--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        CI Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            2021 MY 7L, 200 hp Engine          2021 MY 7L, 270 hp Engine        2021 MY
                                                                                11L, 350
                                                                                hp Engine     2021 MY 11L, 350 hp
                                                                                Engine and 2021 MY 15L
                                                                                455hp Engine a
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Torque Converter Lockup in 1st (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
30%.....................................................        30%         30%         30%         30%         30%         10%         10%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          6 x 2 Disconnect Axle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0%......................................................         0%          0%          0%          0%          0%          0%          5%         10%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   AES (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
30%.....................................................        30%         40%         30%         30%         40%         30%         30%         40%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Stop-Start (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
10%.....................................................        10%          0%         10%         10%          0%          0%          0%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Neutral Idle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
50%.....................................................        50%          0%         50%         50%          0%         50%         50%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Steer Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.......................................................        6.8         6.8         6.8         6.7         6.7         6.4         6.2         6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Drive Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.2.....................................................        6.9         6.9         7.8         7.5         7.5         7.8         7.5         7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Weight Reduction (lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
15......................................................         15          15          15          15          15          25          25          25
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ The Multipurpose and Regional HHD standards are established using averages of configurations with different engines as described in RIA Chapter
  2.9.2.

                                    Table V-25--GEM Inputs Used To Derive Final MY 2024 Vocational Vehicle Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Class 2b-5                                                  Class 6-7                            Class 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Multi-                              Multi-                              Multi-
                          Urban                             purpose    Regional      Urban      purpose    Regional      Urban      purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      SI Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             2018 MY 6.8L, 300 hp engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        CI Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            2024 MY 7L, 200 hp Engine          2024 MY 7L, 270 hp Engine        2024 MY
                                                                                11L, 350
                                                                                hp Engine     2024 MY 11L, 350 hp
                                                                                Engine and 2024 MY 15L
                                                                                455hp Engine a
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Torque Converter Lockup in 1st (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
40%.....................................................        40%         40%         40%         40%         40%         20%         20%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                          6 x 2 Disconnect Axle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0%......................................................         0%          0%          0%          0%          0%          0%         15%         20%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   AES (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
60%.....................................................        60%         80%         60%         60%         80%         60%         60%         80%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Stop-Start (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
20%.....................................................        20%          0%         20%         20%          0%         10%         10%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Neutral Idle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
70%.....................................................        70%          0%         70%         70%          0%         70%         70%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Steer Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.0.....................................................        6.8         6.2         6.8         6.7         6.2         6.4         6.2         6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Drive Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.2.....................................................        6.9         6.9         7.8         7.5         6.9         7.8         7.5         6.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Weight Reduction (lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45......................................................         45          45          45          45          45          75          75          75
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ The Multipurpose and Regional HHD standards are established using averages of configurations with different engines as described in RIA Chapter
  2.9.2.

                                    Table V-26--GEM Inputs Used To Derive Final MY 2027 Vocational Vehicle Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Class 2b-5                                                  Class 6-7                            Class 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Multi-                              Multi-                              Multi-
                          Urban                             purpose    Regional      Urban      purpose    Regional      Urban      purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      SI Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             2018 MY 6.8L, 300 hp engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        CI Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            2027 MY 7L, 200 hp Engine          2027 MY 7L, 270 hp Engine        2027 MY
                                                                                11L, 350
                                                                                hp Engine     2027 MY 11L, 350 hp
                                                                                Engine and 2027 MY 15L
                                                                                455hp Engine a
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Torque Converter Lockup in 1st (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
50%.....................................................        50%         50%         50%         50%         50%         30%         30%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          6 x 2 Disconnect Axle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0%......................................................         0%          0%          0%          0%          0%          0%         25%         30%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   AES (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
70%.....................................................        70%         90%         70%         70%         90%         70%         70%         90%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Stop-Start (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
30%.....................................................        30%          0%         30%         30%          0%         20%         20%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Neutral Idle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
60%.....................................................        60%          0%         60%         60%          0%         70%         70%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                             Steer Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6.8.....................................................        6.2         6.2         6.7         6.2         6.2         6.2         6.2         6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Drive Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6.9.....................................................        6.9         6.9         7.5         6.9         6.9         7.5         6.9         6.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Weight Reduction (lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
75......................................................         75          75          75          75          75         125         125         125
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ The Multipurpose and Regional HHD standards are established using averages of configurations with different engines as described in RIA Chapter
  2.9.2.

                                                  Table V-27--Vocational Driveline Improvement Factors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Class 2b-5                       Class 6-7                         Class 8
                                                      --------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
CI 2021..............................................      0.019      0.018      0.018      0.019      0.019      0.019      0.019      0.018      0.017
CI 2024..............................................      0.041      0.036      0.029      0.041      0.036      0.029      0.040      0.036      0.026
CI 2027..............................................      0.061      0.053      0.037      0.061      0.053      0.037      0.060      0.052      0.034
SI 2021..............................................      0.027      0.026      0.026      0.028      0.027      0.027  .........  .........  .........
SI 2024..............................................      0.048      0.044      0.037      0.049      0.044      0.037  .........  .........  .........
SI 2027..............................................      0.067      0.059      0.045      0.068      0.060      0.045  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

(d) Role of Fleet Averaging and Constraints in Vocational Vehicle
Standards
    In part to avoid potentially creating incentives to misclassify
vehicles, the agencies proposed to ``equalize'' the standards for each
of the subcategories. 80 FR 40308. Thus, at proposal, the standards for
the Regional, Multipurpose, and Urban subcategories reflected the
arithmetic mean of the Regional, Multipurpose and Urban stringency
levels (i.e., all three drive cycle subcategory percent improvements
averaged together) in each weight class.\442\ Most commenters
criticized this proposed approach. For example, Navistar commented that
equalization could inappropriately benefit one manufacturer over
another based on their product mix. We also note that the equalization
process, if adopted, would have made the standards for the Regional
vehicles unattainable using the technology pathway identified by the
agencies, thus motivating manufacturers to select less appropriate test
cycles for vehicles that are designed for Regional service. Therefore,
we have decided not to apply ``equalization'' for finalizing the
vocational vehicle standards. Instead, we have developed the final
vocational vehicle standards using the same methodology as for all of
the other Phase 2 standards, where we apply fleet average technology
mixes to fleet average baseline vehicle configurations, and each
average baseline and technology mix is unique for each vehicle
subcategory. Along with this standard-setting approach, the agencies
are also adopting certain interim constraints on the otherwise
generally manufacturer-selected assignment of vehicle configurations to
one of the three drive cycle subcategories, as explained in Section
V.D.(1)(e) below.
---------------------------------------------------------------------------

    \442\ See proposed rules at 80 FR 40308, July 13, 2015.
---------------------------------------------------------------------------

    Elsewhere in this rulemaking we present overall costs and benefits,
which are based our projected distribution of vocational vehicles in
each subcategory. This projection includes our most updated population
distributions by weight class, which we have adjusted in part in
response to comments on the draft NREL report in the NODA and based on
an analysis of telematics data from Ryder's leased vehicles. We intend
to monitor whether our projection of distribution of vehicles among
subcategories is consistent with outcomes. Under the three drive cycle
subcategory structure, manufacturers must use good engineering judgment
(subject to the provisions of 40 CFR 1068.5) to choose a subcategory
for each vehicle configuration that represents the type of operation
the vehicle is configured to experience in use, and the agencies expect
the manufacturer and customer to specify a technology mix that is most
effective for that vehicle's likely operation. In other words, as long
as manufacturers work with their customers, the general rule describing
this greater flexibility in choice of subcategory could be that the
``customer knows best.'' In fact, our standards are predicated on the
premise that willful misclassification not reflecting good engineering
judgment will be rare, and thus environmentally inconsequential.
    In considering our approach for setting the final standards, we
compared the relative stringencies in each subcategory with each
respective baseline, and we observed that Regional vehicles are
generally able to achieve the smallest percent improvement from the
lowest (most efficient) baseline. By contrast, the Urban vehicles are
generally able to achieve the greatest percent improvement from the
highest (least efficient) baseline. We are not particularly concerned
that adopting final standards with these unequal percent improvements
poses a danger of losing environmental benefits from this

program, as long as vehicle configurations are properly classified at
the time of certification. To test the potential impacts of
misclassification, we compared the performance of each of our baseline
configurations over all three drive cycles. This analysis is presented
in a memorandum to the docket.\443\ Results for LHD and MHD weight
classes were generally consistent with the rule's projections across
each drive cycle. Results for HHD were equivocal in some instances,
particularly for our baseline vehicles equipped with manual
transmissions. This issue appears to be related to both the difference
in the weighting of time spent in the drive idle mode in the Regional
versus Urban and Multi-purpose drive cycles, and whether or not
automatic transmissions are part of a baseline. In the analysis, that
combination of circumstances showed how manual transmission-equipped
vehicles could potentially become credit generators without any further
addition of technology, if certified to the Urban or Multi-purpose
cycles. The agencies are concerned that if this circumstance were to be
left unconstrained, it could create an incentive to misclassify some
Regional vehicles into one of the other two drive cycle subcategories,
even though manual transmissions are generally best suited for Regional
driving patterns, as discussed further below.
---------------------------------------------------------------------------

    \443\ See spreadsheet file dated July 2016 titled,
VocationalStringencyComparison.xlsx.
---------------------------------------------------------------------------

    In light of this analysis, and consistent with recent comments from
chassis manufacturers mentioned above in Section V.B.(1)(a), the
agencies are adopting some constraints to the otherwise generally
manufacturer-selected assignment of vocational chassis to regulatory
subcategories. These constraints are described in Section V.D.(1)(e). A
subset of the constraints prevents inappropriate classification based
on transmission type. These constraints restrict classification options
where a vocational vehicle is certifying with a manual transmission or
in some cases an automated manual transmission. We are adopting these
constraints as interim provisions in response to manufacturers'
concerns that the manual transmission constraints could present
competitive disadvantages, where different manufacturers produce very
different sales mixes of vehicles equipped with different transmission
types.\444\ However, at this time the final program structure,
including these constraints, will remain in place unless and until the
agencies determine that revisions to the vocational vehicle program
structure are warranted, in which case the agencies would undertake a
notice and comment rulemaking proposing to amend the programmatic
structure, consistent with such a determination.
---------------------------------------------------------------------------

    \444\ See memorandum dated July 2016 titled, ``Summary of Late
Comments on Vocational Transmissions and N/V.''
---------------------------------------------------------------------------

    It is important to clarify that we would consider all relevant
factors together before deciding whether to propose any revisions. If
we find that a significant discrepancy arises between our projections
and outcomes, such that our estimated GHG and fuel consumption benefits
are not being achieved because of the program structure, we may revisit
relevant aspects of the program structure, including the drive cycles,
subcategories and classification constraints. If we propose to revise
the structure in the future, it might also be necessary to propose
revising the numerical values of the standards to maintain equivalence
with the final stringency being established in this rulemaking. We
would of course find it acceptable if manufacturers implemented more
cost-effective technologies than we projected, while still achieving
the projected reductions in use. Similarly, if the structure results in
manufacturers generally adopting the projected cost-effective
technologies on the appropriate vehicles, but somehow this fails to
fully achieve the projected reductions in use, we do not believe
revisions necessarily would be warranted.
(e) Technology Package Costs Associated With Primary Vocational Vehicle
Standards
    The agencies have estimated the costs of the technologies that
could be used to comply with the final Phase 2 vocational vehicle
standards. The estimated costs are shown in Table V-28 for MY 2021, in
Table V-29 for MY 2024, and Table V-30 for MY 2027. Fleet average costs
are shown for light, medium and heavy HD vocational vehicles in each
duty-cycle-based subcategory--Urban, Multi-Purpose, and Regional. As
shown in Table V-28, in MY 2021 these range from approximately $900 for
MHD and LHD Regional vehicles, up to $2,600 for HHD Regional vehicles.
Those two lower-cost packages reflect zero hybrids, and the higher-cost
package reflects significant adoption of automated transmissions. Many
changes have been made to the cost estimates since proposal. In the RIA
Chapter 2.12.2, the agencies present vocational vehicle technology
package costs differentiated by MOVES vehicle type. These costs do not
indicate the per-vehicle cost that may be incurred for any individual
technology. For more specific information about the agencies' estimates
of per-vehicle costs, please see the RIA Chapter 2.11. The engine costs
listed represent the cost of an average package of diesel engine
technologies as set out in Section II. Individual technology adoption
rates for engine packages are described in Section II.D. For gasoline
vocational vehicles, the agencies are projecting adoption of Level 2
engine friction reduction plus cylinder deactivation (i.e., all engine
improvements are reflected exclusively in the vehicle standard) for an
estimated $138 added to the average SI vocational vehicle package cost
beginning in MY 2021. Further details on how the SI vocational vehicle
costs were estimated are provided in the RIA Chapter 2.9.
    The details behind all these costs are presented in RIA Chapter
2.11, including the markups and learning effects applied and how the
costs shown here are weighted to generate an overall cost for the
vocational segment. These estimates have changed significantly from
those presented in the proposal, due to changes in projected technology
adoption rates as well as changes in direct costs that reflect comments
received.

                              Table V-28--Final Vocational Vehicle Technology Incremental Costs in the 2021 Model Year a b
                                                                         [2013$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Light HD                        Medium HD                         Heavy HD
                                                      --------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...........................................       $298       $298       $298       $275       $275       $275       $275       $275       $275

Tires................................................          0         27         27          9          9          9         13         13         13
Tire Pressure Monitoring.............................        123        154        184        123        154        184        233        292        350
Transmission.........................................        217        217        217        217        217        217        186        413      1,519
Axle related.........................................         13         13         13         13         13         13         20         26         32
Weight Reduction.....................................         69         69         69         69         69         69        250        250        250
Idle reduction.......................................        155        155         12        160        160         12         68         68         12
Hybridization........................................        178        178          0        178        178          0        178        178          0
Air Conditioning \d\.................................         22         22         22         22         22         22         22         22         22
Other \e\............................................         30         30         30         49         49         49         89         89         89
                                                      --------------------------------------------------------------------------------------------------
    Total............................................      1,106      1,164        873      1,116      1,146        851      1,334      1,625      2,562
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2021 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the RIA (see RIA 2.11).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the RIA (see RIA 2.11 in
  particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting $138 of additional costs beyond Phase 1 for gasoline
  vocational engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.
\e\ Other incremental technology costs include electrified accessories and advanced shift strategy.

    The estimated fleet average vocational vehicle package costs are
shown in Table V-29 for MY 2024. As shown, these range from
approximately $1,300 for MHD and LHD Regional vehicles, up to $4,000
for HHD Regional vehicles. The increased costs above the MY 2021 values
reflect increased adoption rates of individual technologies, while the
individual technology costs are generally expected to remain the same
or decrease, as explained in the RIA Chapter 2.11. The engine costs
listed represent the average costs associated with the MY 2024
vocational diesel engine standard described in Section II.D.

                              Table V-29--Final Vocational Vehicle Technology Incremental Costs in the 2024 Model Year a b
                                                                         [2013$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Light HD                        Medium HD                         Heavy HD
                                                      --------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...........................................       $446       $446       $446       $413       $413       $413       $413       $413       $413
Tires................................................          0         31         33         10         10         33         13         13         53
Tire Pressure Monitoring.............................        155        183        211        155        183        211        294        347        401
Transmission.........................................        276        276        276        276        276        276        222      1,032      2,193
Axle related.........................................         24         24         24         24         24         24         37         54         60
Weight Reduction.....................................        186        186        186        186        186        186        684        684        684
Idle reduction.......................................        248        248         21        256        256         21        242        242         21
Hybridization........................................        550        550          0        653        653          0        844        844          0
Air Conditioning \d\.................................         20         20         20         20         20         20         20         20         20
Other \e\............................................         54         54         54         89         89         89        162        162        162
                                                      --------------------------------------------------------------------------------------------------
    Total............................................      1,959      2,018      1,272      2,082      2,110      1,274      2,932      3,813      4,009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the RIA (see RIA 2.11).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the RIA (see RIA 2.9 in
  particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting $136 additional costs beyond Phase 1 for gasoline vocational
  engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.
\e\ Other incremental technology costs include electrified accessories and advanced shift strategy.

    The estimated fleet average vocational vehicle package costs are
shown in Table V-30 for MY 2027. As shown, these range from
approximately $1,500 for MHD and LHD Regional vehicles, up to $5,700
for HHD Regional vehicles. These per-vehicle technology package costs
were averaged using our projections of vehicle populations in the

nine regulatory subcategories and do not correspond to the MOVES
vehicle types. The engine costs shown represent the average costs
associated with the MY 2027 vocational diesel engine standard described
in Section II.D.
    Purchase prices of non-custom vocational vehicles can range from
$60,000 for a light heavy-duty stake-bed landscape truck to over
$300,000 for a heavy heavy-duty boom truck. The costs of the vocational
vehicle standards can be put into perspective by comparing estimated
package costs with typical prices for those vehicles. For example, a
package cost of $3,000 on a $60,000 landscaping truck represents an
incremental increase of about five percent of the vehicle purchase
price. Similarly, a package cost of $4,000 on a $300,000 boom truck
represents an incremental increase of less than two percent of the
vehicle purchase price. The vocational vehicle industry
characterization report in the docket includes additional examples of
vehicle prices for a variety of vocational applications.\445\
---------------------------------------------------------------------------

    \445\ See Heavy Duty Vocational Vehicle Industry
Characterization, EPA Contract No. EP-C-12-011. September 2013.

                              Table V-30--Final Vocational Vehicle Technology Incremental Costs in the 2027 Model Year a b
                                                                         [2013$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Light HD                        Medium HD                         Heavy HD
                                                      --------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...........................................       $481       $481       $481       $446       $446       $446       $446       $446       $446
Tires................................................         12         24         24          6         24         24         12         36         36
Tire Pressure Monitoring.............................        187        214        240        187        214        240        355        405        456
Transmission.........................................        271        271        293        271        271        293        220        990      3,269
Axle related.........................................         35         35         35         35         35         35         52         82         87
Weight Reduction.....................................        294        294        294        294        294        294      1,102      1,102      1,102
Idle reduction.......................................        303        303         23        314        314         23        365        365         23
Hybridization........................................        857        857          0      1,032      1,032          0      1,353      1,353          0
Air Conditioning \d\.................................         20         20         20         20         20         20         20         20         20
Other \e\............................................         73         73         77        122        122        127        227        227        231
                                                      --------------------------------------------------------------------------------------------------
    Total............................................      2,533      2,571      1,486      2,727      2,771      1,500      4,151      5,025      5,670
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2027 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the RIA (see RIA 2.11).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the RIA (see RIA 2.9 in
  particular).
\c\ Engine costs are shown for a light HD, medium HD or heavy HD diesel engine. For gasoline-powered vocational vehicles we are projecting $125 of
  additional engine-based costs beyond Phase 1.
\d\ EPA's air conditioning standards are presented in Section V.C above.
\e\ Other incremental technology costs include electrified accessories and advanced shift strategy.

(f) Custom Chassis Cost Estimates
    The agencies have performed the above-described cost analysis using
the assumption that all custom chassis vocational vehicles are
certified to the primary standards, with full technology packages and
use of the regular Phase 2 GEM. In terms of costs, we expect that a
manufacturer will choose to certify a vehicle family to the optional
custom chassis standards only if it is less costly to do so. The cost-
benefit analysis found in the RIA Chapter 7 presents some estimates of
what the technology package costs of the primary standards are in terms
of MOVES vehicle types. For the MOVES types where a custom chassis
option is available, these are conservatively high cost estimates.
Table 6 and Table 7 of the RIA Executive Summary present estimates of
average custom chassis technology packages associated with the final
optional standards in MY 2021 and MY 2027, respectively.
    The agencies are not aware of any custom chassis manufacturer that
produces engines. Thus, the engine costs will be borne by engine
manufacturers. While some of the added engine costs may be passed on to
vehicle manufacturers, and some vehicle costs may be passed on to
owners/operators, the overall technology costs of the custom chassis
standards are significantly less than the Phase 2 vocational vehicle
technology costs, which, as shown directly below, are highly cost-
effective.
(3) Consistency of the Vocational Vehicle Standards With the Agencies'
Legal Authority
    NHTSA and EPA project these standards to be achievable within known
design cycles, and we believe these standards, although technology-
advancing, will allow many different paths to compliance in addition to
the technology paths on which standard stringency is predicated. These
standards are predicated on manufacturers implementing technologies
that we expect will be available in the time frame of these final
rules. We are projecting that most vehicles can adopt certain of the
technologies. For example, we project a 70 to 90 percent application
rate for TPMS. However, for other technologies, such as electrified
accessories, we are projecting an adoption rate of 15 percent. These
standards offer manufacturers the flexibility to apply the technologies
that make sense for their business and for customer needs.
    As discussed above, average per-vehicle costs associated with the
2027 MY standards are projected to be generally less than five percent
of the overall price of a new vehicle. The annual cost-effectiveness of
these vocational vehicle standards in dollars

per metric ton is presented in the RIA Chapter 7 in Table 7-47. As
shown in that table, without fuel savings the cost per metric ton of
the final vocational vehicle standards in calendar year 2021 is $710,
decreasing to $100 by 2030. The cost effectiveness estimated for heavy-
duty pickup trucks and vans in this rulemaking is presented in Table 7-
46 in that same chapter of the RIA. Those Phase 2 standards have an
estimated annual cost per metric ton without fuel savings of $2,800 in
2020, decreasing to $110 (about the same as for vocational) by calendar
year 2030. The annual cost per ton of the MY 2017-2025 light-duty
greenhouse gas standards for pickup trucks as reported in 2010 dollars
without fuel savings is $430 in calendar year 2020, decreasing to $142
in 2030.\446\ The agencies have found these standards to be highly cost
effective. In addition, the vocational vehicle standards are clearly
effective from a net benefits perspective (see RIA Chapter 11.2).
Therefore, the agencies regard the cost of the final standards as
reasonable, even without considering that the costs are recovered due
decreased fuel consumption.
---------------------------------------------------------------------------

    \446\ See Chapter 5.3 of the final RIA for the MY 2017-2025
Light-Duty GHG Rule, available at http://www3.epa.gov/otaq/climate/documents/420r12016.pdf.
---------------------------------------------------------------------------

    The agencies note that while the projected costs are significantly
greater than the costs projected for Phase 1, we still consider these
costs to be reasonable, especially given that the first vehicle owner
may see the technologies pay for themselves in many cases. As discussed
above, the usual period of ownership for a vocational vehicle reflects
a lengthy trade cycle that may often exceed seven years. For most
vehicle types evaluated, the cost of these technologies, if passed on
fully to customers, will likely be recovered within four years or less
due to the associated fuel savings, as shown in the payback analysis
included in Section IX.M and in the RIA Chapter 7.1. Specifically, in
RIA Chapter 7.2.4, a summary is presented with estimated payback
periods for each of the MOVES vocational vehicle types, using the
annual vehicle miles traveled from the MOVES model for each vehicle
type. As noted above, the cost analysis presented for this rulemaking
assumes that all vocational vehicles are certified to the primary
standard. Using this assumption, the vocational vehicle type with the
shortest payback is intercity buses (less than one year), while most
other vehicles (with the exception of school buses and motor homes) are
projected to see paybacks in the fourth year or sooner. We expect that
manufacturers will certify to the optional custom chassis standards
where it is more cost-effective to do so; therefore, our analysis may
be overly conservative where it indicates very long paybacks for some
vocational vehicles.
    The agencies note further that although the rules are technology-
advancing (especially with respect to driveline improvements) and the
estimated costs for each subcategory vary considerably (by a factor of
five in some cases), these costs represent only one of many possible
pathways to compliance for manufacturers. Manufacturers retain leeway
to develop alternative compliance paths, increasing the likelihood of
the standards' successful implementation. Based on available
information, the agencies believe the final vocational vehicle
standards are technically feasible within the lead time provided, are
cost effective while accounting for the fuel savings (see RIA Chapter
7.1.4), and have no apparent adverse collateral potential impacts
(e.g., there are no projected negative impacts on safety or vehicle
utility).
    The final standards thus appear to represent a reasonable choice
under section 202(a) of the CAA and are maximum feasible under NHTSA's
EISA authority at 49 U.S.C. 32902(k)(2). The agencies believe that the
final standards are consistent with their respective authorities.
(4) Alternative Vocational Vehicle Standards Considered
    The agencies developed and considered other alternative levels of
stringency for the Phase 2 program. The results of the analysis of
these alternatives, and comments received on alternatives, are
discussed below in Section X of the Preamble and the RIA Chapter 11.
For vocational vehicles, the agencies developed alternatives as shown
in Table V-31. The agencies are not adopting standards reflecting
Alternative 2, because as already described, technically feasible
standards are available that provide for greater emission reductions
and reduced fuel consumption than provided under Alternative 2. The
agencies are not adopting standards reflecting Alternative 4 or
Alternative 5 because we do not believe these standards to be feasible
considering lead time and other relevant factors. Nevertheless, we have
reevaluated each of the technology projections proposed for Alternative
4 and have determined that some engine and tire reductions will be
feasible on the Alternative 4 timeline.

 Table V-31--Summary of Alternatives Considered for the Final Rulemaking
------------------------------------------------------------------------
            Alternative 1 and 1b                No action alternatives
------------------------------------------------------------------------
Alternative 2..............................  Less stringent than the
                                              preferred alternative in
                                              the proposal, applying off-
                                              the-shelf technologies.
Final HD Phase 2 program...................  Fully phased-in by MY 2027.
Alternative 4..............................  Same stringency as
                                              preferred alternative in
                                              the proposal, phasing in
                                              by MY 2024.
Alternative 5..............................  More stringent alternative,
                                              based on higher adoption
                                              rates of advanced
                                              technologies.
------------------------------------------------------------------------

D. Compliance Provisions for Vocational Vehicles

    We are adopting many changes in the compliance provisions for
vocational vehicles compared with what we proposed, as described in
this section.
(1) Application and Certification Process
    The agencies are adopting changes in the final Phase 2 version of
GEM, as described in Section II of this Preamble. Below we provide
cross-references to test procedures either that are either required or
optional, for generation of Phase 2 GEM input values. See Section
II.D.1 for details of engine testing and GEM inputs for engines.
    As described above in Section I, the agencies will continue the
Phase 1 compliance process in terms of the manufacturer requirements
prior to the effective model year, during the model year, and after the
model year. The information that will be required to be submitted by
manufacturers is set forth

in 40 CFR 1037.205, 49 CFR 537.6, and 49 CFR 537.7. EPA will continue
to issue certificates upon approval based on information submitted
through the VERIFY database (see 40 CFR 1037.255). End of year reports
will continue to include the GEM results for all of the configurations
built, along with credit/deficit balances, if applicable (see 40 CFR
1037.250 and 1037.730).
(a) GEM Inputs
    In Phase 1, there were two inputs to GEM for vocational vehicles:

 Steer tire coefficient of rolling resistance, and
 Drive tire coefficient of rolling resistance

    As discussed above in Section II and III.D, there are several
additional inputs that we are adopting for Phase 2. In addition to the
steer and drive tire CRR, the inputs include the following:
     Engine input file with fuel map, full-load torque curve,
and motoring curve,
     Transmission input file including architecture type, gear
number and ratios, and minimum lockup gear for transmissions with
torque converters,
     Drive axle ratio,
     Axle configuration,
     Tire size in revs/mi for drive and steer tires,
     Idle Reduction,
     Weight Reduction,
     Vehicle Speed Limiter,
     Aerodynamic Drag Area, and
     Pre-defined technology inputs for Accessory Load and Tire
Pressure Systems
(i) Driveline Inputs
    As with tractors, for each engine family, engine fuel maps, full
load torque curve, and motoring curve will be generated by engine
manufacturers and supplied to chassis manufacturers in a format
compatible with GEM. The test procedures for the torque and motoring
curves are found in 40 CFR part 1065. Section II.D.1.b describes these
procedures as well as the procedures for generating the engine fuel
maps. We require the steady state map approach for the 55 and 65 mph
cruise speed cycles, while the cycle average approach is required for
the ARB transient cycle. As an option, the cycle average map may also
be used for 55 and 65 mph cruise speed cycles. Also similar to
tractors, transmission specifications will be input to GEM. Any number
of gears may be entered with a numerical ratio for each, and
transmission type must be entered as either a Manual, Automated Manual,
or Automatic transmission.
    As part of the driveline information needed to run GEM, drive axle
ratio will be a user input. If a configuration has a two-speed axle,
the agencies are adopting regulations to instruct a manufacturer to
enter the ratio that is expected to be engaged for the greatest driving
distance. We requested comment on whether the agencies should allow
this choice, and what the GEM input instructions should be. Both Dana
and Meritor commented that there should be an option to recognize two-
speed axles, but neither axle supplier offered a preference for how the
agencies should implement this. Two-speed axles are typically specified
for heavy-haul vehicles, where the higher numerical ratio axle is
engaged during transient driving conditions and to deliver performance
needed on work sites, while the lower numerical ratio axle may be
engaged during light-load highway driving.
    Tire size is a Phase 2 input to GEM that is necessary for the model
to simulate the performance of the vehicle. As a result of comment and
further technical analysis, we are adopting the tire size input as
measured in revs/mile, rather than the measure of loaded radius in
meters, as was proposed. The RIA Chapter 3 includes a description of
how to measure tire size. For each model and nominal size of a tire,
there are numerous possible sizes that could be measured, depending on
whether the tire is new or ``grown,'' meaning whether it has been
broken in for at least 200 miles. Size can also vary based on load and
inflation levels, air temperature, and tread depth. The agencies
requested comment on aspects of measuring and reporting tire size. The
revised test procedure is described in the RIA Chapter 3.3.4.
    For manufacturers electing to certify a vocational vehicle to the
optional custom chassis standards, none of the above driveline inputs
are applicable. In this case manufacturers must input one of the custom
chassis regulatory subcategory identifiers shown in Table V-32. After
the remaining input fields are either completed with values or N/A, GEM
will simulate the vehicle by calling the default engine and
transmission files, tire size, and axle radius from the GEM library.
The following subsections describe the required and optional inputs for
custom chassis.

              Table V-32--Custom Chassis Subcategory Names
------------------------------------------------------------------------
                                   Regulatory
        Vehicle type             subcategory GEM    Default weight class
                                   identifier          and duty cycle
------------------------------------------------------------------------
Motor Home..................  MHD_CC_MH...........  MHD Regional.
School Bus..................  MHD_CC_SB...........  MHD Urban.
Coach Bus...................  HHD_CC_CB...........  HHD Regional.
Emergency Vehicle...........  HHD_CC_EM...........  HHD Urban.
Concrete Mixer..............  HHD_CC_CM...........  HHD Urban.
Transit and Other bus.......  HHD_CC_OB...........  HHD Urban.
Refuse Truck................  HHD_CC_RF...........  HHD Urban.
------------------------------------------------------------------------

    The agencies requested comments on the merits of using an equation-
based compliance approach for emergency vehicle manufacturers, similar
to the approach for trailer manufacturers described in Section IV.F.
CARB commented in support of an equation-based compliance approach, but
in the same comment they also expressed support for using a Phase 1-
style GEM interface with a default engine simulated in GEM as
appropriate for the emergency vehicle category. We received adverse
comment on the equation-based approach from Daimler, because they
believed it would make the compliance process more complex if some
vehicles needed to be tracked differently. Our intent in soliciting
comment on an equation-based approach was to assess whether running GEM
was a burden for non-diversified manufacturers of low-technology
vehicles. Because we received sufficient support from non-diversified
manufacturers that a simplified GEM would meet their needs, we did not
pursue an equation-based approach.
    The final certification approach is consistent with the approach
recommended by the Small Business Advocacy Review Panel, which believed
it will be feasible for small emergency

vehicle manufacturers to install a Phase 2-compliant engine, but
recommended a simplified certification approach to reduce the number of
required GEM inputs.
(ii) Idle Reduction Inputs
    The agencies proposed two different idle reduction inputs for
vocational vehicles: Neutral idle and stop-start. Based on comment, we
are adding a third type of idle reduction input: Automatic engine
shutdown. Based on user inputs derived from engine testing described in
Section II and RIA Chapter 3.1, GEM will calculate CO2
emissions and fuel consumption at both zero torque (neutral idle) and
with torque set to Curb-Idle Transmission Torque for automatic
transmissions in ``drive'' (as described in the RIA Chapter <IP_ADDRESS>)
for use in the CO2 emission calculation in 40 CFR
1037.510(b). At proposal, neutral idle and stop-start were not
recognized during the ARB transient cycle, they were recognized only
during the separate idle cycle. The agencies received comments
requesting recognition of neutral idle during the ARB transient test
cycle. We agree this is desirable and have adopted changes in GEM to
accomplish this. Also, with the adoption of the alternative engine
mapping procedure for the ARB transient cycle, the computation for idle
reduction has changed. Please see RIA Chapter <IP_ADDRESS> for a description
of how GEM recognizes idle reduction.
    For vocational custom chassis certified to the optional standards,
all three idle reduction inputs will be available, however, the
computation will be based on the EPA default engine. As described in
the GEM User Guide, users will enter Y or N, and GEM will return a
predefined improvement.
(iii) Weight Reduction Inputs
    In Phase 1, the agencies adopted tractor regulations that provided
manufacturers with the ability to utilize high strength steel and
aluminum components for weight reduction without the burden of entering
the curb weight of every tractor produced. In Phase 2, the agencies are
adopting a lookup table of lightweight components for use in certifying
vocational vehicles, similar to the process for tractors. As noted
above, the agencies will recognize weight reduction by allocating one
half of the weight reduction to payload in the denominator, while one
half of the weight reduction will be subtracted from the overall weight
of the vehicle in GEM.
    The agencies are adopting lookup values for components on
vocational vehicles in all HD weight classes. Components available for
vocational vehicle manufacturers to select for weight reduction are
shown below in Table V-33, below. All of these weight reduction inputs
will be available for manufacturers of custom chassis certifying to the
optional standards. We received comments from Allison Transmission
noting that aluminum transmission cases and clutch housings are
standard for automatic transmissions so we agree it is inappropriate to
include these components in the lookup table. We have revised the
values in response to adverse comments from AISI, and after
reevaluating information available at proposal. Although we are not
projecting any adoption of permanent 6x2 axles for non-custom
vocational vehicles, if a manufacturer chooses to apply this technology
for class 8 vocational vehicles, users may enter an appropriate weight
reduction compared to the traditional 6x4 axle configuration.\447\ We
received adverse comments on the proposal to assign a fixed weight
increase to natural gas fueled vehicles to reflect the weight increase
of natural gas fuel tanks versus gasoline or diesel tanks. Based on
comments and further technical analysis, we have determined that to
provide equitable treatment to technologies, we will not require a
weight penalty for any technology applied to achieve certification in
Phase 2. We accounted for adoption of weight-increasing technologies in
our MOVES modeling.
---------------------------------------------------------------------------

    \447\ See NACFE Confidence Findings on the Potential of 6x2
Axles.

                    Table V-33--Phase 2 Weight Reduction Technologies for Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                             Vocational vehicle class
               Component                        Material         -----------------------------------------------
                                                                    Class 2b-5       Class 6-7        Class 8
----------------------------------------------------------------------------------------------------------------
Axle Hubs--Non-Drive..................  Aluminum................                40                            40
Axle Hubs--Non-Drive..................  High Strength Steel.....                 5                             5
Axle--Non-Drive.......................  Aluminum................                60                            60
Axle--Non-Drive.......................  High Strength Steel.....                15                            15
Brake Drums--Non-Drive................  Aluminum................                60                            60
Brake Drums--Non-Drive................  High Strength Steel.....                42                            42
Axle Hubs--Drive......................  Aluminum................                40                            80
Axle Hubs--Drive......................  High Strength Steel.....                10                            20
Brake Drums--Drive....................  Aluminum................                70                           140
Brake Drums--Drive....................  High Strength Steel.....                37                            74
Suspension Brackets, Hangers..........  Aluminum................                67                           100
Suspension Brackets, Hangers..........  High Strength Steel.....                20                            30
                                       -------------------------------------------------------------------------
Crossmember--Cab......................  Aluminum................              10              15              15
Crossmember--Cab......................  High Strength Steel.....               2               5               5
Crossmember--Non-Suspension...........  Aluminum................              15              15              15
Crossmember--Non-Suspension...........  High Strength Steel.....               5               5               5
Crossmember--Suspension...............  Aluminum................              15              25              25
Crossmember--Suspension...............  High Strength Steel.....               6               6               6
Driveshaft............................  Aluminum................              12              40              50
Driveshaft............................  High Strength Steel.....               5              10              12
Frame Rails...........................  Aluminum................             120             300             440
Frame Rails...........................  High Strength Steel.....              40              40              87
Wheels--Dual..........................  Aluminum................             150             150             250
Wheels--Dual..........................  High Strength Steel.....              48              48              80
Wheels--Wide Base Single..............  Aluminum................             294             294             588

Wheels--Wide Base Single..............  High Strength Steel.....             168             168             336
Permanent 6x2 Axle Configuration......  Multi...................             N/A             N/A             300
----------------------------------------------------------------------------------------------------------------

(iv) Other Inputs
    Certifying manufacturers may enter values in GEM as applicable for
vehicle speed limiters, fairings to reduce aerodynamic drag area,
electrified accessories, and tire pressure systems where such features
meet the criteria in the regulations at 40 CFR 1037.520.
(b) Test Procedures
    Powertrain families are defined in Section II.C.3.b, and powertrain
test procedures are discussed in the RIA Chapter 3.6. The results from
testing a powertrain configuration using the matrix of tests described
in RIA Chapter 3.6 can be applied broadly across all vocational
vehicles in which that powertrain will be installed. Powertrain test
results become a GEM input file that replaces both the engine input
file and transmission input file.
    As in Phase 1, the rolling resistance of each tire will be measured
using the ISO 28850 test method for drive tires and steer tires planned
for fitment to the vehicle being certified. Once the test CRR values
are obtained, a manufacturer will declare TRRLs (which may be equal to
or higher than the measured values) for the drive and steer tires
separately to be input into the GEM. For Phase 2 vocational vehicles,
GEM will distribute the vehicle load with 30 percent of the load over
the steer tires and 70 percent of the load over the drive tires. With
these data entered, the amount of GHG reduction attributed to tire
rolling resistance will be incorporated into the overall vehicle
compliance value.
    The final Phase 2 GEM will accept as inputs results from a
transmission efficiency test. A procedure for this was discussed in the
NPRM, and received favorable comment. The transmission efficiency test
will be optional, but will allow manufacturers to reduce the
CO2 emissions and fuel consumption by designing better
transmissions with lower friction due to better gear design and/or
mandatory use of better lubricants.
    In lieu of a fixed value for low friction axle lubricants as was
proposed, the agencies are adopting an axle efficiency test procedure,
as was discussed in the NPRM. See 80 FR 40323. The axle efficiency test
will be optional, but will allow manufacturers to reduce CO2
emissions and fuel consumption through improved axle gear designs and/
or mandatory use of low friction lubricants. The agencies are not
finalizing any other paths to recognize low friction axle lubricants.
(c) Useful Life and In-Use Standards
    Section 202(a)(1) of the CAA specifies that emission standards are
to be applicable for the useful life of the vehicle. The standards that
EPA and NHTSA are adopting will apply to individual vehicles and
engines at production and in use. NHTSA is not adopting in-use
standards for vehicles or engines.
    Manufacturers may be required to submit, as part of the application
for certification, an engineering analysis showing that emission
control performance will not deteriorate during the useful life, with
proper maintenance. If maintenance will be required to prevent or
minimize deterioration, a demonstration may be required that this
maintenance will be performed in use. See 40 CFR 1037.241.
    EPA will continue the Phase 1 approach to adjustment factors and
deterioration factors for vehicles. The technologies on which the Phase
1 vocational vehicle standards were predicated were not expected to
have any deterioration of GHG effectiveness in use. However, the
regulations provided a process for manufacturers to develop
deterioration factors (DF) if they needed. We anticipate that some
hybrid powertrain systems may experience some deterioration of
effectiveness with age of the energy storage device. We believe the
regulations in place currently provide adequate instructions to
manufacturers for developing DF where needed. We received comments from
Daimler on deterioration factors for engines and the process for
extrapolating where DF's are nonlinear. See Section 3.7 of the RTC.
Allison Transmission commented that the amount of credits generated for
a hybrid system should be dependent, in part, on design limits of
batteries. We do not believe any changes are needed because the
regulations do account for this by basing the FELs on the highest
emissions during the useful life, including any effects from
deterioration.
    As with engine certification, a chassis manufacturer must design
their vehicles to be durable enough to maintain compliance through the
regulatory useful life of the vehicle. Factors influencing vehicle-
level GHG performance over the life of the vehicle fall into two basic
categories: Vehicle attributes and maintenance items. Each category
merits different treatment from the perspective of assessing useful
life compliance, as each has varying degrees of manufacturer versus
owner/operator responsibility. The agencies require manufacturers to
explain how they meet these requirements as part of certification.
    For vocational vehicles, attributes generally refers to components
that are installed by the manufacturer to meet the standard, whose
reduction properties are assessed at the time of certification, and
which are expected to last the full life of the vehicle with
effectiveness maintained as new for the life of the vehicle with no
special maintenance requirements. To assess useful life compliance, we
will follow a design-based approach that will ensure that the
manufacturer has robustly designed these features so they can
reasonably be expected to last the useful life of the vehicle.
    For vocational vehicles, maintenance items generally refers to
items that are replaced, renewed, cleaned, inspected, or otherwise
addressed in the preventative maintenance schedule specified by the
vehicle manufacturer. Replacement items that have a direct influence on
GHG emissions are primarily tires and lubricants, but may also include
hybrid system batteries. Synthetic engine oil may be used by vehicle
manufacturers to reduce the GHG emissions of their vehicles.
Manufacturers may specify that these fluids be changed throughout the
useful life of the vehicle. If this is the case, the manufacturer
should have a reasonable basis that the owner/operator will use fluids
having the same properties. This may be accomplished by requiring (in
service documentation, labeling, etc.) that only these fluids can be
used as replacements. We received comments from EMA asking us to
consider maintenance costs for hybrids. In these final rules, we have
quantified

maintenance costs for tire replacement, stop-start, axle lubrication,
and hybrids, as described in Section IX.D and the RIA Chapter 7.1.
    Aside from those technologies identified above, if the vehicle
remains in its original certified condition throughout its useful life,
it is not believed that GHG emissions will increase as a result of
service accumulation. As in Phase 1, the agencies will therefore allow
the use of an assigned deterioration factor of zero where appropriate
in Phase 2; however this does not negate the responsibility of the
manufacturer to ensure compliance with the emission standards
throughout the useful life.\448\ Under both Phase 1 and the new Phase
program, manufacturers must apply good engineering judgment when
considering deterioration and may not ignore any evidence that the
emissions performance will decline during actual use. The agencies may
require vehicle manufacturers to provide engineering analyses at the
time of certification demonstrating that vehicle attributes will last
for the full useful life of the vehicle. We anticipate this
demonstration would often need only show that components are
constructed of sufficiently robust materials and design practices so as
not to become dysfunctional under normal operating conditions.
---------------------------------------------------------------------------

    \448\ For most technologies, manufacturers may presume zero
deterioration unless good engineering judgment does not support such
a presumption. For example, it would not be appropriate to presume
no deterioration in hybrid battery performance.
---------------------------------------------------------------------------

    In Phase 1, EPA set the useful life for engines and vehicles with
respect to GHG emissions equal to the respective useful life periods
for criteria pollutants. In April 2014, as part of the Tier 3 light-
duty vehicle final rule, EPA extended the regulatory useful life period
for criteria pollutants to 150,000 miles or 15 years, whichever comes
first, for Class 2b and 3 pickup trucks and vans and some light-duty
trucks (79 FR 23414, April 28, 2014). Class 2 through Class 5 heavy-
duty vehicles subject to the GHG standards described in this section
for vocational applications generally use the same kinds of engines,
transmissions, and emission controls as the Class 2b and 3 vehicles
that are chassis-certified to the criteria standards under 40 CFR part
86, subpart S. In Phase 2, EPA and NHTSA are adopting a useful life of
150,000 miles or 15 years for vocational vehicles at or below 19,500
lbs GVWR. In many cases, this will result in aligned useful-life values
for criteria and GHG standards. Where this longer useful life is not
aligned with the useful life that applies for criteria standards
(generally in the case of engine-based certification under 40 CFR part
86, subpart A), EPA may revisit the useful-life values for both
criteria and GHG standards in a future rulemaking. For medium heavy-
duty vehicles (19,500 to 33,000 lbs GVWR) and heavy heavy-duty vehicles
(above 33,000 lbs GVWR) EPA will keep the useful-life values from Phase
1, which are 185,000 miles (or 10 years) and 435,000 miles (or 10
years), respectively. EPA received comments in support of this
approach, including support for the numerical values and the overall
process envisioned for achieving the long-term goal of adopting
harmonized useful-life specifications for criteria pollutant and GHG
standards that properly represent the manufacturers' obligation to meet
emission standards over the expected service life of the vehicles.
    We received comment on what policies we should adopt to address the
situation where the engine and the vehicle are subject to emission
standards over different useful-life periods. For example, a medium
heavy-duty engine may power vehicles in weight classes ranging from 2b
to 8, with correspondingly different regulatory useful lives for those
vehicles. Please see Section I.F.2.f for a discussion of revisions made
to the final regulations to address this situation. The Response to
Comments also addresses this issue at Chapter 1.4.
(d) Definitions of Custom Chassis
    Eligible emergency vehicles for Phase 2 purposes are ambulances and
fire trucks. The agencies requested comment on aligning the definition
of emergency vehicle for purposes of the Phase 2 program with the
definition of emergency vehicle for purposes of the light-duty GHG
provisions under 40 CFR 86.1818, which includes additional vehicles
such as those used by law enforcement.\449\ Daimler commented in
support of aligning these definitions of emergency vehicle. Daimler
further requested the agencies consider adopting the same definition as
in 13 CCR 1956.8(a)(6), the California regulations. We are adopting the
narrow definition as was proposed, with agency discretion to apply
these provisions to similar vehicles.
---------------------------------------------------------------------------

    \449\ See 40 CFR 86.1803-01 for the applicable definition of
emergency vehicle.
---------------------------------------------------------------------------

    RVIA commented in favor of adopting a motor home definition
consistent with NHTSA's definition at 49 CFR 571.3: Motor home means a
multipurpose passenger vehicle with motive power that is designed to
provide temporary residential accommodations, as evidenced by the
presence of at least four of the following facilities: Cooking;
refrigeration or ice box; self-contained toilet; heating and/or air
conditioning; a potable water supply system including a faucet and a
sink; and a separate 110-125 volt electrical power supply and/or
propane. The agencies are adopting a definition of motor home that is
generally consistent with this, without specifying detailed features.
    Since 2003, NHTSA has implemented a broad definition of school bus
that includes multifunction school activity buses that don't have stop
arms or flashing lights, need not be painted yellow, and do not have an
upper weight limit. These are a category of school bus that must meet
the school bus structural standards or the equivalent set forth in 49
Code of Federal Regulations Part 571, and the emergency exit
requirements specified in FMVSS No. 217 for school buses, as well as
FMVSS 222 for passenger seating and crash protection. This definition
was created in part to allow for use of safe buses to transport school
age children on trips other those than between home and school. The
agencies are adopting Phase 2 provisions such that buses eligible to
certify to the custom chassis school bus standards are those that meet
NHTSA's definition of school bus, including multifunction school
activity buses.\450\
---------------------------------------------------------------------------

    \450\ See 68 FR 44892--Federal Motor Vehicle Safety Standards;
Definition of Multifunction School Activity Bus; https://www.govinfo.gov/content/pkg/FR-2003-07-31/pdf/03-19457.pdf.
---------------------------------------------------------------------------

    The most definitive attribute we have identified to distinguish
over-the-road coach buses from transit buses is whether passengers are
permitted to stand while the vehicle is driving. Therefore the only
buses permitted to certify to the final custom chassis coach bus
standards are those subject to NHTSA's Occupant Crash Protection
Rule.\451\
---------------------------------------------------------------------------

    \451\ See Occupant Crash Protection rule, November 25, 2013, 78
FR 70415, 49 CFR 571, FMVSS 208 https://www.gpo.gov/fdsys/pkg/FR-2013-11-25/html/2013-28211.htm, accessed February 2016.
---------------------------------------------------------------------------

    Allied Specialty Vehicles (aka Rev Group) commented on the need for
a clear distinction between transit buses and school buses.\452\ If the
pupils transported are not K-12 students, such as may be the case for
buses serving college campuses, then the chassis may not be easily
distinguishable from transit buses. The agencies are adopting
provisions in Phase 2 such that buses not qualifying as eligible to
certify as coach buses or school buses must meet the custom chassis
standards for transit

buses. Buses serving college campuses do not have the same design and
safety restrictions as those intended to transport primary and
secondary school children, and may apply the same technologies as
general-purpose urban buses.
---------------------------------------------------------------------------

    \452\ Phone conversation March 2016, see L. Steele phone log.
---------------------------------------------------------------------------

    Therefore, we are requiring refuse trucks that do not compact waste
to be certified to the primary vocational vehicle standards. Front-
loading refuse collection vehicles tend to have a relatively low number
of stops per day as they tend to collect waste from central locations
such as commercial buildings and apartment complexes. Because these
have a relatively low amount of PTO operation, we expect stop-start
will be reasonably effective for these vehicles. Rear-loading and side-
loading neighborhood waste and recycling collection trucks are the
refuse trucks where the largest number of stop-start and neutral idle
over-ride conditions are likely to be encountered. Because chassis
manufacturers, even those with small production volumes and close
customer relationships, do not always know whether a refuse truck will
be a front-loader, rear-loader, or side loader, we are grouping these
together in a subcategory.
    We received comment on the need to clarify whether vehicles
designed to pump and convey concrete at a job site, but which do not
carry the wet mix concrete to the job site, would be included in the
definition of cement mixers. Although we are not defining other
vehicles as cement mixers, we are allowing miscellaneous vocational
vehicles meeting some but not all of the eligibility criteria at 40 CFR
1037.631 to be certified under the custom chassis program, using
technology equivalent to the cement mixer package, as described above
in Section V.B.
(e) Assigning Vehicles to Subcategories
    In the NPRM, the agencies proposed criteria by which a vehicle
manufacturer would know in which vocational subcategory--Regional,
Urban, or Multipurpose--the vehicle should be certified. These cut-
points were defined using calculations relating engine speed to vehicle
speed. 80 FR 40287-40288. Specifically, we proposed a cutpoint for the
Urban duty cycle where a vehicle at 55 mph would have an engine working
above 90 percent of maximum engine test speed for vocational vehicles
powered by diesel engines and above 50 percent for vocational vehicles
powered by gasoline engines. Similarly, we proposed a cutpoint for the
Regional duty cycle where a vehicle at 65 mph would have an engine
working below 75 percent of maximum engine test speed for vocational
vehicles powered by diesel engines and below 45 percent for vocational
vehicles powered by gasoline engines. We received several comments that
identified weaknesses in that approach. Specifically, Allison explained
that vehicles with two shift schedules would need clarification which
top gear to use when calculating the applicable cut-point. Also,
Daimler noted that, to the extent that downspeeding occurs in this
sector over the next decade or more, cutpoints based on today's fleet
may not be valid for a future fleet. Allison noted that the presence of
additional top gears could strongly influence the subcategory placement
of vocational vehicles. These comments highlight the possibility of
misclassification, and the potential pitfalls in a mandated
classification scheme.
    Two commenters pointed out important weaknesses in this approach,
namely that future trends in engine speeds, torque curves, and
transmission gear ratio spreads may cause the vocational fleet of 2027
to have drivelines that are sufficiently different than those of the
baseline fleet, so that segment cut-points based on the 2016 fleet may
not be valid a decade or more into the future. For example, if data on
today's fleet indicated an appropriate cut-point for Regional HHD
diesel vehicles of 1,400 rpm engine speed with a vehicle speed of 65
mph, while a future fleet might show that Regional vehicles operated at
1,200 rpm at 65 mph, then having a cut-point set by rule at 1,400 rpm
could result in an excess of future vehicles certifying as Regional.
However, we have further assessed the impact of manufacturers shifting
certification of chassis from Multipurpose to Regional subcategories,
and we have concluded this is not an unacceptable outcome. As explained
above in Section V.C.(2)(d), we are not particularly concerned that
adopting final standards with unequal percent improvements poses a
danger of losing environmental benefits from this program, as long as
vehicle configurations are properly classified at the time of
certification.
    In a regulatory structure where baselines are equal but future
standards for vehicles in different subcategories have different
stringencies, the agencies would typically assign subcategorization
based on regulatory criteria rather than allowing the manufacturers
unconstrained choice because manufacturers would have a strong
incentive to simply choose the least stringent standards. However,
because the baseline performance levels of the different vocational
vehicle regulatory subcategories widely differ, the agencies have
determined that it is acceptable to adopt standards with unequal
percent stringencies. Further discussion of our reasons for this
determination is presented above in Section V.C.(2)(d). Another
weakness in the proposed approach was that even though we have obtained
a great deal of data thanks to manufacturer cooperation and NREL duty
cycle analysis, the only one of the proposed regulatory cut-points in
which we have a high degree of confidence is the cut-point between
Regional and Multipurpose class 8 diesels. Any cut-points we could
establish based on available data for lower weight class diesels or for
gasoline powered vocational vehicles would be less robust. These
weaknesses have led the agencies to take a different approach to
assigning vehicles to subcategories. The agencies are adopting final
regulations that generally allow manufacturers to choose a subcategory,
with a revised set of constraints as well as a provision requiring use
of good engineering judgment. The constraints discussed here are being
adopted as interim provisions in response to manufacturers' concerns
that some of them could present competitive disadvantages, where
different manufacturers produce very different sales mixes of vehicles
equipped with different transmission types, as discussed above in
Section V.C.(2)(d).
    Because the baseline configurations against which vehicles in the
Urban subcategories will measure their future performance do not
include any manual transmissions, we have determined that vocational
vehicles with manual transmissions may not be certified as Urban. In
the real world, we do not expect any vehicles intended to be used in
urban driving patterns will be specified with manual transmissions.
Driver fatigue and other performance problems make this an illogical
choice of transmission, and thus it is appropriate for us to adopt this
constraint. As described in Chapter 2.9.2 of the RIA, both the HHD
Regional and HHD Multipurpose baselines have a blend of manual
transmissions, although the majority of manuals are in the HHD Regional
baseline. Further, by MY 2024, our adoption rate of transmission
technology reflects zero manuals in HHD Multipurpose. Thus, beginning
in MY 2024, any vocational vehicle certified with a manual transmission
must be classified in a Regional subcategory, except a vehicle with a
hybridized manual transmission may be certified in a Multipurpose
subcategory beyond MY 2024.

    We are not adopting constraints on vehicles with automated manual
transmissions certifying in either Regional or Multipurpose
subcategories, because we believe this is a technology that can provide
real world benefits for vehicles with those driving patterns. However,
we are adopting an interim constraint to prevent vehicles with AMT from
being certified as Urban for a reason similar to one described above
for manuals, namely that in the real world, we do not expect any
vehicles intended to be used in urban driving patterns will be
specified with transmissions that do not have powershifts. Lack of
smooth shifting characteristics during low speed accelerations and
decelerations make AMT an illogical choice of transmission for urban
vehicles, and thus it is appropriate for us to adopt this constraint.
    Dual clutch transmissions have very recently become available for
medium heavy-duty vocational vehicles and very little data are
available on their design or performance. We anticipate that in the
future, some designs may have features that make them perform similarly
to AMT's while others may have features that make them more similar to
automatics with torque converters. Because we are not confident that we
know in which duty cycle(s) they are best suited, we are adopting a
partial constraint on these, namely that dual clutch transmissions
without powershifting must also be constrained out of Urban. We are
finalizing as proposed that any vehicle whose engine is exclusively
certified over the SET must be certified in the Regional subcategory.
Further, to the extent manufacturers of intercity coach buses and
recreational vehicles certify these to the primary standards, these
also must be certified as Regional vehicles.\453\
---------------------------------------------------------------------------

    \453\ Based on NREL drive cycle analysis of the existing fleet,
we imagine that HHD vehicles with a diesel engine rpm of 1,400 and
below when the vehicle is at 65 mph would be appropriately certified
as Regional vehicles. However, this is illustrative only, and the
final rules do not include an engine speed cutpoint as a criterion
in subcategory selection.
---------------------------------------------------------------------------

    In the final regulatory structure, although the standards for
vehicles in different subcategories have different percent stringencies
from each baseline, the agencies can allow the manufacturers to choose
without risking a loss of environmental benefits because a standard
that may appear less stringent in terms of relative improvement from
each respective baseline may also be numerically lower (and farther
away from current model performance) due to a comparatively better-
performing regulatory baseline. As explained above, the final standards
described above in Section V.C.(2)(c) are derived directly from the
technology packages without applying any assumptions about fleet
averages. Thus, unlike at proposal, the final regulations will
generally allow manufacturers to certify in the particular duty-cycle
subcategory they believe to be most appropriate. Manufacturers may make
this choice as part of the certification process and will not be
allowed to change it after the vehicle has been introduced into
commerce. Under this structure, the agencies expect manufacturers to
choose a subcategory for each vehicle configuration that best
represents the type of operation that vehicle will actually experience
in use (presuming the manufacturer and customer would specify the
technologies to reflect such operation).
(2) Other Compliance Provisions
(a) Emission Control Labels
    As proposed, EPA is removing the requirement to include the
emission control system identifiers required in 40 CFR 1037.135(c)(6)
and in Appendix III to 40 CFR part 1037 from the emission control
labels for vehicles certified to the Phase 2 standards. For vehicles
certified to the optional custom chassis standards, the label should
meet the requirements of 40 CFR 1037.105(h). Please see Section
I.C.(1)(g) of this Preamble for additional discussion of labeling.
(b) End of Year Reports
    In the Phase 1 program, manufacturers participating in the ABT
program provided 90 day and 270 day reports to EPA and NHTSA after the
end of the model year. The agencies adopted two reports for the initial
program to help manufacturers become familiar with the reporting
process. For the HD Phase 2 program, the agencies proposed to simplify
reporting such that manufacturers would only be required to submit the
final report 90 days after the end of the model year with the potential
to obtain approval for a delay up to 30 days. We requested comments on
this approach. EMA, PACCAR, Navistar, Daimler, and Cummins recommended
keeping the 270 day report to allow sufficient time after the
production period is completed. We are accordingly keeping both the 90
day and 270 day reports, with the ability of the agencies' to waive the
90 day report.
(c) Delegated Assembly
    The final standards for vocational vehicles are based on the
application of a wide range of technologies. Certifying vehicle
manufacturers manage their compliance demonstration to reflect this
range of technologies by describing their certified configurations in
the application for certification. In most cases, these technologies
are designed and assembled (or installed) directly by the certifying
vehicle manufacturer, which is typically the chassis manufacturer. In
these cases, it is straightforward to assign the responsibility to the
certifying vehicle manufacturer for ensuring that vehicles are in their
proper certified configuration before they are introduced into
commerce. In Phase 1, the only vehicle technology available for
certified vocational vehicles is LRR tires. Because these are generally
installed by the chassis manufacturer, there is no need to rely on a
second stage manufacturer for purposes of certification in Phase 1,
unless innovative credits are sought. Thus, the Phase 1 regulations did
not specify precise procedures for this.
    In Phase 2, the agencies are projecting adoption of certain
technologies where the certifying vehicle manufacturer may want or need
to rely on a downstream manufacturing company (a secondary vehicle
manufacturer) to take steps to assemble or install certain components
or technologies to bring the vehicle into a certified configuration. A
similar relationship between manufacturers applies with aftertreatment
devices for certified engines. EPA previously adopted ``delegated
assembly'' provisions for engines at 40 CFR 1068.261 to describe how
manufacturers can share compliance responsibilities through these
cooperative assembly procedures, and proposed to also apply it for
vehicle-based GHG standards in 40 CFR part 1037, including the
vocational vehicle standards.
    The delegated assembly provisions being finalized for Phase 2
vehicle standards are only invoked if a certifying manufacturer
includes in its certified configuration a technology that it does not
install itself. Examples may include fairings to reduce aerodynamic
drag, air conditioning systems, automatic tire inflation systems, or
hybrid systems. We are clarifying this regulatory process to enable
manufacturers to include technologies in their compliance plans that
might otherwise not be considered on the basis of what they can install
themselves. To the extent certifying manufacturers rely on secondary
vehicle manufacturers to bring the vehicle into a certified
configuration, the following provisions will apply:

     The certifying manufacturer will describe its approach to
delegated assembly in the application for certification.
     The certifying manufacturer will create installation
instructions to describe how the secondary vehicle manufacturer will
bring the vehicle into a certified configuration.
     The certifying manufacturer must take additional steps for
certified configurations that include hybrid powertrain components,
auxiliary power units, aerodynamic devices, or natural gas fuel tanks.
In these cases, the certifying manufacturer must have a contractual
agreement with each affected secondary vehicle manufacturer obligating
the secondary vehicle manufacturer to build each vehicle into a
certified configuration and to provide affidavits confirming proper
assembly procedures, and to provide information regarding deployment of
each type of technology (if there are technology options that relate to
different GEM input values).
    See Section I.F of this Preamble and Section 1.4.4 of the RTC for
further discussion of the comments received on delegated assembly
provisions.
    The agencies have developed the delegated-assembly and other
provisions in 40 CFR 1037.620--1037.622 to clarify how manufacturers
have shared and separate responsibilities for complying with the
regulations. Vocational vehicles are the most likely vehicle types to
involve both primary and secondary manufacturers; however, other types
of vehicles may also involve multiple manufacturers, so these
regulatory provisions apply to all vehicles.
    Secondary manufacturers (such as body builders) that build complete
vehicles from certified chassis are obligated to comply with the
emission-related installation instructions provided by the certifying
manufacturer. Secondary manufacturers that build complete vehicles from
exempted chassis are similarly obligated to comply with all of the
regulatory provisions related to the exemption.
(d) Demonstrating Compliance With HFC Leakage Standards
    EPA's requirements for vocational chassis manufacturers to
demonstrate reductions in direct emissions of HFC in their A/C systems
and components through a design-based method. The method for
calculating A/C leakage is the same as was adopted in Phase 1 for
tractors and HD pickups and vans. It is based closely on an industry-
consensus leakage scoring method, described below. This leakage scoring
method is correlated to experimentally-measured leakage rates from a
number of vehicles using the different available A/C components. As is
done currently for other HD vehicles, vocational chassis manufacturers
will choose from a menu of A/C equipment and components used in their
vehicles in order to establish leakage scores, to characterize their A/
C system leakage performance. The percent leakage per year will then be
calculated as this score divided by the system refrigerant capacity. We
received comments from transit bus manufacturers with concerns that the
air conditioning systems on their vehicles are much larger and more
complex than systems on typical heavy-duty trucks. As such, they
questioned whether our HFC leakage compliance process was valid for
their vehicles. Based on information provided by suppliers of air
conditioning systems for large buses, we believe some unusually large
systems may include components not adequately represented by those
listed in the standard compliance procedure, namely the hoses, fittings
or seals may not be listed with realistic leakage rates. Therefore EPA
is adopting in this final rule provisions allowing use of an alternate
compliance procedure where an air conditioning system with refrigerant
charge capacity greater than 3,000 grams is installed in a Phase 2
vocational vehicle.
    Consistent with the light-duty rule and the Phase 1 program for
other HD vehicles, vocational chassis manufacturers will compare the
components of a vehicle's A/C system with a set of leakage-reduction
technologies and actions that is based closely on that developed
through the Improved Mobile Air Conditioning program and SAE
International (as SAE Surface Vehicle Standard J2727, ``HFC-134a,
Mobile Air Conditioning System Refrigerant Emission Chart,'' August
2008 version). See generally 75 FR 25426. The SAE J2727 approach was
developed from laboratory testing of a variety of A/C related
components, and EPA believes that the J2727 leakage scoring system
generally represents a reasonable correlation with average real-world
leakage in new vehicles. This approach associates each component with a
specific leakage rate in grams per year that is identical to the values
in J2727 and then sums together the component leakage values to develop
the total A/C system leakage. Unlike the light-duty program, in the
heavy-duty vehicle program, the total A/C leakage score is divided by
the value of the total refrigerant system capacity to develop a percent
leakage per year.
    EPA concludes that the design-based approach results in estimates
of likely leakage emissions reductions that are comparable to those
that would result from performance-based testing. Where a manufacturer
installs an air conditioning system in a vocational vehicle that has a
working fluid consisting of an alternate refrigerant with a lower
global warming potential than HFC-134a, compliance with the leakage
standard is addressed in the regulations at 40 CFR 1037.115. Please see
Section I.F.(2)(b) for a discussion related to alternative
refrigerants.
    Consistent with the HD Phase 1 program and the light-duty rule,
where we require that manufacturers attest to the durability of
components and systems used to meet the CO2 standards (see
75 FR 25689), we are requiring that manufacturers of heavy-duty
vocational vehicles attest to the durability of these systems, and
provide an engineering analysis that demonstrates component and system
durability.
(e) Glider Vehicles
    EPA and NHTSA requested comment on gliders and received extensive
comment. The main issues involve standards for rebuilt engines
installed in new glider vehicles. These issues are fully addressed in
Preamble Section XIII.B and RTC Section 14.2. Of relevance for the
vocational vehicle sector, the final standards contain a number of
provisions allowing donor engines that are still within their
regulatory useful life to be used in new glider vehicles provided the
engine meets all standards applicable to the year in which the engine
was originally manufactured and also meets one of the following
criteria:
     The engine is still within its original useful life in
terms of both miles and years.
     The engine has less than 100,000 miles of engine
operation.
     The engine is less than three years old.
    Thus, if a donor engine meeting one of the above criteria was
manufactured before the Phase 1 GHG standards, it would not be subject
to those standards when installed in a glider vehicle. Similarly, if
such an engine was manufactured before 2010, it would be subject to the
pre-2010 criteria pollutant standards corresponding to its year of
manufacture. EPA is adopting this provision consistent with the
original purpose of glider vehicles as providing a means of salvaging
of relatively new powertrains from vehicle chassis that have been
damaged or have otherwise failed prematurely. See Section XIII.B of the
Preamble.

(3) Compliance Flexibility Provisions
    EPA and NHTSA are adopting several flexibility provisions in the
Phase 2 program. Program-wide compliance flexibilities include an
averaging, banking and trading program for CO2 emissions and
fuel consumption credits, provisions for off-cycle credits for
technologies that are not included as inputs to the GEM, and advanced
technology credits. These are described below as well as in Section
I.B.3 to I.C.1. Provisions that are not program-wide include optional
chassis certification and a revised interim loose engines provision, as
described below.
(a) Averaging, Banking, and Trading (ABT) Program
    Averaging, banking, and trading of emission credits have been an
important part of many EPA mobile source programs under CAA Title II.
ABT provisions provide manufacturers flexibilities that assist in the
efficient development and implementation of new technologies and
therefore enable new technologies to be implemented at a more
aggressive pace than without ABT. NHTSA and EPA are carrying-over the
Phase 1 ABT provisions for vocational vehicles into Phase 2, as it is
an important way to achieve each agency's programmatic goals. ABT is
also discussed in Section I and Section III.F.1.
    Consistent with the Phase 1 averaging sets, the agencies are
allowing chassis manufacturers to average SI-powered vocational vehicle
chassis with CI-powered vocational vehicle chassis, within the same
vehicle weight class group. In Phase 1, all vocational and tractor
chassis within a vehicle weight class group were able to average with
each other, regardless of whether they were powered by a CI or SI
engine. The Phase 2 approach continues this. The only difference is
that in Phase 2, there are different numerical standards set for the
SI-powered and CI-powered vehicles, but that does not alter the basis
for averaging. This is consistent with the Phase 1 approach where, for
example, Class 8 day cab tractors, Class 8 sleeper cab tractors and
Class 8 vocational vehicles each have different numerical standards,
while they all belong to the same averaging set.
    As discussed in V.D.(1)(c), EPA and NHTSA are adopting a revised
useful life for LHD vocational vehicles for GHG emissions from the
current 10 years/110,000 miles to 15 years/150,000 miles, to be
consistent with the useful life of criteria pollutants recently updated
in EPA's Tier 3 rule. For the same reasons, EPA and NHTSA are also
adopting a useful life adjustment for HD pickups and vans, as described
in Section VI.E.(1). According to the credits calculation formula at 40
CFR 1037.705 and 49 CFR 535.7, useful life in miles is a multiplicative
factor included in the calculation of CO2 and fuel
consumption credits. In order to ensure that banked credits will
maintain their value in the transition from Phase 1 to Phase 2, NHTSA
and EPA are adopting an interim vocational vehicle adjustment factor of
1.36 for credits that are carried forward from Phase 1 to the MY 2021
and later Phase 2 standards.\454\ Without this adjustment factor the
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. The agencies do not
believe that this adjustment will result 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, the carry-forward of credits is an integral part of the
program, helping to smooth the transition to the Phase 2 standards. The
agencies believe that effectively discounting carry-forward credits
from Phase 1 to Phase 2 is unnecessary and could negatively impact the
feasibility of the Phase 2 standards. EPA and NHTSA requested comment
on all aspects of the averaging, banking, and trading program. A
complete discussion of the comments on credits and ABT can be found in
the RTC Section 1.4.
---------------------------------------------------------------------------

    \454\ See 40 CFR 1037.150(o) and 49 CFR 535.7.
---------------------------------------------------------------------------

(b) Innovative and Off-Cycle Technology Credits
    In Phase 1, the agencies adopted an emissions and fuel consumption
credit generating opportunity that applied to innovative technologies
that reduce fuel consumption and CO2 emissions. Eligible
technologies were required to not be in common use with heavy-duty
vehicles before the 2010MY and not reflected in the GEM simulation tool
(i.e., the benefits are ``off-cycle''). See 76 FR 57253. In Phase 2,
the agencies are re-designating it as an off-cycle technology program.
The agencies are maintaining the requirement that, in order for a
manufacturer to receive credits for Phase 2, the off-cycle technology
must not have been in common use prior to MY 2010.
    The agencies recognize that there are emerging technologies today
that are being developed, but will not be accounted for in the GEM
tool, and therefore will be considered off-cycle. For vocational
vehicles, this could include technologies whose scope and effectiveness
surpass those defined and pre-approved in the HD Phase 2 program, such
as aerodynamics and electrified accessories. Any credits for these
technologies will need to be based on real-world fuel consumption and
GHG reductions that can be measured with verifiable test methods using
representative driving conditions typical of the engine or vehicle
application. More information about off-cycle technology credits can be
found at Section I.C.1.c.
    As in Phase 1, the agencies will continue to provide two paths for
approval of the test procedure to measure the CO2 emissions
and fuel consumption reductions of an off-cycle technology used in
vocational vehicles. See 40 CFR 1037.610 and 49 CFR 535.7. The first
path will not require a public approval process of the test method. A
manufacturer may use ``pre-approved'' test methods for HD vehicles
including the A-to-B chassis testing, powerpack testing or on-road
testing. A manufacturer may also use any developed test procedure that
has known quantifiable benefits. A test plan detailing the testing
methodology will be required to be approved prior to collecting any
test data. The agencies are also continuing the second path, which
includes a public approval process of any testing method that could
have questionable benefits (i.e., an unknown usage rate for a
technology). Furthermore, the agencies are adopting revisions to
clarify what documentation must be submitted for approval, aligning
them with provisions in 40 CFR 86.1869-12. NHTSA is prohibiting credits
from technologies addressed by any of its crash avoidance safety
rulemakings (i.e., congestion management systems). See also 77 FR 62733
(discussion of similar issue in the light duty greenhouse gas/fuel
economy regulations). We received extensive comment on the off-cycle
technology approval process. In response to requests to develop a
streamlined path for off-cycle technology approval, we are not making
fundamental changes from the proposal at this time; however, we remain
open to working with stakeholders to look for ways to simplify the
process. For example, although we are including specific provisions to
recognize certain electrified accessories, recognizing others would
require the manufacturer to go through the off-cycle process. However,
it is quite possible that the agencies could gather sufficient data to
allow us to adopt specific provisions in a future rulemaking to
recognize other accessories in a simpler

manner. Please see Section I.C. of this Preamble for further discussion
of off-cycle credits.
    There are some technologies that are entering the market today, and
although our model does not have the capability to simulate the
effectiveness over the test cycles, there are reliable estimates of
effectiveness available to the agencies. These will be recognized in
our HD Phase 2 certification procedures as pre-defined technologies,
and will not be considered off-cycle. Examples of such technologies for
vocational vehicles include narrowly-defined types of electrified
accessories or aerodynamic improvements. The agencies are specifying
default effectiveness values to be used as valid inputs to GEM for each
of these. The projected effectiveness of each vocational vehicle
technology is discussed in the RIA Chapter 2.9.3.
    The agencies' approval for Phase 1 innovative technology credits
(approved prior to 2021 MY) will be carried into the Phase 2 program on
a limited basis for those technologies where the benefit is not
accounted for in the Phase 2 test procedure. Therefore, the
manufacturers will not be required to request new approval for any
innovative credits carried into the off-cycle program, but will have to
demonstrate, as part of the MY 2021 certification, the extent to which
the new cycle does not account for these improvements. The agencies
believe this is appropriate because technologies, such as those related
to the transmission or driveline, may no longer be ``off-cycle''
because of the addition of these technologies into the Phase 2 version
of GEM.
(c) Advanced Technology Credits
    As described above in Section I, the agencies proposed to
discontinue advanced technology credits in Phase 2, which had been
intended to promote the early implementation of advanced technologies
that were not expected to be widely adopted in the market in the 2014
to 2018 time frame. These technologies were defined in Phase 1 as
hybrid powertrains, Rankine cycle engines, all-electric vehicles, and
fuel cell vehicles (see 40 CFR 1037.150(p)), at a 1.5 credit value. We
requested and received comments on the need for such incentives, and as
a result we are not only continuing these credits, we are adopting even
greater multipliers than before. See Section I of this Preamble for
further discussion of the comments received and the agencies' response
regarding advanced technology credits.
(d) Optional Chassis Certification
    In Phase 2, the agencies are continuing the Phase 1 option to
chassis certify vehicles over 14,000 lbs GVWR, but only if there is a
family with vehicles at or below 14,000 pounds GVWR that can properly
accommodate the bigger vehicles as part of the same family. As adopted
in this final rule, chassis-certified vehicles above 14,000 pounds GVWR
may not rely on a work factor that is greater than the largest work
factor that applies for vehicles at or below 14,000 pounds GVWR from
the same family. Applying this work factor constraint avoids the need
to set a specific upper GVWR limit on vehicles eligible to use this
flexibility. See Section XIII.A.2 of this Preamble, and Section 14.3.2
of the RTC, for further discussion of this issue.
(e) Certifying Loose SI Engines in Vocational Vehicles in Phase 2
    The agencies proposed not to continue the Phase 1 interim
flexibility known as the ``loose engine'' provision, receiving
favorable comment from Cummins and adverse comment on this from Isuzu
and AAPC. 80 FR 40331. Under this provision, SI engines produced by
manufacturers of HD pickup trucks and vans and sold to chassis
manufacturers and intended for use in vocational vehicles need not meet
the separate SI engine standard, and instead may be averaged with the
manufacturer's HD pickup and van fleet (see 40 CFR 86.1819-14(k)(8)).
The agencies are adopting a Phase 2 SI engine standard that is no more
stringent than the MY 2016 SI engine standard adopted in Phase 1, while
the Phase 2 standards for the HD pickup and van fleet is progressively
more stringent through MY 2027. The primary certification path designed
in the Phase 1 program for both CI and SI engines sold separately and
intended for use in vocational vehicles is that they are engine
certified while the vehicle is GEM certified under the GHG rules.
    This provision was adopted primarily to address small volume sales
of engines used in complete vehicles that are also sold to other
manufacturers. The Phase 1 final rules explain that we set the
effective date of the Phase 1 SI engine standard as MY 2016 because we
projected by this time all manufacturers would have redesigned their
gasoline engine offerings to adopt the technologies needed to reduce
FTP-cycle emissions by five percent; technologies that cannot simply be
bolted on to an existing engine but can only be effectively applied
through an integrated design and development process (76 FR 57180,
57235). The Phase 1 final rules also explain that the compliance
flexibility provided by the loose engine provision is technically
appropriate because it provides manufacturers with an option to focus
their energy on improving the GHG and fuel consumption performance of
their complete vehicle products (including engine improvements), rather
than on concurrently calibrating for both vehicle and engine test
compliance (76 FR 57260). At proposal we noted that although gasoline
engine manufacturers have accomplished extensive improvements to comply
with HD pickup and vans standards as well as the light-duty vehicle
standards, the agencies had not seen evidence of the engine redesigns
that we had projected to occur by 2016, and we concluded that
discontinuation of this flexibility by MY 2021 was appropriate to
provide regulatory certainty on the date beyond which engine
certification would be mandatory for HD SI engines.
    However, in response to persuasive comments from a chassis
manufacturer that purchases these engines, we are adopting a narrow
extension of this interim flexibility, where for MYs 2021-2023, each SI
engine manufacturer may sell an annual maximum of 10,000 SI engines
certified under this provision.\455\ We believe this three-year
extension is needed to prevent market disruptions. We are concerned
that SI engine manufacturers might not choose to certify any SI engines
that can be sold to other vocational chassis manufacturers, which would
significantly disrupt the market. With this limited extension, we are
ensuring no loss of environmental benefits because any vehicle
certified by a chassis manufacturer who obtains a high-emitting SI
engine must apply additional technology as needed to meet the
applicable vocational vehicle standard. We are generally not allowing
custom chassis manufacturers to use SI engines that have been certified
under this loose engine provision, if they are certifying using one of
the custom chassis regulatory subcategories. However, manufacturers
certifying motor homes or emergency vehicles to the optional standards
may install engines certified through the interim loose engine
provision. The typical annual miles driven by these vehicles is very
low, usually between 2,000 and 5,000 miles for either motor homes or
emergency vehicles, and thus their contribution to emissions and fuel
consumption is very small. See Section II of this Preamble for a
discussion of

the comments received and the agencies' response on the separate engine
standard for SI engines intended for vocational vehicles.
---------------------------------------------------------------------------

    \455\ Meeting with Isuzu dated April 22, 2016.
---------------------------------------------------------------------------

(f) On-Board Diagnostics for Hybrid Vehicle Systems
    In HD Phase 1, EPA adopted provisions to delay the onboard
diagnostics (OBD) requirements for heavy-duty hybrid powertrains (see
40 CFR 86.010-18(q)). This provision delayed full OBD requirements for
hybrids until MY 2016 and MY 2017. The agencies have received comments
from hybrid manufacturers regarding their progress toward meeting the
on-board diagnostic requirements for criteria pollutant engine
certification related to hybrid systems. See Section XIII.A.1 for a
discussion of comments received and EPA's response related to
certification of engines paired with hybrid powertrain systems.

VI. Heavy-Duty Pickups and Vans

    In the NPRM, the agencies conducted coordinated and complementary
analyses using two analytical methods for the heavy-duty pickup and van
segment, both of which used the same version of NHTSA's CAFE model to
analyze technology. The agencies have also used two analytical methods
for the joint final rule. However, unlike the NPRM, for the joint final
rule, the agencies are using different versions of NHTSA's CAFE model
to analyze technology. The Method B approach continues to use the same
version of the model and inputs that was used for the NPRM. Method A
uses an updated version of the CAFE model and some updated inputs.

A. Summary of Phase 1 HD Pickup and Van Standards

    In the Phase 1 rule, EPA and NHTSA established GHG and fuel
consumption standards and a program structure for complete Class 2b and
3 heavy-duty vehicles (referred to in these rules as ``HD pickups and
vans''), as described below. The Phase 1 standards began to be phased-
in in MY 2014 and the agencies believe the program is working well. The
agencies are retaining most elements from the structure of the program
established in the Phase 1 rule for the Phase 2 program while
establishing more stringent Phase 2 standards for MY 2027, phased in
over MYs 2021-2027, that will require additional GHG reductions and
fuel consumption improvements. As discussed below, the agencies are
adopting the Phase 2 standards as proposed. The MY 2027 standards will
remain in place unless and until amended by the agencies.
    Heavy-duty vehicles with GVWR between 8,501 and 10,000 lbs. are
classified in the industry as Class 2b motor vehicles. Class 2b
includes vehicles classified as medium-duty passenger vehicles (MDPVs)
such as very large SUVs. Because MDPVs are frequently used like light-
duty passenger vehicles, they are regulated by the agencies under the
light-duty vehicle rules. Thus, the agencies did not adopt additional
requirements for MDPVs in the Phase 1 rule and are not adopting
additional requirements for MDPVs in this rulemaking. Heavy-duty
vehicles with GVWR between 10,001 and 14,000 lbs are classified as
Class 3 motor vehicles. Class 2b and Class 3 heavy-duty vehicles
together emit about 23 percent of today's GHG emissions from the heavy-
duty vehicle sector.
    About 90 percent of HD pickups and vans are \3/4\-ton and 1-ton