150,000 useful life value (as applicable), and certifies on the new
Tier 3 test fuel. Table IV-11 below presents the PM phase-in schedule
for Final Tier 3 vehicles.

                                               Table IV-11--PM Phase-In Schedule for Final Tier 3 Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Model year                              2017                      2018            2019            2020            2021       2022 and later
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer's Fleet (%)............  20 a..............................              20              40              70             100             100
                                                                         -------------------------------------------------------------------------------
Vehicle Types.......................  <= 6,000 lbs GVWR.................                     All vehicles <= 8,500 lbs GVWR and MDPVs
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Manufacturers comply in MY 2017 with 20 percent of their LDV and LDT fleet under 6,000 lbs GVWR, or alternatively with 10 percent of their total
  LDV, LDT, and MDPV fleet Optional PM Phase-in

    The PM percent-of-sales phase-in schedule described above will
allow manufacturers with multiple vehicle models to plan the phase-in
of those models based on anticipated volumes of each vehicle model.
However, manufacturers certifying only a few vehicle models might not
benefit from this schedule. This is because, in order to satisfy the
phase-in schedule percentages, they may have to over-comply with the
required percentages earlier than will a manufacturer with many vehicle
models available for the phase-in.
    For instance, a manufacturer with only two models that each equally
account for 50 percent of their sales will be required to introduce (at
least) one of the models in MY 2017 to meet the PM phase-in requirement
of 20 percent in the first year. Because it represents 50 percent of
the manufacturer's sales, this model will then also meet the
requirements for MY 2018 (20 percent) and MY 2019 (40 percent). To meet
the MY 2020 requirement of 70 percent of sales, however, the
manufacturer will need to introduce the second Tier 3 vehicle that
year. Thus the manufacturer will have introduced 100 percent of its
Tier 3 models one year earlier than required of a manufacturer that is
able to delay the final 30 percent of its fleet until MY 2021 (by
distributing its models over the entire phase-in period).
    To provide for more equivalent phasing in of the PM requirements
among all manufacturers in the early years of the program, we are
finalizing, as proposed, an optional ``indexed'' PM phase-in schedule
that can be used by a manufacturer to meet its PM percent phase-in
requirements. A manufacturer that exceeds the phase-in requirements in
any given year will be allowed to, in effect, offset some of the phase-
in requirements in a later model year. The optional phase-in schedule
will be acceptable if it passes a mathematical test. The mathematical
test is designed to provide manufacturers a benefit from certifying to
the standards at higher volumes than they are obligated to under the
normal phase-in schedule, while ensuring that significant numbers of
vehicles are meeting the new Tier 3 requirements during each year of
the optional phase-in schedule. In this approach, manufacturers weight
the earlier years by multiplying their percent phase-in by the number
of years prior to MY 2022 (i.e., the second year of the 100 percent
phase-in requirement).
    The mathematical equation for applying the optional PM phase-in is
as follows: (5 x APP2017) + (4 x APP2018) + (3 x APP2019) + (2 x
APP2020) + (1 x APP2021) = 540, where APP is the actual phase-in
percentage for the referenced model year.
    The sum of the calculation must be greater than or equal to 540,
which is the result when the optional phase-in equation is applied to
the primary percent phase-in schedule (i.e., 5 x 20% + 4 x 20% + 3 x
40% + 2 x 70% + 1 x 100% = 540).
    Applying the optional PM phase-in equation to the hypothetical
manufacturer in the example above, the manufacturer can postpone its
model introductions by one year each, to MY 2018 and MY 2021. Its
calculation is (5 x 0% + 4 x 50% + 3 x 50% + 2 x 50% + 1 x 100% = 550,
and thus the phase-in is acceptable.
i. In-Use Standards
i. NMOG+NOX
    The Tier 3 emission standards will require a substantial migration
of emission control technology historically used only on a small
percent of the fleet and typically limited to smaller vehicles and
engines. While we believe that these technologies can generally be used
on any vehicle and are applicable to the entire fleet, manufacturers
have less experience with the in-use performance of these technologies
across the fleet. For example, technologies that accelerate catalyst
warm-up such as catalyst location close to the engine exhaust ports and
other advanced thermal management approaches will be new to certain
vehicle types, particularly larger vehicles (i.e., LDT3/4s), which have
historically not relied on these technologies to meet emission
standards.
    As proposed, to help manufacturers address the lack of in-use
experience and associated challenges with the expanded introduction of
these technologies, particularly in the larger vehicles, we are
finalizing temporarily-relaxed in-use NMOG+NOX standards
that will apply to all vehicles certified to Bins 70 and cleaner as
Interim or Final Tier 3 vehicles. The in-use standards will apply
during the entire percent phase-in period (i.e., through MY 2021). The
in-use standards are 40 percent less stringent than the certification
standards, providing a significant but reasonable temporary cushion for
the uncertainties associated with new technologies (or new applications
of existing technologies) over the life of the vehicles.
    The in-use NMOG+NOX standards are shown in Table IV-12.

   Table IV-12--FTP In-Use Standards for Light Duty Vehicles and MDPVs
                                 [mg/mi]
------------------------------------------------------------------------
                                                           NMOG+NOX (mg/
                           Bin                                  mi)
------------------------------------------------------------------------
Bin 160.................................................             160
Bin 125.................................................             125
Bin 70..................................................              98
Bin 50..................................................              70
Bin 30..................................................              42
Bin 20..................................................              28
------------------------------------------------------------------------

ii. PM
    As with the NMOG+NOX standards, the introduction of new
emission control technologies or new applications of existing
technologies (e.g., GDI, turbocharging, downsized engines) will create
significant uncertainties for manufacturers about in-use performance
over the vehicle's useful life. We are finalizing as proposed a
temporary in-use FTP standard for PM of 6 mg/mi for all light duty
vehicles certified to the Tier 3 full useful life 3 mg/mi standard.
Since the Tier 3 FTP PM standard has a percent phase-in schedule spread
over several years, starting in 2017 with full phase-in completed in
2022, we are finalizing the requirement that the in-use standard apply
to all vehicles certified to the new PM standards during the entire
percent phase-in period (i.e., through MY 2021).
    We also proposed temporarily-relaxed in-use US06 PM standards. As
described

in Section IV.A.4.b above, we are finalizing an in-use US06 PM standard
of 10 mg/mi for the intermediate years of the program (MYs 2019 through
2023) in response to industry concerns about emissions variability as
the new standards become effective.
j. FFVs
    Because of the physical and chemical differences in how emissions
are generated and controlled between vehicles operating on different
blends of gasoline and ethanol, manufacturers of vehicles designed for
high-percentage blends of ethanol (usually called Flexible Fuel
Vehicles, or FFVs) may face unique compliance challenges under the Tier
3 program. Historically, under the Tier 2 program, FFVs have only been
required to meet all Tier 2 emission standards, FTP and SFTP, while
operating on gasoline (E0); when operating on the alternative fuel
(generally this means a blend that is nominally 85 percent ethanol, or
E85), they have only been required to meet the FTP emission standards.
    However, E85 use may rise considerably in the future as ethanol use
increases in response to the Renewable Fuels Standards (RFS). Thus, as
the Tier 3 program is implemented, it is increasingly important that
FFVs maintain their emission performance when operating on E85 across
different operating conditions.
    We believe that at standard test conditions, requiring
manufacturers to meet the Tier 3 standards on any blend of gasoline and
ethanol will not be significantly more challenging technologically than
compliance on lower ethanol blends, including the E10 Tier 3 test fuel
we are adopting. We are thus finalizing, as proposed, the requirement
that in addition to complying with the Tier 3 requirements when
operating on Tier 3 test fuel, FFVs also comply with both the FTP and
the SFTP emission standards when operating on E85. This includes the
requirement to meet emission standards for both Tier 3 test fuel and
E85 for the FTP, highway test, and SFTP emission standards at standard
test temperatures (i.e., 68 [deg]F to 86 [deg]F). Since FFVs can
operate on any blend of gasoline and ethanol (up to a nominal 85
percent ethanol), the emission requirements apply to operation at all
levels of the alternative fuel that can be achieved with commercially
available fuels. However, for exhaust emission compliance demonstration
purposes, we will test on Tier 3 test fuel and on fuel with the highest
available ethanol content.
k. Credit for Direct Ozone Reduction (DOR) Technology
    Since the late 1990s, technologies have been commercialized with
which vehicles can remove ozone from the air that flows over the
vehicle's coolant radiator. In such direct ozone reduction (DOR)
technology, a catalytic coating on the radiator is designed to convert
ambient ozone into gaseous oxygen, as a way of addressing the air
quality concerns about ozone. Detailed technical analyses for the
California LEV II and the federal Tier 2 programs showed that when
properly designed these systems can remove sufficient ozone from the
air to be equivalent to a quantifiable reduction in tailpipe NMOG
emissions. In the earlier programs, both California and EPA provided
methodologies through which a manufacturer could demonstrate the
capability and effectiveness of the ozone-reducing technology and be
granted an NMOG credit. A small number of vehicle models with DOR
applications received credit under the LEV II program; no manufacturer
formally applied for credits under the federal Tier 2 program.
    Some manufacturers have expressed an interest in the continued
availability of a DOR credit as a part of their potential LEV III and
Tier 3 compliance strategies. EPA believes that when a DOR system is
shown to be effective in reducing ozone, a credit toward Tier 3
compliance is warranted. We are finalizing a provision, as proposed,
that manufacturers following the California methodology for
demonstrating effectiveness and calculating a appropriate credit for a
DOR system be granted a specific credit toward the NMOG portion of the
NMOG+NOX standard.\334\ As with the California program, such
a credit may not exceed 5 mg/mi NMOG.
---------------------------------------------------------------------------

    \334\ EPA is incorporating the CARB DOR methodology by
reference.
---------------------------------------------------------------------------

l. Credit for Adopting a 150,000-Mile Emissions Warranty
    Under the Tier 3 standards, manufacturers are expected to design
their emission control systems to continue to operate effectively for a
useful life of 150,000 miles (120,000 miles for some smaller vehicles).
However, manufacturers are only required to replace failed emission
control components or systems on customers' vehicles for a limited time
period, specified in the Clean Air Act (80,000 miles/8 years for key
emission control components). EPA believes that voluntary extension of
this warranty obligation by manufacturers would provide additional
emission reductions by helping ensure that controls continue to operate
effectively in actual operation through the full life of the vehicle.
    We are finalizing as proposed that a manufacturer providing its
customers with a robust emission control system warranty of 15 years or
150,000 miles be eligible for a modest credit of 5 mg/mi
NMOG+NOX.\335\ Because of the significant liability that
manufacturers would be accepting, we do not expect that the use of this
credit opportunity will be widespread. However, based on our modeling
of the expected deterioration of the emissions of future Tier 3
vehicles absent repair/replacement of failed emission controls, we
anticipate that the value to the environment of long emissions
warranties in terms of reduced real-world emissions would significantly
exceed the 5 mg/mi NMOG+NOX credit.\336\
---------------------------------------------------------------------------

    \335\ Manufacturers choosing to comply with the standards for a
120,000 mile useful life for their LDVs and LDT1s are not eligible
for this extended warranty credit for those vehicles.
    \336\ Beardsley, M, et al. (2013, February). Updates to MOVES
for the Tier 3 NPRM. Memorandum to the docket.
---------------------------------------------------------------------------

    We will use the same criteria for approving such a credit as does
the parallel California program.\337\ Thus, in addition to committing
to customers that failing emission controls will be repaired or
replaced for 15 years/150,000 miles, manufacturers will also need to
accept the liability that in the event that a specific emissions
control device fails on greater than 4 percent of a vehicle model's
production, they will recall the entire production of that model for
repair.
---------------------------------------------------------------------------

    \337\ EPA is incorporating the CARB extended emission warranty
provisions by reference.
---------------------------------------------------------------------------

m. Averaging, Banking, and Trading of Credits
    We proposed and are finalizing an averaging, banking, and trading
(ABT) program similar to those that have historically been a part of
most EPA emission control programs. For the Tier 3 final rule, the ABT
program is consistent with the other Tier 3 program elements, the heavy
duty exhaust emission standards and the evaporative emission standards
programs, with the only exception being credit life during the longer
phase in for the light duty program as described below. The ABT program
is intended to provide an opportunity for manufacturers to deploy their
Tier 3 vehicle models more efficiently, especially during the
transition years, and to avoid excessive delays in the necessary
technological improvements across the fleet. We have

designed the Tier 3 ABT program to provide for credits to be generated
by certifying vehicles that perform better than the fleet-average
NMOG+NOX standards. These credits may be used within a
company to offset vehicles that perform worse than the standards, they
may be banked for later use, or they may be traded to other
manufacturers.
    We are also finalizing limitations on the use of credits for the
light-duty fleet. We proposed that Tier 3 credits expire after 5 model
years following the model year they are generated and solicited comment
on the Tier 3 credit life. In communications regarding the proposed
rule, representatives of the auto industry expressed to EPA that the
value of the ABT program during the MY 2017-2025 phase-in of the
primary program would be improved if credits had a longer credit
life.\338\ We determined that, with certain restrictions, Tier 3 credit
life can be temporarily extended with no adverse impacts on the overall
emission reductions of the program. Specifically, we are finalizing a
credit life of 8 years for credits generated in MYs 2017-2022 for the
FTP and SFTP NMOG+NOX fleet average standards for the
primary program only. For the heavier light-duty vehicles, the 8-year
credit life begins for credits generated in MY 2018. Note that, as
proposed, credits generated under the Early Tier 3 Credit provision
(Section IV.A.7.a) are limited to 5-year life, and are not affected by
the longer credit life.
---------------------------------------------------------------------------

    \338\ Passavant, G. (January 2014), Meetings with Chrysler--Tier
3 NPRM Lead Time and ABT, Memorandum to Docket.
---------------------------------------------------------------------------

    For credits generated in MYs 2023-2025, the credit life declines by
one year of credit life annually, with credit life stabilizing at 5
years for credits generated in MYs 2025 and later. That is, credits
generated in MY 2023 have a 7-year life, in MY 2024 a 6-year life, and
in MY 2025 and later a 5-year life. However, while credits can be
generated, banked, and used internally for the extended time periods,
credits cannot be traded to other manufacturers after 5 years.
    After considering the views expressed by manufacturers as well as
the implementation schedules of this Tier 3 rule and the 2017 light-
duty GHG rule, we believe that the temporary up-to-8-year credit life
available to manufacturers during the phase-in period provides
substantial flexibility to address manufacturer uncertainties about
future technology development and product planning during
implementation of the Tier 3 program. We also believe this longer
credit life provision will alleviate most if not all concerns expressed
by manufacturers with respect to the challenges they may encounter by
simultaneous implementation of the two programs.
    As proposed, we are finalizing a provision for a manufacturer to
create a credit deficit, at certification or at the end of the
production year, if its fleet average emissions exceed the standard. A
manufacturer would be required to use all of its banked credits, if
any, before creating a credit deficit. A credit deficit would need to
be resolved before the fourth model year after the deficit was created;
that is, a manufacturer may not maintain a credit deficit more than 3
consecutive model years.
n. Tier 3 Transitional Emissions Bins
    During the development of the proposed rule and in their comments,
manufacturers pointed out that they may continue to produce some
vehicles as late as MY 2019 that could be certified to Tier 2 Bin 3 or
Bin 4 standards. In order to provide manufacturers flexibility in
meeting the fleet average standards and to further facilitate the
transition, we will allow manufacturers to certify to the combined
NMOG+NOX levels of these Tier 2 bins through MY 2019. We are
finalizing two transitional Tier 3 bins, Bin 110 and Bin 85, that have
FTP NMOG+NOX standards of 110 mg/mi and 85 mg/mi,
respectively (i.e., the sum of the NMOG and NOX values from
the Tier 2 bins). The associated FTP standards for CO, PM, and HCHO
corresponding to these bins are identical to those for vehicles
certified to the Tier 3 Bin 125. Tier 3 SFTP standards will apply to
these vehicles, and these vehicles will be included in the Tier 3 PM
percent phase-in calculations.
o. Compliance Demonstration
    In general, we are finalizing requirements that manufacturers
demonstrate compliance with the Tier 3 light-duty vehicle emission
standards in a very similar manner to existing Tier 2 vehicle
compliance (see Sec.  86.1860 of the regulatory language). However, for
Tier 3, manufacturers must calculate their compliance with the fleet
average standards and percent phase-in standards based on annual
nationwide sales, including sales in California and Clean Air Act
Section 177 states. We believe that this approach represents another
step toward achieving the goal of an effectively nationwide program as
early as possible, which has been a basic principle in EPA's
development of this program and broadly supported by vehicle
manufacturers. We also believe that basing compliance on nationwide
sales may reduce the need for manufacturers to project future sales and
track past years' sales in a disaggregated way. Because the Tier 3
provisions become increasingly consistent with LEV III provisions as
the Tier 3 program phases in, we believe that any disproportionate
impacts of different mixes of vehicles in different states are unlikely
to occur.
    This nationwide compliance calculation approach applies to vehicles
as they become subject to the Tier 3 provisions, either the declining
fleet-average NMOG+NOX curves or the percent phase-in PM
standards. Were any manufacturer to choose to use the alternative FTP
and SFTP phase-ins, which are not a part of the LEV III program, the
manufacturer would not include sales in California or in the Section
177 states in its compliance calculations.

B. Tailpipe Emissions Standards for Heavy-Duty Vehicles

1. Overview and Scope of Vehicles Regulated
    After considering the comments we received, we are adopting the
Tier 3 exhaust emissions standards that we proposed for chassis-
certified heavy-duty vehicles (HDVs) between 8501 and 14,000 lbs gross
vehicle weight rating (GVWR). Vehicles in this GVWR range are often
referred to as Class 2b (8501-10,000 lbs) and Class 3 (10,001-14,000
lbs) vehicles, and are typically full-size pickup trucks and work vans
certified as complete vehicles.\339\ Medium-duty passenger vehicles
(MDPVs), although in the Class 2b GVWR range, are subject to Tier 3
standards discussed in Section IV.A. To a large extent, we are also
adopting the Tier 3 certification testing and compliance provisions
that we proposed for HDVs. There are, however, a number of improvements
we are making in response to comments, as discussed in detail below.
---------------------------------------------------------------------------

    \339\ 40 CFR 86.1803-01 defines HDVs to also include motor
vehicles at or below 8,500 lbs GVWR that have a vehicle curb weight
of more than 6,000 lbs or a basic vehicle frontal area in excess of
45 square feet, and these vehicles will also be subject to the Tier
3 standards and other provisions applicable to Class 2b vehicles
discussed in this section.
---------------------------------------------------------------------------

    The Tier 3 program for HDVs will bring substantial reductions in
harmful emissions from this large fleet of work trucks and vans, a
fleet that is used extensively on every part of the nation's highway,
rural, and urban roadway system. The fully-phased in Tier 3 standards
levels for non-methane organic gas (NMOG) plus oxides of nitrogen
(NOX), and for particulate matter (PM), are on the order of
60 percent lower than the current standards levels.

    We proposed to require that diesel-fueled Class 2b and 3 complete
vehicles, like their gasoline-fueled counterparts, be certified to the
Tier 3 standards on the chassis test; we also proposed to include these
vehicles in the Tier 3 HDV averaging, banking, and trading (ABT)
program. Currently only gasoline-fueled Class 2b/3 complete HDVs are
required to chassis certify.
    The International Council for Clean Transportation (ICCT) provided
comments in support of this requirement, arguing that it is needed to
stop manufacturers from making trucks marginally above 8500 lbs GVWR to
avoid light-duty emission standards. The Truck and Engine Manufacturers
Association (EMA) opposed mandatory chassis certification for any class
of engines or vehicles over 8500 lbs GVWR, arguing that the existing
flexibility is needed to minimize unnecessary costs and certification
burdens. EMA commented that, at a minimum, EPA should maintain optional
certification of diesel engines used in complete Class 3 vehicles. In
their joint comments, the Alliance of Automobile Manufacturers and the
Association of Global Automakers also requested that EPA retain the
option for complete Class 3 diesel vehicles and engines, arguing that
otherwise manufacturers may be required to dual certify vehicle models
that include variants both under and over 14,000 lbs.
    We are sensitive to this issue but remain concerned that the fleet
average standard program we are finalizing would not work well if a
major fleet component, such as complete Class 3 diesel trucks, can be
left in or taken out of the fleet calculation based on what each
manufacturer considers to be most advantageous. We believe the
resulting competitive issues and uncertainties would be problematic,
given the wide variance in gasoline/diesel HDV sales among the
manufacturers, our provision for averaging across each manufacturers'
entire Class 2b/3 fleet, and the overwhelming preponderance of diesels
in the Class 3 market. It would also create uncertainties in the Tier 3
environmental benefits, given the pronounced difference between these
Tier 3 standards and the heavy-duty diesel engine standards we set 13
years ago, which we expect to remain in effect for the foreseeable
future.
    As a result, we are finalizing these provisions as proposed, except
that we are providing that manufacturers, instead of certifying
complete diesel Class 3 HDVs, may install diesel engines that have been
engine-certified for any model year that the engine family has less
than half of its sales being installed in such non-chassis-certified
complete Class 3 vehicles. For example, if a company has a certified
diesel engine family with 10,001 sales in MY 2020, up to 5,000 of those
engines may be installed in complete Class 3 HDVs that are not chassis-
certified for exhaust emissions. This provision is intended to help
address manufacturers' concern about dual certification, while at the
same time ensuring a coherent fleetwide standards regimen in this
vehicle class. It also better harmonizes with California's low-emission
vehicle (LEV) III program which does not mandate chassis certification
for diesel Class 3 vehicles. By only allowing engine-certified vehicles
in the case of engines that are primarily produced for other purposes,
we believe this approach adequately guards against potential abuse. In
the case of complete diesel Class 3 HDVs produced by a company other
than the engine certifier, the responsibility for ensuring the sales
limit is not exceeded remains with the vehicle manufacturer, who will
need to coordinate with the engine supplier to ensure compliance.
    Manufacturers of incomplete HDVs that are sold to secondary
manufacturers for subsequent completion (less than 10 percent of the
Class 2b and 3 U.S. market) are also allowed under existing EPA
regulations to certify via either the chassis or engine test, and those
who choose to chassis-certify in the future will be subject to Tier 3
requirements. We asked for comment on mandating chassis certification
of incomplete Class 2b and 3 vehicles, noting that California's LEV III
program includes such a requirement for Class 2b. Commenters expressed
opposition to this extension of mandatory chassis certification,
despite their general support for harmonization with LEV III; as a
result, we are not mandating chassis certification for any incomplete
HDVs.
    The key elements of the Tier 3 program for HDVs parallel those for
passenger cars and light-duty trucks (LDTs), with adjustments in
standards levels, emissions test requirements, and implementation
schedules, appropriate to this sector. These key elements include:
     A combined NMOG+NOX declining fleet average
standard beginning in 2018 and reaching the final, fully phased-in
level in 2022,
     creation of a bin structure for standards, including
standards for carbon monoxide (CO) and formaldehyde,
     PM standards phasing in separately on a percent-of-sales
basis,
     changes to the test fuel for gasoline- and ethanol-fueled
vehicles,
     extension of the regulatory useful life to 150,000 miles,
     a new requirement to meet standards over the supplemental
federal test procedure (SFTP) that addresses real-world driving modes
not well-represented by the federal test procedure (FTP) cycle alone,
and
     special flexibility provisions for small businesses and
small volume manufacturers described in Section IV.G.
    As in the light-duty Tier 3 program, we have put a strong emphasis
on coordinating HDV Tier 3 program elements with California's LEV III
program for Class 2b and 3 vehicles, referred to in LEV III as medium-
duty vehicles (MDVs). The goal is to create a coordinated ``national
program'' in which California would accept compliance with Tier 3
standards as sufficient to also satisfy LEV III requirements, thus
allowing manufacturers to comply nationwide by marketing a single
vehicle fleet. As part of this effort, we proposed that manufacturers
of Tier 3 HDVs calculate compliance with the fleet average standards
and percent phase-in standards based on annual nationwide sales,
including sales in California and in states implementing California
standards under Clean Air Act section 177. Commenters expressed
emphatic support for this approach and we are finalizing it as a key
element of the Tier 3 program.
2. HDV Exhaust Emissions Standards
a. Bin Standards
    Manufacturers will certify HDVs to Tier 3 requirements by having
them meet the standards for NMOG+NOX, PM, CO and
formaldehyde for one of the bins listed in Table IV-13. Manufacturers
choose bins for their vehicles based on their product plans and
corporate strategy for compliance with the fleet average standards
discussed in Section IV.B.2.b, and once a vehicle's bin is designated,
those bin standards apply throughout its useful life. Because the fleet
average standards become more stringent over time, the bin mix will
gradually shift from higher to lower bins.
    As in the past, there are numerically higher standards levels for
Class 3 vehicles than for Class 2b vehicles, reflective of the added
challenge in reducing per-mile emissions from large work trucks
designed to carry and tow heavier loads. Also, the standards levels for
both Class 2b and Class 3 HDVs are significantly higher than those
being adopted for light-duty trucks due to marked differences in
vehicle size and

capability, and to our requirement to test HDVs in a loaded condition
(at the adjusted loaded vehicle weight (ALVW)). By conducting emissions
testing with loaded vehicles, the heavy-duty program ensures that
emissions controls are effective when these vehicles are performing one
of their core functions: hauling heavy loads. This is a key difference
between the heavy-duty and light-duty truck programs. The bin structure
and standards levels are consistent with those in California's LEV III
program. We requested comment on the usefulness of creating additional
bins between Bin 0 and the next lowest bin in each vehicle class, as a
means of encouraging clean technologies and adding flexibility, but
commenters saw no need for these.

                                       Table IV-13 FTP Standards for HDVs
----------------------------------------------------------------------------------------------------------------
                                                   NMOG+NOX (mg/                                   Formaldehyde
                                                        mi)         PM (mg/mi)       CO (g/mi)        (mg/mi)
----------------------------------------------------------------------------------------------------------------
                                         Class 2b (8501-10,000 lbs GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 395 (interim)...............................             395               8             6.4               6
Bin 340 (interim)...............................             340               8             6.4               6
Bin 250.........................................             250               8             6.4               6
Bin 200.........................................             200               8             4.2               6
Bin 170.........................................             170               8             4.2               6
Bin 150.........................................             150               8             3.2               6
Bin 0...........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                        Class 3 (10,001-14,000 lbs GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 630 (interim)...............................             630              10             7.3               6
Bin 570 (interim)...............................             570              10             7.3               6
Bin 400.........................................             400              10             7.3               6
Bin 270.........................................             270              10             4.2               6
Bin 230.........................................             230              10             4.2               6
Bin 200.........................................             200              10             3.7               6
Bin 0...........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------

    The NMOG+NOX standards levels for the highest bins in
each class (Class 2b Bin 395 and Class 3 Bin 630) are equal to the sum
of the current non-methane hydrocarbon (NMHC) and NOX
standards levels that took full effect in 2009, as well as to
equivalent LEV standards in California's LEV II program. These bins are
intended as carryover bins. That is, we expect them to be populated
with vehicles that are designed to meet the current standards, and that
are being phased out as new lower-emitting vehicle designs phase in to
satisfy the Tier 3 fleet average NMOG+NOX standard. We also
consider the next highest bins (Class 2b Bin 340 and Class 3 Bin 570)
to be carryover bins, because they likewise can be readily achieved by
vehicles designed for today's EPA and California LEV II emissions
programs. As the 2018-2022 phase-in progresses, it will become
increasingly difficult to produce vehicles in these bins and still meet
the fleet average standard. Therefore vehicles in these bins (as well
as some others not yet designed to meet Tier 3 PM standards described
in Section IV.B.2.d) will be considered ``interim Tier 3'' vehicles,
and the bins themselves will be considered ``interim bins.''
    To facilitate their use in this carryover function, the interim
bins do not require manufacturers to meet Tier 3 exhaust emissions
standards on the SFTP, over the longer useful life, or with the new
gasoline test fuel discussed in Section IV.F, although testing on this
fuel will be allowed. These requirements do apply in all other bins.
    In the context of these relaxed requirements for the interim bins,
we proposed two additional measures to help ensure these bins are
focused on their function of helping manufacturers transition to the
long-term Tier 3 emissions levels. First, we proposed that the interim
bins would be available only in the phase-in years of the program; that
is, through model year (MY) 2021, as is appropriate to their interim
status. Second, vehicles in the interim bins would meet separate NMOG
and NOX standards rather than combined NMOG+NOX
standards. The goal was to ensure that a manufacturer does not redesign
or recalibrate a vehicle model under combined NMOG+NOX Tier
3 standards for such purposes as reducing fuel consumption, through
means that result in higher NOX or NMOG emissions than
exhibited by today's vehicles, contrary to the intended carryover
function of the interim bins. Industry commenters objected to both the
proposed sunsetting of the interim bins and the proposed separate
NOX and NMOG standards, arguing that they overly restrict
manufacturer flexibility and work against harmonization with LEV III.
However, commenters did not address EPA's concern regarding increased
NOX emissions at the interim bin levels.
    After considering the comments, we believe a modified approach to
the interim bins can at least partly address the industry concerns
regarding harmonization while still precluding backsliding on
NOX levels. We are finalizing the interim bins with combined
NMOG+NOX standards as requested by the commenters, but are
adopting a restriction on deterioration-adjusted NOX levels
in certification testing, to the levels allowed under the current
standards in 40 CFR 86.1816-08. These are 0.2 and 0.4 g/mi for Class 2b
and Class 3, respectively. This restriction will not apply to vehicles
in use, and does not impose a parallel NMOG restriction. Given our
continuing concerns about NOX increases that would be
allowed by the combined standards at the interim bin levels, we believe
that this approach and the associated certification burden are
reasonable, noting that manufacturers already must obtain
NOX test results in certifying to an NMOG+NOX
standard, and the differing NOX and NMOG deterioration
mechanisms will likely dictate that they be considered separately in
obtaining deteriorated NMOG+NOX levels for certification.
    We believe that making the interim bins available indefinitely
would run counter to their limited purpose as an aid to making the
transition to Tier 3

emissions levels. Making these bins permanent would, we believe,
necessitate that they take on other key elements of the Tier 3 program
such as longer useful life, SFTP compliance, and the use of Tier 3 test
fuel. These requirements in turn would negate the usefulness of these
bins in helping to carry over some pre-Tier 3 vehicle designs during
the transition years in which the declining fleet average standard
levels are high enough to accommodate their continued sale. By MY 2022,
the fleetwide standard will be stringent enough to effectively
eliminate the ability of manufacturers to use interim bins while
meeting the declining fleet average standard levels. We are therefore
adopting the sunsetting of the interim bins as proposed, making them
available only through MY 2021.
b. Fleet Average NMOG+NOX Standards
    As in the light-duty Tier 3 program, a key element of the program
we are finalizing for HDVs is a fleet average NMOG+NOX
standard that becomes more stringent in successive model years: in the
case of HDVs, from 2018 to 2022. Each HDV sold by a manufacturer in
each model year contributes to this fleet average based on the mg/mi
NMOG+NOX level of the bin declared for it by the
manufacturer. Manufacturers may also earn or use credits for fleet
average NMOG+NOX levels below or above the standard in any
model year, as described in Section IV.B.4. As proposed, we are
adopting the separate Class 2b and Class 3 fleet average standards
shown in Table IV-14, though a manufacturer can effectively average the
two fleet classes using credits (see Section IV.B.4). We believe this
split-curve approach is superior to a single phase-in covering all HDVs
because it recognizes the different Class 2b/Class 3 fleet mixes among
manufacturers and the differing challenge in meeting mg/mi standards
for Class 3 vehicles compared to Class 2b vehicles, while still
allowing for a corporate compliance strategy based on a combined HDV
fleet through the use of credits.
    We are adopting the proposed fleet average NMOG+NOX
standards. These are consistent with those set for the LEV III MDV
program in model years 2018 and later. As proposed, we are also
adopting provisions allowing manufacturers to voluntarily meet bin and
fleet average standards in model years 2016 and 2017 that are
consistent with the MDV LEV III standards in those years, for the
purpose of generating credits that can be used later or traded to
others. These voluntary standards are shown in Table IV-14. This
voluntary opt-in program serves the important purpose of furthering
consistency between the federal and California programs, such that
manufacturers who wish to can produce a single vehicle fleet for sale
nationwide, with the opportunity for reciprocal certification in
affected model years. It further incentivizes pulling ahead of Tier 3
technologies, with resulting environmental benefits, by providing for
early compliance credits in this nationwide fleet. Commenters expressed
support for this harmonized array of HDV emissions standards.
    Manufacturers choosing to opt into this early compliance program
could start in either model year 2016 or 2017. They would have to meet
the full complement of applicable bin standards and requirements for
the bins they choose for their vehicles in meeting the 2016/2017 MY
fleet average FTP NMOG+NOX standards, including SFTP
standards in the bins that have SFTP standards. However, they do not
need to meet the Tier 3 PM FTP and SFTP standards discussed in Sections
IV.B.2.d and IV.B.3.a, or the evaporative emissions standards discussed
in Section IV.C, because these requirements phase in on a later
schedule. We are not extending the voluntary compliance opportunity to
the 2015 model year, based on manufacturer comments indicating it would
be of little value.

                                                    Table IV-14--HDV Fleet Average NMOG+NOX Standards
                                                                         [mg/mi]
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Voluntary
                                                                Required program
--------------------------------------------------------------------------------------------------------------------------------------------------------
Model Year.....................            2016            2017            2018            2019            2020            2021  2022 and later.
Class 2b.......................             333             310             278             253             228             203  178.
Class 3........................             548             508             451             400             349             298  247.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We believe that the voluntary program provisions will benefit the
environment, the regulated industry, and vehicle purchasers, because it
has potential to accomplish early emissions reductions while
maintaining the goal of a cost-effective, nationwide vehicle program in
every model year going forward.
    Although manufacturers will be allowed to meet the fleet average
NMOG+NOX standard through whatever combination of bin-
specific vehicles they choose, it is instructive to note that the fully
phased in fleet average standard for model years 2022 and later will be
the equivalent of a Class 2b fleet mix of 90 percent Bin 170 and 10
percent Bin 250 vehicles, and a Class 3 fleet mix of 90 percent Bin 230
and 10 percent Bin 400 vehicles. Therefore, it is appropriate to
consider Bin 170 Class 2b vehicles and Bin 230 Class 3 vehicles to be
representative of Tier 3-compliant HDVs in the long term.
c. Alternative NMOG+NOX Phase-In
    We believe the fleet average phase-in described above will be
flexible, effective, and highly compatible with manufacturers' desire
to market vehicles nationwide, because of its close alignment with
California's LEV III program for medium-duty vehicles. However, for any
HDV manufacturers seeking four years of lead time and three years of
stability as specified in Clean Air Act section 202(a)(3)(C), we
proposed an alternative compliance path.\340\ This alternative approach
was crafted to be equivalent to the NMOG+NOX declining fleet
average in the above-described LEV III-harmonized alternative in every
model year, except that the period for the voluntary program in the
alternative approach would extend an extra model year--through 2018. To
ensure that this approach meets the Act's stability requirement,
instead of being structured around an annually declining fleet average
standard, the alternative approach requires a manufacturer to
demonstrate compliance (including through use of credits) with a
schedule of annually increasing percent-of-sales of HDVs certified to
the fully phased in 178 mg/mi (Class 2b) and 247 mg/mi (Class 3)
standards, as shown in Table

IV-15. We are adopting the alternative percent-of-sales phase-in
largely as proposed, with limited changes described below.
---------------------------------------------------------------------------

    \340\ For vehicles above 6,000 lbs GVWR, Clean Air Act section
202(a)(3)(C) requires EPA to provide manufacturers with a minimum of
4 years of lead time before mandatory changes to any standard
applicable to hydrocarbon, NOX, carbon monoxide, or PM
can be implemented, and 3 years of stability between changes to any
such standard.

                                               Table IV-15--Percent-of-Sales Alternative NMOG+NOX Phase-In
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Voluntary
                                                        Required program
--------------------------------------------------------------------------------------------------------------------------------------------------------
Model Year.....................            2016            2017            2018        \a\ 2019            2020            2021  2022 and later.
Class 2b.......................             29%             39%             54%             65%             77%             88%  100%.
Class 3........................             21%             32%             47%             60%             73%             87%  100%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Special provisions apply to models with an early-starting 2019 model year.

    The availability of emissions averaging under our alternative
phase-in, discussed below, makes the two alternatives functionally
equivalent, not just in the annual emissions reductions they achieve,
but also in how manufacturers may design their mix of products to meet
the phase-in standards. Commenters who disagreed with this assessment
for HDVs did not provide their reasoning, beyond referring to similar
comments they had on the parallel light-duty (above 6000 lbs GVWR)
alternative phase-in. However, that proposed alternative differs from
the one we proposed for HDVs, and the elements in it that were found
objectionable by the manufacturers are not in the HDV alternative. (See
Section IV.A.3 for discussion of comments on the light-duty
alternative.)
    Commenters objected that the proposed percent-of-sales alternative
has not been shown by EPA to be feasible, or in fact is infeasible
because it mandates the early phase-in of low-emitting vehicles
certified to the final standards. Such comments miss the fact that,
with ABT, every manufacturer can produce the same mix of vehicles in
any model year to comply with either HDV phase-in alternative, with the
exception that MY 2018 is a voluntary phase-in year under the
alternative phase-in and a required year under the LEV III-harmonized
phase-in. The ABT provisions enable a manufacturer to adopt a fleet
average compliance strategy while utilizing the percent-of-sales phase-
in that is identical to what would be required under the LEV III-
harmonized phase-in's fleet average standards. By no means are
manufacturers forced to make only vehicles certified to the final
standards. The percent-of-sales phase-in is thereby no more stringent
than the LEV III-harmonized phase-in, and the feasibility analysis
provided in Section IV.B.5, which expressly addresses the LEV III-
harmonized phase-in, serves to demonstrate the feasibility of both
alternatives.
    Some comments seem to assert that the percent-of-sales framework
for the alternative was chosen by EPA to make this alternative so
stringent (by requiring some vehicles to meet final standards four
years early) that no reasonable company would use it. This is
incorrect, both in regard to its actual effect (which as explained
above is not more stringent), and in regard to our intent. The percent-
of-sales framework for the alternative was proposed and is being
adopted for the purpose of providing manufacturers with a phase-in
alternative that explicitly meets the applicable Clean Air Act
stability requirement.
    We are making one change to the percent-of-sales alternative,
necessitated by the fact that this final rule is being signed in 2014,
not 2013 as envisioned in the proposal. HDV models for which the 2019
model year begins before the fourth anniversary of the signature date
of this final rule may be excluded from the Tier 3 fleet average
compliance calculations and all other Tier 3 requirements. These
excluded vehicles would instead need to comply with the applicable pre-
Tier 3 standards and requirements for the entire production of these
models throughout the 2019 MY. This limited allowance ensures that the
alternative meets EPA's obligation for four years of lead time under
the Clean Air Act. It is similar to a phase-in alternative we provided
in the light-duty vehicle Tier 2 rule (see 65 FR 6747, February 10,
2000). Note that 40 CFR 86.1803-01 defines ``model year'' as ``the
manufacturer's annual production period (as determined by the
Administrator) which includes January 1 of such calendar year: Provided
that if the manufacturer has no annual production period, the term
`model year' shall mean the calendar year.'' Additional regulations
pertaining to the definition of a model year are in 40 CFR 85, subpart
X.
    This allowance remains optional within the percent-of-sales
alternative--a manufacturer may voluntarily include these early-
starting 2019 MY vehicles in the Tier 3 program, and in this case these
vehicles would be treated no differently under the alternative than
vehicles with a later-starting 2019 MY, including with regard to
whether manufacturers choose to make them part of the ``phase-in''
fleet (vehicles counting toward the phase-in percentages) or the
``phase-out'' fleet (vehicles not counting toward the phase-in
percentages).
    Although it is conceivable that manufacturers would commence an
early start of the 2019 model year specifically for the purpose of
delaying Tier 3 obligations, we do not think this is likely, given the
many important constraints and decisions that typically factor into
setting this date, and the fact that signature of this final rule is
occurring relatively early in the calendar year, well before typical
model year start dates. We believe this is a reasonable way to provide
a viable percent-of-sales phase-in alternative that has four years of
lead time without making the 2019 model year voluntary for all vehicles
or putting new constraints on the timing of a manufacturer's model
year.
    To help ensure that the percent-of-sales alternative is fully
equivalent to the LEV III-harmonized alternative in terms of fleet-wide
emissions control and technology mix choices, we are including some
additional provisions, as proposed. First, the Tier 3 vehicles being
phased in under the percent-of-sales alternative, in addition to
meeting the fully phased-in FTP NMOG+NOX standards, must
also meet all other FTP and (as described below) SFTP standards
required by the LEV III-harmonized alternative. These include the CO
and formaldehyde FTP standards, the 150,000 mile (15 year) useful life
requirement, exhaust emissions testing with the new test fuel for
gasoline- and ethanol-fueled vehicles discussed in Section IV.F, and
the NMOG+NOX and CO SFTP standards in Table IV-16. The
specific standards are those for the bins in these tables closest to
the fully phased-in NMOG+NOX standards: Bin 170 for Class 2b
and Bin 230 for Class 3. (The PM and evaporative emissions standards
phase in on separate schedules under both alternatives, as discussed in
Sections IV.B.2.d and IV.C.)

    Second, we are making an ABT program available for the percent-of-
sales alternative, structured like the one created for the LEV III-
harmonized alternative. This involves certifying the vehicles in a
manufacturer's HDV fleet to the bin standards, and demonstrating
compliance with the fleet average standards for the LEV III-harmonized
alternative in each model year, including through the use of ABT
credits as in the LEV III-harmonized alternative. We are using the
fleet average calculation method for purposes of ABT because, as
explained above, we have determined that making this demonstration is
equivalent to demonstrating compliance with the percent-of-sales
requirement, and we see no value in complicating the program with
another set of calculations.
    However, we are establishing one difference between the LEV III-
harmonized and percent-of-sales alternatives with respect to ABT
provisions. Unlike in the LEV III-harmonized alternative, manufacturers
will not have to certify all vehicles into bins in order to take
advantage of the ABT provisions under the percent-of-sales alternative.
Rather they could choose to certify any ``phase-out'' vehicles (that
is, those not counting toward the percent-of-sales phase-in) to the
pre-Tier 3 NMHC and NOX standards, provided these vehicles
do not have family emission limits (FELs) above those standards. These
non-Tier 3 vehicles will not be subject to the Tier 3 standards or
other vehicle-specific elements of the Tier 3 compliance program. There
were no comments on these specific compliance and ABT provisions
associated with the percent-of-sales alternative.
d. Phase-In of PM Standards
    Consistent with the light-duty Tier 3 program discussed in Section
IV.A, we are phasing in the PM standards for HDVs as an increasing
percentage of a manufacturer's production of chassis-certified HDVs
(combined Class 2b and 3) per year. In addition to concerns regarding
the availability and required upgrades of test facilities used for both
light-duty and heavy-duty vehicle testing, manufacturers have expressed
uncertainty about PM emissions with new engine and emissions control
technologies entering the market as a result of new greenhouse gas
(GHG) standards. Therefore we are adopting the same phase-in schedule
as for the light-duty sector in model years 2018-2019-2020-2021: 20-40-
70-100 percent, respectively. This will apply to HDVs certified under
either NMOG+NOX phase-in alternative. The California Air
Resources Board (CARB) is phasing in the LEV III PM standards for HDVs
on the same schedule, except that LEV III will also involve a 10
percent PM phase-in in the 2017 model year. We asked for comment on our
adding this to our voluntary program for 2017, but received no comments
on it and are not including it in the Tier 3 program.
    For manufacturers choosing the declining fleet average
NMOG+NOX compliance path, the PM phase-in requirement for
HDVs will be completely independent of the NMOG+NOX phase-
in, with no requirement that both phase-ins be met on the same
vehicles. As a result, vehicles certified to any of the bin standards
for NMOG+NOX need not necessarily meet Tier 3 PM standards
before the 2021 model year. Instead, the current 0.02 g/mi PM standard
will apply for those vehicles not yet phased into the Tier 3 PM
standards. We are requiring that manufacturers choosing the percent-of-
sales phase-in alternative for NMOG+NOX meet the PM phase-in
requirements with only those vehicles certified to the Tier 3
NMOG+NOX standard, except in the 2019 and earlier model
years when the standards, including the PM standards, are voluntary,
and in the 2021 model year when the 100 percent PM phase-in requirement
exceeds the 87-88 percent NMOG+NOX phase-in requirement.
This is appropriate given the ability of manufacturers to build
``phase-out'' vehicles (those not counting toward the phase-in
percentages) under the percent-of-sales NMOG+NOX alternative
that are certified entirely to pre-Tier 3 standards while still
participating in the Tier 3 ABT program, discussed above.
    We will consider any vehicle under either compliance path that is
not certified to Tier 3 standards for PM and NMOG+NOX (as
well as the other, concomitant Tier 3 standards and requirements such
as the extended useful life), an ``interim Tier 3'' vehicle. This term
also applies to vehicles certified in one of the interim bins, as
discussed above.
    Note that compliance with Tier 3 evaporative emissions requirements
follows a separate phase-in schedule as described in Section IV.C. As a
result, a vehicle in an exhaust emissions family that the manufacturer
has phased in to the new useful life and test fuel requirements may be
in an evaporative emissions family that has not yet phased in the Tier
3 useful life and test fuel for evaporative emissions compliance and
testing.
i. Optional PM Phase-In
    The percent-of-sales phase-in schedule for the PM standard,
described above, will allow manufacturers with multiple vehicle models
to determine and plan the phase-in of those models based on anticipated
sales volumes of each model. However, manufacturers certifying only a
few vehicle models may not be able to take meaningful advantage of this
schedule. This is because their limited number of models may force them
to over-comply to reach the required minimum percentages, compared to a
manufacturer with many vehicle models available from which to choose a
phase-in pathway.
    For instance, a manufacturer with only two models that each equally
account for 50 percent of its sales would be required to introduce (at
least) one of the models in MY 2018 to meet the phase-in requirement of
20 percent in the first year. At the 50 percent level, this model would
then also meet the requirements for MY 2019 (40 percent). To meet the
MY 2020 requirement of 70 percent of sales, however, the manufacturer
would need to introduce the second Tier 3 vehicle that year. Thus the
manufacturer would have introduced 100 percent of its Tier 3 models one
year earlier compared to a manufacturer that was able to delay the
final 30 percent of its fleet until MY 2021 by distributing its
redesign of models over the entire phase-in period.
    To provide for more equal application of this benefit among all
manufacturers in the early years of the program, we are adopting the
proposed optional ``indexed'' phase-in schedule that could be used by a
manufacturer to meet the phase-in requirements. A manufacturer that
exceeds the phase-in requirements in any given year will be allowed to,
in effect, offset some of the phase-in requirements in a later model
year. The optional phase-in schedule will be acceptable if it passes a
mathematical test. The mathematical test is designed to provide
manufacturers a benefit from certifying to the standards at higher
volumes than they are obligated to under the normal phase-in schedule,
while ensuring that the overall population of complying vehicles at the
end of the phase-in is roughly the same as under the fixed percentage
approach. In this alternative approach, manufacturers will weight Tier
3 PM-compliant vehicles in the earlier years by multiplying their
percent phase-in by the number of years prior to MY 2022 (that is, the
second year of the 100 percent phase-in requirement).

    The mathematical equation for applying the optional phase-in is as
follows:

(4 x APP2018) + (3 x APP2019) + (2 x APP2020) + (1 x APP2021) >= 440,

where APP is the actual phase-in percentage for the referenced model
year. The sum of the calculation will need to be greater than or equal
to 440, which is the result when the optional phase-in equation is
applied to the primary percent phase-in schedule (4 x 20% + 3 x 40% + 2
x 70% + 1 x 100% = 440). Commenters supported this optional PM phase-in
approach.
3. Supplemental FTP Standards for HDVs
    Unlike passenger cars and light trucks, HDVs are not currently
subject to SFTP standards. SFTP standards are intended to ensure
vehicles have robust emissions control over a wide range of real-world
driving patterns not well-covered by the FTP drive cycle. Even though
HDVs are not typically driven in the same way as passenger cars and
LDTs, especially as they frequently carry or tow heavy loads, we
believe some substantial portion of real world heavy-duty pickup and
van driving is not well-represented on the FTP cycle.
    The goal in setting the SFTP standards levels is not to force
manufacturers to add expensive new control hardware for off-FTP cycle
conditions, but rather to ensure a robust overall control program that
precludes high off-FTP cycle emissions by having vehicle designers
consider them in their choice of compliance strategies. High off-FTP
cycle emissions, even if encountered relatively infrequently in real-
world driving, could create a substantial inadequacy in the Tier 3
program, which aims to achieve very low overall emissions in use. The
SFTP provisions will also help make the HDV program more consistent
with the heavy-duty engine program, which for several years has
included ``not-to-exceed'' provisions to control off-cycle emissions.
Therefore, in addition to the SFTP provisions, we are further limiting
enrichment on spark ignition engines in all areas of operation unless
absolutely necessary.
a. SFTP NMOG+NOX, PM and CO Standards
    The SFTP standards levels are provided in Table IV-16. These are
consistent with those adopted in the LEV III program.

                                      Table IV-16--SFTP Standards for HDVs
----------------------------------------------------------------------------------------------------------------
                   Vehicles in FTP bins                     NMOG+NOX (mg/mi)     PM (mg/mi)         CO (g/mi)
----------------------------------------------------------------------------------------------------------------
                                    Class 2b with hp/GVWR <= 0.024 hp/lb \a\
----------------------------------------------------------------------------------------------------------------
FTP Bins 200, 250.........................................               550                 7              22.0
FTP Bins 150, 170.........................................               350                 7              12.0
----------------------------------------------------------------------------------------------------------------
                                                    Class 2b
----------------------------------------------------------------------------------------------------------------
FTP Bins 200, 250.........................................               800                10              22.0
FTP Bins 150, 170.........................................               450                10              12.0
----------------------------------------------------------------------------------------------------------------
                                                     Class 3
----------------------------------------------------------------------------------------------------------------
FTP Bins 270, 400.........................................               550                 7               6.0
FTP Bins 200, 230.........................................               350                 7               4.0
----------------------------------------------------------------------------------------------------------------
\a\ These standards apply for vehicles optionally tested using emissions from only the highway portion of the
  US06 cycle.

    We are linking Tier 3 SFTP implementation for HDVs directly to the
Tier 3 FTP phase-in and bins for these vehicles. That is, an HDV
certified to any of the Tier 3 FTP bin standards must meet the SFTP
standards for that bin as well. However, because the FTP PM standard
phases in on a separate schedule, we will require that SFTP PM
compliance be linked to the same schedule. That is, an HDV certified to
the Tier 3 FTP PM standard must meet the applicable SFTP PM standard as
well. This approach recognizes the complementary nature of FTP and SFTP
provisions and helps to ensure that Tier 3 emissions controls are
robust in real world driving. CARB expressed support in its written
comments for this approach to linking FTP and SFTP requirements and an
intent to propose aligning LEV III with it once the Tier 3 program is
finalized.
    There are no SFTP requirements for the interim Tier 3 bins in each
class (Class 2b Bins 340 and 395 and Class 3 Bins 570 and 630), because
these are essentially carry-over bins from the previous standards to
help facilitate the transition to Tier 3, and therefore are not
intended to take on new requirements that might prompt a redesign.
These implementation provisions are consistent with the approach taken
in the LEV III program, except that California applies more of the Tier
3 requirements for SFTP and extended useful life to vehicles in the
interim bins.
    To help ensure a robust SFTP program that achieves good control
over a wide range of real world conditions, we proposed to use a
weighted-average composite SFTP cycle, with NMOG+NOX
emissions calculated from results of testing over three cycles: the
US06, the FTP, and the SC03, weighting these results by 0.28, 0.35, and
0.37, respectively. However, at proposal, we determined that the full
US06 component of the composite cycle, along with the ALVW loaded test
condition, would not be sufficiently representative of real-world
driving for two groups of HDVs: Those with low power-to-weight ratios
and Class 3 vehicles.
    Therefore, as discussed in the proposal, SFTP testing of Class 2b
vehicles with power-to-weight ratios at or below 0.024 hp/lb, may, at
the manufacturer's option replace the full US06 component of the
composite SFTP emissions with the test results from only the second of
the three emissions sampling bags in the US06 test, generally referred
to as the ``highway'' portion of the US06. HDVs so tested will be
subject to the correspondingly lower SFTP standards levels shown in the
table above. These vehicles will be driven during the test in the same
way as the higher power-to-weight Class 2b vehicles (over the full US06
cycle), using best effort (maximum power) if

the vehicle cannot maintain the driving schedule. The large majority of
Class 2b vehicles--those with power-to-weight above 0.024 hp/lb--will
be required to include emissions over the full US06 cycle in the
composite SFTP. We believe that this approach provides a robust but
repeatable and reliable test for the full range of Class 2b vehicles,
as the highway portion of the US06 retains broad coverage of vehicle
speed/acceleration combinations measured in real-world driving. Any
testing conducted by EPA would follow the manufacturer's test path for
the vehicle.
    For Class 3 vehicles, which range up to 14,000 lbs GVWR, we are
also concerned that the full US06 cycle would not provide a
representative drive cycle for SFTP testing. These vehicles are much
larger than the light-duty vehicles that formed the basis for
development of the US06 cycle, and loading them to ALVW for the SFTP
test yields a very heavy test vehicle, not likely to be safely driven
in the real world in a manner that is typified by this aggressive
cycle. We believe that the LA-92 (or ``Unified'') driving cycle
developed by CARB is more representative of Class 3 truck driving
patterns and will produce more robust results for use in SFTP
evaluations. Therefore we are adopting the proposed LA-92 cycle for use
in place of the US06 component of the composite SFTP for Class 3 HDVs.
    HDVs do not have SC03 emissions requirements under the current HDV
standards. Manufacturers of HDVs have indicated that they expect the
SC03 emissions to be consistently lower than either the US06 or the FTP
emissions levels, and therefore the added SC03 testing burden may be
unnecessary. We are therefore providing HDV manufacturers with the
option to substitute the FTP emissions levels for the SC03 emissions
results for purposes of compliance. However, we will retain the ability
to determine the composite emissions using SC03 test results in
confirmatory or in-use testing. We received no adverse comments on this
proposed approach.
    The set of composite SFTP cycles and standards we proposed and are
adopting for HDVs is consistent with the MDV LEV III program. We
received no adverse comments on them, except with regard to in-use
testing as discussed in Section IV.B.6.a.
b. Enrichment Limitation for Spark-Ignition Engines
    To prevent emissions from excessive enrichment in areas not fully
encountered in the SFTP cycles, we proposed and are adopting
limitations in the frequency and magnitude of enrichment episodes for
spark-ignition HDVs. These limitations are identical to those for
light-duty vehicles. See Section IV.A.4.c for discussion of the
requirements and relevant comments received.
4. HDV Emissions Averaging, Banking, and Trading
    This section describes how exhaust emissions credits may be earned
and used. See Section V.C for similar provisions that apply for
evaporative emissions. We are continuing the practice of allowing
manufacturers to satisfy standards through the averaging of emissions,
as well as through the banking of emissions credits for later use and
the trading of credits with others.
    There are a number of facets of the Tier 3 ABT program for HDVs
that are different from the existing program. First, instead of
separate NMHC and NOX credits, manufacturers earn combined
credits, consistent with the form of the standards.
    Second, manufacturers may accrue a deficit in their credit balance.
Deficits incurred in a model year may be carried forward but a
manufacturer will not be permitted to have a negative overall HDV
credit balance in more than 3 consecutive model years. Manufacturers
will have to use any new credits to offset any shortfall before those
credits can be traded or banked for additional model years. Credits not
used within 5 years after they are earned will be forfeited. These 5/3-
year credit/deficit life provisions are consistent with our light-duty
Tier 3 approach, the California LEV III program for MDVs, and EPA
programs for controlling GHG emissions from light- and heavy-duty
vehicles.
    Third, as part of our new requirement for chassis certification of
complete diesel HDVs, we are allowing the chassis-certified diesel HDVs
to participate in the Tier 3 ABT program without restriction. Prior to
Tier 3 they have not been allowed to earn or use ABT credits. We are
not restricting or adjusting credit exchange between diesel and
gasoline-fueled HDVs, consistent with our shift to combined
NMOG+NOX standards that helps to ensure comparable
stringency for these two engine types, and consistent also with the LEV
III MDV program.
    Credits earned by a chassis-certified Tier 3 HDV may be used to
demonstrate compliance with NMOG+NOX standards for any other
chassis-certified Tier 3 HDV, regardless of size and without
adjustment. This effectively allows manufacturers to plan a
comprehensive HDV compliance strategy for their entire Class 2b and
Class 3 product offering, by balancing credits so as to demonstrate
compliance with the standards for both classes.
    Industry commenters argued that EPA should align the HDV credit
provisions with the light-duty program by allowing early Tier 3 credits
to be generated in MYs 2016 and 2017, calculated relative to the
highest Class 2b and Class 3 bin NMOG+NOX levels (395 and
630 mg/mi, respectively), and capped at a level proportional to the
California level in MY 2018. However, these highest bin levels
correspond to those of the existing HDV standards for NMHC and
NOX, and are significantly higher than the MY 2016 and 2017
LEV III levels. Thus vehicles designed to just meet the LEV III
standards in these years could generate a large preliminary number of
credits under the industry's Tier 3 early credits proposal, credits
they would not earn in LEV III, thereby potentially thwarting the
harmonization of the two programs. Truncating that credit bank for each
manufacturer in 2018 such that it is proportional to their LEV III
balance could perhaps, with additional restrictions on trading and
banking, restore a harmonized credit status in that year. However, it
constitutes an unnecessarily complex and uncertain pathway to the same
result as that achieved under EPA's early opt-in provisions.
    Commenters requested that we provide for the conversion of pre-Tier
3 HDV credits for use in Tier 3. However, as discussed in the proposal,
we are not including provisions for doing so. We believe that by
providing an early Tier 3 opt-in program for HDVs, capable of
generating credits for two model years before the mandatory standards
take effect (even longer under the alternative percent-of-sales phase-
in approach), we are giving ample opportunity for the manufacturers to
accumulate early credits.
    Manufacturers commented that the proposed fleet average compliance
approach is incongruous with California's LEV III method based on
vehicle equivalent credits (VECs). Although expressing that they have
no preference for the method since the stringency is equivalent, they
recommended that EPA foster harmonization by providing a compliance
option based on VECs. We believe that such an option would add
unnecessary complexity to the Tier 3 program, and is made even more
unnecessary by the intent expressed in CARB's written comments to
propose a fleet average option for LEV III that is identical to EPA's
approach.

    In the past we have set upper bounds, called family emission limit
(FEL) caps, on how high emissions can be for credit-using vehicles,
regardless of how many credits might be available. Under our Tier 3 bin
structure, we believe that exhaust emission FEL caps are no longer
relevant for Tier 3 HDVs, as every vehicle must meet whatever standards
apply in the bin chosen for the vehicle by the manufacturer. (The bin
standard becomes the effective FEL.) Indeed, because credits and
deficits are calculated based on the difference between a
manufacturer's fleet average emissions and the fleet average standards
for a given model year, credits are not calculated for individual
vehicle families at all. Thus the standard for NMOG+NOX in
the highest allowable bin serves the purpose of the FEL caps in
previous programs.
    Consistent with our proposal, we are not creating an averaging
program for the HDV SFTP program, because we believe that the bin
structure and FTP-centered NMOG+NOX ABT program provide
adequate flexibility for smooth program implementation, especially in
light of our aim to have the FTP standards be the primary technology
forcers. A separate ABT program for SFTP compliance would add
substantial complexity with little benefit, and, by making it possible
to demonstrate robust SFTP emissions control on a vehicle that lacks
commensurate FTP control, could prove at odds with the primary goal of
the supplemental test for HDVs.
5. Feasibility of HDV Standards
    The feasibility assessment, discussed in more detail in Chapter 1
of the RIA, recognizes that the Tier 3 program is composed of several
new requirements for Class 2b and 3 heavy-duty vehicles, which include
primarily large gasoline and diesel pick-up trucks and vans with
diverse application-specific designs. These new exhaust emissions
requirements include stringent NMOG+NOX and PM standards for
the FTP and the SFTP, that will as a whole require new emissions
control strategies and hardware in order to achieve the standards. The
type of new hardware that will be required will vary depending on the
specific application and emissions challenges. Additionally, gasoline
and diesel vehicles will require different emissions control strategies
and hardware. The level of stringency for the SFTP NMOG+NOX
standards will generally only require additional precise control of the
engine parameters not necessitated in the past because of the lack of
SFTP requirements. Similarly, the new PM standards on both the FTP and
SFTP cycles will require more precise control of engine operation on
gasoline vehicles while diesels already equipped with diesel
particulate filters will require minimal changes. The new PM standards
may also require that manufacturers consider the durability of their
engines to the 150,000 miles useful life requirement with respect to
engine wear resulting in increased oil consumption and potentially
higher PM emissions.
    In order to assess the technical feasibility of NMOG+NOX
national fleet average FTP standards of 178 mg/mi for Class 2b vehicles
and 247 mg/mi for Class 3 vehicles, we conducted an analysis of
certification data for the HDVs certified in the 2010 and 2011 MYs. For
this final rule, we also reviewed certification records for 2012 and
2013 MY vehicles, and determined that these primarily involve carryover
engines and emission control hardware. Therefore we did not update the
NPRM analysis however any new or updated certification results in the
2012 or 2013 MYs are included in the RIA chapter 1 discussion. This
analysis provided a baseline for the current HDV fleet emissions
performance, as well as the emissions performance specific to the Class
2b and 3 vehicles. The emissions performance of each heavy-duty vehicle
class specific to gasoline and diesel is shown in Table IV-17 below. It
is important to note that the emissions results are only the 4000 mile
test point results and do not incorporate any deterioration which
manufacturers must account for when certifying to a full useful life
standard. Designs limiting the deterioration of emission control
hardware are critical to meeting the emission standards at the useful
life of the Tier 3 program. Deterioration factors to adjust the values
to the Tier 3 useful life standard of 150,000 miles were not available.
However, deterioration factors to adjust to 120,000 miles useful life,
and their implications for performance at higher miles, are discussed
in the RIA Chapter 1.
    The analysis also reflects the importance of the combined
NMOG+NOX standard approach, where diesels and gasoline HDVs
can balance their combined NMOG and NOX levels. Diesel
vehicles in the analysis produce very low NMHC emissions (NMOG is not
reported for diesels) but higher NOX emissions, while
gasoline vehicles have opposite performance. The combined standard
allows manufacturers to determine the proper balance of the unique
emissions challenges of a diesel or gasoline vehicle.

                                             Table IV--17 2010/11 Certification Test Results at 4,000 Miles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               NMHC            NMOG             NOX             CO           NMOG+NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline..................................  Class 2b....................           0.050           0.052           0.041           1.648           0.092
                                            Class 3.....................           0.080           0.083           0.073           2.373           0.156
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                NMHC+NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
Diesel....................................  Class 2b....................           0.037  ..............           0.138           0.195           0.174
                                            Class 3.....................           0.019  ..............           0.249           0.158           0.268
-------------------------------------------------------------------------
Combined Class 2b.......................................................           0.043           0.026           0.089           0.922           0.133
Combined Class 3........................................................           0.050           0.041           0.161           1.265           0.212
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Manufacturers typically certify their vehicles at emissions levels
well below the numerical standards. This difference is referred to as
``compliance margin'' and is a result of manufacturers' efforts to
address all the sources of variability that could occur during the
certification or in-use testing processes and during in-use operation.
These sources of variability include: Test-to-test variability, test
location, build variation and manufacturing tolerances, vehicle
operation (for example: Driving habits, ambient temperature, etc.), and
the deleterious effects of sulfur and other oil and fuel contaminants.
To meet the NMOG+NOX standard of 178 mg/mi for Class 2b and
247 mg/mi for Class 3 vehicles and establish a compliance margin for
these sources of variability, manufacturers will need to reduce their

emission levels considerably from the levels indicated in this data
set, particularly for diesel vehicles.
    However, as discussed above, these emission results do not include
the expected emissions deterioration which will be determined by
manufacturers during development and certification testing. Therefore,
manufacturers will need to further reduce emissions levels in
anticipation of the unavoidable emissions deterioration that will occur
during the useful life of the vehicle. Further, deterioration is a
function of several factors, but it is predominantly due to emissions
control hardware thermal exposure (high temperatures), which is
typically a significant issue on vehicles used for performing work like
Class 2b and 3 vehicles.
    We also expect that the 2011 heavy-duty GHG rule will present new
challenges to manufacturers' emissions performance goals as vehicles
begin to use new engines designed to meet the new GHG
requirements.\341\ Some of these new technologies may result in
emissions challenges that are specific to certain operating conditions.
For example, downsized gasoline engines will likely have improved FTP
exhaust emissions but have increased challenge with the high-load SFTP
requirements. Diesel-fueled vehicles may need to carefully balance
engine controls which reduce GHG emissions but can increase criteria
emissions (NOX).
---------------------------------------------------------------------------

    \341\ 76 FR 57106 (September 15, 2011).
---------------------------------------------------------------------------

    With regard to the ability of the heavy-duty fleet to meet the PM
standards for the FTP and the SFTP, we based our conclusions on some
testing of current heavy-duty gasoline vehicles (HDGVs) and the PM
performance of the existing light-duty fleet with similar engines.
Testing of two HDGVs with the highest sales volume (Ford F250 and
Chevrolet Silverado 2500), albeit not aged to full useful life,
confirmed that they have similar PM emissions levels as the light-duty
counterparts and therefore also meet the standards for both the Class
2b and Class 3 configurations. Data from light-duty gasoline vehicles
with similar or common engines with their heavy-duty ``sister'' vehicle
models demonstrates that these vehicles are currently meeting the Tier
3 FTP PM standards at the Tier 2 useful life mileage of 120,000 miles.
Heavy-duty diesel vehicles all are equipped with DPFs and have no
challenges meeting the FTP or SFTP PM standards being set for Tier 3.
    The SFTP test data from the same two heavy-duty vehicles described
above indicates that gasoline vehicles can achieve the standards for
SFTP NMOG+NOX and PM. Since heavy-duty vehicles are not
currently required to comply with any of the SFTP requirements,
manufacturers have not focused on improving the emissions performance
specifically over the SFTP cycles (US06, LA-92, and SC03). Therefore,
although the limited testing results had a high degree of variability,
several tests met the PM standards for the high power-to-weight Class
2b vehicles. Consistent with light-duty, vehicles that are
demonstrating high PM on the US06 will need to control enrichment and
oil consumption from engine wear. Recently manufacturers have already
been implementing product changes to reduce oil consumption to address
both customer satisfaction issues and to reduce cost of vehicle
ownership.
    Given the technologies likely to be applied to meet the HDV exhaust
emissions standards, discussed below, we consider the lead time
available before the standards take effect under all of the
alternatives to be sufficient. HDV manufacturers are already adopting
some of the complying technologies, especially for their light-duty
vehicles, and these can readily be adapted for heavy-duty applications.
In addition, manufacturers have already begun developing these
technologies for HDVs, including diesels, in response to California's
recently adopted LEV III MDV standards which begin to take effect in
the 2015 model year. Finally, as described above in Sections IV.B.2,
IV.B.3, and IV.B.4, our program incorporates a number of phase-in and
alternative compliance provisions that will ease the transition to
final standards without disrupting heavy-duty pickup and van product
redesign cycles. Among these is an alternative phase-in that does not
begin mandatory standards until model year 2019.
    Comments we received on the proposed HDV standards did not
specifically address our analysis of their technical feasibility. The
Manufacturers of Emission Controls Association (MECA) outlined diesel
and gasoline-engine technologies that they expect will be used to
achieve the Tier 3 standards cost-effectively, generally consistent
with our draft RIA. Vehicle and engine industry commenters argued that
the case we made for feasibility relied too heavily on extending light-
duty truck test data, supplemented by testing of only two HDVs, neither
of which were fully aged or representative of future vehicles designed
to meet our new GHG standards. However, commenters did not question the
feasibility, durability, implementability, or effectiveness of the
technologies we identified, or their ability to achieve the proposed
standards. Instead, the focus of these comments was on statutory
provisions for lead time and stability, and on how relaxed standards
for in-use testing and testing at high altitudes would help to
implement the standards within the allotted lead time. These issues,
including changes we are making in response to the comments, are
addressed in Sections IV.B.2.c, IV.B.6.a, and IV.B.6.f.
i. Technologies Likely To Be Applied
    The technologies expected to be applied to vehicles to meet the
lower standards levels will address the emissions control system's
ability to control emissions during cold start. Current vehicle
emissions control systems depend on the time it takes for the catalyst
to light-off, which is typically defined as the catalyst reaching a
temperature of 250 [deg]C. While the specific emissions challenge is
somewhat different for gasoline engines than for diesel engines,
achieving the necessary temperatures in the catalysts is a common
challenge. In order to improve catalyst light-off, the manufacturers
will likely add technologies that provide heat from combustion more
readily to the catalyst or improve the catalyst efficiency at lower
temperatures. These technologies could include calibration changes,
thermal management, close-coupled catalysts, catalyst Platinum Group
Metal (PGM) loading, and possibly secondary air injection. In some
cases, where the catalyst light-off response and efficiency are not
enough to address the cold start emissions, hydrocarbon adsorbers may
be applied to trap hydrocarbons until such time that the catalyst is
lit-off. Note that with the exception of hydrocarbon adsorbers each of
these technologies addresses both NMOG and NOX performance.
Key potential technologies are described in greater detail below.
     Engine Control Calibration Changes--These include changes
to retard spark and/or adjust air/fuel mixtures such that more
combustion heat is created during the cold start on gasoline engines.
Diesel engines may use unique injection timing strategies or other
available engine control parameters. Engine calibration changes can
affect NMOG, NOX and PM emissions.
     Thermal Management--This technology includes all design
attributes meant to conduct the combustion heat into the catalyst with
minimal cooling on both gasoline and diesel engines. This includes
insulating the exhaust piping between the engine and the catalyst,
reducing the wetted area of the

exhaust path and/or reducing the thermal mass of the exhaust system.
Close-coupling of catalysts (packaging the catalysts as close to the
head of the engine as possible to mitigate the cooling effects of
longer exhaust piping) can also be effective, but is more difficult to
employ than in light-duty applications because of durability concerns
with highly loaded operation and the potential increase in fuel
consumption to protect the catalyst from high temperatures.
     Catalyst PGM Loading--Additional PGM loading in the
catalyst provides a greater number of sites to catalyze emissions and
addresses NMOG, NOX and PM emissions.
     Selective Catalytic Reduction Optimization--Diesel
applications will continue to refine this NOX emissions
control strategy through improved hardware design and implementation in
vehicle applications. Additional engineering enhancements in the
control of the SCR system and related processes will also help reduce
emissions levels.
6. Other HDV Provisions
a. In-Use Emissions
    The proposal requested comment on the need for relaxation of
NMOG+NOX and PM standards for in-use vehicle testing. The
LEV III program includes these on an interim basis in the more
stringent bins in both FTP and SFTP testing. However, in its written
comments, CARB expressed the view that the technologies required for
SFTP compliance are well-established, and that sufficient lead time is
provided such that interim in-use standards for SFTP are not needed. As
a result, CARB expressed an intent to propose aligning the LEV III
program with the approach EPA proposed on this matter after the Tier 3
program is finalized. The manufacturers commented that relaxed interim
in-use standards are needed in the HDV sector, both for FTP and SFTP
standards. The reasons cited were a need to harmonize with LEV III, the
scarcity of data on which to establish standards that apply over the
full useful life, the extension of that useful life to 150,000 miles,
the need for manufacturers to address customer concerns with new
products and technologies, uncertainties that accompany the new SFTP
cycles and part 1066 testing requirements (especially for PM), and the
introduction of innovative technologies required to meet GHG standards
in the same timeframe.
    After considering the comments we have concluded that relaxed
interim in-use standards are appropriate for HDVs, both for FTP and
SFTP testing. We are adopting HDV in-use standards levels that are
identical to those adopted for LEV III, as shown in Table IV-18. We
consider these levels reasonable, in line with relaxed in-use standards
adopted in past programs, and helpful toward harmonization. We are not
applying interim in-use NMOG+NOX standards to the interim
(two highest) bins for the FTP standards, because these bins are
intended for carry-over of existing designs, and there should be little
uncertainty over their in-use emissions performance. Interim bin
vehicles certified to the Tier 3 PM standards shall, however, be
subject to the relaxed in-use PM standards in the same way as for HDVs
in other bins. Bin 0 standards are driven by specific zero-emissions
technologies for which in-use margins would not be appropriate, and so
we are not setting in-use standards for Bin 0.
    We are also adopting the general approach taken in LEV III of
making these interim standards available during the phase-in period
(model years 2016-2022) for the first two model years that a test group
is newly certified to a Tier 3 NMOG+NOX or PM standard. Test
groups subsequently recertified to a more stringent NMOG+NOX
bin standard may begin the two year cycle over again. A test group that
is first certified into a Tier 3 bin in model year 2022 or later may
not take advantage of the relaxed interim in-use standards. LEV III
adopted somewhat different applicability years, for the most part
ending earlier, in model year 2020. However, we believe that the modest
extension is appropriate to facilitate the Tier 3 phase-in. If a
vehicle test group is certified into a Tier 3 bin, but not yet to the
Tier 3 PM standard, the in-use standard for PM shall apply for the
first two model years it is first certified to the PM standard. In
order to better harmonize with LEV III, the availability of these in-
use standards includes the voluntary model years.

                                 Table IV-18--Interim In-Use Standards for HDVs
----------------------------------------------------------------------------------------------------------------
                                                      FTP (mg/mi)                        SFTP (mg/mi)
                                         -----------------------------------------------------------------------
                                              NMOG+NOX             PM             NMOG+NOX             PM
----------------------------------------------------------------------------------------------------------------
                                                    Class 2b
----------------------------------------------------------------------------------------------------------------
Bin 395 (interim).......................             (\a\)                16             (\a\)             (\a\)
Bin 340 (interim).......................             (\a\)                16             (\a\)             (\a\)
Bin 250.................................               370                16      \b\ 770/1120         \b\ 12/15
Bin 200.................................               300                16      \b\ 770/1120         \b\ 12/15
Bin 170.................................               250                16       \b\ 490/630         \b\ 12/15
Bin 150.................................               220                16       \b\ 490/630         \b\ 12/15
Bin 0...................................             (\a\)             (\a\)             (\a\)             (\a\)
----------------------------------------------------------------------------------------------------------------
                                                     Class 3
----------------------------------------------------------------------------------------------------------------
Bin 630 (interim).......................             (\a\)                20             (\a\)             (\a\)
Bin 570 (interim).......................             (\a\)                20             (\a\)             (\a\)
Bin 400.................................               600                20               770                12
Bin 270.................................               400                20               770                12
Bin 230.................................               340                20               490                12
Bin 200.................................               300                20               490                12
Bin 0...................................             (\a\)             (\a\)             (\a\)             (\a\)
----------------------------------------------------------------------------------------------------------------
\a\ No relaxed interim in-use standard.
\b\ The lower value applies to low power-to-weight vehicles optionally certified using only the highway portion
  of the SFTP US06.

b. HDV Useful Life
    Currently the HDV regulatory useful life, the period of use or time
during which emissions standards apply, is 120,000 miles or 11 years,
whichever occurs first (40 CFR 86.1805-4). For Tier 3 vehicle criteria
emissions we are extending the useful life to 150,000 miles or 15
years, whichever occurs first. This change better reflects the
improvements in vehicle durability and longevity that have occurred in
the several years since the 120,000 mile useful life was established,
and maintains consistency with the LEV III MDV program and with our
Tier 3 program for large LDTs, for which the same useful life period is
being adopted.
    The new useful life requirement applies to Tier 3 HDVs in all bins
except those designated as interim bins, consistent with the purpose of
the interim bins to provide for limited carry-over of pre-Tier 3
vehicle designs during the phase-in period. Although the percentage
application in each year will therefore depend on each manufacturer's
fleet binning strategy, the declining NMOG+NOX fleet average
standard will ensure a robust phase-in of the new useful life
requirement over the 2018-2022 model years, such that it is expected to
be about 50 percent in 2018, and necessarily reaches 100 percent by
2022 when the interim bins are no longer available. For those
manufacturers choosing to certify to the voluntary standards, the new
useful life will apply even earlier, in model year 2016 or 2017. For
manufacturers choosing the alternative percent-of-sales
NMOG+NOX alternative, the new useful life requirement
applies to all HDVs counted toward the phase-in requirement, resulting
in a generally equivalent useful life phase-in rate to that of the LEV
III-harmonized alternative.
    See Section IV.F.5 for further discussion of useful life
requirements with regard to GHG standards. Manufacturers may optionally
retain the 120,000 mile/11 year useful life for PM on interim Tier 3
vehicles that are not phased in to the Tier 3 PM standards. We received
no adverse comments on these useful life provisions.
c. Heavy-Duty Alternative Fuel Vehicles
    As in the light-duty program, manufacturers must demonstrate heavy-
duty flexible fuel vehicle (FFV) and dual-fuel vehicle compliance with
both the FTP and the SFTP emissions standards when operating on both
the conventional petroleum-derived fuel and the alternative fuel.
Dedicated alternative fuel vehicles must demonstrate compliance with
both the FTP and SFTP emission standards while operating on the
alternative fuel. For all of these vehicles, this includes the
requirement to meet FTP emissions standards when conducting fuel
consumption and GHG emissions testing, and also to meet the FTP and
highway test requirements at high altitudes (see Sections IV.B.6.e and
f). Because FFVs can operate on various combinations of their
conventional and alternative fuel, the emissions requirements apply to
operation at any mix of the fuels achievable in the fuel tank with
commercially available fuels, including for compliance at high
altitudes, even though the required demonstration of compliance is
limited to the conventional and alternative fuels designated for
certification testing. We received no adverse comments on these
provisions.
d. Existing Provision To Waive HDV PM Testing
    EPA's existing program includes a provision for manufacturers to
waive measurement of PM emissions in non-diesel heavy-duty vehicle
emissions testing. As proposed, we are eliminating this provision. We
believe that the Tier 3 PM standards for these vehicles are of
sufficient stringency that routine waiver of testing is not
appropriate. The CARB LEV III program also reflects this view. We do
not expect this change to be onerous for manufacturers, as the number
of heavy-duty vehicle families is not large. We received no adverse
comments on this change.
e. Meeting HDV Standards in Fuel Consumption and GHG Emissions Testing
    As with the light-duty Tier 3 program, HDVs must meet the FTP bin
standards when tested over both the city and highway test cycles. We do
not believe this adds a very significant test burden as vehicle
emissions are already required to be measured when these tests are run
for GHG and fuel consumption determinations. Nor do we believe that
this requirement is design forcing. Rather, we are creating this
requirement to ensure that test vehicle calibrations are not set by
manufacturers to minimize fuel consumption and GHG emissions, at the
expense of causing high criteria pollutant emissions. Considering the
additional work involved in measuring PM emissions and the reduced
likelihood of high PM emissions on the highway test, we are not
mandating that PM emissions testing be included in this requirement. We
received no adverse comments on these proposed provisions.
f. HDV Altitude Requirements
    As in the past, we intend that HDV Tier 3 standards result in
emissions controls that are effective over a full range of operating
altitudes. We proposed that HDVs be required to meet the FTP bin
standards (but not the SFTP standards) at high altitudes, and expressed
our expectation that compliance with the FTP standards would require
neither the use of special hardware nor adjustment to the level of the
standards.
    The manufacturers argued in their comments that the reasons EPA
cited in proposing relief at high altitudes for light-duty vehicles
apply for HDVs as well, and requested that relaxed NMOG+NOX
standards be adopted in the more stringent bins for testing of HDVs at
high altitudes. Ford argued that the challenges could be even greater
for HDVs because they are designed to operate at high altitudes with
heavy payloads and towed trailers, and this may necessitate the
locating of emissions systems farther from exhaust manifolds, thereby
increasing catalyst lightoff delays.
    Although we agree to a certain extent about the performance of
gasoline-fueled HDVs at high altitudes and their similarity to LDVs,
the comments did not alter our view that the compliance margins
provided in the HDV FTP bin standards compared to what the control
technologies can achieve, and the freedom manufacturers have to shift
to the more stringent bins gradually as the program phases in, are
adequate to account for these effects at altitude. The manufacturers
provided no data to counter this view.
    We note that our adoption of relaxed interim in-use standards for
vehicles in these bins will be directionally helpful to address any
remaining concerns by manufacturers regarding emissions at altitude
(Section IV.B.6.a). This is because testing at high altitudes is often
not required for certification (typically manufacturers use an
engineering analysis instead), and thus the relaxed in-use standards
will help to facilitate Tier 3 implementation for any HDV designs in
which in-use problems at high altitudes surface in the initial model
years.

C. Evaporative Emissions Standards

    Gasoline vapor emissions from vehicle fuel systems, which are a
mixture of hydrocarbon compounds, occur when a vehicle is in operation,
when it is parked, and when it is being refueled. Evaporative emissions
which occur daily from gasoline-powered vehicles are primarily
functions of air

and fuel temperature, fuel vapor pressure, and vehicle driving. EPA
first instituted evaporative emissions standards in the early 1970s to
address hydrocarbon emissions when vehicles are parked after being
driven. These are commonly referred to as hot soak and diurnal
emissions. Over the subsequent years the test procedures have been
modified and improved, the standards have been revised to be more
stringent, and we have addressed emissions which arose from new fuel
system designs by establishing new requirements such as running loss
emission standards and test procedure provisions which address resting
losses (e.g., permeation). Onboard refueling vapor recovery (ORVR)
requirements for control of refueling emissions first began to phase-in
for light-duty vehicles (LDVs) and light-duty trucks (LDTs) in the 1998
MY. These were later expanded to cover medium-duty passenger vehicles
(MDPVs) and some heavy-duty gasoline vehicles (HDGVs).
    Even though evaporative and refueling emission control systems have
been in place for most of these vehicles for many years, evaporative
emissions still contribute 30-40 percent of the on-road mobile source
hydrocarbon inventory. The rate of these emissions in grams/day (hot
soak and diurnal), grams/mile (running loss) or grams per gallon
(refueling) depends on (1) the stringency of the applicable emission
standards, (2) ambient and fuel temperature, (3) fuel vapor pressure,
and (4) the presence/state of repair of the fuel/evaporative control
system.
    These fuel vapor emissions are ozone and PM precursors, and also
contain air toxics such as benzene. Even though there are mature
evaporative emission control programs in place, further hydrocarbon
emission reductions are needed and can be achieved from further
evaporative emission controls on gasoline-powered highway motor
vehicles.
    This section discusses the vehicle evaporative emission standards
and related provisions for LDVs, LDTs, MDPVs, and HDGVs. The
evaporative emissions program has six basic elements: (1) The early
allowance program (MY 2015-2016), (2) the transitional program (MY
2017), (3) the Tier 3 evaporative emission phase-in program (MY 2018-
2021), (4) the fully phased-in standards (MY2022+), (5) requirements
for HDGVs including ORVR for the 2018MY, and (6) a leak standard and
test procedure which become mandatory for Tier 3 vehicles in the
2018MY. As discussed below, we are finalizing more stringent standards
that will apply for the 2- and 3-day evaporative emissions tests, a
canister bleed test procedure and emission standard, and a new
certification test fuel specification.\342\ As discussed in section
IV.D, we are also adding a fuel/vapor system leak standard and test
procedure for LDVs, LDTs, and MDPVs. EPA is not changing any existing
light-duty running loss or refueling emission standards with the Tier 3
FRM, with the exception of the certification test fuel specification
and the addition of a refueling emission controls for complete HDGVs
over 10,000 lbs gross vehicle weight rating (GVWR). This section also
describes phase-in flexibilities, credit and allowance programs, and
other issues related to evaporative emissions control.
---------------------------------------------------------------------------

    \342\ Certification fuel provisions for evaporative and
refueling emissions testing for flexible fuel vehicles (FFVs) are
discussed separately below.
---------------------------------------------------------------------------

    In this rule, the vehicle classifications, LDVs, LDTs, MDPVs, and
HDGVs, remain unchanged from Tier 2 (see 40 CFR 86.1803-010). For
purposes of this discussion of the Tier 3 evaporative emissions
program, the vehicle standards can be further placed in four
categories: (1) ``zero evaporative emission'' PZEV vehicles certified
by CARB as part of the ZEV program, (2) vehicles certified by CARB to
meet LEV III evaporative emission program requirements on CARB
certification fuel (7 RVP E10) as early as 2014 MY, (3) vehicles
meeting the Tier 3 evaporative emissions program requirements using the
Tier 3 certification test fuel (9 RVP E10), and (4) transitional
vehicles meeting existing EPA evaporative requirements on Tier 2
certification test fuel (9 RVP E0).343 344 For ease of
reference these four categories may be referred to as PZEV evap, LEV
III evap, Tier 3 evap, and Tier 2/MSAT evap in this section.\345\
---------------------------------------------------------------------------

    \343\ We adopted the most recent vehicle evaporative emission
standards for LDVs, LDTs, and MDPVs in 2007 (72 FR 8428, February
26, 2007). The most recent standards for HDGVs were adopted in 2000
(66 FR 5165, January 18, 2001).
    \344\ See Section IV.F for a discussion of the final
certification fuel provisions, including discussion of options for
and implications of the certification test fuel having 10 percent
ethanol.
    \345\ ``PZEV evap'' as discussed here refers only to the
evaporative emission and useful life requirements of the PZEV
program, not the exhaust emission requirements.
---------------------------------------------------------------------------

1. Tier 3 Evaporative Emission Standards
a. Final Standards
    The Tier 3 program for evaporative emissions builds on previous EPA
requirements as well as the evaporative emissions portion of CARB's
recent LEV III rule which starts mandatory phase-in with the 2018 MY.
The level of the standards, the timing of their implementation, and
related provisions are designed in great measure to allow manufacturers
to design, certify, and build one control system for each evaporative/
refueling family to meet CARB and EPA requirements so that these
vehicles can be sold in all 50 states. Commenters supported this
approach and no commenter opposed the stringency or timing of the
evaporative emission standards and related test procedures. We believe
the program is appropriate since it will require new more stringent
evaporative emissions control technology in new vehicles and also
achieve improved in-use system performance.
    Section IV.C.1.a.i, which follows, describes the basic emission
standard levels for LDVs, LDTs, MDPVs, and HDGVs. Section IV.C.1.a.ii,
describes a new canister bleed standard and testing requirement for
measuring emissions from the evaporative canister. Section IV.C.1.a.iii
discusses the optional use of the CARB LEV III Option 1 evaporative
emission standards during a transition period. Next, Section
IV.C.1.a.iv discusses interim use of CARB PZEV zero evap data based on
CARB Phase II fuel. Finally section IV.C.1.a.iv, discusses the ongoing
requirement to meet running loss emission standards.
i. Hot Soak Plus Diurnal Standards
    The Tier 3 hot soak plus diurnal emission standards are designed to
bring into the broader motor vehicle fleet the ``zero evap'' technology
used by the manufacturers in their partial zero emission vehicles
(PZEVs). Manufacturers developed this ``zero evap'' technology as part
of their response to meeting the requirements of the CARB Zero Emission
Vehicle (ZEV) program. This program, which is in effect in 11 other
states, allows manufacturers to meet their ZEV mandate percentages
(totally or in-part) by the use of vehicles which among other
characteristics have very low fuel vapor emissions.
    The hot soak plus diurnal emission standards we are adopting
(presented in Table IV-19) are designed to be met with technology that
limits Tier 3 vehicles to essentially zero fuel vapor emissions. For
the Tier 3 evaporative emissions program, we are not changing the basic
2-and 3-day evaporative emission test procedures other than the
certification fuel requirements. The level of the standards primarily
accommodates what is often referred to as new vehicle background
hydrocarbon emissions. These emissions arise from the off-gassing of
volatile hydrocarbons from plastics, rubbers, and other

polymers found in new vehicles (e.g., new tires, interiors, seats, fuel
system components, paints, and adhesives). In the field these emissions
decrease over time as the vehicle ages, but this cannot necessarily be
replicated in the time that manufacturers typically allocate for
vehicle certification or with the techniques normally used for vehicle
pre-conditioning. Provisions related to vehicle pre-conditioning before
evaporative emissions certification testing are discussed further
below.
    In the past EPA has set relatively uniform (but not identical)
evaporative emission standards for LDVs and LDTs and somewhat higher
values for MDPVs and HDGVs. The Tier 3 hot soak plus diurnal emission
standards follow this approach, because in general the vehicles have
higher levels of non-fuel background emissions as they get larger.
    As described in more detail in Section IV.C.2.d below, EPA is
finalizing a program that will allow manufacturers to demonstrate
compliance with the hot soak plus diurnal evaporative emission
standards using averaging concepts. A manufacturer may comply by
averaging within each of the four vehicle categories but for the
reasons discussed below, may not rely on averaging across categories.
The technical approaches to meeting the standards are discussed in
Section IV.C.2.

            Table IV-19 Final Evaporative Emission Standards
                          [g/test] \a\ \b\ \c\
------------------------------------------------------------------------
                                                    Highest hot soak +
                                                   diurnal level (over
        Vehicle category/averaging sets            both 2-day and 3-day
                                                      diurnal tests)
------------------------------------------------------------------------
LDV, LDT1......................................                    0.300
LDT2...........................................                    0.400
LDT3, LDT4, MDPV...............................                    0.500
HDGVs..........................................                    0.600
------------------------------------------------------------------------
\a\ The standards are in grams of hydrocarbons as measured by flame
  ionization detector during the diurnal and hot soak emission tests in
  the enclosure known as the sealed housing for evaporative
  determination (SHED).
\b\ Note that the standards are the same for both tests; existing
  standards are slightly different for the 2- and 3-day tests.
\c\ Vehicle categories are the same as in EPA's Tier 2 final rule; see
  65 FR 6698, February 10, 2000.

ii. Canister Bleed Emission Standard
    In addition to more stringent hot soak plus diurnal standards, EPA
is finalizing a new canister bleed emission test procedure and standard
as part of the Tier 3 program. The canister bleed test procedure is
described in Section IV.C.6 below. EPA is adopting the canister bleed
standard because it is an important tool in moving Tier 3 evaporative
emissions control toward zero fuel vapor emissions. No commenter
opposed the canister bleed standard or commented on the test procedure.
The new test and standard align with the California LEV III
requirements and help to ensure that near-zero fuel vapor emissions are
being emitted by vehicles from the fuel tank through the evaporative
emission canister. Manufacturers will be required to measure diurnal
emissions over the 2-day diurnal test procedure from just the fuel tank
and the evaporative emission canister using Tier 3 certification fuel
and comply with a 0.020 g/test standard for all LDVs, LDTs, and MDPVs
and 0.030 g/test for HDGVs. The feasibility of this standard is
discussed in Section IV.C.3 below. The canister bleed test and standard
drives canister design elements such as total gasoline working
capacity, internal architecture, and the type of carbon used. These are
also key elements of canister design for the hot soak plus diurnal
emission standards.
    The canister bleed standard will be implemented differently than
the hot soak plus diurnal standard. EPA is not applying the averaging
program to this new bleed test standard as compliance is relatively
straightforward and low in cost. Therefore, each evaporative/refueling
emission family certified by manufacturers will need to demonstrate
compliance with their respective standard. As discussed below, the
canister bleed standard will not apply at high altitude, but
proportional control is expected. Since the performance of the canister
is also evaluated in the hot soak plus diurnal evaporative emissions
sealed housing for evaporative determination (SHED) test the canister
bleed emission standard will not be included in the In-Use Verification
Program of under 40 CFR 86.1845 through 1853, but it must be met in
use. We will not have canister bleed specific family criteria for
certification but the test will have to be completed and the standard
met for each evaporative/refueling family including potentially twice
if there are two canisters used. A deterioration factor will not be
required, but the manufacturer must certify that the standard will be
met for the full useful life. As mentioned above, the standard will
have to be met in-use and could be evaluated in EPA confirmatory
testing.
    The canister bleed standard will have to be met using the same
fuels and test procedures used for the hot soak plus diurnal standards.
We will accept results on either CARB or EPA test fuels/test
temperatures for the canister bleed test provided the same are used for
the hot soak plus diurnal test.
iii. Hot Soak Plus Diurnal Standard With the Fuel System Rig Test
    As part of its LEV III program, CARB has included an alternative
set of evaporative emission standards, referred to as Option 1
standards. These are shown in Table IV-20.

                            Table IV-20 CARB--Option 1 Evaporative Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                             Highest hot soak + diurnal level
                                                              (over both 2- and 3-day diurnal
                     Vehicle category                                tests)  (g/test)           Running loss (g/
                                                           ------------------------------------       mile)
                                                              Vehicle SHED        Rig SHED
----------------------------------------------------------------------------------------------------------------
Passenger Car.............................................             0.350               0.0              0.05
LDT <= 6,000 lbs GVWR.....................................             0.500               0.0              0.05
All other vehicles > 6,000 lbs GVWR.......................             0.750               0.0              0.05
----------------------------------------------------------------------------------------------------------------

    The Option 1 standards include evaporative emission standards (hot
soak plus diurnal) that are slightly higher numerically than our final
standards. Vehicles certified under this option may not use averaging
in the CARB LEV III program because they basically represent the same
evaporative emission standards as exist for PZEVs under CARBs ZEV
program wherein averaging is not permitted. Option 1 also includes an
additional SHED test of the vehicle fuel system (rig test) that pre-
dates development of the canister bleed emission standard. The rig SHED
test is discussed in Section IV.C.6. From a practical perspective, this
test is more difficult to conduct than the bleed test discussed above
and is intended to force manufacturers to demonstrate at certification
that their stand alone (not in chassis) fuel/vapor control system
designs have <= 54 mg fuel vapor emissions.\346\ While one commenter
was in favor of permanently including Option 1 in the EPA final rule
based on what it viewed to be favorable pre-production engineering
design features of the rig SHED test, EPA is including Option 1 only as
interim compliance alternative for a limited period of time but not as
a permanent option in the Tier 3 evaporative emission program. While we
see the value to vehicle manufacturers of the rig SHED test as an
engineering design and development tool, by its very nature, the rig
SHED test and standard is not implementable as an enforceable standard
because a fuel system cannot be removed from a vehicle and
reconstructed in a SHED for testing without compromising its
fundamental structural and mechanical integrity as it existed on the
vehicle. We believe that the hot soak plus diurnal SHED test and
standard and the canister bleed test and standard will accomplish the
objective of keeping fuel vapor emissions to a minimum while doing so
in an enforceable manner.
---------------------------------------------------------------------------

    \346\ Any value < 54mg rounds down to zero under the
regulations.
---------------------------------------------------------------------------

    EPA believes most manufacturers will prefer to certify to the
averaging based standards in Table IV-1 (similar in stringency and
program construct to CARB Option 2). However, because some
manufacturers may have vehicle models meeting the CARB Option 1
standards and emission requirements now or in the near future, EPA will
allow compliance with the CARB Option 1 standards as an acceptable
interim alternative to compliance with the Tier 3 evaporative emission
standards if the model is certified by CARB to LEV III requirements
before the 2017 MY. These vehicles could then be certified using
carryover provisions through the 2021 MY as part of the evaporative
emissions phase-in described below. This is two model years longer than
in the proposal, but this extension is reasonable given the life cycle
of most fuel/vapor control systems and the goal of aligning with the
LEV III program for a national program where possible.\347\ As noted in
the following sections, vehicles certified under this provision will
count toward the phase-in percentage requirements and could earn
allowances as discussed below, but the vehicles will not be eligible to
earn or use credits for the evaporative emissions averaging program.
Carryover vehicles will have to meet the EPA leak standard and the high
altitude emission standard to be counted toward the sales percentage
requirements for 2018 and later model years.
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    \347\ EPA is incorporating by reference the CARB Option 1 test
procedures and emission standards for this interim period.
---------------------------------------------------------------------------

iv. Interim Carryover of PZEV Evap Data for Tier 3 Certification
    To earn credits toward compliance with the CARB Zero Evaporative
Emissions (ZEV) program requirements, many manufacturers have certified
LDVs and LDTs to 150,000 mile useful life emission standards similar to
those found in Table IV-20. These vehicles have used CARB Phase II fuel
(E0) and met the rig SHED test requirement in lieu of the canister
bleed standard, but otherwise have employed the same basic technology
EPA expects for the LEV III and Tier 3 programs. EPA is permitting data
generated from certification of these vehicles in the 2015 and 2016 MYs
to be used for Tier 3 evaporative emissions purposes through the 2019
MY.
v. Running Loss Emission Standards
    EPA has required vehicles to meet running loss emission standards
since the 1996 model year. These requirements, which are specified in
40 CFR 86.134-96, apply to all gasoline-powered highway motor vehicles.
EPA is not changing either the test procedures or emission standard for
the running loss test. However, the change in certification test fuel
will apply to testing for such standards. This is appropriate based on
the rationale for implementing a certification fuel change and is
necessary since the running loss test is part of the overall test
sequence for the 3-day hot soak plus diurnal test. EPA does not
anticipate that the change in certification test fuel will impact the
stringency of the running loss test and standards or the manufacturers'
ability to comply as part of Tier 3.
b. High-Altitude Requirements
    Prior to this rule, the most recent vehicle evaporative emission
standards were adopted in 2007.\348\ The new standards adopted in 2007
apply only to testing under low-altitude conditions.\349\ In the 2007
rule, we decided to continue to apply the previous ``Tier 2'' standards