----------------------------------------------------------------------------------------------------------------
PM2.5 Reductions from Proposed Vehicle Standards (tons).........           7,037          11,803          20,096
----------------------------------------------------------------------------------------------------------------

2. Proposed Fuel Benzene Controls
    The proposed fuel benzene controls would reduce benzene exhaust and
evaporative emissions from both on-road and nonroad mobile sources that
are fueled by gasoline. In addition, the proposed fuel benzene standard
would reduce evaporative emissions from gasoline distribution and gas
cans.

Impacts on 1,3-butadiene, formaldehyde, and acetaldehyde emissions are
not significant, but are presented in Chapter 2 of the RIA. We do not
expect the fuel benzene standard to have quantifiable impacts on any
other air toxics, total VOCs, or PM.
    Table V.E-5 shows national estimates of total benzene emissions
from these source sectors with and without the proposed fuel benzene
standard. These estimates do not include effects of the proposed
vehicle or gas can standards (see section V.E.4 for the combined
effects of the controls). The proposed fuel benzene standard would
reduce total benzene emissions from on-road and nonroad gasoline mobile
sources, gas cans, and gasoline distribution by 12% in 2015.

    Table V.E-5.--Estimated Reductions in Benzene Emissions From Proposed Gasoline Standard by Sector in 2015
----------------------------------------------------------------------------------------------------------------
                                   Gasoline on-      Gasoline
                                    road mobile   nonroad mobile     Gas cans        Gasoline          Total
                                      sources         sources                      distribution
----------------------------------------------------------------------------------------------------------------
Benzene Without Rule (tons).....         103,797          37,747           2,262           5,999         149,805
Benzene With Proposed Gasoline            92,513          33,247           1,359           4,054         131,173
 Standard (tons)................
Benzene Reductions from Proposed          11,284           4,500             903           1,945          18,632
 Gasoline Standard (tons).......
Percentage Reduction............              11              12              40              32              12
----------------------------------------------------------------------------------------------------------------

3. Proposed Gas Can Standards
a. VOC
    Table V.E-6 shows the reductions in VOC emissions that we expect
from the proposed gas can standard. In 2015, VOC emissions from gas
cans would be reduced by 60% because of reduced permeation, spillage,
and evaporative losses. These estimates do not include the effects of a
fuel benzene standard (see section V.E.4 for the combined effects of
the proposed controls).

            Table V.E-6.--Estimated National Reductions in VOC Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
                                       1999            2010            2015            2020            2030
----------------------------------------------------------------------------------------------------------------
VOC Without Rule (tons).........         318,596         279,374         296,927         318,384         362,715
VOC With Proposed Gas Can                   N.A.         250,990         116,431         125,702         144,634
 Standard (tons)................
VOC Reductions from Proposed Gas            N.A.          28,384         180,496         192,683         218,080
 Can Standard (tons)............
Percentage Reduction............            N.A.              10              61              61              60
----------------------------------------------------------------------------------------------------------------

b. Toxics
    The proposed gas can standard would reduce emissions of benzene,
naphthalene, toluene, xylenes, ethylbenzene, n-hexane, 2,2,4-
trimethylpentane, and MTBE. We estimate that benzene emissions from gas
cans would be reduced by 65% (see Table V.E-7) and, more broadly, air
toxic emissions by 61% (see Table V.E-8) in year 2015. These reductions
do not include effects of the proposed fuel benzene standard (see
section V.E.4 for the combined effects of the proposed controls).
Chapter 2 of the RIA provides details on the emission reductions of the
other toxics.

          Table V.E-7.--Estimated National Reductions in Benzene Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
                                       1999            2010            2015            2020            2030
----------------------------------------------------------------------------------------------------------------
Benzene Without Rule (tons).....           2,229           2,118           2,262           2,423           2,757
Benzene With Proposed Gas Can               N.A.           1,885             794             856             985
 Standard (tons)................
Benzene Reductions from Proposed            N.A.             233           1,468           1,567           1,772
 Gas Can Standard (tons)........
Percentage Reduction............            N.A.              11              65              65              64
----------------------------------------------------------------------------------------------------------------

         Table V.E-8.--Estimated National Reductions in Total MSAT Emissions From Gas Cans, 2010 to 2030
----------------------------------------------------------------------------------------------------------------
                                       1999            2010            2015            2020            2030
----------------------------------------------------------------------------------------------------------------
MSATs Without Rule (tons).......          39,581          34,873          37,076          39,751          45,284
MSATs With Proposed Gas Can                 N.A.          31,312          14,445          15,593          17,942
 Standard (tons)................
MSAT Reductions from Proposed               N.A.           3,561          22,631          24,158          27,342
 Gas Can Standard (tons)........
Percentage Reduction............            N.A.              10              61              61              60
----------------------------------------------------------------------------------------------------------------

    Chapter 2 of the RIA describes how we estimated emissions from gas
cans, including the key assumptions used and uncertainties in the
analysis. We request comments on the emissions inventory methodology
used by EPA and we encourage commenters to provide relevant data where
possible.
4. Total Emission Reductions From Proposed Controls
    Sections V.E.1 through V.E.3 present the emissions impacts of each
of the

proposed controls individually. This section presents the combined
emissions impacts of the proposed controls.
a. Toxics
    Air toxic emissions from light-duty vehicles depend on both fuel
benzene content and vehicle hydrocarbon emission controls. Similarly,
the air toxic emissions from gas cans depend on both fuel benzene
content and the gas can emission controls. Tables V.E-9 and V.E-10
below summarize the expected reductions in benzene and MSAT emissions,
respectively, from our proposed vehicle, fuel, and gas can controls. In
2030, annual benzene emissions from gasoline on-road mobile sources
would be 44% lower as a result of this proposal (see Figure V.E-1).
Annual benzene emissions from gasoline light-duty vehicles would be 45%
lower in 2030 as a result of this proposal. Likewise, this proposal
would reduce annual emissions of benzene from gas cans by 78% in 2030
(see Figure V.E-2). For MSATs from on-road mobile sources, Figure V.E-3
below shows a 33% reduction in MSAT emissions in 2030.

                     Table V.E-9.--Estimated Reductions in Benzene Emissions From Proposed Control Measures by Sector, 2015 to 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             2015                                2020                                2030
                                             -----------------------------------------------------------------------------------------------------------
             Benzene                 1999       Without                             Without                             Without
                                                 rule      With rule  Reductions     rule      With rule  Reductions     rule      With rule  Reductions
                                                (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline On-road Mobile Sources.     178,465     103,798      77,155      26,643     108,256      71,326      36,930     127,058      70,682      56,376
Gasoline Nonroad Mobile Sources.      58,710      37,747      33,247       4,500      36,440      32,018       4,422      39,162      34,400       4,762
Gas Cans........................       2,229       2,262         492       1,770       2,423         531       1,892       2,757         610       2,147
Gasoline Distribution...........       5,502       5,999       4,054       1,945       6,207       4,210       1,997       6,207       4,210       1,997
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................     244,905     149,806     114,948      34,858     153,326     108,085      45,241     175,184     109,902      65,282
--------------------------------------------------------------------------------------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TP29MR06.003

                      Table V.E-10.--Estimated Reductions in MSAT Emissions From Proposed Control Measures by Sector, 2015 to 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             2015                                2020                                2030
                                             -----------------------------------------------------------------------------------------------------------
              MSAT                   1999       Without                             Without                             Without
                                                 rule      With rule  Reductions     rule      With rule  Reductions     rule      With rule  Reductions
                                                (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)      (tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline On-road Mobile Sources.   1,415,502     731,283     613,227     118,056     745,769     555,541     190,228     865,767     548,298     317,469
Gasoline Nonroad Mobile Sources.     673,922     432,953     428,506       4,447     390,468     386,095       4,373     405,119     400,408       4,711
Gas Cans........................      39,581      37,076      14,143      22,933      39,751      15,268      24,483      45,284      17,567      27,717
Gasoline Distribution...........      50,625      62,804      60,859       1,945      64,933      62,936       1,997      64,933      62,936       1,997
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................   2,179,630   1,264,116   1,116,735     147,381   1,240,921   1,019,840     221,081   1,381,103   1,029,209     351,894
--------------------------------------------------------------------------------------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TP29MR06.004

b. VOC
    VOC emissions would be reduced by the hydrocarbon emission
standards for both light-duty vehicles and gas cans. As seen in the
table and accompanying figure below, annual VOC emission reductions
from both of these sources would be 35% lower in 2030 because of
proposed control measures.

  Table V.E-11.--Estimated Reductions in VOC Emissions from Light-Duty Gasoline Vehicles and Gas Cans, 2015 to
                                                      2030
----------------------------------------------------------------------------------------------------------------
                                                                       2015            2020            2030
----------------------------------------------------------------------------------------------------------------
VOC Without Rule (tons).........................................       2,922,003       2,875,135       3,261,984
VOC With Proposed Vehicle and Gas Can Standards (tons)..........       2,421,633       2,145,969       2,130,464
VOC Reduction (tons)............................................         500,370         729,168       1,131,520
----------------------------------------------------------------------------------------------------------------

                                                                                [GRAPHIC] [TIFF OMITTED] TP29MR06.005

c. PM2.5
    We expect that only the proposed vehicle control would reduce
emissions of direct PM2.5. As shown in Table V.E-4, we
expect this control to reduce direct PM2.5 emissions by
about 20,000 tons in 2030. In addition, the VOC reductions from the
proposed vehicle and gas can standards would also reduce secondary
formation of PM2.5.

F. How Would This Proposal Reduce Exposure to Mobile Source Air Toxics
and Associated Health Effects?

    The proposed benzene standard for gasoline would reduce both
evaporative and exhaust emissions from motor vehicles and nonroad
equipment. It would also reduce emissions from gas cans and stationary
source emissions associated with gasoline distribution. Therefore, it
would reduce exposure to benzene for the general population, and also
for people near roadways, in

vehicles, in homes with attached garages, operating nonroad equipment,
and living or working near sources of gasoline distribution emissions
(such as bulk terminals, bulk plants, tankers, marine vessels, and
service stations). Section IV.B.2 of this preamble provides more
details on these types of exposures.
    We performed national-scale air quality, exposure, and risk
modeling in order to quantitatively assess the impacts of the proposed
fuel benzene standard. However, in addition to the limitations of the
national-scale modeling tools (discussed in section IV.A), this
modeling did not account for the elevated hydrocarbon emissions from
motor vehicles at cold temperatures, which we recently discovered and
are further described in section VI and the RIA. The modeling also
examined the gasoline benzene standard alone, without the proposed
vehicle or gas can standards. Nevertheless, the modeling is useful as a
preliminary assessment of the impacts of the fuel standard.
    The fuel benzene standard being proposed in this rule would reduce
both the number of people above the 1 in 100,000 increased cancer risk
level, and the average population cancer risk, by reducing exposures to
benzene from mobile sources. The number of people above the 1 in
100,000 cancer risk level due to exposure to all mobile source air
toxics from all sources would decrease by over 3 million in 2020 and by
about 3.5 million in 2030, based on average census tract risks. The
number of people above the 1 in 100,000 increased cancer risk level
from exposure to benzene from all sources would decrease by over 4
million in 2020 and 5 million in 2030. It should be noted that if it
were possible to estimate impacts of the proposed standard on
``background'' concentrations, the estimated overall risk reductions
would be even larger. The proposed standard would have little impact on
the number of people above various respiratory hazard index levels,
since this potential non-cancer risk is dominated by exposure to
acrolein.
    Table V.F-1 depicts the impact on the mobile source contribution to
nationwide average population cancer risk from benzene in 2020.
Nationwide, the cancer risk attributable to mobile source benzene would
be reduced by over 8%. Reductions in areas not subject to reformulated
gasoline controls are almost 13 percent relative to risks without the
proposed control; and in some states with high fuel benzene levels,
such as Minnesota and Washington, the risk reduction would exceed 17
percent. In Alaska, which has the highest fuel benzene levels in the
country, reductions would exceed 30%. Reductions for other modeled
years are similar. The methods and assumptions used to model the impact
of the proposed control are described in more detail in the Regulatory
Impact Analysis. Although not quantified in the risk analyses for this
rule, controls proposed for portable fuel containers will also reduce
exposures and risk from benzene, and cold temperature hydrocarbon
standards for exhaust emissions will reduce cancer and noncancer risks
for all gaseous mobile source air toxics. These reductions will vary
geographically since reductions from vehicle control are higher at
colder temperatures, and reductions from gas can controls are higher at
higher temperatures.

  Table V.F-1.--Impact of Proposed Fuel Benzene Control on the Mobile Source Contribution to Nationwide Average
                                         Population Cancer Risk in 2020
----------------------------------------------------------------------------------------------------------------
                                                                       U.S.          RFG areas     Non-RFG areas
----------------------------------------------------------------------------------------------------------------
 Without Proposal...............................................       2.57x10-6       3.64x10-6       1.96x10-6
0.62% Benzene Standard..........................................       2.35x10-6       3.51x10-6       1.72x10-6
 % Reduction....................................................             8.6             3.6            12.2
----------------------------------------------------------------------------------------------------------------

    Table V.F-2 summarizes the change in median and 95th percentile
benzene inhalation cancer risk from all outdoor sources in 2015, 2020,
and 2030, with the fuel benzene controls proposed in this rule. The
reductions in risk would be larger if the modeling fully accounted for
a number of factors, including: benzene emissions at cold temperature;
exposure to benzene emissions from vehicles, equipment, and gas cans in
attached garages; near-road exposures; and the impacts of the control
program on ``background'' levels attributable to transport.

  Table V.F-2.--Change in Median and 95th Percentile Benzene Inhalation Cancer Risk From Outdoor Sources in 2015, 2020, and 2030 With the Fuel Benzene
                                                             Controls Proposed in this Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       2015                            2020                            2030
                                                         -----------------------------------------------------------------------------------------------
                                                              median           95th           median           95th           median           95th
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Controls........................................       5.73x10-6       1.38x10-5       5.61x10-6       1.35x10-5       5.75x10-6       1.41x10-5
Proposed Benzene Standard...............................       5.49x10-6       1.32x10-5       5.39x10-6       1.29x10-5       5.51x10-6       1.35x10-5
Percent Change..........................................             4.2             4.3             3.9             4.4             4.2             4.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We did not model the air quality, exposure, and risk impacts of the
proposed vehicle and gas can standards. However, the proposed vehicle
standards would reduce exposure to several MSATs, including benzene.
Like the proposed fuel standard, the vehicle standards would reduce the
general population's exposure to MSATs, as well as people near roadways
and in vehicles. Since motor vehicle emissions are ubiquitous across
the U.S. and widely dispersed, reductions in exposure and risk will be
approximately proportional to reductions in emissions.
    The gas can standard will reduce evaporative emissions of several
MSATs, including benzene. We expect that these standards would
significantly reduce concentrations of benzene and other MSATs in
attached garages and inside homes with attached garages. Accordingly,
exposure to benzene and other MSATs would be significantly reduced. As
discussed in section IV.B.2, exposures to emissions occurring in
attached garages can be quite high.

    The proposed vehicle and gas can standards would also reduce
precursors to ozone and PM. We have modeled the ozone impacts of the
proposed gas can standard and the PM health benefits that would be
associated with the direct PM reductions from the proposed vehicle
standards. These results are discussed in sections IV.D and IX,
respectively.

G. Additional Programs Under Development That Will Reduce MSATs

1. On-Board Diagnostics for Heavy-Duty Vehicles Over 14,000 Pounds
    We are planning to propose on-board diagnostics (OBD) requirements
for heavy-duty vehicles over 14,000 pounds. In general, OBD systems
monitor the operation of key emissions controls to detect major
failures that would lead to emissions well above the standards during
the life of the vehicle. Given the nature of the heavy-duty trucking
industry, 50-state harmonization of emissions requirement is an
important consideration. In order to work towards this goal, the Agency
signed a Memorandum of Agreement in 2004 with the California Air
Resources Board which expresses both agencies' interest in working
towards a single, nationwide program for heavy-duty OBD. Since that
time, California has established their heavy-duty OBD program, which
will begin implementation in 2010. We expect the Agency's program will
also begin in the 2010 time frame. These requirements would help ensure
that the emission reductions we projected in the 2007 rulemaking for
heavy-duty engines occur in-use.
2. Standards for Small SI Engines
    We are developing a proposal for Small SI engines (those typically
used in lawn and garden equipment) and recreational marine engines.
This proposal is being developed in response to Section 428 of the
Omnibus Appropriations Bill for 2004, which requires EPA to propose
regulations under Clean Air Act section 213 for new nonroad spark-
ignition engines under 50 horsepower. We plan to propose standards that
would further reduce the emissions for these nonroad categories, and we
anticipate that the new standards would provide significant further
reductions in HC (and VOC-based toxics) emissions.
3. Standards for Locomotive and Marine Engines
    In addition, we are planning to propose more stringent standards
for large diesel engines used in locomotive and marine applications, as
discussed in a recent Advance Notice of Proposed Rulemaking.\179\ New
standards for marine diesel engines would apply to engines less than 30
liters per cylinder in displacement (all engine except for Category 3).
We are considering standards modeled after our Tier 4 nonroad diesel
engine program, which achieve substantial reductions in PM, HC, and
NOX emissions. These standards would be based on the use of
high efficiency catalyst aftertreatment and would also require fuel
sulfur control. As discussed in our recent ANPRM, we are considering
implementation as early as 2011.
---------------------------------------------------------------------------

    \179\ 69 FR 39276, June 29, 2004.
---------------------------------------------------------------------------

VI. Proposed New Light-Duty Vehicle Standards

A. Why Are We Proposing New Standards?

1. The Clean Air Act and Air Quality
    As described in section V of this preamble, the U.S. has made
significant progress in reducing emissions from passenger cars and
light trucks since the passage of the 1990 Clean Air Act Amendments.
Many emission control programs adopted to implement the 1990 Clean Air
Act Amendments are reducing and will continue to reduce air toxics from
light-duty vehicles. These include our reformulated gasoline (RFG)
program, our Supplemental Federal Test Procedure (SFTP) standards, our
national low emission vehicle program (NLEV), and, most recently, our
Tier 2 motor vehicle emissions standards and gasoline sulfur control
requirements.\180\ While these vehicle programs were put in place
primarily to reduce ambient concentrations of criteria pollutants and
their precursors (NOX, VOC, CO, and PM), they have reduced
and will continue to significantly reduce light-duty vehicle emissions
of air toxics. For example, there are numerous chemicals that make up
total VOC emissions, including several gaseous toxics (e.g., benzene,
formaldehyde, 1,3-butadiene, and acetaldehyde). These toxics are all
reduced by VOC emissions standards. It is the stringent control of
hydrocarbons in particular that results in stringent control of gaseous
toxics. There are no vehicle-based technologies of which we are aware
that reduce these air toxics individually.
---------------------------------------------------------------------------

    \180\ Unless otherwise noted, we use ``light-duty vehicles'' or
``vehicles'' to generally refer to passenger vehicles, light-duty
trucks such as sport utility vehicles (SUVs) and pick-ups, and
medium-duty passenger vehicles (MDPVs) which includes larger SUVs
and passenger vans up to 10,000 pounds Gross Vehicle Weight Rating.
---------------------------------------------------------------------------

    At the time of our 2001 MSAT rule, we had recently finalized the
Tier 2 emissions standards and gasoline sulfur control requirements
(described in more detail below in section V.D). As explained earlier,
we concluded then under section 202(l) that the Tier 2 standards
represented the greatest degree of emissions control achievable for
those vehicles. However, we also committed to continue to consider the
feasibility of additional vehicle-based MSAT controls in the future.
2. Technology Opportunities for Light-Duty Vehicles
    Since the 2001 MSAT rule, we have identified potential situations
where further reductions of light-duty vehicle hydrocarbon emissions--
and, therefore, mobile source air toxics--are technically feasible,
cost-effective, and do not have adverse energy or safety implications.
First, recent research and analytical work shows that the Tier 2
exhaust emission standards for hydrocarbons (which are typically tested
at 75[deg] F) do not, in the case of many vehicles, result in robust
control of hydrocarbon emissions at lower temperatures. We believe that
cold temperature hydrocarbon control can be substantially improved
using the same technological approaches generally already in use in the
Tier 2 vehicle fleet to meet the stringent standards at 75[deg] F.
Second, we believe that harmonization of evaporative emission standards
with California would prevent backsliding by codifying current industry
practices. Sections VI.B.1 and VI.B.2, below, provide our rationale for
proposing new cold temperature and evaporative controls and describe
the detailed provisions of our proposal. We request comment on all
aspects of these proposals and encourage commenters to provide detailed
rationales and supporting data where possible.
    Aside from these proposed standards, we continue to believe that
the remaining Tier 2 exhaust emission standards (i.e., those that apply
over the standard Federal Test Procedure at temperatures between
68[deg] F and 86[deg] F) represent the greatest emissions reductions
achievable as required under Clean Air Act section 202(l). We therefore
are not proposing further emission reductions from these vehicles.
(Please see section VI.D for further discussion.)
3. Cold Temperature Effects on Emission Levels
a. How Does Temperature Affect Emissions?
    With the possible exception of high-load operation, Tier 2
gasoline-powered vehicles emit the overwhelming

majority of hydrocarbon emissions in the first few minutes of operation
following a cold start (i.e., starting the vehicles after the engine
has stabilized to the ambient temperatures, such as overnight). This is
true at all cold start temperatures, and the general trend is that
hydrocarbon emissions progressively increase as engine start
temperatures decrease. The level of hydrocarbon emissions produced by
the engine will vary with start temperature, engine hardware design and
most importantly, engine management control strategies. Furthermore,
due to the heavy dependence on the aftertreatment system to perform the
main emission reducing functions, any delayed or non-use of emission
controls (hardware or software) will further increase the amount of
hydrocarbon emissions emitted from the vehicle following the cold
start.
    Elevated hydrocarbon levels at cold temperatures, specifically, the
non-methane hydrocarbons (NMHC) portion of total hydrocarbons (THC),
also indicate higher emissions of gaseous air toxics. A detailed
description of the relationship between NMHC and air toxics can be
found in Chapter 2 of the RIA. Recent EPA research studies \181\ on
Tier 2 gasoline vehicles, and past EPA studies \182\ on older
generation gasoline vehicles, demonstrate that many air toxics (e.g.,
benzene) are a relatively constant fraction of NMHC. This relationship
is observed regardless of vehicle type, NMHC emissions level, or
temperature. The relationship remains relatively constant for different
vehicles with different levels of NMHC emissions, and for the same
vehicle at colder temperatures. Therefore, it can be concluded that
reductions in NMHC will result in proportional reductions in gaseous
air toxics which are components of HC. These observations and findings
indicate that controlling NMHC is an effective approach to reducing
toxics which are a component of NMHC, including benzene emissions.
---------------------------------------------------------------------------

    \181\ ``VOC/PM Cold Temperature Characterization and Interior
Climate Control Emissions/Fuel Economy Impact,'' Volume I and II,
October 2005.
    \182\ ``Characterization of Emissions from Malfunctioning
Vehicles fueled with Oxygenated Gasoline-Ethanol (E10) Fuel,'' Part
I, II and III.
---------------------------------------------------------------------------

    In addition to control of air toxics, another benefit of regulating
NMHC at cold temperatures is reductions in particulate matter (PM). PM
is a criteria pollutant and for gasoline-fueled vehicles is an emerging
area of interest on which we are continuing to collect data (see
sections III.E and IV.F for more details on PM). We have limited data
indicating that PM emissions can be significantly higher at cold
temperatures compared to emissions at the 68-86[deg] F testing
temperatures used in the FTP. Data also indicate that HC and direct PM
emissions correlate fairly well as temperature changes and that some
direct PM emissions reductions can be expected when VOCs are reduced.
Also, from a technological standpoint, we can expect reductions in PM
as manufacturers reduce over-fueling at cold temperatures for NMHC
control. Although section 202(l) deals with control of air toxics, and
not criteria pollutants like PM, this co-benefit of cold temperature
control is significant.
b. What Are the Current Emissions Control Requirements?
    There are several requirements currently in place that have
resulted in significant NMHC reductions and provided experience with
control strategies that apply across a broad range of in-use driving
conditions, including cold temperatures. These requirements include the
Tier 2 standards, the Supplemental Federal Test Procedure (SFTP)
standards, the cold temperature carbon monoxide (CO) standard, and the
California 50[deg] F hydrocarbon standard.
    The Tier 2 program (and, before that, the NLEV program) contains
stringent new standards for light-duty vehicles that have resulted in
significant hydrocarbon reductions. To meet these standards, vehicle
manufacturers have responded with emissions control hardware and
control strategies that have very effectively minimized emissions,
particularly immediately following the vehicle start-up. In addition,
the SFTP rule (effective beginning in model year 2001) significantly
expanded the area of operation where stringent emission control was
required, by adding a high load/speed cycle (US06) and an air
conditioning cycle (SC03). Vehicle manufacturers responded with
additional control strategies across a broader range of in-use driving
conditions to successfully meet SFTP requirements.
    We also have cold temperature carbon monoxide (CO) standards which
began in model year 1994 for light-duty vehicles (LDVs) and light-duty
trucks (LDTs).\183\ This program requires manufacturers to comply with
a 20[deg] F CO standard. The 20[deg] F cold CO test replicates the
75[deg] F FTP drive cycle, but at the colder temperature. While the
recent Tier 2 program is primarily designed to reduce ozone, the cold
CO requirement was enacted to address exceedances of the national
ambient air quality standards (NAAQS) for CO, which were mostly
occurring during the cold weather months. While the cold CO standard
was considered challenging at its introduction, manufacturers quickly
developed emission control strategies and today comply with the
standard with generally large compliance margins. This indicates that
manufacturers do in fact have experience with emission control
strategies at colder temperatures.
---------------------------------------------------------------------------

    \183\ 57 FR 31888 ``Control of Air Pollution from New Motor
Vehicles and New Motor Vehicle Engines: Cold Temperature Carbon
Monoxide Emissions from 1994 and Later Model Year Gasoline-Fueled
Light-Duty Vehicles and Light-Duty Trucks'', Final Rule, July 17,
1992.
---------------------------------------------------------------------------

    Under the Low Emission Vehicle (LEV) programs, California
implemented stringent emissions standards for a 50[deg] F FTP test
condition in addition to stringent 75[deg] F standards. By creating a
unique 50[deg] F standard, California ensures that emission control
strategies successfully used at 75[deg] F are also utilized at the
slightly cooler temperatures that encompass a larger range of
California's expected climates. The 50[deg] F non-methane organic gases
(NMOG) standards are directly proportional to the 75[deg] F
certification standard; that is, they are two times the 75[deg] F
standard. These standards have resulted in proportional emissions
improvements at 50[deg] F for vehicles certified to the California
standards, as observed in the manufacturer certification data.
Manufacturers have met the standards and have successfully obtained
these proportional improvements at 50[deg] F by implementing the same
emission control strategies developed for 75[deg] F requirements.
c. Opportunities for Additional Control
    As emissions standards have become more stringent from Tier 1 to
NLEV, and now to Tier 2, manufacturers have concentrated primarily on
emissions performance just after the start of the engine in order to
further reduce emissions. To comply with stringent hydrocarbon emission
standards at 75[deg] F, manufacturers developed new emission control
strategies and practices that resulted in significant emissions
reductions at that start temperature. For California, the LEV II
program contains a standard at 50[deg] F (as just explained), which
essentially requires proportional control of hydrocarbon emissions down
to that temperature. On the national level, even though there is no
explicit requirement, we expected that proportional reductions in
hydrocarbon emissions would occur at other colder start temperatures--
including the 20[deg] F Cold CO test point--as a result of the more
stringent NLEV and Tier 2 standards. We believe that there is no

engineering reason why proportional control should not be occurring on
a widespread basis.
    However, reported annual manufacturer certification results
(discussed in the next paragraph) indicate that for many engine
families, very little improvement in hydrocarbon emissions was realized
at the colder 20[deg] F Cold CO test conditions, despite the improved
emission control systems designed for the vehicle under normal 75[deg]
F test conditions. Thus although all vehicle manufacturers have been
highly successful at reducing emissions at the required FTP start
temperature range, in general, they do not appear to be capitalizing on
NMHC emission control strategies and technologies at lower
temperatures.
    Certification reports submitted by manufacturers for recent model
years of light duty vehicles in fact show a sharp rise in hydrocarbon
\184\ emissions at 20[deg] F when compared to the reported 75[deg] F
hydrocarbon emission levels. Any rise in hydrocarbon emissions,
specifically NMHC, will result in proportional rise in VOC-based air
toxics \185\. While some increase in NMHC emissions can be expected
simply due to combustion limitations of gasoline engines at colder
temperatures, the reported levels of hydrocarbon emissions seem to
indicate a significantly diminished use of hydrocarbon emissions
controls occurring at colder temperatures. For example, on recent Tier
2 certified vehicles, the reported 20[deg] F hydrocarbon levels on
average were 10 to 12 times higher than the equivalent vehicle's
measured 75[deg] F hydrocarbon levels. Some vehicles which were
certified to more stringent Tier 2 bins (bins 2, 3, and 4) demonstrated
20[deg] F hydrocarbon levels no different than less stringent Tier 2
bins (bins 5, 6, 7, and 8), likewise suggesting no discernable attempt
to use the 75[deg] F hydrocarbon controls at the 20[deg] F temperature.
On the other hand, in some select cases, individual vehicles did
demonstrate proportional improvements in hydrocarbon emission results
at 20[deg] F relative to their 75[deg] F results, confirming our belief
that proportional control is feasible and indeed is occasionally
practiced. One manufacturer's certification results reflected
proportional improvements across almost its entire vehicle lines
(including vehicles up to 5665 GVWR), further supporting that
proportional control is feasible.
---------------------------------------------------------------------------

    \184\ Most certification 20[deg] F hydrocarbon levels are
reported as THC, but NMHC accounts for approximately 95% of THC as
seen in results with both THC and NMHC levels reported. This
relationship also is confirmed in EPA test programs supporting this
rule-making.
    \185\ ``VOC/PM Cold Temperature Characterization and Interior
Climate Control Emissions/Fuel Economy Impact'', Volume I and II,
October 2005.
---------------------------------------------------------------------------

B. What Cold Temperature Requirements Are We Proposing?

1. NMHC Exhaust Emissions Standards
    We are proposing a set of standards that will achieve proportional
NMHC control from the 75[deg] F Tier 2 standards to the 20[deg] F test
point. The proposed standard would achieve the greatest degree of
hydrocarbon emissions reductions feasible by fully utilizing the
substantial existing emission control hardware required to meet Tier 2
standards. We believe these standards would be achievable through
calibration and software control strategies on Tier 2 level vehicles
without use of additional hardware. The proposed standards are shown in
Table VI.B-1.

    Table VI.B-1.--Proposed 20[deg] F FTP Exhaust Emission Standards
------------------------------------------------------------------------
                                                             NMHC sales-
                                                               weighted
                                                                fleet
                 Vehicle GVWR and category                     average
                                                               standard
                                                               (grams/
                                                                mile)
------------------------------------------------------------------------
< = 6000 lbs: Light-duty vehicles (LDV) & Light light-duty            0.3
 trucks (LLDT).............................................
> 6000 lbs: Heavy light-duty trucks (HLDT) up to 8,500 lbs           0.5
 & Medium-duty passenger vehicles (MDPV) up to 10,000 lbs..
------------------------------------------------------------------------

    We are proposing two separate sales-weighted fleet average NMHC
levels: (1) 0.3 g/mile for vehicles at or below 6,000 pounds GVWR and
(2) 0.5 g/mile for vehicles over 6,000 pounds, including MDPVs.\186\
The new standard would not require additional certification testing
beyond what is required today with ``worst case'' model selection of a
durability test group.\187\ NMHC emissions would be measured during the
Cold CO test, which already requires hydrocarbon measurement.\188\
---------------------------------------------------------------------------

    \186\ Tier 2 created the medium-duty passenger vehicle (MDPV)
category to include larger complete passenger vehicles, such as SUVs
and vans, with a GVWR of 8,501-10,000 pounds GVWR. Large pick-ups
above 8,500 pounds are not included in the MDPV category but are
included in the heavy-duty vehicle category.
    \187\ The existing cold FTP test procedures are specified in 40
CFR Subpart C. In the proposed rule for fuel economy labeling,
recently signed on January 10, 2006 (71, FR 5426, February 1, 2006),
EPA is seeking comment on the issue of requiring manufacturers to
run the heater and/or defroster while conducting the cold FTP test.
As discussed in the fuel economy labeling proposed rule, we do not
believe this requirement would have a significant impact on
emissions.
    \188\ 40 CFR Subpart C, Sec.  86.244-94 requires the measurement
of all pollutants measured over the FTP except NOX.
---------------------------------------------------------------------------

    The separate fleet average standards are proposed to address
challenges related to vehicle weight. We examined the certification
data from interim non-Tier 2 vehicles (i.e., vehicles not yet phased in
to the final Tier 2 program, but meeting interim standards established
by Tier 2), and we determined that there was a general trend of
increasing hydrocarbon levels with heavier GVWR vehicles. Heavier
vehicles generally produce higher levels of emissions for several
reasons. First, added weight results in additional work required to
accelerate the vehicle mass. This generally results in higher
emissions, particularly early in the test right after engine start-up.
Second, the design of these vehicle emission control systems may
incorporate designs for heavy work (i.e., trailer towing) that may put
them at some disadvantage at 20[deg] F cold starts. For example, the
catalyst may be located further away from the engine so it is protected
from high exhaust temperatures. This catalyst placement may delay the
warm-up of the catalyst, especially at colder temperatures. Therefore,
we believe a standard that is higher than the 0.3 g/mile level proposed
for vehicles below 6,000 lbs GVWR, is what is technically feasible for
heavier vehicles. The proposed 0.5 g/mile standard would apply for
vehicles over 6000 lbs GVWR, which includes both HLDTs (6000 lbs to
8500 lbs) and MDPVs.
    We are proposing the sales-weighted fleet average approach because
it achieves the greatest degree of emission control feasible for Tier 2
vehicles, while allowing manufacturers flexibility to certify different
vehicle groups to different levels and thus providing both lower cost
and feasible lead times. We believe this is an appropriate approach
because the base Tier 2 program is also based on emissions averaging,
and will result in a mix of emissions control strategies across the
fleet that would have varying cold temperature capabilities. These
capabilities won't be fully understood until manufacturers go through
the process of evaluating each Tier 2 package for cold temperature
emissions control potential. Also, Tier 2 is still being phased in and
some Tier 2 vehicle emissions control packages are still being
developed. A fleet average provides manufacturers with flexibility to
balance challenging vehicle families with ones that more easily achieve
the standards.

    There are several ways fleet averaging can work. In Tier 2, we
established bins of standards to which individual vehicle families were
certified. Each bin contains a NOX standard, and these
NOX standards are then sales-weighted to demonstrate
compliance with the corporate average NOX standard. In other
emissions control programs, such as the highway motorcycle program and
the highway and nonroad heavy-duty engine programs, we have established
a Family Emissions Limit (FEL) structure. In this approach,
manufacturers establish individual FELs for each group of vehicles
certified. These FELs serve as the standard for each individual group,
and the FELs are averaged together on a sales-weighted basis to
demonstrate overall compliance with the standards. For the proposed new
cold temperature NMHC standards, we are proposing to use the FEL-based
approach. We believe the FEL approach adds flexibility and should lead
to cost-effective improvements in vehicle emissions performance. The
FEL approach is discussed further in Section VI.B.4 below.
    We are proposing to apply the new cold temperature NMHC standards
to Tier 2 gasoline-fueled vehicles. We are not proposing to apply the
standards to diesel vehicles, alternative-fueled vehicles, or heavy-
duty vehicles, in general, due to a lack of data on which to base
standards. Section VI.B., below, provides a detailed discussion of
applicability.
    As discussed above, we are expecting PM reductions at cold
temperatures as a result of the control strategies we expect
manufacturers to meet under the proposed cold temperature NMHC
standards. We may consider the need for a separate PM standard under
CAA section 202(a), as part of a future rulemaking, to further ensure
that PM reductions occur under cold temperature conditions. We also
request comments on what testing challenges exist for testing PM under
cold conditions. We request that comments be supported by data where
possible.
    We request comments on the level of the new standards and the
averaging approach we are proposing, and we urge commenters to include
supporting information and data where possible.
2. Feasibility of the Proposed Standards
    We believe the proposed standards are feasible, based on our
analysis of the stringency of the standard provided below and the lead
time and flexibilities described in section VI.B.3. We believe that the
proposed standards could be achieved using a number of the technologies
discussed in the following section, but that none of these potential
technologies performs markedly better than any other. Moreover, as
explained in section VI.D, we do not believe that additional reductions
would be feasible without significant changes in Tier 2 technology, and
we are not yet in a position to fully evaluate the achievability of
standards based on such technologies. We thus are not considering more
stringent cold temperature NMHC standards. We request comment on our
analysis of the feasibility of the proposed standards.
a. Currently Available Emission Control Technologies
    We believe that the cold temperature NMHC standards being proposed
today for gasoline-fueled vehicles are challenging but within the reach
of Tier 2 level emission control technologies. Our proposed
determination of feasibility is based on the emission control hardware
and strategies that are already in use today on Tier 2 vehicles. These
emission control technologies are successfully used to meet the
stringent Tier 2 standards for HC at the FTP temperature range of
68[deg] F to 86[deg] F, but generally are not fully used or activated
at colder temperatures. As discussed in section VI.D, we are not
proposing standards that would force changes to Tier 2 technology at
this time. As discussed above, many current engine families are already
achieving emissions levels at or below the proposed emission standards
(see RIA Chapter 5), while other engine families are at levels greater
than twice the proposed standard. The only apparent reason for the
difference is the failure of some vehicles to use the Tier 2 control
technologies at cold temperatures. While manufacturers could always
choose to use additional hardware to facilitate compliance with the
proposed standard, many of the engine families already at levels below
the proposed standard do not necessarily contain any unique enabling
hardware. These vehicles appear to achieve their results through mainly
software and calibration control technologies. Thus, we believe our
proposed standards can be met by the application of calibration and
software approaches similar to those currently used at 50[deg] F and
75[deg] F, and we have estimated cost of control based on use of
calibration and software approaches. Estimated costs are provided in
section IX below, and in Chapter 8 of the RIA. As described in section
VI.B.2.c, our own feasibility testing of a vehicle over 6000 lbs GVWR
achieved NMHC reductions consistent with the proposed standard without
the use of new hardware.
    In addition, a 20[deg] F cold hydrocarbon requirement has been in
place in Europe since approximately the 2002 model year.\189\ Many
manufacturers currently have common vehicle models offered in Europe
and the U.S. market. While the European standard is over a different
drive cycle, unique strategies have been developed to comply with this
standard. In fact, when the new European cold hydrocarbon standard was
implemented in conjunction with a new 75[deg] F standard (Euro4), many
manufacturers responded by implementing NLEV level hardware and
supplementing this hardware with advanced cold start emission control
strategies. Although we are proposing a sales-weighted fleet average
standard, the European standard is a fixed standard that cannot be
exceeded by any vehicle model. Like the standard we are proposing,
Europe also has made distinctions in the level of the standard
reflecting that heavier weight vehicles cannot achieve as stringent a
standard. Those manufacturers with European models shared with the U.S.
market have the opportunity to leverage their European models or
divisions in an attempt to transfer the emission control technologies
that are used today for 20[deg] F hydrocarbon control.
---------------------------------------------------------------------------

    \189\ European Union (EU) Type VI Test (-7[deg] C) required for
new vehicle model certified as of 1/1/2002.
---------------------------------------------------------------------------

    There are several different approaches or strategies used in the
vehicles that are achieving proportional improvements in NMHC emissions
at 20[deg] F FTP. Several European models sold in the U.S. market that
demonstrate excellent cold hydrocarbon performance are utilizing
secondary air systems at the 20[deg] F start temperature. These
secondary air systems, sometimes called air pumps, inject ambient air
into the exhaust immediately after the cold start. This performs
additional combustion of unburned hydrocarbons prior to the catalytic
converter and also accelerates the necessary heating of the catalytic
converter. In the past and even recently, these systems have been used
extensively to improve hydrocarbon performance at 75[deg] F starts. As
predicted in the Tier 2 Final Rule, a portion of the Tier 2 fleet is
being equipped with secondary air systems in order to comply with Tier
2 standards.
    Some manufacturers that currently have these systems available on
their vehicles have indicated that they are simply not utilizing them
at temperatures below freezing due to past engineering issues. The
manufacturers that are using secondary air at 20[deg] F, mainly
European manufacturers, have indicated that these engineering

challenges have been addressed through design changes. The robustness
of these systems below freezing has also been confirmed with the
manufacturers and with the suppliers of the secondary air
components.\190\ While not necessarily producing 20[deg] F NMHC
emission results better than other available technologies, vehicles
equipped with this technology should be able to meet the proposed
20[deg] F standard by capitalizing on this hardware.
---------------------------------------------------------------------------

    \190\ Memo to docket ``Discussions Regarding Secondary Air
System Usage at 20[deg] F with European Automotive Manufacturers and
Suppliers of Secondary Air Systems,'' December 2005.
---------------------------------------------------------------------------

    Manufacturers have also used several other strategies to
successfully produce proportional improvements in hydrocarbon emissions
at 20[deg] F. These include lean limit fuel strategies, elevated idle
speeds, retarded spark timing, and accelerated closed loop times. Some
software design strategies include fuel injection strategies detailed
in past Society of Automotive Engineers (SAE) papers \191\ that
synchronize fuel injection timing with engine intake valve position to
provide optimal fuel preparation. Spark delivery strategies have also
been entertained that include higher energy levels and even redundant
spark delivery to possibly complete additional combustion of unburned
hydrocarbons. We expect that software and/or calibration changes, such
as previously described, will generally perform as well or better than
added hardware. This is because critical hardware such as the catalyst
may not be immediately usable directly following the cold start. See
RIA Chapter 5 for further discussion.
---------------------------------------------------------------------------

    \191\ Meyer, Robert and John B. Heywood, ``Liquid Fuel Transport
Mechanisms into the Cylinder of a Firing Port-Injected SI Engine
During Start-up,'' SAE 970865, 1997.
---------------------------------------------------------------------------

b. Feasibility Considering Current Certification Levels, Deterioration
and Compliance Margin
    Of the vehicles that were certified to Tier 2 and demonstrated
proportional improvements in hydrocarbon emissions, approximately 20%
of vehicles below 6,000 pounds GVWR had certification levels in the
range of two to three times the 75[deg] F Tier 2 bin 5 full useful life
standard (.18 g/mile to .27 g/mile). These reported hydrocarbon levels
are from Cold CO test results for certification test vehicles with
typically only 4,000 mile aged systems, without full useful life
deterioration applied. Due to rapid advances in emission control
hardware technology, deterioration factors used today by manufacturers
to demonstrate full useful life compliance are very low and typically
even indicate little or no deterioration over the life of the vehicle.
The deterioration factors generated today by manufacturers are common
across all required test cycles including cold temperature testing. The
standards we are proposing will have a full useful life of 120,000
miles, consistent with Tier 2 standards. Additionally, manufacturers
typically target certification emission levels that incorporate a 20%
to 30% compliance margin primarily to account for in-use issues that
may cause emissions variability. The 0.3 g/mile FEL standard would
leave adequate flexibility for compliance margins and any emissions
deterioration concerns. See RIA Chapter 5 for further discussion and
details regarding current certification levels.
    Given enough lead time, we believe manufacturers would be able to
develop control strategies for each of their widely varying product
lines utilizing the approaches outlined above without fundamentally
changing the design of the vehicles.
c. Feasibility and Test Programs for Higher Weight Vehicles
    While a few of the heavier vehicles achieved a standard similar to
the lighter weight class, there were limited certification results
available for Tier 2 compliant vehicles over 6000 lbs GVWR (due to the
later Tier 2 phase-in schedule for these vehicles). To further support
the feasibility of the standard for heavier vehicles, we conducted a
feasibility study for Tier 2 vehicles over 6000 lbs GVWR to assess
their capabilities with typical Tier 2 hardware. We were able to reduce
HC emissions for one vehicle with models above and below 6,000 pounds
GVWR by between 60-70 percent, depending on control strategy, from a
baseline level of about 1.0 g/mile. The results are well within the 0.5
g/mile standard including compliance margin, and we even achieved a 0.3
g/mile level on some tests. We achieved these reductions through
recalibration without the use of new hardware. The findings from the
study are provided in detail in the RIA.
    We believe the proposed standards are feasible while at the same
time providing the greatest degree of emission reduction achievable
through the application of available technology. Our feasibility
assessment, provided above, is based on our analysis of the stringency
of the standard given current emission levels at certification
(considering deterioration, compliance margin, and vehicle weight);
available emission control techniques; and our own feasibility testing.
In addition, sections VI.B.3-6 describe the proposed lead time and
flexibility within the program structure, which also contribute to the
feasibility of the proposed standards. Chapter 8 of the RIA provides
our cost estimations per vehicle and on a nationwide basis, including
capital and development costs. We believe the estimated costs are
reasonable and the proposal is cost effective, as provided in section
IX, below. Given the emission control strategies we expect
manufacturers to utilize, we expect feasible implementation of
technologies without a significant impact on vehicle noise, energy
consumption, or safety factors. Although manufacturers would need to
employ new emissions control strategies at cold temperatures,
fundamental Tier 2 vehicle hardware and designs are not expected to
change. In addition, we are providing necessary lead time for
manufacturers to identify and resolve any related issues as part of
overall vehicle development. We request comment on our analysis of the
feasibility of the proposed standards.
3. Standards Timing and Phase-in
a. Phase-In Schedule
    EPA must consider lead time in determining the greatest degree of
emission reduction achievable under section 202(l) of the CAA. We are
proposing to begin implementing the standard in the 2010 model year
(MY) for LDVs/LLDTs and 2012 MY for HLDTs/MDPVs. The proposed
implementation schedule, in Table VI.B-2, begins 3 model years after
Tier 2 phase-in is complete for both vehicle classes. Manufacturers
would demonstrate compliance with phase-in requirements through sales
projections, similar to Tier 2. The 3-year period between completion of
the Tier 2 phase-in and the start of the new cold NMHC standard should
provide vehicle manufacturers sufficient lead time to design their
compliance strategies and determine the product development plans
necessary to meet the new standards. We believe that this phase-in
schedule is needed to allow manufacturers to develop compliant vehicles
without significant disruptions in the product development cycles.
Also, for vehicles above 6,000 GVWR, section 202(a) of the Act requires
that four years of lead time be provided to manufacturers.
    We recognize that the new cold temperature standards we are
proposing could represent a significant new challenge for manufacturers
and development time will be needed. The issue of NMHC control at cold
temperatures was not anticipated by

many entities, and research and development to address the issue is
consequently at a rudimentary stage. Lead time is therefore necessary
before compliance can be demonstrated. While certification will only
require one vehicle model of a durability group to be tested,
manufacturers must do development on all vehicle combinations to ensure
full compliance within the durability test group. We believe a phase-in
allows the program to begin sooner than would otherwise be feasible.

               Table VI.B-2.--Proposed Phase-in Schedule for 20 [deg]F NMHC Standard by Model Year
----------------------------------------------------------------------------------------------------------------
      Vehicle GVWR (category)           2010         2011         2012         2013         2014         2015
----------------------------------------------------------------------------------------------------------------
< = 6000 lbs (LDV/LLDT)............          25%          50%          75%         100%  ...........  ...........
> 6000 lbs HLDT and MDPV..........  ...........  ...........          25%          50%          75%         100%
----------------------------------------------------------------------------------------------------------------

    In considering a phase-in period, manufacturers have raised
concerns that a rapid phase-in schedule would lead to a significant
increase in the demand for their cold testing facilities, which could
necessitate substantial capital investment in new cold test facilities
to meet development needs. This is because manufacturers would need to
use their cold testing facilities not only for certification but also
for vehicle development. If vehicle development is compressed into a
narrow time window, significant numbers of new facilities would be
needed. Manufacturers were further concerned that investment in new
test facilities would be stranded at the completion of the initial
development and phase-in period.
    As stated earlier, durability test groups may be large and diverse
and therefore require significant development effort and cold test
facility usage for each model. Our proposed phase-in period
accommodates test facilities and work load concerns by distributing
these fleet phase-in percentage requirements over a 4-year period for
each vehicle weight category. The staggered start dates for the phase-
in schedule between the two weight categories should further alleviate
manufacturers' concerns with needing to construct new test facilities.
Some manufacturers may still determine that upgrades to their current
cold facility are needed to handle increased workload. Some
manufacturers have indicated that they would simply add additional
shifts to their facility work schedules that are not in place today.
Some manufacturers will already meet the first-year requirement based
on current certification reporting, essentially providing an additional
year for distributing the anticipated development test burden for the
remaining fleet. The 4-year phase-in period provides ample time for
vehicle manufacturers to develop a compliance schedule that is
coordinated with their future product plans and projected product sales
volumes of the different vehicle models.
    We request comments on the proposed start date and duration of the
phase-in schedule. We also request comment on allowing a volume-based
offset during the phase-in period for cases where manufacturers
voluntarily certify heavy-duty vehicles above 8,500 pound GVWR to the
proposed cold temperature standards. This may provide incentive for
voluntary certification of these heavier vehicles.
b. Alternative Phase-In Schedules
    Alternative phase-in schedules essentially credit the manufacturer
for its early or accelerated efforts and allow the manufacturer greater
flexibility in subsequent years during the phase-in. By introducing
vehicles earlier than required, manufacturers would earn the
flexibility to make offsetting adjustments, on a vehicle-year basis, to
the phase-in percentages in later years. Under these alternative
schedules, manufacturers would have to introduce vehicles that meet or
surpass the NHMC average standards before they are required to do so,
or else introduce vehicles that meet or surpass the standard in greater
quantities than required.
    We are proposing that manufacturers may apply for an alternative
phase-in schedule that would still result in 100% phase-in by 2013 and
2015, respectively, for the lighter and heavier weight categories. As
with the primary phase-in, manufacturers would base an alternative
phase-in on their projected sales estimates. An alternate phase-in
schedule submitted by a manufacturer would be subject to EPA approval
and would need to provide the same emissions reductions as the primary
phase-in schedule. We propose that the alternative phase-in could not
be used to delay full implementation past the last year of the primary
phase-in schedule (2013 for LDVs/LDTs and 2015 for HLDTs/MDPVs).
    An alternative phase-in schedule would be acceptable if it passes a
specific mathematical test. We have designed the test to provide
manufacturers a benefit from certifying to the standards early, while
ensuring that significant numbers of vehicles are introduced during
each year of the alternative phase-in schedule. Manufacturers would
multiply their percent phase-in by the number of years the vehicles are
phased in prior to the second full phase-in year. The sum of the
calculation would need to be greater than or equal to 500, which is the
sum from the primary phase-in schedule (4*25 + 3*50 + 2*75 +
1*100=500). For example, the equation for LDVs/LLDTs would be as
follows:

(6xAPI2008) + (5xAPI 2009) + (4xAPI
2010) + (3xAPI 2011) + (2xAPI 2012) +
(1xAPI 2013) >= 500%,

Where:

API is the anticipated phase-in percentage for the referenced model
year.

    California used this approach to an alternative phase-in for the
LEVII program.\192\ It provides alternative phase-in credit for both
the number of vehicles phased in early and the number of years the
early phase-in occurs.
---------------------------------------------------------------------------

    \192\ Title 13, California Code of Regulations, Section
1961(b)(2).
---------------------------------------------------------------------------

    As described above, the final sum of percentages for both LDVs/LDTs
and HLDTs/MDPVs must equal or exceed 500--the sum that results from a
25/50/75/100 percent phase-in. For example, a 10/25/50/55/100 percent
phase-in for LDVs/LDTs that begins in 2009 will have a sum of 510
percent and is acceptable. A 10/20/40/70/100 percent phase-in that
begins the same year has a sum of 490 percent and is not acceptable.
    To ensure that significant numbers of LDVs/LDTs are introduced in
the 2010 time frame (2012 for HLDTs/MDPVs), manufacturers would not be
permitted to use alternative phase-in schedules that delay the
implementation of the requirements, even if the sum of the phase-in
percentages ultimately meets or exceeds 500. Such a situation could
occur if a manufacturer delayed implementation of its compliant
production until 2011 and began an 80/85/100 percent phase-in that year
for

LDVs/LDTs. To protect against this possibility, we are proposing that
for any alternative phase-in schedule, a manufacturer's phase-in
percentages*years factor from the 2010 and earlier model years sum to
at least 100 (2012 and earlier for HLDTs/MDPVs). The early phase-in
also encourages the early introduction of vehicles meeting the new
standard or the introduction of such vehicles in greater quantity than
required. This would achieve early emissions reductions and provide an
opportunity to gain experience in meeting the standards.
    Phase-in schedules, in general, add little flexibility for
manufacturers with limited product offerings because a manufacturer
with only one or two test groups cannot take full advantage of a 25/50/
75/100 percent or similar phase-in. Therefore, consistent with the
recommendations of the Small Advocacy Review Panel (SBAR Panel), which
we discuss in more detail later in section VI.E, manufacturers meeting
EPA's definition of ``small volume manufacturer'' would be exempt from
the phase-in schedules and would be required to simply comply with the
final 100% compliance requirement. This provision would only apply to
small volume manufacturers and not to small test groups of larger
manufacturers.
4. Certification Levels
    Manufacturers typically certify groupings of vehicles called
durability groups and test groups, and they have some discretion on
what vehicle models are placed in each group. A durability group is the
basic classification used by manufacturers to group vehicles to
demonstrate durability and predict deterioration. A test group is a
basic classification within a durability group used to demonstrate
compliance with FTP 75[deg] F standards.\193\ For Cold CO,
manufacturers certify on a durability group basis, whereas for 75[deg]
F FTP testing, manufacturers certify on a test group basis. In keeping
with the current cold CO standards, we are proposing to require testing
on a durability group basis for the cold temperature NMHC standard. We
also propose to allow manufacturers the option of certifying on the
smaller test group basis, as is allowed under current cold CO
standards. Testing on a test group basis would require more tests to be
run by manufacturers but may provide them with more flexibility within
the averaging program. In either case, the worst case vehicle within
the group from an NMHC emissions standpoint would be tested for
certification.
---------------------------------------------------------------------------

    \193\ 40 CFR 86.1803-01.
---------------------------------------------------------------------------

    For the new standard, manufacturers would declare a family emission
limit (FEL) for each group either at, above, or below the fleet
averaging standard. The FEL would be based on the certification NMHC
level, including deterioration factor, plus the compliance margin
manufacturers feel is needed to ensure in-use compliance. The FEL
becomes the standard for each group, and each group could have a
different FEL so long as the projected sales-weighted average level met
the fleet average standard at time of certification. Like the standard,
the certification resolution for the FEL would be one decimal point.
This FEL approach would be similar to having bins in 0.1 g/mile
intervals, with no upper limit. Similar to a bin approach,
manufacturers would compute a sales-weighted average for the NMHC
emissions at the end of the model year and then determine credits
generated or needed based on how much the average is above or below the
standard.
5. Credit Program
    As described above, we are proposing that manufacturers average the
NMHC emissions of their vehicles and comply with a corporate average
NMHC standard. In addition, we are proposing that when a manufacturer's
average NMHC emissions of vehicles certified and sold falls below the
corporate average standard, it could generate credits that it could
save for later use (banking) or sell to another manufacturer (trading).
Manufacturers would consume any credits if their corporate average NMHC
emissions were above the applicable standard for the weight class.
    EPA views the proposed averaging, banking, and trading (ABT)
provisions as an important element in setting emission standards
reflecting the greatest degree of emission reduction achievable,
considering factors including cost and lead time. If there are vehicles
that will be particularly costly or have a particularly hard time
coming into compliance with the standard, a manufacturer can adjust the
compliance schedule accordingly, without special delays or exceptions
having to be written into the rule. This is an important flexibility
especially given the current uncertainty regarding optimal technology
strategies for any given vehicle line. In addition, ABT allows us to
consider a more stringent emission standard than might otherwise be
achievable under the CAA, since ABT reduces the cost and improves the
technological feasibility of achieving the standard. By enhancing the
technological feasibility and cost effectiveness of the proposed
standard, ABT allows the standard to be attainable earlier than might
otherwise be possible.
    Credits may be generated prior to, during, and after the phase-in
period. Manufacturers could certify LDVs/LLDTs to standards as early as
the 2008 model year (2010 for HLDTs/MDPVs) and receive early NMHC
credits for their efforts. They could use credits generated under these
``early banking'' provisions after the phase-in begins in 2010 (2012
for HLDTs/MDPVs).
a. How Credits Are Calculated
    The corporate average for each weight class would be calculated by
computing a sales-weighted average of the NMHC levels to which each FEL
was certified. As discussed above, manufacturers group vehicles into
durability groups or test groups and establish an FEL for each group.
This FEL becomes the standard for that group. Consistent with FEL
practices in other programs, manufacturers may opt to select an FEL
above the test level. The FEL would be used in calculating credits. The
number of credits or debits would then be determined using the
following equation:

Credits or Debits = (Standard - Sales weighted average of FELs to
nearest tenth) x Actual Sales

    If a manufacturer's average was below the 0.3 g/mi corporate
average standard for LDVs/LDTs, credits would be generated (below 0.5
g/mi for HLDTs/MDPVs). These credits could then be used in a future
model year when its average NMHC might exceed the 0.3 or the 0.5
standard. Conversely, if the manufacturer's fleet average was above the
corporate average standard, banked credits could offset the difference,
or credits could be purchased from another manufacturer.
b. Credits Earned Prior to Primary Phase-in Schedule
    We propose that manufacturers could earn early emissions credits if
they introduce vehicles that comply with the new standards early and
the corporate average of those vehicles is below the applicable
standard. Early credits could be earned starting in 2008 for vehicles
meeting the 0.3 g/mile standard and in 2010 for vehicles meeting the
0.5 g/mile standard. These emissions credits generated prior to the
start of the phase-in could be used both during and after the phase-in
period and have all the same properties as credits generated by
vehicles subject to the primary phase-in schedule. As previously
mentioned, we are also proposing that manufacturers

may apply for an alternative phase-in schedule for vehicles that are
introduced early. The alternative phase-in and early credits provisions
would operate independent of one another.
c. How Credits Can Be Used
    A manufacturer could use credits in any future year when its
corporate average was above the standard, or it could trade (sell) the
credits to other manufacturers. Because of separate sets of standards
for the different weight categories, we are proposing that
manufacturers compute their corporate NMHC averages separately for LDV/
LLDTs and HLDTs/MDPVs. Credit exchanges between LDVs/LLDTs and HLDTs/
MDPVs would be allowed. This will provide added flexibility for fuller-
line manufacturers who may have the greatest challenge in meeting the
new standards due to their wide disparity of vehicle types/weights and
emissions levels.
d. Discounting and Unlimited Life
    Credits would allow manufacturers a way to address unexpected
shifts in their sales mix. The NMHC emission standards in this proposed
program are quite stringent and do not present easy opportunities to
generate credits. Therefore, we are not proposing to discount unused
credits. Further, the degree to which manufacturers invest the
resources to achieve extra NMHC reductions provides true value to the
manufacturer and the environment. We do not want to take measures to
reduce the incentive for manufacturers to bank credits, nor do we want
to take measures to encourage unnecessary credit use. Consequently we
are not proposing that the NMHC credits would have a credit life limit.
However, we are proposing that they only be used to offset deficits
accrued with respect to the proposed 0.3/0.5 g/mile cold temperature
standards. We request comment on the need for discounting of credits or
credit life limits and what those discount rates or limits, if any,
should be.
e. Deficits Could Be Carried Forward
    When a manufacturer has an NMHC deficit at the end of a model
year--that is, its corporate average NMHC level is above the required
corporate average NMHC standard--we are proposing that the manufacturer
be allowed to carry that deficit forward into the next model year. Such
a carry-forward could only occur after the manufacturer used any banked
credits. If the deficit still existed and the manufacturer chose not
to, or was unable to, purchase credits, the deficit could be carried
over. At the end of that next model year, the deficit would need to be
covered with an appropriate number of credits that the manufacturer
generated or purchased. Any remaining deficit would be subject to an
enforcement action.
    To prevent deficits from being carried forward indefinitely, we
propose that manufacturers would not be permitted to run a deficit for
two years in a row. We believe that it is reasonable to provide this
flexibility to carry a deficit for one year given the uncertainties
that manufacturers face with changing market forces and consumer
preferences, especially during the introduction of new technologies.
These uncertainties can make it hard for manufacturers to accurately
predict sales trends of different vehicle models.
f. Voluntary Heavy-Duty Vehicle Credit Program
    In addition to MDPV requirements in Tier 2, we also currently have
chassis-based emissions standards for other complete heavy-duty
vehicles (e.g., large pick-ups and cargo vans) above 8,500 pound GVWR.
However, these standards do not include cold temperature CO standards.
As noted below in section VI.B.6.a, we are not proposing to apply cold
temperature NMHC standards to heavy-duty gasoline vehicles due to a
current lack of emissions data on which to base such standards. We plan
to revisit the need for and feasibility of standards as data become
available.
    During discussions with manufacturers, we discussed a voluntary
program for chassis-certified complete heavy-duty vehicles. We believe
that there may be opportunities within the framework of a cold
temperature NMHC program to allow for emissions credits from chassis-
certified heavy-duty vehicles above 8,500 pounds GVWR to be used to
meet the proposed standards. It is possible that some control
strategies developed for meeting cold NMHC emissions standards could
also be applied to these vehicles above 8,500 pounds GVWR.
    One approach would be to allow manufacturers to certify heavy-duty
vehicles voluntarily to the 0.5 g/mile cold NMHC standards proposed for
HLDTs/MDPVs. To the extent that heavy-duty vehicles achieve FELs below
the 0.5 g/mile standard, manufacturers could earn credits which could
be applied to any vehicle subject to the proposed standard. It is
unclear, however, if this approach would provide a meaningful
opportunity for credit generation, given the stringency of the
standard. We would expect that most heavy-duty vehicles would have
emissions well above the 0.5 g/mile level, based on the additional
weight of the vehicle. We request comment on this approach, as well as
others for voluntary certification and credit generation.
    It may be possible to establish a voluntary standard above 0.5 g/
mile for purposes of generating credits, but we would need data on
which to base this level of the standard. Suggestions on an appropriate
level of a voluntary standard are welcomed, as well as any data that
support such a recommendation. Comments on testing protocols, such as
use of the vehicle's adjusted loaded vehicle weight (ALVW) or loaded
vehicle weight (LVW), are also encouraged. We believe such a voluntary
program could provide significant data that would help us evaluate the
feasibility of a future standard for these vehicles.
6. Additional Vehicle Cold Temperature Standard Provisions
    We request comments on all of the following proposed provisions.
a. Applicability
    We are proposing to apply the new cold temperature standards to all
gasoline-fueled light-duty vehicles and MDPVs sold nationwide. While we
have significant amounts of data on which to base our proposals for
gasoline-fueled light-duty vehicles, we have very little data for
light-duty diesels. For 75[deg] F FTP standards, the same set of
standards apply, but in the 20[deg] F context we know very little about
diesel emissions due to a lack of data. Currently, diesel vehicles are
not subject to the cold CO standard, so there are no requirements to
test diesel vehicles at cold temperatures. There are sound engineering
reasons, however, to expect cold NMHC emissions for diesel vehicles to
be as low as or even lower than the proposed standards. This is because
diesel engines operate under leaner air-fuel mixtures compared to
gasoline engines, and therefore have fewer engine-out NMHC emissions
due to the abundance of oxygen and more complete combustion. A very
limited amount of confidential manufacturer-furnished information is
consistent with this engineering hypothesis. A comprehensive assessment
of appropriate standards for diesel vehicles would require a
significant amount of investigation and analysis of issues such as
feasibility and costs. This effort would be better suited to a future
rulemaking. Therefore, at this time, we are not proposing to apply the
cold NMHC standards to light-duty diesel vehicles. We will continue to
evaluate

data for these vehicles as they enter the fleet and will reconsider the
need for standards if data indicate that there may be instances of high
NMHC emissions from diesels at cold temperatures. We have proposed cold
temperature FTP testing for diesels as part of the Fuel Economy
Labeling rulemaking, including NMHC measurement.\194\ This testing data
would allow us to assess NMHC certification type data over time.
However, this wouldn't include development testing manufacturers would
need to do in order to meet a new diesel cold temperature standard.
---------------------------------------------------------------------------

    \194\ ``Fuel Economy Labeling of Motor Vehicles; Revisions to
Improve Calculation of Fuel Economy Estimates,'' Proposed Rule, 71,
FR 5426, February 1, 2006.
---------------------------------------------------------------------------

    In addition, there currently is no cold CO testing requirement for
alternative fuel vehicles. There are little data upon which to evaluate
NMHC emissions when operating on alternative fuels at cold
temperatures. For fuels such as ethanol, it is difficult to develop a
reasonable proposal due to a lack of fuel specifications, testing
protocols, and current test data. Other fuels such as methanol and
natural gas pose similar uncertainty. Therefore, we are not proposing a
cold NMHC testing requirement for alternative fuel vehicles. We will
continue to investigate these other technologies and request comment on
standards for vehicles operating on fuels other than gasoline.
    We are proposing that flex-fuel vehicles would still require
certification to the applicable cold NMHC standard, though only when
operated on gasoline. For multi-fuel vehicles, manufacturers would need
to submit a statement at the time of certification that either confirms
the same control strategies used with gasoline would be used when
operating on ethanol, or that identifies any differences as an
Auxiliary Emission Control Device (AECD). Again, dedicated alternative-
fueled vehicles, including E-85 vehicles, would not be covered.
    For heavy-duty gasoline-fueled vehicles, we have no data, but we
would expect a range of emissions performance similar to that of
lighter gasoline-fueled trucks. Due to the lack of test data on which
to base feasibility and cost analyses, we are not proposing cold
temperature NMHC standards for these vehicles at this time. We request
comments and data on these vehicles and plan to revisit this issue when
sufficient data is available.
b. Useful Life
    The ``useful life'' of a vehicle means the period of use or time
during which an emission standard applies to light-duty vehicles and
light-duty trucks.\195\ Consistent with the current definition of
useful life in the Tier 2 regulations, for all LDVs/LDTs and HLDTs/
MDPVs, we are proposing new full useful life standards for cold
temperature NMHC standards. Given that we expect that manufacturers
will make calibration or software changes to existing Tier 2
technologies, it is reasonable for there to be the same useful life as
for the Tier 2 standards themselves. For LDV/LLDT, the full useful life
values would be 120,000 miles or 10 years, whichever comes first, and
for HLDT/MDPV, full useful life is 120,000 miles or 11 years, whichever
comes first.\196\
---------------------------------------------------------------------------

    \195\ 40 CFR 86.1803-01.
    \196\ 40 CFR 86.1805-04.
---------------------------------------------------------------------------

c. High Altitude
    We do not expect emissions to be significantly different at high
altitude due to the use of common emissions control calibrations.
Limited data submitted by a manufacturer suggest that FTP emissions
performance at high altitude generally follows sea level performance.
Furthermore, there are very limited cold temperature testing facilities
at high altitudes. Therefore, under normal circumstances, manufacturers
would not be required to submit vehicle test data for high altitude.
Instead, manufacturers would be required to submit an engineering
evaluation indicating that common calibration approaches are utilized
at high altitude. Any deviation from sea level in emissions control
practices would be required to be included in the auxiliary emission
control device (AECD) descriptions submitted by manufacturers at
certification. Additionally, any AECD specific to high altitude would
require engineering emission data for EPA evaluation to quantify any
emission impact and validity of the AECD.
d. In-Use Standards for Vehicles Produced During Phase-In
    As we have indicated, the standards we are proposing would be more
challenging for some vehicles than for others. With any new technology,
or even with new calibrations of existing technology, there are risks
of in-use compliance problems that may not appear in the certification
process. In-use compliance concerns may discourage manufacturers from
applying new calibrations or technologies. Thus, it may be appropriate
for the first few years, for those vehicles most likely to require the
greatest applications of effort, to provide assurance to the
manufacturers that they will not face recall if they exceed standards
in use by a specified amount. Therefore, similar to the approach used
in Tier 2, we are proposing an in-use standard that is 0.1 g/mile
higher than the certification FEL for any given test group for a
limited number of model years.\197\ For example, a test group with a
0.2 g/mile FEL would have an in-use standard of 0.3 g/mile. This would
not change the FEL or averaging approaches and would only apply in
cases where EPA tests vehicles in-use to ensure emissions compliance.
---------------------------------------------------------------------------

    \197\ ``Control of Air Pollution from New Motor Vehicles: Tier 2
Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements'', Final Rule, 65 FR 6796, February 10, 2000.
---------------------------------------------------------------------------

    We propose that the in-use standards be available for the first few
model years of sales after a test group meeting the new standards is
introduced, according to a schedule that provides more years for test
groups introduced earlier in the phase-in. This schedule provides
manufacturers with time to determine the in-use performance of vehicles
and learn from the earliest years of the program to help ensure that
vehicles introduced after the phase-in period meet the final standards
in-use. It also assumes that once a test group is certified to the new
standards, it will be carried over to future model years. The tables
below provide the proposed schedule for the availability of the in-use
standards.

                           Table VI.B-3.--Schedule for In-Use Standards for LDVs/LLDTs
----------------------------------------------------------------------------------------------------------------
          Model year of introduction               2008       2009       2010       2011       2012       2013
----------------------------------------------------------------------------------------------------------------
Models years that the in-use standard is             2008       2009       2010       2011       2012       2013
 available for carry-over test groups.........       2009       2010       2011       2012       2013       2014
                                                     2010       2011       2012       2013       2014
                                                     2011       2012       2013
----------------------------------------------------------------------------------------------------------------

[[Continued on page 15853]]

]

[[pp. 15853-15902]] Control of Hazardous Air Pollutants From Mobile Sources

[[Continued from page 15852]]

                          Table VI.B-4.--Schedule for In-Use Standards for HLDVs/MDPVs
----------------------------------------------------------------------------------------------------------------
          Model year of introduction               2010       2011       2012       2013       2014       2015
----------------------------------------------------------------------------------------------------------------
Models years that the in-use standard is             2010       2011       2012       2013       2014       2015
 available for carry-over test groups.........       2011       2012       2013       2014       2015       2016
                                                     2012       2013       2014       2015       2016
                                                     2013       2014       2015
----------------------------------------------------------------------------------------------------------------

7. Monitoring and Enforcement
    Under the proposed programs, manufacturers could either report that
they met the relevant corporate average standard in their annual
reports to the Agency, or they could show via the use of credits that
they have offset any exceedance of the corporate average standard.
Manufacturers would also report their credit balances or deficits. EPA
would monitor the program.
    As in Tier 2, the averaging, banking and trading program would be
enforced through the certificate of conformity that manufacturers must
obtain in order to introduce any regulated vehicles into commerce.\198\
The certificate for each test group would require all vehicles to meet
the emissions level to which the vehicles were certified, and would be
conditioned upon the manufacturer meeting the corporate average
standard within the required time frame. If a manufacturer failed to
meet this condition, the vehicles causing the corporate average
exceedance would be considered to be not covered by the certificate of
conformity for that engine family. A manufacturer would be subject to
penalties on an individual vehicle basis for sale of vehicles not
covered by a certificate.
---------------------------------------------------------------------------

    \198\ ``Control of Air Pollution from New Motor Vehicles: Tier 2
Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements'', Final Rule, 65 FR 6797, February 10, 2000.
---------------------------------------------------------------------------

    EPA would review the manufacturer's sales to designate the vehicles
that caused the exceedance of the corporate average standard. We would
designate as nonconforming those vehicles in those test groups with the
highest certification emission values first, continuing until a number
of vehicles equal to the calculated number of noncomplying vehicles as
determined above is reached. In a test group where only a portion of
vehicles would be deemed nonconforming, we would determine the actual
nonconforming vehicles by counting backwards from the last vehicle
produced in that test group. Manufacturers would be liable for
penalties for each vehicle sold that is not covered by a certificate.
    We are proposing to condition certificates to enforce the
requirements that manufacturers not sell credits that they have not
generated. A manufacturer that transferred credits it did not have
would create an equivalent number of debits that it would be required
to offset by the reporting deadline for the same model year. Failure to
cover these debits with credits by the reporting deadline would be a
violation of the conditions under which EPA issued the certificate of
conformity, and nonconforming vehicles would not be covered by the
certificate. EPA would identify the nonconforming vehicles in the same
manner described above.
    In the case of a trade that resulted in a negative credit balance
that a manufacturer could not cover by the reporting deadline for the
model year in which the trade occurred, we propose to hold both the
buyer and the seller liable. We believe that holding both parties
liable will induce the buyer to exercise diligence in assuring that the
seller has or will be able to generate appropriate credits and will
help to ensure that inappropriate trades do not occur.
    We are not proposing any new compliance monitoring activities or
programs for vehicles. These vehicles would be subject to the
certification testing provisions of the CAP2000 rule. We are not
proposing to require manufacturer in-use testing to verify compliance.
There is no cold CO manufacturer in-use testing requirement today
(similarly, we do not require manufacturer in-use testing for SCO3
standards under the SFTP program). As noted earlier, manufacturers have
limited cold temperature testing capabilities and we believe these
facilities will be needed for product development and certification
testing. However, we have the authority to conduct our own in-use
testing program for exhaust emissions to ensure that vehicles meet
standards over their full useful life. We will pursue remedial actions
when substantial numbers of properly maintained and used vehicles fail
any standard in-use. We also retain the right to conduct Selective
Enforcement Auditing of new vehicles at manufacturers' facilities.
    The use of credits would not be permitted to address Selective
Enforcement Auditing or in-use testing failures. The enforcement of the
averaging standard would occur through the vehicle's certificate of
conformity. A manufacturer's certificate of conformity would be
conditioned upon compliance with the averaging provisions. The
certificate would be void ab initio if a manufacturer failed to meet
the corporate average standard and did not obtain appropriate credits
to cover their shortfalls in that model year or in the subsequent model
year (see proposed deficit carryforward provision in section
VI.B.5.e.). Manufacturers would need to track their certification
levels and sales unless they produced only vehicles certified to NMHC
levels below the standard and did not plan to bank credits.
    We request comments on the above approach for compliance monitoring
and enforcement.

C. What Evaporative Emissions Standards Are We Proposing?

    We are proposing to adopt a set of numerically more stringent
evaporative emission standards for all light-duty vehicles, light-
trucks, and medium-duty passenger vehicles. The proposed standards are
equivalent to California's LEV II standards, and these proposed
standards are shown in Table VI.C-1. The proposed standards would
represent about a 20 to 50 percent reduction (depending on vehicle
weight class and type of test) in diurnal plus hot soak standards from
the Tier 2 standards that will be in effect in the years immediately
preceding the implementation of today's proposed standards.\199\ As
with the current Tier 2 evaporative emission standards, the proposed
standards vary by vehicle weight class. The increasingly higher
standards for heavier weight class vehicles account for larger vehicle
sizes

and fuel tanks (non-fuel and fuel emissions).\200\
---------------------------------------------------------------------------

    \199\ Diurnal emissions (or diurnal breathing losses) means
evaporative emissions as a result of daily temperature cycles or
fluctuations for successive days of parking in hot weather. Hot soak
emissions (or hot soak losses) are the evaporative emissions from a
parked vehicle immediately after turning off the hot engine. For the
evaporative emissions test procedure, diurnal and hot soak emissions
are measured in an enclosure commonly called the SHED (Sealed
Housing for Evaporative Determination).
    \200\ Larger vehicles may have greater non-fuel evaporative
emissions, probably due to an increased amount of interior trim,
vehicle body surface area, and larger tires.

         Table VI.C-1.--Proposed Evaporative Emission Standards
                    [Grams of hydrocarbons per test]
------------------------------------------------------------------------
                                                         Supplemental 2-
             Vehicle class               3-day diurnal     day diurnal
                                         plus hot soak    plus hot soak
------------------------------------------------------------------------
LDVs..................................             0.50             0.65
LLDTs.................................             0.65             0.85
HLDTs.................................             0.90             1.15
MDPVs.................................             1.00             1.25
------------------------------------------------------------------------

1. Current Controls and Feasibility of the Proposed Standards
    Evaporative emissions from light-duty vehicles and trucks will
represent about 35 percent of the light-duty VOC inventory and about 4
percent of the benzene inventory in 2020. As described earlier, we are
proposing to reduce the level of the evaporative emission standards
applicable to diurnal and hot soak emissions from these vehicles by
about 20 to 50 percent. These proposed standards are meant to be
effectively the same as the evaporative emission standards in the
California LEV II program. Although the California program contains
evaporative emissions standards that appear more stringent than EPA
Tier 2 standards if one looks only at the level of the standard, we
believe they are essentially equivalent because of differences in
testing requirements. For these same reasons, some manufacturers
likewise view the programs as similar in stringency. (See section
VI.C.5 below for further discussion of such test differences, e.g.,
test temperatures and fuel volatilities.) Thus, some manufacturers have
indicated that they will produce 50-state evaporative systems that meet
both sets of standards (manufacturers sent letters indicating this to
EPA in 2000).201 202 203 In addition, a review of recent
model year certification results indicates that essentially all
manufacturers certify 50-state systems, except for a few limited cases
where manufacturers have not yet needed to certify a LEVII vehicle in
California due to the phase-in schedule. Also, in recent discussions,
manufacturers have restated that they plan to continue producing 50-
state evaporative systems in the future. Based on this understanding,
we do not project additional VOC or air toxics reductions from the
evaporative standards we are proposing today.\204\ Also, we do not
expect additional costs since we expect that manufacturers will
continue to produce 50-state evaporative systems. Therefore,
harmonizing with California's LEV-II evaporative emission standards
would be an ``anti-backsliding'' measure--that is, it would prevent
potential future backsliding as manufacturers pursue cost
reductions.\205\ It would thus codify (i.e., lock in) the approach
manufacturers have already indicated they are taking for 50-state
evaporative systems.
---------------------------------------------------------------------------

    \201\ DaimlerChrysler, Letter from Reginald R. Modlin to Margo
Oge of U.S. EPA, May 30, 2000. A copy of this letter can be found in
Docket No. EPA-HQ-OAR-2005-0036.
    \202\ Ford, Letter from Kelly M. Brown to Margo Oge of U.S. EPA,
May 26, 2000. A copy of this letter can be found in Docket No. EPA-
HQ-OAR-2005-0036.
    \203\ General Motors, Letter from Samuel A. Leonard to Margo Oge
of U.S. EPA, May 30, 2000. A copy of this letter can be found in
Docket No. EPA-HQ-OAR-2005-0036.
    \204\ U.S. EPA, Office of Air and Radiation, Update to the
Accounting for the Tier 2 and Heavy-Duty 2005/2007 Requirements in
MOBILE6, EPA420-R-03-012, September 2003.
    \205\ Anti-backsliding provisions can satisfy the requirement in
section 202 (l) (2) that emission reductions of hazardous air
pollutants be the greatest achievable. Sierra Club v. EPA, 325 F. 3d
at 477.
---------------------------------------------------------------------------

    We believe this proposed action would be an important step to
ensure that the federal standards reflect the lowest possible
evaporative emissions, and it also would provide states with certainty
that the emissions reductions we project to occur due to 50-state
compliance strategies will in fact occur. In addition, the proposed
standards will assure that manufacturers continue to capture the
abilities of available fuel system materials to minimize evaporative
emissions.
    We also considered the possibility of whether it is feasible to
achieve further evaporative emission reductions from motor vehicles. In
this regard, it is important to note that California's LEV II program
includes partial zero-emission vehicle (ZEV) credits for vehicles that
achieve near zero emissions (e.g., LDV evaporative emission standards
for both the 2-day and 3-day diurnal plus hot soak tests are 0.35
grams/test, which are more stringent than proposed standards).\206\ The
credits would include full ZEV credit for a stored hydrogen fuel cell
vehicle and 0.2 credits for (among other categories for partial credit)
a partial zero emission vehicle (PZEV).\207\ Currently, only a fraction
of California's certified vehicles (gasoline powered, hybrid, and
compressed natural gas vehicles) meet California's optional PZEV
standards, but this number is expected to increase in coming
years.208 209 These limited PZEV vehicles require additional
evaporative emissions technology or hardware (e.g., modifications to
fuel tank and secondary canister) than we expect to be needed for
vehicles meeting the proposed standards. At this time, we need to
better understand the evaporative system modifications (i.e.,
technology, costs, lead time, etc.) potentially needed for other
vehicles in the fleet to meet PZEV-level standards before we can
rationally evaluate whether to adopt more stringent standards. For
example, at this point we cannot even determine whether the PZEV
technologies could be used fleetwide or on only a limited set of
vehicles. Thus, in the near term, we lack any of the information
necessary to determine if further reductions are feasible, and if they
could be achievable considering cost, energy and safety issues.
However, we intend to consider

more stringent evaporative emission standards in the future, and
revisiting this issue in a future rulemaking will allow us time to
obtain the important necessary additional information for such
standards.
---------------------------------------------------------------------------

    \206\ California Air Resources Board, Fact Sheet, LEV-II
Amendments to California's Low-Emission Vehicle Regulations,
February 1999
    \207\ PZEV meets California super ultra low emission vehicle
exhaust emission standards and have near zero evaporative emissions.
California Air Resources Board, News Release, ARB Modifies Zero
Emission Vehicle Regulation, April 24, 2003.
    \208\ California Air Resources Board, Fact Sheet, California
Vehicle Emissions, April 8, 2004.
    \209\ California Air Resources Board, Consumer Information: 2006
California Certified Vehicles, November 7, 2005.
---------------------------------------------------------------------------

2. Evaporative Standards Timing
    We are proposing to implement today's evaporative emission
standards in model year 2009 for LDVs/LLDTs and model year 2010 for
HLDTs/MDPVs. Today's proposed rule is not expected to be finalized
until February 2007, at which time many manufacturers already will have
begun or completed model year 2008 certification. Thus, model year 2009
is the earliest practical start date of new standards for LDVs/LLDTs.
For HLDTs/MDPVs, the phase-in of the existing Tier 2 evaporative
emission standards ends in model year 2009. Thus, the model year 2010
is the earliest start date possible for HLDTs/MDPVs. Since the proposed
standards are an anti-backsliding measure and we believe that
manufacturers already meet these standards, there is no need for
additional lead time beyond the implementation dates proposed. We
request comment on this proposed schedule.
3. Timing for Multi-Fueled Vehicles
    As discussed earlier in this section, manufacturers appear to view
the Tier 2 and LEV II evaporative emission programs as similar in
stringency, and thus, they have indicated that they will produce 50-
state evaporative systems that meet both sets of standards. For multi-
fueled vehicles capable of operating on alternative fuel (e.g., E85
vehicles--fuel is 85% ethanol and 15% gasoline) and conventional fuel
(e.g., gasoline),\210\ this commitment for 50-state systems would still
apply. However, a few multi-fueled vehicles were certified only on the
conventional fuel (gasoline) for the California LEV II program even
though they had 50-state evaporative emission systems. For such cases,
manufacturers did not intend to sell these vehicles for operation on
the alternative fuel (e.g. E85) in California (only for operation on
conventional fuel in California), but they did certify and plan to sell
these vehicles in the federal Tier 2 program for operation on the
alternative and conventional fuels.\211\ For these few types of multi-
fueled vehicles, manufacturers are potentially at risk of not complying
with the proposed new evaporative emission certification standards
(which are equivalent to California LEV II certification standards)
when operating on the alternative fuel.
---------------------------------------------------------------------------

    \210\ 40 CFR 86.1803-01 defines multi-fuel as capable of
operating on two or more different fuel types, either separately or
simultaneously.
    \211\ For the Tier 2 program, multi-tier vehicles must meet the
same standards on conventional and alternative fuel.
---------------------------------------------------------------------------

    For such multi-fueled vehicles or evaporative emission systems,
manufacturers would need a few additional years of lead time to adjust
their evaporative systems to comply with the proposed evaporative
emission certification standards when operating on the alternative
fuel. Thus, to reduce the compliance risk for these types of multi-
fueled vehicles (or evaporative families) when they first certify to
the more stringent evaporative standards, the proposed evaporative
emission certification standards would apply to the non-gasoline
portion of multi-fueled vehicles beginning in the fourth year of the
program--2012 for LDVs/LLDTs and 2013 for HLDTs/MDPVs. The proposed
evaporative emission certification standards would be implemented in
2009 for LDVs/LLDTs and 2010 for HLDTs/MDPVs for the gasoline portion
of multi-fueled vehicles and vehicles that are not multi-fueled. We
believe this additional three years of lead time would provide
sufficient time for manufacturers to make adjustments to their new
evaporative systems for multi-fueled vehicles, which are limited
product lines.
    The provisions for in-use evaporative emission standards described
below in section VI.C.4 would not change for multi-fueled vehicles. We
believe that three additional years to prepare vehicles (or evaporative
families) to meet the certification standards, and to simultaneously
make vehicle adjustments from the federal in-use experience of other
vehicles (other vehicles that are not multi-fueled) is sufficient to
resolve any issues for multi-fueled vehicles. Therefore, the proposed
evaporative emission standards would apply both for certification and
in-use beginning in 2012 for LDVs/LLDTs and 2013 for HLDTs/MDPVs.
4. In-Use Evaporative Emission Standards
    As described earlier in this section, we are proposing to adopt
evaporative emission standards that are equivalent to California's LEV
II standards for all light duty vehicles, light trucks, and medium duty
passenger vehicles. Currently, the Tier 2 evaporative emission
standards are the same for certification and in-use vehicles. However,
the California LEV II program permits manufacturers to meet less
stringent standards in-use for a short time period in order to account
for potential variability in-use during the initial years of the
program when technical issues are most likely to arise.\212\ The LEV II
program specifies that in-use evaporative emission standards of 1.75
times the certification standards will apply for the first three model
years after an evaporative family is first certified to the LEV II
standards (only for vehicles introduced prior to model year 2007, the
year after 100 percent phase-in).213 214 An interim three-
year period was considered sufficient to accommodate any technical
issues that may arise.
---------------------------------------------------------------------------

    \212\ California Air Resources Board, ``LEV II'' and ``CAP
2000'' Amendments to the California Exhaust and Evaporative Emission
Standards and Test Procedures for Passenger Cars, Light-Duty Trucks
and Medium-Duty Vehicles, and to the Evaporative Emission
Requirements for Heavy-Duty Vehicles, Final Statement of Reasons,
September 1999.
    \213\ 1.75 times the 3-day diurnal plus hot soak and 2-day
diurnal plus hot soak standards.
    \214\ For example, evaporative families first certified to LEV
II standards in the 2005 model year shall meet in-use standards of
1.75 times the evaporative certification standards for 2005, 2006,
and 2007 model year vehicles.
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    Federal in-use conditions may raise unique issues (e.g., salt/ice
exposure) for evaporative systems certified to the new proposed
standards (which are equivalent to the LEV II standards), and thus, we
propose to adopt a similar, interim in-use compliance provision for
federal vehicles. As with the LEV II program, this provision would
enable manufacturers to make adjustments for unforeseen problems that
may occur in-use during the first three years of a new evaporative
family. Like California, we believe that a three-year period is enough
time to resolve these problems, because it allows manufacturers to gain
real world experience and make adjustments to a vehicle within a
typical product cycle.
    Depending on the vehicle weight class and type of test, the Tier 2
certification standards are 1.3 to 1.9 times the LEV II certification
standards. On average the Tier 2 standards are 1.51 times the LEV II
certification standards. Thus, to maintain the same level of stringency
for the in-use evaporative emission standards provided by the Tier 2
program, we propose to apply the Tier 2 standards in-use for only the
first three model years after an evaporative family is first certified
under today's proposed standards instead of the 1.75 multiplier
implemented in the California LEV II program. Since the proposed
evaporative emission certification standards (equivalent to LEV II
standards) would be implemented in model year 2009 for LDVs/LLDTs and
model year 2010 for HLDTs/MDPVs, these same certification

standards would apply in-use beginning in model year 2012 for LDVs/
LLDTs and model year 2013 for HLDTs/MDPVs.\215\
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    \215\ For example, evaporative families first certified to the
proposed LDV/LLDT evaporative emission standards in the 2011 model
year would be required to meet the Tier 2 LDV/LLDT evaporative
emission standards in-use for 2011, 2012, and 2013 model year
vehicles (applying Tier 2 standards in-use would be limited to the
first three years after introduction of a vehicle), and 2014 and
later model year vehicles of such evaporative families would be
required to meet the proposed LDV/LLDT evaporative emission
standards in-use.
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5. Existing Differences Between California and Federal Evaporative
Emission Test Procedures
    As described above, the California LEV II evaporative emission
standards are numerically more stringent than EPA's Tier 2 standards,
but due to differences in California and EPA evaporative test
requirements, EPA and most manufacturers view the programs as similar
in stringency. The Tier 2 evaporative program requires manufacturers to
certify the durability of their evaporative emission systems using a
fuel containing the maximum allowable concentration of alcohols
(highest alcohol level allowed by EPA in the fuel on which the vehicle
is intended to operate, i.e., a ``worst case'' test fuel). Under
current requirements, this fuel would be about 10 percent ethanol by
volume.\216\ (We are retaining these Tier 2 durability requirements for
the proposed evaporative emissions program.) California does not
require this provision. To compensate for the increased vulnerability
of system components to alcohol fuel, manufacturers have indicated that
they will produce a more durable evaporative emission system than the
Tier 2 numerical standards would imply, using the same low permeability
hoses and low loss connections and seals planned for California LEV II
vehicles.
---------------------------------------------------------------------------

    \216\ Manufacturers are required to develop deterioration
factors using a fuel that contains the highest legal quantity of
ethanol available in the U.S.
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    As shown in Table VI.C-2, combined with the maximum alcohol fuel
content for durability testing, the other key differences between the
federal and California test requirements are fuel volatilities, diurnal
temperature cycles, and running loss test temperatures.\217\ The EPA
fuel volatility requirement is 2 psi greater than that of California.
The high end of EPA's diurnal temperature range, is 9[deg] F lower than
that of California. Also, EPA's running loss temperature is 10[deg] F
lower than California's.
---------------------------------------------------------------------------

    \217\ Running loss emissions means evaporative emissions as a
result of sustained vehicle operation (average trip in an urban
area) on a hot day. The running loss test requirement is part of the
3-day diurnal plus hot soak test sequence.

  Table VI.C-2.--Differences in Tier 2 and LEV II Evaporative Emission
                            Test Requirements
------------------------------------------------------------------------
      Test requirement             EPA tier 2         California LEV II
------------------------------------------------------------------------
Fuel volatility (Reid Vapor   9...................  7.
 Pressure in psi).
Diurnal temperature cycle     72 to 96............  65 to 105.
 (degrees F).
Running loss test             95..................  105.
 temperature (degrees F).
------------------------------------------------------------------------

    Currently, California accepts evaporative emission results
generated on the federal test procedure (using federal test fuel),
because available data indicates the federal procedure to be a ``worst
case'' procedure. In addition, manufacturers can obtain federal
evaporative certification based upon California results (meeting LEV II
standards under California fuels and test conditions), if they obtain
advance approval from EPA.\218\
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    \218\ EPA may require comparative data from both federal and
California tests.
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D. Opportunities for Additional Exhaust Control Under Normal Conditions

    In addition to the cold temperature NMHC and evaporative emission
standards we are proposing, we evaluated an additional option for
reducing hydrocarbons from light-duty vehicles. This option would
further align the federal light-duty exhaust emissions control program
with that of California. We are not proposing this option today for the
reasons described below. It is possible that a future evaluation could
result in EPA reconsidering the option of harmonizing the Tier 2
program with California's LEV-II program or otherwise seeking emission
reductions beyond those of the Tier 2 program and those being proposed
today.\219\
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    \219\ See Sierra Club v. EPA, 325 F.3d at 480 (EPA can
reasonably determine that no further reductions in MSATs are
presently achievable due to uncertainties created by other recently
promulgated regulatory provisions applicable to the same vehicles).
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    As explained earlier, section 202(l)(2) requires EPA to adopt
regulations that contain standards which reflect the greatest degree of
emissions reductions achievable through the application of technology
that will be available, taking into consideration existing motor
vehicle standards, the availability and costs of the technology, and
noise, energy and safety factors. The cold temperature NMHC program
proposed today is appropriate under section 202(l)(2) as a near-term
control: That is, a control that can be implemented relatively soon and
without disruption to other existing vehicle emissions control program.
We are not proposing long-term (i.e., controls that require longer lead
time to implement) at this time because we lack the information
necessary to assess appropriate long-term controls. We believe it will
be important to address the appropriateness of further MSAT controls in
the context of compliance with other significant vehicle emissions
regulations (discussed below).
    In the late 1990's both the EPA and the California Air Resources
Board finalized new and technologically challenging light-duty vehicle/
truck emission control programs. The EPA program, known as Tier 2,
focused on reducing NOX emissions from the light-duty fleet.
The California program, which is the second generation of their low
emission vehicle (LEV) program and is known as LEV-II, focuses
primarily on reducing hydrocarbons by tightening the light-duty NMOG
standards. Both programs are expected to present the manufacturers with
significant challenges, and will require the use of hardware and
emission control strategies not used in the fleet under previously
existing programs. Both programs will achieve significant reductions in
emissions. Taken as a whole, the Tier 2 program presents the
manufacturers with significant challenges in the coming years. Bringing
essentially all passenger vehicles under the same emission control
program regardless of their size, weight, and application is a major
engineering challenge. The Tier 2 program represents a comprehensive,
integrated package of exhaust, evaporative, and fuel quality standards
which will achieve significant reductions in

NMHC, NOX, and PM emissions from all light-duty vehicles in
the program. These reductions will include significant reductions in
MSATs. Emission control in the Tier 2 program will be based on the
widespread implementation of advanced catalyst and related control
system technology. The standards are very stringent and will require
manufacturers to make full use of nearly all available emission control
technologies.
    Today the Tier 2 program remains early in its phase-in. Cars and
lighter trucks will be fully phased into the program with the 2007
model year, and the heavier trucks won't be fully entered into the
program until the 2009 model year. Even though the lighter vehicles
will be fully phased in by 2007, we expect the characteristics of this
segment of the fleet to remain in a state of transition at least
through 2009, because manufacturers will be making adjustments to their
fleets as the larger trucks phase in. The Tier 2 program is designed to
enable vehicles certified to the LEV-II program to cross over to the
federal Tier 2 program. At this point in time, however, it is difficult
to predict the degree to which this will occur. The fleetwide NMOG
levels of the Tier 2 program will ultimately be affected by the manner
in which LEV-II vehicles are certified within the Tier 2 bin structure,
and vice versa. We intend to carefully assess these two programs as
they evolve and periodically evaluate the relative emission reductions
and the integration of the two programs.
    Today's proposal addresses toxics emissions from vehicles operating
at cold temperatures. The technology to achieve this is already
available and we project that compliance will not be costly. However,
we do not believe that we could reasonably propose further controls at
this time. There is enough uncertainty regarding the interaction of the
Tier 2 and LEV-II programs to make it difficult to evaluate today what
might be achievable in the future. Depending on the assumptions one
makes, the LEV-II and Tier 2 programs may or may not achieve very
similar NMOG emission levels. Therefore, the eventual Tier 2 baseline
technologies and emissions upon which new standards would necessarily
be based are not known today. Additionally, we believe it is important
for manufacturers to focus in the near term on developing and
implementing robust technological responses to the Tier 2 program
without the distraction or disruption that could result from changing
the program in the midst of its phase-in. We believe that it may be
feasible in the longer term to seek additional emission reductions from
the base Tier 2 program, and the next several years will allow an
evaluation based on facts rather than assumptions. For these reasons,
we are deferring a decision on seeking additional NMOG reductions from
the base Tier 2 program.

E. Vehicle Provisions for Small Volume Manufacturers

    Prior to issuing a proposal for this proposed rulemaking, we
analyzed the potential impacts of these regulations on small entities.
As a part of this analysis, we convened a Small Business Advocacy
Review Panel (SBAR Panel, or the Panel). During the Panel process, we
gathered information and recommendations from Small Entity
Representatives (SERs) on how to reduce the impact of the rule on small
entities, and those comments are detailed in the Final Panel Report
which is located in the public record for this rulemaking (Docket EPA-
HQ-OAR-2005-0036). Based upon these comments, we propose to include
lead time transition and hardship provisions that would be applicable
to small volume manufacturers as described below in section VI.E.1 and
VI.E.2. For further discussion of the Panel process, see section XII.C
of this proposed rule and/or the Final Panel Report.