2007, 2008 and 2009 dollars to 2010 dollars are shown below.

                            Table II-17--GDP Price Deflators Used in This Final Rule
----------------------------------------------------------------------------------------------------------------
                                                       2007            2008            2009            2010
----------------------------------------------------------------------------------------------------------------
Price Index for Gross Domestic Product..........          106.2           108.6           109.7           111.0
Factor applied to convert to 2010 dollars.......            1.04            1.02            1.01            1.00
----------------------------------------------------------------------------------------------------------------
Source: Bureau of Economic Analysis, Table 1.1.4. Price Indexes for Gross Domestic Product, downloaded 2/9/2012,
  last revised 1/27/2012.

d. Cost Effects Due to Learning
    The agencies have not changed the approach to manufacturer learning
since the proposal. For many of the technologies considered in this
rulemaking, the agencies expect that the industry should be able to
realize reductions in their costs over time as a result of ``learning
effects,'' that is, the fact that as manufacturers gain experience in
production, they are able to reduce the cost of production in a variety
of ways. For this rule, the agencies continue to apply learning effects
in the same way as we did in both the MYs 2012-2016 final rule and in
the 2010 TAR. However, in the proposal, we employed some new
terminology in an effort to eliminate some confusion that existed with
our old terminology. (This new terminology was described in the recent
heavy-duty GHG final rule (see 76 FR 57320)). Our old terminology
suggested we were accounting for two completely different learning
effects--one based on volume production and the other based on time.
This was not the case since, in fact, we were actually relying on just
one learning phenomenon, that being the learning-by-doing phenomenon
that results from cumulative production volumes.
    As a result, the agencies have also considered the impacts of
manufacturer learning on the technology cost estimates by reflecting
the phenomenon of volume-based learning curve cost reductions in our
modeling using two algorithms depending on where in the learning cycle
(i.e., on what portion of the learning curve) we consider a technology
to be--``steep'' portion of the curve for newer technologies and
``flat'' portion of the curve for more mature technologies. The
observed phenomenon in the economic literature which supports
manufacturer learning cost reductions are based on reductions in costs
as production volumes increase with the highest absolute cost reduction
occurring with the first doubling of production. The agencies use the
terminology ``steep'' and ``flat'' portion of the curve to distinguish
among newer technologies and more mature technologies, respectively,
and how learning cost reductions are applied in cost analyses.
    Learning impacts have been considered on most but not all of the
technologies expected to be used because some of the expected
technologies are already used rather widely in the industry and,
presumably, quantifiable learning impacts have already occurred. The
agencies have applied the steep learning algorithm for only a handful
of technologies considered to be new or emerging technologies such as
PHEV and EV batteries which are experiencing heavy development and,
presumably, rapid cost declines in coming years. For most technologies,
the agencies have considered them to be more established and, hence,
the agencies have applied the lower flat learning algorithm. For more
discussion of the learning approach and the technologies to which each
type of learning has been applied the reader is directed to Chapter 3
of the Joint TSD. NHTSA has further discussion in Chapter 7 of the
NHTSA FRIA. Note that, since the agencies had to project how learning
will occur with new technologies over a long period of time, we request
comments on the assumptions of learning costs and methodology. In
particular, we are interested in input on the assumptions for advanced
27-bar BMEP cooled exhaust gas recirculation (EGR) engines, which are
currently still in the experimental stage and not expected to be
available in volume production until 2017. For our analysis, we have
based estimates of the costs of this engine on current (or soon to be
current) production technologies (e.g., gasoline direct injection fuel
systems, engine downsizing, cooled EGR, 18-bar BMEP capable
turbochargers), and assumed that, since learning (and the associated
cost reductions) begins in 2012 for them that it also does for the
similar technologies used in 27-bar BMEP engines.
    The agencies did not receive comments on the issue of manufacturer
learning.
3. How did the agencies determine the effectiveness of each of these
technologies?
    For this final rule, EPA has conducted another peer reviewed study
with the global engineering consulting firm, Ricardo, Inc., adding to
and refining the results of the 2007 study, consistent with a longer-
term outlook through model years MYs 2017-2025. The 2007 study was a
detailed, peer reviewed vehicle simulation project to quantify the
effectiveness of a multitude of technologies for the MYs 2012-2016 rule
(as well as the 2010 NOI) published in 2008. The extent of the new
study was vast, including hundreds of thousands of vehicle simulation
runs. The results were, in turn, employed to calibrate and update EPA's
lumped parameter model, which is used to quantify the synergies and
dis-synergies associated with combining technologies together for the
purposes of generating

inputs for the agencies respective OMEGA and CAFE modeling.
    Additionally, there were a number of technologies that Ricardo did
not model explicitly. For these, the agencies relied on a variety of
sources in the literature. A few of the values are identical to those
presented in the MYs 2012-2016 final rule, while others were updated
based on the newer version of the lumped parameter model. More details
on the Ricardo simulation, lumped parameter model, as well as the
effectiveness for supplemental technologies are described in Chapter 3
of the Joint TSD.
    The agencies note that the effectiveness values estimated for the
technologies considered in the modeling analyses may represent average
values, and do not reflect the virtually unlimited spectrum of possible
values that could result from adding the technology to different
vehicles. For example, while the agencies have estimated an
effectiveness of 0.6 to 0.8 percent for low-friction lubricants,
depending on the vehicle class, each vehicle could have a unique
effectiveness estimate depending on the baseline vehicle's oil
viscosity rating. Similarly, the reduction in rolling resistance (and
thus the improvement in fuel economy and the reduction in
CO2 emissions) due to the application of low rolling
resistance tires depends not only on the unique characteristics of the
tires originally on the vehicle, but on the unique characteristics of
the tires being applied, characteristics that must be balanced between
fuel efficiency, safety, and performance. Aerodynamic drag reduction is
much the same--it can improve fuel economy and reduce CO2
emissions, but it is also highly dependent on vehicle-specific
functional objectives. For purposes of this rule, NHTSA and EPA believe
that employing average values for technology effectiveness estimates,
as adjusted depending on vehicle class, is an appropriate way of
recognizing the potential variation in the specific benefits that
individual manufacturers (and individual vehicles) might obtain from
adding a fuel-saving technology.
    As discussed in the proposal, the U.S. D.O.T. Volpe Center entered
into a contract with Argonne National Laboratory (ANL) to provide full
vehicle simulation modeling support for this MYs 2017-2025 rulemaking.
While modeling was not complete in time for use in the NPRM, the ANL
results were available for the final rule and were used to define the
effectiveness of mild hybrids for both agencies, and NHTSA used the
results to update the effectiveness of advanced transmission
technologies coupled with naturally-aspirated engines for the CAFE
analysis, as discussed in the Joint TSD and more fully in NHTSA's RIA.
This simulation modeling was accomplished using ANL's full vehicle
simulation tool called ``Autonomie,'' which is the successor to ANL's
Powertrain System Analysis Toolkit (PSAT) simulation tool, and that
includes sophisticated models for advanced vehicle technologies. The
ANL simulation modeling process and results are documented in multiple
reports and are peer reviewed. Both the ANL reports and peer review
report can be found in NHTSA's docket.\258\
---------------------------------------------------------------------------

    \258\ Docket No: NHTSA-2010-0131.
---------------------------------------------------------------------------

4. How did the agencies consider real-world limits when defining the
rate at which technologies can be deployed?
a. Refresh and Redesign Schedules
    During MYs 2017-2025 manufacturers are expected to go through the
normal automotive business cycle of redesigning and upgrading their
light-duty vehicle products, and in some cases introducing entirely new
vehicles not in the market today. The MYs 2017-2025 standards timeframe
allows manufacturers the time needed to incorporate GHG reduction and
fuel-saving technologies into their normal business cycle while
considering the requirements of the MYs 2012-2016 standards. This is
important because it has the potential to avoid the much higher costs
that could occur if manufacturers need to add or change technology at
times other than their scheduled vehicle redesigns. This time period
also provides manufacturers the opportunity to plan for compliance
using a multi-year time frame, again consistent with normal business
practice. Over these 9 model years, and the 5 prior model years that
make up the MYs 2012-2016 standards, there will be an opportunity for
manufacturers to evaluate, presumably, every one of their vehicle
platforms and models and add technology in a cost effective way to
control GHG emissions and improve fuel economy. This includes all the
technologies considered here and the redesign of the air conditioner
systems in ways that will further reduce GHG emissions and improve fuel
economy.
    Because of the complexities of the automobile manufacturing
process, manufacturers are generally only able to add new technologies
to vehicles on a specific schedule; just because a technology exists in
the marketplace or is made available, does not mean that it is
immediately available for applications on all of a manufacturer's
vehicles. In the automobile industry there are two terms that describe
when technology changes to vehicles occur: redesign and refresh (i.e.,
freshening). Vehicle redesign usually refers to significant changes to
a vehicle's appearance, shape, dimensions, and powertrain. Redesign is
traditionally associated with the introduction of ``new'' vehicles into
the market, often characterized as the ``next generation'' of a
vehicle, or a new platform. Across the industry, redesign of models
generally takes place about every 5 years. However, while 5 years is a
typical design period, there are many instances where redesign cycles
can be longer or shorter. For example, it has generally been the case
that pickup trucks and full size vans have longer redesign cycles
(e.g., 6 to 7 years), while high-volume cars have shorter redesign
cycles in order to remain competitive in the market. There are many
other factors that can also affect redesign such as availability of
capital and engineering resources and the extent of platform and
component sharing between models, or even manufacturers.
    We have a more detailed discussion in Chapter 3.4 of the joint TSD
that describes how refresh and redesign cycles play into the modeling
each agency has done in support of the final standards.
b. Vehicle Phase-In Caps
    GHG-reducing and fuel-saving technologies for vehicle applications
vary widely in function, cost, effectiveness and availability. Some of
these attributes, like cost and availability vary from year to year.
New technologies often take several years to become available across
the entire market. The agencies use phase-in caps to manage the maximum
rate that the CAFE and OMEGA models can apply new technologies.
    Phase-in caps are intended to function as a proxy for a number of
real-world limitations in deploying new technologies in the auto
industry. These limitations can include but are not limited to,
engineering resources at the OEM or supplier level, restrictions on
intellectual property that limit deployment, and/or limitations in
material or component supply as a market for a new technology develops.
Without phase-in caps, the models may apply technologies at rates that
are not representative of what the industry is actually capable of
producing, which would suggest that more stringent standards might be
feasible than actually would be.

    EPA applies the caps on an OEM vehicle platform basis for most
technologies. For a given technology with a cap of x%, this means that
x% of a vehicle platform can receive that technology. On a fleet
average basis, since all vehicle platforms can receive x% of this
technology, x% of a manufacturer's fleet can also receive that
technology. EVs and PHEVs are an exception to this rule as the agencies
limit the availability of these technologies to some subclasses. Unlike
other technologies, in order to maintain utility, EPA only allows non-
towing vehicle types to be electrified in the OMEGA model. As a result,
the PHEV and EV cap was applied so that the average manufacturer could
produce to the cap levels. As would be expected, manufacturers that
make more non-towing vehicles can have a higher fraction of their fleet
converted to EVs and PHEVs, while those that make fewer non-towing
vehicles have a lower potential maximum limit on EV and PHEV
production.
    NHTSA applies phase-in caps in addition to refresh/redesign cycles
used in the CAFE model, which constrain the rate of technology
application at the vehicle level so as to ensure a period of stability
following any modeled technology applications, Unlike vehicle-level
cycle settings, phase-in caps, defined on a percent per year basis,
constrain technology application at the OEM level. As discussed above
phase-in caps are intended to reflect a manufacturer's overall resource
capacity available for implementing new technologies (such as
engineering and development personnel and financial resources) thereby
ensuring that resource capacity is accounted for in the modeling
process. At a high level, phase-in caps and refresh/redesign cycles
work in conjunction with one another to avoid the CAFE modeling process
out-pacing an OEM's limited pool of available resources during the
rulemaking time frame, especially in years where many models may be
scheduled for refresh or redesign. This helps to ensure technological
feasibility and economic practicability in determining the stringency
of the standards.
    We have a more detailed discussion of phase-in caps in Chapter 3.4
of the joint TSD.
5. Maintenance and Repair Costs Associated With New Technologies
    In the proposal, we requested comment on maintenance, repair, and
other operating-costs and whether these might increase or decrease with
the new technologies. (See 76 FR 74925) We received comments on this
topic from NADA. These comments stated that the agencies should include
maintenance and repair costs in estimates of total cost of ownership
(i.e., in our payback analyses).\259\ NADA proffered their Web site
\260\ as a place to find information on operating costs that might be
used in our final analyses. This Web site tool is meant to help
consumers quantify the cost of ownership of a new vehicle. The tool
includes estimates for depreciation, fees, financing, insurance, fuel
maintenance, opportunity costs and repairs for the first five years of
ownership. The agencies acknowledge that the tool may be useful for
consumers; however, there is no information provided on how these
estimates were determined. Without documentation of the basis for
estimates, the Web site information is of limited use in this
rulemaking where the agencies document the source and basis for each
factual assertion. There are also evident substantive anomalies in the
Web site information.\261\ For these reasons, the agencies have
performed an independent analysis to quantify maintenance costs.
---------------------------------------------------------------------------

    \259\ See NADA (EPA-HQ-OAR-2010-0799-0639, p.10).
    \260\ http://www.nadaguides.com/Cars/Cost-to-Own.
    \261\ For example, comparing the 2012 Hyundai Sonata showed the
same cost for fuel ($11,024) regardless of whether it is a hybrid
option or not. The HEV fuel economy rating is 35/40 mpg City/Highway
for the HEV and 2.4L non HEV rating is 24/35. Another example is the
2012 Ford Fusion SEL: the front wheel drive and the all-wheel drive
versions have identical fuel cost despite having different fuel
economies.
---------------------------------------------------------------------------

    For the first time in CAFE and GHG rulemaking, both agencies now
include maintenance costs in their benefit-cost analyses and in their
respective payback analyses. This analysis is presented in Chapter 3.6
of the joint TSD and the maintenance intervals and costs per
maintenance event used by both agencies are summarized in Table II-18.
For information on how each agency has folded the maintenance costs
into their respective final analyses, please refer to each agency's
respective RIA (Chapter 5 of EPA's RIA, Chapter VIII of NHTSA's FRIA).

                                Table II-18--Maintenance Event Costs & Intervals
                                                 [2010 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Maintenance
                New technology                           Reference case             maintenance      interval
                                                                                event          (mile)
----------------------------------------------------------------------------------------------------------------
Low rolling resistance tires level 1..........  Standard tires..................           $6.44          40,000
Low rolling resistance tires level 2..........  Standard tires..................           43.52          40,000
Diesel fuel filter replacement................  Gasoline vehicle................           49.25          20,000
EV oil change.................................  Gasoline vehicle................          -38.67           7,500
EV air filter replacement.....................  Gasoline vehicle................          -28.60          30,000
EV engine coolant replacement.................  Gasoline vehicle................          -59.00         100,000
EV spark plug replacement.....................  Gasoline vehicle................          -83.00         105,000
EV/PHEV battery coolant replacement...........  Gasoline vehicle................          117.00         150,000
EV battery health check.......................  Gasoline vehicle................           38.67          15,000
----------------------------------------------------------------------------------------------------------------
Note: Negative values represent savings due to the EV not needing the maintenance required of the gasoline
  vehicle; EPA applied a battery coolant replacement cost to PHEVs and EVs, while NHTSA applied it to EVs only.

E. Joint Economic and Other Assumptions

    The agencies' analysis of CAFE and GHG standards for the model
years covered by this final rule rely on a range of forecast
information, estimates of economic variables, and input parameters.
This section briefly describes the sources of the agencies' estimates
of each of these values. These values play a significant role in
assessing the benefits of both CAFE and GHG standards.
    In reviewing these variables and the agencies' estimates of their
values for purposes of this final rule, NHTSA and EPA considered
comments received in

response to the proposed rule, and also reviewed newly available
literature. For this final rule, we made several changes to the
economic assumptions used in our proposed rule, including revised
technology costs to reflect more recently available data; updated
values of the cost of owning a vehicle based on new data; updated fuel
price and transportation demand forecasts that reflect the Annual
Energy Outlook (AEO) 2012 Early Release; and changes to vehicle miles
travelled (VMT) schedules, survival rates, and projection methods. The
final values summarized below are discussed in greater detail in
Chapter 4 of the joint TSD and elsewhere in the preamble and in the
agencies' respective RIAs.
     Costs of fuel economy-improving technologies--These inputs
are discussed in summary form in Section II.D above and in more detail
in the agencies' respective sections of this preamble, in Chapter 3 of
the joint TSD, and in the agencies' respective RIAs. The direct
manufacturing cost estimates for fuel economy improving and GHG
emissions reducing technologies that are used in this analysis are
intended to represent manufacturers' direct costs for high-volume
production of vehicles equipped with these technologies in the year for
which we state the cost is considered ``valid.'' Technology direct
manufacturing cost estimates are the same as those used to analyze the
proposed rule, with the exception of those for hybrid electric
vehicles, plug-in hybrid electric vehicle (PHEV) and electric vehicle
(EV) battery costs which have been updated using an updated version of
Argonne National Laboratory's (ANL's) BatPaC model.\262\ Indirect costs
are accounted for by applying near-term indirect cost multipliers
ranging from 1.24 to 1.77 to the estimates of vehicle manufacturers'
direct costs for producing or acquiring each technology, depending on
the complexity of the technology and the time frame over which costs
are estimated. These values are reduced to 1.19 to 1.50 over the long
run as some aspects of indirect costs decline. As explained at
proposal, the indirect cost markup factors have been revised from the
MYs 2012-2016 rulemaking and the Interim Joint TAR to reflect the
agencies current thinking regarding a number of issues. The final rules
use the same factors the agencies used at proposal. These factors are
discussed in detail in Section II.D.2 of this preamble and in Chapter 3
of the joint TSD, where we also discuss comments received on the
proposal and our response to them. Details of the agencies' technology
cost assumptions and how they were derived can be found in Chapter 3 of
the joint TSD. We did not receive specific comments on our estimated
technology direct manufacturing costs.
---------------------------------------------------------------------------

    \262\ Technology direct manufacturing cost estimates for most
technologies are fundamentally unchanged from those used by the
agencies in the MYs 2012-2016 final rule, the heavy-duty truck rule
(to the extent relevant), and TAR, although the agencies have
revised costs for mass reduction, transmissions, and a few other
technologies from those used in these earlier regulatory actions and
analyses.
---------------------------------------------------------------------------

     Potential opportunity costs of improved fuel economy--This
issue addresses the possibility that achieving the fuel economy
improvements required by alternative CAFE or GHG standards would
require manufacturers to compromise the performance, carrying capacity,
safety, or comfort of their vehicle models. If this were the case, the
resulting sacrifice in the value of these attributes to consumers would
represent an additional cost of achieving the required improvements,
and thus of manufacturers' compliance with stricter standards.
Currently the agencies assume that these vehicle attributes will not
change as a result of these rules. Section II.C above and Chapter 2 of
the joint TSD describe how the agencies carefully selected an
attribute-based standard to minimize manufacturers' incentive to reduce
vehicle capabilities. While manufacturers may choose to do this for
other reasons, the agencies continue to believe that the rules
themselves will not result in such changes. Importantly, EPA and NHTSA
have sought to include the cost of maintaining these attributes as part
of the cost and effectiveness estimates for technologies that are
included in the analysis for this final rule. For example, downsized
engines are assumed to be turbocharged, so that they provide the same
performance and utility even though they are smaller, and the costs of
turbocharging and downsizing are included in the agencies' cost
estimates.\263\ The two instances where the rules might result in loss
of vehicle utility, as described in Section III.D.3, III.H.1.b, and
Section IV.G, involve cases where vehicles are converted to hybrid or
full electric vehicles (EVs) and some buyers may experience a loss of
welfare due to the reduced range of driving on a single charge compared
to the range of an otherwise similar gasoline vehicle. However, in such
cases, we believe that sufficient options would exist for consumers
concerned about the possible loss of this utility (e.g., they could
purchase the non-hybridized version of the vehicle or not buy an EV)
that the agencies do not attribute a welfare loss for these vehicles
resulting from the final rules. Though some comments raised concerns
over consumer acceptance of EVs, other comments expressed optimism that
consumer interest in EVs would be sufficient for the low levels of
adoption projected in these rules to be used for compliance with the
standards. The agencies maintain their assumption that purchasers of
EVs will not incur welfare losses given that they will have sought out
vehicles with these properties. Moreover, given the modest levels of EV
penetration which the agencies project as a compliance strategy for
manufacturers, the agencies likewise do not project any general loss of
societal welfare since many other compliance alternatives remain
available to manufacturers and thus to vehicle purchasers.
---------------------------------------------------------------------------

    \263\ The modeling work underlying the agencies' estimates of
technology effectiveness build in the need to maintain vehicle
performance (utility). See chapter 3.2 of the Joint TSD for details
behind these effectiveness estimates. Our technology costs include
all costs of implementing the technologies required to achieve these
effectiveness values while maintaining performance and other
utility. Thus, the costs of maintaining performance and other
utility are an inherent element of the agencies' cost estimation
process. The agencies consequently believe it reasonable to conclude
that there will be no loss of vehicle utility as a direct result of
these final rules. The agencies also do not believe that adding
fuel-saving technology should preclude future improvements in
performance, safety, or other attributes, though it is possible that
the costs of these additions may be affected by the presence of
fuel-saving technology.
---------------------------------------------------------------------------

    Consumer vehicle choice modeling is a method to understand and
predict what vehicles consumers might buy. In principle these models
can be used to estimate the effects of these rules on vehicle sales and
fleet mix. In practice, though, past analyses using such models have
not produced consistent estimates of how buyers might respond to
improved fuel economy, and it is difficult to decide whether one data
source, model specification, or estimation procedure is clearly
preferable over another. Thus, for these final rules, the agencies
continue to use forecasts of total industry sales, the share of total
sales accounted for by passenger cars, and the market shares of
individual models for all years between 2010 and 2025 that do not vary
among regulatory alternatives.
    The agencies requested comment on how to estimate explicitly the
changes in vehicle buyers' choices and welfare from the combination of
higher prices for new vehicle models, increases in their fuel economy,
and any accompanying changes in vehicle attributes such as performance,
passenger- and cargo-carrying capacity, or other dimensions of utility.
Some

commenters considered vehicle choice models too uncertain for use in
this rulemaking, while another requested that we conduct explicit
consumer vehicle choice modeling (although without providing a
justification as to which models to use or why any particular modeling
approach is likely to generate superior estimates). Because the
agencies have not yet developed sufficient confidence in their vehicle
choice modeling efforts, we believe it is premature to use them in this
rulemaking. The agencies have continued to explore the possible use of
these models, as discussed in Sections III.H.1.a and IV.G.6, below.
     The on-road fuel economy ``gap'' -- Actual fuel economy
levels achieved by light-duty vehicles in on-road driving fall somewhat
short of their levels measured under the laboratory test conditions
used by EPA to establish compliance with CAFE and GHG standards (and
which is mandated by statute for measuring compliance with CAFE
passenger car standards) \264\. The modeling approach in this final
rule is consistent with the proposal, and also follows the MYs 2012-
2016 final rule and the Interim Joint TAR. In calculating benefits of
the program, the agencies estimate that actual on-road fuel economy
attained by light-duty models that operate on liquid fuels will be 20
percent lower than their fuel economy ratings as measured for purposes
of CAFE fuel economy testing. For example, if the measured CAFE fuel
economy value of a light truck is 20 mpg, the on-road fuel economy
actually achieved by a typical driver of that vehicle is expected to be
16 mpg (20*.80).\265\ Based on manufacturer confidential business
information, as well as data derived from the 2006 EPA fuel economy
label rule, the agencies use a 30 percent gap for consumption of wall
electricity for electric vehicles and plug-in hybrid electric
vehicles.\266\ The U.S. Coalition for Advanced Diesel Cars suggested
that the on-road gap used in the proposal was overly conservative at
20%, and that advanced technology vehicles may have on-road gaps that
are larger than current vehicles. The agencies recognize the potential
for future changes in driver behavior or vehicle technology to change
the on-road gap to be either larger or smaller. The agencies continue
to use the same estimates of the on-road gap as in the proposed rule
for estimating fuel savings and other impacts, and will monitor the EPA
fuel economy database as these future model year vehicles enter the
fleet.
---------------------------------------------------------------------------

    \264\ 49 U.S.C. 32904(c).
    \265\ U.S. Environmental Protection Agency, Final Technical
Support Document, Fuel Economy Labeling of Motor Vehicle Revisions
to Improve Calculation of Fuel Economy Estimates, EPA420-R-06-017,
December 2006. (Docket No. EPA-HQ-OAR-2010-0799-1125).
    \266\ See 71 FR 77887, and U.S. Environmental Protection Agency,
Final Technical Support Document, Fuel Economy Labeling of Motor
Vehicle Revisions to Improve Calculation of Fuel Economy Estimates,
EPA420-R-06-017, December 2006 for general background on the
analysis. See also EPA's Response to Comments (EPA-420-R-11-005,
Docket No. EPA-HQ-OAR-2010-0799-1113) to the 2011 labeling rule,
page 189, first paragraph, specifically the discussion of the
derived five cycle equation and the non-linear adjustment with
increasing MPG.
---------------------------------------------------------------------------

     Fuel prices and the value of saving fuel--Projected future
fuel prices are a critical input into the preliminary economic analysis
of alternative standards, because they determine the value of fuel
savings both to new vehicle buyers and to society, and fuel savings
account for the majority of the rule's estimated benefits. For these
rules, the agencies are using the most recent fuel price projections
from the U.S. Energy Information Administration's (EIA) Annual Energy
Outlook (AEO) 2012 Early Release reference case. The projections of
fuel prices reported in EIA's AEO 2012 Early Release extend through
2035. Fuel prices beyond the time frame of AEO's forecast were
estimated by applying the average growth rate for the years 2017-2035
for each year after 2035. This is the same general methodology used by
the agencies in the analysis for the proposed rule, as well as in the
MYs 2012-2016 rulemaking, in the heavy duty truck and engine rule (76
FR 57106), and in the Interim Joint TAR. For example, the AEO 2012
Early Release projections of gasoline fuel prices (in constant 2010$)
are $3.63 per gallon in 2017, $3.76 in 2020, and $4.09 in 2035.
Extrapolating as described above, retail gasoline prices are projected
to reach $4.57 per gallon in 2050 (measured in constant 2010 dollars).
Several commenters (Volkwagen, Consumer Federation of America,
Environmental Defense Fund, Consumer's Union, National Resources
Defense Council, Union of Concerned Scientists) stated that the EIA AEO
2011 future fuel price projections used in the proposal were similar to
current prices, and thus were modest, or lower than expected. The
agencies note that if a higher fuel prices projection were used, it
would increase the value of the fuel savings from the rule, while a
lower fuel price projection would decrease the value of the fuel
savings from the rule. Another commenter noted the uncertainty
projecting automotive fuel prices during this extended time period
(National Auto Dealers' Association). As discussed in Chapter 4 of the
Joint TSD, while the agencies believe that EIA's AEO reference case
generally represents a reasonable forecast of future fuel prices for
use in our analysis of the benefits of this rule, we recognize that
there is a great deal of uncertainty in future fuel prices. However,
given that no commenters offered alternative sources for fuel price
projections, and the agencies have found no better source since the
NPRM, in this final rulemaking the agencies continue to rely upon EIA
projections of future gasoline and diesel prices.
     Consumer cost of ownership and payback period--The
agencies provide, in Sections III.H.3 and IV.G.4, estimates of the
impacts of these rules on the net costs of owning new vehicles, as well
as the time period necessary for the fuel savings to outweigh the
expected increase in prices for the new vehicles (i.e., the payback
period). These analyses focus specifically on the buyers' perspectives,
and therefore take into account the effect of the rule on insurance
premiums, sales tax, and finance charges. From a social perspective,
these are transfers of money from one group to another, rather than net
gains or losses, and thus have no net effect on the net benefits of the
rules. For instance, a sales tax is a cost to a vehicle buyer, but the
money does not represent economic resources that are consumed; instead,
it goes to finance state and local government activities, such as
schools or roads. The role of finance charges is to spread payments
over time, taking into account the opportunity cost of financing; this
is just a reversal of the process of discounting, and thus does not
affect the present value of the vehicle cost. Though the net benefits
analysis is not affected by these payments, from the buyers' viewpoint,
these are additional costs. In the NPRM, EPA included these factors in
its payback period analysis and asked for comment on them; no comments
were received. The agencies have updated these values for these final
rules; the details of the estimation of these factors are found in TSD
Chapter 4.2.13. Though the agencies use these common values for their
respective cost of ownership and payback period analyses, each agency's
estimates for the cost of ownership and the payback period differ due
to somewhat different estimates for vehicle cost increases and fuel
savings. Some comments encouraged our inclusion of maintenance and
repair costs in these calculations and the agencies have responded by
including maintenance costs in that analysis of the final rule.

The potential effects of the rule on maintenance and repair costs are
discussed in Sections III.H.2, IV.C.2, and Chapter 3.6 of the Joint
TSD. When a new vehicle is destroyed in an accident, the higher costs
of the replacement vehicle are already accounted for in the technology
costs of new vehicles sold, since some of these are purchased to
replace vehicles destroyed in accidents.\267\
---------------------------------------------------------------------------

    \267\ The agencies do not have information to estimate the
effect of the rule on repair costs for vehicles that are damaged but
not destroyed. Some repairs, such as minor dents, may be unaffected
by changes in vehicles; others may be more or less expensive.
Insurance premiums in principle could provide insight into the costs
of damages associated with more expensive vehicles, but, because
insurance premiums include costs for destroyed vehicles, which are
already implicitly covered in the sales estimates, it is not
possible to separately estimate the costs for repairs from insurance
data. See Joint TSD Chapter 3.6 for further discussion of this
issue.
---------------------------------------------------------------------------

     Vehicle sales assumptions--The first step in estimating
lifetime fuel consumption by vehicles produced during a model year is
to calculate the number of vehicles that are expected to be produced
and sold. The agencies relied on the AEO 2011 and AEO 2012 Early
Release Reference Cases for forecasts of total vehicle sales, while the
baseline market forecast developed by the agencies (discussed in
Section II.B and in Chapter 1 of the TSD) divided total projected sales
into sales of cars and light trucks.
     Vehicle lifetimes and survival rates--As in the analysis
for the proposed rule (and as in the MYs 2012-2016 final rule and
Interim Joint TAR), we apply updated values of age-specific survival
rates for cars and light trucks to the adjusted forecasts of passenger
car and light truck sales to determine the number of these vehicles
expected to remain in use during each year of their lifetimes. Since
the proposal, these values were updated using the same methodology with
which the original estimates were developed, together with recent
vehicle registration data obtained from R.L. Polk. No comments were
received on the vehicle lifetime and survival rates in the proposal.
     Vehicle miles traveled (VMT)--We calculated the total
number of miles that cars and light trucks produced in each model year
will be driven during each year of their lifetimes using estimates of
annual vehicle use by age tabulated from the Federal Highway
Administration's 2009 National Household Travel Survey (NHTS).\268\ In
order to insure that the resulting mileage schedules imply reasonable
estimates of future growth in total car and light truck use, we
calculated the rate of future growth in annual mileage at each age that
would be necessary for total car and light truck travel to meet the
levels projected in the AEO 2012 Early Release Reference Case. The
growth rate in average annual car and light truck use produced by this
calculation is approximately 0.6 percent per year, and is applied in
the agencies' modeling through 2050. We applied this growth rate to the
mileage figures derived from the 2009 NHTS to estimate annual mileage
by vehicle age during each year of the expected lifetimes of MY 2017-
2025 vehicles. A generally similar approach to estimating future
vehicle use was used in the MYs 2012-2016 final rules and Interim Joint
TAR, but the future growth rates in average vehicle use have been
revised for this rule. No substantive technical comments were received
on this approach.
---------------------------------------------------------------------------

    \268\ For a description of the Survey, see http://www.bts.gov/programs/national_household_travel_survey/ (last accessed Sept.
9, 2011).
---------------------------------------------------------------------------

     Accounting for the fuel economy rebound effect--The fuel
economy rebound effect refers to the increase in vehicle use (VMT) that
results if an increase in fuel economy lowers the cost of driving. The
agencies are continuing to use a 10 percent fuel economy rebound
effect, consistent with the proposal, in their analyses of fuel savings
and other benefits from more stringent standards. This value is also
consistent with that used in the MYs 2012-2016 light-duty vehicle
rulemaking and the Interim Joint TAR. That is, we assume that a 10
percent decrease in fuel cost per mile resulting from our standards
would result in a 1 percent increase in the annual number of miles
driven at each age over a vehicle's lifetime. We received comments
recommending values both higher and lower than our proposed value of 10
percent for the fuel economy rebound effect, as well as comments
maintaining that there were indirect rebound effects for which the
agencies should account. The agencies discuss comments on this topic in
more detail in sections III.H.4 and IV.C.3 of the preamble. The
agencies do not regard any of these comments as providing new data or
analysis that justify revising the 10 percent value. In Chapter 4 of
the joint TSD, we provide a detailed explanation of the basis for our
fuel economy rebound estimate, including a summary of new literature
published since the MYs 2012-2016 rulemaking that lends further support
to the 10 percent rebound estimate. We also refer the reader to
Chapters X and XII of NHTSA's RIA and Chapter 4 of EPA's RIA for
sensitivity and uncertainty analyses of alternative fuel economy
rebound assumptions.
     Benefits from increased vehicle use--The increase in
vehicle use from the rebound effect results from vehicle buyers'
decisions to make more frequent trips or travel farther to reach more
desirable destinations. This additional travel provides benefits to
drivers and their passengers by improving their access to social and
economic opportunities away from home. The analysis estimates the
economic benefits from increased rebound-effect driving as the sum of
the fuel costs they incur during that additional travel, plus the
consumer surplus drivers receive from the improved accessibility their
travel provides. No comments were received on this particular issue. As
in the analysis for the proposed rule (and as in the MYs 2012-2016
final rule) we estimate the economic value of this consumer surplus
using the conventional approximation, which is one half of the product
of the decline in operating costs per vehicle-mile and the resulting
increase in the annual number of miles driven.
     Added costs from congestion, accidents, and noise--
Although it provides benefits to drivers as described above, increased
vehicle use associated with the fuel economy rebound effect also
contributes to increased traffic congestion, motor vehicle accidents,
and highway noise. Depending on how the additional travel is
distributed over the day and where it takes place, additional vehicle
use can contribute to traffic congestion and delays by increasing the
number of vehicles using facilities that are already heavily traveled.
These added delays impose higher costs on drivers and other vehicle
occupants in the form of increased travel time and operating expenses.
At the same time, this additional travel also increases costs
associated with traffic accidents and vehicle noise. No comments were
received on the specific economic assumptions employed in the proposal.
The agencies are using the same methodology as used in the analysis for
the proposed rule, relying on estimates of congestion, accident, and
noise costs imposed by automobiles and light trucks developed by the
Federal Highway Administration to estimate these increased external
costs caused by added driving.\269\ This method is also

consistent with the MYs 2012-2016 final rules.
---------------------------------------------------------------------------

    \269\ These estimates were developed by FHWA for use in its 1997
Federal Highway Cost Allocation Study; http://www.fhwa.dot.gov/policy/hcas/final/index.htm (last accessed July 8, 2012).
---------------------------------------------------------------------------

     Petroleum consumption and import externalities--U.S.
consumption of imported petroleum products imposes costs on the
domestic economy that are not reflected in the market price for crude
oil, or in the prices paid by consumers of petroleum products such as
gasoline (often referred to as ``energy security'' costs). These costs
include (1) higher prices for petroleum products resulting from the
effect of increased U.S. demand for imported oil on the world oil price
(the ``monopsony effect''); (2) the expected costs associated with the
risk of disruptions to the U.S. economy caused by sudden reductions in
the supply of imported oil to the U.S. (often referred to as
``macroeconomic disruption and adjustment costs''); and (3) expenses
for maintaining a U.S. military presence to secure imported oil
supplies from unstable regions, and for maintaining the strategic
petroleum reserve (SPR) to cushion the U.S. economy against the effects
of oil supply disruptions (i.e., ``military/SPR costs'').\270\ While
the agencies received a number of comments regarding these energy
security costs, particularly the treatment of military costs, we
continue to use the same methodology from the proposal. Further
discussion of these comments and the agencies' responses can be found
in Sections III.H.8 and IV.3.
---------------------------------------------------------------------------

    \270\ See, e.g., Bohi, Douglas R. and W. David Montgomery
(1982). Oil Prices, Energy Security, and Import Policy Washington,
DC: Resources for the Future, Johns Hopkins University Press; Bohi,
D. R., and M. A. Toman (1993). ``Energy and Security: Externalities
and Policies,'' Energy Policy 21:1093-1109; and Toman, M. A. (1993).
``The Economics of Energy Security: Theory, Evidence, Policy,'' in
A. V. Kneese and J. L. Sweeney, eds. (1993). Handbook of Natural
Resource and Energy Economics, Vol. III. Amsterdam: North-Holland,
pp. 1167-1218.
---------------------------------------------------------------------------

     Monopsony Component--The energy security analysis
conducted for this rule estimates that the world price of oil will fall
modestly in response to lower U.S. demand for refined
fuel.271,272 Although the reduction in the global price of
crude oil and refined petroleum products due to decreased demand for
fuel in the U.S. resulting from this rule represents a benefit to the
U.S. economy, it simultaneously represents an economic loss to sellers
of crude petroleum and refined products from other countries.
Recognizing the redistributive nature of this ``monopsony effect'' when
viewed from a global perspective (which is consistent with the
agencies' use of a global estimate for the social cost of carbon to
value reductions in CO2 emissions), the energy security
benefits estimated to result from this program exclude the value of
this monopsony effect.
---------------------------------------------------------------------------

    \271\ Leiby, Paul. Oak Ridge National Laboratory. ``Approach to
Estimating the Oil Import Security Premium for the MY 2017-2025
Light Duty Vehicle Rule'' 2012, EPA Docket EPA-HQ-OAR-2010-0799-
41789.
    \272\ Note that this change in world oil price is not reflected
in the AEO fuel price projections described earlier in this section.
---------------------------------------------------------------------------

     Macroeconomic Disruption Component: In contrast to
monopsony costs, the macroeconomic disruption and adjustment costs that
arise from sudden reductions in the supply of imported oil to the U.S.
do not have offsetting impacts outside of the U.S., so we include the
estimated reduction in their expected value stemming from reduced U.S.
petroleum imports in our energy security benefits estimated for this
program.
     Military and SPR Component: We recognize that there may be
significant (if unquantifiable) benefits in improving national security
by reducing U.S. oil imports, and public comments supported the
agencies inclusion of such benefits. Quantification of military
security benefits is challenging because attribution to particular
missions or activities is difficult and because it is difficult to
anticipate the impact of reduced U.S. oil imports on military spending.
The agencies do not have a robust way to calculate these benefits at
this time, and thus exclude U.S. military costs from the analysis.
    Similarly, since the size of the SPR, or other factors affecting
the cost of maintaining the SPR, historically have not varied in
response to changes in U.S. oil import levels, we exclude changes in
the cost of maintaining the SPR from the estimates of the energy
security benefits of the program. The agencies continue to examine
appropriate methodologies for estimating the impacts on military and
SPR costs as U.S. oil imports are reduced.
    To summarize, the agencies have included only the macroeconomic
disruption and adjustment costs portion of potential energy security
benefits to estimate the monetary value of the total energy security
benefits of this program. The energy security premium values in this
final rule have been updated since the proposal to reflect the AEO2012
Early Release Reference Case projection of future world oil prices.
Otherwise, the methodology for estimating the energy security benefits
is consistent with that used in the proposal. Based on an update of an
earlier peer-reviewed Oak Ridge National Laboratory study that was used
in support of the both the MYs 2012-2016 light duty vehicle and the MYs
2014-2018 medium- and heavy-duty vehicle rulemakings, we estimate that
each gallon of fuel saved will reduce the expected macroeconomic
disruption and adjustment costs of sudden reductions in the supply of
imported oil to the U.S. economy by $0.197 (2010$) in 2025. Each gallon
of fuel saved as a consequence of higher standards is anticipated to
reduce total U.S. imports of crude oil or refined fuel by 0.95
gallons.\273\
---------------------------------------------------------------------------

    \273\ Each gallon of fuel saved is assumed to reduce imports of
refined fuel by 0.5 gallons, and the volume of fuel refined
domestically by 0.5 gallons. Domestic fuel refining is assumed to
utilize 90 percent imported crude petroleum and 10 percent
domestically-produced crude petroleum as feedstocks. Together, these
assumptions imply that each gallon of fuel saved will reduce imports
of refined fuel and crude petroleum by 0.50 gallons + 0.50 gallons *
90 percent = 0.50 gallons + 0.45 gallons = 0.95 gallons.
---------------------------------------------------------------------------

     Air pollutant emissions--
     Impacts on criteria air pollutant emissions--Criteria air
pollutants emitted by vehicles, during fuel production and
distribution, and during electricity generation include carbon monoxide
(CO), hydrocarbon compounds (usually referred to as ``volatile organic
compounds,'' or VOC), nitrogen oxides (NOX), fine
particulate matter (PM2.5), and sulfur oxides
(SOX). Although reductions in domestic fuel refining and
distribution that result from lower fuel consumption will reduce U.S.
emissions of these pollutants, additional vehicle use associated with
the rebound effect, and additional electricity generation to power
PHEVs and EVs will increase emissions. Thus the net effect of more
stringent GHG and fuel economy standards on emissions of each criteria
pollutant depends on the relative magnitudes of reduced emissions from
fuel refining and distribution, and increases in emissions resulting
from added vehicle use. The agencies' analysis assumes that the per-
mile criteria pollutant emission rates for cars and light trucks
produced during the model years affected by the rule will remain
constant at the levels resulting from EPA's Tier 2 light duty vehicle
emissions standards. The agencies' approach to estimating criteria air
pollutant emissions is consistent with the method used in the proposal
and in the MYs 2012-2016 final rule (where the agencies received no
significant adverse comments), although the agencies employ a more
recent version of the EPA's MOVES (Motor Vehicle Emissions Simulator)
model, as well as new estimates of the emission rates from electricity
generation. No comments were received on the use of the MOVES model.
The agencies analyses of

emissions from electric power plants are discussed in EPA RIA chapter
4, NHTSA RIA chapter VIII and NHTSA's EIS.
     Economic value of reductions in criteria pollutant
emissions--To evaluate benefits from reducing emissions of criteria
pollutants over the lifetimes of MY 2017-2025 vehicles, EPA and NHTSA
estimate the economic value of the human health impacts associated with
reducing population exposure to PM2.5 using a ``dollar-per-
ton'' method. These PM2.5-related dollar-per-ton estimates
provide the total monetized impacts to human health (the sum of changes
in the incidence of premature mortality and morbidity) that result from
eliminating or adding one ton of directly emitted PM2.5, or
one ton of PM2.5 precursor (such as NOX,
SOX, and VOCs, which are emitted as gases but form
PM2.5 as a result of atmospheric reactions), from a
specified source. These unit values remain unchanged from the proposal.
Note that the agencies' joint analysis of criteria air pollutant
impacts over the model year lifetimes of 2017-2025 vehicles includes no
estimates of the direct health or other impacts associated with
emissions of criteria pollutants other than PM2.5 (as
distinguished from their indirect effects as precursors to
PM2.5). The agencies did receive comments arguing that the
agencies should have included these impacts in their analyses, however,
no ``dollar-per-ton'' method exists for ozone or toxic air pollutants
due to complexity associated with atmospheric chemistry (for ozone and
toxics) and a lack of economic valuation data and methods (for air
toxics).
    For the final rule, however, EPA and NHTSA also conducted full
scale, photochemical air quality modeling to estimate the change in
ambient concentrations of ozone, PM2.5 and air toxics (i.e.,
hazardous air pollutants listed in section 112(b) of the Clean Air Act)
for the year 2030, and used these results as the basis for estimating
the human health impacts and their economic value of the rule in 2030.
However, the agencies have not conducted such modeling over the
complete life spans of the vehicle model years subject to this
rulemaking, due to timing and resource limitations. Section III.H.7
below and Appendix E of NHTSA's Final EIS present these impact
estimates.
     Impacts on greenhouse gas (GHG) emissions--NHTSA estimates
reductions in emissions of carbon dioxide (CO2) from
passenger car and light truck use by multiplying the estimated
reduction in consumption of fuel (gasoline and diesel) by the quantity
or mass of CO2 emissions released per gallon of fuel
consumed. EPA directly calculates reductions in total CO2
emissions from the projected reductions in CO2 emissions by
each vehicle subject to these rules.\274\ Both agencies also calculate
the impact on CO2 emissions that occur during fuel
production and distribution resulting from lower fuel consumption, as
well as the emission impacts due to changes in electricity production.
Although CO2 emissions account for nearly 95 percent of
total GHG emissions that result from fuel combustion during vehicle
use, emissions of other GHGs are potentially significant as well
because of their higher ``potency'' as GHGs than that of CO2
itself. EPA and NHTSA therefore also estimate the changes in emissions
of non-CO2 GHGs that occur during fuel production,
electricity use, and vehicle use due to their respective
standards.\275\ The agencies approach to estimating GHG emissions is
consistent with the method used at proposal (and in the MYs 2012-2016
final rule and the Interim Joint TAR). No comments were received on the
method for calculating impacts on greenhouse gas emissions, although
several commenters discussed the emission factors used for electricity
generation. These comments are discussed in section III.C and IV.X.
---------------------------------------------------------------------------

    \274\ The weighted average CO2 content of
certification gasoline is estimated to be 8,887 grams per gallon,
while that of diesel fuel is estimated to be approximately 10,180
grams per gallon.
    \275\ There is, however, an exception. NHTSA does not and cannot
claim benefit from reductions in downstream emissions of HFCs
because they do not relate to fuel economy, while EPA does because
all GHGs are relevant for purposes of EPA's Clean Air Act standards.
---------------------------------------------------------------------------

     Economic value of reductions in CO2 emissions--
EPA and NHTSA assigned a dollar value to reductions in CO2
emissions, consistent with the proposal, using recent estimates of the
``social cost of carbon'' (SCC) developed by a federal interagency
group that included representatives from both agencies and reported the
results of its work in February 2010. As that group's report observed,
``The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) changes in net agricultural
productivity, human health, property damages from increased flood risk,
and the value of ecosystem services due to climate change.'' \276\
Published estimates of the SCC, as well as those developed by the
interagency group, vary widely as a result of uncertainties about
future economic growth, climate sensitivity to GHG emissions,
procedures used to model the economic impacts of climate change, and
the choice of discount rates.\277\ The SCC Technical Support Document
(SCC TSD) provides a complete discussion of the methods used by the
federal interagency group to develop its SCC estimates. Several
commenters expressed support for using SCC to value reductions in
CO2 emissions and provided detailed recommendations directed
at improving the estimates. One commenter disagreed with the use of
SCC. However, as discussed in III.H.6 and IV.C.3 of the preamble, the
SCC estimates were developed using a reasonable set of input
assumptions that are supported by published literature. As noted in the
SCC TSD, the U.S. government intends to revise these estimates over
time, if appropriate, taking into account new research findings that
were not available in 2010.
---------------------------------------------------------------------------

    \276\ SCC TSD, see page 2. Docket ID EPA-HQ-OAR-2010-0799-0737,
Technical Support Document: Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order 12866, Interagency Working
Group on Social Cost of Carbon, with participation by Council of
Economic Advisers, Council on Environmental Quality, Department of
Agriculture, Department of Commerce, Department of Energy,
Department of Transportation, Environmental Protection Agency,
National Economic Council, Office of Energy and Climate Change,
Office of Management and Budget, Office of Science and Technology
Policy, and Department of Treasury (February 2010). Also available
at http://epa.gov/otaq/climate/regulations.htm.
    \277\ SCC TSD, see pages 6-7.
---------------------------------------------------------------------------

    Several commenters also recommended presenting monetized estimates
of the benefits of reductions in non-CO2 GHG emissions
(i.e., methane, nitrous oxides, and hydrofluorocarbons) expected to
result from the final rule. Although the agencies are not basing their
primary analyses on this suggested approach, they have conducted
sensitivity analyses of the final rule's monetized non-CO2
GHG impacts in preamble section III.H.6 and Chapter X of NHTSA's FRIA.
Preamble sections III.H.6 and IV.C.3 also provide a more detailed
discussion about the response to comments on SCC.
     The value of changes in driving range--By reducing the
frequency with which drivers typically refuel their vehicles and by
extending the upper limit of the range they can travel before requiring
refueling, improving fuel efficiency provides additional benefits to
vehicle owners. The primary benefits from reducing the required
frequency of refueling are the value of time saved by drivers and other
vehicle occupants, as well as the value of the minor savings in fuel
that would have been consumed during refueling trips that are no longer

required. Using recent data on vehicle owners' refueling patterns
gathered from a survey conducted by the National Automotive Sampling
System (NASS), NHTSA was able to more accurately estimate the
characteristics of refueling trips. NASS data provided NHTSA with the
ability to estimate the average time required for a refueling trip, the
average time and distance drivers typically travel out of their way to
reach fueling stations, the average number of adult vehicle occupants
during refueling trips, the average quantity of fuel purchased, and the
distribution of reasons given by drivers for refueling. From these
estimates, NHTSA constructed a revised set of assumptions to update
those used in the MYs 2012-2016 FRM for calculating refueling-related
benefits. The MYs 2012-2016 FRM discussed NHTSA's intent to utilize the
NASS data on refueling trip characteristics in future rulemakings.
While the NASS data improve the precision of the inputs used in the
analysis of benefits resulting from less frequent refueling, the
framework of the analysis remains essentially the same as in the MYs
2012-2016 final rule. Note that this topic and associated benefits were
not covered in the Interim Joint TAR. No comments were received on the
refueling analysis presented in the NPRM. Detailed discussion and
examples of the agencies' approaches are provided in Chapter VIII of
NHTSA's FRIA and Chapter 7 of EPA's RIA.
     Discounting future benefits and costs--Discounting future
fuel savings and other benefits is intended to account for the
reduction in their value to society when they are deferred until some
future date, rather than received immediately.\278\ The discount rate
expresses the percent decline in the value of these future fuel-savings
and other benefits--as viewed from today's perspective--for each year
they are deferred into the future. In evaluating the non-climate
related benefits of the final standards, the agencies have employed
discount rates of both 3 percent and 7 percent, consistent with the
proposal. One commenter (UCS) agreed with the agencies' use of 3 and 7
percent discount rates, while another (API) stated that the Energy
Information Administration (EIA) uses a 15 percent ``consumer-relevant
discount rate when evaluating the economic cost-effectiveness of new
vehicle efficiency technology,'' which it noted would affect the
agencies' assumptions of benefits if employed. The agencies have
continued to employ the 3 and 7 percent discount rate values for the
final rule analysis, as discussed further below in section IV.C.3 and
in Chapter 4 of the Joint TSD.
---------------------------------------------------------------------------

    \278\ Because all costs associated with improving vehicles' fuel
economy and reducing CO2 emissions are assumed to be
incurred at the time they are produced, these costs are already
expressed in their present values as of each model year affected by
the rule, and require discounting only for the purpose of expressing
them as present values as of a common year (2012 for the Calendar
Year analysis; the first year of production for each MY vehicle--
2017 through 2025--for the Model Year analysis).
---------------------------------------------------------------------------

    For the reader's reference, Table II-19 and Table II-20 below
summarize the values used by both agencies to calculate the impacts of
the final standards. The values presented in these tables are summaries
of the inputs used for the models; specific values used in the
agencies' respective analyses may be aggregated, expanded, or have
other relevant adjustments. See the Joint TSD, Chapter 4, and each
agency's respective RIA for details.
    A wide range of estimates is available for many of the primary
inputs that are used in the agencies' CAFE and GHG emissions models.
The agencies recognize that each of these values has some degree of
uncertainty, which the agencies further discuss in the Joint TSD. The
agencies tested the sensitivity of their estimates of costs and
benefits to a range of assumptions about each of these inputs, and
found that the magnitude of these variations would not have changed the
final standards. For example, NHTSA conducted separate sensitivity
analyses for, among other things, discount rates, fuel prices, the
social cost of carbon, the fuel economy rebound effect, consumers'
valuation of fuel economy benefits, battery costs, mass reduction
costs, energy security costs, and the indirect cost markup factor. This
list is similar in scope to the list that was examined in the proposal,
but includes post-warranty repair costs and transmission shift
optimizer effectiveness as well. NHTSA's sensitivity analyses are
contained in Chapter X of NHTSA's RIA.
    Similarly, EPA conducted sensitivity analyses on discount rates,
the social cost of carbon, the rebound effect, battery costs, mass
reduction costs, the indirect cost markup factor and on the cost
learning curves used in this analysis. These analyses are found in
Chapters 3, 4, and 7 of the EPA RIA. In addition, NHTSA performed a
probabilistic uncertainty analysis examining simultaneous variation in
the major model inputs including technology costs, technology benefits,
fuel prices, the rebound effect, and military security costs. This
information is provided in Chapter XII of NHTSA's RIA.

     Table II-19--Economic Values for Benefits Computations (2010$)
------------------------------------------------------------------------
        Rebound effect                            10%
------------------------------------------------------------------------
``Gap'' between test and on-   20%.
 road MPG for liquid-fueled
 vehicles.
``Gap'' between test and on-   30%.
 road electricity consumption
 for electric and plug-in
 hybrid electric vehicles.
Annual growth in average       0.6.
 vehicle use.
------------------------------------------------------------------------
                 Fuel Prices (2017-50 average, $/gallon)
------------------------------------------------------------------------
Retail gasoline price........  $4.13.
Pre-tax gasoline price.......  3.78.
------------------------------------------------------------------------
         Economic Benefits from Reducing Oil Imports ($/gallon)
------------------------------------------------------------------------
``Monopsony'' Component......  $ 0.0.0.
Macroeconomic Disruption        0.197 in 2025.
 Component.
Military/SPR Component.......   0.00.
    Total Economic Costs ($/    0.197 in 2025.
     gallon).
------------------------------------------------------------------------
       Emission Damage Costs (2020, $/short ton, 3% discount rate)
------------------------------------------------------------------------
Carbon monoxide..............  $ 0.

Nitrogen oxides (NOX)--         5,600.
 vehicle use.
Nitrogen oxides (NOX)--fuel     5,400.
 production and distribution.
Particulate matter (PM2.5)--    310,000.
 vehicle use.
Particulate matter (PM2.5)--    250,000.
 fuel production and
 distribution.
Sulfur dioxide (SO2).........   33,000.
Annual CO2 Damage Cost (per    Variable, depending on discount rate and
 metric ton).                   year (see Table II-20 for 2017
                                estimate).
------------------------------------------------------------------------
     External Costs from Additional Automobile Use ($/vehicle-mile)
------------------------------------------------------------------------
Congestion...................  $ 0.056.
Accidents....................   0.024.
Noise........................   0.001.
                              ------------------------------------------
    Total External Costs.....  $ 0.081.
------------------------------------------------------------------------
     External Costs from Additional Light Truck Use ($/vehicle-mile)
------------------------------------------------------------------------
Congestion...................  $0.050.
Accidents....................  0.027.
Noise........................  0.001.
                              ------------------------------------------
    Total External Costs.....  0.078.
Discount Rates Applied to      3%, 7%.
 Future Benefits.
------------------------------------------------------------------------

                          Table II-20--Social Cost of CO2 ($/metric ton), 2017 (2010$)
----------------------------------------------------------------------------------------------------------------
                  Discount rate                         5%              3%             2.5%             3%
----------------------------------------------------------------------------------------------------------------
Source of Estimate..............................             Mean of Estimated Values                       95th
                                                                                percentile
                                                                                estimate.
----------------------------------------------------------------------------------------------------------------
2017 Estimate...................................              $6             $26             $41            $79.
----------------------------------------------------------------------------------------------------------------

F. CO2 Credits and Fuel Consumption Improvement Values for Air
Conditioning Efficiency, Off-Cycle Reductions, and Full-Size Pickup
Trucks

    For the MYs 2012-2016 rule, EPA provided an option for
manufacturers to generate credits for complying with GHG standards by
incorporating efficiency-improving vehicle technologies that would
reduce CO2 and fuel consumption from air conditioning (A/C)
operation. EPA also provided another credit generating option for
vehicle operation that is not captured by the Federal Test Procedure
(FTP) and Highway Fuel Economy Test (HFET), also collectively known as
the ``two-cycle'' test procedure. EPA referred to these credits as
``off-cycle credits.'' See 76 FR 74937, 74998, 75020.
    EPA proposed to continue these credit mechanisms in the MYs 2017-
2025 GHG program, and is finalizing these proposals in this notice. EPA
also proposed that certain of the A/C credits and the off-cycle credits
be included under the CAFE program. See id. and 76 FR 74995-998. For
this rule, under EPA's EPCA authority, EPA is allowing manufacturers to
generate fuel consumption improvement values for purposes of CAFE
compliance based on the use of A/C efficiency and the other off-cycle
technologies. These fuel consumption improvement values will not apply
to compliance with the CAFE program for MYs 2012-2016. Also, reductions
in direct A/C emissions resulting from leakage of HFCs from air
conditioning systems, which are generally unrelated to fuel consumption
reductions, will not apply to compliance with the CAFE program. Thus,
as discussed below, credits for refrigerant leakage emission reductions
will continue to apply only to the EPA GHG program.
    The agencies expect that, because of the significant credits and
fuel consumption improvement values available for improvements to the
efficiency of A/C systems (up to 5.0 g/mi for cars and 7.2 g/mi for
trucks which is equivalent to a fuel consumption improvement value of
0.000563 gal/mi for cars and 0.000810 gal/mi for trucks), manufacturers
will take technological steps to maximize these benefits. Since we
project that all manufacturers will adopt these A/C improvements to
their maximum extent, EPA has adjusted the stringency of the two-cycle
tailpipe CO2 standards in order to account for this
projected widespread penetration of A/C credits (as described more
fully in Section III.C),\279\ and NHTSA has also accounted for expected
A/C efficiency improvements in determining the maximum feasible CAFE
standards. The agencies discuss these CO2 credits and fuel
consumption improvement values below and in more detail in Chapter 5 of
the Joint TSD. We also discuss below how other (non-A/C) off-cycle
improvements in CO2 and fuel consumption may be eligible to
apply towards compliance with the GHG and CAFE standards; however, with
two exceptions (for the two-cycle benefits of stop-start and active
aerodynamic improvements--technologies which EPA expects manufacturers
to adopt widely and whose benefits can be reliably quantified), these
off-cycle improvements are not incorporated in the stringency of the
standards Finally, EPA discusses in Section III.C below the

GHG A/C leakage credits that are exclusive to the GHG standards.
---------------------------------------------------------------------------

    \279\ Similarly, the MYs 2012-2016 GHG standards reflect direct
and indirect A/C improvements. See 75 FR 25371, May 7, 2010.
---------------------------------------------------------------------------

    EPA, in coordination with NHTSA, is also introducing for MYs 2017-
2025 a new incentive for certain advanced technologies used in full-
sized pickup trucks. Under its EPCA authority for CAFE and under its
CAA authority for GHGs, EPA is establishing GHG credits and fuel
economy improvement values for manufacturers that hybridize a
significant quantity of their full size pickup trucks, or that use
other technologies that significantly reduce CO2 emissions
and fuel consumption from these full-sized pickup trucks.
    We discuss each of these types of credits and incentives, in detail
below and throughout Chapter 5 of the Joint TSD. We also discuss and
respond to the key comments throughout this section.
1. Air Conditioning Efficiency Credits and Fuel Consumption Improvement
Values
    After detailed consideration of the comments and other available
information, the agencies are finalizing a program of A/C efficiency
credits and fuel consumption improvement values. Although the agencies
are making some minor changes for the final rule, as described below,
we are finalizing the program establishing efficiency credits and fuel
consumption improvement values largely in its proposed form.
Specifically, efficiency credits will continue to be calculated from a
technology ``menu'' once manufacturers qualify for eligibility to
generate A/C efficiency credits through specified A/C CO2
emissions testing.
    The efficiency credits and fuel consumption improvement values in
this rule reflect an understanding of the relationships between A/C
technologies and CO2 emissions and fuel consumption that is
improved from the MYs 2012-2016 rulemaking. Much of this understanding
results from the use of a new vehicle simulation tool that EPA has
developed and that the agencies used for the proposal and for this
final rulemaking. EPA designed this model to simulate, in an integrated
way, the dynamic behavior of the several key systems that affect
vehicle efficiency: The engine, electrical, transmission, and vehicle
systems. The simulation model is supported by data from a wide range of
sources, and no comments were received raising concerns about the model
or its use in this rule. Chapter 2 of the EPA Regulatory Impact
Analysis discusses the development of this model in more detail.
    The agencies have identified several technologies related to
improvements in A/C efficiency. Most of these technologies already
exist on current vehicles, but manufacturers can improve the energy
efficiency of the technology designs and operation. For example, most
of the additional air conditioning related load on an engine is due to
the compressor, which pumps the refrigerant around the system loop. The
less the compressor operates, the less load the compressor places on
the engine, resulting in less fuel consumption and CO2
emissions. Thus, optimizing compressor operation to align with cabin
demand by using more sophisticated sensors and control strategies is
one path to improving the overall efficiency of the A/C system. See
generally section 5.1.3 of Joint TSD Chapter 5.
    A broad range of stakeholders submitted general comments expressing
support for the overall proposed program for A/C efficiency credits and
fuel consumption improvement values as an appropriate method of
encouraging efficiency-improving technologies. One commenter, Center
for Biological Diversity, stated that ``[t]echnology that will be
available during the rulemaking period and can be incorporated in an
economically feasible manner should be built into the standard and not
merely used as an `incentive'.'' In fact, all of these A/C improvements
(for both indirect and direct A/C improvements) are reflected in the
standard stringency.\280\ See section II.C.7.b above. Moreover, we have
every expectation that manufacturers will use most if not all of these
technologies--precisely because of their ready availability and
relatively low cost.
---------------------------------------------------------------------------

    \280\ As explained in section I.B above, one reason the CAFE and
GHG standards are not the same in miles-per-gallon space is that
direct leakage A/C improvements are reflected in the GHG standards.
---------------------------------------------------------------------------

    Automaker and auto supplier commenters broadly supported the
agencies' assessments of likely A/C efficiency-improving technologies
and the credit values assigned to them. Several commenters suggested
relatively minor changes in these assessments. One commenter, ICCT,
suggested an approach that would attempt to vary A/C efficiency credits
based on the degree to which other off-cycle improvements--specifically
solar load reductions--may have independently reduced the demand for A/
C cooling. ICCT's suggestion was to address what the commenter viewed
as a potential for `double-counting.' EPA agrees with the observation
that A/C efficiency improvements and solar load improvements are
related technically. However, we believe that the added complexity of
scaling the established credit values for A/C technologies according to
solar load improvements would not be warranted, given relatively small
change in the overall credit values that would likely result. We are
thus finalizing separate treatment of A/C efficiency and other off-
cycle improvements, as proposed. (We summarize and discuss comments on
A/C efficiency test procedures below.)
    As described in Chapter <IP_ADDRESS> of the Joint TSD, EPA calculated
the total eligible A/C efficiency credits from an analysis of the
average impact of air conditioning on tailpipe CO2
emissions. This methodology differs from the one used for the MYs 2012-
2016 rule, though it does give similar values. In the MYs 2012-2016
rule, the total impact of A/C on tailpipe emissions was estimated to be
3.9% of total GHG emissions, or approximately 14.3 g/mi. Largely based
on an SAE feasibility study,\281\ EPA assumed that 40% of those
emissions could be reduced through advanced technologies and controls.
Thus, EPA calculated a maximum credit of 5.7 g/mi (for both cars and
trucks) from efficiency improvements. EPA also assumed that there would
be 85% penetration of these technologies when setting the standard, and
consequently made the standard more stringent by 5.0 g/mi. For the MYs
2017-2025 proposal, EPA recalculated the A/C tailpipe impact using its
vehicle simulation tool. Based on these simulations, it was determined
that trucks should have a higher impact than cars, and the total
emissions due to A/C was calculated to be 11.9g/mi for cars and 17.1 g/
mi for trucks. In the proposal, the feasible level of control was
increased slightly from the MYs 2012-2016 final rule to 42% (within the
uncertainty bounds of the studies cited). Thus the maximum credit
became 5.0 for cars and 7.2 for trucks, and the proposed stringency of
the standards reflected these new levels as the penetrations increased
from 85% in MY 2016 to 100% in MY 2017 (for car) and 2019 (for truck).
Volkswagen commented that the change in split in the maximum car/truck
efficiency credit from the previous rule changed the context for their
compliance plans for cars. The agencies understand that a slightly
lower maximum credit level could have a modest effect on compliance
plans. We note that the level of stringency for cars due to A/C has not
changed from the value we used

for MY 2016, as this was assumed to be 5.0 g/mi in the previous rule as
well as in the more recent proposal. We also believe that it is
appropriate that the program evolve as our understanding of the
inventory of in-use GHG emission inventories improves--as is the case
in this instance. Having said this, the levels of the credits did not
change significantly for cars and thus should not significantly affect
A/C related GHG credit and fuel consumption improvement value
calculations. We are therefore, finalizing the 5.0 and 7.2 g/mi maximum
credits for cars and trucks respectively as proposed. This represents
an improvement in current A/C related CO2 and fuel
consumption of 42% (again, as proposed) and the agencies are using this
level of improvement to represent the maximum efficiency credit
available to a manufacturer. This degree of improvement is reflected in
the stringency of the final standards.
---------------------------------------------------------------------------

    \281\ Society of Automotive Engineers, ``IMAC Team 2--Improved
Efficiency, Final Report,'' April 2006 (EPA Docket  EPA-HQ-
OAR-2010-0799).
---------------------------------------------------------------------------

    Specific components and control strategies that are available to
manufacturers to reduce the air conditioning load on the engine are
listed in Table II-21 below and are discussed in more detail in Chapter
5 of the joint TSD.
a. A/C Idle Test
    Demonstrating the degree of efficiency improvement that a
manufacturer's air conditioning systems achieve--thus quantifying the
appropriate GHG credit and CAFE fuel consumption improvement value that
the manufacturer is eligible for--would ideally involve a performance
test. That is, manufacturers would use a test that would directly
measure CO2 (and thus allow calculation of fuel consumption)
before and after the incorporation of the improved technologies. A
performance test would be preferable to a predetermined menu value
because it could--potentially--provide a more accurate assessment of
the efficiency improvements of differently designed A/C systems.
Progress toward such a test (or tests) continues. As mentioned in the
introduction to this section, the primary vehicle emissions and fuel
consumption test, the Federal Test Procedure (FTP) or ``two-cycle''
test, does not require or simulate air conditioning usage through the
test cycle. The existing SC03 test, which is used for developing the
fuel economy and environment label values, is designed to identify any
effect that the air conditioning system has on other emissions when it
is operating under extreme temperature and solar conditions, but that
test is not designed to measure the relatively small differences in
tailpipe CO2 due to different A/C efficiency technologies.
    At the time of the final rule for the MYs 2012-2016 GHG program,
EPA concluded that a practical, performance-based test procedure
capable of quantifying efficiency credits was not yet available.
Instead, EPA adopted a specialized new procedure for the more limited
purpose of demonstrating that the design improvements for which a
manufacturer was earning credits produced actual efficiency
improvements. That is, passing the test was a precondition to
generating A/C efficiency credits, but the test was not used in
measuring the amount of those credits. See 76 FR 74938. EPA's test is
fairly simple, performed while the vehicle is at idle, and thus named
the A/C Idle Test, or just Idle Test. Beginning with the 2014 model
year, manufacturers are required to achieve a certain CO2
level on the Idle Test in order to then be able to use the technology-
based lookup table (``menu'') and thus quantify the appropriate number
of GHG efficiency credits that the vehicle can generate. See 75 FR
25427-31.
    In meetings since the MYs 2012-2016 final rule was published and
during the public comment period for this rule, several manufacturers
provided data that raise questions about the ability of the Idle Test
to completely fulfill its intended purpose. Especially for smaller,
lower-powered vehicles, the data show that it can be difficult to
achieve a degree of test-to-test repeatability that manufacturers
believe is necessary in order to comply with the Idle Test requirement
and generate credits. Similarly, manufacturers and others have stated
that the Idle Test does not accurately or sufficiently capture the
improvements from many of the technologies listed in the menu. While
two commenters (Hyundai and Kia) supported retaining the Idle Test for
the purpose of generating A/C credits, most commenters strongly opposed
any use of the Idle Test. In some cases, although they recommended that
EPA abandon the Idle Test, several manufacturers suggested changes to
the test if it is to remain as a part of the program. Specifically,
these manufacturers supported the EPA proposals to scale the Idle Test
results by engine size and to broaden the ambient temperature and
humidity specifications for the Idle Test.
    EPA noted many of these concerns in the preamble to the proposed
rule, and proposed certain changes to the A/C Idle Test as a result.
See 76 FR 74938. EPA also notes that the Idle Test was never meant to
directly quantify the credits generated and we acknowledge that it is
inadequate to that task. The Idle Test was meant simply to set a
threshold in order to access the menu to generate credits (and in some
cases to adjust the menu values for partial credit). EPA also discussed
that it had developed a more rigorous (albeit more complicated and
expensive to perform) test--the AC17 test--which includes the SC03
driving cycle, the fuel economy highway cycle, a preconditioning cycle,
and a solar peak period. EPA proposed that the AC17 test would be
mandatory in MYs 2017 and following model years, but that the AC Idle
Test would continue to be used in MYs 2014-2016 (with the AC17 test
used as a report-only alternative in those earlier model years).\282\
Under the proposal, the AC17 test (unlike the AC Idle Test) would be
used in fixing the amount of available credit. Specifically, if the
AC17 test result, compared to a baseline AC17 test of a previous model
year vehicle without the improved technology, equaled or surpassed the
amount of menu credit, the manufacturer would receive the full menu
credit amount. If the AC17 test result was less than the menu value,
the manufacturer would receive the amount of credit corresponding to
the AC17 test result.\283\
---------------------------------------------------------------------------

    \282\ 76 FR 74940.
    \283\ 76 FR 74940.
---------------------------------------------------------------------------

    Since proposal, EPA has continued to carefully evaluate the
concerns and suggestions relating to the Idle Test. The agency
recognizes that there are technical shortcomings as well as advantages
to this relatively simple and inexpensive test. EPA has concluded that,
given that a more sophisticated A/C is now available, the most
appropriate course is to maintain the availability of the AC Idle Test
through MY 2016, but to also allow manufacturers the option of using
the AC17 test to demonstrate that A/C components are indeed functioning
effectively. This use of the AC17 test as an alternative to the Idle
Test will be allowed, commencing with MY 2014. Thus, for MYs 2014,
2015, and 2016, manufacturers will be able to generate A/C efficiency
credits from the technology menu by performing and reporting results
from the AC17 test in lieu of passing the Idle Test. During these model
years, the level of credit and fuel consumption improvement value
manufacturers can generate from the menu will be based on the design of
the A/C system. In MYs 2017-2019, eligibility for AC efficiency credits
will be determined solely by performing and reporting AC17 test
results. During this time, the process for determining the

level of credit and fuel consumption improvement value will be the same
as during MYs 2014, 2015, and 2016. Finally, starting in MY 2020, AC17
test results will be used both to determine eligibility for AC
efficiency credits and to play a role in determining the amount of the
credit, as proposed. In order to determine the amount of credit or fuel
consumption improvement value after MY 2020, an A to B comparison will
be required. The credit and fuel consumption improvement menu will
continue to be used. Because of the general technical support for the
AC17 test, and in light of several important clarifications and changes
that EPA is implementing to minimize the AC17 testing burden on
manufacturers, EPA believes that most if not all manufacturers wishing
to generate efficiency credits will choose to perform the AC17 test.
Specifically, EPA is modifying the proposed AC17 test procedure to
reduce the number of vehicles requiring testing, so that many fewer
vehicles will need to be tested on the AC17 than on the Idle Test.
Further discussion of the AC17 test appears below in this section of
the preamble and in Chapter <IP_ADDRESS> of the Joint TSD.
    However, EPA is continuing to allow the Idle Test as a testing
option through MY 2016. In addition, EPA is finalizing the
modifications that we proposed to the Idle Test, making the threshold
for access to the menu a function of engine displacement an option
instead of the flat threshold, as well as adjusting the temperature and
humidity specifications in the AC Idle Test. We are also finalizing the
proposed modification that would allow a partial credit if the Idle
Test performance is better than typical performance, based on historic
EPA results from Idle Testing. Chapter <IP_ADDRESS> of the Joint TSD further
describes the adjustments that EPA is making to the Idle Test for MYs
2014-2016.
b. AC17 Test
    As mentioned above, EPA, working in a joint collaboration with
manufacturers (through USCAR) and CARB, has made significant progress
in developing a more robust A/C-related emissions test. As noted above,
the AC17 test is a four-part performance test, which combines the
existing SC03 driving cycle, the fuel economy highway cycle, as well as
a pre-conditioning cycle and a solar soak period. As proposed, and as
discussed below, EPA will allow manufacturers choosing to generate
efficiency credits to report the results of the AC17 test in lieu of
the Idle Test requirements for MYs 2014-2016, and will require them to
use the AC17 test after MY 2016. Until MY 2019, as for MYs 2014-2016,
manufacturers will need to report the results from AC17 testing, but
not to achieve a specific CO2 emissions reduction in order
to access the menu. However, beginning with MY 2020, they will need to
compare the test results to those of a baseline vehicle to demonstrate
a measureable improvement in A/C CO2 emissions and fuel
consumption as a precondition to generating AC efficiency credits from
the A/C credit and fuel consumption improvement menu; in the event that
the improvement is less than the menu value, the amount of credit would
be determined by the AC17 test result.
    EPA is making several technical and programmatic changes to the
proposed AC17 test to minimize the number of vehicles that
manufacturers will need to test, and to further streamline each test in
order to minimize the testing burden. Since the appropriateness of the
AC17 test for actually quantifying absolute A/C efficiency improvements
(as opposed to demonstrating a relative improvement) is still being
evaluated, manufacturers wishing to generate A/C efficiency credits
will continue to use the technology menu to quantify the amount of
CO2 credits and fuel consumption improvement values for
compliance with the GHG and CAFE programs. A number of commenters,
including the Alliance, Ford, The Global Automakers, and others
suggested that further work with the industry on the test should occur
before implementing its use. However, we believe that the general
robustness of the test, combined with the technical and programmatic
improvements that EPA is incorporating in this final rule (as discussed
below), and the de facto phase-in of the test in MYs 2014-2016 as well
as MYs 2017-2019, support our decision to implement the test.
i. AC17 Technical Issues
    Commenters universally agreed that in most technical respects the
AC17 test represents an improvement over the Idle Test. A few
commenters suggested specific technical changes, which EPA has
considered. Several auto industry commenters suggested that the
proposed temperature and humidity tolerances of the test cell
conditions may result in voided tests, due to the difficulty they see
in maintaining these conditions throughout a 4-hour test interval.
However, as discussed in more detail in Chapter 5 of the joint TSD, we
are allowing manufacturers to utilize a 30-second moving average for
the test chamber temperature; we have concluded that these tolerances
are achievable with this revision, and that widening these tolerances
would negatively affect the accuracy and repeatability of the test. As
a result, we are finalizing the tolerances as originally proposed.
Also, one commenter (Enhanced Protective Glass Automotive Association
or EPGAA) suggested that for manual A/C systems, the A/C temperature
control settings for the test be based on actual cabin temperatures
rather than on the duration of lapsed time of the test, as proposed.
EPA does not disagree in theory with the purpose of such a change--to
attempt to better align the control requirements for a manual A/C
system with those for an automatic system. However, the effect on test
results of the slightly different control requirements is not large,
and we believe that it would be impractical for the technician/driver
to monitor cabin temperature and adjust the system accordingly during
the test. We are therefore finalizing the automatic and manual A/C
system control requirements as proposed.
    In several cases, commenters suggested other technical changes to
the AC17 test that EPA agrees will make performance of the test more
efficient, with no appreciable effect on test accuracy. The relatively
minor technical changes that we are finalizing include provisions
relating to: the points during the test when cell solar lamps are
turned on; establishing a specification for test cell wind speed; and a
simplification of the placement requirements for ambient temperature
sensors in the passenger cabin. See joint TSD section <IP_ADDRESS>
explaining these changes more fully.
    Overall, EPA has concluded that the AC17 test as proposed, with the
improvements described above, is a technically robust method for
demonstrating differences in A/C system efficiency as manufacturers
progressively apply new efficiency-improving technologies.
ii. AC17 Program Issues
    Beyond technical issues related to the AC17 test itself, many
commenters expressed concerns about several related program issues--
i.e., how the agency proposed to use the test as a part of determining
eligibility for A/C efficiency credits. First, many manufacturers and
their trade associations stated that some characteristics of the AC17
test unnecessarily add to the burden on manufacturers of performing
each individual test. For example, the roughly 4-hour duration of the
AC17 test limits the number of tests that can be performed in a given
facility over a period of time. Also, the test requires the use of
relatively costly SC03 test

chambers, and manufacturers say that they have, or have access to, only
a limited number of these chambers.
    Most of these concerns, however, are direct results of necessary
design characteristics of the test. Specifically, the impacts on
vehicle efficiency of improved A/C technologies are relatively small
compared to total vehicle CO2 emissions and fuel
consumption. Similarly, the relative contributions of various A/C-
related components, systems, and controls can be difficult to isolate
from one another. For these reasons, the joint government and industry
collaborators designed the test to accurately and repeatably measure
small differences in the efficiency of the entire vehicle related to A/
C operation. The result has been that the AC17 test takes a fairly long
time to perform (about 4 hours) and requires the special climate-
controlled capability of an SC03 chamber, as well as relatively tight
test parameters.
    As discussed above, EPA believes that the AC17 represents a major
step toward the eventual goal of performance-based testing that could
be used to directly quantify the very significant A/C efficiency
credits and fuel consumption improvement values that are available to
eligible manufacturers under this program. In this context, EPA
believes that the characteristics of the AC17 test identified by the
manufacturers in their comments generally tend to be inherent aspects
needed for a robust test, and in most respects we are finalizing the
requirements for the use of the AC17 as proposed.
    In addition to concerns about the effort required to perform each
AC17 test, manufacturers also commented on what they understood as a
requirement to run an unreasonable number of tests in order to qualify
for efficiency credits and improvement values. On the other hand, ICCT
commented that they believe that given the frequent changes in A/C
technology, one or two tests per year for a manufacturer is too few,
and that ``each significantly changed model should be tested.'' In
response to these concerns, EPA has taken several steps in this final
rule to clarify how a manufacturer will be able to use the AC17 to
demonstrate the effectiveness of its different A/C systems and
technologies while minimizing the number of tests that it will need to
perform. In general, EPA believes that it is appropriate to limit the
number of vehicles a manufacturer must test in any given model year to
no more than one vehicle from each platform that generates credits (and
CAFE improvement values) during each model year. For the purpose of the
AC17 test and generating efficiency credits, EPA will use a definition
for ``platform'' that allows a manufacturer to include several
generally similar vehicle models in a single ``platform'' and to
generate credits (or improvement values) for all of the vehicles with
that platform based on a limited number of AC17 tests, as described
below. This definition is slightly modified from the proposed
definition, primarily by making clear that manufacturers need not
necessarily associate vehicles that have different powertrains with
different platforms for A/C credit purposes. The modified definition
follows:
    ``Platform'' means a segment of an automobile manufacturer's
vehicle fleet in which the vehicles have a degree of commonality in
construction (primarily in terms of body and chassis design). Platform
does not consider the model name, brand, marketing division, or level
of decor or opulence, and is not generally distinguished by such
characteristics as powertrain, roof line, or number of doors, seats, or
windows. A platform may include vehicles from various fuel economy
classes, including both light-duty vehicles and light-duty trucks/
medium-duty passenger vehicles.
    At the same time, EPA believes that if only a limited number of
vehicles in a platform are to be tested on the AC17 in any given model
year, it is important that vehicles in that platform with substantially
different air conditioning designs be included in that testing over
time. Thus, manufacturers with vehicles in a platform that are
generating credits will need to choose a different vehicle model each
year for AC17 testing. Testing will begin with the model that is
expected to have highest sales. In the following model year, the
manufacturer will choose the model in that platform representing the
next-highest expected sales not already tested, and so on. This process
will continue either until all vehicles in that platform that are
generating credits have been tested (in which case the previous test
data can be carried over) or until the platform experiences a major
redesign (at which point the AC17 testing process will start over.) We
believe that by clarifying the definition of ``platform'' and more
clearly limiting testing to one test per platform per year, we have
addressed the manufacturers' concerns about unreasonable test burdens.
    Finally, in order to further minimize the number of tests that will
be required for A/C efficiency credit purposes, instead of requiring
replicate testing in all cases, EPA will allow a manufacturer to submit
data from as few as one AC17 test for each instance in which testing is
required. A manufacturer concerned about the variability of its testing
program may at its option choose to perform additional replicate tests
and use of the AC17 test in MYs 2014-2016 is for reporting only)
because the data from these initial years will form the basis on which
future credits are measured as described below, and a more robust
confirmation of test-to-test consistency may be in their interest.
    As mentioned above, for MYs 2019 and earlier (including optional
AC17 testing prior to MY 2017), AC17 testing will only require
reporting of results (and system characteristics) for manufacturers to
be eligible to generate credits and improvement values from the
technology menu. Beginning in MY 2020, manufacturers will also need to
use AC17 testing to demonstrate that the A/C efficiency-improving
technologies or systems on which the desired credits are based are
indeed reducing CO2 emissions and fuel consumption. EPA
proposed to have the manufacturer identify an appropriate comparison
``baseline'' vehicle that did not incorporate the new technology, and
generate CO2 emissions data on both vehicles. The
manufacturer would be eligible for credits and fuel consumption
improvement values to the extent that the test results showed an
improvement over the earlier version of the vehicle without the
improved technology. If the test result with the new technology
demonstrated an emission reduction that is greater than or equal to the
menu-based credit potential of those technologies, the manufacturer
would generate the appropriate credit based on the menu. However, if
the test result did not demonstrate the full menu-based potential of
the technology, partial credit could still be earned, in proportion to
how far away the result was from the expected menu-based credit amount.
    In their comments, auto manufacturers raised concerns about the
potential difficulty of identifying and testing an acceptable baseline
vehicle. EPA has considered these comments, and continues to believe
that identifying and testing a baseline vehicle will not be overly
burdensome in most cases. However, we agree that establishing an
appropriate baseline vehicle can be difficult in some cases, including
when the manufacturer has made major technological improvements to the
vehicle, beyond the A/C technology improvements in question. Some
manufacturers recommended that because of this difficulty and the other
issues discussed above, the AC17 test should only be used in a
``research'' role to validate credit values on the credit

menu, rather than in a regulatory compliance role. However, EPA
believes that with the adjustments in its use described below, the AC17
can appropriately serve as a part of the GHG and CAFE compliance
programs. One such adjustment is to allow the manufacturer to compare
vehicles from different ``generations'' of design (i.e., from earlier
major design cycles), which expands the universe of potentially
appropriate comparative baseline vehicles. Further, if cases arise
where no appropriate baseline comparison vehicles are available,
manufacturers will instead be able to submit an engineering analysis
that describes why a comparison to a baseline vehicle is neither
available nor appropriate, and also justifies the generating of credits
and improvement values, in lieu of a baseline vehicle test result. EPA
would evaluate these submissions as part of the vehicle certification
process. EPA discusses such an engineering analysis in Chapter 5
(Section <IP_ADDRESS>) of the Joint TSD. Other than these adjustments, this
final rule adopts the AC17 testing of certification vehicles and
comparative baseline vehicles beginning in MY 2020, as proposed. Thus,
starting in MY 2020, the AC17 test will be used not only to establish
eligibility for generating credits, but will also play a role in
determining the amount of the credit.
    EPA discusses the revised AC17 test in more detail in Chapter 5
(section <IP_ADDRESS>) of the joint TSD, including a graphical flow-chart
designed to illustrate how the AC17 test will be used at various points
during the implementation of the GHG (and from MY 2017 on, CAFE)
programs.
    c. Technology ``Menu'' for Quantifying A/C Efficiency Credits and
Fuel Consumption Improvement Values
    EPA believes that more testing and development will be necessary
before the AC17 test could be used to measure absolute CO2
and fuel consumption performance with sufficient accuracy to completely
replace the technology menu as the method for quantifying efficiency
credits and fuel consumption improvement values. As EPA did in the MYs
2012-2016 rule, the agencies have used a design-based ``menu'' approach
for the actual quantification of efficiency credits (upon which fuel
consumption improvement values are also based) for this final rule. The
menu established today is very similar to that of the earlier rule,
both in terms of the technologies included in the lookup table and the
effectiveness values assigned to each technology. As in the earlier
rule, the agencies assign an appropriate amount of CO2
credit to each efficiency-improving air conditioning technology that
the manufacturer incorporates into a vehicle model. The sum of these
values for all of the technologies used on a vehicle will be the amount
of CO2 credit generated by that vehicle, up to a maximum of
5.0 g/mi for cars and 7.2 g/mi for trucks. As stated above, these
maximum values are equivalent to fuel consumption improvement values of
0.000563 gallons/mi for cars and 0.000810 gallons/mi for trucks. (If
amendments to the menu values are made in the future, EPA will consult
with NHTSA on the amount of fuel consumption improvement value
manufacturers may factor into their CAFE calculations.)
    Several comments addressed the technology menu and its use. The
Alliance of Automobile Manufacturers said that they believe that
projected A/C CO2 emissions--and thus the maximum potential
reductions against which credits can be generated--are actually higher
than EPA had projected. We have reassessed this issue since the MYs
2012-2017 rulemaking, including the question of how much time vehicles
spend in a ``compressor on'' mode, and on balance we continue to
believe that our projected A/C CO2 emissions values--and
thus the potential credits from the technology menu--are appropriate.
We discuss the development of the maximum efficiency credit values in
more detail in Chapter 5 (section <IP_ADDRESS>) of the Joint TSD.
    Honeywell recognized that a performance-based test procedure for
quantifying credits is not yet available, but asked EPA to be open to
using such a test if one is developed. EPA agrees, and we are making
clear that the off-cycle technology provisions discussed in the next
section can be applied to A/C technologies if all criteria are met. We
will also continue to monitor the quality of A/C efficiency testing
procedures as they develop and consider specific revisions to the AC17
as appropriate. Finally, ICCT proposed accounting for any efficiency
impact of alternative refrigerants in quantifying efficiency credits.
However, because the effect on efficiency of the most likely future
alternative refrigerant, HFO-1234yf, is only minimal when the A/C
system design is optimized for its use, we are finalizing the
technology menu with no adjustments for the use of alternative
refrigerants. Here too, however, EPA will monitor the development and
use of alternative refrigerants and any data on their impact on A/C
efficiency, and consider adjustments in the future as appropriate.
    Table II-21 presents the A/C efficiency credits and estimated CAFE
fuel consumption improvement values being finalized in this rule for
each of the efficiency-improving air conditioning technologies. We
provide more detail on the agencies' development of the A/C efficiency
credits and CAFE fuel consumption improvement values in Chapter 5 of
the Joint TSD. In addition, that Chapter 5 presents very specific
definitions of each of the technologies in the table below, definitions
intended to ensure that the A/C technologies used by manufacturers
correspond with the technologies we used to derive the credits and fuel
consumption improvement values.

                   Table II-21--A/C Efficiency Credits and Fuel Consumption Improvement Values
----------------------------------------------------------------------------------------------------------------
                                     Estimated
                                  reduction in A/                                     Car A/C        Truck A/C
                                       C CO2          Car A/C        Truck A/C      efficiency      efficiency
     Technology description        emissions and    efficiency      efficiency         fuel            fuel
                                       fuel        credit (g/mi    credit (g/mi     consumption     consumption
                                    consumption        CO2)            CO2)         improvement     improvement
                                     (percent)                                      (gallon/mi)     (gallon/mi)
----------------------------------------------------------------------------------------------------------------
Reduced reheat, with externally-              30             1.5             2.2        0.000169        0.000248
 controlled, variable-
 displacement compressor........
Reduced reheat, with externally-              20             1.0             1.4        0.000113        0.000158
 controlled, fixed-displacement
 or pneumatic variable
 displacement compressor........

Default to recirculated air with              30             1.5             2.2        0.000169        0.000248
 closed-loop control of the air
 supply (sensor feedback to
 control interior air quality)
 whenever the outside ambient
 temperature is 75 [deg]F or
 higher (although deviations
 from this temperature are
 allowed based on additional
 analysis)......................
Default to recirculated air with              20             1.0             1.4        0.000113        0.000158
 open-loop control of the air
 supply (no sensor feedback)
 whenever the outside ambient
 temperature is 75 [deg]F or
 higher (although deviations
 from this temperature are
 allowed if accompanied by an
 engineering analysis)..........
Blower motor controls that limit              15             0.8             1.1        0.000090        0.000124
 wasted electrical energy (e.g.
 pulse width modulated power
 controller)....................
Internal heat exchanger (or                   20             1.0             1.4        0.000113        0.000158
 suction line heat exchanger)...
Improved evaporators and                      20             1.0             1.4        0.000113        0.000158
 condensers (with engineering
 analysis on each component
 indicating a COP improvement
 greater than 10%, when compared
 to previous design)............
Oil Separator (internal or                    10             0.5             0.7        0.000056        0.000079
 external to compressor)........
----------------------------------------------------------------------------------------------------------------

    For the CAFE program, EPA will determine fleet average fuel
consumption improvement values in a manner consistent with the way
fleet average CO2 credits will be determined. EPA will
convert the metric tons of CO2 credits for air conditioning
(as well as for other off-cycle technologies and for full size pick-up
trucks) into fleet-wide fuel consumption improvement values, consistent
with the way EPA would convert the improvements in CO2
performance to metric tons of credits. Section III.C discusses this
methodology in more detail. There will be separate improvement values
for each type of credit, calculated separately for cars and for trucks.
These improvement values are subtracted from the manufacturer's two-
cycle-based fleet fuel consumption value to yield a final new fleet
fuel consumption value, which would be inverted to determine a final
fleet fuel CAFE value.
2. Off-Cycle CO2 Credits
    Although EPA employs a five-cycle test methodology to evaluate fuel
economy for fuel economy labeling purposes, EPA uses the established
two-cycle (city, highway or correspondingly FTP, HFET) test methodology
for GHG and CAFE compliance.\284\ EPA recognizes that there are
technologies that provide real-world GHG benefits to consumers, but
that the benefit of some of these technologies is not represented on
the two-cycle test. For MYs 2012-2016, EPA provided an option for
manufacturers to generate adjustments (credits) for employing new and
innovative technologies that achieve CO2 reductions which
are not reflected on current 2-cycle test procedures if, after
application to EPA, EPA determined that the credits were technically
appropriate.
---------------------------------------------------------------------------

    \284\ As noted earlier, use of the two-cycle test is mandated by
statute for passenger car CAFE standards.
---------------------------------------------------------------------------

    During meetings with vehicle manufacturers prior to the proposal of
the MY 2017-2025 standards, manufacturers raised concerns that the
approval process in the MYs 2012-2016 rule for generating off-cycle
credits was complicated and did not provide sufficient certainty on the
amount of credits that might be approved. Commenters also maintained
that it is impractical to measure small incremental improvements on top
of a large tailpipe measurement, similar to comments received related
to quantifying air conditioner efficiency improvements. These same
manufacturers believed that such a process could stifle innovation and
fuel efficient technologies from penetrating into the vehicle fleet.
    In the MYs 2017-2025 proposal, EPA, in coordination with NHTSA,
proposed to extend the off-cycle credit program to MY 2017 and later,
and to apply the off-cycle credits and equivalent fuel consumption
improvement values to both the CAFE and GHG programs.\285\ The proposal
to extend the off-cycle credits program to CAFE was a change from the
MYs 2012-2016 final rule where EPA provided the off-cycle credits only
for the GHG program. In addition, in response to the concerns noted
above, EPA proposed to substantially streamline the off-cycle credit
program process by establishing means of obtaining credits without
having to prove case-by-case that such credits are justified.
Specifically, EPA proposed a menu with a number of technologies that
the agency believed would show real-world CO2 and fuel
consumption benefits not measured, or not fully measured, by the two-
cycle test procedures, which benefits could be reasonably quantified by
the agencies at this time. For each of the preapproved technologies in
the menu, EPA proposed a quantified default value that would be
available without additional testing. Manufacturers would thus have to
demonstrate that they were in fact using the menu technology but would
not have to do testing to quantify the technology's effects unless they
wished to receive a credit larger than the default value. This list is
conceptually similar to the menu-driven approach just described for A/C
efficiency credits.
---------------------------------------------------------------------------

    \285\ 76 FR 74941-944.
---------------------------------------------------------------------------

    The proposed default values for these off-cycle credits were
largely determined from research, analysis, and simulations, rather
than from full vehicle testing, which would have been both cost and
time prohibitive. EPA believed that these predefined estimates were
somewhat conservative to avoid the potential for windfall credits.\286\
If

manufacturers believe their specific off-cycle technology achieves
larger improvement, they could apply for greater credits and fuel
consumption improvement values with supporting data using the case-by-
case demonstration approach. For technologies not listed on the menu,
EPA proposed to continue the case-by-case demonstration approach from
the MYs 2012-2016 rule but with important modifications to streamline
the decision-making process. Comments to the proposal (addressed at the
end of this preamble section) were largely supportive. In the final
rule, EPA is continuing the off-cycle credit program established in the
MYs 2012-2016 rule (but with some significant procedural changes), as
proposed. EPA is also finalizing a list of pre-approved technologies
and credit values. The pre-defined list, with credit values and CAFE
fuel consumption improvement values, is shown in Table II-21 below.
Fuel consumption improvement values under the CAFE program based on
off-cycle technology would be equivalent to the off-cycle credit
allowed by EPA under the GHG program, and these amounts would be
determined using the same procedures and test methods for use in EPA's
GHG program, as proposed.
---------------------------------------------------------------------------

    \286\ While many of the assumptions made for the analysis were
``conservative'', others were ``central''. For example, in some
cases an average vehicle was selected on which the analysis was
conducted. In this case, a smaller vehicle may presumably be
deserving of fewer credits whereas a larger vehicle may be deserving
of more. Where the estimates are central, it would obviously be
inappropriate for the Agencies to grant greater credit for the
larger vehicles since this value is already balanced by the smaller
vehicles in the fleet. The agency will take these matters into
consideration when applications are submitted to modify credits on
the menu.
---------------------------------------------------------------------------

    In the NPRM, EPA proposed capping the amount of credits a
manufacturer may generate using the defined technology list to 10 g/
mile per year on a combined car and truck fleet-wide average basis. EPA
also proposed to require minimum penetration rates for several of the
listed technologies as a condition for generating credit from the list
as a way to further encourage their significant adoption by MY 2017 and
later. Based on comments and consideration on the amount of data that
are available, we are finalizing the cap of 10 g/mile per year on a
combined car and truck fleet-wide average basis. The fleetwide cap is
being finalized because the default credit values are based on limited
data, and also because EPA recognizes that some uncertainty is
introduced when credits are provided based on a general assessment of
off-cycle performance as opposed to testing on the individual vehicle
models. However, we are not finalizing the minimum penetration rates
applicable to certain technologies, primarily based the agencies'
agreement with commenters stating that penetration caps might stifle
the introduction of fuel economy and GHG improving technologies
particularly in cases where manufacturers would normally introduce the
technologies because manufacturing capacities are limited or low
initial volume reduces risk if consumer acceptance is uncertain.
Allowing credits for lower production volumes may encourage
manufacturers to introduce more off-cycle technologies and then over
several years increase production volumes thereby bringing more of
these technologies into the mainstream. These program details are
discussed in further in Section III.C.5.b.i.
    For the final rule analysis, the agencies have developed estimates
for the cost and effectiveness of two off-cycle technologies, active
aerodynamics and stop-start. The agencies assumed that these two
technologies are available to manufacturers for compliance with the
standards, similar to all of the other fuel economy improving
technologies that the analysis assumes are available. EPA and NHTSA's
modeling and other final rule analyses use the 2-cycle effectiveness
values for these technologies and include the additional off-cycle
adjustment that reflects the real world effectiveness of the
technologies. Therefore, NHTSA has included the assessment of these two
off-cycle technologies in the assessment of maximum feasible standards
for this final rulemaking. Including these technologies that are on the
pre-defined menu recognizes that these technologies have a higher
degree of effectiveness in the real-world than reflected in 2-cycle
testing. EPA likewise considered the 2-cycle benefits of these
technologies in determining the stringency of the final standards. The
agencies note that they did not consider the availability of other off-
cycle technologies in their modeling analyses for the proposal or for
the final rule. There are two reasons for this. First, the agencies
have virtually no data on the cost, development time necessary,
manufacturability, etc. of these other technologies. The agencies thus
cannot project the degree of emissions reduction and fuel economy
improvements properly attributable to these technologies within the MYs
2017-2025 timeframe. Second, the agencies have no data on what the
penetration rates for these technologies would be during the rule
timeframe, even assuming their feasibility. See 76 FR 74944 (agencies
need information on ``effectiveness, cost, and availability'' before
considering inclusion of off-cycle technology benefits in determining
the standards).
    This section provides an overview of the pre-defined technology
list being finalized and the key comments the agencies received
regarding the technologies on the list and the proposed credit values.
Provisions regarding how the pre-defined list fits into the overall
off-cycle credit program are discussed in section III.C.5, including
the MY 2014 start date for using the list, the 10 g/mile credit cap for
the list, and the proposed penetration thresholds for listed
technologies. In addition, a detailed discussion of the comments the
agencies received regarding the technical details of individual
technologies and how the credit values were derived is provided in
Chapter 5 of the joint TSD.
    In the proposal, the agencies requested comments on all aspects of
the off-cycle credit menu technologies and derivations. EPA and NHTSA
received many comments and, in addition, several stakeholders including
Denso, Enhanced Protective Glass Automotive Association (EPGAA), ICCT
and Honda, requested meetings and met with the agencies. Overall, there
was general support for the menu based approach and the technologies
included in the proposed list, but there were also suggestions to re-
evaluate the definition of some of the technologies included in the
menu, the calculation and/or test methods for determining the credits
values, and recommendations to periodically re-evaluate the menu as
technologies emerge or become pervasive.
    For most of the listed technologies, the agencies proposed single
fixed credit values and for other technologies a step-function (e.g., x
amount of credit for y amount of reduction or savings).\287\ The
agencies received comments requesting a scalable calculation method for
some technologies rather than the proposed fixed value or step-function
approach. Some commenters requested that the credits for active
aerodynamics, high efficiency exterior lighting, waste heat recovery
(proposed as ``engine heat recovery'' but revised based on comments to