the Heavy-Duty
Technology Resource Use Case Scenario (HD TRUCS) tool used to analyze
HD vehicle energy usage and associated component costs. We also
conducted a peer review of a Heavy-Duty Vehicle Industry
Characterization, Technology Assessment, and Costing Report developed
by FEV Consulting. 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

Executive Summary
A. Purpose of This Regulatory Action
B. The Opportunity for New Standards Based on Advancements in
Heavy-Duty Vehicle Technologies Which Prevent or Control GHG
Emissions
C. Overview of the Final Regulatory Action
D. Impacts of the Standards
E. Coordination With Federal and State Partners
F. Stakeholder Engagement
I. Statutory Authority for the Final Rule
A. Summary of Key Clean Air Act Provisions
B. Authority To Consider Technologies in Setting Motor Vehicle
GHG Standards
C. Response to Other Comments Raising Legal Issues
II. Final HD Phase 3 GHG Emission Standards
A. Public Health and Welfare Need for GHG Emission Reductions
B. Summary of Comments and the HD GHG Phase 3 Standards and
Updates From Proposal
C. Background on the CO2 Emission Standards in the HD GHG Phase
2 Program
D. Vehicle Technologies and Supporting Infrastructure
E. Technology, Charging Infrastructure, and Operating Costs
F. Final Standards
G. EPA's Basis for Concluding That the Final Standards Are
Feasible and Appropriate Under the Clean Air Act
H. Alternatives Considered
I. Small Businesses
III. Compliance Provisions, Flexibilities, and Test Procedures
A. Revisions to the ABT Program
B. Battery Durability Monitoring and Warranty Requirements
C. Additional Revisions to the Regulations
IV. Program Costs
A. IRA Tax Credits
B. Technology Package Costs
C. Manufacturer Costs
D. Purchaser Costs
E. Social Costs
V. Estimated Emission Impacts From the Final Standards
A. Model Inputs
B. Estimated Emission Impacts From the Final Standards
VI. Climate, Health, Air Quality, Environmental Justice, and
Economic Impacts
A. Climate Change Impacts
B. Health and Environmental Effects Associated With Exposure to
Non-GHG Pollutants
C. Air Quality Impacts of Non-GHG Pollutants
D. Environmental Justice
E. Economic Impacts
F. Oil Imports and Electricity and Hydrogen Consumption
VII. Benefits of the Program
A. Climate Benefits
B. Non-GHG Health Benefits
C. Energy Security
VIII. Comparison of Benefits and Costs
A. Methods
B. Results
IX. Analysis of Alternative CO<INF>2</INF> Emission Standards
A. Comparison of Final Standards and Alternative
B. Emission Inventory Comparison of Final Rule and Slower Phase-
In Alternative
C. Program Costs Comparison of the Final Rule and Alternative
D. Benefits
E. How do the final standards and alternative compare in overall
benefits and costs?
X. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
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 and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
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 and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
K. Congressional Review Act (CRA)
L. Judicial Review
M. Severability
XI. Statutory Authority and Legal Provisions

Executive Summary

A. Purpose of This Regulatory Action

The Environmental Protection Agency (EPA) is finalizing this action
to further reduce greenhouse gas (GHG) air pollution from highway
heavy-duty (hereafter referred to as ``heavy-duty'' or HD) engines and
vehicles across the United States. This final rule establishes new
CO<INF>2</INF> emission standards for MY 2032 and later HD vehicles
with more stringent CO<INF>2</INF> standards phasing in as early as MY
2027 for certain vehicle categories. We have assessed and demonstrated
that these standards are appropriate and feasible considering cost,
lead time, and other relevant factors, as described throughout this
preamble and supporting materials in the docket for this final rule.
Under the

[[Page 29442]]

Clean Air Act (CAA) ``the Administrator shall by regulation prescribe
(and from time to time revise) . . . standards applicable to the
emission of any air pollutant from any class or classes of new motor
vehicles or new motor vehicle engines, . . . which in his judgment
cause, or contribute to, air pollution which may reasonably be
anticipated to endanger public health or welfare.'' The regulation
``shall take effect after such period as the Administrator finds
necessary to permit the development and application of the requisite
technology, giving appropriate consideration to the cost of compliance
within such period.'' Despite the significant emissions reductions
achieved by previous rulemakings, GHG emissions from HD vehicles
continue to adversely impact public health and welfare, and there is a
critical need for further GHG reductions. The transportation sector is
the largest U.S. source of GHG emissions, representing 29 percent of
total GHG emissions,\4\ and within this, heavy-duty vehicles are the
second largest contributor to GHG emissions and are responsible for 25
percent of GHG emissions in the sector.\5\ At the same time, there have
been significant advances in technologies to prevent and control GHG
emissions from heavy-duty vehicles, and we project there will be more
such advances. These final regulations appropriately take advantage of
those projected available and cost-reasonable motor vehicle
technologies to set more stringent GHG standards that will
significantly reduce GHG emissions from heavy-duty vehicles. In
general, the final standards are less stringent than proposed for the
early model years of the program and more stringent or equivalent to
the proposed standards in later model years (expect for heavy-heavy
vocational vehicles which are less stringent in later model years; see
section ES.C.2.ii of this preamble for more details).
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\4\ EPA (2023). Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2021 (EPA-430-R-23-002, published April 2023).
\5\ EPA (2023). Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2021 (EPA-430-R-23-002, published April 2023).
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GHG emissions have significant adverse impacts on public health and
welfare. In 2009, the Administrator issued an Endangerment Finding
under CAA section 202(a), concluding that GHG emissions from new motor
vehicles and engines, including heavy-duty vehicles and engines, cause
or contribute to air pollution that may endanger public health or
welfare.\6\ After making such a finding, EPA is mandated to issue GHG
standards ``to regulate emissions of the deleterious pollutant from new
motor vehicles.'' State of Massachusetts v. EPA, 549 U.S. 497, 533
(2007). Therefore, following the 2009 Endangerment Finding, EPA
promulgated GHG regulations for heavy-duty vehicles and engines in 2011
and 2016.\7\ We refer to the EPA-specific GHG regulations found within
the ``Greenhouse Gas Emissions and Fuel Efficiency Standards for
Medium- and Heavy-Duty Engines and Vehicles--Phase 1'' and ``Greenhouse
Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty
Engines and Vehicles--Phase 2'' final rulemakings as ``HD GHG Phase 1''
and ``HD GHG Phase 2'' respectively throughout this preamble (i.e., we
are not including any reference to the Department of Transportation
(DOT) fuel efficiency standards in those rulemakings in using these
terms in this preamble). In the HD GHG Phase 1 and Phase 2 programs,
EPA set GHG emission standards that the Agency found appropriate and
feasible at that time, considering cost, lead time, and other relevant
factors, in 2011 and 2016, respectively.\8\ Meanwhile, 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 detail in section II.A.
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\6\ 74 FR 66496, December 15, 2009.
\7\ 76 FR 57106, September 15, 2011; 81 FR 73478, October 25,
2016.
\8\ See, e.g., 40 CFR 1036.101(a)(2) (engines, overview of
emission standards); 40 CFR 1036.108 (engine GHG standards, exhaust
emissions of CO2, CH4, and N2O); 40 CFR 1037.101(a)(2) (vehicles,
overview of emission standards); 40 CFR 1037.105 and 1037.106
(vehicle GHG standards, exhaust emissions of CO2 for vocational
vehicles and tractors).
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At the same time, manufacturers have continued to find ways to
further reduce and eliminate tailpipe emissions from new motor
vehicles, resulting in a range of technologies with the potential for
further significant reductions of GHG emissions from HD motor vehicles.
These include but are not limited to reductions reflecting increased
use of advanced internal combustion vehicle and engine technologies and
including increased use of hybrid technologies. These also include
technologies with the greatest potential HD vehicle GHG emission
reductions, such as battery electric vehicle technologies (BEV) and
fuel cell electric vehicle technologies (FCEV). These technologies--
which are already being adopted by the HD industry--present an
opportunity for significant reductions in heavy-duty GHG emissions over
the long term. While standards promulgated pursuant to CAA section
202(a)(1)-(2) 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 ``the development and application of the
requisite technology'' as determined by the Administrator.\9\
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\9\ CAA section 202(a)(2).
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Major trucking fleets, HD vehicle and engine manufacturers, and
U.S. states have announced plans to increase the use of these
technologies in the coming years. Tens of billions of dollars are being
invested not only in these technologies, but also to increase the
infrastructure necessary for their successful deployment, including
electric charging and hydrogen refueling infrastructure, manufacturing
and production of batteries, and domestic sources of critical minerals
and other important elements of the supply chain. The 2021
Infrastructure Investment and Jobs Act (commonly referred to as the
``Bipartisan Infrastructure Law'' or BIL) and the Inflation Reduction
Act of 2022 (``Inflation Reduction Act'' or IRA) accelerate these
ongoing trends by together including many incentives for the
development, production, and sale of a wide range of advanced
technologies (including BEVs, plug-in hybrid electric vehicles (PHEVs),
FCEVs, and others), electric charging infrastructure, and hydrogen,
which are expected to spur significant innovation in the heavy-duty
sector.\10\ Technical assessments and data provided by commenters
during the public comment period for this action's notice of proposed
rulemaking (hereafter referred to as the ``HD GHG Phase 3 NPRM'') as
well as comments on related rules, which proposed strengthening
existing MY 2027 GHG standards for heavy-duty vehicles, support that
significant adoption of technologies with the greatest potential to
reduce GHG emissions and associated infrastructure growth is expected
to occur over the next decade.11 12 13 14 We summarize

[[Page 29443]]

these developments in section B of this Executive Summary, and provide
further detail in section I of the HD GHG Phase 3 NPRM, section II of
this final rule, and Regulatory Impact Analysis (RIA) Chapters 1 and
2.15 16
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\10\ Infrastructure Investment and Jobs Act, Public Law 117-58,
135 Stat. 429 (2021) (``Bipartisan Infrastructure Law'' or ``BIL''),
available at <a href="https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf">https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf</a>; Inflation Reduction Act of 2022, Public Law 117-169,
136 Stat. 1818 (2022) (``Inflation Reduction Act'' or ``IRA''),
available at <a href="https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf">https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf</a>.
\11\ Notice of Proposed Rulemaking for Control of Air Pollution
from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards. 87
FR 17414 (March 28, 2022).
\12\ U.S. EPA, ``Control of Air Pollution from New Motor
Vehicles: Heavy-Duty Engine and Vehicle Standards--Response to
Comments.'' Section 28. Docket EPA-HQ-OAR-2019-0055.
\13\ Notice of Proposed Rulemaking for Greenhouse Gas Emissions
Standards for Heavy-Duty Vehicles--Phase 3. 88 FR 25926, April 27,
2023.
\14\ U.S. EPA. Response to Comments (RTC)--Greenhouse Gas
Emissions Standards for Heavy-Duty Vehicles: Phase 3. EPA-420-R-24-
007. March 2024.
\15\ Notice of Proposed Rulemaking for Greenhouse Gas Emissions
Standards for Heavy-Duty Vehicles--Phase 3. 88 FR 25926, April 27,
2023.
\16\ U.S. EPA. Regulatory Impact Analysis--Greenhouse Gas
Emissions Standards for Heavy-Duty Vehicles: Phase 3. EPA-420-R-24-
006. March 2024.
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In addition, technologies for vehicles with ICE, along with a range
of electrification, exist today and continue to evolve to further
reduce and eliminate exhaust emissions from new motor vehicles. For
example, some of these technologies include improvements to the
efficiency of the engine, transmission, drivetrain, aerodynamics, and
tire rolling resistance in HD vehicles that reduce their GHG emissions.
Another example of a technology under development by manufacturers that
reduces vehicle GHG emissions is HD vehicles that use hydrogen-fueled
internal combustion engines (H2-ICE), which have zero engine-out
CO<INF>2</INF> emissions. The heavy-duty industry has also been
developing hybrid powertrains, which consist of an ICE as well as an
electric drivetrain and some designs also incorporate plug-in
capability. Hybrid powered vehicles may provide CO<INF>2</INF> emission
reductions through the use of downsized engines, recovering energy
through regenerative braking system that is normally lost while
braking, and providing additional engine-off operation during idling
and coasting. Hybrid powertrains are available today in a number of
heavy-duty vocational vehicles including passenger van/shuttle bus,
transit bus, street sweeper, refuse hauler, and delivery truck
applications--and as noted in the preceding paragraph, plug-in hybrid
technologies are included in advanced technology incentives under IRA.
We discuss these technology developments further in section II of this
final rule, and Regulatory Impact Analysis (RIA) Chapters 1 and 2.
With respect to the need for GHG reductions and after consideration
of these and other heavy-duty sector developments, EPA is finalizing in
this action new CO<INF>2</INF> emission standards for MY 2032 and later
HD vehicles with more stringent CO<INF>2</INF> standards phasing in as
early as MY 2027 for certain vehicle categories (i.e., more stringent
than what was finalized in HD GHG Phase 2). We have assessed and
demonstrated that these standards are appropriate and feasible
considering cost, lead time, and other relevant factors, as described
throughout this preamble and supporting materials in the docket for
this final rule. EPA considers safety, consistent with CAA section
202(a)(4), and may consider other factors such as the impacts of
potential GHG standards on the industry, fuel savings, oil
conservation, energy security, and other relevant considerations. These
standards build on decades of EPA regulation of harmful pollution from
HD vehicles. Pursuant to our section 202(a) authority, EPA first
established standards for the heavy-duty sector in the 1970s. Since
then, the Agency has revised the standards multiple times based upon
updated data and information, the continued need to mitigate air
pollution, and congressional enactments directing EPA to regulate
emissions from the heavy-duty sector more stringently. Since 1985, HD
engine and vehicle manufacturers have been able to comply with
standards using averaging;\17\ EPA also introduced banking and trading
compliance flexibilities in the HD program in 1990;\18\ and EPA
explained that manufacturers could use the Averaging, Banking and
Trading (ABT) flexibilities to meet more stringent standards at lower
cost. EPA's HD GHG standards and regulations have consistently included
an ABT program from the start,\19\ and have relied on averaging as the
basis for standards of greater stringency.\20\ Since the first CAA
section 202(a) HD standards in 1972, subsequent standards have extended
to additional pollutants (e.g., particulate matter and GHGs), have
increased in stringency, and have spurred the development and
deployment of numerous new vehicle and engine technologies to reduce
pollution. For example, the Phase 2 GHG standards for HD vehicles (81
FR 73478, October 25, 2016) were projected to reduce CO<INF>2</INF>
emissions by approximately 1.1 billion metric tons over the lifetime of
the new vehicles sold under the program (see, e.g., 81 FR 73482), and
the most recent ``criteria-pollutant''\21\ standards are projected to
reduce oxides of nitrogen (NO<INF>X</INF>) emissions from the in-use HD
fleet by almost 50 percent by 2045 (``Control of Air Pollution from New
Motor Vehicles: Heavy-Duty Engine and Vehicle Standards'' (hereafter
referred to as ``HD2027 Low NO<INF>X</INF> final rule,'' 88 FR 4296,
January 24, 2023)). This final rule builds upon EPA's multi-decadal
tradition of regulating heavy-duty vehicles and engines, by applying
the Agency's clear and longstanding statutory authority to consider the
feasibility and costs of reducing harmful pollution using new real-
world data and information, including the effects of recent
congressional action in the BIL and IRA.
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\17\ 50 FR 10606, March 15, 1985; see also NRDC v. Thomas, 805
F.2d 410, 425 (D.C. Cir. 1986) (upholding emissions averaging in the
1985 HD final rule).
\18\ 55 FR 30584, July 26, 1990.
\19\ 76 FR 57128, September 15, 2011 (explaining ABT is a
flexibility that provides an opportunity for manufacturers to make
necessary technological improvements while reducing the overall cost
of the program); 81 FR 73495, October 25, 2016 (explaining that ABT
plays an important role in providing manufacturers flexibilities,
including helping reduce costs).
\20\ For example, in promulgating the HD GHG Phase 2 standards,
we explained that the stringency of the HD GHG Phase 2 standards
were derived on a fleet average technology mix basis and that the
emission averaging provisions of ABT meant that the regulations did
not require all vehicles to meet the standards. See, e.g., 81 FR
73715.
\21\ We refer to PM, oxides of nitrogen (NO<INF>X</INF>),
Volatile Organic Compounds (VOCs), hydrocarbons (HC), carbon
monoxide (CO), sulfur dioxide (SO<INF>2</INF>), more generally as
``criteria pollutants'' throughout this preamble.
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We are issuing this HD vehicle GHG Phase 3 Final Rulemaking (``HD
GHG Phase 3 final rule'') which finalizes certain revised HD vehicle
carbon dioxide (CO<INF>2</INF>) standards for MY 2027 and certain new
HD vehicle CO<INF>2</INF> standards for MYs 2028, 2029, 2030, 2031, and
2032 that will achieve significant GHG reductions for these and later
model years. (Note that the MY 2032 standards will remain in place for
MY 2033 and thereafter unless and until new standards are promulgated.)
The final standards we are promulgating take into account the ongoing
technological innovation in the HD vehicle space and reflect
CO<INF>2</INF> emission standards that we have assessed and
demonstrated are appropriate and feasible considering cost, lead time,
and other relevant factors, as described throughout this preamble and
supporting materials in the docket for this final rule.\22\
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\22\ We note that EPA also included in the HD GHG Phase 3 NPRM a
proposal to revise its regulations addressing preemption of state
regulation of new locomotives and new engines used in locomotives;
those revisions were finalized in a separate action on November 8,
2023, and therefore are not discussed further in this final rule.
Final Rulemaking for Locomotives and Locomotive Engines; Preemption
of State and Local Regulations. 88 FR 77004, November 8, 2023.
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In this rulemaking, EPA did not reopen (1) the other HD GHG
standards, including nitrous oxide (N<INF>2</INF>O), methane

[[Page 29444]]

(CH<INF>4</INF>), and CO<INF>2</INF> emission standards that apply to
heavy-duty engines and the hydrofluorocarbon (HFC) emission standards
that apply to heavy-duty vehicles, (2) any portion of our heavy-duty
compliance provisions, flexibilities, and testing procedures, including
those in 40 CFR parts 1037, 1036, and 1065, other than those
specifically identified in our proposal (e.g., EPA did not reopen the
general availability of Averaging, Banking, and Trading), and (3) the
existing approach taken in both HD GHG Phase 1 and Phase 2 that
compliance with vehicle emission standards is based on emissions from
the vehicle, including that compliance with vehicle exhaust
CO<INF>2</INF> emission standards is based on CO<INF>2</INF> emissions
from the vehicle. We further note that we did not reopen anything on
which we did not propose or solicit comment.

B. The Opportunity for New Standards Based on Advancements in Heavy-
Duty Vehicle Technologies Which Prevent or Control GHG Emissions

1. Brief Overview of the Heavy-Duty Industry
Heavy-duty highway vehicles range from commercial pickup trucks; to
vocational vehicles that support local and regional transportation,
construction, refuse collection, and delivery work; to line-haul
tractors (semi-trucks) that move freight cross-country. This diverse
array of vehicles is categorized into weight classes based on gross
vehicle weight ratings (GVWR). These weight classes span Class 2b
pickup trucks and vans from 8,500 to 10,000 pounds GVWR through Class 8
line-haul tractors and other commercial vehicles that exceed 33,000
pounds GVWR. While Class 2b and 3 complete pickups and vans are not
included in this rulemaking, Class 2b and 3 vocational vehicles are
included in this rulemaking (as discussed further in section II.C).\23\
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\23\ Class 2b and 3 vehicles with GVWR between 8,500 and 14,000
pounds are primarily commercial pickup trucks and vans and are
sometimes referred to as ``medium-duty vehicles''. The vast majority
of Class 2b and 3 vehicles are chassis-certified vehicles, and we
included those vehicles in the proposed combined light-duty and
medium-duty rulemaking action, consistent with E.O. 14037, section
2a. Heavy-duty engines and vehicles are also used in nonroad
applications, such as construction equipment; nonroad heavy-duty
engines, equipment, and vehicles are not within the scope of this
FRM.
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Heavy-duty highway vehicles are powered through an array of
different means. Currently, the HD vehicle fleet is primarily powered
by diesel-fueled, compression-ignition (CI) engines. However, gasoline-
fueled, spark-ignition (SI) engines are common in the lighter weight
classes, and smaller numbers of alternative fuel engines (e.g.,
liquified petroleum gas, compressed natural gas) are found in the
heavy-duty fleet. We refer to the vehicles powered by internal
combustion engines as ICE vehicles (or ICEV) throughout this preamble.
An increasing number of HD vehicles are powered by technologies that do
not have any tailpipe emissions such as battery electric vehicle (BEV)
technologies and hydrogen fuel cell electric vehicles (FCEVs). These
technologies have seen significant growth in recent years, for example,
EPA certified approximately 400 HD BEVs in MY 2020, 1,200 HD BEVs in MY
2021, and 3,400 HD BEVs in MY 2022 across several vehicle categories.
We use the term zero-emission vehicle (ZEV) technologies throughout the
preamble to refer to technologies that result in zero tailpipe
emissions, and vehicles that use these ZEV technologies we refer to
collectively as ZEVs in this preamble.\24\ Hybrid vehicles (including
plug-in hybrid electric vehicles) include energy storage features such
as batteries and also include an ICE.\25\ Further background on the HD
industry can be found in section II.D, RIA Chapter 1, and HD GHG Phase
3 NPRM section I.A.\26\
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\24\ Throughout the preamble, we use the term ZEV technologies
to refer to technologies that result in zero tailpipe emissions.
Example ZEV technologies include battery electric vehicles and fuel
cell vehicles.
\25\ Furthermore, hydrogen-powered internal combustion engines
(H2-ICE) fueled with neat hydrogen emit zero engine-out
CO<INF>2</INF> emissions (as well as zero engine-out HC,
CH<INF>4</INF>, CO emissions). We recognize that there may be
negligible, but non-zero, CO<INF>2</INF> emissions at the tailpipe
of H2-ICE that use selective catalytic reduction (SCR)
aftertreatment systems and are fueled with neat hydrogen due to
contributions from the aftertreatment system from urea
decomposition. As further explained in preamble section III, H2-ICE
are considered to emit near zero CO<INF>2</INF> emissions under our
part 1036 regulations and are deemed zero under out part 1037
regulations, consistent with our treatment of CO<INF>2</INF>
emissions that are attributable to the aftertreatment systems in
compression-ignition ICEs. H2-ICE also emit certain criteria
pollutants. H2-ICE are not included in what we refer to collectively
as ZEVs throughout this final rule. Note, NO<INF>X</INF> and PM
emission testing is required under existing 40 CFR part 1036 for
engines fueled with neat hydrogen.
\26\ Notice of Proposed Rulemaking for Greenhouse Gas Emissions
Standards for Heavy-Duty Vehicles--Phase 3. 88 FR 25926, April 27,
2023.
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The industry that designs and manufactures HD vehicles is composed
of three primary segments: vehicle manufacturers, engine manufacturers
and other major component manufacturers, and secondary manufacturers
(i.e., body builders). Some vehicle manufacturers are vertically
integrated (designing, developing, and testing their engines in-house
for use in their vehicles). Others purchase some or all of their
engines from independent engine suppliers. At the time of this
rulemaking, only one major independent engine manufacturer supports the
HD industry, though some vehicle manufacturers sell their engines or
``incomplete vehicles'' (i.e., a chassis that includes the engine, the
frame, and a transmission) to body builders who design and assemble the
final vehicle. Each of these subindustries is often supported by common
suppliers for subsystems such as transmissions, axles, engine controls,
and emission controls.
In addition to the manufacturers and suppliers responsible for
producing HD vehicles, an extended network of dealerships, repair and
service facilities, and rebuilding facilities contributes to the sale,
maintenance, and extended life of these vehicles and engines. HD
vehicle dealerships offer customers a place to order such vehicles from
a specific manufacturer and often include service facilities for those
vehicles and their engines. Dealership service technicians are
generally trained to perform regular maintenance and make repairs,
which generally include repairs under warranty and in response to
manufacturer recalls. Some trucking fleets, businesses, and large
municipalities hire their own technicians to service their vehicles in
their own facilities. Many refueling centers along major trucking
routes have also expanded their facilities to include roadside
assistance and service stations to diagnose and repair common problems.
The end-users for HD vehicles are as diverse as the applications
for which these vehicles are purchased. Smaller weight class HD
vehicles are commonly purchased by delivery services, contractors, and
municipalities. The middle weight class vehicles tend to be used as
commercial vehicles for business purposes and municipal work that
transport people and goods locally and regionally or provide services
such as utilities. Vehicles in the heaviest weight classes are
generally purchased by businesses with high load demands, such as
construction, towing or refuse collection, or freight delivery fleets
and owner-operators for regional and long-haul goods movement. The
competitive nature of the businesses and owner-operators that purchase
and operate HD vehicles means that any time at which the vehicle is
unable to operate due to maintenance or repair (i.e., downtime) can
lead to a loss in income. The customers' need for reliability drives
much of the vehicle manufacturers' innovation and research efforts.

[[Page 29445]]

2. History of Greenhouse Gas Emission Standards for Heavy-Duty Engines
and Vehicles
EPA has a longstanding practice of regulating GHG emissions from
the HD sector. In 2009, EPA and the U.S. Department of Transportation's
(DOT's) National Highway Traffic Safety Administration (NHTSA) began
working on a coordinated regulatory program to reduce GHG emissions and
fuel consumption from HD vehicles and engines.\27\ The first phase of
the HD GHG and fuel efficiency program was finalized in 2011 (76 FR
57106, September 15, 2011) (``HD GHG Phase 1'').\28\ The HD GHG Phase 1
program set performance-based standards and largely adopted approaches
consistent with recommendations from the National Academy of Sciences.
The HD GHG Phase 1 program, which began in MY 2014 and was phased in
through MY 2018, included separate standards for HD vehicles and HD
engines. The program offered flexibility allowing manufacturers to
attain these standards through any mix of technologies and the option
to participate in an ABT program.
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\27\ Greenhouse gas emissions from heavy-duty vehicles are
primarily carbon dioxide (CO<INF>2</INF>), but also include methane
(CH<INF>4</INF>), nitrous oxide (N<INF>2</INF>O), and
hydrofluorocarbons (HFC).
\28\ National Research Council; Transportation Research Board.
The National Academies' Committee to Assess Fuel Economy
Technologies for Medium- and Heavy-Duty Vehicles; ``Technologies and
Approaches to Reducing the Fuel Consumption of Medium- and Heavy-
Duty Vehicles.'' 2010. Available online: <a href="https://www.nap.edu/catalog/12845/technologies-and-approaches-to-reducing-the-fuel-consumption-of-medium-and-heavy-duty-vehicles">https://www.nap.edu/catalog/12845/technologies-and-approaches-to-reducing-the-fuel-consumption-of-medium-and-heavy-duty-vehicles</a>.
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In 2016, EPA and NHTSA finalized the HD GHG Phase 2 program.\29\
The HD GHG Phase 2 program included more stringent, performance-based
emission standards for HD vehicles and HD engines that phase in over
the long term, with initial standards for most vehicles and engines
commencing in MY 2021, increasing in stringency in MY 2024, and
culminating in even more stringent MY 2027 standards. HD GHG Phase 2
built upon the Phase 1 program and set standards based not only on
then-currently available technologies, but also on technologies that
were either still under development or not yet widely deployed at the
time of the HD GHG Phase 2 final rule. To ensure adequate time for
technology development, HD GHG Phase 2 provided up to 10 years lead
time to allow for the development and phase-in of these control
technologies. EPA recently finalized technical amendments to the HD GHG
Phase 2 rulemaking (``HD Technical Amendments'') that included changes
to the test procedures for heavy-duty engines and vehicles to improve
accuracy and reduce testing burden.\30\
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\29\ 81 FR 73478, October 25, 2016.
\30\ 86 FR 34308, June 29, 2021.
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As with the previous HD GHG Phase 1 and Phase 2 rules and light-
duty GHG rules, EPA has coordinated with the DOT and NHTSA during the
development of this final rule. This included coordination prior to and
during the interagency review conducted under E.O. 12866. EPA has also
consulted with the California Air Resources Board (CARB) during the
development of this final rule, as EPA also did during the development
of the HD GHG Phase 1 and 2 and light-duty rules. See section ES.E of
this preamble for additional detail on EPA's coordination with DOT/
NHTSA, additional Federal agencies, and CARB.
3. What has changed since EPA finalized the HD GHG Phase 2 rule?
i. Technology Advancements
When EPA promulgated the HD GHG Phase 2 rule in 2016, the agency
established the CO<INF>2</INF> standards on the premise of GHG-reducing
technologies for vehicles with ICE including technologies such as
hybrid powertrains. However, in 2016 we projected that ZEV
technologies, such as BEVs and FCEVs, would become more widely
available in the heavy-duty market over time, but would not be
available and cost-competitive in significant volume in the timeframe
of the Phase 2 program. EPA finalized BEV, PHEV, and FCEV advanced
technology credit multipliers to encourage the development and
availability of these advanced technologies at a faster pace because of
their potential for large GHG emissions reductions.
Several significant developments have occurred since 2016 that
point to ZEV technologies becoming more readily available much sooner
than EPA had previously projected for the HD sector. These developments
are summarized here, but more detail can be found in the section II and
HD GHG NPRM section ES.B or I.C).\31\ These developments support the
feasibility of ZEV technologies and render adoption of ZEV technologies
to reduce GHG emissions more cost-competitive than ever before. First,
the HD market has evolved such that early ZEV models are in use today
for some applications and are expected to expand to many more; costs of
ZEV technologies have gone down and are projected to continue to fall;
and manufacturers have announced and begun to implement plans to
rapidly increase their investments in ZEV technologies over the next
decade. While some HD vehicle manufacturers and firms that purchase HD
fleets cautioned in comments that such announcements may change,
several HD vehicle manufacturers also commented that their MYs 2024-
2027 production plans include ZEVs for their planned compliance with
the previously promulgated Phase 2 standards.\32\ In 2022 and 2023,
there were several manufacturers producing fully electric HD vehicles
for use in a variety of applications, and these volumes are expected to
rise (see RIA Chapter 1.5). The cost to manufacture lithium-ion
batteries (the single most expensive component of a BEV) has dropped
significantly in the past eight years, and that cost is projected to
continue to fall during this decade, all while the performance of the
batteries (in terms of energy density) improves.\33\ \34\ Many of the
manufacturers that produce HD vehicles and major firms that purchase HD
vehicles have announced billions of dollars' worth of investments in
ZEV technologies and significant plans to transition to a zero-carbon
fleet over the next ten to fifteen years.35 36 37 See
section II.D of this preamble, RIA Chapter 1, and HD GHG NPRM section
I.C.1 for further information.\38\ Furthermore, we also have seen
development of technologies such as H2-ICE that also will significantly
reduce CO<INF>2</INF> emissions from HD vehicles.
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\31\ Notice of Proposed Rulemaking for Greenhouse Gas Emissions
Standards for Heavy-Duty Vehicles--Phase 3. 88 FR 25926, April 27,
2023.
\32\ See RTC section 10.3.1.
\33\ Mulholland, Eamonn. ``Cost of electric commercial vans and
pickup trucks in the United States through 2040.'' Page 7. January
2022. Available at <a href="https://theicct.org/wp-content/uploads/2022/01/cost-ev-vans-pickups-us-2040-jan22.pdf">https://theicct.org/wp-content/uploads/2022/01/cost-ev-vans-pickups-us-2040-jan22.pdf</a>.
\34\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase
costs for zero-emission trucks''. The International Council on Clean
Transportation, Working Paper 2022-09 (February 2022). Available
online: <a href="https://theicct.org/publication/purchase-cost-ze-trucks-feb22">https://theicct.org/publication/purchase-cost-ze-trucks-feb22</a>.
\35\ Environmental Defense Fund (2022) September 2022 Electric
Vehicle Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and Worldwide,
available online at: <a href="https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf">https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf</a>.
\36\ EDF Comments to the HD GHG Phase 3 NPRM. EPA-HQ-OAR-2022-
0985-1644-A1.
\37\ Heavy Duty Trucking Staff, `Autocar, GM to Produce Fuel-
Cell Electric Vocational Trucks,' Trucking Info (December 11, 2023).
<a href="https://www.truckinginfo.com/10211875/autocar-and-gm-announce-electric-truck-joint-venture">https://www.truckinginfo.com/10211875/autocar-and-gm-announce-electric-truck-joint-venture</a>.
\38\ 88 FR 25926, April 27, 2023.
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Second, in enacting the 2021 BIL and the 2022 IRA laws, Congress
chose to provide significant and unprecedented

[[Page 29446]]

monetary incentives for the production and purchase of qualified ZEVs
in the HD market, as well as certain key components. These laws also
provide incentives for qualifying electric charging infrastructure and
for clean hydrogen production and refueling infrastructure, which will
further support a rapid increase in market penetration of HD ZEVs. As a
few examples, BIL provisions include $5 billion to fund the replacement
of school buses with clean and zero- or low-emission buses (EPA's
``Clean School Bus Program'') and over $5.5 billion to support the
purchase of zero- or low-emission transit buses and associated
infrastructure, with up to $7.5 billion to help build out a national
network of EV charging and hydrogen refueling infrastructure through
DOT's Federal Highway Administration (FHWA), some of which can be used
for refueling of heavy-duty vehicles.\39\ The IRA creates a tax credit
available from calendar year (CY) 2023 through CY 2032 of up to $40,000
per vehicle for vehicles over 14,000 pounds (and up to $7,500 per
vehicle for vehicles under 14,000 pounds) for the purchase of qualified
commercial clean vehicles; provides tax credits available from CY 2023
through CY 2032 (phasing down starting in CY 2030) for the production
and sale of battery cells and modules of up to $45 per kilowatt-hour
(kWh); and also provides tax credits for 10 percent of the cost of
producing applicable critical minerals (including those found in
batteries and fuel cells, provided that the minerals meet certain
specifications), when such components or minerals are produced in the
United States. The IRA also modifies an existing tax credit that
applies to alternative fuel refueling property (e.g., electric vehicle
chargers and hydrogen fueling stations) and extends the tax credit
through CY 2032; starting in CY 2023, this provision provides a tax
credit of up to 30 percent of the cost of the qualified alternative
fuel refueling property (e.g., HD BEV charging and hydrogen refueling
equipment) and up to $100,000 per item when located in low-income or
non-urban area census tracts and certain other requirements are met.
Further, the IRA includes the ``Clean Heavy-Duty Vehicles'' program,
which includes $400 million to make awards to eligible recipients/
contractors that propose to replace eligible vehicles to serve one or
more communities located in an air quality area designated pursuant to
CAA section 107 as nonattainment for any air pollutant, in fiscal year
(FY) 2022 and available through FY 2031. The IRA also includes the
``Grants to Reduce Air Pollution at Ports'' program, which appropriates
$3 billion ($750 million of which is for projects located in areas of
nonattainment for any air pollutant) in FY 2022 and available through
FY 2027, to reduce air pollution at ports. These are only a few
examples of a wide array of incentives in both laws that will help to
reduce the costs to manufacture, purchase, and operate ZEVs, thereby
bolstering their adoption in the market. See section II.E.4 of this
preamble, RIA Chapter 1, and HD GHG NPRM section I.C.2 for further
information.\40\
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\39\ While jurisdictions are not required to build stations
specifically for heavy-duty vehicles, FHWA's guidance encourages
states to consider station designs and power levels that could
support heavy-duty vehicles. U.S. Department of Transportation,
Federal Highway Administration. ``National Electric Vehicle
Infrastructure Formula Program: Bipartisan Infrastructure Law--
Program Guidance (Update)''. June 2, 2023. Available online: <a href="https://www.fhwa.dot.gov/environment/nevi/formula_prog_guid/90d_nevi_formula_program_guidance.pdf">https://www.fhwa.dot.gov/environment/nevi/formula_prog_guid/90d_nevi_formula_program_guidance.pdf</a>.
\40\ 88 FR 25926, April 27, 2023.
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Third, there have been multiple actions by states to accelerate the
adoption of HD ZEV technologies. As of February 15, 2023, the State of
California and ten other states have adopted the Advanced Clean Trucks
(ACT) program that includes a manufacturer requirement for zero-
emission truck sales, and CAA section 177 empowers additional states to
adopt California's ACT program if they wish.\41\ \42\ \43\ The ACT
program requires that ``manufacturers who certify Class 2b-8 chassis or
complete vehicles with combustion engines would be required to sell
zero-emission or near-zero emission such as plug-in hybrid trucks as an
increasing percentage of their annual [state] sales from 2024 to
2035.''\44\ \45\ In addition, 17 states plus the District of Columbia
and Quebec (in Canada) have signed a Memorandum of Understanding
establishing goals to support widespread electrification of the HD
vehicle market.\46\ See RIA Chapter 1 and HD GHG NPRM section I.C.3 for
further information.\47\ While independent of EPA's section 202
standards, these efforts nonetheless indicate the interest at the state
level for increasing electrification of the HD vehicle market.
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\41\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available
at: <a href="https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf">https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf</a>.
\42\ Oregon, Washington, New York, New Jersey, and Massachusetts
adopted ACT beginning in MY 2025 while Vermont and New Mexico
adopted ACT beginning in MY 2026, and Colorado, Maryland, and Rhode
Island in MY 2027.
\43\ California Air Resources Board. States that have Adopted
California's Vehicle Regulations. Available at: <a href="https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/states-have-adopted-californias-vehicle-regulations">https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/states-have-adopted-californias-vehicle-regulations</a>; See also, e.g., Final
Advanced Clean Truck Amendments, 1461 Mass. Reg. 29 (January 21,
2022) (Massachusetts).; Medium- and Heavy-Duty (MHD) Zero Emission
Truck Annual Sales Requirements and Large Entity Reporting, 44 N.Y.
Reg. 8 (January 19, 2022) (New York), available at <a href="https://dos.ny.gov/system/files/documents/2022/01/011922.pdf">https://dos.ny.gov/system/files/documents/2022/01/011922.pdf</a>.; Advanced
Clean Trucks Program and Fleet Reporting Requirements, 53 N.J.R.
2148(a) (December 20, 2021) (New Jersey), available at <a href="https://www.nj.gov/dep/rules/adoptions/adopt_20211220a.pdf">https://www.nj.gov/dep/rules/adoptions/adopt_20211220a.pdf</a> (pre-publication
version); Clean Trucks Rule 2021, DEQ-17-2021 (November 17, 2021),
available at <a href="http://records.sos.state.or.us/ORSOSWebDrawer/Recordhtml/8581405">http://records.sos.state.or.us/ORSOSWebDrawer/Recordhtml/8581405</a> (Oregon); Low emission vehicles, Wash. Admin.
Code 173-423-070 (2021), available at <a href="https://app.leg.wa.gov/wac/default.aspx?cite=173-423-070">https://app.leg.wa.gov/wac/default.aspx?cite=173-423-070</a>; 2021 Wash. Reg. 587356 (December 15,
2021); Wash. Reg. 21-24-059 (November 29, 2021) (amending Wash.
Admin. Code 173-423 and 173-400), available at <a href="https://lawfilesext.leg.wa.gov/law/wsrpdf/2021/24/21-24-059.pdf">https://lawfilesext.leg.wa.gov/law/wsrpdf/2021/24/21-24-059.pdf</a>
(Washington); ``More electric, hydrogen, and hybrid passenger and
commercial vehicles coming to New Mexico starting in 2026'' <a href="https://www.env.nm.gov/wp-content/uploads/2023/11/2023-11-16-COMMS-More-electric-hydrogen-and-hybrid-passenger-and-commercial-vehicles-coming-to-New-Mexico-starting-in-2026-Final.pdf">https://www.env.nm.gov/wp-content/uploads/2023/11/2023-11-16-COMMS-More-electric-hydrogen-and-hybrid-passenger-and-commercial-vehicles-coming-to-New-Mexico-starting-in-2026-Final.pdf</a>.
\44\ California Air Resources Board, Advanced Clean Trucks Fact
Sheet (August 20, 2021), available at <a href="https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet">https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet</a>. See also
California Air Resources Board, Final Regulation Order--Advanced
Clean Trucks Regulation. Filed March 15, 2021. Available at: <a href="https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf">https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf</a>.
\45\ EPA granted the ACT rule waiver requested by California
under CAA section 209(b) on March 30, 2023. 88 FR 20688, April 6,
2023 (signed by the Administrator on March 30, 2023).
\46\ Multi-State MOU (July 2022), available at <a href="https://www.nescaum.org/documents/multi-state-medium-and-heavy-duty-zev-action-plan.pdf">https://www.nescaum.org/documents/multi-state-medium-and-heavy-duty-zev-action-plan.pdf</a>. States include California, Colorado, Connecticut,
Hawaii, Maine, Maryland, Massachusetts, Nevada, New Jersey, New
York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont,
Virginia, and Washington.
\47\ 88 FR 25926, April 27, 2003.
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ii. Development of a HD GHG Phase 3 Program
Recognizing the need for additional GHG reductions from HD vehicles
and the growth of advanced HD vehicle technologies, including ZEV
technologies, EPA believes this increased application of technologies
in the HD sector that prevent and control GHG emissions from HD
vehicles presents an opportunity to strengthen GHG standards, which can
result in significant reductions in heavy-duty vehicle emissions. Based
on an in-depth analysis of the potential for the development and
application of such technologies in the HD sector, in April 2023 we
proposed in the HD GHG Phase 3 NPRM GHG standards for MYs 2027 through
2032 and later HD vehicles more stringent than the Phase 2 GHG
standards.\48\ The proposed Phase 3

[[Page 29447]]

standards included (1) revised GHG standards for many MY 2027 HD
vehicles, with a subset of standards that we did not propose to change,
and (2) new GHG standards starting in MYs 2028 through 2032, of which
the MY 2032 standards would remain in place for MYs 2033 and later. In
the HD GHG Phase 3 NPRM, EPA requested comment on setting more
stringent GHG standards beyond the MYs proposed for MYs 2033 through
2035. EPA also requested comment on an alternative set of GHG standards
for MYs 2027 through 2032 that were less stringent than those proposed
yet still more stringent than the Phase 2 standards. We also requested
comment, including supporting data and analysis, as to whether there
are certain market segments, such as heavy-haul vocational trucks or
long-haul tractors which may require significant energy content for
their intended use, for which it may be appropriate to set standards
less stringent than the alternative for the specific corresponding
regulatory subcategories in order to provide additional lead time to
develop and introduce ZEV or other low emission HD vehicle technologies
for those specific vehicle applications. In consideration of the
environmental impacts of HD vehicles and the need for significant
emission reductions, we also requested comment on a more stringent set
of GHG standards starting in MYs 2027 through 2032 whose values would
go beyond the proposed standards, such as values that would be
comparable to the stringency levels in California's ACT program, values
in between these proposed standards and those that would be comparable
to stringency levels in ACT, and values beyond those that would be
comparable to stringency levels in ACT, such as stringency levels
comparable to the 50-60 percent ZEV adoption range represented by the
publicly stated goals of several major original equipment manufacturers
(OEMs) for 2030.49 50 51 52 53 Finally, after considering
the state of the HD market, new incentives, and comments received on
the HD2027 NPRM regarding Advanced Technology Credit Multipliers
(``credit multipliers'') under the HD GHG Phase 2 program, EPA proposed
to end credit multipliers for BEVs and PHEVs one year earlier than
provided in the existing HD GHG Phase 2 program (i.e., no credit
multipliers for BEVs and PHEVs in MYs 2027 and later).
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\48\ 88 FR 25926, April 27, 2003.
\49\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available
at: <a href="https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf">https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf</a>.
\50\ Scania, `Scania's Electrification Roadmap,' Scania Group,
November 24, 2021, <a href="https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html">https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html</a>.
\51\ AB Volvo, `Volvo Trucks Launches Electric Truck with Longer
Range,' Volvo Group, January 14, 2022, <a href="https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html">https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html</a>.
\52\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean
for North America?,' Trucking Info (November 11, 2021). <a href="https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america">https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america</a>.
\53\ Navistar presentation at the Advanced Clean Transportation
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
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The final standards and requirements we are promulgating in this
action are based on further consideration of the data and analyses
included in the proposed rule, additional supporting data and analyses
we conducted in support of this final rule, and consideration of the
extensive public input EPA received in response to the proposed rule.
These considerations and analyses are described in detail throughout
this preamble, the RIA, and the Response to Comments document (RTC)
accompanying this preamble, found in the docket to this rule (EPA-HQ-
OAR_2022-0985). In the remainder of this section, we summarize the
final program and key changes from the proposal in the section
immediately following, followed by a summary of the impacts of the
standards, EPA's statutory authority, and coordination with partners
and stakeholders.

C. Overview of the Final Regulatory Action

EPA carefully considered input from stakeholders, as discussed
throughout this preamble and in our accompanying RTC. This preamble
section contains an overview of stakeholders' key concerns, an overview
of how EPA has adjusted approaches in the final rule after further
consideration, and an overview of the final standards. More detailed
discussion of the final rule and key comments and EPA's consideration
of them is included in the rest of the preamble, and the RTC contains
detailed comment excerpts, comment summaries and EPA's responses.
1. Overview of Stakeholder Positions on Standards' Stringency
EPA's HD GHG Phase 3 Proposed Rule was signed by Administrator
Michael Regan on April 11, 2023, and published in the Federal Register
on April 27, 2023 (88 FR 25926). EPA held two days of public hearings
on May 2 and 3, 2023, and the public comment period ended on June 16,
2023. EPA received over 172,000 comments in the public docket, of which
over 230 had detailed comments. In addition, 185 people testified over
the two-day public hearing period and EPA held dozens of follow-up
meetings with a broad range of stakeholders including environmental
justice (EJ) stakeholders, labor unions, manufacturers, fleets, truck
dealerships, power sector-related organizations, environmental and
public health non-governmental organizations (NGOs), and states.
Memoranda regarding these meetings are in the rulemaking docket.
We note that very generally, in comments on the NPRM stakeholders
demonstrated strong and opposing views on major issues, including:
stringency of the standards, the rate of increasing stringency of the
standards year over year from early model years to later model years,
availability and readiness of future ZEV infrastructure, availability
of minerals critical to battery production and assurance of supply
chain readiness for those materials, impact of the IRA tax credits, and
key elements of EPA's analysis such as technical feasibility, costs of
ZEV technologies, and other elements. For example, many commenters
representing environmental NGOs, public health NGOs, environmental
justice organizations, front-line communities and some state and local
governments supported standards that would be more stringent than our
proposed standards in terms of both stringency level and year-over-year
pacing of increased stringency, with many supporting standards
comparable with stringency levels used in California's ACT program, and
some supporting even higher levels (e.g., 100 percent ZEVs by 2035). A
number of these commenters provided EPA with technical analyses and
data to support their view that infrastructure necessary to support
ZEVs is projected to be ready within the rule time frame, and that
there would be sufficient critical minerals as well, such that
standards more stringent than those EPA proposed are feasible.
Generally, many of these commenters included various technical
submissions on how EPA purportedly underestimated ZEV feasibility and
adoption, underestimated the impacts of the BIL and IRA in contributing
to the further development of the ZEV market, and overestimated ZEV-
related costs--which, they argue when accounted for, would have led EPA
to consider standards that are more stringent than those proposed.
Citing the public health and environmental needs for pollutant
reductions that can be achieved with ZEV technology, especially in
places such as fence-line and overburdened

[[Page 29448]]

communities, many of these commenters also suggested more stringent or
faster pacing of standards for specific subcategories of vehicles such
as tractors, school/transit buses, etc. These commenters generally
supported EPA's proposed elimination of credit multipliers for BEVs and
PHEVs one year earlier than provided in the existing HD GHG Phase 2
program and some asked EPA to finalize even further limitations of the
credit multipliers. EPA requested comment on what, if any, additional
information and data EPA should consider collecting and monitoring
during the implementation of the Phase 3 standards, including with
respect to the important issues of refueling and charging
infrastructure for ZEVs; on this topic, this general set of commenters
expressed strong opposition to any action EPA would take to create a
regulatory self-adjusting link between such monitoring and amending
standards to decrease their stringency.
In stark contrast, commenters representing many truck
manufacturers, owners, fleets, and dealers, along with some labor
groups and some states, voiced support for standards less stringent
than even the lowest levels of stringency on which we requested comment
in the proposal, i.e., considerably less stringent than the alternative
presented in the HD GHG Phase 3 NPRM. A few commenters representing
certain truck manufacturers supported the proposed MY 2032 standards
but were concerned about the stringency of the early model year
standards. Many commenters representing truck manufacturers, owners,
fleets, and dealers opposed any revision to the model year 2027
standards and, even at lower overall stringency levels, voiced support
for a much more gradual pace of increasing stringency of the
standards--with some suggesting standards not commencing until model
years 2030 and 2033. Part of their argument is that Phase 2 established
GHG vehicle and engine standards for MY 2027 which are challenging, and
manufacturers have made compliance plans to meet those standards. In
their view, amending those MY 2027 standards cuts against these plans.
These commenters also state that, although manufacturers intend to
introduce ZEVs in larger numbers over time (and have invested billions
of dollars already to do so),\54\ there is too much uncertainty
regarding availability of supporting electrification (or hydrogen)
infrastructure, critical minerals, and supply chains to increase the
stringency of the MY 2027 standards. Some of these commenters further
asserted that the CAA mandates four years of lead time and three years
of standard stability for revisions of heavy-duty vehicle and engine
emissions standards for any pollutant, including GHGs, citing CAA
section 202(a)(3)(B) and (C). A number of these commenters provided EPA
with technical analyses and data to support their view that ZEV
infrastructure would fall far short of what would be needed to support
ZEV adoption levels presented in the potential compliance pathway on
which the proposed standards were predicated, and that critical
minerals would remain a limitation to ZEV growth in the HD sector.
Generally, many of these commenters included various technical
submissions on how EPA purportedly overestimated ZEV adoption,
overestimated the impacts of the BIL and IRA in contributing to the
further development of the ZEV market, and underestimated ZEV-related
costs. Citing the concerns that unexpectedly slow infrastructure
development could impact manufacturers' ability to comply with Phase 3,
a number of these commenters called for EPA to conduct extensive
monitoring of post-rule infrastructure buildout and further suggested
that EPA establish mechanisms for the standards to self-adjust to
become less stringent if the infrastructure deployment was found to be
insufficient. These commenters generally opposed EPA's proposed
elimination of credit multipliers for BEVs and PHEVs one year earlier
than provided in the existing HD GHG Phase 2 program and some asked for
an extension of certain technology credit multipliers beyond MY 2027.
The commenters representing certain truck manufacturers who supported
the proposed MY 2032 standards but expressed concern with early model
year standards more specifically cited the early MY standards as being
too stringent and progressing in stringency at too steep of an increase
given uncertainties associated with sufficiency of supportive
electrical infrastructure in the program's initial years.
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\54\ See, for example, comments from the Truck and Engine
Manufactures (EMA), EPA-HQ-OAR-2022-0985-2668-A1.
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Commenters from the petroleum industry and others challenged EPA's
authority to issue the proposed standards at all.\55\ Terming the
proposal a ``ZEV mandate,'' they asserted that the question of whether
EPA has authority to issue standards reflecting performance of
different vehicle powertrains under the CAA implicates the Major
Questions Doctrine, and assert that CAA section 202(a) does not contain
the correspondingly requisite clear statement authorizing EPA to do so.
These commenters also assert that EPA predicating the proposed
standards on averaging under the ABT program, such that vehicles with
zero tailpipe emissions purportedly must be averaged with emitting
vehicles for manufacturers to be able to meet the standards, is beyond
EPA's authority. These commenters stated they were asserting this lack
of authority both because, in their view, such averaging implicates the
Major Questions Doctrine and EPA lacks a clear statement of
authorization from Congress to do so, and because, in their view,
averaging and the ABT program are inconsistent with CAA statutory
provisions for certification, warranty, and civil penalties, all of
which they state contemplate individualized determinations, not
determinations on average.
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\55\ See, for example, comments from American Free Enterprise
Chamber of Commerce, EPA-HQ-OAR-2022-0985-1660.
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EPA heard from some representatives from the heavy-duty vehicle
manufacturing industry both optimism regarding the heavy-duty
industry's ability to produce ZEV applications in future years at high
volume, but also concern that a slow deployment of electrification
infrastructure (magnitude of potential upgrades to the electrical
distribution system necessary to support depot charging, and public
charging infrastructure) could slow the growth of heavy-duty ZEV
adoption, and that this may present challenges for vehicle
manufacturers' ability to comply with EPA HD GHG Phase 3 standards.
Concerns about uncertainties relating to supporting infrastructure
included: limited nature of today's HD charging infrastructure, the
magnitude of buildout of electrical distribution systems necessary to
support (BEVs especially in the early model years of the program), the
cost and length of time needed for infrastructure buildout, a chicken-
egg dynamic whereby prospective BEV purchasers will not act until
assured of adequate supporting infrastructure, and utilities will not
build out the infrastructure without assurance of demand, and the lack
of availability of hydrogen infrastructure. Some commenters further
noted that fleets and owners will be reluctant to buy, or may cancel
orders for, ZEVs, if/when ZEV infrastructure is a barrier. Commenters
raised these concerns on top of those voiced by some

[[Page 29449]]

manufacturers that more lead time is needed for product development,
especially given uncertainty regarding purchasers' decisions, noting
customer reluctance to utilize an unfamiliar technology, and asserted
barriers associated with limited range and cargo penalty due to need
for large batteries. These comments are discussed in more detail in
section II and in Chapters 6, 7, and 8 of the RTC.
2. Overview of Consideration of Key Concerns From Stakeholders and the
Final Standards
i. Improvements to EPA's Technical and Infrastructure Analyses
EPA considered the wide-ranging perspectives, data and analyses
submitted in support of stakeholder positions, as well as new studies
and data that became available after the proposal. As a consequence,
EPA believes that the technical analyses supporting the final rule are
improved and more robust. For example, in our technology analysis tool
(HD TRUCS, see section II of this preamble) we have adjusted our
battery and other component cost assumptions, revised vehicle
efficiency values, refined the battery sizing determination, added
public charging, increased depot charging costs and diesel prices,
added Federal excise tax (FET) and state tax, increased charging
equipment installation costs, included more charger sharing, and
increased hydrogen fuel costs. Based on consideration of feedback from
commenters, in HD TRUCS we also adjusted the technology payback
schedule using a publicly-available model. After consideration of
comment (and as EPA signaled at proposal), we also have adjusted our
analytical baseline by increasing the amount of ZEV adoption in our
``no-action'' scenario (i.e., without this rule) to reflect ZEV
adoption required by California's ACT program, as well as further ZEV
adoption in other states. These and many more updates described
throughout this preamble and the RIA strengthen the analyses supporting
the final standards.
We also improved our analysis of infrastructure readiness and cost
by including projected needed upgrades to the electricity distribution
system under our potential compliance pathway in our analysis. As
described in section II of this preamble, our improved analysis of
charging infrastructure needs and costs supports the feasibility of the
future growth of ZEV technology of the magnitude EPA is projecting in
this final rule's potential compliance pathway's technology packages.
EPA further notes that we recognize that charging and refueling
infrastructure for BEVs and FCEVs is necessary for success in the
increasing development and adoption of those vehicle technologies
(further discussed in section II and RIA Chapters 1 and 2). There are
significant efforts already underway to develop and expand heavy-duty
vehicle electric charging and hydrogen refueling infrastructure. The
U.S. government is making large investments through the BIL and the
IRA, as discussed in more detail in RIA Chapter 1.3 (e.g., this
includes a tax credit for charging or hydrogen refueling infrastructure
as well as billions of additional dollars for programs that could help
fund charging infrastructure if purchased alongside an electric
vehicle).<INF>56 57</INF> Private investments will also play a critical
role in meeting future infrastructure needs, as discussed in more
detail in RIA Chapter 1.6. We expect many BEV or fleet owners to invest
in depot-based charging infrastructure (see RIA Chapter 2.6 for
information on our analysis of charging needs and costs).
Manufacturers, charging network providers, energy companies and others
are also investing in high-power public or other stations that will
support public charging. For example, Daimler Truck North America is
partnering with electric power generation company NextEra Energy
Resources and BlackRock Renewable Power to collectively invest $650
million to create a nationwide U.S. charging network for commercial
vehicles with a later phase of the project also supporting hydrogen
fueling stations.\58\ Volvo Group and Pilot announced their intent to
offer public charging for medium- and heavy-duty BEVs at priority
locations throughout the network of 750 Pilot and Flying J North
American truck stops and travel plazas.\59\ A recent assessment by
Atlas Public Policy estimated that $30 billion in public and private
investments had been committed as of the end of 2023 specifically for
charging infrastructure for medium- and heavy-duty BEVs.\60\
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\56\ Inflation Reduction Act, Public Law 117-169 (2022).
\57\ Bipartisan Infrastructure Law, Public Law 117-58, 135 Stat.
429 (2021).
\58\ NextEra Energy. News Release: ``Daimler Truck North
America, NextEra Energy Resources and BlackRock Renewable Power
Announce Plans to Accelerate Public Charging Infrastructure for
Commercial Vehicles Across The U.S.'' January 31, 2022. Available
online: <a href="https://newsroom.nexteraenergy.com/news-releases?item=123840">https://newsroom.nexteraenergy.com/news-releases?item=123840</a>.
\59\ Adler, Alan. ``Pilot and Volvo Group add to public electric
charging projects.'' FreightWaves. November 16, 2022. Available
online: <a href="https://www.freightwaves.com/news/pilot-and-volvo-group-add-to-public-electric-charging-projects">https://www.freightwaves.com/news/pilot-and-volvo-group-add-to-public-electric-charging-projects</a>.
\60\ Lepre, Nicole. ``Estimated $30 Billion Committed to Medium-
and Heavy-Duty Charging Infrastructure in the United States.'' Atlas
Public Policy. EV Hub. January 26, 2024. Available online:<a href="https://www.atlasevhub.com/data_story/estimated-30-billion-committed-to-medium-and-heavy-duty-charging-infrastructure-in-the-united-states">https://www.atlasevhub.com/data_story/estimated-30-billion-committed-to-medium-and-heavy-duty-charging-infrastructure-in-the-united-states</a>.
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Domestic manufacturing capacity is also increasing. Department of
Energy (DOE) estimates over $500 million in announced investments have
been made to support the domestic manufacturing of BEV charging
equipment, with companies planning to produce more than one million BEV
chargers in the U.S. each year.61 62 Workforce development
is on the rise. For example, the Siemens Foundation announced they will
invest $30 million over ten years focused on the EV charging
sector.\63\ As of early 2023, about 20,000 people had been certified
through a national Electric Vehicle Infrastructure Training
Program.64 65 These important early actions and market
indicators suggest strong growth in charging and refueling ZEV
infrastructure in the coming years. See RIA Chapters 1.3 and 1.6 for
more information on public and private investments in charging
infrastructure.
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\61\ DOE, ``Building America's Clean Energy Future''. 2024.
Available online: <a href="https://www.energy.gov/invest">https://www.energy.gov/invest</a>.
\62\ U.S. Department of Energy, Vehicle Technologies Office.
``FOTW #1314, October 30, 2023: Manufacturers Have Announced
Investments of Over $500 million in More Than 40 American-Made
Electric Vehicle Charger Plants''. October 30, 2023. Available
online:<a href="https://www.energy.gov/eere/vehicles/articles/fotw-1314-october-30-2023-manufacturers-have-announced-investments-over-500">https://www.energy.gov/eere/vehicles/articles/fotw-1314-october-30-2023-manufacturers-have-announced-investments-over-500</a>.
\63\ Lienert, Paul. ``Siemens to invest $30 million to train
U.S. EV charger technicians''. Reuters. September 6, 2023. Available
online: <a href="https://www.reuters.com/business/autos-transportation/siemens-invest-30-million-train-us-ev-charger-technicians-2023-09-06">https://www.reuters.com/business/autos-transportation/siemens-invest-30-million-train-us-ev-charger-technicians-2023-09-06</a>.
\64\ IBEW. ``IBEW Members Answer Call for National Electric
Vehicle Program''. April 2023. Available online:<a href="https://www.ibew.org/articles/23ElectricalWorker/EW2304/Politics.0423.html">https://www.ibew.org/articles/23ElectricalWorker/EW2304/Politics.0423.html</a>.
\65\ The White House. ``FACT SHEET: Biden Harris Administration
Announces New Standards and Major Progress for a Made-in-America
National Network of EV Chargers.'' February 15, 2023. Available
online:<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/15/fact-sheet-biden-harris-administration-announces-new-standards-and-major-progress-for-a-made-in-america-national-network-of-electric-vehicle-chargers">https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/15/fact-sheet-biden-harris-administration-announces-new-standards-and-major-progress-for-a-made-in-america-national-network-of-electric-vehicle-chargers</a>.
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ii. Summary of Final Standards
Our improved analyses for the final rule continue to show that it
is appropriate and feasible to revise the MY 2027 standards promulgated
under the HD GHG Phase 2 program for most vehicles, and to set new
standards for MYs 2028 through 2032 with year-over-

[[Page 29450]]

year increases in stringency. In consideration of the opposing concerns
raised by commenters, EPA believes it is critical to balance the public
health and welfare need for GHG emissions reductions over the long term
with the time needed for product development and manufacturing as well
as infrastructure development in the near term. After further
consideration of the lead times necessary to support both the vehicle
technologies' development and deployment and the infrastructure needed,
as applicable, under the potential compliance pathway's technology
packages described in section ES.C.2.iii, EPA is finalizing GHG
emission standards for heavy-duty vehicles that, compared to the
proposed standards, include less stringent standards for all vehicle
categories in MYs 2027, 2028, 2029, and 2030. The final standards
increase in stringency at a slower pace through MYs 2027 to 2030
compared to the proposal, and day cab tractor standards start in MY
2028 and heavy heavy-duty vocational vehicles start in MY 2029 (we
proposed Phase 3 standards for day cabs and heavy heavy-duty vocational
vehicles starting in MY 2027). As proposed, the final standards for
sleeper cabs start in MY 2030 but are less stringent than proposed in
that year and in MY 2031, and equivalent in stringency to the proposed
standards in MY 2032. Our updated analyses for the final rule show that
model years 2031 and 2032 GHG standards in the range of those we
requested comment on in the HD GHG Phase 3 NPRM are feasible and
appropriate considering feasibility, lead time, cost, and other
relevant factors as described throughout this preamble and particularly
section II. Specifically, we are finalizing MY 2031 standards that are
on par with the proposal for light and medium heavy-duty vocational
vehicles and day cab tractors. Heavy heavy-duty vocational vehicle
final standards are less stringent than proposed for all model years,
including 2031 and 2032. For MY 2032, we are finalizing more stringent
standards than proposed for light and medium heavy-duty vocational
vehicles and day cab tractors. Our assessment is that setting this
level of standards starting in MY 2032 achieves meaningful GHG emission
reductions at reasonable cost, and that heavy-duty vehicle
technologies, charging and refueling infrastructure, and critical
minerals and related supply chains will be available to support this
level of stringency (as many commenters agreed with and provided
technical information to support). Our assessment of the final program
as a whole is that it takes a balanced and measured approach while
still applying meaningful requirements in MY 2027 and later to reducing
GHG emissions from the HD sector.
A summary of the final standards can be found in this Executive
Summary, with more details on the standards themselves and our
supporting analysis found in section II and Chapter 2 of the RIA. The
standards for MY 2027 through 2032 and later are presented in Table ES-
1 and Table ES-2 with additional tables showing the final custom
chassis and heavy-haul tractor standards in section II.F.\66\ When
compared to the existing Phase 2 standards, the Phase 3 standards begin
in MY 2027 with a 13 percent increase in the stringency of the medium
heavy-duty vocational vehicle standards and a 17 percent increase in
the light heavy-duty vocational vehicle standards, the Phase 3 day cab
tractor standards begin in MY 2028 with an 8 percent increase in
stringency over the Phase 2 standards, the heavy heavy-duty vocational
standards begin in MY 2029 with a 13 percent increase over Phase 2, and
the sleeper cab tractor standards begin in MY 2030 with a 6 percent
increase over Phase 2. Each vehicle category then increases in
stringency each year, through MY 2032, at which time compared to the
Phase 2 program the light heavy-duty vocational standards are a 60
percent increase in stringency of the CO<INF>2</INF> standard, the
medium heavy-duty vocational vehicle standards are a 40 percent
increase, the day cab standards are a 40 percent increase, the heavy
heavy-duty vocational standards are a 30 percent increase, and the
sleeper cab standards are a 25 percent increase in the stringency of
the standards. As described in section II of this preamble, our
analysis shows that the final Phase 3 standards, including revisions to
HD GHG Phase 2 CO<INF>2</INF> standards for MY 2027 and the new,
progressively more stringent numeric values of the CO<INF>2</INF>
standards starting in MYs 2028 through 2032, are feasible and
appropriate considering feasibility, lead time, costs, and other
relevant factors.
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\66\ See regulations 40 CFR 1037.105 and 1037.106.
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Table ES-1 MY 2027 through 2032 and Later Vocational Vehicle
CO<INF>2</INF> Emission Standards (grams/ton-mile) by Regulatory
Subcategory (with Phase 2 2024 through 2026 Standards for Reference)

[[Page 29451]]

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[GRAPHIC] [TIFF OMITTED] TR22AP24.002

[[Page 29452]]

iii. Updated Technology Packages for Example Potential Compliance
Pathways
The standards do not mandate the use of a specific technology, and
EPA anticipates that a compliant fleet under the standards would
include a diverse range of HD motor vehicle technologies (e.g.,
transmission technologies, aerodynamic improvements, engine
technologies, hybrid technologies, battery electric powertrains,
hydrogen fuel cell powertrains, etc.). The technologies that have
played (and that the Phase 2 rule projected would play) a fundamental
role in meeting the Phase 2 GHG standards will continue to play an
important role going forward, as they remain key to reducing the GHG
emissions of HD vehicles powered by internal combustion engines. In our
assessment that supports the appropriateness and feasibility of these
final standards, we developed projected technology packages for
potential compliance pathways that could be used to meet each of the
final standards.\67\ Because our standards are technology neutral and
there are flexibilities built into the ABT program, there are many
variations in the exact mix of technologies manufacturers can use to
meet the standards, and this mix can include technologies that EPA has
not envisioned. We have projected a few compliance pathways with
technology packages that are purposely different. One example potential
compliance pathway's projected technology package includes a mix of HD
motor vehicle technologies that prevent and control GHG emissions,
including technologies for vehicles with ICE and ZEV technologies
(Table ES-3). In Table ES-4, we present another example compliance
pathway's technology package that does not include ZEVs but does
include a suite of GHG-reducing technologies for vehicles with ICE
ranging from: ICE improvements in engine, transmission, drivetrain,
aerodynamics, and tire rolling resistance; the use of lower carbon
fuels (Compressed Natural Gas (CNG)/Liquified Natural Gas (LNG));
hybrid powertrains (Hybrid Electric Vehicles (HEV) and Plug-in Hybrid
Electric Vehicles (PHEV)); and hydrogen-fueled ICE (H2-ICE). Except for
H2-ICE, these technologies exist today and continue to evolve to
improve their CO<INF>2</INF> emissions reductions. To demonstrate
feasibility and project emissions impacts, costs, benefits, etc. in
this final rule, we present a detailed analysis of the compliance
pathway represented by the technology packages shown in Table ES-3,
which we believe is one reasonable pathway. Details on several
additional example potential technology compliance pathways we
considered can be found in section II.F.4 and RIA Chapter 2.11, and
details on our projected technology mix in a ``reference'' scenario
that represents the United States without the final standards can be
found in section V and RIA Chapter 4. EPA emphasizes that its standards
are performance-based, and manufacturers are not required to use
particular technologies to meet the standards. Tables ES-3 and ES-4 are
just two examples of potential technology compliance pathways and do
not reflect a requirement of how manufacturers will ultimately meet the
standards finalized in this rule.
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\67\ As further explained in sections I and II (including II.G),
EPA is required by law to assess feasibility and compliance costs of
standards issued pursuant to CAA section 202(a), and thus
practically must demonstrate a potential means of complying with the
standards in order to do so (e.g., a potential compliance pathway's
projected technology packages that manufacturers may, but are not
required, to utilize). Long-standing case law regarding EPA's CAA
section 202(a) authority supports the necessity of this approach.
See NRDC v. EPA, 655 F. 2d 321, 332 (D.C. Cir. 1981) (indicating
that EPA is to state the engineering basis underlying a section 202
standard (i.e., the technology package which could be utilized to
meet a standard), indicate potential impediments to that technology
package's feasibility, and plausibly explain how those impediments
could be resolved within the lead time afforded).
[GRAPHIC] [TIFF OMITTED] TR22AP24.003

[[Page 29453]]

[GRAPHIC] [TIFF OMITTED] TR22AP24.004

iv. Revisions to Advanced Technology Vehicle Credit Multipliers
Along with retaining EPA's historical approach to setting
performance-based standards and providing manufacturers flexibility in
meeting the standards by allowing them to choose their own mix of
vehicle technologies, we are retaining and did not reopen the general
structure of the Averaging, Banking and Trading (ABT) program, which
allows manufacturers further flexibility in meeting standards using
averaging provisions. In other words, consistent with EPA's practice
for over fifty years of setting emissions standards for HD vehicles, we
are retaining the existing regulatory scheme that does not require each
vehicle to meet the standards individually and instead allows
manufacturers to meet the standards on average within each weight class
of their fleet.\68\ As described in section III.A of this preamble, we
are finalizing updates to the advanced technology incentives in the ABT
program for HD GHG Phase 2 for PHEVs, BEVs, and FCEVs. As further
explained in section III, after consideration of comments, we are
retaining the advanced technology vehicle credit multipliers for PHEV,
BEV, and FCEV technologies through MY 2027, consistent with the
previously promulgated HD GHG Phase 2 program. In order to ensure
meaningful vehicle GHG emission reductions under the Phase 3 program,
we are limiting the period over which manufacturers can use the
multiplier portion of credits earned from advanced technologies.
However, in recognition that the final HD GHG Phase 3 standards will
require meaningful investments from manufacturers to reduce GHG
emissions from HD vehicles, we requested comment on and are finalizing
certain additional transitional flexibilities to assist manufacturers
in the implementation of Phase 3. See section III of this preamble for
further details.
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\68\ As further described in section III, as has been the case
since the ABT program was first promulgated, although manufacturers
choosing to use ABT as a compliance strategy must assure that their
vehicle families comply with the standard on average, each
individual vehicle is certified to an individual limit (called a
Family Emission Limit) as well.
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v. Commitment to Engagement and Monitoring Elements of Phase 3
Compliance and Supporting Technology and Infrastructure Development
As we noted in the HD GHG Phase 3 NPRM, EPA has a vested interest
in monitoring industry's performance in complying with mobile source
emission standards, including the highway heavy-duty industry. In fact,
EPA already monitors and reports out industry's performance through a
range of approaches, including publishing industry compliance reports
(such as has been done during the heavy-duty GHG Phase 1 program).\69\
After consideration of the divergent comments received on the topic of
collecting and monitoring ZEV infrastructure during the implementation
of the Phase 3 standards, as further described in section II, we are
committing in this final rule to actively engage and monitor both
manufacturer compliance and the major elements of heavy-duty technology
and supporting infrastructure development. EPA, in consultation with
other Federal agencies, will issue periodic reports reflecting
collected information. These reports will track HD electric charging
and hydrogen refueling infrastructure buildout throughout Phase 3
implementation as well as an evaluation of zero and low GHG-emitting HD
vehicle production and the evolution of the HD battery production and
material supply, including supply of critical minerals. Based on these
reports, as appropriate and consistent with CAA section 202(a)
authority, EPA may decide to issue guidance documents, initiate a
rulemaking to consider modifications to the Phase 3 rule, or make no
changes to the Phase 3 rule program. We are not finalizing any
mechanisms for including a self-adjusting linkage between the
standards' stringency and ZEV infrastructure as requested by some
industry stakeholders. Further details on EPA's Phase 3 rule
implementation engagement, data collection and monitoring and reporting
commitments can be found in section II.B.2 of this preamble.
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\69\ See EPA Reports EPA-420-R-21-001B covering Model Years
2014-2018, and EPA report EPA-420-R-22-028B covering Model Years
2014--2020, available online at <a href="https://www.epa.gov/compliance-and-fuel-economy-data/epa-heavy-duty-vehicle-and-engine-greenhouse-gas-emissions">https://www.epa.gov/compliance-and-fuel-economy-data/epa-heavy-duty-vehicle-and-engine-greenhouse-gas-emissions</a>.
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D. Impacts of the Standards

Our estimated emission impacts, average per-vehicle costs,
monetized program costs, and monetized benefits of the final program
are summarized in this section and detailed in sections IV through VIII
of the preamble and Chapters 3 through 8 of the RIA. EPA notes that,
consistent with CAA section 202(a)(1) and (2), in evaluating potential
GHG standards, we carefully weigh the statutory factors, including GHG
emissions impacts of the GHG standards, and the feasibility of the
standards (including cost of compliance and available lead time).
We monetize benefits of the GHG standards and evaluate costs in
part to

[[Page 29454]]

better enable a comparison of costs and benefits pursuant to E.O.
12866, but we recognize that there are benefits that we are currently
unable to fully quantify and monetize. EPA's consistent practice has
been to set standards to achieve improved air quality consistent with
CAA section 202(a), and not to rely on cost-benefit calculations, with
their uncertainties and limitations, in identifying the appropriate
standards. Nonetheless, our conclusion that the estimated benefits
exceed the estimated costs of the final program reinforces our view
that the GHG standards represent an appropriate weighing of the
statutory factors and other relevant considerations.
Our analysis of emissions impacts accounts for downstream
emissions, i.e., from emission processes such as engine combustion,
engine crankcase exhaust, vehicle evaporative emissions, vehicle
refueling emissions, and brake and tire wear. Vehicle technologies
would also affect emissions from upstream sources, i.e., emissions that
are attributable to a vehicle's operation but not the vehicle itself,
for example, electricity generation and the refining and distribution
of fuel. Our analyses include emissions impacts from electrical
generating units (EGUs) and refinery emission impacts.\70\
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\70\ We are continuing and are not reopening the existing
approach taken in both HD GHG Phase 1 and Phase 2, that compliance
with the vehicle exhaust CO<INF>2</INF> emission standards is based
solely on CO<INF>2</INF> emissions from the vehicle. Indeed, all of
our vehicle emission standards are based on vehicle emissions.
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The estimated impacts summarized in this section are based on our
projection of a scenario that represents the United States with the
final standards in place, relative to our projection of a ``reference''
scenario that represents the United States without the final standards.
For a similar estimate for the alternative standards, please see
preamble section IX. As suggested by many commenters, and as EPA
suggested at proposal (88 FR 25989), we updated our reference scenario
between the proposal and this final rule to include California's ACT
program implementation in California and in the states that have
adopted the ACT rule under CAA section 177, thus increasing the amount
of ZEV technology in our projection of the United States without the
final standards in place.\71\ Further, we improved our projections of
the rate of expected ZEV adoption across vehicle categories for the
reference scenario, the result of which in the modeled compliance
pathway was increased projected adoption in the light heavy-duty
vocational vehicle subcategory and decreased adoption in other
subcategories compared to the reference scenario in the proposal. These
updates to the reference scenario resulted in changes to the estimated
numeric values of emissions and costs as shown but reflect the same
general expected impacts of the standards as we projected at the time
of proposal, i.e., significant reductions in downstream GHG emissions,
reductions in GHGs from lower demand for onroad fuels and therefore
reduced emissions from fuel refineries, and increases in GHG emissions
from EGUs (which we expect to decline over time as the electricity grid
becomes cleaner). This same trend is expected for non-GHG pollutants as
well, which are affected to the extent that zero- or lower-non-GHG
emitting technologies are used to meet the GHG standards, i.e., we
project significant reductions in downstream emissions of non-GHG
pollutants, reductions in non-GHG pollutants resulting from lower
demand for onroad fuels and therefore reduced emissions from fuel
refineries, and increases in non-GHG pollutant emissions from EGUs
(which we expect to decrease over time as previously noted).
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\71\ EPA granted California's waiver request on March 30, 2023,
which left EPA insufficient time to develop an alternative reference
case for the proposal. 88 FR 25989.
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As seen in Table ES-5, through 2055 the program will result in
significant downstream GHG emission reductions--approximately 1.4
billion metric tons in reduced CO<INF>2</INF>-equivalent emissions.\72\
From calendar years 2027 through 2055, we project a cumulative increase
of approximately 0.39 billion metric tons of CO<INF>2</INF>-equivalent
emissions from EGUs as a result of the increased demand for electricity
associated with the rule. We also project reductions in CO<INF>2</INF>-
equivalent emissions from refineries on the order of 0.013 billion
metric tons during this time period. Considering both downstream and
upstream cumulative emissions from calendar years 2027 through 2055 (a
year when most of the regulated fleet will consist of HD vehicles
subject to the Phase 3 standards due to fleet turnover), the standards
will achieve approximately 1 billion metric tons in net CO<INF>2</INF>-
equivalant emission reductions (see section V of this preamble and
Chapter 4 of the RIA for more detail). Following improvements to our
technical analysis as described in more detail in sections II and V of
this preamble, we remodeled the GHG emission reductions from the
proposed standards, and the results show the reductions from the final
rule are close to but greater than projected reductions from the
proposed standards (e.g., net reductions are 998 million metric ton for
the proposed standards). As summarized in section C2.ii of the
Executive Summary and detailed in section II of this preamble, the
final standards are less stringent and increase in stringency at a
slower pace compared to the proposal in the early model years of the
program, but the later model year final standards are more stringent
than proposed for light and medium heavy-duty vocational vehicles and
day cab tractors. This final rule's GHG emission reductions will make
an important contribution to efforts to limit climate change and its
anticipated impacts. These GHG reductions will benefit all U.S.
residents, including populations such as people of color, low-income
populations, indigenous peoples, and/or children that may be especially
vulnerable to various forms of damages associated with climate change.
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\72\ Note that these reductions are lower in the final rule than
the proposal primarily due to the increased number of ZEVs
considered in the reference case, see section V of this preamble for
details.
[GRAPHIC] [TIFF OMITTED] TR22AP24.005

[[Page 29455]]

In our modeled potential compliance pathway, we project that the
GHG emission standards will lead to an increase in HD ZEVs relative to
our reference case (i.e., without the rule), which will also result in
downstream reductions of vehicle emissions of non-GHG pollutants that
contribute to ambient concentrations of ozone, particulate matter
(PM<INF>2.5</INF>), nitrogen dioxide (NO<INF>2</INF>), CO, and air
toxics. Exposure to these non-GHG pollutants is linked to adverse human
health impacts such as premature death as well as other adverse public
health and environmental effects (see section VI). As shown in Table
ES-6, in 2055, we estimate a decrease in emissions from all criteria
pollutants modeled (i.e., NO<INF>X</INF>, PM<INF>2.5</INF>, VOC, and
SO<INF>2</INF>) from downstream sources. The reductions in non-GHG
emissions from vehicles will reduce air pollution near roads. As
described in section VI of this preamble, there is substantial evidence
that people who live or attend school near major roadways are more
likely to be of a non-White race, Hispanic ethnicity, and/or low
socioeconomic status. In addition, emissions from HD vehicles and
engines can significantly and adversely affect individuals living near
truck freight routes. Based on a study EPA conducted of people living
near truck routes, an estimated 72 million people live within 200
meters of a truck freight route.\73\ Relative to the rest of the
population, people of color and those with lower incomes are more
likely to live near truck routes.\74\ In addition, children who attend
school near major roads are disproportionately more highly represented
by children of color and children from low-income households.\75\
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\73\ 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 EPA-HQ-OAR-
2019-0055.
\74\ See section VI.D of this preamble for additional discussion
on our analysis of environmental justice impacts of this final rule.
\75\ Kingsley, S., Eliot, M., Carlson, L. et al. Proximity of
U.S. schools to major roadways: a nationwide assessment. J Expo Sci
Environ Epidemiol 24, 253-259 (2014). <a href="https://doi.org/10.1038/jes.2014.5">https://doi.org/10.1038/jes.2014.5</a>.
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Table ES-6 also shows impacts on EGU and refinery emissions.
Similar to GHG emissions, we project that non-GHG emissions from EGUs
will increase in the near term as a result of the increased demand for
electricity associated with the rule, and we expect those projected
impacts to decrease over time as the electricity grid becomes cleaner.
We project reductions in non-GHG emissions from refineries.\76\ We
project net reductions in NO<INF>X</INF>, VOC, and SO<INF>2</INF>
emissions in 2055. Although there is a small net increase in direct
PM<INF>2.5</INF> emissions in 2055, ambient PM<INF>2.5</INF> is formed
from emissions of direct PM<INF>2.5</INF> as well as emissions of other
precursors such as NOx and SO<INF>2.</INF> We project overall
PM<INF>2.5</INF>-related benefits based on the contribution of
emissions from each of these pollutants (see Table ES-8). See section V
of this preamble and RIA Chapter 4 for more details.
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\76\ We note here that there is uncertainty surrounding how
refinery activity would change in response to lower domestic demand
for liquid transportation fuels and in response to comments received
on the proposal, the estimates in Table ES-6 reflect the assumption
that half of the projected drop in domestic fuel demand would be
offset by an increase in exports.
[GRAPHIC] [TIFF OMITTED] TR22AP24.006

EPA believes the non-GHG emissions reductions of this rule provide
important health benefits to the 72 million people living near truck
routes and even more broadly over the longer term. We note that the
agency has broad authority to regulate emissions from the power sector
(e.g., the mercury and air toxics standards, and new source performance
standards), as do the States and EPA through cooperative federalism
programs (e.g., in response to PM National Ambient Air Quality
Standards (NAAQS) implementation requirements, interstate transport,
emission guidelines, and regional haze),\77\ and that EPA reasonably
may address air pollution incrementally across multiple rulemakings,
particularly across multiple industry sectors. For example, EPA has
separately proposed new source performance standards and emission
guidelines for greenhouse gas emissions from fossil fuel-fired power
plants, which would also reduce emissions of criteria air pollutants
such as PM<INF>2.5</INF> and SO<INF>2</INF> (88 FR 33240, May 23,
2023).\78\
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\77\ See also CAA section 116.
\78\ New Source Performance Standards for Greenhouse Gas
Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired
Electric Generating Units; Emission Guidelines for Greenhouse Gas
Emissions From Existing Fossil Fuel-Fired Electric Generating Units;
and Repeal of the Affordable Clean Energy Rule. 88 FR 33240, May 23,
2023. <a href="https://www.federalregister.gov/documents/2023/05/23/2023-10141/new-source-performance-standards-for-greenhouse-gas-emissions-from-new-modified-and-reconstructed">https://www.federalregister.gov/documents/2023/05/23/2023-10141/new-source-performance-standards-for-greenhouse-gas-emissions-from-new-modified-and-reconstructed</a>.
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In general, the final rule cost analysis methodology mirrors the
approach we took for the proposal, but with a number of important
updates to our modeling approach and the data used in our modeling
projections. More details on specific updates after consideration of
comments and new data can be found in sections II and IV of this
preamble, but we note here that our final rule analysis was conducted
using the latest dollar value, 2022 dollars (2022$), which represents
an update from the 2021 dollars used in the NPRM analysis. We also note
that updates to our reference scenario have lowered the overall costs
and benefits of the final standards, as described briefly in this
Executive Summary and in more detail in sections IV through VIII of
this preamble. The decrease is attributable to the increase in the
number of ZEVs in the reference case.
We estimate that for calendar years 2027 through 2055 and at an
annualized 2 percent discount rate, costs to manufacturers will result
in a cost savings of $0.19 billion dollars before considering the IRA
battery tax credits. With those battery tax credits, which we estimate
to be $0.063 billion, the cost to manufacturers of compliance with the

[[Page 29456]]

program will result in a cost savings of $0.25 billion. The
manufacturer cost of compliance with the rule on a per-vehicle basis
are shown in Table ES-7. We estimate that the MY 2032 fleet average
per-vehicle cost to manufacturers by regulatory group will range from a
cost savings of between $700 and $3,000 per vehicle for vocational
vehicles to costs of between $3,200 and $10,800 per tractor. EPA notes
the projected fleet-average costs per-vehicle for this rule are less
than the fleet average per-vehicle costs projected for the HD GHG Phase
2 MY 2027 standards which EPA found to be reasonable under our
statutory authority, where the tractor standards were projected to cost
between $12,750 and $17,125 (2022$) per vehicle and the vocational
vehicle standards were projected to cost between $1,860 and $7,090
(2022$) per vehicle.\79\ For this action, EPA finds that the expected
additional vehicle costs are reasonable considering the related GHG
emissions reductions.\80\ EPA emphasizes again that manufacturers will
choose their pathway for compliance and the pathway modeled here is
just one of many potential compliance pathways.
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\79\ The Phase 2 tractor MY 2027 standard cost increments were
projected to be between $10,200 and $13,700 per vehicle in 2013$ (81
FR 73621). The Phase 2 vocational vehicle MY 2027 standards were
projected to cost between $1,486 and $5,670 per vehicle in 2013$ (81
FR 73718).
\80\ For illustrative purposes, these average costs range
between an approximate 0.03 percent decrease for light-heavy
vocational vehicles up to a 6 percent increase for long-haul
tractors based on a minimum vehicle price of $100,000 for vocational
vehicles and $190,000 for long-haul tractors (see section II.G.2 of
this preamble). We also note that these average upfront costs are
taken across the HD vehicle fleet and are not meant as an indicator
of average price increase.
[GRAPHIC] [TIFF OMITTED] TR22AP24.007

The GHG standards will reduce adverse impacts associated with
climate change and exposure to non-GHG pollutants and thus will yield
significant benefits, including those we can monetize and those we are
unable to quantify. Table ES-8 summarizes EPA's estimates of total
monetized discounted costs, operational savings, and benefits. In our
proposal, EPA used interim Social Cost of GHGs (SC-GHG) values
developed for use in benefit-cost analyses until updated estimates of
the impacts of climate change could be developed based on the best
available science and economics. In response to recent advances in the
scientific literature on climate change and its economic impacts,
incorporating recommendations made by the National Academies of
Science, Engineering, and Medicine \81\ (National Academies, 2017), and
to address public comments on this topic, for this final rule we are
using updated SC-GHG values. EPA presented these updated values in a
sensitivity analysis in the December 2022 Oil and Gas Rule RIA which
underwent public comment on the methodology and use of these estimates
as well as external peer review.\82\ After consideration of public
comment and peer review, EPA issued a technical report signed by the
EPA Administrator on December 2, 2023, updating the estimates of SC-GHG
in light of recent information and advances.\83\ This is discussed
further in preamble section VII and RIA Chapter 7.
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\81\ National Academies of Sciences, Engineering, and Medicine.
2017. Valuing Climate Damages: Updating Estimation of the Social
Cost of Carbon Dioxide. Washington, DC: The National Academies
Press. <a href="https://doi.org/10.17226/24651">https://doi.org/10.17226/24651</a>.
\82\ Standards of Performance for New, Reconstructed, and
Modified Sources and Emissions Guidelines for Existing Sources: Oil
and Natural Gas Sector Climate Review. 87 FR 74702.
\83\ Supplementary Material for the Regulatory Impact Analysis
for the Supplemental Proposed Rulemaking, ``Standards of Performance
for New, Reconstructed, and Modified Sources and Emissions
Guidelines for Existing Sources: Oil and Natural Gas Sector Climate
Review'' EPA, 2022. Docket ID No. EPA-HQ-OAR-2021-0317. Available
at: <a href="https://www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-ria-20231130.pdf">https://www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-ria-20231130.pdf</a>.
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The results presented in Table ES-8 project the monetized
environmental and economic impacts associated with the program during
each calendar year through 2055. EPA estimates that the annualized
value of monetized net benefits to society at a 2 percent discount rate
will be approximately $13 billion through the year 2055, roughly 12
times the cost in vehicle technology and associated electric vehicle
supply equipment (EVSE) combined. Regarding social costs, EPA estimates
that the cost of vehicle technology (not including the vehicle or
battery tax credits) and EVSE at depots \84\ will be approximately $1.1
billion. The HD industry will save approximately $3.5 billion in
operating costs (e.g., savings that come from less liquid fuel used,
lower maintenance and repair costs for ZEV technologies as compared to
ICE technologies, etc.). The program will result in significant social
benefits including $10 billion in climate benefits (with the average
SC-GHG at a 2 percent near-term Ramsey discount rate) and $0.3 billion
in estimated benefits attributable to changes in emissions of
PM<INF>2.5</INF> precursors. Finally, the benefits due to reductions in
energy security externalities caused by U.S.

[[Page 29457]]

petroleum consumption and imports will be approximately $0.45 billion
under the program. A more detailed description and breakdown of these
benefits can be found in section VIII of the preamble and Chapters 7
and 8 of the RIA.
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\84\ EVSE costs include hardware and installation costs for
electric vehicle supply equipment at depots. Costs for upgrades to
the distribution system are incorporated in the operating costs
(specifically within $/kWh charging costs). We also estimate
infrastructure costs for vehicles we project to use public charging.
See RIA 2.4.4 and 2.6 for more information.
[GRAPHIC] [TIFF OMITTED] TR22AP24.008

Regarding the costs to purchasers as shown in Table ES-9, for the
final program we estimated the average upfront incremental cost to
purchase a new MY 2032 HD ZEV relative to a comparable ICE vehicle
meeting the Phase 2 MY 2027 standards for a vocational ZEV and EVSE, a
short-haul tractor ZEV and EVSE, and a long-haul tractor ZEV. These
incremental costs account for the IRA tax credits, specifically battery
and vehicle tax credits and tax credits applicable to EVSE installation
and infrastructure, as discussed in section II.E.4 and RIA Chapter 2.
We also estimated the operational savings each year (i.e., savings that
come from the lower costs to operate, maintain, and repair ZEV
technologies) and payback period (i.e., the year the initial cost
increase would pay back). Table ES-9 shows that for the vocational
vehicle ZEVs, short-haul tractor ZEVs, and long-haul tractor ZEVs the
incremental upfront costs (after the tax credits) are recovered through
operational savings such that payback occurs between two and four years
on average for vocational vehicles, after two years for short-haul
tractors and after five years on average for long-haul tractors. We
discuss this in more detail in sections II and IV of this preamble and
RIA Chapters 2 and 3.

[[Page 29458]]

[GRAPHIC] [TIFF OMITTED] TR22AP24.009

E. Coordination With Federal and State Partners

EPA has coordinated and consulted with DOT/NHTSA, both on a
bilateral level during the development of this program as well as
through the interagency review of the action led by the Office of
Management and Budget. EPA has set some previous heavy-duty vehicle GHG
emission standards in joint rulemakings where NHTSA also established
heavy-duty fuel efficiency standards. EPA notes that there is no
statutory requirement for joint rulemaking, that the agencies have
different statutory mandates and that their respective programs have
always reflected those differences. As the Supreme Court has noted,
``EPA has been charged with protecting the public's `health' and
`welfare,' a statutory obligation wholly independent of DOT's mandate
to promote energy efficiency.'' \85\ Although there is no statutory
requirement for EPA to consult with NHTSA, EPA has consulted with NHTSA
in the development of this program. For example, staff of the two
agencies met frequently to discuss various technical issues and to
share technical information. While assessing safety implications of
this rule for the NPRM, EPA consulted with NHTSA. EPA further
coordinated with NHTSA regarding safety implications of this rule,
including EPA's response to safety related comments and identifying
updates, for the final rule.\86\
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\85\ Massachusetts v. EPA, 549 U.S. at 532.
\86\ Landgraf, Michael. Memorandum to docket EPA-HQ-OAR-2022-
0985. Summary of NHTSA Safety Communication. February 2024.
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EPA also has consulted with other Federal agencies in developing
this rule and the light-duty vehicles GHG rulemaking, including the
Federal Energy Regulatory Commission (FERC), the Joint Office for
Energy and Transportation, the Department of Energy and several
National Labs. EPA consulted with FERC on this rulemaking regarding
potential impacts of these rulemakings on bulk power system reliability
and related issues.\87\ EPA collaborated with DOE and Argonne National
Laboratory on battery cost analyses and critical minerals forecasting.
EPA, National Renewable Energy Laboratory (NREL), and DOE collaborated
on forecasting the development of a national charging infrastructure
and projecting regional charging demand for input into EPA's power
sector modeling. EPA also coordinated with the Joint Office of Energy
and Transportation on charging infrastructure. EPA and the Lawrence
Berkeley National Laboratory collaborated on issues of consumer
acceptance of plug-in electric vehicles. EPA and the Oak Ridge National
Laboratory collaborated on energy security issues. EPA also
participated in the Federal Consortium for Advanced Batteries led by
DOE and the Joint Office of Energy and Transportation. EPA and DOE also
have entered into a Joint Memorandum of Understanding to provide a
framework for interagency cooperation and consultation on electric
sector resource adequacy and operational reliability.\88\ EPA consulted
with the Department of Labor (DOL) and DOE on labor and employment
initiatives involving the battery and vehicle electrification spaces,
and DOL provided a memorandum to EPA containing an overview of numerous
Federal Government initiatives focused on these areas.\89\ EPA also
consulted with NHTSA on potential safety issues and NHTSA provided a
number of studies to us concerning electric vehicle safety. In
addition, EPA consulted with the Department of State on the Federal
Government's initiatives concerning supply chains for critical
minerals.
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\87\ Although not a Federal agency, EPA also consulted with the
North American Electric Reliability Corporation (NERC). NERC is the
Electric Reliability Organization for North America, subject to
oversight by FERC.
\88\ Joint Memorandum on Interagency Communication and
Consultation on Electric Reliability, U.S. Department of Energy and
U.S. Environmental Protection Agency, March 8, 2023.
\89\ See Memorandum from Employment and Training Administration
(ETA), Office of Assistant Secretary for Policy (OASP), Office of
the Solicitor (SOL) at the U.S. Department of Labor to EPA re Labor/
Employment Initiatives in the Battery/Vehicle Electrification Space
(February 2024), which is available in the docket for this action.
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EPA has also engaged with the California Air Resources Board on
technical issues in developing this program. EPA has considered certain
aspects of the CARB ACT rule, as

[[Page 29459]]

discussed elsewhere in this document. We also have engaged with other
states, including members of the National Association of Clean Air
Agencies, the Association of Air Pollution Control Agencies, the
Northeast States for Coordinated Air Use Management, and the Ozone
Transport Commission.

F. Stakeholder Engagement

EPA conducted extensive engagement with a diverse range of
interested stakeholders in developing this final rule, including labor
unions, states, industry, environmental justice organizations and
public health experts. In addition, we have engaged with environmental
NGOs, vehicle manufacturers, technology suppliers, dealers, utilities,
charging providers, tribal governments, and other organizations. For
example, in April-May 2022, EPA held a series of engagement sessions
with organizations representing all of these stakeholder groups so that
EPA could hear early input in developing its proposal. EPA has
continued engagement with stakeholders throughout the development of
this rule, throughout the public comment period and into the
development of this final rule.\90\
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\90\ Miller, Neil. Memorandum to docket EPA-HQ-OAR-2022-0985.
Summary of Stakeholder Meetings. March 2024.
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I. Statutory Authority for the Final Rule

This section summarizes the statutory authority for the final rule.
Statutory authority for the GHG standards EPA is finalizing is found in
CAA section 202(a)(1)-(2), 42 U.S.C. 7521(a)(1)-(2), which requires EPA
to establish standards applicable to emissions of air pollutants from
new motor vehicles and engines which in the Administrator's judgment
cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare. Additional statutory
authority for the action is found in CAA sections 202-209, 216, and
301, 42 U.S.C. 7521-7543, 7550, and 7601.
Section I.A overviews the text of the relevant statutory provisions
read in their context. We discuss the statutory definition of ``motor
vehicles'' in section 216 of the Act, EPA's authority to establish
emission standards for such motor vehicles in section 202, and
authorities related to compliance and testing in sections 203, 206, and
207.
Section I.B addresses comments regarding our legal authority to
consider a wide range of technologies, including electrified
technologies that completely prevent vehicle tailpipe emissions. EPA's
standard-setting authority under section 202 is not limited to any
specific type of emissions control technology, such as technologies
applicable only to ICE vehicles; rather, the Agency must consider all
technologies that reduce emissions from motor vehicles--including zero-
emissions vehicle (ZEV) technologies that allow for complete prevention
of emissions such as battery electric vehicle (BEV) and fuel-cell
electric vehicle (FCEV) technologies--in light of the lead time
provided and the costs of compliance. Many commenters, including the
main trade group representing regulated entities under this rule,
supported EPA's legal authority to consider such technologies. At the
same time, the final standards do not require the manufacturers to
adopt any specific technological pathway and can be achieved through
the use of a variety of technologies, including without producing
additional ZEVs to comply with this rule.
Section I.C summarizes our responses to certain other comments
relating to our legal authority, including whether this rule implicates
the major questions doctrine, whether EPA has authority for its
Averaging, Banking, and Trading (ABT) program, whether EPA properly
considered ZEVs as part of the class of vehicles for GHG regulation,
and whether the 4-year lead time and 3-year stability requirements in
CAA section 202(a)(3)(C) apply to this rule. We discuss our legal
authority and rationale for battery durability and warranty separately
in section III.B of the preamble. Additional discussion of legal
authority for the entire rule is found in Chapters 2 and 10 of the RTC,
and additional background on authority to regulate GHGs from heavy-duty
motor vehicles and engines can be found in the HD GHG Phase 1 final
rule.\91\ EPA's assessment of the statutory and other factors in
selecting the final GHG standards is found in section II.G of this
preamble, and further discussion of our statutory authority in support
of all the revised compliance provisions is found throughout section
III of this preamble.
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\91\ 76 FR 57129-57130, September 15, 2011.
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A. Summary of Key Clean Air Act Provisions

Title II of the Clean Air Act provides for comprehensive regulation
of emissions from mobile sources, authorizing EPA to regulate emissions
of air pollutants from all mobile source categories, including motor
vehicles under CAA section 202(a). To understand the scope of
permissible regulation, we first must understand the scope of the
regulated sources. CAA section 216(2) defines ``motor vehicle'' as
``any self-propelled vehicle designed for transporting persons or
property on a street or highway.'' \92\ Congress has intentionally and
consistently used the broad term ``any self-propelled vehicle'' since
the Motor Vehicle Air Pollution Control Act of 1965 to include vehicles
propelled by various fuels (e.g., gasoline, diesel, or hydrogen), or
systems of propulsion, whether they be ICE engine, hybrid, or electric
motor powertrains.\93\ The subjects of this rulemaking all fit that
definition: they are self-propelled, via a number of different
powertrains, and they are designed for transporting persons or property
on a street or highway. The Act's focus is on reducing emissions from
classes of motor vehicles and the ``requisite technologies'' that could
feasibly reduce those emissions, giving appropriate consideration to
cost of compliance and lead time.
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\92\ EPA subsequently interpreted this provision through a 1974
rulemaking. 39 FR 32611 (September 10, 1974), codified at 40 CFR
85.1703. The regulatory provisions establish more detailed criteria
for what qualifies as a motor vehicle, including criteria related to
speed, safety, and practicality for use on streets and ways. The
regulation, however, does not draw any distinctions based on whether
the vehicle emits pollutants or its powertrain.
\93\ The Motor Vehicle Air Pollution Act of 1965 defines ``motor
vehicle'' as ``any self-propelled vehicle designed for transporting
persons or property on a street or highway.'' Public Lae 89-272, 79
Stat. 992, 995 (October 20, 1965). See also, e.g., 116 S. Cong. Rec.
at 42382 (December 18, 1970) (Clean Air Act Amendments of 1970--
Conference Report) (``The urgency of the problems require that the
industry consider, not only the improvement of existing technology,
but also alternatives to the internal combustion engine and new
forms of transportation.'').
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Congress delegated to the Administrator the authority to identify
available control technologies, and it did not place any restrictions
on the types of emission reduction technologies EPA could consider,
including different powertrain technologies. By contrast, other parts
of the Act explicitly limit EPA's authority by powertrain type,\94\ so
Congress's conscious decision not to do so when defining ``motor
vehicle'' in section 216 further highlights the breadth of EPA's
standard-setting authority for such vehicles. As we explain further
below, Congress did place some limitations on

[[Page 29460]]

EPA's standard-setting under CAA section 202(a),\95\ but these
limitations generally did not restrict EPA's authority to broadly
regulate motor vehicles to any particular vehicle type or emissions
control technology.
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\94\ See CAA section 213 (authorizing EPA to regulate ``non-
road'' engines''), 216(10) (defining non-road engine to ``mean[ ] an
internal combustion engine''). Elsewhere in the Act, Congress also
specified specific technological controls, further suggesting its
decision to not to limit the technological controls EPA could
consider in section 202(a)(1)-(2) was intentional. See, e.g., CAA
section 407(d) (``Units subject to subsection (b)(1) for which an
alternative emission limitation is established shall not be required
to install any additional control technology beyond low
NO<INF>X</INF> burners.'').
\95\ See, e.g., CAA section 202(a)(4)(A) (``no emission control
device, system, or element of design shall be used in a new motor
vehicle or new motor vehicle engine for purposes of complying with
requirements prescribed under this subchapter if such device,
system, or element of design will cause or contribute to an
unreasonable risk to public health, welfare, or safety in its
operation or function''). In addition, Congress established
particular limitations for discrete exercises of CAA section
202(a)(1) authority which are not at issue in this rulemaking. See,
e.g., CAA section 202(a)(3)(A)(i) (articulating specific parameters
for standards for heavy-duty vehicles applicable to emissions of
certain criteria pollutants).
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We turn now to section 202(a)(1)-(2), which provides the statutory
authority for the final GHG standards in this action. Section 202(a)(1)
directs the Administrator to set ``standards applicable to the emission
of any air pollutant from any class or classes of new motor vehicles or
new motor vehicle engines, which in his judgment cause, or contribute
to, air pollution which may reasonably be anticipated to endanger
public health or welfare.'' This core directive has remained the same,
with only minor edits, since Congress first enacted it in the Motor
Vehicle Pollution Control Act of 1965.\96\ Thus the first step when EPA
regulates emissions from motor vehicles is a finding (the
``endangerment finding''), either as part of the initial standard
setting or prior to it, that the emission of an air pollutant from a
class or classes of new motor vehicles or new motor engines causes or
contributes to air pollution which may reasonably be anticipated to
endanger public health or welfare.
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\96\ Public Law 89-272.
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The statute directs EPA to define the class or classes of new motor
vehicles for which the Administrator is making the endangerment
finding.\97\ EPA for decades has defined ``classes'' subject to
regulation according to their weight and function. This is consistent
with both Congress's functional definition of a ``motor vehicle,'' as
discussed previously in this section, and Congress's explicit
contemplation of functional classes or categories. See CAA section
202(b)(3)(C) (defining ``heavy-duty vehicle'' with reference to
function and weight), 202(a)(3)(A)(ii) (``the Administrator may base
such classes or categories on gross vehicle weight, horsepower, type of
fuel used, or other appropriate factors.'').\98\
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\97\ See CAA section 202(a)(1) (``The Administrator shall by
regulation prescribe . . . standards applicable to the emission of
any air pollutant from any class or classes of new motor vehicles or
new motor vehicle engines, which in his judgment cause, or
contribute to, air pollution which may reasonably be anticipated to
endanger public health or welfare.'' (emphasis added)),
202(a)(3)(A)(ii) (``the Administrator may base such classes or
categories on gross vehicle weight, horsepower, type of fuel used,
or other appropriate factors'' (emphasis added)).
\98\ Section 202(a)(3)(A)(ii) applies to standards established
under section 202(a)(3), not to standards otherwise established
under section 202(a)(1). However, we think it nonetheless provides
guidance on what kinds of classifications and categorizations
Congress generally thought were appropriate.
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In 2009, EPA made an endangerment finding for GHG and explicitly
stated that ``[t]he new motor vehicles and new motor vehicle engines .
. . addressed are: Passenger cars, light-duty trucks, motorcycles,
buses, and medium and heavy-duty trucks.'' 74 FR 66496, 66537 (December
15 2009).99 100 Then EPA reviewed the GHG emissions data
from ``new motor vehicles'' and determined that these classes of
vehicles do contribute to air pollution that may reasonably be
anticipated to endanger public health and welfare. The endangerment
finding was made with regard to pollutants--in this case, GHGs--emitted
from ``any class or classes of new motor vehicles or new motor vehicle
engines.'' This approach--of identifying a class or classes of vehicles
that contribute to endangerment--is how EPA has always implemented the
statute.
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\99\ EPA considered this list to be a comprehensive list of the
new motor vehicle classes. See id. (``This contribution finding is
for all of the CAA section 202(a) source categories.''); id. at
66544 (``the Administrator is making this finding for all classes of
new motor vehicles under CAA section 202(a)''). By contrast, in
making an endangerment finding for GHG emissions from aircraft, EPA
limited the endangerment finding to engines used in specific classes
of aircraft (such as civilian subsonic jet aircraft with maximum
take off mass greater than 5,700 kilograms). 81 FR 54421, August 15,
2016.
\100\ EPA is not reopening the 2009 or any other prior
endangerment finding in this action. Rather, we are discussing the
2009 endangerment finding to provide the reader with helpful
background information relating to this action.
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For purposes of establishing GHG emissions standards, EPA has
regarded new heavy-duty trucks (also known as heavy-duty vehicles) as
its own class and has then made further sub-categorizations based on
weight and functionality in promulgating standards for the air
pollutant, as further elaborated in section II of this preamble.\101\
EPA's class and categorization framework allows the Agency to recognize
real-world variations in the lead time and costs of emissions control
technology for different vehicle types. It also ensures that consumers
can continue to access a wide variety of vehicles to meet their
mobility needs, while enabling continued emissions reductions for all
vehicle types, including to the point of completely preventing
emissions where appropriate.
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\101\ See NRDC v. EPA, 655 F.2d 318, 338 (D.C. Cir. 1981) (the
Court held that ``the adoption of a single particulate standard for
light-duty diesel vehicles was within EPA's regulatory
discretion.'').
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In setting standards, CAA section 202(a)(1) requires that any
standards promulgated thereunder ``shall be applicable to such vehicles
and engines for their useful life (as determined under [CAA section
202(d)], relating to useful life of vehicles for purposes of
certification), whether such vehicle and engines are designed as
complete systems or incorporate devices to prevent or control such
pollution.'' \102\ In other words, Congress specifically determined
that EPA's standards could be based on a wide array of technologies,
including technologies for the engine and for the other (non-engine)
parts of the vehicle, technologies that ``incorporate devices'' on top
of an existing motor vehicle system as well as technologies that are
``complete systems'' and that may involve a complete redesign of the
vehicle. Congress also determined that EPA could base its standards on
both technologies that ``prevent'' the pollution from occurring in the
first place--such as the zero emissions technologies considered in this
rule--as well as technologies that ``control'' or reduce the pollution
once produced.\103\
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\102\ See also Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt.
Dist., 541 U.S. 246, 252-53 (2004) (As stated by the Supreme Court,
a standard is defined as that which ``is established by authority,
custom, or general consent, as a model or example; criterion; test .
. . . This interpretation is consistent with the use of `standard'
throughout Title II of the CAA . . . . to denote requirements such
as numerical emission levels with which vehicles or engines must
comply . . . , or emission-control technology with which they must
be equipped.'').
\103\ Pollution prevention is a cornerstone of the Clean Air
Act. The title of 42 U.S.C. Chapter 85 is ``Air Pollution Prevention
and Control''; see also CAA section 101(a)(3), (c). One of the very
earliest vehicle pollution control technologies (one which is still
in use by some vehicles) was exhaust gas recirculation, which
reduces in-cylinder temperature and oxygen concentration, and, as a
result, engine-out NO<INF>X</INF> emissions from the vehicles. More
recent examples of pollution prevention technologies include
cylinder deactivation, and electrification technologies such as idle
start-stop or ZEVs.
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While emission standards set by the EPA under CAA section 202(a)(1)
generally do not mandate use of particular technologies, they are
technology-based, as the levels chosen must be premised on a finding of
technological feasibility. EPA must therefore necessarily identify
potential control technologies, evaluate the rate each technology could
be introduced,

[[Page 29461]]

and its cost. Standards promulgated under CAA section 202(a) are to
take effect only ``after such period as the Administrator finds
necessary to permit the development and application of the requisite
technology, giving appropriate consideration to the cost of compliance
within such period.'' \104\ This reference to ``cost of compliance''
means that EPA must consider costs to those entities which are directly
subject to the standards,\105\ but ``does not mandate consideration of
costs to other entities not directly subject to the standards.'' \106\
Given the prospective nature of standard-setting and the inherent
uncertainties in predicting the future development of technology,
Congress entrusted to EPA the authority to assess issues of technical
feasibility and availability of lead time to implement new technology.
Such determinations are ``subject to the restraints of reasonableness''
but ``EPA is not obliged to provide detailed solutions to every
engineering problem posed in the perfection of [a particular device].
In the absence of theoretical objections to the technology, the agency
need only identify the major steps necessary for development of the
device, and give plausible reasons for its belief that the industry
will be able to solve those problems in the time remaining. The EPA is
not required to rebut all speculation that unspecified factors may
hinder `real world' emission control.'' \107\
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\104\ CAA section 202(a)(2); see also NRDC v. EPA, 655 F. 2d
318, 322 (D.C. Cir. 1981).
\105\ Motor & Equipment Mfrs. Ass'n Inc. v. EPA, 627 F. 2d 1095,
1118 (D.C. Cir. 1979).
\106\ Coal. for Responsible Regulation v. EPA, 684 F.3d 120, 128
(D.C. Cir. 2012).
\107\ NRDC, 655 F. 2d at 328, 333-34.
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Although standards under CAA section 202(a)(1) are technology-
based, they are not based exclusively on technological capability.
Pursuant to the broad grant of authority in section 202, when setting
GHG emission standards for HD vehicles, EPA must consider certain
factors and may also consider other relevant factors and has done so
previously when setting such standards. For instance, in HD GHG Phase 1
and Phase 2, EPA explained that when acting under this authority EPA
has considered such issues as technology effectiveness, ability of the
vehicle to perform its work for vehicle purchasers, its cost (including
for manufacturers and for purchasers), the lead time necessary to
implement the technology, and, based on this, the feasibility of
potential standards; the impacts of potential standards on emissions
reductions; the impacts of standards on oil conservation and energy
security; the impacts of standards on fuel savings by vehicle
operators; the impacts of standards on the heavy-duty vehicle industry;
as well as other relevant factors such as impacts on safety.\108\ EPA
has considered these factors in this rulemaking as well.
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\108\ 81 FR 73512, October 25, 2016; 76 FR 57129-30, September
15, 2011.
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Rather than specifying levels of stringency in section 202(a)(1)-
(2), Congress directed EPA to determine the appropriate level of
stringency for the standards taking into consideration the statutory
factors therein. EPA has clear authority to set standards under CAA
section 202(a)(1)-(2) that are technology forcing when EPA considers
that to be appropriate,\109\ but is not required to do so. Section
202(a)(2) requires the Agency to give appropriate consideration to cost
and lead time necessary to allow for the development and application of
such technology. The breadth of this delegated authority is
particularly clear when contrasted with section 202(b), (g), (h), which
identifies specific levels of emissions reductions on specific
timetables for past model years.\110\ In determining the level of the
standards, CAA section 202(a) does not specify the degree of weight to
apply to each factor such that the Agency has authority to choose an
appropriate balance among factors and may decide how to balance
stringency and technology considerations with cost and lead
time.111 112
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\109\ Indeed, the D.C. Circuit has repeatedly cited NRDC v. EPA,
which construes section 202(a)(1), as support for EPA's actions when
EPA acted pursuant to other provisions of section 202 or Title II
that are explicitly technology forcing. See, e.g., NRDC v. Thomas,
805 F. 2d 410, 431-34 (D.C. Cir. 1986) (section 202 (a)(3)(B), 202
(a)(3)(A)); Husqvarna AB v. EPA, 254 F. 3d 195, 201 (D.C. Cir. 2001)
(section 213(a)(3)); Nat'l Petroleum and Refiners Ass'n v. EPA, 287
F. 3d 1130, 1136 (D.C. Cir. 2002) (section 202(a)(3)).
\110\ See also CAA 202(a)(3)(A).
\111\ See Sierra Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003)
(even where a provision is technology-forcing, the provision ``does
not resolve how the Administrator should weigh all [the statutory]
factors''); Nat'l Petrochemical and Refiners Ass'n v. EPA, 287 F.3d
1130, 1135 (D.C. Cir. 2002) (EPA decisions, under CAA provision
authorizing technology-forcing standards, based on complex
scientific or technical analysis are accorded particularly great
deference); see also Husqvarna AB v. EPA, 254 F. 3d 195, 200 (D.C.
Cir. 2001) (great discretion to balance statutory factors in
considering level of technology-based standard, and statutory
requirement ``to [give appropriate] consideration to the cost of
applying . . . technology'' does not mandate a specific method of
cost analysis); Hercules Inc. v. EPA, 598 F. 2d 91, 106 (D.C. Cir.
1978) (``In reviewing a numerical standard we must ask whether the
agency's numbers are within a zone of reasonableness, not whether
its numbers are precisely right.'').
\112\ Additionally, with respect to regulation of vehicular GHG
emissions, EPA is not ``required to treat NHTSA's . . . regulations
as establishing the baseline for the [section 202(a) standards].''
Coal. for Responsible Regulation, 684 F.3d at 127 (noting that the
section 202(a) standards provide ``benefits above and beyond those
resulting from NHTSA's fuel-economy standards'').
---------------------------------------------------------------------------

We now turn from section 202(a) to overview several other sections
of the Act relevant to this action. CAA section 202(d) directs EPA to
prescribe regulations under which the ``useful life'' of vehicles and
engines shall be determined for the purpose of setting standards under
CAA section 202(a)(1). For HD highway vehicles and engines, CAA section
202(d) establishes ``useful life'' minimum values of 10 years or
100,000 miles, whichever occurs first, unless EPA determines that
greater values are appropriate.\113\
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\113\ In 1983, EPA adopted useful life periods to apply for HD
engines criteria pollutant standards (48 FR 52170, November 16,
1983). The useful life mileage for heavy HD engines criteria
pollutant standards was subsequently increased for 2004 and later
model years (62 FR 54694, October 21, 1997). In the GHG Phase 2 rule
(81 FR 73496, October 25, 2016), EPA set the same useful life
periods to apply for HD engines and vehicles greenhouse gas emission
standards, except that the spark-ignition HD engine standards and
the standards for model year 2021 and later light HD engines apply
over a useful life of 15 years or 150,000 miles, whichever comes
first. In the Heavy Duty (HD) 2027 Low NO<INF>X</INF> final rule
(HD2027 rule) (88 FR 4359, January 24, 2023), EPA lengthened useful
life periods for all 2027 and later model year HD engines criteria
pollutant standards. See also 40 CFR 1036.104(e), 1036.108(d),
1037.105(e), and 1037.106(e).
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Additional sections of the Act provide authorities relating to
compliance, including certification, testing, and warranty. Under
section 203 of the CAA, sales of vehicles are prohibited unless the
vehicle is covered by a certificate of conformity, and EPA issues
certificates of conformity pursuant to section 206 of the CAA.
Compliance with standards is required not only at certification but
throughout a vehicle's useful life, so that testing requirements may
continue post-certification. To assure each engine and vehicle complies
during its useful life, EPA may apply an adjustment factor to account
for vehicle emission control deterioration or variability in use. EPA
also establishes the test procedures through which compliance with the
CAA emissions standards is measured. The regulatory provisions for
demonstrating compliance with emissions standards have been
successfully implemented for decades, including through our Averaging,
Banking, and Trading (ABT) program.\114\
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\114\ EPA's consideration of averaging in standard-setting dates
back to 1985. 50 FR 1060, March 15, 1985 (``Emissions averaging, of
both particulate and oxides of nitrogen emissions from heavy-duty
engines, is allowed beginning with the 1991 model year. Averaging of
NO, emissions from light-duty trucks is allowed beginning in
1988.''). The availability of averaging as a compliance flexibility
has an even earlier pedigree. See 48 FR 33456, July 21, 1983 (EPA's
first averaging program for mobile sources); 45 FR 79382, November
28, 1980 (advance notice of proposed rulemaking investigating
averaging for mobile sources). We have included banking and trading
in our rules dating back to 1990. 55 FR 30584, July 26, 1990 (``This
final rule announces new programs for banking and trading of
particulate matter and oxides of nitrogen emission credits for
gasoline-, diesel- and methanol-powered heavy-duty engines.''). See
section III.A of this preamble and RTC 10.2 for further background
on the structure and history of our ABT program's regulations,
including consistency with CAA section 206.

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[[Page 29462]]

Under CAA section 207, manufacturers are required to provide
emission-related warranties. The emission-related warranty period for
HD engines and vehicles under CAA section 207(i) is ``the period
established by the Administrator by regulation (promulgated prior to
November 15, 1990) for such purposes unless the Administrator
subsequently modifies such regulation.'' For HD vehicles, part 1037
currently specifies that the emission-related warranty for Light HD
vehicles is 5 years or 50,000 miles and for Medium HD and Heavy HD
vehicles is 5 years or 100,000 miles, and specifies the components
covered for such vehicles.\115\ Section 207 of the CAA also grants EPA
broad authority to require manufacturers to remedy nonconformity if EPA
determines there are a substantial number of noncomplying vehicles.
These warranty and remedy provisions have also been applied for decades
under our regulations, including where compliance occurs through use of
ABT provisions. Further discussion of these sections of the Act,
including as they relate to the compliance provisions we are
finalizing, is found in section III of the preamble.
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\115\ See 40 CFR 1037.120.
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B. Authority To Consider Technologies in Setting Motor Vehicle GHG
Standards

Having provided an overview of the key statutory authorities for
this action, we now elaborate on the specific issue of the types of
control technology that are to be considered in setting standards under
section 202(a)(1)-(2). EPA's position on this issue is consistent with
our position in the HD Phase 1 and Phase 2 GHG rules, and with the
historical exercise of the Agency's section 202(a)(1)-(2) authority
over the last five decades. That is, EPA's standard-setting authority
under section 202(a)(1)-(2) is not a priori limited to consideration of
specific types of emissions control technology; rather, in determining
the level of the standards, the agency must account for emissions
control technologies that are available or will become available for
the relevant model year.\116\ In this rulemaking, EPA has accounted for
a wide range of emissions control technologies, including advanced ICE
engine and vehicle technologies (e.g., engine, transmission,
drivetrain, aerodynamics, tire rolling resistance improvements, the use
of low carbon fuels like CNG and LNG, and H2-ICE), hybrid technologies
(e.g., HEV and PHEV), and ZEV technologies (e.g., BEV and FCEV).\117\
These include technologies applied to motor vehicles with ICE
(including hybrid powertrains) and without ICE, and a range of
electrification across the technologies.
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\116\ For example, in 1998, EPA published regulations for the
voluntary National Low Emission Vehicle (NLEV) program that allowed
LD motor vehicle manufacturers to comply with tailpipe standards for
cars and light-duty trucks more stringent than that required by EPA
in exchange for credits for such low emission and zero emission
vehicles. 63 FR 926, January 7, 1998. In 2000, EPA promulgated LD
Tier 2 emission standards which built upon ``the recent technology
improvements resulting from the successful [NLEV] program.'' 65 FR
6698, February 10, 2000.
\117\ ZEV technologies include BEV and FCEV. Both rely on an
electric powertrain to achieve zero tailpipe emissions. FCEVs run on
hydrogen fuel, while BEVs are plugged in for charging.
---------------------------------------------------------------------------

In response to the proposed rulemaking, the agency received
numerous comments on this issue, specifically on our consideration of
BEV and FCEV technologies. Regulated entities generally offered support
for the agency's legal authority to consider such technologies, noting
that they themselves were also considering varying levels of these
technologies in their own product plans. Their comments relating to
these technologies, and those of most stakeholders, were more technical
and policy in nature, for example, relating to the pace at which
manufacturers could adopt and deploy such technologies in the real
world or the pace at which enabling infrastructure could be deployed.
We address these comments in detail in section II of this preamble and
have revised the standards from those proposed after consideration of
comments.
A few commenters, however, alleged that the agency lacked statutory
authority altogether to consider BEV and FCEV technologies because they
believed the Act limited EPA to considering only technologies
applicable to ICE vehicles or to technologies that reduce, rather than
altogether prevent, pollution. EPA disagrees. The constraints they
would impose have no foundation in the statutory text, are contrary to
the statutory purpose, are undermined by a substantial body of
statutory and legislative history, and are inconsistent with how the
agency has applied the statute in numerous rulemakings over five
decades. The following discussion elaborates our position on this
issue; further discussion is found in Chapter 2.1 of the RTC.
The text of the Act directly addresses this issue and provides
unambiguous authority for EPA to consider all motor vehicle
technologies, including a range of electrified technologies such as
fully-electrified vehicle technologies without an ICE that achieve zero
vehicle tailpipe emissions (e.g., BEVs), fuel cell electric vehicle
technologies that run on hydrogen and achieve zero tailpipe emissions
(e.g., FCEVs), plug-in hybrid partially electrified technologies, and
other ICE vehicles across a range of electrification. As described
earlier in this section, the Act directs EPA to prescribe emission
standards for ``motor vehicles,'' which are defined broadly in CAA
section 216(2) and do not exclude any forms of vehicle propulsion. The
Act then directs EPA to promulgate emission standards for such
vehicles, ``whether such vehicles and engines are designed as complete
systems or incorporate devices to prevent or control such pollution,''
based on the ``development and application of the requisite
technology.'' There is no question that electrified technologies,
including various ICE, hybrid, BEV, and FCEV technologies, meet all of
these specific statutory criteria. They apply to ``motor vehicles'',
are systems and incorporate devices that ``prevent'' and ``control''
emissions,\118\ and qualify as ``technology.''
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\118\ The statute emphasizes that the agency must consider
emission reductions technologies regardless of ``whether such
vehicles and engines are designed as complete systems or incorporate
devices to prevent or control such pollution.'' CAA section
202(a)(1); see also CAA section 202(a)(4)(B) (describing conditions
for ``any device, system, or element of design'' used for compliance
with the standards); Truck Trailer Manufacturers Ass'n, Inc v. EPA,
17 F.4th 1198, 1202 (D.C. Cir. 2021) (the statute ``created two
categories of complete motor vehicles. Category one: motor vehicles
with built-in pollution control. Category two: motor vehicles with
add-in devices for pollution control.''). While the statute does not
define ``system,'' section 202 does use the word expansively, to
include ``vapor recovery system[s]'' (CAA section 202(a)(5)(A)),
``new power sources or propulsion systems'' (CAA section 202(e)),
and onboard diagnostics systems (CAA section 202(m)(1)(D)). In any
event, the intentional use of the phrase ``complete systems'' shows
that Congress expressly contemplated as methods of pollution control
not only add-on devices (like catalysts that control emissions after
they are produced by the engine), but wholesale redesigns of the
motor vehicle and the motor vehicle engine to prevent and reduce
pollution. Many technologies that reduce vehicle GHG emissions today
can be characterized as systems that reduce or prevent GHG
emissions, including advanced engine designs in ICE and hybrid
vehicles; integration of electric drive units in hybrids, PHEVs, BEV
and FCEV designs; high voltage batteries and controls; redesigned
climate control systems improvements, and more.

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[[Page 29463]]

While the statute also imposes certain specific limitations on
EPA's consideration of technology, none of these statutory limitations
preclude the consideration of electrified technologies, a subset of
electrified technologies, or any other technologies that achieve zero
vehicle tailpipe emissions. Specifically, the statute states that the
following technologies cannot serve as the basis for the standards:
first, technologies which cannot be developed and applied within the
relevant time period, giving appropriate consideration to the cost of
compliance; and second, technologies that ``cause or contribute to an
unreasonable risk to public health, welfare, or safety in its operation
or function.'' CAA section 202(a)(2), (4).\119\ The statute does not
contain any other exclusions or limitations relevant to the Phase 3
model years. EPA has undertaken a comprehensive assessment of the
statutory factors, further discussed in section II of the preamble and
throughout the RIA and the RTC, and has found that the CAA plainly
authorizes the consideration of these technologies, including BEV and
FCEV technologies, at the levels that support the modeled potential
compliance pathway to achieve the final standards.
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\119\ In addition, under section 202(a)(3)(A), EPA must
promulgate under section 202(a)(1) certain criteria pollutant
standards for ``classes or categories'' of heavy-duty vehicles that
``reflect the greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available . . . giving appropriate consideration
to cost, energy, and safety factors associated with the application
of such technology.'' EPA thus lacks discretion to base such
standards on a technological pathway that reflects less than the
greatest degree of emission reduction achievable for the class
(giving consideration to cost, energy, and safety). In other words,
where EPA has identified available control technologies that can
completely prevent pollution and otherwise comport with the statute,
the agency lacks the discretion to rely on less effective control
technologies to set weaker standards that achieve fewer emissions
reductions. And while section 202(a)(3)(A) does not govern any GHG
standards, which are established only under section 202(a)(1)-(2),
we think it is also informative as to the breadth of EPA's authority
under those provisions.
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Having discussed what the statutory text does say, we note what the
statutory text does not say. Nothing in section 202(a)(1)-(2)
distinguishes technologies that prevent vehicle tailpipe emissions from
other technologies as being suitable for consideration in establishing
the standards. Moreover, nothing in the statute suggests that certain
kinds of electrified technologies are appropriate for consideration
while other kinds of electrified technologies are not. While some
commenters suggest that battery electric vehicles or fuel cell vehicles
represent a difference in kind from all other emissions control
technologies, that is simply untrue. As we explain in section II and
RIA Chapter 1, electrified technologies comprise a large range of motor
vehicle technologies. In fact, all new motor vehicles manufactured in
the United States today have some degree of electrification and rely on
electrified technology to control emissions.
ICE vehicles are equipped with alternators that generate
electricity and batteries that store such electricity. The electricity
in turn is used for numerous purposes, such as starting the ICE and
powering various vehicle electronics and accessories. More
specifically, electrified technology is a vital part of controlling
emissions on all new motor vehicles produced today: motor vehicles rely
on electronic control modules (ECM) for controlling and monitoring
their operation, including the fuel mixture (whether gasoline fuel,
diesel fuel, natural gas fuel, etc.), ignition timing, transmission,
and emissions control system. In enacting the Clean Air Act Amendments
of 1990, Congress itself recognized the great importance of this
particular electrified technology for emissions control in certain
vehicles.\120\ It would be impossible to drive any ICE vehicle produced
today or to control the emissions of such a vehicle without such
electrified technology.
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\120\ See CAA 207(i)(2) (for light-duty vehicles, statutorily
designating ``specified major emission control components'' subject
to extended warranty provisions as including ``an electronic
emissions control unit''). Congress also designated by statute
``onboard emissions diagnostic devices'' as ``specified major
emission control components''; OBD devices also rely on electrified
technology.
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Indeed, many of the extensive suite of technologies that
manufacturers have devised for controlling emissions rely on
electrified technology and do so in a host of different ways. These
include technologies that improve the efficiency of the engine and
system of propulsion, such as the ECMs, electronically-controlled fuel
injection (for all manners of fuel, including but not limited to
gasoline, diesel, natural gas, propane, and hydrogen), and automatic
transmission; technologies that reduce the amount of ICE engine use
such as engine stop-start technology and other idle reduction
technologies; add-on technologies to control pollution after it has
been generated by the engine, such as gasoline three-way catalysts, and
diesel selective catalytic reduction and particulate filters that rely
on electrified technology to control and monitor their performance;
non-engine technologies that that rely on electrified systems to
improve vehicle aerodynamics; technologies related to vehicle
electricity production, such as high efficiency alternators; and engine
accessory technologies that increase the efficiency of the vehicle,
such as electric coolant pumps, electric steering pumps, and electric
air conditioning compressors. Because electrified technologies reduce
emissions, EPA has long considered them relevant for regulatory
purposes under Title II. For example, EPA has relied on various such
technologies to justify the feasibility of the standards promulgated
under section 202(a),\121\ promulgated requirements and guidance
related to testing involving such technologies under section 206,\122\
required manufacturers to provide warranties for them under section
207,\123\ and prohibited their tampering under section 203.\124\
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\121\ See, e.g., LD 2010 rule, 88 FR 25324, May 7, 2010; HD GHG
Phase 2 rule, 81 FR 73478, October 25, 2016.
\122\ See, e.g., HD GHG Phase 1 rule, 76 FR 57106, September 15,
2011.
\123\ See, e.g., HD GHG Phase 1 rule, 76 FR 57106, September 15,
2011.
\124\ See, e.g., HD GHG Phase 1 rule, 76 FR 57106, September 15,
2011.
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Certain vehicles rely to a greater extent on electrification as an
emissions control strategy. These include (1) hybrid vehicles, which
rely principally on an ICE to power the wheels, but also derive
propulsion from an on-board electric motor, which can charge batteries
through regenerative braking, and feature a range of larger batteries
than non-hybrid ICE vehicles;\125\ (2) plug-in hybrid vehicles (PHEV),
which have an even larger battery that can also be charged by plugging
it into an outlet and can rely principally on electricity for
propulsion, along with an ICE; (3) hydrogen fuel-cell vehicles (FCEV),
which are fueled by hydrogen to produce electricity to power the wheels
and have a range of larger battery sizes; \126\ and (4) battery
electric vehicles (BEV), which rely entirely on plug-in charging and
the battery to provide the energy for propulsion. Manufacturers may
also choose to sell different models of the same vehicle with different
levels of electrification. In many but not all

[[Page 29464]]

cases,\127\ electrified technologies are systems which ``prevent''
(partially or completely) the emission of pollution from the motor
vehicle engine.\128\ Nothing in the statute indicates that EPA is
limited from considering any of these technologies. For instance,
nothing in the statute says that EPA may only consider emissions
control technologies with a certain kind or level of electrification,
e.g., where the battery is smaller than a certain size, where the
energy derived from the battery is less than a certain percentage of
total vehicle energy, where certain energy can be recharged by plugging
the vehicle into an outlet as opposed to running the internal
combustion engine, etc. The statute does not differentiate in terms of
such details, but simply commands EPA to adopt emissions standards
based on the ``development and application of the requisite technology,
giving appropriate consideration to the cost of compliance within such
period.''
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\125\ Hybrid vehicles include both mild hybrids, which have a
relatively smaller battery and can use the electric motor to
supplement the propulsion provided by the ICE, as well as strong
hybrids, which have a relatively larger battery and can drive for
limited distances entirely on battery power.
\126\ As explained in section II.D.3.ii, the instantaneous power
required to move a FCEV can come from either the fuel cell, the
battery, or a combination of both. Interactions between the fuel
cells and batteries of a FCEV can be complex and may vary based on
application.
\127\ For example, some vehicles also use electrified technology
to preheat the catalyst and improve catalyst efficiency especially
when starting in cold temperatures.
\128\ CAA section 202(a)(1).
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EPA's interpretation also accords the primary purpose and operation
of section 202(a), which is to reduce emissions of air pollutants from
motor vehicles that are anticipated to endanger public health or
welfare.\129\ This statutory purpose compels EPA to consider available
technologies that reduce emissions of air pollutants most effectively,
including vehicle technologies that result in no vehicle tailpipe
emissions of GHGs and completely ``prevent'' such emissions.\130\ And,
given Congress's directive to reduce air pollution, it would make
little sense for Congress to have authorized EPA to consider
technologies that achieve 99 percent pollution reduction (for example,
as some PM filter technologies do to control criteria pollutants), but
not 100 percent pollution reduction. At minimum, the statute allows EPA
to consider such technologies. Today, many of the available
technologies that can achieve the greatest emissions control are those
that rely on greater levels of electrification, with ZEV technologies
capable of completely preventing vehicle tailpipe emissions.
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\129\ See also Coal. for Responsible Regulation, Inc. v. EPA,
684 F.3d 102, 122 (D.C. Cir. 2012), aff'd in part, rev'd in part sub
nom. Util. Air Regulation. Grp. v. EPA, 573 U.S. 302 (2014), and
amended sub nom. Coal. for Responsible Regulation, Inc. v. EPA, 606
F. App'x 6 (D.C. Cir. 2015) (the purpose of section 202(a) is
``utilizing emission standards to prevent reasonably anticipated
endangerment from maturing into concrete harm'').
\130\ CAA section 202(a)(1); see also CAA section 202(a)(4)(B)
directing EPA to consider whether a technology ``eliminates the
emission of unregulated pollutants'' in assessing its safety.
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The surrounding statutory context further highlights that Congress
intended section 202 to lead to reductions to the point of complete
pollution prevention. Consistent with section 202(a)(1), section
101(c), of the Act states), ``A primary goal of this chapter is to
encourage or otherwise promote reasonable Federal, State, and local
governmental actions, consistent with the provisions of this chapter,
for pollution prevention.'' \131\ Section 101(a)(3) further explains
the term ``air pollution prevention'' (as contrasted with ``air
pollution control'') to mean ``the reduction or elimination, through
any measures, of the amount of pollutants produced or created at the
source.'' That is to say, EPA is not limited to requiring small
reductions, but instead has authority to consider technologies that may
entirely prevent the pollution from occurring in the first place.
Congress also repeatedly amended the Act to itself impose extremely
large reductions in motor vehicle pollution.\132\ Similarly, Congress
prescribed EPA to set standards achieving specific, numeric levels of
emissions reductions (which in many instances cumulatively amount to
multiple orders of magnitude),\133\ while explicitly stating that EPA's
202(a) authority allowed the agency to go still further.\134\
Consistent with these statutory authorities, prior rulemakings have
also required very large emissions reductions, including to the point
of completely preventing certain types of emissions.\135\
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\131\ Clean Air Act Amendments, 104 Stat. 2399, 2468, November
15, 1990; see also 42 U.S.C. chapter 85 (``AIR POLLUTION PREVENTION
AND CONTROL'').
\132\ See, e.g., CAA section 202(a)(3)(A)(i) (directed EPA to
promulgate standards that ``reflect the greatest decree of emission
reduction achievable'' for certain pollutants).
\133\ CAA section 202(a), (g)-(h), (j).
\134\ See, e.g., CAA section 202(b)(1)(C) (``The Administrator
may promulgate regulations under subsection (a)(1) revising any
standard prescribed or previously revised under this subsection . .
. . Any revised standard shall require a reduction of emissions from
the standard that was previously applicable.''), (i)(3)(B)(iii)
(``Nothing in this paragraph shall prohibit the Administrator from
exercising the Administrator's authority under subsection (a) to
promulgate more stringent standards for light-duty vehicles and
light-duty . . . at any other time thereafter in accordance with
subsection (a).'').
\135\ See, e.g., 31 FR 5171, March 30, 1966 (``No crankcase
emissions shall be discharged into the ambient atmosphere from any
new motor vehicle or new motor vehicle engine subject to this
subpart.'').
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This reading of the statute accords with the practical reality of
administering an effective emissions control program, a matter in which
the Agency has developed considerable expertise over the last five
decades. Such a program is necessarily predicated on the continuous
development of increasingly effective emissions control technologies.
In determining the standards, EPA appropriately considers updated data
and analysis on pollution control technologies, without a priori
limiting its consideration to a particular set of technologies. Given
the continuous development of pollution control technologies since the
early days of the CAA, this approach means that EPA has routinely
considered new and projected technologies developed or refined since
the time of the CAA's enactment, including for instance,
electrification technologies.\136\ The innumerable technologies on
which EPA's standards have been premised, or which EPA has otherwise
incentivized, are presented in summary form later in this section and
then in full in section 2 of the RTC. This approach is inherent in the
statutory text of section 202(a)(2): in requiring EPA to consider lead
time for the development and application of technology before standards
may take effect, Congress directed EPA to consider future technological
advancements and innovation rather than limiting the Agency to only
those technologies in place at the time the statute was enacted. In the
report accompanying the Senate bill for the 1965 legislation
establishing section 202(a), the Senate Committee wrote that it
``believes that exact standards need not be written legislatively but
that the Secretary should adjust to changing technology.'' \137\ This
forward-looking regulatory approach keeps pace with real-world
technological developments that have the potential to reduce emissions
and comports with congressional intent and precedent.\138\
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\136\ For example, when EPA issued its Tier 2 standards for
light-duty and medium-duty vehicles in 2000, the Agency established
``bins'' of standards in addition to a fleet average requirement. 65
FR 6698, 6734-6735, February 10, 2000. One ``bin'' was used to
certify electric vehicles that have zero criteria pollutant
emissions. Id. Under the Tier 2 program, a manufacturer could
designate which bins their different models fit into, and the
weighted average across bins was required to meet the fleet average
standard. Id. at 6746.
\137\ S. Rep. No. 89-192, at 4 (1965). Likewise, the report
accompanying the House bill stated that ``the objective of achieving
fully effective control of motor vehicle pollution will not be
accomplished overnight. [T]he techniques now available provide only
a partial reduction in motor vehicle emissions. For the future,
better methods of control will clearly be needed; the committee
expects that [the agency] will accelerate its efforts in this
area.'' H.R. Rep. No. 89-899, at 4 (1965).
\138\ See also NRDC, 655 F.2d at 328 (EPA is ``to project future
advances in pollution control capability. It was `expected to press
for the development and application of improved technology rather
than be limited by that which exists today.' ;'' To do otherwise
would thwart congressional intent and leave EPA ``unable to set
pollutant levels until the necessary technology is already
available.'').

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[[Page 29465]]

For all these reasons, EPA's consideration of electrified
technologies and technologies that prevent vehicle tailpipe emissions
in establishing the standards is unambiguously permitted by the Act;
indeed, given the Act's purpose to use technology to prevent air
pollution from motor vehicles, and the agency's factual finding based
on voluminous record evidence that BEV and FCEV technologies are the
most effective and available technologies for doing so, the Agency's
consideration of such technologies is compelled by the statute. Because
the statutory text in its context is plain, we could end our
interpretive inquiry here. However, we have taken the additional step
of reviewing the extensive statutory and legislative history regarding
the kinds of technology, including electric vehicle technology, that
Congress expected EPA to consider in exercising its section 202(a)
authority. Over six decades of congressional enactments and statements
provide overwhelming support for EPA's consideration of electrified
technologies and technologies that prevent vehicle tailpipe emissions
in establishing the final standards.
As explained, section 202 does not specify or expect any particular
type of motor vehicle propulsion system to remain prevalent, and it was
clear to Congress as early as the 1960s that ICE vehicles might be
inadequate to achieve the country's air quality goals. In 1967, the
Senate Committees on Commerce and Public Works held five days of
hearings on ``electric vehicles and other alternatives to the internal
combustion engine,'' which Chairman Magnuson opened by saying ``The
electric [car] will help alleviate air pollution and urban congestion.
The consumer will benefit from instant starting, reduced maintenance,
long life, and the economy of electricity as a fuel. . . . The electric
car does not mean a new way of life, but rather it is a new technology
to help solve the new problems of our age.'' \139\ In a 1970 message to
Congress seeking a stronger CAA, President Nixon stated he was
initiating a program to develop ``an unconventionally powered,
virtually pollution free automobile'' because of the possibility that
``the sheer number of cars in densely populated areas will begin
outrunning the technological limits of our capacity to reduce pollution
from the internal combustion engine.'' \140\
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\139\ Electric Vehicles and Other Alternatives to the Internal
Combustion Engine: Joint Hearings before the Comm. On Commerce and
the Subcomm. On Air and Water Pollution of the Comm. On Pub. Works,
90th Cong. (1967).
\140\ Richard Nixon, Special Message to the Congress on
Environmental Quality (February 10, 1970), <a href="https://www.presidency.ucsb.edu/documents/special-message-the-congress-environmental-quality">https://www.presidency.ucsb.edu/documents/special-message-the-congress-environmental-quality</a>.
---------------------------------------------------------------------------

Since the earliest days of the CAA, Congress has also emphasized
that the goal of section 202 is to address air quality hazards from
motor vehicles, not to simply reduce emissions from internal combustion
engines to the extent feasible. In the Senate Report accompanying the
1970 CAA Amendments, Congress made clear the EPA ``is expected to press
for the development and application of improved technology rather than
be limited by that which exists'' and identified several
``unconventional'' technologies that could successfully meet air
quality-based emissions targets for motor vehicles.\141\ In the 1970
amendments, Congress further demonstrated its recognition that
developing new technology to ensure that pollution control keeps pace
with economic development is not merely a matter of refining the ICE,
but requires considering new types of motor vehicle propulsion.\142\
Congress provided EPA with authority to fund the development of ``low
emission alternatives to the present internal combustion engine'' as
well as a program to encourage Federal purchases of ``low-emission
vehicles.'' See CAA section 104(a)(2) (previously codified as CAA
section 212).\143\ Congress also adopted section 202(e) expressly to
grant the Administrator discretion under certain conditions regarding
the certification of vehicles and engines based on ``new power sources
or propulsion system[s],'' that is to say, power sources and propulsion
systems beyond the existing internal combustion engine and fuels
available at the time of the statute's enactment. As the D.C. Circuit
stated in 1975, ``We may also note that it is the belief of many
experts--both in and out of the automobile industry--that air pollution
cannot be effectively checked until the industry finds a substitute for
the conventional automotive power plant--the reciprocating internal
combustion (i.e., `piston') engine. . . . It is clear from the
legislative history that Congress expected the Clean Air Amendments to
force the industry to broaden the scope of its research--to study new
types of engines and new control systems.'' \144\
---------------------------------------------------------------------------

\141\ S. Rep. No. 91-1196, at 24-27 (1970).
\142\ In the lead up to enactment of the CAA of 1970, Senator
Edmund Muskie, Chair of the Subcommittee on Environmental Pollution
of the Committee on Public Works (now the Committee on Environment
and Public Works), stated that ``[t]he urgency of the problems
required that the industry consider, not only the improvement of
existing technology, but also alternatives to the internal
combustion engine and new forms of transportation.'' 116 Cong. Rec.
42382, December 18, 1970.
\143\ A Senate report on the Federal Low-Emission Vehicle
Procurement Act of 1970, the standalone legislation that ultimately
became the low-emission vehicle procurement provisions of the 1970
CAA, stated that the purpose of the bill was to direct Federal
procurement to ``stimulate the development, production and
distribution of motor vehicle propulsion systems which emit few or
no pollutants'' and explained that ``the best long range method of
solving the vehicular air pollution problem is to substitute for
present propulsion systems a new system which, during its life,
produces few pollutants and performs as well or better than the
present powerplant.'' S. Rep. No. 91-745, at 1, 4 (March 20, 1970).
\144\ Int'l Harvester Co. v. Ruckelshaus, 478 F.2d 615, 634-35
(D.C. Cir. 1975).
---------------------------------------------------------------------------

Moreover, Congress believed that the motor vehicle emissions
program could achieve enormous emissions reductions, not merely modest
ones, through the application and development of ever-improving
emissions control technologies. For example, the Clean Air Act of 1970
required a 90 percent reduction in emissions, which was to be achieved
with less lead time than this rule provides for its final
standards.\145\ Ultimately, although the industry was able to meet the
standard using ICE technologies, the standard drove development of
entirely new engine and emission control technologies such as exhaust
gas recirculation and catalytic converters, which in turn required a
switch to unleaded fuel and the development of massive new
infrastructure (not present at the time the standard was finalized) to
support the distribution of this fuel.\146\
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\145\ See Clean Air Act Amendments of 1970, Public Law 91-604,
at sec. 6, 84 Stat. 1676, 1690, December 31, 1970 (amending section
202 of the CAA and directing EPA to issue regulations to reduce
carbon monoxide and hydrocarbons from LD vehicles and engines by 90
percent in MY 1975 compared to MY 1970 and directing EPA to issue
regulations to reduce NO<INF>X</INF> emissions from LD vehicles and
engines by 90 percent in MY 1976 when compared with MY 1971).
\146\ Since the new vehicle technology required on all model
year 1975-76 vehicles would be poisoned by the lead in the existing
gasoline, it required the rollout of an entirely new fuel to the
marketplace with new refining technology needed to produce it. It
was not possible for refiners to make the change that quickly to all
of the nation's gasoline production, so this in turn required
installation of a new parallel fuel distribution infrastructure to
distribute and new retail infrastructure to dispense unleaded
gasoline to the customers with MY1975 and later vehicles while still
supplying leaded gasoline to the existing fleet. In order to ensure
availability of unleaded gasoline across the nation, all refueling
stations with sales greater than 200,000 gallons per year were
required to dispense the new unleaded gasoline. In 1974, less than
10 percent of all gasoline sold was unleaded gasoline, but by 1980
nearly 50 percent was unleaded. See generally Richard G. Newell and
Kristian Rogers, The U.S. Experience with the Phasedown of Lead in
Gasoline, Resources for the Future (June 2003), available at <a href="https://web.mit.edu/ckolstad/www/Newell.pdf">https://web.mit.edu/ckolstad/www/Newell.pdf</a>.

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[[Page 29466]]

Since that time, Congress has continued to emphasize the importance
of technology development to achieving the goals of the CAA.\147\ In
the 1990 amendments, Congress determined that evolving technologies
could support further order of magnitude reductions in emissions. For
example, the statutory Tier I light-duty standards required (on top of
the existing standards) a further 30 percent reduction in nonmethane
hydrocarbons, 60 percent reduction in NO<INF>X</INF>, and 80 percent
reduction in PM for diesel vehicles. The Tier 2 light-duty standards in
turn required passenger vehicles to be 77 to 95 percent cleaner.\148\
Congress instituted a clean fuel vehicles program to promote further
progress in emissions reductions, which also applied to motor vehicles
as defined under section 216, see CAA section 241(1), and explicitly
defined motor vehicles qualifying under the program as including
vehicles running on an alternative fuel or ``power source (including
electricity),'' CAA section 241(2).\149\
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\147\ For example, in the lead up to the CAA Amendments of 1990,
the House Committee on Energy and Commerce reported that ``[t]he
Committee wants to encourage a broad range of vehicles using
electricity, improved gasoline, natural gas, alcohols, clean diesel
fuel, propane, and other fuels.'' H. Rep. No. 101-490, at 283 (May
17, 1990).
\148\ See 65 FR 28, February 10, 2000).
\149\ See also CAA section 246(f)(4) (under the clean fuels
program, directing the Administrator to issue standards ``for Ultra-
Low Emission Vehicles (ULEV's) and Zero Emissions Vehicles (ZEV's)''
and to conform certain such standards ``as closely as possible to
standards which are established by the State of California for ULEV
and ZEV vehicles in the same class.'').
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Congress also directed EPA to phase-in certain section 202(a)
standards in CAA section 202(g)-(j).\150\ In doing so, Congress
recognized that certain technologies, while extremely potent at
achieving lower emissions, would be difficult for the entire industry
to adopt all at once. Rather, it would be more appropriate for the
industry to gradually implement the standards over a longer period of
time. This is directly analogous to EPA's assessment in this final
rule, which finds that industry will gradually shift to more effective
emissions control technologies over a period of time. Generally
speaking, phase-ins, fleet averages, and ABT all are means of
addressing the question, recognized by Congress in section 202, of how
to achieve emissions reductions to protect public health when it may be
difficult (or less preferable for manufacturers) to implement a
stringency increase across the entire fleet simultaneously.
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\150\ CAA section 202(g) required a phase in for LD trucks up to
6,000 lbs GVWR and LD vehicles beginning with MY 1994 for emissions
of nonmethane hydrocarbons (NMHC), carbon monoxide (CO), nitrogen
oxides (NO<INF>X</INF>), and particular matter (PM). These standards
phased in over several years. Similarly, CAA section 202(h) required
standards to be phased in beginning with MY 1995 for LD trucks of
more than 6,000 lbs GVWR for the same pollutants. CAA section 202(i)
required EPA to study whether further emission reductions should be
required with respect to MYs after January 1, 2003 for certain
vehicles. CAA section 202(j) required EPA to promulgate regulations
applicable to CO emissions from LD vehicles and LD trucks when
operated under ``cold start'' conditions i.e., when the vehicle is
operated at 20 degrees Fahrenheit. Congress directed EPA to phase in
these regulations beginning with MY 1994 under Phase I, and to study
the need for further reductions of CO and the maximum reductions
achievable for MY 2001 and later LD vehicles and LD trucks when
operated in cold start conditions. In addition, Congress specified
that any ``revision under this subchapter may provide for a phase-in
of the standard.'' CAA 202(b)(1)(C).
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Similar to EPA's ABT program, these statutory phase-in provisions
also evaluated compliance with respect to a manufacturers' fleet of
vehicles over the model year. More specifically, CAA section 202(g)-(j)
each required a specified percentage of a manufacturer's fleet to meet
a specified standard for each model year (e.g., 40 percent of a
manufacturer's sales volume must meet certain standards by MY 1994).
This made the level of a manufacturer's production over a model year a
core element of the standard. In other words, the form of the standard
mandated by Congress in these sections recognized that pre-production
certification would be based on a projection of production for the
upcoming model year, with actual compliance with the required
percentages not demonstrated until after the end of the model year.
Compliance was evaluated not only with respect to individual vehicles,
but with respect to the fleet as a whole. EPA's ABT provisions use this
same approach, adopting a similar, flexible form, that also makes the
level of a manufacturer's production a core element of the standard and
evaluates compliance at the fleet level, in addition to at the
individual vehicle level.
In enacting the Energy Independence and Security Act of 2007,
Congress also recognized the possibility that fleet-average standards
also recognized the possibility of fleet-average standards. The statute
barred Federal agencies from acquiring ``a light duty motor vehicle or
medium duty passenger vehicle that is not a low greenhouse gas emitting
vehicle.'' \151\ It directed the Administrator to promulgate guidance
on such ``low greenhouse gas emitting vehicles,'' but explicitly
prohibited vehicles from so qualifying ``if the vehicle emits
greenhouse gases at a higher rate than such standards allow for the
manufacturer's fleet average grams per mile of carbon dioxide-
equivalent emissions for that class of vehicle, taking into account any
emissions allowances and adjustment factors such standards provide.''
\152\ Congress thus explicitly contemplated the possibility of motor
vehicle GHG standards with a fleet average form.\153\
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\151\ 42 U.S.C. 13212(f)(2)(A).
\152\ 42 U.S.C. 13212(f)(3)(C) (emphasis added).
\153\ 42 U.S.C. 13212 does not specifically refer back to CAA
section 202(a). However, we think it is plain that Congress intended
for EPA in implementing section 13212 to consider relevant CAA
section 202(a) standards as well as standards issued by the State of
California. See 42 U.S.C. 13212(f)(3)(B) (``In identifying vehicles
under subparagraph (A), the Administrator shall take into account
the most stringent standards for vehicle greenhouse gas emissions
applicable to and enforceable against

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