Mass Fatality Coeff 95pct...............................             0.0             0.0             0.0            23.9             0.0            -8.0
NoSHEVs.................................................            -6.7            -5.8            -5.0             2.3            -5.1            -7.6
NoSHEVs, 0 Month Payback................................             8.2             9.8            11.5            -1.2            11.3            15.4
Lower Effectiveness.....................................            -7.8            -7.8            -8.1            39.5            -8.0           -23.9
Higher Effectiveness....................................           -10.6           -10.3           -10.0           -23.3           -10.2            -5.8
Lower Direct Costs......................................             0.9             2.7             4.8            18.4             4.3            -0.4
Higher Direct Costs.....................................            -4.1            -3.8            -3.5            75.3            -3.8           -30.3
Wider Diesel Downsizing.................................            -1.5            -1.0            -0.6           -10.3            -0.8             2.4
07 Pct Discount Rate....................................             0.0             0.0          -100.0           -41.7          -100.0          -119.5
07 Pct DR, 0 Month Payback..............................            14.0            14.5           -37.9           -30.7           -30.7           -30.7
Allow Gas To Diesel.....................................            15.5             5.3          -100.0            16.8          -100.0          -139.1
Allow Gas To Diesel, 0 Month Payback....................            32.1            22.6            14.5            46.8            17.0             7.0
flat mix after 2016.....................................             1.1             0.9             0.7             2.6             0.8             0.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

    For some of the cases for which results are presented above, the
sensitivity of results to changes in inputs is simple, direct, and
easily observed. For example, changes to valuation of avoided GHG
emissions impact only this portion of the estimated economic benefits;
manufacturers' responses and corresponding costs are not impacted.
Similarly, a higher discount rate does not affect physical quantities
saved (gallons of fuel and metric tons of CO2 in the table),
but reduces the value of the costs and benefits attributable to the
proposed standards in an intuitive way. Some other cases warrant closer
consideration:
    First, cases involving alternatives to the reference six-month
payback period involve different degrees of fuel consumption
improvement, and these differences are greatest in the no-action
alternative defining the baseline. Because all estimated impacts of the
proposed standards are shown as incremental values relative to this
baseline, longer payback periods correspond to smaller estimates of
incremental impacts, as fuel economy increasingly improves in the
absence of the rule and manufacturers are compelled to add less
technology in order to comply with the standards.
    Second, cases involving different fuel prices similarly involve
different degrees of fuel economy improvement in the absence of the
standard, as more, or less, improvement occurs as a result of more, or
fewer, technologies appearing cost effective to owner/operators. Lower
fuel prices correspond to increases in fuel savings on a volumetric
basis, as the standard is responsible for a greater amount of the fuel
economy improvement, but the value of fuel savings decreases because
each gallon saved is worth less when fuel prices are low. Higher fuel
prices correspond to reductions in the volumetric fuel savings
attributable to the proposed standards, but lead to increases in the
value of fuel saved because each gallon saved is worth more when fuel
prices are high.
    Third, because the payback period and fuel price inputs work in
opposing directions, the relative magnitude of each is important to
consider for the combined sensitivity cases. While the low price and 0-
month payback case leads to significant volumetric savings compared to
the main analysis, the low fuel price is still sufficient to produce a
negative change in net benefits. Similarly, the high price and 24-month
payback case results in large reductions to volumetric savings that can
be attributed to the proposed standards, but the presence of high fuel
prices is not sufficient to lead to increases in either the dollar
value of fuel savings or net social benefits.
    Fourth, the cases involving different inputs defining the
availability of some technologies do not impact equally the estimated
impacts across all manufacturers. Section C.8 above

provides a discussion of a sensitivity analysis that excludes strong
hybrids and includes the use of downsized turbocharged engines in vans
currently equipped with large V-8 engines. The modeling results for
this analysis are provided in Section C.8 and in the table above. The
no strong hybrid analysis shows that GM could comply with the proposed
preferred Alternative 3 without strong hybrids based on the use of
turbo downsizing on all of their HD gasoline vans. Alternatively, when
the analysis is modified to allow for wider application of diesel
engines, strong HEV application for GM drops slightly (from 19 percent
to 17 percent) in MY2030, average per-vehicle costs drop slightly (by
about $50), but MY2030 additional penetration rates of diesel engines
increase by about 10 percent. Manufacturer-specific model results
accompanying today's rules show the extent to which individual
manufacturers' potential responses to the standards vary with these
alternative assumptions regarding the availability and applicability of
fuel-saving technologies. However, across all of these sensitivity
cases, the model projects that social costs increase (as a result of
increases in technology costs) when manufacturers choose to comply with
the proposed regulations without the use of strong hybrids.
    Fifth, the cases that vary the effectiveness and direct cost of
available technologies produce nuanced results in the context of even
the 0-month payback case. In the case of effectiveness changes, both
sensitivity cases result in reductions to the volumetric fuel savings
attributable to the proposal; lower effectiveness because the
technologies applied in response to the standards save less fuel, and
higher effectiveness because more of the increase in fuel economy
occurs in the baseline. However, for both cases, social costs (a strong
proxy for technology costs) move in the intuitive direction.
    The cases that vary direct costs show volumetric fuel savings
increasing under lower direct technology costs despite additional fuel
economy improvements in the baseline, as more aggressive technology
becomes cost effective. Higher direct costs lead to decreases in
volumetric fuel savings, as more of the fuel economy improvement can be
attributed to the rule. In both cases, social costs (as a result of
technology costs) move in the intuitive direction.
    If, instead of using the values in the main analysis, each
sensitivity case were itself the main analysis, the costs and benefits
attributable to the proposed rule would be as they appear in Table VI-
32, below.

                       Table VI-32--Costs and Benefits of Proposed Standards for HD Pickups and Vans Under Alternative Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Fuel savings                                                       Social        Net social
                    Sensitivity case                         (billion      CO2 reduction   Fuel savings    Social costs      benefits        benefits
                                                             gallons)          (MMT)        ($billion)      ($billion)      ($billion)      ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6 Month Payback (main)..................................             7.8            94.1            15.9             5.5            23.5            18.0
0 Month Payback.........................................             8.9           107.7            18.3             5.8            27.0            21.3
12 Month Payback........................................             7.4            87.2            15.2             5.6            21.9            16.3
18 Month Payback........................................             5.5            65.8            11.7             4.9            16.8            11.9
24 Month Payback........................................             4.5            52.7             9.2             4.4            13.3             8.9
AEO-Low.................................................             8.1            94.7            11.5             5.1            17.8            12.7
AEO-High................................................             7.3            84.9            19.6             5.8            27.4            21.6
AEO-Low, 0 Month Payback................................             9.3           109.1            13.3             5.6            20.6            15.1
AEO-High, 24 Month Payback..............................             2.8            32.4             7.2             2.9            10.2             7.3
50pct Owner/operator Benefit............................             7.8            91.5             8.0             5.8            15.0             9.2
75pct Owner/operator Benefit............................             7.8            91.5            11.9             5.8            19.0            13.2
Low SCC.................................................             7.8            91.5            15.9             5.8            20.5            14.8
Low SCC, 0 Month Payback................................             8.9           104.7            18.3             6.1            23.6            17.5
High SCC................................................             7.8            91.5            15.9             5.8            24.7            19.0
High SCC, 0 Month Payback...............................             8.9           104.7            18.3             6.1            28.5            22.4
Very High SCC...........................................             7.8            91.5            15.9             5.8            29.5            23.8
Very High SCC, 0 Month Payback..........................             8.9           104.7            18.3             6.1            34.0            27.9
05 Pct Rebound Effect...................................             8.2            95.7            16.6             5.0            23.0            18.0
15 Pct Rebound Effect...................................             7.5            87.2            15.2             6.5            22.9            16.4
20 Pct Rebound Effect...................................             7.1            83.0            14.4             7.2            22.8            15.5
RPE-Based Markup........................................             7.6            90.1            16.0             7.6            22.9            15.4
Mass Fatality Coeff 05pct...............................             7.8            91.5            15.9             4.4            23.0            18.5
Mass Fatality Coeff 95pct...............................             7.8            91.5            15.9             7.1            23.0            15.8
NoSHEVs.................................................             7.2            84.3            14.6             8.0            21.1            13.1
NoSHEVs, 0 Month Payback................................             7.0            82.0            14.3             4.4            20.6            16.2
Lower Effectiveness.....................................             7.9            94.0            16.7             6.8            23.9            17.1
Higher Effectiveness....................................             7.5            88.0            15.3            10.1            22.1            12.0
Lower Direct Costs......................................             7.7            90.5            15.8             5.2            22.8            17.6
Higher Direct Costs.....................................             7.8            91.5             8.5             3.8            13.8            10.0
Wider Diesel Downsizing.................................             8.9           104.7             9.9             4.0            15.9            11.9
07 Pct Discount Rate....................................             9.0            96.3            15.3             7.2            22.7            15.5
07 Pct DR, 0 Month Payback..............................            10.3           112.2            18.2             8.5            26.9            18.4
Allow Gas To Diesel.....................................             7.9            92.3            16.0             5.9            23.1            17.2
Allow Gas To Diesel, 0 Month Payback....................             7.3            85.8            15.1             6.9            21.7            14.8
Flat mix after 2016.....................................             8.4            99.8            17.6             7.4            25.4            17.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

(7) Uncertainty Analysis
    As in previous rules, NHTSA has conducted an uncertainty analysis
to determine the extent to which uncertainty about input assumptions
could impact the costs and benefits attributable to the proposed rule.
Unlike the preceding sensitivity analysis, which is useful for
understanding how

alternative values of a single input assumption may influence the
estimated impacts of the proposed standards, the uncertainty analysis
considers multiple states of the world, characterized by a distribution
of specific values of all relevant inputs, based on their relative
probability of occurrence. A sensitivity analysis varies a single
parameter of interest, holding all others constant at whatever nominal
values are used to generate the single point estimate in the main
analysis, and measures the resulting deviation. However, the
uncertainty analysis allows all of those parameters to vary
simultaneously--relaxing the assumption that ``all else is equal''.
    Each trial, of which there are 14,000 in this analysis, represents
a different state of the world in which the standards are implemented.
To gauge the robustness of the estimates of impacts in the proposal,
NHTSA varied technology costs and effectiveness, fuel prices, market
demand for fuel economy improvements in the absence of the rule, the
amount of additional driving associated with fuel economy improvements
(the rebound effect), and the on-road gaps between realized fuel
economy and laboratory test values for gasoline and diesel vehicles.
The shapes and types of the probability distributions used in the
analysis vary by uncertainty parameter, though the costs and
effectiveness values for technologies are sampled as groups to minimize
issues associated with interdependence. The most important input to the
uncertainty analysis, fuel prices (which drive the majority of benefits
from the proposed standards), are drawn from a range of fuel prices
characterized by permutations of the Low, Reference, and High fuel
price cases in the Annual Energy Outlook 2014.
[GRAPHIC] [TIFF OMITTED] TP13JY15.013

    Figure VI-7 displays the distribution of net benefits estimated by
the ensemble of simulation runs. As Figure VI-7 indicates, the analysis
produces a wide distribution of possible outcomes that are much broader
than the range of estimates characterized by only the difference
between the more and less dynamic baselines. While the expected value,
the probability-weighted average outcome, is only about 70 percent of
the net benefits estimated in the main analysis, almost all of the
trials produce positive net benefits. In fact, the distribution
suggests there is only a one percent chance of the proposal producing
negative net benefits for HD pickups and vans. So while the estimated
net benefits in the main analysis may be higher than the expected value
when uncertainty is considered, net benefits at least as high as those
estimated in the main analysis are still 20 times as likely as an
outcome that results in net costs.
    Figure VI-8 shows the distribution of payback periods (in years)
for Model Year 2029 trucks across 14,000 simulation runs. The ``payback
period'' typically refers to the number of years of vehicle use that
occur before the savings on fuel expenditures offset the additional
technology cost associated with improved fuel economy. As Figure VI-8
illustrates, the expected incremental technology cost of both Phase 1
and Phase 2 is eclipsed by the value of fuel savings by year three of
ownership in most cases

[GRAPHIC] [TIFF OMITTED] TP13JY15.014

    This is an important metric for owner/operator acceptability and,
though Figure VI-8 illustrates the long right tail of the payback
distribution (where payback periods are likely to be unacceptably
long), fewer than ten percent of the trials result in payback periods
longer than four years. This suggests that, even in the face of
uncertainty about future fuel prices and fuel economy in real-world
driving conditions, buyers of the vehicles that are modified to comply
with the requirements of the proposal will still see fuel savings
greater than their additional vehicle cost in a relatively short period
of time. As one would expect, the technologies used in Phase 1 of the
MDHD program are likely to be more cost effective and serve to lower
the expected payback period, even compared to the main analysis of
Phase 2.

E. Compliance and Flexibility for HD Pickup and Van Standards

(1) Averaging, Banking, and Trading
    The Phase 1 program established substantial flexibility in how
manufacturers can choose to implement EPA and NHTSA standards while
preserving the benefits for the environment and for energy consumption
and security. Primary among these flexibilities are the gradual phase-
in schedule, and the corporate fleet average approach which encompasses
averaging, banking and trading described below. See Section IV.A. of
the Phase 1 preamble (76 FR 57238) for additional discussion of the
Phase 1 averaging, banking, and trading and Section IV.A (3) of the
Phase 1 preamble (76 FR 57243) for a discussion of the credit
calculation methodology.
    Manufacturers in this category typically offer gasoline and diesel
versions of HD pickup and van vehicle models. The agencies established
chassis-based Phase 1 standards that are equivalent in terms of
stringency for gasoline and diesel vehicles and are proposing the same
approach to stringency for Phase 2. In Phase 1, the agencies
established that HD pickups and vans are treated as one large averaging
set that includes both gasoline and diesel vehicles \369\ and the
agencies are proposing to maintain this averaging set approach for
Phase 2.
---------------------------------------------------------------------------

    \369\ See 40 CFR 1037.104(d) and the proposed 40 CFR 86.1819-
14(d). Credits may not be transferred or traded between this vehicle
averaging set and loose engines or other heavy-duty categories, as
discussed in Section I.
---------------------------------------------------------------------------

    As explained in Section II.C(3) of the Phase 1 preamble (76 FR
57167), and in Section VI.B (3) above, the program is structured so
that final compliance is determined at the end of each model year, when
production for the model year is complete. At that point, each
manufacturer calculates production-weighted fleet average
CO2 emission and fuel consumption rates along with its
production-weighted fleet average standard. Under this approach, a
manufacturer's HD pickup and van fleet that achieves a fleet average
CO2 or fuel consumption level better than its standard would
be allowed to generate credits. Conversely, if the fleet average
CO2 or fuel consumption level does not meet its standard,
the fleet would incur debits (also referred to as a shortfall).
    A manufacturer whose fleet generates credits in a given model year
will have several options for using those credits to offset emissions
from other HD pickups and vans. These options include credit carry-
back, credit carry-forward, and credit trading within the HD pickup and
van averaging set. These types of credit provisions also exist in the
light-duty 2012-2016 and 2017-2025 MY vehicle

rules, as well as many other mobile source standards issued by EPA
under the CAA. The manufacturer will be able to carry back credits to
offset a deficit that had accrued in a prior model year and was
subsequently carried over to the current model year, with a limitation
on the carry-back of credits to three model years. After satisfying any
need to offset pre-existing deficits, a manufacturer may bank remaining
credits for use in future years, with a limitation on the carry-forward
of credits to five model years. Averaging vehicle credits with engine
credits or between vehicle weight classes is not allowed, as discussed
in Section I. The agencies are not proposing changes to any of these
provisions for the Phase 2 program.
    While the agencies are proposing to retain 5 year carry-forward of
credits for all HD sectors, the agencies request comment on the merits
of a temporary credit carry-forward period of longer than 5 years for
HD pickups and vans, allowing Phase 1 credits generated in MYs 2014-
2019 to be used through MY 2027. EPA included a similar provision in
the MY 2017-2025 light-duty vehicle rule, which allows a one-time
credit carry-forward of MY 2010-2015 credits to be carried forward
through MY 2021.\370\ Such a credit carry-forward extension for HD
pickups and vans may provide manufacturers with additional flexibility
during the transition to the proposed Phase 2 standards. A temporary
credit carry-forward period of longer than five years for Phase 1
credits may help manufacturers resolve lead-time issues they might face
as the proposed more stringent Phase 2 standards phase-in and help
avoid negative impacts to their product redesign cycles which tend to
be longer than those for light-duty vehicles.
---------------------------------------------------------------------------

    \370\ 77 FR 62788, October 15, 2012.
---------------------------------------------------------------------------

    As discussed in Section VI.B.4., EPA and NHTSA are proposing to
change the HD pickup and van useful life for GHG emissions and fuel
consumption from the current 11 years/120,000 miles to 15 years/150,000
miles to make the useful life for GHG emissions consistent with the
useful life of criteria pollutants recently updated in the Tier 3 rule.
As shown in the Equation VI-1 credits calculation formula below,
established by the Phase 1 rule, useful life in miles is a
multiplicative factor included in the calculation of CO2 and
fuel consumption credits. In order to ensure banked credits maintain
their value in the transition from Phase 1 to Phase 2, NHTSA and EPA
propose an adjustment factor of 1.25 (i.e, 150,000/120,000) for credits
that are carried forward from Phase 1 to the MY 2021 and later Phase 2
standards. Without this adjustment factor the proposed change in useful
life would effectively result in a discount of banked credits that are
carried forward from Phase 1 to Phase 2, which is not the intent of the
change in the useful life. Consider, for example, a vehicle
configuration with annual sales of 1,000 vehicles that was 10 g/mile
below the standard. Under Phase 1, those vehicles would generate 1,200
Mg of credit (10x1,000x120,000/1,000,000). Under Phase 2, the same
vehicles would generate 1,500 Mg of credit (10x1,000x150,000/
1,000,000). The agencies do not believe that this proposed adjustment
results in a loss of program benefits because there is little or no
deterioration anticipated for CO2 emissions and fuel
consumption over the life of the vehicles. Also, as described in the
standards and feasibility sections above, the carry-forward of credits
is an integral part of the program, helping to smoothing the transition
to the new Phase 2 standards. The agencies believe that effectively
discounting carry-forward credits from Phase 1 to Phase 2 would be
unnecessary and could negatively impact the feasibility of the proposed
Phase 2 standards. EPA and NHTSA request comment on all aspects of the
averaging, banking, and trading program.
[GRAPHIC] [TIFF OMITTED] TP13JY15.096

Where:
CO2 Std = Fleet average CO2 standard (g/mi)
FC Std = Fleet average fuel consumption standard (gal/100 mile)
CO2 Act = Fleet average actual CO2 value (g/
mi)
FC Act = Fleet average actual fuel consumption value (gal/100 mile)
Volume = the total production of vehicles in the regulatory category
UL = the useful life for the regulatory category (miles)
(2) Advanced Technology Credits
    The Phase 1 program included on an interim basis advanced
technology credits for MYs 2014 and later in the form of a multiplier
of 1.5 for the following technologies:

 Hybrid powertrain designs that include energy storage systems
 Waste heat recovery
 All-electric vehicles
 Fuel cell vehicles
    The advanced technology credit program is intended to encourage
early development of technologies that are not yet commercially
available. This multiplier approach means that each advanced technology
vehicle would count as 1.5 vehicles in a manufacturer's compliance
calculation. A manufacturer also has the option to subtract these
vehicles out of its fleet and determine their performance as a separate
fleet calculating advanced technology credits that can be used for all
other HD vehicle categories, but these credits would, of course, not
then be reflected in the manufacturer's conventional pickup and van
category credit balance. The credits are thus `special' in that they
can be applied across the entire heavy-duty sector, unlike the ABT and
early credits discussed above and the proposed off-cycle technology
credits discussed in the following subsection. The agencies also capped
the amount of advanced credits that can be transferred into any
averaging set into any model year at 60,000 Mg to prevent market
distortions.
    The advanced technology multipliers were included on an interim
basis in the Phase 1 program and the agencies are proposing to end the
incentive multipliers beginning in MY 2021, when the more stringent
Phase 2 standards are proposed to begin phase-in. The agencies are
proposing a similar approach for the other HD sectors as

discussed in Section I.C. (1). The advanced technology incentives are
intended to promote the commercialization of technologies that have the
potential to provide substantially better GHG emissions and fuel
consumption if they were able to overcome major near-term market
barriers. However, the incentives are not intended to be a permanent
part of the program as they result in a decrease in overall GHG
emissions and fuel consumption benefits associated with the program
when used. More importantly, as explained in Section I. above, the
agencies are already predicating the stringency of the proposed
standards on development and deployment of two of these Phase 1
advanced technologies (waste heat recovery and strong hybrid
technology), so that it would be inappropriate (and essentially a
windfall) to include credits for use of these technologies in Phase
2.\371\
---------------------------------------------------------------------------

    \371\ EPA and NHTSA similarly included temporary advanced
technology multipliers in the light-duty 2017-2025 program,
believing it was worthwhile to forego modest additional emissions
reductions and fuel consumption improvements in the near-term in
order to lay the foundation for the potential for much larger
``game-changing'' GHG and oil consumption reductions in the longer
term. The incentives in the light-duty vehicle program are available
through the 2021 model year. See 77 FR 62811, October 15, 2012.
---------------------------------------------------------------------------

    As discussed in Section I, the agencies request comment on the
proposed approach for the advanced technology multipliers for HD
pickups and vans as well as the other HD sectors, including comments on
whether or not the credits should be extended to later model years for
more advanced technologies such as EVs and fuel cell vehicles. These
technologies are not projected to be part of the technology path used
by manufacturer to meet the proposed Phase 2 standards for HD pickups
and vans. Waste heat recovery is also not projected to be used for HD
pickups and vans in the time frame of the proposed rules. EV and fuel
cell technologies would presumably need to overcome the highest hurdles
to commercialization for HD pickups and vans in the time frame of the
proposed rules, and also have the potential to provide the highest
level of benefit. We welcome comments on the need for such incentives,
including information on why an incentive for specific technologies in
this time frame may be warranted, recognizing that the incentive would
result in reduced benefits in terms of CO2 emissions and
fuel use due to the Phase 2 program.
    NHTSA and EPA established that for Phase 1, EVs and other zero
tailpipe emission vehicles be factored into the fleet average GHG and
fuel consumption calculations based on the diesel standards targets for
their model year and work factor. The agencies also established for
electric and zero emission vehicles that in the credits equation the
actual emissions and fuel consumption performance be set to zero (i.e.
that emissions be considered on a tailpipe basis exclusively) rather
than including upstream emissions or energy consumption associated with
electricity generation. As we look to the future, we are not projecting
the adoption of electric HD pickups and vans into the market;
therefore, we believe that this provision is still appropriate. Unlike
the MY2012-2016 light-duty rule, which adopted a cap whereby upstream
emissions would be counted after a certain volume of sales (see 75 FR
25434-25436), we believe there is no need to propose a cap for HD
pickups and vans because of the infrequent projected use of EV
technologies in the Phase 2 timeframe. In Phase 2, we propose to
continue to deem electric vehicles as having zero CO2,
CH4, and N2O emissions as well as zero fuel
consumption. We welcome comments on this approach. See also Section I
for a discussion of the treatment of lifecycle emissions for
alternative fuel vehicles and Section XI for the treatment of lifecycle
emissions for natural gas specifically.
(3) Off-Cycle Technology Credits
    The Phase 1 program established an opportunity for manufacturers to
generate credits by applying innovative technologies whose
CO2 and fuel consumption benefits are not captured on the 2-
cycle test procedure (i.e., off-cycle).\372\ As discussed in Sections
III.F. and V.E.3., the agencies are proposing approaches for Phase 2
off-cycle technology credits for tractors and vocational vehicles with
proposed provisions tailored for those sectors. For HD pickups and
vans, the approach for off-cycle technologies established in Phase 1 is
similar to that established for light-duty vehicles due to the use of
the same basic chassis test procedures. The agencies are proposing to
retain this approach for Phase 2. To generate credits, manufacturers
are required to submit data and a methodology for determining the level
of credits for the off-cycle technology subject to EPA and NHTSA review
and approval. The application for off-cycle technology credits is also
subject to a public evaluation process and comment period. EPA and
NHTSA would approve the methodology and credits only if certain
criteria were met. Baseline emissions and fuel consumption \373\ and
control emissions and fuel consumption need to be clearly demonstrated
over a wide range of real world driving conditions and over a
sufficient number of vehicles to address issues of uncertainty with the
data. Data must be on a vehicle model-specific basis unless a
manufacturer demonstrated model-specific data were not necessary. Once
a complete application is submitted by the manufacturer, the
regulations require that the agencies publish a notice of availability
in the Federal Register notifying the public of a manufacturer's
proposed off-cycle credit calculation methodology and provide
opportunity for comment.
---------------------------------------------------------------------------

    \372\ See 76 FR 57251, September 15, 2011, 40 CFR
1037.104(d)(13), and the proposed 40 CFR 86.1819-14(d)(13).
    \373\ Fuel consumption is derived from measured CO2
emissions using conversion factors of 8,887 g CO2/gallon
for gasoline and 10,180 g CO2/gallon for diesel fuel.
---------------------------------------------------------------------------

    As noted above, the approach finalized for HD pickups and vans
paralleled provisions for off-cycle credits in the MY 2012-2016 light-
duty vehicle GHG program.\374\ In the MY 2017-2025 light-duty vehicle
program, EPA revised the off-cycle credits program for light-duty
vehicles to streamline the credits process. In addition to the process
established in the MY 2012-2016 rule, EPA added a list or ``menu'' of
pre-approved off-cycle technologies and associated credit levels.\375\
Manufacturers may use the pre-defined off-cycle technology menu to
generate light-duty vehicle credits by demonstrating at time of
certification that the vehicles are equipped with the technology
without providing additional test data. Different levels of credits are
provided for cars and light trucks in the light-duty program. NHTSA
also included these credits in the CAFE program (in gallons/mile
equivalent) starting with MY 2017. The list of pre-approved off-cycle
technologies for light-duty vehicles is shown below.
---------------------------------------------------------------------------

    \374\ See 75 FR 25440, May 7, 2010 and 40 CFR 86.1869-12(d).
    \375\ 77 FR 62832-62839, October 15, 2012.

Table VI-33--Pre-Approved Off-Cycle Technologies for Light-Duty Vehicles
------------------------------------------------------------------------
                        Pre-approved technologies
-------------------------------------------------------------------------
High Efficiency Exterior Lighting (at 100W)
Waste Heat Recovery (at 100W; scalable)
Solar Roof Panels (for 75 W, battery charging only)
Solar Roof Panels (for 75 W, active cabin ventilation plus battery
 charging)
Active Aerodynamic Improvements (scalable)
Engine Idle Start-Stop w/heater circulation system
Engine Idle Start-Stop without/heater circulation system
Active Transmission Warm-Up
Active Engine Warm-Up
Solar/Thermal Control
------------------------------------------------------------------------

    The agencies initially note that where vehicles are not chassis-
certified, but rather evaluate compliance using the GEM simulation
tool, with the proposed modifications to GEM, many more technologies
(especially those related to engine and transmission improvements) will
now be `on-cycle'--evaluated directly by the GEM compliance tool.
However, with respect to the proposed standards which would be chassis-
certified--namely, the standards for heavy duty pickups and vans, the
effectiveness of some technologies will be only partially captured (or
not captured at all). EPA and NHTSA are requesting comment on
establishing a pre-defined technology menu list for HD pickups and
vans. The list for HD pickups and vans could include some or all of the
technologies listed in Table VI-33. As with the light-duty program, the
pre-defined list may simplify the process for generating off-cycle
credits and may further encourage the introduction of these
technologies. However, the appropriate default level of credits for the
heavier vehicles would need to be established. The agencies request
comments with supporting HD pickup and van specific data and analysis
that would provide a substantive basis for appropriate adjustments to
the credits levels for the HD pickup and van category. The data and
analysis would need to demonstrate that the pre-defined credit level
represents real-world emissions reductions and fuel consumption
improvements not captured by the 2-cycle test procedures.
    As with the light-duty vehicle program, the agencies would also
consider including a cap on credits generated from a pre-defined list
established for HD pickups and vans. The cap for the light-duty vehicle
program is 10 g/mile (and gallons/mi equivalent) applied on a
manufacturer fleet-wide basis.\376\ The 10 g/mile cap limits the total
off-cycle credits allowed based on the pre-defined list across the
manufacturer's light-duty vehicle fleet. The agencies adopted the cap
on credits to address issues of uncertainty regarding the level of
credits automatically assigned to each technology. Manufacturers able
to demonstrate that a technology provides improvements beyond the menu
credit level would be able to apply for additional credits through the
individual demonstration process noted above. Credits based on the
individual manufacturer demonstration would not count against the
credit cap. If a menu list of credits is developed to be included in
the HD pickup and van program, a cap may also be appropriate depending
on the technology list and credit levels. The agencies request comments
on all aspects of the off-cycle credits program for HD trucks and vans.
---------------------------------------------------------------------------

    \376\ See 40 CFR 86.1869-12(b).
---------------------------------------------------------------------------

(4) Demonstrating Compliance for Heavy-Duty Pickup Trucks and Vans
    The Phase 1 rule established a comprehensive compliance program for
HD pickups and vans that NHTSA and EPA are generally retaining for
Phase 2. The compliance provisions cover details regarding the
implementation of the fleet average standards including vehicle
certification, demonstrating compliance at the end of the model year,
in-use standards and testing, carryover of certification test data, and
reporting requirements. Please see Section V.B (1) of the Phase 1 rule
preamble (76 FR 57256-57263) for a detailed discussion of these
provisions.
    The Phase 1 rule contains special provisions regarding loose
engines and optional chassis certification of certain vocational
vehicles over 14,000 lbs. GVWR. The agencies are proposing to extend
the optional chassis certification provisions to Phase 2 and are not
proposing to extend the loose engine provisions. See the vocational
vehicle Section V.E. and XIV.A.2 for a detailed discussion of the
proposal for optional chassis certification and II.D. for the
discussion of loose engines.

VII. Aggregate GHG, Fuel Consumption, and Climate Impacts

    Given that the purpose of setting these Phase 2 standards is to
reduce fuel consumption and greenhouse gas (GHG) emissions from heavy-
duty vehicles, it is necessary for the agencies to analyze the extent
to which the proposed standards would accomplish that purpose. This
section describes the agencies' methodologies for projecting the
reductions in greenhouse gas (GHG) emissions and fuel consumption, and
the methodologies the agencies used to quantify the impacts associated
with the proposed standards, as well as the impacts of Alternative 4.
In addition, EPA's analyses of the projected change in atmospheric
carbon dioxide (CO2) concentration and consequent climate
change impacts are discussed. Because of NHTSA's obligations under
EPCA/EISA and NEPA, NHTSA further analyzes, for each regulatory
alternative, the projected environmental impacts related to fuel
consumption, GHG emissions, and climate change. Detailed documentation
of this analysis is provided in Chapters 3 and 5 of NHTSA's DEIS
accompanying today's notice.

A. What methodologies did the agencies use to project GHG emissions and
fuel consumption impacts?

    Different tools exist for estimating potential fuel consumption and
GHG emissions impacts associated with fuel efficiency and GHG emission
standards. One such tool is EPA's official mobile source emissions
inventory model named Motor Vehicle Emissions Simulator (MOVES).\377\
The agencies used the most current version of the model, MOVES2014, to
quantify the impacts of the proposed standards for vocational vehicles
and combination tractor-trailers on GHG emissions and fuel consumption
for each regulatory alternative. MOVES was run with user

input databases, described in more detail below, that reflected the
projected technological improvements resulting from the proposed rules,
such as the improvements in engine and vehicle efficiency, aerodynamic
drag, and tire rolling resistance.
---------------------------------------------------------------------------

    \377\ MOVES homepage: http://www.epa.gov/otaq/models/moves/index.htm (last accessed Feb 23, 2015).
---------------------------------------------------------------------------

    Another such tool is DOT's CAFE model, which estimates how
manufacturers could potentially apply technology improvements in
response to new standards, and then calculates, among other things,
resultant changes in national fuel consumption and GHG emissions. For
today's analysis of potential new standards for HD pickups and vans,
the model was reconfigured to use the work-based attribute metric of
``work factor'' established in the Phase 1 rule for heavy-duty pickups
and vans instead of the light-duty ``footprint'' attribute metric. The
CAFE model takes user-specified inputs on, among other things, vehicles
that will be produced in a given model year, technologies available to
improve fuel efficiency on those vehicles, potential regulatory
standards that would drive improvements in fuel efficiency, and
economic assumptions. The CAFE model takes every vehicle in each
manufacturer's fleet and decides what technologies to add to those
vehicles in order to allow each manufacturer to comply with the
standards in the most cost-effective way. Based on the resulting
improved vehicle fleet, the CAFE model then calculates total fuel
consumption and GHG emissions impacts based on those inputs, along with
economic costs and benefits. The DOT's CAFE model is further described
in detail in Section VI.C of the preamble and Chapter 2 of the draft
RIA.
    For these rules, the agencies conducted coordinated and
complementary analyses by using two analytical methods for the heavy-
duty pickup and van segment employing both DOT's CAFE model and EPA's
MOVES model. The agencies used EPA's MOVES model to estimate fuel
consumption and emissions impacts for tractor-trailers (including the
engine that powers the tractor), and vocational vehicles (including the
engine that powers the vehicle).
    For heavy-duty pickups and vans, the agencies performed
complementary analyses, which we refer to as ``Method A'' and ``Method
B''. In Method A, the CAFE model was used to project a pathway the
industry could use to comply with each regulatory alternative and the
estimated effects on fuel consumption, emissions, benefits and costs.
In Method B, the MOVES model was used to estimate fuel consumption and
emissions from these vehicles. NHTSA considered Method A as its central
analysis. EPA considered the results of both methods. The agencies
concluded that both methods led the agencies to the same conclusions
and the same selection of the proposed standards. See Chapter 5 of the
draft RIA for additional discussions of these two methods.
    For both methods, the agencies analyzed the impact of the proposed
rules and Alternative 4, relative to two different reference cases--
less dynamic and more dynamic. The less dynamic baseline projects very
little improvement in new vehicles in the absence of new Phase 2
standards. In contrast, the more dynamic baseline projects more
improvements in vehicle fuel efficiency. The agencies considered both
reference cases (for additional details, see Chapter 11 of the draft
RIA). The results for all of the regulatory alternatives relative to
both reference cases, derived via the same methodologies discussed in
this section, are presented in Section X of the preamble.
    For brevity, a subset of these analyses are presented in this
section, and the reader is referred to both the RIA Chapter 11 and
NHTSA's DEIS Chapters 3 and 5 for complete sets of these analyses. In
this section, Method A is presented for both the proposed standards
(i.e., Alternative 3--the agencies' preferred alternative) and for the
standards the agencies considered in Alternative 4, relative to both
the more dynamic baseline (Alternative 1b) and the less dynamic
baseline (Alternative 1a). Method B is presented also for the proposed
standards and Alternative 4, but relative only to the less dynamic
baseline. The agencies' intention for presenting both of these
complementary and coordinated analyses is to offer interested readers
the opportunity to compare the regulatory alternatives considered for
Phase 2 in both the context of our HD Phase 1 analytical approaches and
our light-duty vehicle analytical approaches. The agencies view these
analyses as corroborative and reinforcing: Both support agencies'
conclusion that the proposed standards are appropriate and at the
maximum feasible levels.
    Because reducing fuel consumption also affects emissions that occur
as a result of fuel production and distribution (including renewable
fuels), the agencies also calculated those ``upstream'' changes using
the ``downstream'' fuel consumption reductions predicted by the CAFE
model and the MOVES model. As described in Section VI, Method A uses
the CAFE model to estimate vehicular fuel consumption and emissions
impacts for HD pickups and vans and to calculate upstream impacts. For
vocational vehicles and combination tractor-trailers, both Method A and
Method B use the same upstream tools originally created for the
Renewable Fuel Standard 2 (RFS2) rulemaking analysis,\378\ used in the
LD GHG rulemakings,\379\ HD GHG Phase 1,\380\ and updated for the
current analysis. The estimate of emissions associated with production
and distribution of gasoline and diesel from crude oil is based on
emission factors in the ``Greenhouse Gases, Regulated Emissions, and
Energy Use in Transportation'' model (GREET) developed by DOE's Argonne
National Lab. In some cases, the GREET values were modified or updated
by the agencies to be consistent with the National Emission Inventory
(NEI) and emission factors from MOVES. Method B uses the same tool
described above to estimate the upstream impacts for HD pickups and
vans. For additional details, see Chapter 5 of the draft RIA. The
upstream tool used for the Method B can be found in the docket.\381\ As
noted in Section VI above, these analyses corroborate each other's
results.
---------------------------------------------------------------------------

    \378\ U.S. EPA. Draft Regulatory Impact Analysis: Changes to
Renewable Fuel Standard Program. Chapters 2 and 3. May 26, 2009.
Docket ID: EPA-HQ-OAR-2009-0472-0119
    \379\ 2017 and Later Model Year Light-Duty Vehicle Greenhouse
Gas Emissions and Corporate Average Fuel Economy Standards (77 FR
62623, October 15, 2012).
    \380\ Greenhouse Gas Emission Standards and Fuel Efficiency
Standards for Medium- and Heavy-Duty Engines and Vehicles (76 FR
57106, September 15, 2011).
    \381\ Memorandum to the Docket ``Upstream Emissions Modeling
Files for HDGHG Phase 2 NPRM'' Docket No. EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    The agencies analyzed the anticipated emissions impacts of the
proposed rules and Alternative 4 on carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O), and
hydrofluorocarbons (HFCs) for a number of calendar years (for purposes
of the discussion in these proposed rules, only 2025, 2035 and 2050
will be shown) by comparing to both reference cases.\382\ Additional
runs were performed for just the three of the greenhouse gases
(CO2, CH4, and N2O) and for fuel
consumption for every calendar year from 2014 to 2050, inclusive, which
fed the economy-wide modeling, monetized greenhouse gas benefits
estimation, and climate impacts

analyses, discussed in sections below.\383\
---------------------------------------------------------------------------

    \382\ The emissions impacts of the proposed rules on non-GHGs,
including air toxics, were also estimated using MOVES. See Section
VIII of the preamble for more information.
    \383\ The CAFE model estimates, among other things,
manufacturers' potential multiyear planning decisions within the
context of an estimated year-by-year product cadence (i.e., schedule
for redesigning and freshening vehicles). The agencies included
earlier model years in the analysis in order to account for the
potential that manufacturers might take anticipatory actions in
model years preceding those covered by today's proposal.
---------------------------------------------------------------------------

B. Analysis of Fuel Consumption and GHG Emissions Impacts Resulting
From Proposed Standards and Alternative 4

    The following sections describe the model inputs and assumptions
for both the less dynamic and more dynamic reference cases and the
control case representing the agencies' proposed fuel efficiency and
GHG standards. The agencies request comment on the model inputs,
projected reductions in energy rates and fuel consumption rates
presented in this section, as well as in Chapter 5 of the draft RIA.
The details of all the MOVES runs, and input data tables, as well as
the MOVES code and database, can be found in the docket.\384\ See
Section VI.C for the discussion of the model inputs and assumptions for
the analysis of the HD pickups and vans using DOT's CAFE Model.
---------------------------------------------------------------------------

    \384\ Memorandum to the Docket ``Runspecs, Model Inputs, MOVES
Code and Database for HD GHG Phase 2 NPRM Emissions Modeling''
Docket No. EPA-HQ-OAR-2014-0827
---------------------------------------------------------------------------

(1) Model Inputs and Assumptions for the Less Dynamic Reference Case
    The less dynamic reference case (identified as Alternative 1a in
Section X), includes the impact of Phase 1, but generally assumes that
fuel efficiency and GHG emission standards are not improved beyond the
required 2018 model year levels. Alternative 1a functions as one of the
baselines against which the impacts of the proposed standards can be
evaluated. This case projects some improvements in the efficiency of
the box trailers pulled by combination tractors due to increased
penetration of aerodynamic technologies and low rolling resistance
tires attributed to both EPA's SmartWay Transport Partnership and
California Air Resources Board's Tractor-Trailer Greenhouse Gas
regulation, as described in Section IV of the preamble. For other HD
vehicle sectors, no market-driven improvement in fuel efficiency was
assumed. For HD pickups and vans, the CAFE model was applied in a
manner that assumes manufacturers would only add fuel-saving technology
as needed to continue complying with Phase 1 standards. MOVES2014
defaults were used for all other parameters to estimate the emissions
inventories for this case. The less dynamic reference case assumed the
MOVES2014 default vehicle population and miles traveled estimates. The
growth in vehicle populations and miles traveled in MOVES2014 is based
on the relative annual VMT growth from AEO2014 Early Release for model
years 2012 and later.\385\
---------------------------------------------------------------------------

    \385\ MOVES2014 assumes the population and VMT growth based on
the early release version of AEO2014 because it was the only version
that was available at the time of MOVES2014 development. Annual
Energy Outlook 2014. http://www.eia.gov/forecasts/aeo/er/ (last
accessed Feb 23, 2015).
    \386\ Vocational vehicles modeled in MOVES include heavy heavy-
duty, medium heavy-duty, and light heavy-duty vehicles. However, for
light heavy-duty vocational vehicles, class 2b and 3 vehicles are
not included in the inventories for the vocational sector. Instead,
all vocational vehicles with GVWR of less than 14,000 lbs were
modeled using the energy rate reductions described below for HD
pickup trucks and vans. In practice, many manufacturers of these
vehicles choose to average the lightest vocational vehicles into
chassis-certified families (i.e., heavy-duty pickups and vans).
---------------------------------------------------------------------------

(2) Model Inputs and Assumptions for the More Dynamic Reference Case
    The more dynamic reference case (identified as Alternative 1b in
Section X), also includes the impact of Phase 1 and generally assumes
that fuel efficiency and GHG emission standards are not improved beyond
the required 2018 model year levels. However, for this case, the
agencies assume market forces would lead to additional fuel efficiency
improvements for HD pickups and vans and tractor-trailers. These
additional assumed improvements are described in Section X of the
preamble. No additional fuel efficiency improvements due to market
forces were assumed for vocational vehicles. For HD pickups and vans,
the agencies applied the CAFE model using the input assumption that
manufacturers having achieved compliance with Phase 1 standards would
continue to apply technologies for which increased purchase costs would
be ``paid back'' through corresponding fuel savings within the first
six months of vehicle operation. The agencies conducted the MOVES
analysis of this case in the same manner as for the less dynamic
reference case.
(3) Model Inputs and Assumptions for ``Control'' Case
(a) Vocational Vehicles and Tractor-Trailers
    The ``control'' case represents the agencies' proposed fuel
efficiency and GHG standards. The agencies developed additional user
input data for MOVES runs to estimate the control case inventories. The
inputs to MOVES for the control case account for improvements of engine
and vehicle efficiency in vocational vehicles and combination tractor-
trailers. The agencies used the percent reduction in aerodynamic drag
and tire rolling resistance coefficients and absolute changes in
average total running weight (gross combined weight) expected from the
proposed rules to develop the road load inputs for the control case,
based on the GEM analysis. The agencies also used the percent reduction
in CO2 emissions expected from the powertrain and other
vehicle technologies not accounted for in the aerodynamic drag and tire
rolling resistance in the proposed rules to develop energy inputs for
the control case runs.
    Table VII-1 and Table VII-2 describe the proposed improvements in
engine and vehicle efficiency from the proposed rules for vocational
vehicles and combination tractor-trailers that were input into MOVES
for estimating the control case emissions inventories. Additional
details regarding the MOVES inputs are included in the Chapter 5 of the
draft RIA.

                  Table VII-1--Estimated Reductions in Energy Rates for the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                                Reduction from
                 Vehicle type                                 Fuel                  Model years   reference case
                                                                                (percent)
----------------------------------------------------------------------------------------------------------------
Long-haul Tractor-Trailers and HHD Vocational.  Diesel..........................       2018-2020             1.3
                                                                                2021-2023             5.2
                                                                                2024-2026             9.7
                                                                                2027+            10.4
Short-haul Tractor-Trailers and HHD Vocational  Diesel..........................       2018-2020             0.9

                                                                                2021-2023             5.0
                                                                                2024-2026             9.5
                                                                                2027+            10.4
Single-Frame Vocational \386\.................  Diesel and CNG..................       2021-2023             5.3
                                                                                2024-2026             8.9
                                                                                2027+            13.3
                                                Gasoline........................       2021-2023             3.3
                                                                                2024-2026             5.4
                                                                                2027+            10.3
----------------------------------------------------------------------------------------------------------------

                Table VII-2--Estimated Reductions in Road Load Factors for the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                 Reduction in     Reduction in
                                                                 tire rolling     aerodynamic         Weight
                 Vehicle type                    Model years      resistance          drag        reduction (LB)
                                                                 coefficient      coefficient          \a\
                                                                  (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
Combination Long-haul Tractor-Trailers.......       2018-2020              5.5              5.1           -131
                                                    2021-2023              9.8             15.3           -199
                                                    2024-2026             15.7             20.5           -246
                                                        2027+             17.9             26.9           -304
Combination Short-haul Tractor-Trailers \387\       2018-2020              4.0              1.6            -41
                                                    2021-2023             10.5              9.3            -79
                                                    2024-2026             13.9             12.3           -100
                                                        2027+             17.6             15.9           -127
Intercity Buses..............................       2021-2023              6.5              0                0
                                                    2024-2026              9.2              0                0
                                                        2027+             16.5              0                0
Transit Buses................................       2021-2023              0                0                0
                                                    2024-2026              2.9              0                0
                                                        2027+              3.0              0                0
School Buses.................................       2021-2023              0                0                0
                                                    2024-2026              2.9              0                0
                                                        2027+              4.0              0                0
Refuse Trucks................................       2021-2023              0                0               20
                                                    2024-2026              2.9              0               20
                                                        2027+              3.0              0               25
Single Unit Short-haul Trucks................       2021-2023              4.8              0                5.8
                                                    2024-2026              8.3              0                5.8
                                                        2027+             13.0              0                7
Single Unit Long-haul Trucks.................       2021-2023              6.5              0               20
                                                    2024-2026              9.2              0               20
                                                        2027+             16.5              0               25
Motor Homes..................................       2021-2023              3.0              0                0
                                                    2024-2026              6.2              0                0
                                                        2027+              7.4              0                0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Negative weight reductions reflect an expected weight increase as a byproduct of other vehicle and engine
  improvements, as described in Chapter 5 of the draft RIA.

    In addition, the proposed CO2 standard for tractors
reflecting the use of auxiliary power units (APU) during extended
idling, as discussed in Section III.D of the preamble, was included in
the modeling for the long-haul combination tractor-trailers, as shown
below in Table VII-3.
---------------------------------------------------------------------------

    \387\ Vocational tractors are included in the short-haul tractor
segment.

Table VII-3--Assumed APU Use During Extended Idling for Combination Long-
                          Haul Tractor-Trailers
------------------------------------------------------------------------
                                                                APU
              Vehicle type                  Model year      penetration
                                                           \a\ (percent)
------------------------------------------------------------------------
Combination Long-Haul Trucks............       2010-2020              30
                                               2021-2023              80

                                                   2024+              90
------------------------------------------------------------------------
Note:
\a\ The assumed APU penetration remains constant for model years 2024
  and later.

    To account for the potential increase in vehicle use expected to
result from improvements in fuel efficiency for vocational vehicles and
combination tractor-trailers due to the proposed rules (also known as
the ``rebound effect'' and described in more detail in Chapter 5 of the
draft RIA), the control case assumed an increase in VMT from the
reference levels by 1.83 percent for the vocational vehicles and 0.79
percent for the combination tractor-trailers.
(b) Heavy-Duty Pickups and Vans
    As explained above and as also discussed in the draft RIA, the
agencies used both DOT's CAFE model and EPA's MOVES model, for Method A
and B, respectively, to project fuel consumption and GHG emissions
impacts resulting from the proposed standards for HD pickups and vans,
including downstream vehicular emissions as well as emissions from
upstream processes related to fuel production, distribution, and
delivery.
(i) Method A for HD Pickups and Vans
    For Method A, the agencies used the CAFE model which applies fuel
properties (density and carbon content) to estimated fuel consumption
in order to calculate vehicular CO2 emissions, applies per-
mile emission factors from MOVES to estimated VMT (for each regulatory
alternative, adjusted to account for the rebound effect) in order to
calculate vehicular CH4 and N2O emissions (as
well, as discussed below, of non-GHG pollutants), and applies per-
gallon upstream emission factors from GREET in order to calculate
upstream GHG (and non-GHG) emissions.
    As discussed above in Section VI, the proposed standards for HD
pickups and vans--that is, the functions defining fuel consumption and
GHG targets that each depend work factor--increase in stringency by 2.5
percent annually during model years 2021-2027. The standards define
targets specific to each vehicle model, but no vehicle is required to
meet its target; instead, the production-weighted averages of the
vehicle-specific targets define average fuel consumption and
CO2 emission rates that a given manufacturer's overall fleet
of produced vehicles is required to achieve. The standards are
specified separately for gasoline and diesel vehicles, and vary with
work factor. Work factors could change, and today's analysis assumes
that some applications of mass reduction could enable increased work
factor in cases where manufacturers could increase a vehicle's rated
payload and/or towing capacity. Therefore, average required levels will
depend on the mix of vehicles and work factors of the vehicles produced
for sale in the U.S., and since these can only be estimated at this
time, average required and achieved fuel consumption and CO2
emission rates are subject to uncertainty. Between today's notice and
issuance of the ensuing final rule, the agencies intend to update the
market forecast (and other inputs) used to analyze HD pickup and van
standards, and expect that doing so will lead to different estimates of
required and achieved fuel consumption and CO2 emission
rates (as well as different estimates of impacts, costs, and benefits).
    The following four tables present stringency increases and
estimated required and achieved fuel consumption and CO2
emission rates for the two No Action Alternatives (Alternative 1a and
1b) and the proposed standards defining the Preferred Alternative.
Stringency increases are shown relative to standards applicable in
model year 2018 (and through model year 2020). As mathematical
functions, the standards themselves are not subject to uncertainty. By
2027, they are 16.2 percent more stringent (i.e., lower) than those
applicable during 2018-2020. NHTSA estimates that, by model 2027, the
proposed standards could reduce average required fuel consumption and
CO2 emission rates to about 4.86 gallons/100 miles and about
458 grams/mile, respectively. NHTSA further estimates that average
achieved fuel consumption and CO2 emission rates could
correspondingly be reduced to about the same levels. If, as represented
by Alternative 1b, manufacturers would, even absent today's proposed
standards, voluntarily make improvements that pay back within six
months, these model year 2027 levels are about 13.5 percent lower than
the agencies estimate could be achieved under the Phase 1 standards
defining the No Action Alternative. If, as represented by Alternative
1a, manufacturers would, absent today's proposed standards, only apply
technology as required to achieve compliance, these model year 2027
levels are about 15 percent lower than the agencies estimate could be
achieved under the Phase 1 standards. As indicated below, the agencies
estimate that these improvements in fuel consumption and CO2
emission rates would build from model year to model year, beginning as
soon as model year 2017 (insofar as manufacturers may make anticipatory
improvements if warranted given planned produce cadence).

    Table VII-4--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to
                                                                   Alternative 1b \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Ave. required fuel cons. (gal./100 mi.)         Ave. achieved fuel cons. (gal./100 mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018) (%)          No action       Proposed      Reduction (%)     No action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.41            6.41             0.0            6.21            6.21             0.0
2015..............................   Subject to Phase 1             6.41            6.41             0.0            6.12            6.12             0.0
2016..............................   Standards.                     6.27            6.27             0.0            6.15            6.15             0.0
2017..............................                                  6.11            6.11             0.0            5.89            5.88             0.2
2018..............................                                  5.80            5.80             0.0            5.75            5.70             0.8
2019..............................                                  5.78            5.78             0.0            5.72            5.68             0.7
2020..............................                                  5.78            5.78             0.0            5.69            5.64             0.8
2021..............................  2.5.................            5.77            5.64             2.2            5.63            5.42             3.8
2022..............................  4.9.................            5.77            5.50             4.7            5.63            5.42             3.8
2023..............................  7.3.................            5.77            5.38             6.8            5.63            5.28             6.3
2024..............................  9.6.................            5.77            5.25             9.0            5.63            5.23             7.1
2025..............................  11.9................            5.77            5.12            11.4            5.63            4.99            11.5
2026..............................  14.1................            5.77            4.98            13.7            5.63            4.93            12.5
2027..............................  16.2................            5.77            4.86            15.8            5.62            4.86            13.7
2028*.............................  16.2................            5.77            4.86            15.8            5.62            4.86            13.7
2029*.............................  16.2................            5.77            4.86            15.8            5.62            4.85            13.7
2030*.............................  16.2................            5.77            4.86            15.8            5.62            4.85            13.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.

Table VII-5--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative
                                                                         1b \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Ave. required CO2 Rate (g./                   Ave. achieved CO2 Rate (g./mi.)
                                       Stringency (vs.                 mi.)              ---------------------------------------------------------------
            Model year                    2018) (%)      --------------------------------
                                                             No action       Proposed        Reduction       No Action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                    602             602             0.0             581             581             0.0
2015..............................   Subject to Phase 1              608             608             0.0             578             578             0.0
2016..............................   Standards.                      593             593             0.0             580             580             0.0
2017..............................                                   578             578             0.0             556             554             0.2
2018..............................                                   548             548             0.0             543             538             0.8
2019..............................                                   545             545             0.0             539             535             0.7
2020..............................                                   545             545             0.0             536             532             0.8
2021..............................  2.5.................             544             532             2.2             530             510             3.8
2022..............................  4.9.................             544             519             4.7             530             510             3.8
2023..............................  7.3.................             544             507             6.8             530             496             6.4
2024..............................  9.6.................             544             495             9.1             530             492             7.2
2025..............................  11.9................             544             482            11.3             530             470            11.3
2026..............................  14.1................             544             470            13.6             530             465            12.3
2027..............................  16.2................             544             458            15.8             529             458            13.4
2028*.............................  16.2................             544             458            15.8             529             458            13.4
2029*.............................  16.2................             544             458            15.8             529             458            13.5
2030*.............................  16.2................             544             458            15.8             529             458            13.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.

    Table VII-6--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to
                                                                   Alternative 1a \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Ave. required fuel cons. (gal./100 mi.)         Ave. achieved fuel cons. (gal./100 mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018)(%)           No action       Proposed      Reduction (%)     No Action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.41            6.41             0.0            6.21            6.21             0.0
2015..............................   Subject to Phase 1             6.41            6.41             0.0            6.12            6.12             0.0
2016..............................   Standards.                     6.27            6.27             0.0            6.15            6.15             0.0
2017..............................                                  6.11            6.11             0.0            5.89            5.87             0.3
2018..............................                                  5.80            5.80    **[caret]0.0            5.75            5.70             0.9
2019..............................                                  5.78            5.78             0.0            5.73            5.68             0.8
2020..............................                                  5.78            5.78             0.0            5.73            5.68             0.8
2021..............................  2.5.................            5.77            5.64             2.3            5.72            5.44             4.8
2022..............................  4.9.................            5.77            5.50             4.7            5.72            5.44             4.8
2023..............................  7.3.................            5.77            5.38             6.8            5.72            5.29             7.6

2024..............................  9.6.................            5.77            5.25             9.1            5.72            5.23             8.5
2025..............................  11.9................            5.77            5.12            11.4            5.72            4.98            12.9
2026..............................  14.1................            5.77            4.98            13.7            5.72            4.94            13.6
2027..............................  16.2................            5.77            4.86            15.8            5.72            4.87            14.9
2028*.............................  16.2................            5.77            4.86            15.8            5.72            4.87            14.9
2029*.............................  16.2................            5.77            4.86            15.8            5.72            4.86            15.0
2030*.............................  16.2................            5.77            4.86            15.8            5.72            4.86            15.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in average required fuel consumption.

Table VII-7--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative
                                                                         1a \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Ave. required CO2 Rate (g./mi.)                 Ave. achieved CO2 Rate (g./mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018) (%)          No action       Proposed      Reduction (%)     No action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.02             602             0.0             581             581             0.0
2015..............................   Subject to Phase 1             6.08             608             0.0             578             578             0.0
2016..............................   Standards.                      593             593             0.0             580             580             0.0
2017..............................                                   578             578             0.0             556             554             0.3
2018..............................                                   548             548          **-0.0             543             538             0.9
2019..............................                                   545             546          **-0.1             539             535             0.8
2020..............................                                   545             545          **-0.1             539             535             0.8
2021..............................  2.5.................             544             532             2.2             538             512             4.9
2022..............................  4.9.................             544             519             4.7             538             512             4.9
2023..............................  7.3.................             544             507             6.8             538             497             7.7
2024..............................  9.6.................             544             495             9.1             538             492             8.6
2025..............................  11.9................             544             482            11.4             538             470            12.7
2026..............................  14.1................             544             470            13.6             538             466            13.4
2027..............................  16.2................             544             458            15.8             538             459            14.7
2028*.............................  16.2................             544             458            15.8             538             459            14.7
2029*.............................  16.2................             544             458            15.8             538             459            14.8
2030*.............................  16.2................             544             458            15.8             538             459            14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in the average required CO2 emission rate.

    While the above tables show the agencies' estimates of average fuel
consumption and CO2 emission rates manufacturers might
achieve under today's proposed standards, total U.S. fuel consumption
and GHG emissions from HD pickups and vans will also depend on how many
of these vehicles are produced, and how they are operated over their
useful lives. Relevant to estimating these outcomes, the CAFE model
applies vintage-specific estimates of vehicle survival and mileage
accumulation, and adjusts the latter to account for the rebound effect.
This impact of the rebound effect is specific to each model year (and,
underlying, to each vehicle model in each model year), varying with
changes in achieved fuel consumption rates.
(ii) Method B for HD Pickups and Vans
    For Method B, the MOVES model was used to estimate fuel consumption
and GHG emissions for HD pickups and vans. MOVES evaluated the proposed
standards for HD pickup trucks and vans in terms of grams of
CO2 per mile or gallons of fuel per 100 miles. Since nearly
all HD pickup trucks and vans are certified on a chassis dynamometer,
the CO2 reductions for these vehicles were not represented
as engine and road load reduction components, but rather as total
vehicle CO2 reductions. The control case for HD pickups and
vans assumed an increase in VMT from the reference levels by 1.18
percent for HD pickups and vans.

  Table VII-8--Estimated Total Vehicle CO2 Reductions for the Proposed
Standards and In-Use Emissions for HD Pickup Trucks and Vans in Method B
                                   \a\
------------------------------------------------------------------------
                                                                 CO2
                                                              reduction
         Vehicle type                Fuel        Model year      from
                                                              reference
                                                               case (%)
------------------------------------------------------------------------
HD pickup trucks and vans....  Gasoline and            2021         2.50
                                Diesel.
                                                       2022         4.94
                                                       2023         7.31
                                                       2024         9.63
                                                       2025        11.89
                                                       2026        14.09
                                                      2027+        16.24
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

C. What are the projected reductions in fuel consumption and GHG
emissions?

    NHTSA and EPA expect significant reductions in GHG emissions and
fuel consumption from the proposed rules--fuel consumption reductions
from more efficient vehicles, emission reductions from both downstream
(tailpipe) and upstream (fuel production and distribution) sources, and
HFC emissions from the proposed air conditioning leakage standards. The
following subsections summarize two slightly different analyses of the
annual GHG emissions and fuel consumption reductions expected from
these proposed rules, as well as the reductions in GHG emissions and
fuel consumption expected over the lifetime of each heavy-duty vehicle
categories. In addition, because the agencies are carefully considering
Alternative 4 along with Alternative 3, the preferred alternative, the
results from both are presented here for the reader's reference.
Section VII. C. (1) shows the impacts of the proposed rules and
Alternative 4 on fuel consumption and GHG emissions using the MOVES
model for tractor-trailers and vocational vehicles, and the DOT's CAFE
model for HD pickups and vans (Method A), relative to two different
reference cases--less dynamic and more dynamic. Section VII. C. (2)
shows the impacts of the proposed standards and Alternative 4, relative
to the less dynamic reference case only, using the MOVES model for all
heavy-duty vehicle categories. NHTSA also analyzes these impacts
resulting from the proposed rules and reasonable alternatives in
Chapters 3 and 5 of its DEIS.
(1) Impacts of the Proposed Rules and Alternative 4 Using Analysis
Method A
(a) Calendar Year Analysis
(i) Downstream (Tailpipe) Emissions Projections
    As described in Section VII. A, for the analysis using Method A,
the agencies used MOVES to estimate downstream GHG inventories from the
proposed rules for vocational vehicles and tractor-trailers. For HD
pickups and vans, DOT's CAFE model was used.
    The following two tables summarize the agencies' estimates of HD
pickup and van fuel consumption and GHG emissions under the current and
proposed standards defining the No-Action and Preferred alternatives,
respectively, using Method A. Table VII-9 shows results assuming
manufacturers would voluntarily make improvements that pay back within
six months (i.e., Alternative 1b). Table VII-10 shows results assuming
manufacturers would only make improvements as needed to achieve
compliance with standards (i.e., Alternative 1a). While underlying
calculations are all performed for each calendar year during each
vehicle's useful life, presentation of outcomes on a model year basis
aligns more clearly with consideration of cost impacts in each model
year, and with consideration of standards specified on a model year
basis. In addition, Method A analyzes manufacturers' potential
responses to HD pickup and van standards on a model year basis through
2030, and any longer-term costs presented in today's notice represent
extrapolation of these results absent any underlying analysis of
longer-term technology prospects and manufacturers' longer-term product
offerings.

  Table VII-9--Estimated Fuel Consumption and GHG Emissions Over Useful Life of HD Pickups and Vans Produced in
                          Each Model Year for Method A, Relative to Alternative 1b \a\
----------------------------------------------------------------------------------------------------------------
                                       Fuel consumption (b. gal.) over         GHG emissions (MMT CO2eq) over
                                             fleet's useful life                    fleet's useful life
            Model year             -----------------------------------------------------------------------------
                                                               Reduction                              Reduction
                                     No action     Proposed       (%)       No action     Proposed       (%)
----------------------------------------------------------------------------------------------------------------
2014..............................         9.41         9.41          0.0          115          115          0.0
2015..............................         9.53         9.53          0.0          117          117          0.0
2016..............................         9.72         9.72          0.0          119          119          0.0
2017..............................         9.49         9.47          0.2          116          116          0.2
2018..............................         9.26         9.19          0.7          113          113          0.7
2019..............................         9.20         9.14          0.7          113          112          0.7
2020..............................         9.19         9.12          0.7          112          112          0.7
2021..............................         9.10         8.79          3.4          111          107          3.4
2022..............................         9.13         8.82          3.4          112          108          3.4
2023..............................         9.11         8.59          5.7          111          105          5.7
2024..............................         9.32         8.72          6.4          114          107          6.4

2025..............................         9.49         8.49         10.5          116          104         10.4
2026..............................         9.67         8.56         11.5          118          105         11.3
2027..............................         9.78         8.55         12.6          120          105         12.3
2028..............................         9.90         8.66         12.6          121          106         12.3
2029..............................        10.02         8.75         12.6          122          107         12.4
2030..............................        10.03         8.76         12.6          123          107         12.4
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VII-10--Estimated Fuel Consumption and GHG Emissions over Useful Life of HD Pickups and Vans Produced in
                          Each Model Year for Method A, Relative to Alternative 1a \a\
----------------------------------------------------------------------------------------------------------------
                                       Fuel consumption (b. gal.) over         GHG Emissions (MMT CO2eq) over
                                             fleet's useful life                    fleet's useful life
            Model year             -----------------------------------------------------------------------------
                                                               Reduction                              Reduction
                                     No action     Proposed       (%)       No action     Proposed       (%)
----------------------------------------------------------------------------------------------------------------
2014..............................         9.41         9.41          0.0          115          115          0.0
2015..............................         9.53         9.53          0.0          117          117          0.0
2016..............................         9.72         9.72          0.0          119          119          0.0
2017..............................         9.49         9.46          0.3          116          116          0.3
2018..............................         9.27         9.19          0.8          114          113          0.8
2019..............................         9.20         9.14          0.7          113          112          0.7
2020..............................         9.25         9.18          0.7          113          112          0.8
2021..............................         9.23         8.82          4.4          113          108          4.4
2022..............................         9.26         8.85          4.4          113          108          4.4
2023..............................         9.23         8.60          6.9          113          105          6.9
2024..............................         9.45         8.72          7.7          116          107          7.7
2025..............................         9.62         8.48         11.8          118          104         11.7
2026..............................         9.81         8.58         12.5          120          105         12.3
2027..............................         9.93         8.57         13.7          121          105         13.5
2028..............................        10.05         8.68         13.7          123          106         13.5
2029..............................        10.17         8.77         13.7          124          108         13.5
2030..............................        10.18         8.78         13.7          124          108         13.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    To more clearly communicate these trends visually, the following
two charts present the above results graphically for Method A, relative
to Alternative 1b. As shown, fuel consumption and GHG emissions follow
parallel though not precisely identical paths. Though not presented,
the charts for Alternative 1a would appear sufficiently similar that
differences between Alternative 1a and Alternative 1b remain best
communicated by comparing values in the above tables.

[GRAPHIC] [TIFF OMITTED] TP13JY15.015

[GRAPHIC] [TIFF OMITTED] TP13JY15.016

      Table VII-11 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)     CO2eq)\9\   (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -26.9         -0.4            0        -27.2
2035........................................................        -86.0         -1.0            0        -86.9
2050........................................................       -121.6         -1.4            0       -123.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-12--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                                             Gasoline
                                          Diesel savings      savings
                   CY                        (billion        (billion
                                             gallons)        gallons)
------------------------------------------------------------------------
2025....................................             2.5             0.2
2035....................................             7.6             0.9
2050....................................            10.8             1.2
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

     Table VII-13--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)         CO2eq)\9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -27.7            -0.4               0           -28.1
2035............................................           -93.6            -1.0               0           -94.6
2050............................................          -133.5            -1.4               0          -134.9
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-14--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          2.5          0.2
2035..........................................          8.3          1.0
2050..........................................         11.9          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

 Table VII-15--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)         CO2eq)\9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -33.2            -0.4               0           -33.5
2035............................................           -89.9            -1.0               0           -90.9
2050............................................          -122.6            -1.4               0          -124.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-16--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
          Alternative 4 vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          3.0          0.3
2035..........................................          7.9          1.0
2050..........................................         10.8          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

 Table VII-17--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)        CO2eq) \9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -34.3            -0.4               0           -34.6
2035............................................           -97.7            -1.0               0           -98.7
2050............................................          -134.6            -1.4               0          -136.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-18--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
          Alternative 4 vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          3.1          0.3
2035..........................................          8.6          1.1
2050..........................................         12.0          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(ii) Upstream (Fuel Production and Distribution) Emissions Projections

Table VII-19--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred Alternative
                                     vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................            -8.4            -0.9            -0.1            -9.3
2035............................................           -26.6            -2.8            -0.2           -29.7
2050............................................           -37.7            -4.0            -0.3           -42.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-20--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred Alternative
                                     vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................            -8.6            -0.9            -0.1            -9.6
2035............................................           -29.0            -3.1            -0.2           -32.3
2050............................................           -41.4            -4.4            -0.3           -46.1
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-21--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt
                                         1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -10.3            -1.1            -0.1           -11.5
2035............................................           -27.8            -3.0            -0.2           -31.0
2050............................................           -38.0            -4.0            -0.3           -42.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-22--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt
                                         1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -10.6            -1.1            -0.1           -11.8
2035............................................           -30.2            -3.2            -0.2           -33.7
2050............................................           -41.7            -4.4            -0.3           -46.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(iii) HFC Emissions Projections
    The projected HFC emission reductions due to the proposed AC
leakage standards are 93,272 metric tons of CO2eq in 2025,
253,118 metric tons of CO2eq in 2035, and 299,590 metric
tons CO2eq in 2050.
    (iv) Total (Downstream + Upstream + HFC) Emissions Projections

Table VII-23--Annual Total GHG Emissions Impacts in Calendar Years 2025,
 2035 and 2050--Preferred Alternative vs. Alt 1b Using Analysis Method A
                                   \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -27.2..........        -86.9       -123.0
Upstream.....................  -9.3...........        -29.7        -42.0
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -36.4..........       -116.4       -164.7
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-24--Annual Total GHG Emissions Impacts in Calendar Years 2025,
   2035 and 2050 2050--Preferred Alternative vs. Alt 1a Using Analysis
                              Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -28.1..........        -94.6       -134.9
Upstream.....................  -9.6...........        -32.3        -46.1
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -37.6..........       -126.4       -180.7
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-25--Annual Total GHG Emissions Impacts in Calendar Years 2025,
   2035 and 2050--Alternative 4 vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -33.5..........        -90.9       -124.0
Upstream.....................  -11.5..........        -31.0        -42.3
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -44.9..........       -121.7       -166.0
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-26--Annual Total GHG Emissions Impacts in Calendar Years 2025,
2035 and 2050 2050--Alternative 4 vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -34.6..........        -98.7       -136.0
Upstream.....................  -11.8..........        -33.7        -46.5
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -46.3..........       -132.2       -182.2
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(b) Model Year Lifetime Analysis

  Table VII-27--Lifetime GHG Reductions and Fuel Savings Using Analysis Method A--Summary for Model Years 2018-
                                                    2029 \a\
----------------------------------------------------------------------------------------------------------------
                                                              Alternative 3 (proposed)        Alternative 4
----------------------------------------------------------------------------------------------------------------
                                                                1b (More     1a (Less     1b (More     1a (Less
              No-Action Alternative (Baseline)                  Dynamic)     Dynamic)     Dynamic)     Dynamic)
----------------------------------------------------------------------------------------------------------------
Fuel Savings (Billion Gallons)..............................         72.2         76.7         81.9         86.7
    Total GHG Reductions (MMT CO2eq)........................          974        1,034        1,102        1,166
        Downstream (MMT CO2eq)..............................        726.1        771.3        821.9        870.3
        Upstream (MMT CO2eq)................................        247.7        262.9        279.9        296.1
----------------------------------------------------------------------------------------------------------------
Note:

\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(2) Impacts of the Proposed Rules and Alternative 4 using Analysis
Method B
(a) Calendar Year Analysis
(i) Downstream (Tailpipe) Emissions Projections
    As described in Section VII. A., the Method B used MOVES to
estimate downstream GHG inventories from the proposed rules and
Alternative 4 relative to Alternative 1a for all heavy-duty vehicle
categories (including the engines associated with tractor-trailer
combinations and vocational vehicles). The agencies expect reductions
in CO2 emissions from all heavy-duty vehicle categories due
to engine and vehicle improvements. We expect N2O emissions
to increase very slightly because of a rebound in vehicle miles
traveled (VMT). However, since N2O is produced as a
byproduct of fuel combustion, the increase in N2O emissions
is expected to be more than offset by the improvements in fuel
efficiency from the proposed rules.\388\ We expect methane emissions to
decrease primarily due to reduced refueling from improved fuel
efficiency and the differences in hydrocarbon emission characteristics
between on-road diesel engines and APUs. The amount of methane emitted
as a fraction of total hydrocarbons is expected to be significantly
less for APUs than for on-road diesel engines during extended idling.
Overall, the downstream GHG emissions would be reduced significantly
and are described in the following subsections.
---------------------------------------------------------------------------

    \388\ MOVES is not capable of modeling the changes in exhaust
N2O emissions from the improvements in fuel efficiency.
Due to this limitation, a conservative approach was taken to only
model the VMT rebound in estimating the emissions impact on
N2O from the proposed rules, resulting in a slight
increase in downstream N2O inventory.
---------------------------------------------------------------------------

    Since fuel consumption is not directly modeled in MOVES, the total
energy consumption was run as a surrogate in MOVES. Then, the total
energy consumption was converted to fuel consumption based on the fuel
heating values assumed in the Renewable Fuels Standard rulemaking \389\
and used in the development of MOVES emission and energy rates.\390\
---------------------------------------------------------------------------

    \389\ Renewable Fuels Standards assumptions of 115,000 BTU/
gallon gasoline (E0) and 76,330 BTU/gallon ethanol (E100) were
weighted 90% and 10%, respectively, for E10 and 85% and 15%,
respectively, for E15 and converted to kJ at 1.055 kJ/BTU. The
conversion factors are 117,245 kJ/gallon for gasoline blended with
ten percent ethanol (E10) and 115,205 kJ/gallon for gasoline blended
with fifteen percent ethanol (E15).
    \390\ The conversion factor for diesel is 138,451 kJ/gallon. See
MOVES2004 Energy and Emission Inputs. EPA420-P-05-003, March 2005.
http://www.epa.gov/otaq/models/ngm/420p05003.pdf (last accessed Feb
23, 2015).
---------------------------------------------------------------------------

    Table VII-28 and Table VII-29 show the impacts on downstream GHG
emissions and fuel savings in 2025, 2035 and 2050, relative to
Alternative 1a, for the preferred alternative and Alternative 4,
respectively.
    Table VII-30 and Table VII-31 show the estimated fuel savings from
the preferred alternative and Alternative 4 in 2025, 2035, and 2050,
relative to Alternative 1a. For both GHG emissions and fuel savings,
the annual impacts are greater for Alternative 4 than the preferred
alternative in earlier years, but the differences become
indistinguishable by 2050. The results from the comparable analyses
relative to Alternative 1b are presented in Section VII. C. (1).

     Table VII-28--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -27.0         -0.4        0.002        -27.4
2035........................................................        -93.7         -1.0        0.004        -94.7
2050........................................................       -135.1         -1.4        0.005       -136.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VII-29--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1a using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -33.3         -0.4        0.002        -33.7
2035........................................................        -97.3         -1.0        0.004        -98.3
2050........................................................       -135.5         -1.4        0.005       -136.9
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-30--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1a using Analysis Method B \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          2.5          0.2
2035..........................................          8.5          0.8
2050..........................................         12.3          1.1
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section