Rule2026-03300
Petroleum-Equivalent Fuel Economy Calculation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 19, 2026
Effective
February 19, 2026
Issuing agencies
Energy Department
Abstract
The Office of Critical Minerals and Energy Innovation (formerly the Office of Energy Efficiency and Renewable Energy) of the Department of Energy (DOE) has reviewed the petroleum-equivalency factor (PEF) for electric vehicles (EVs) used by the Environmental Protection Agency (EPA) in calculating light-duty vehicle manufacturers' compliance with the Department of Transportation's (DOT) Corporate Average Fuel Economy (CAFE) standards. DOE has determined that revisions to the PEF are necessary. DOE is first publishing a final rule that removes the fuel content factor (FCF) from the calculation of the PEF. Removal of the FCF is consistent with a United States Court of Appeals for the Eighth Circuit decision that held, among other things, that the inclusion of the FCF in the PEF calculation exceeded DOE's authority under the substantive statute. DOE will propose additional revisions to the PEF in a forthcoming notice of proposed rulemaking.
Full Text
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<title>Federal Register, Volume 91 Issue 33 (Thursday, February 19, 2026)</title>
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[Federal Register Volume 91, Number 33 (Thursday, February 19, 2026)]
[Rules and Regulations]
[Pages 7810-7817]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03300]
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DEPARTMENT OF ENERGY
10 CFR Part 474
[EERE-2025-VT-0073]
RIN 1904-AF47
Petroleum-Equivalent Fuel Economy Calculation
AGENCY: Office of Critical Minerals and Energy Innovation, Department
of Energy.
ACTION: Interim final rule; request for comments.
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SUMMARY: The Office of Critical Minerals and Energy Innovation
(formerly the Office of Energy Efficiency and Renewable Energy) of the
Department of Energy (DOE) has reviewed the petroleum-equivalency
factor (PEF) for electric vehicles (EVs) used by the Environmental
Protection Agency (EPA) in calculating light-duty vehicle
manufacturers' compliance with the Department of Transportation's (DOT)
Corporate Average Fuel Economy (CAFE) standards. DOE has determined
that revisions to the PEF are necessary. DOE is first publishing a
final rule that removes the fuel content factor (FCF) from the
calculation of the PEF. Removal of the FCF is consistent with a United
States Court of Appeals for the Eighth Circuit decision that held,
among other things, that the inclusion of the FCF in the PEF
calculation exceeded DOE's authority under the substantive statute. DOE
will propose additional revisions to the PEF in a forthcoming notice of
proposed rulemaking.
DATES: The effective date of this interim final rule is February 19,
2026. DOE will accept comments, data, and information regarding this
interim final rule no later than March 23, 2026.
ADDRESSES: Interested persons are encouraged to submit comments using
[[Page 7811]]
the Federal eRulemaking Portal at <a href="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by RIN 1904-AG09, by any of the
following methods:
Federal eRulemaking Portal: <a href="http://www.regulations.gov/docket/EERE-2025-VT-0073">www.regulations.gov/docket/EERE-2025-VT-0073</a>. Follow the instructions for submitting comments.
Email: <a href="/cdn-cgi/l/email-protection#48180d0e170b2725252d263c3b082d2d662c272d662f273e"><span class="__cf_email__" data-cfemail="e9b9acafb6aa8684848c879d9aa98c8cc78d868cc78e869f">[email protected]</span></a>. Include the RIN 1904-AG09 in the
subject line of the message.
Postal Mail: U.S. Department of Energy, 1904-AG09, 1000
Independence Avenue SW, Washington, DC 20585. If possible, please
submit all items on a compact disc (``CD''), in which case it is not
necessary to include printed copies.
Hand Delivery/Courier: U.S. Department of Energy, Attention: Kevin
Stork, 1000 Independence Avenue SW, Washington, DC 20585. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
No telefacsimilies (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section V, Public Participation, for details.
Docket: The docket, which includes Federal Register notices,
comments, and other supporting documents/materials, is available for
review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All documents in the docket are listed
in the <a href="http://www.regulations.gov">www.regulations.gov</a> index. However, some documents listed in the
index, such as those containing information that is exempt from public
disclosure, may not be publicly available.
The docket web page can be found at the <a href="http://www.regulations.gov">www.regulations.gov</a> web
page associated with RIN 1904-AG09. The docket web page contains simple
instructions on how to access all documents, including public comments,
in the docket. See section V of this document, Public Participation,
for information on how to submit comments through <a href="http://www.regulations.gov">www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Mr. Kevin Stork, U.S. Department of
Energy, Vehicle Technologies Office, EE-3V, 1000 Independence Avenue
SW, Washington, DC 20585. Telephone: (202) 586-8306. Email:
<a href="/cdn-cgi/l/email-protection#e2b2a7a4bda18d8f8f878c9691a28787cc868d87cc858d94"><span class="__cf_email__" data-cfemail="550510130a163a3838303b21261530307b313a307b323a23">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Fuel Content Factor
A. Historical Background of the Fuel Content Factor
B. The Phaseout of the FCF in the 2024 PEF Final Rule
C. Eighth Circuit Court Decision Vacating the 2024 Final Rule
III. Discussion
A. Not Supported by the 49 U.S.C. 32904(a)(B)(2) Factors
B. Not Supported by the 49 U.S.C. 32905
IV. Conclusion
A. Impact on PEF Values
B. Section-by-Section Analysis
V. Public Participation
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 14192
B. Administrative Procedure Act
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act of 1995
E. Review Under the National Environmental Policy Act of 1969
F. Review under Executive Order 13132
G. Review Under Executive Order 12988
H. Review Under the Unfunded Mandates Reform Act of 1995
I. Review Under the Treasury and General Government
Appropriations Act of 1999
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Congressional Notification
VII. Approval of the Office of the Secretary
I. Introduction
In 1975, Congress passed the Energy Policy and Conservation Act
(EPCA), Public Law 94-163. Title III of EPCA amended the Motor Vehicle
Information and Cost Savings Act (15 U.S.C. 1901 et. seq.) (the Motor
Vehicle Act) by mandating fuel economy standards for automobiles
produced in, or imported into, the United States. This legislation, as
amended, requires every manufacturer to meet applicable specified
corporate average fuel economy (CAFE) standards for their fleets of
light-duty vehicles under 8,500 pounds that the manufacturer
manufactures in any model year.\1\ The Department of Transportation
(through the National Highway Traffic Safety Administration (NHTSA)) is
responsible for prescribing the CAFE standards and enforcing the
penalties for failure to meet these standards. 49 U.S.C. 32902. The
Environmental Protection Agency (EPA) is responsible for calculating
each manufacturer's fleet CAFE value. 49 U.S.C. 32902 and 32904.
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\1\ The relevant provisions of the CAFE program, including DOE's
establishment of equivalent petroleum-based fuel economy values were
transferred to Title 49 of the U.S. Code by Public Law 103-272 (July
5, 1984). See 49 U.S.C. 32901 et seq. The authority for DOE's
establishment of equivalent petroleum-based fuel economy values was
transferred to 49 U.S.C. 32904(a)(2)(B).
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With respect to electric vehicles, EPA uses the PEF determined by
DOE in the calculation of CAFE standards. DOE reviews the PEF annually
and determines whether revisions are necessary based on the following
factors:
(i) The approximate electrical energy efficiency of the vehicle,
considering the kind of vehicle and the mission and weight of the
vehicle.
(ii) The national average electrical generation and transmission
efficiencies.
(iii) The need of the United States to conserve all forms of energy
and the relative scarcity and value to the United States of all fuel
used to generate electricity.
(iv) The specific patterns of use of electric vehicles compared to
petroleum-fueled vehicles.
49 U.S.C. 32904(a)(2)(B).
Section 18 of the Chrysler Corporation Loan Guarantee Act of 1979
further amended the Electric and Hybrid Vehicle Research, Development,
and Demonstration Act of 1976 by adding a new paragraph (3) to section
13(c), which directed the Secretary of Energy, in consultation with the
Secretary of Transportation and the Administrator of EPA, to conduct a
seven-year evaluation program of the inclusion of electric vehicles in
the calculation of average fuel economy. As required by section
503(a)(3) of the Motor Vehicle Act, DOE proposed a method of
calculating the petroleum-equivalent fuel economy of electric vehicles
utilizing a PEF in a new 10 CFR part 474 on May 21, 1980. 45 FR 34008.
The rule was finalized on April 21, 1981, and became effective May 21,
1981. 46 FR 22747. The seven-year evaluation program was completed in
1987, and the calculation of the annual petroleum equivalency factors
was not extended past 1987.
DOE published a proposed rule for a permanent PEF for use in
calculating petroleum-equivalent fuel economy values of electric
vehicles on February 4, 1994, and obtained comments from interested
parties. 59 FR 5336 (1994 NOPR). Following consideration of comments,
DOE's own internal re-examination of the assumptions underlying the
proposed rule, and existing regulations for other classes of
alternative fuel vehicles, DOE decided to modify the PEF calculation
approach proposed in 1994. The 1994 NOPR was later withdrawn, and DOE
proposed a modified approach in a July 14, 1999, notice of proposed
rulemaking. 64 FR 37905 (1999 NOPR). DOE published a final rule with a
PEF of 82,049 Watt-hours per gallon on June 12, 2000, that amended 10
CFR part 474. 65 FR 36985 (2000 Final Rule).
On October 22, 2021, DOE received a petition for rulemaking from
the Natural Resources Defense Council (NRDC) and
[[Page 7812]]
Sierra Club requesting that DOE update its regulations at 10 CFR part
474. DOE published a notice of receipt of the petition on December 29,
2021, and solicited comment on the petition and whether DOE should
proceed with a rulemaking. 86 FR 73992. In April 2023, DOE agreed that
the inputs upon which the calculations and PEF values are based were
outdated and that the technology and market penetration of EVs has
significantly changed since the 2000 Final Rule and granted the
petition from NRDC and Sierra Club. When granting the petition, DOE
also published a notice of proposed rulemaking. 88 FR 21525 (April 11,
2023) (2023 NOPR).
In the 2023 NOPR, DOE proposed to update the PEF value and revise
the methodology used to calculate the PEF. One of the proposed
revisions was to remove the fuel content factor (FCF) as DOE determined
that the fuel content factor was not supported by the underlying
statutory provisions. 88 FR 21525, 21530. However, in a final rule
published on March 29, 2024, DOE elected to phase-out the FCF between
Model Year (MY) 2027 and MY 2030 rather than removing it from the PEF
equation as of the effective date of the final rule. 89 FR 22041, 22052
(2024 Final Rule).
On April 5, 2024, the states of Iowa, Arkansas, Florida, Idaho,
Kansas, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma,
Texas, Utah, and the American Free Enterprise Chamber of Commerce filed
a petition for review in the United States Court of Appeals for the
Eighth Circuit. Iowa, et al. v. Wright (Case No. 24-1721 (8th Cir.)).
In a September 5, 2025, opinion, the Eighth Circuit granted the
petition for review, vacated the 2024 Final Rule, and remanded the
proceedings to DOE. Specifically, the court ruled, among other things,
that the FCF was illegal or otherwise contrary to statute. Consistent
with the court's opinion and DOE's own determination in the 2023 NOPR,
DOE is issuing this interim final rule to immediately remove the FCF
from the PEF calculation. As noted previously, DOE will propose
additional revisions to the PEF calculation in a forthcoming notice of
proposed rulemaking.
II. Fuel Content Factor
A. Historical Background of the Fuel Content Factor
In the 1994 NOPR, DOE proposed a scarcity factor as an intermediate
factor that used a complex approach to quantify the relative scarcity
and value of all fuels used to generate electricity in the United
States. 59 FR 5336, 5339; see 49 U.S.C. 32904(a)(2)(B)(iii). This
proposed scarcity factor was based on estimates of the U.S. share of
world reserves of fossil fuels and estimated rates of depletion of
world reserves. The scarcity factor was derived by determining the U.S.
percent and numeric share of the world reserve market and calculating
the rate at which the United States is depleting each fuel source's
reserves. These values were then normalized to obtain the relative
scarcity value for each fuel source. 59 FR 5336, 5338-5339.
In response to the 1994 NOPR, DOE received comments that were
critical of the proposed scarcity factor. After considering these
comments, DOE concluded that scarcity did not appear to be of concern
and should not be a guiding factor in setting the PEF value. 64 FR
37905, 37907. In the 1999 NOPR, due to concerns with assumptions and
calculations used, DOE decided to replace the scarcity factor rather
than attempt to refine it. After considering alternative approaches to
quantifying scarcity and value, DOE determined that each of these
approaches were found to have technical or policy shortcomings or
internal inconsistencies. Id. at 37906-37907.
Instead of trying to quantify scarcity, DOE examined existing law,
specifically 49 U.S.C. 32905, which prescribes procedures for
determining the petroleum-equivalent fuel economy of non-EV alternative
fueled vehicles. Id. at 37907. DOE then determined to include an FCF of
1.0/0.15 into its PEF calculation for EVs, noting that this approach
would be consistent with the existing regulatory and statutory
procedures for other types of alternative fuel vehicles, the approach
treated manufacturers of all alternative fuel vehicles similarly, and
that the calculation is relatively simple and straightforward to apply.
Id. at 37907.
In the 2000 Final Rule, DOE stated that although it did not
expressly incorporate scarcity in the 1999 NOPR, DOE added the FCF, in
part, to help address scarcity issues by rewarding electric vehicles'
benefits to the Nation relative to petroleum-fueled vehicles. 65 FR
36986, 36988. Specifically, DOE noted that the 1.0/0.15 factor results
in a substantial adjustment to the raw calculated energy efficiency of
electric vehicles, which would result in a higher petroleum-equivalent
fuel economy for EVs and that manufacturers would be rewarded for
adding EVs to its corporate-wide fleet. Id.
B. The Phaseout of the FCF in the 2024 PEF Final Rule
In the 2023 NOPR, DOE proposed removing the FCF from the PEF
equation. In addition to changing EV technology and market penetration
and the fact that the current PEF value overvalues EVs in determining
fleetwide CAFE compliance,\2\ DOE also stated that the FCF lacks legal
support. Specifically, DOE noted that the FCF is based on the same
factor for non-EV alternative fuel vehicles under 49 U.S.C. 32905.
However, DOE noted that section 32905 does not apply the factor to EVs.
DOE concluded that although DOE sought to treat EVs the same as other
alternative fuel vehicles by using the same fuel content factor, there
is no basis to do so in sections 32905 or 32904.
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\2\ In the 2023 NOPR, DOE applied the PEF value to the then-
current version of the Kia Niro EV and the similar Hyundai Kona and
found that the vehicles were rated a 394.3 miles per gallon
equivalent and 41.2 miles per gallon respectively. 88 FR 21525,
21530.
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DOE received several comments on its proposal to remove FCF from
the PEF calculation. In the 2024 Final Rule, DOE decided instead to
phase out the FCF starting with MY 2027 EVs through MY 2030 vehicles.
DOE reasoned that other incentives and support for EVs would become
more fully operative and effective over time, reducing the need for the
FCF. But, in the meantime, DOE concluded that retaining and phasing out
the FCF would ``incentivize additional EV production'' and result in
petroleum conservation. Id.
C. Eighth Circuit Court Decision Vacating the 2024 Final Rule
On April 5, 2024, the states of Iowa, Arkansas, Florida, Idaho,
Kansas, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma,
Texas, Utah, and the American Free Enterprise Chamber of Commerce filed
a petition for review in the United States Court of Appeals for the
Eighth Circuit. Iowa, et al. v. Wright (Case No. 24-1721 (8th Cir.)).
In a September 5, 2025, opinion, the Court granted the petition for
review, vacated the 2024 Final Rule, and remanded the proceedings to
DOE. Specifically, the court ruled, among other things, that the FCF
exceeded DOE's authority under the substantive statute.
The Court observed that when DOE adopted the 2024 Final Rule, DOE
justified the retention and gradual phasing out of the FCF on 49 U.S.C.
32904(a)(2)(B)(iii). Iowa, et al. v. Wright (Slip Opinion 21). However,
the Court determined that DOE's reading of
[[Page 7813]]
subsection 32904(a)(2)(B)(iii) is broad and contradicts DOE's decades-
long construction of the statute because the FCF does not try to
quantify the relative value of scarcity of various fuels but instead
applies a flat fuel content factor. Id. at 21-22. Furthermore, the
Court notes that DOE does not tie the 1.0/0.15 factor to the relative
costs of various fuels but instead justifies the FCF as an incentive
for EV production. Id. at 22. The Court noted the stark difference
between DOE's previous interpretation of factor (iii) from the reading
of subsection 32904(a)(2)(B)(iii) adopted by DOE in the 2024 Final
Rule.
The Court also discussed why DOE's interpretation of subsection
32904(a)(2)(B) is not the best reading of the statute. Specifically,
factor (iii) is one of four factors that DOE considers when determining
the petroleum equivalency factor. The Court stated that DOE's
interpretation of factor (iii) would enable DOE to set the value of the
FCF at any value ``so long as `applying such a fuel content factor
would in fact conserve energy.' '' Id. However, the Court noted that
``[i]f Congress aimed to empower DOE to incentivize the production of
electric vehicles so long as the use of electric vehicles conserved
energy overall and scarce fuels in particular, `Congress easily could
have drafted' the statute `in that broad manner.' '' Id. at 23; citing
National Ass'n of Mfrs. v. Dep't of Defense, 583 U.S. 109, 128 (2018).
The Court held that ``DOE exceed[ed] the boundaries of its
statutory authority for the reasons discussed--the dramatic difference
between DOE's current view and its previous constructions of section
32904, the broadness of the authority DOE assert[ed] by including the
fuel content factor, [and] the risk of making other subsections
superfluous[.]'' Id. at 25. In short, the ``fuel content factor--as
currently determined and justified by the DOE--lacks statutory
authority.'' Id. at 27.
III. Discussion
After the Eighth Circuit Court of Appeals vacated the 2024 Final
Rule in Iowa, et al. v. Wright, DOE reviewed the PEF value adopted by
the 2000 Final Rule to ensure consistency with the Court's decision.
For the following reasons, DOE concludes that the FCF is unlawful and,
as a result, is issuing this IFR to remove the FCF from the PEF
calculation.
A. Not Supported by the 49 U.S.C. 32904(a)(B)(2) Factors
In Iowa, et al. v. Wright, the Eighth Circuit concluded that ``fuel
content factor--as currently determined and justified by the DOE--lacks
statutory authority'' and vacated the 2024 Final Rule that preserved
and then phased out the FCF. Id. (emphasis added). In this rulemaking,
DOE determines that the FCF adopted by the 2000 Final Rule is not
supported by section 49 U.S.C. 32904 for the same reasons the Court
found the FCF, as determined and justified by DOE in the 2024 Final
Rule, unlawful.
In the 1994 NOPR, DOE proposed a scarcity factor to quantify the
relative scarcity and value of all fuels used to generate electricity
in the United States. 59 FR 5336, 5339. However, after considering
comments, in the 1999 NOPR, DOE decided to replace the scarcity factor
rather than attempt to refine it. Instead of a scarcity factor that is
based on the relative scarcity and value for each fuel source, DOE
proposed a flat 1.0/0.15 FCF, which is based on the factor Congress set
for liquid and gaseous alternative fuel in section 32905. 64 FR 37905,
37907. This marked DOE's departure from its initial interpretation of
subsection 32904(a)(2)(B)(iii) and DOE abandoned its decade-long
approach of attempting to quantify the relative value or scarcity of
various fuels as it did in the 1981 rulemaking or the 1994 NOPR. In the
2000 Final Rule, in response to comments stating that ``DOE should
provide a technical basis for its application [of the 1.0/0.15 factor]
to EVs, or else modify the factor accordingly,'' DOE failed to provide
a technical basis for setting the factor at that value. 65 FR 36986,
36988. Instead, DOE stated that it replaced the proposed scarcity
factor with the FCF to simplify the calculation, and to ``maintain
consistency with the existing regulatory treatment of other types of
alternative fueled vehicles.'' Id. By adopting a flat FCF in the 2000
Final Rule, DOE contradicted its decades-long understanding that factor
(iii) as requiring quantification of the relative value or scarcity of
various fuels.
Additionally, in the 2000 Final Rule when DOE adopted the current
FCF, DOE stated that it adopted the 1.0/0.15 FCF, in part, to help
address scarcity issues by rewarding electric vehicles' benefits to the
Nation relative to petroleum-fueled vehicles, in a manner consistent
with the treatment of other types of alternative fueled vehicles. 65 FR
36986, 36988. Like DOE's rationale in the 2024 Final Rule, the 2000
Final Rule incorporated the FCF to incentivize manufacturers to produce
more EVs. Thus, DOE interpretated subsection 32904(a)(2)(B)(iii) as
enabling it to set a PEF value to incentivize the manufacture of EVs to
conserve petroleum. By interpretating subsection 32904(a)(2)(B)(iii) to
grant such broad authority, DOE rendered factors (i) and (ii)
redundant. Similar to the Court's decision regarding the 2024 Final
Rule, DOE determines that this interpretation is not the best reading
of the statute.
For the reasons discussed previously, the 1.0/0.15 FCF adopted in
the 2000 Final Rule is unsupported by section 32904(a)(2)(B).
B. Not Supported by the 49 U.S.C. 32905
Section 32905 also does not empower DOE to include a fuel content
factor of 1.0/0.15 when calculating the petroleum-based fuel economy of
EVs. In section 32905, Congress explicitly said that the ``fuel
economy'' of alternative liquid fuel vehicles and gaseous fuel vehicles
would be ``based on'' their ``fuel content.'' 49 U.S.C. 32905(a), (c).
Congress specifically set the ``fuel content'' at 1.0/0.15. Id. But
Congress did not do so for EVs, because section 32905 explicitly
excluded EVs. Id. 32905(a) (``Except as provided in . . . section
32904(a)(2) of this title . . .''). Instead, Congress listed specific
factors for DOE to consider when determining the equivalent petroleum-
based fuel economy values of EVs. 49 U.S.C. 32904(a)(2)(B).
The basis for the current fuel content factor is attached to
statutory provisions not pertinent to EVs. As noted, in the 2000 Final
Rule, DOE set the FCF at 1.0/0.15 because that same factor applies to
non-EV alternative fuel vehicles under section 32905. However, in
adopting the FCF, DOE ignored that Congress intended for liquid and
gaseous alternative fuel vehicles to be treated differently from EVs.
Section 32905 does not apply that factor to EVs and instead instructs
DOE to set the PEF value based on the four factors of subsection
32904(a)(2)(B). Accordingly, there is no basis in section 32905 for DOE
to adopt the 1.0/0.15 FCF when calculating the petroleum-based fuel
economy of EVs.
IV. Conclusion
A. Impact on PEF Values
For these aforementioned reasons, DOE removes the FCF from the PEF
calculation. The PEF value is equal to the product of the values of the
gasoline-equivalent energy content of electricity (Eg), the fuel
content factor of \1/0.15\, the petroleum-fueled accessory factor (AF),
and the driving pattern factor (DPF). 65 FR 36986, 36987. This
methodology is expressed in the following equation:
PEF value = E<INF>g</INF> * FCF * AF * DPF
[[Page 7814]]
In the 2000 Final Rule, DOE determined that E<INF>g</INF> is 12,307
Wh/gal, the AF for EVs that do not have petroleum-powered accessories
is 1.0, the AF for EVs that have petroleum-powered accessories is 0.9,
and the DPF is 1.0. Id. Accordingly, removing the FCF from the PEF
value results in the following PEF values:
Table 1--PEF Values Without FCF
------------------------------------------------------------------------
------------------------------------------------------------------------
EVs without petroleum-powered 12,307 Wh/gal * 12,307 Wh/gal.
accessories. 1.0 * 1.0.
EVs with petroleum-powered 12,307 Wh/gal * 11,706 Wh/gal.
accessories. 0.9 * 1.0.
------------------------------------------------------------------------
E<INF>g</INF> is determined by combining various values for the
efficiency of national electricity and petroleum generation and
distribution. DOE notes that the E<INF>g</INF> adopted in the 2000
Final Rule was based on data sources, primarily monthly and annual
reports from the Energy Information Administration, available in 1999.
Id. However, the efficiency of many of these processes has improved
over the last twenty years. 86 FR 73992, 73995. Specifically, the
December 2021 petition noted that the average fossil-fuel electricity
generation efficiency has improved and that the generation fuel mix has
changed significantly since 2000. Id. DOE agrees that the inputs upon
which the calculations and the PEF values are outdated and have
significantly changed since part 474 was revised in 2000. As stated
previously, DOE will propose the additional revisions to the PEF
calculation in a forthcoming notice of proposed rulemaking. DOE intends
to complete this rulemaking in a timely manner so that the fully
revised PEF values are available as soon as possible.
B. Section-by-Section Analysis
1. Revisions to 10 CFR 474.3
DOE is revising section 474.3(b)(1) and (2), which provides the PEF
values for EVs, to reflect the removal of the FCF from the PEF
calculation. Specifically, DOE is amending subparagraph (b)(1) so that
the PEF value for EVs without petroleum-powered accessories installed
is 12,307 Wh/gal. DOE is also amending subparagraph (b)(2) so that the
PEF value for EVs with petroleum-powered accessories install is 11,706
Wh/gal.
2. Revisions to 10 CFR Part 474 Appendix A
Similarly, DOE is revising Appendix A to 10 CFR part 474 to reflect
PEF values that do not include the FCF. DOE is amending Example 1 to
reflect the PEF value for EVs without petroleum-powered accessories
installed as 12,307 Wh/gal and Example 2 to reflect the PEF value for
EVs with petroleum-powered accessories installed as 11,706 Wh/gal.
V. Public Participation
DOE will accept comments, data, and information regarding this
proposed rule on or before the date provided in the DATES section at
the beginning of this proposed rule. Interested parties may submit
comments, data, and other information using any of the methods
described in the ADDRESSES section at the beginning of this document.
Submitting comments via <a href="http://www.regulations.gov">www.regulations.gov</a>. The
<a href="http://www.regulations.gov">www.regulations.gov</a> web page will require you to provide your name and
contact information. Your contact information will not be publicly
viewable except for your first and last name(s), organization name (if
any), and submitter representative name (if any). If your comment is
not processed properly because of technical difficulties, DOE will use
this information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to <a href="http://www.regulations.gov">www.regulations.gov</a> information the disclosure of
which is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through <a href="http://www.regulations.gov">www.regulations.gov</a>
cannot be claimed as CBI. Comments received through the website will
waive any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section
below.
DOE processes submissions made through <a href="http://www.regulations.gov">www.regulations.gov</a> before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that <a href="http://www.regulations.gov">www.regulations.gov</a>
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to <a href="http://www.regulations.gov">www.regulations.gov</a>. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comment or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable if it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit printed copies.
No telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are written in English, and that are free of any defects or viruses.
Documents should not contain special characters or any form of
encryption and, if possible, they should carry the electronic signature
of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand
[[Page 7815]]
delivery/courier two well-marked copies: One copy of the document
marked ``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
that deletes the information believed to be confidential. Submit these
documents via email or on a CD, if feasible. DOE will make its own
determination about the confidential status of the information and will
treat it according to its determination.
It is DOE's policy that all comments, including any personal
information provided in the comments, may be included in the public
docket, without change and as received, except for information deemed
to be exempt from public disclosure.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 14192
Section 6(a) of E.O. 12866 ``Regulatory Planning and Review''
requires agencies to submit ``significant regulatory actions'' to OIRA
for review. OIRA has determined that this regulatory action does
constitute a ``significant regulatory action'' under section 3(f) of
E.O. 12866. Accordingly, this action was subject to review under that
Executive Order by the Office of Information and Regulatory Affairs
(``OIRA'') of the Office of Management and Budget (``OMB''). Although,
OIRA has determined that this rule constitutes a ``significant
regulatory action,'' DOE notes that the Eighth Circuit Court of Appeals
recently held that the FCF lacks statutory authority. Consistent with
the court's decision, this IFR is amending its methodology to remove
the FCF from the PEF value. Additionally, DOE notes that once
calculated, the PEF has no independent effects, but serves as an input
to calculations that other agencies perform. Thus, the general costs
and benefits that could be attributed to this interim final rule are
somewhat removed from this action, and DOE has not attempted to
quantify them here.
This interim final rule has also been determined to be an ``E.O.
14192 deregulatory action'' under E.O. 14192, ``Unleashing Prosperity
Through Deregulation,'' 90 FR 9065 (February 6, 2025) because the PEF
value is simply an input that other agencies use to determine the
petroleum-based fuel economy of EVs, there are no direct costs
associated with this rulemaking. In addition, as explained previously,
in the 2000 Final Rule, DOE included the FCF, in part, to address
scarcity, and ``reward [EVs'] benefits to the Nation relative to
petroleum-fueled vehicles[.]'' 65 FR 36986, 36988. However, using an
inflated PEF value results in overvaluing EVs when calculating the
fleetwide CAFE compliance. Removing the unlawful FCF from the
calculation of the PEF value will result in more affordable vehicles
for American consumers. Because this interim final rule will reduce the
regulatory burden on the American people, DOE concludes that this rule
is an ``E.O. 14192 deregulatory action.''
B. Administrative Procedure Act
The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq.,
generally requires public notice and an opportunity for comment before
a rule becomes effective. However, APA provides an exception to
ordinary notice and comment procedures ``when the agency for good cause
finds (and incorporates the finding and a brief statement of reasons
therefore in the rules issued) that notice and public procedure thereon
are impracticable, unnecessary, or contrary to the public interest.'' 5
U.S.C. 553(b)(3)(B). For the reasons discussed in section III, the DOE
determines that regulations that include the FCF into the PEF
calculation lack statutory authority and is issuing this interim final
rule to remove the FCF from the PEF value.
The APA's plain language and logic confirm that a rule that repeals
facially unlawful regulations meets the bar for the good cause
exception because ``where a regulation is unlawful under the plain
language of the controlling statute . . . the agency lacks discretion
and authority to retain it, even during the pendency of notice and
comment proceedings[.]'' \3\ Because, as determined by the court, the
FCF is unsupported by the statute and nothing that might emerge during
the comment period can overcome the agency's non-discretionary
inability to retain it, notice and comment are therefore
``unnecessary'' within the meaning of the APA.
---------------------------------------------------------------------------
\3\ Office of Management and Budget, Streamlining the Review of
Deregulatory Actions, October 21, 2025, available at <a href="https://www.whitehouse.gov/wp-content/uploads/2025/10/M-25-36-Streamlining-the-Review-of-Deregulatory-Actions.pdf?cb=1761144575">https://www.whitehouse.gov/wp-content/uploads/2025/10/M-25-36-Streamlining-the-Review-of-Deregulatory-Actions.pdf?cb=1761144575</a>. See E.O.
14219, Ensuring Lawful Governance and Implementing the President's
``Department of Government Efficiency'' Deregulatory Initiative, 90
FR 10583 (signed Feb. 19m, 2025); Presidential Memoranda, Directing
the Repeal of Unlawful Regulations, April 9, 2025, available at
<a href="https://www.whitehouse.gov/presidential-actions/2025/04/directing-the-repeal-of-unlawful-regulations/">https://www.whitehouse.gov/presidential-actions/2025/04/directing-the-repeal-of-unlawful-regulations/</a>.
---------------------------------------------------------------------------
C. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the
preparation of an initial regulatory flexibility analysis (IRFA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by E.O. 13272, Proper Consideration of Small Entities in
Agency Rulemaking, 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. The Department
has made its procedures and policies available on the Office of General
Counsel's website: <a href="http://www.energy.gov/gc/office-general-counsel">www.energy.gov/gc/office-general-counsel</a>.
The interim final rule revises DOE's regulations on electric
vehicles regarding procedures for calculating a value for the
petroleum-equivalent fuel economy of EVs for use in the CAFE program
administered by DOT. Once calculated, the PEF has no independent
effects, but serves as an input to calculations that other agencies
perform. Because this interim final rule does not directly regulate
small entities but instead only amends a factor used to calculate the
average fuel economy of a manufacturer's entire fleet, DOE certifies
that this final rule will not have a significant economic impact on a
substantial number of small entities, and, therefore, no regulatory
flexibility analysis is required.\4\ Mid-Tex Elec. Co-Op, Inc. v.
F.E.R.C., 773 F.2d 327 (1985). Accordingly, DOE certifies that this
rule would not have a significant economic impact on a substantial
number of small entities, and, therefore, no regulatory flexibility
analysis is required. DOE transmitted a certification and supporting
statement of factual basis to the Chief Counsel for Advocacy of the
Small Business Administration for review under 5 U.S.C. 605(b).
---------------------------------------------------------------------------
\4\ DOE notes that passenger vehicle manufacturers that
manufacture fewer than 10,000 vehicles per year can petition NHTSA
to have alternative CAFE standards. See 49 U.S.C. 32902(d).
---------------------------------------------------------------------------
D. Review Under the Paperwork Reduction Act of 1995
The interim final rule does not impose new information or record
keeping requirements. Accordingly, OMB clearance is not required under
the Paperwork Reduction Act. (44 U.S.C. 3501 et seq).
E. Review Under the National Environmental Policy Act of 1969
DOE analyzed this regulation in accordance with the National
Environmental Policy Act of 1969
[[Page 7816]]
(``NEPA''), DOE's NEPA implementing regulations (10 CFR part 1021), and
DOE's NEPA implementing procedures published outside the Code of
Federal Regulations on June 30, 2025. DOE has determined that NEPA does
not apply to this action as this interim final rule amends an existing
rule or regulation that does not change the environmental effect of the
rule or regulation being amended. 10 CFR part 1021, Appendix A. The
interim final rule revises DOE's regulations on electric vehicles
regarding procedures for calculating a value for the petroleum-
equivalent fuel economy of EVs for use in the CAFE program administered
by DOT. Once calculated, the PEF has no independent effects but serves
as an input to calculations that other agencies perform. Because the
PEF value has no independent effects, but instead only amends a factor
used to calculate the average fuel economy of a manufacturer's entire
fleet, amending its value will not change the environmental effect of
the rule or regulation being amended.
F. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999),
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The E.O. requires agencies to examine the constitutional
and statutory authority supporting any action that would limit the
policymaking discretion of the States and to carefully assess the
necessity for such actions. The E.O. also requires agencies to have an
accountable process to ensure meaningful and timely input by State and
local officials in the development of regulatory policies that have
federalism implications. On March 14, 2000, DOE published a statement
of policy describing the intergovernmental consultation process it will
follow in the development of such regulations. See 65 FR 13735. DOE
examined this final rule and determined that it will not preempt State
law and will not have a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
Government. No further action is required by E.O. 13132.
G. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal
agencies the general duty to adhere to the following requirements: (1)
eliminate drafting errors and ambiguity; (2) write regulations to
minimize litigation; and (3) provide a clear legal standard for
affected conduct, rather than a general standard and promote
simplification and burden reduction. Section 3(b) of E.O. 12988
specifically requires that executive agencies make every reasonable
effort to ensure that the regulation: (1) clearly specifies its
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct, while promoting simplification and burden reduction;
(4) specifies its retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of E.O. 12988 requires executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met, or it is unreasonable
to meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this rule does meet
the relevant standards of E.O. 12988.
H. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub.
L. 104-4) requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and tribal governments and the
private sector. For a proposed regulatory action likely to result in a
rule that may cause the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector of $100 million
or more in any one year (adjusted annually for inflation), section 202
of UMRA requires a Federal agency to publish a written statement that
estimates the resulting costs, benefits, and other effects on the
national economy. (2 U.S.C. 1532(a) and (b)). The section of UMRA also
requires a Federal agency to develop an effective process to permit
timely input by elected officers of State, local, and tribal
governments on a proposed ``significant intergovernmental mandate'' and
requires an agency plan for giving notice and opportunity for timely
input to potentially affected small governments before establishing any
requirements that might significantly or uniquely affect small
governments. On March 18, 1997, DOE published a statement of policy on
its process for intergovernmental consultation under UMRA (62 FR 12820)
(also available at <a href="http://www.energy.gov/gc/office-general-counsel">www.energy.gov/gc/office-general-counsel</a>). This rule
contains neither an intergovernmental mandate nor a mandate that may
result in the expenditure of $100 million or more in any year by State,
local, and tribal governments, in the aggregate, or by the private
sector, so these requirements under the Unfunded Mandates Reform Act do
not apply.
I. Review Under the Treasury and General Government Appropriations Act
of 1999
Section 654 of the Treasury and General Government Appropriations
Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a
Family Policymaking Assessment for any rule that may affect family
well-being. This rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE concludes
that it is not necessary to prepare a Family Policymaking Assessment.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002).
DOE has reviewed this rule under the OMB and DOE guidelines and
concludes that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to
OIRA, a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) is a significant regulatory action under E.O.
12866, or any successor order; and (2) is likely to have a significant
adverse effect on the supply, distribution, or use of energy, or (3) is
designated by the Administrator of OIRA as a significant energy action.
For any proposed significant energy action, the agency must give a
detailed
[[Page 7817]]
statement of any adverse effects on energy supply, distribution, or use
should the proposal be implemented, and of reasonable alternatives to
the action and their expected benefits on energy supply, distribution,
and use. This rule amends a factor used to calculate CAFE compliance
and is not expected to have a significant adverse effect on the supply,
distribution, or use of energy. Additionally, OIRA has not designated
this rule as a significant energy action. Accordingly, the requirements
of E.O. 13211 do not apply.
L. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that the Office of Information and Regulatory Affairs has
determined that this rule meets the criteria set forth in 5 U.S.C.
804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this final
rule.
List of Subjects in 10 CFR Part 474
Corporate average fuel economy, Electric (motor) vehicle, Electric
power, Energy conservation, Fuel economy, Motor vehicles, Research.
Signing Authority
This document of the Department of Energy was signed on February
16, 2026, by Audrey Robertson, Assistant Secretary for Energy (EERE),
Office of Critical Minerals and Energy Innovation, pursuant to
delegated authority from the Secretary of Energy. That document with
the original signature and date is maintained by DOE. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on February 17, 2026.
Jennifer Hartzell,
Alternate Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE amends part 474 of
Chapter II of Title 10 of the Code of Federal Regulations as set forth
below:
PART 474--ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND
DEMONSTRATION PROGRAM; PETROLEUM-EQUIVALENT FUEL ECONOMY
CALCULATION
0
1. The authority citation for part 474 continues to read as follows:
Authority: 49 U.S.C. 32901 et seq.
Sec. 474.3 [Amended]
0
2. Amend Sec. 474.3 as follows:
0
a. In (b)(1), by removing ``82,049'' and adding ``12,307'' in its
place.
0
b. In (b)(2), by removing ``73,844'' and adding ``11,706'' in its
place.
0
3. Revise appendix A to part 474 to read as follows:
Appendix A to Part 474--Sample Petroleum-Equivalent Fuel Economy
Calculations
Example 1: An electric vehicle is tested in accordance with
Environmental Protection Agency procedures and is found to have an
Urban Dynamometer Driving Schedule energy consumption value of 265
Watt-hours per mile and a Highway Fuel Economy Driving Schedule
energy consumption value of 220 Watt-hours per mile. The vehicle is
not equipped with any petroleum-powered accessories. The combined
electrical energy consumption value is determined by averaging the
Urban Dynamometer Driving Schedule energy consumption value and the
Highway Fuel Economy Driving Schedule energy consumption value using
weighting factors of 55 percent urban, and 45 percent highway:
combined electrical energy consumption value = (0.55 * urban) +
(0.45 * highway) = (0.55 * 265) + (0.45 * 220) = 244.75 Wh/mile
Since the vehicle does not have any petroleum-powered
accessories installed, the value of the petroleum equivalency factor
is 12,307 Watt-hours per gallon, and the petroleum-equivalent fuel
economy is:
[GRAPHIC] [TIFF OMITTED] TR19FE26.001
Example 2: The vehicle from Example 1 is equipped with an
optional diesel-fired cabin heater/defroster. For the purposes of
this example, it is assumed that the electrical efficiency of the
vehicle is unaffected.
Since the vehicle has a petroleum-powered accessory installed,
the value of the petroleum equivalency factor is 11,706 Watt-hours
per gallon, and the petroleum-equivalent fuel economy is:
[GRAPHIC] [TIFF OMITTED] TR19FE26.002
[FR Doc. 2026-03300 Filed 2-18-26; 8:45 am]
BILLING CODE 6450-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.