[Federal Register Volume 76, Number 129 (Wednesday, July 6, 2011)]
[Rules and Regulations]
[Pages 39478-39587]
[FR Doc No: 2011-14291]

Vol. 76

Wednesday,

No. 129

July 6, 2011

Part II

Environmental Protection Agency

-----------------------------------------------------------------------

40 CFR Parts 85, 86, and 600

Department of Transportation

-----------------------------------------------------------------------

National Highway Traffic Safety Administration

-----------------------------------------------------------------------

49 CFR Part 575

Revisions and Additions to Motor Vehicle Fuel Economy Label; Final Rule

Federal Register / Vol. 76 , No. 129 / Wednesday, July 6, 2011 /
Rules and Regulations

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, and 600

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 575

[EPA-HQ-OAR-2009-0865; FRL-9315-1; NHTSA-2010-0087]
RIN 2060-AQ09; RIN 2127-AK73

Revisions and Additions to Motor Vehicle Fuel Economy Label

AGENCY: Environmental Protection Agency (EPA) and National Highway
Traffic Safety Administration (NHTSA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) and the National
Highway Traffic Safety Administration (NHTSA) are issuing a joint final
rule establishing new requirements for the fuel economy and environment
label that will be posted on the window sticker of all new automobiles
sold in the U.S. The labeling requirements apply for model year 2013
and later vehicles with a voluntary manufacturer option for model year
2012. The labeling requirements apply to passenger cars, light-duty
trucks, and medium duty passenger vehicles such as larger sport-utility
vehicles and vans. The redesigned label provides expanded information
to American consumers about new vehicle fuel economy and fuel
consumption, greenhouse gas and smog-forming emissions, and projected
fuel costs and savings, and also includes a smartphone interactive code
that permits direct access to additional Web resources. Specific label
designs are provided for gasoline, diesel, ethanol flexible fuel,
compressed natural gas, electric, plug-in hybrid electric, and hydrogen
fuel cell vehicles. This rulemaking is in response to provisions in the
Energy Independence and Security Act of 2007 that imposed several new
labeling requirements and new advanced-technology vehicles entering the
market. NHTSA and EPA believe that these changes will help consumers to
make more informed vehicle purchase decisions, particularly as the
future automotive marketplace provides more diverse vehicle
technologies from which consumers may choose. These new label
requirements do not affect the methodologies that EPA uses to generate
consumer fuel economy estimates, or the automaker compliance values for
NHTSA's corporate average fuel economy and EPA's greenhouse gas
emissions standards. This action also finalizes a number of technical
corrections to EPA's light-duty greenhouse gas emission standards
program.

DATES: This final rule is effective on September 6, 2011. The
incorporation by reference of certain publications listed in this
regulation is approved by the Director of the Federal Register as of
September 6, 2011.

ADDRESSES: EPA and NHTSA have established dockets for this action under
Docket ID No. EPA-HQ-OAR-2009-0865 and NHTSA-2010-0087, respectively.
All documents in the docket are listed on the http://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the Internet and will be publicly available only in hard
copy form. Publicly available docket materials are available either
electronically through http;//www.regulations.gov or in hard copy at
the following locations: EPA: EPA Docket Center (EPA/DC), EPA West,
Room 334, 1301 Constitution Ave., NW., Washington, DC. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>. NHTSA: NHTSA: Docket Management
Facility, M-30, U.S. Department of Transportation, West Building,
Ground Floor, Rm. W12-140, 1200 New Jersey Avenue, SE., Washington, DC
20590. The Docket Management Facility is open between 9 a.m. and 5 p.m.
Eastern Time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: EPA: Lisa Snapp, Office of
Transportation and Air Quality, Transportation and Climate Division,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105; telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>    DOT/NHTSA: Rebecca Yoon, Office of Chief Counsel, National Highway
Traffic Safety Administration, 1200 New Jersey Avenue, SE., Washington,
DC 20590. Telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

A. Does this action apply to me?

    This action affects companies that manufacture or sell new light-
duty vehicles, light-duty trucks, and medium-duty passenger vehicles,
as defined under EPA's CAA regulations,\1\ and passenger automobiles
(passenger cars) and non-passenger automobiles (light trucks) as
defined under NHTSA's CAFE regulations.\2\ Regulated categories and
entities include:
---------------------------------------------------------------------------

    \1\ ``Light-duty vehicle,'' ``light-duty truck,'' and ``medium-
duty passenger vehicle'' are defined in 40 CFR 86.1803-01.
Generally, the term ``light-duty vehicle'' means a passenger car,
the term ``light-duty truck'' means a pick-up truck, sport-utility
vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating,
and ``medium-duty passenger vehicle'' means a sport-utility vehicle
or passenger van from 8,500 to 10,000 lbs gross vehicle weight
rating. Medium-duty passenger vehicles do not include pick-up
trucks.
    \2\ ``Passenger car'' and ``light truck'' are defined in 49 CFR
Part 523.

------------------------------------------------------------------------
                                   NAICS codes   Examples of potentially
            Category                   \A\          regulated entities
------------------------------------------------------------------------
Industry........................  336111.......  Motor vehicle
                                                  manufacturers.
                                  336112.......
Industry........................  811112.......  Commercial importers of
                                                  vehicles and vehicle
                                                  components.
                                  811198.......
                                  423110.......
Industry........................  336211.......  Stretch limousine
                                                  manufacturers and
                                                  hearse manufacturers.
Industry........................  441110.......  Automobile dealers.
------------------------------------------------------------------------
\A\ North American Industry Classification System (NAICS).

    This list is not intended to be exhaustive, but rather provides
guidance on entities likely to be regulated by this action. To
determine whether particular activities may be regulated by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action to the person
listed in FOR FURTHER INFORMATION CONTACT.

Table of Contents

I. Overview of Joint EPA/NHTSA New Vehicle Labels
    A. Description of the Proposal
    B. Description of the Action
    C. Rationale for Revising the Label
    D. Market Research
II. Statutory Provisions and Legal Authority
    A. Energy Policy and Conservation Act (EPCA)
    B. Energy Independence and Security Act (EISA)
III. Public Participation and Comment
    A. Energy Metrics
    B. Rating Systems
    C. Form of the Ratings
    D. Fuel Economy and Greenhouse Gas Rating Methodology
    E. Upstream GHGs
    F. Smog Rating
    G. Fuel Costs and Savings
    H. Range and Charge Time
    I. Web Site and QR Code
    J. Color
    K. Lead Time
    L. Harmonization With Other Labels
    M. Electric and Plug-in Hybrid Electric Vehicle Test Procedures
    N. Utility Factors
IV. Final Label Designs and Format
    A. Label Size and Border
    B. Upper Box
    C. Lower Box
    D. Example Labels
V. Additional Related EPA Actions
    A. Comparable Class Categories
    B. Miscellaneous Amendments and Corrections
VI. Impacts of Final Rule
    A. Costs Associated With This Rule
    B. Impact of Requiring One Label To Meet EPCA/EISA
    C. Benefits of Label Changes
    D. Summary of Costs and Benefits
VII. Statutory Authority and Executive Order Reviews
    A. Relationship of EPA's Requirements With Other Statues and
Regulations
    B. Statutory and Executive Order Reviews

List of Acronyms and Abbreviations

A/C Air Conditioning
AC Alternating Current
AIDA Automobile Information Disclosure Act
BTU British Thermal Units
CAA Clean Air Act
CAFE Corporate Average Fuel Economy
ARB California Air Resources Board
CBI Confidential Business Information
CD Charge Depleting
CFR Code of Federal Regulations
CH4 Methane
CNG Compressed Natural Gas
CO Carbon Monoxide
CO2 Carbon Dioxide
CREE Carbon-related Exhaust Emissions
CS Charge Sustaining
DOE Department of Energy
DOT Department of Transportation
E85 A mixture of 85% ethanol and 15% gasoline
EISA Energy Independence and Security Act of 2007
EO Executive Order
EPA Environmental Protection Agency
EPCA Energy Policy and Conservation Act
EPL Environmental Performance Label
EREV Extended Range Electric Vehicle
EV Electric Vehicle
FCV Fuel Cell Vehicle
FE Fuel Economy
FFV Flexible Fuel Vehicle
FTC Federal Trade Commission
FTP Federal Test Procedure
GHG Greenhouse Gas
GVWR Gross Vehicle Weight Rating
HCHO Formaldehyde
HEV Hybrid Electric Vehicle
HFC Hydrofluorocarbon
HFET Highway Fuel Economy Test
ICI Independent Commercial Importer
IT Information Technology
ICR Information Collection Request
LEV II Low Emitting Vehicle II
LEV II opt 1 Low Emitting Vehicle II, option 1
MDPV Medium Duty Passenger Vehicle
MPG Miles per Gallon
MPGe Miles per Gallon equivalent
MY Model Year
N2O Nitrous Oxide
NAICS North American Industry Classification System
NCAP New Car Assessment Program
NEC Net Energy Change
NHTSA National Highway Traffic Safety Administration
NMOG Non-methane Organic Gases
NOX Oxides of Nitrogen
NPRM Notice of Proposed Rulemaking
NTTAA National Technology Transfer and Advancement Act of 1995
O&M Operations and Maintenance
OCR Optical Character Recognition
OMB Office of Management and Budget
PEF Petroleum Equivalency Factor
PHEV Plug-in Hybrid Electric Vehicle
PM Particulate Matter
PZEV Partial Zero-Emissions Vehicle
RCDA Actual Charge Depleting Range
RESS Rechargeable Energy Storage System
RFA Regulatory Flexibility Act
SAE Society of Automotive Engineers
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users
SBA Small Business Administration
SFTP Supplemental Federal Test Procedure
SOC State-of-Charge
SULEV II Super Ultra Low Emission Vehicles II
SUV Sport Utility Vehicle
UDDS Urban Dynamometer Driving Schedule
UF Utility Factor
ULEV II Ultra Low Emission Vehicles II
UMRA Unfunded Mandates Reform Act
ZEV Zero Emission Vehicle

I. Overview

A. Description of the Proposal

    EPA and NHTSA co-proposed two label designs, each meeting statutory
requirements and relying on the same underlying data, but differing in
how the data were presented.\3\ Label 1 utilized a vertical layout that
featured a prominent letter grade to communicate the overall greenhouse
gas emissions (and fuel economy, which is inversely proportional to GHG
emissions for gasoline vehicles), along with projected five-year fuel
cost or savings relative to the average new vehicle; fuel economy and
annual fuel cost information was retained but displayed much less
prominently. Label 2 was more similar to the traditional design and
layout of the label and retained the current label's focus on fuel
economy values and annual fuel cost projections, with the addition of
environmental information in a less prominent position. The agencies
also sought comment on an alternative Label 3 that retained the more
traditional layout of Label 2 but used different graphical approaches.
---------------------------------------------------------------------------

    \3\ 75 FR 58078, September 23, 2010.
---------------------------------------------------------------------------

B. Description of the Action

    This final rule requires that a revised fuel economy and
environmental label be affixed to all new automobiles sold in the U.S.
starting with the 2013 model year and optionally for the remaining
portion of the 2012 model year. The agencies heard a wide range of
viewpoints and considered a wealth of input from market research, an
expert panel, hearings, and public comments in deciding on the final
label design and content. We also consulted with ARB with the intention
of harmonizing labels that address vehicle environmental performance.
The agencies have chosen to require a label that combines the cost-
saving element of Label 1 and the GHG rating of Label 3 with key
elements of the co-proposed Label 2, using a single additional color
besides black and white.

    Labels are being required for seven different vehicle technologies:
Gasoline, diesel, ethanol flexible fuel vehicles (FFV), compressed
natural gas vehicles (CNG), battery electric vehicles (EV), fuel cell
vehicles (FCV), and plug-in hybrid electric vehicles (PHEV). The final
fuel economy and environment labels retain many of the attributes of
the existing fuel economy label; specifically: Estimated annual fuel
cost; city, highway, and combined MPG; and fuel economy relative to
other vehicles in the same class will remain on the label, although
their relative prominence is revised to create space for new features.
Vehicles run on liquid fuels will display MPG, while vehicles run on
other fuel types will display gasoline-energy equivalent MPG (or MPGe).
Test procedures and methodologies for determining label values remain
unchanged from proposal. This rulemaking action also requires fuel
economy and emissions certification test procedure and calculation
methodologies for electric and plug-in hybrid electric vehicles,
essentially codifying the procedures that have been in use under EPA's
general authority to develop procedures for technologies not
specifically discussed in the regulations.
    New label features include a vehicle fuel type identifier in the
upper right corner, fuel consumption (the inverse of fuel economy), a
fuel economy and greenhouse gas rating relative to all new vehicles,
the vehicle's carbon dioxide emissions in grams per mile, the projected
five-year fuel costs or savings of this vehicle compared to the average
new vehicle, and an environmental rating for smog-forming pollutants.
The vehicle's projected range when fully fueled will be required on
dedicated alternative fuel vehicles such as compressed natural gas
vehicles and battery electric vehicles, and also plug-in hybrid
electric vehicles, and can be included at the manufacturer's discretion
on flexible fuel vehicles, such as those that are E85-capable. This
optional inclusion could potentially eliminate the need for
manufacturers to apply a separate FTC-required Alternative Fuel Label,
pending a formal decision by FTC. For vehicles that use an external
electricity source, charge time at 220-240 V (or optionally at 120 V)
will also be shown. Several features of the design of the label differ
from the current labels, such as the removal of the large image of a
fuel pump, the blocking of the label into various defined areas, and
the name on the label, as well as other design changes.
    Plug-in hybrid electric vehicle labels will reflect energy use
during operation when the battery is fully charged (in this mode, some
PHEVs operate on electricity only and others operate on both
electricity and gasoline) and when the battery is not providing any
assistance (the PHEV operates exclusively on gasoline or other non-
electricity fuel). As with labels for other technologies, PHEV labels
will feature a prominent MPG or MPGe metric, as well as fuel
consumption values based on units of purchased fuel; for PHEV labels,
these values will be presented for each operating mode. Several values
on the label--fuel costs and savings, MPGe relative to other vehicles,
carbon dioxide emissions in grams per mile, and the ratings--will be
based on assumptions of the relative use of the two fuels, using a
standard utility factor approach. For further information on utility
factors, please see section III.N. PHEVs which do not operate in
blended mode (i.e., using both electricity and gasoline) will show
range on electricity only (all electric range), PHEVs which do operate
in blended mode will show the range for that mode, and all PHEVs will
show total vehicle range for all fuels. Finally, charge time will be
displayed as on electric vehicles.
    The final label for gasoline-fueled vehicles is illustrated in
Figure I-1. Discussion of the placement of specific label elements,
along with illustrations of the labels for other vehicle technologies
and fuel types, can be found in Section IV, along with information on
where to find and view full color versions of the labels.
[GRAPHIC] [TIFF OMITTED] TR06JY11.000

C. Rationale for Revising the Label

    This joint final rule by EPA and NHTSA represents the most
significant overhaul of the Federal government's fuel economy label or
``sticker'' since its inception over 30 years ago.
    The current fuel economy label required by EPA on all new passenger
cars, light-duty trucks, and medium-duty passenger vehicles focuses on
city and highway fuel economy values in units of MPG, a comparison of
the vehicle's combined city/highway fuel economy to a range of
comparable vehicles, and estimated annual fuel cost. This final rule
expands the current fuel economy label to a more comprehensive fuel
economy and environment label that includes additional information
related to vehicle fuel consumption, GHG and smog-forming emissions,
and fuel costs or savings over a 5-year period relative to the average
vehicle, a smartphone interactive code that links to a Web site for
more detailed information and options for direct vehicle comparisons,
and additional information for advanced technology vehicles such as
driving range and battery charge time. Label designs for gasoline,
diesel, ethanol flexible fuel, compressed natural gas, electric, plug-
in hybrid electric, and hydrogen fuel cell vehicles are shown and
discussed in section IV.
    NHTSA and EPA are undertaking this joint final rule for several
reasons.
    First, both agencies have statutory responsibilities with respect
to vehicle labels. This final rule satisfies each agency's statutory
responsibilities in a manner that maximizes usefulness for the
consumer, while avoiding unnecessary burden on the manufacturers who
prepare the vehicle labels. The Energy Policy and Conservation Act
(EPCA) of 1975 \4\ mandated that auto manufacturers label all new
automobiles pursuant to EPA requirements,\5\ which EPA adopted
beginning in model year 1977. As amended, EPCA requires that labels
shall contain the following information:
---------------------------------------------------------------------------

    \4\ Pub. L. 94-163.
    \5\ 49 U.S.C. 32908(b).
---------------------------------------------------------------------------

    (1) The fuel economy of the automobile;
    (2) the estimated annual fuel cost of operating the automobile;
    (3) the range of fuel economy of comparable vehicles of all
manufacturers;
    (4) a statement that a booklet is available from the dealer to
assist in making a comparison of fuel economy of other automobiles
manufactured by all manufacturers in that model year;
    (5) the amount of the automobile fuel efficiency tax (``gas guzzler
tax'') imposed on the sale of the automobile under section 4064 of the
Internal Revenue Code of 1986 (26 U.S.C. 4064); and
    (6) other information required or authorized by the EPA
Administrator that is related to the information required by (1)
through (4) above.\6\
---------------------------------------------------------------------------

    \6\ 49 U.S.C. 32908(b).
---------------------------------------------------------------------------

    In the Energy Independence and Security Act (EISA) of 2007,\7\
Congress required that NHTSA, in consultation with EPA and the
Department of Energy (DOE), establish regulations to implement several
new labeling requirements for new automobiles.\8\ NHTSA was required to
develop a label program for new automobiles with information reflecting
an automobile's performance with respect to fuel economy and greenhouse
gas and other emissions over the useful life of the automobile based on
criteria provided by EPA.\9\ NHTSA was also tasked with developing a
rating system, based on EPA criteria, that would help consumers easily
compare the fuel economy and greenhouse gas and other emissions of
automobiles at the point of purchase, including designations of
automobiles with the lowest GHG emissions over the useful life of the
vehicles and the highest fuel economy.\10\
---------------------------------------------------------------------------

    \7\ Pub. L. 110-140.
    \8\ EISA Sec. 108, codified at 49 U.S.C. 32908(g).
    \9\ 49 U.S.C. 32908(g)(1)(a)(i).
    \10\ 49 U.S.C. 32908(g)(1)(a)(ii).
---------------------------------------------------------------------------

    Second, NHTSA and EPA believe that a single, coordinated fuel
economy and environment label is the most appropriate way to meet the
statutory requirements described above. The agencies believe that a
single, joint label is preferable to a separate label addressing the
new EISA requirements that could contain duplicative and overlapping
information with the current fuel economy label, causing consumer
confusion and imposing unnecessary burden on the manufacturers.\11\ In
addition, the agencies have consulted with other agencies (Federal and
State) that currently require labels relating to vehicle fuel use or
environmental performance, and have designed the new EPA/NHTSA fuel
economy and environment label to maximize the potential that it might
also satisfy some of the vehicle labeling requirements of the
California Air Resources Board and the Federal Trade Commission, which
could further reduce consumer confusion and manufacturer burden
resulting from the presence of multiple labels on new automobiles. By
including information on GHG emissions and fuel economy, this rule
continues EPA's and NHTSA's recent efforts at harmonizing our
regulatory requirements, such as the joint rulemaking that established
harmonized Federal GHG emissions and corporate average fuel economy
(CAFE) standards for new cars, light-duty trucks, and medium-duty
passenger vehicles for model years 2012-2016.\12\ This effort at
harmonization is consistent with the requirements of Executive Order
13563, section 3, which specifically draws attention to the risk of
``redundant, inconsistent, or overlapping requirements,'' and which
directs agencies to reduce costs by ``simplifying and harmonizing
rules.''
---------------------------------------------------------------------------

    \11\ The agencies also raised the issue of the upcoming labeling
requirements in the joint rulemaking for MYs 2012-2016 CAFE and GHG
standards for light-duty vehicles, 75 FR 25324 (May 7, 2010).
    \12\ 75 FR 25324, May 7, 2010.
---------------------------------------------------------------------------

    Third, the agencies believe this is an opportune time to revise the
label given the likelihood of a much more diverse vehicle technology
marketplace in the near future that will require different label
content to inform consumers of the capabilities of these new
technologies. Since the fuel economy label was first established by EPA
in 1977, over 99 percent of all new cars and light-duty trucks have
been conventional, internal-combustion engine vehicles that run on
petroleum-based fuels (or a liquid fuel blend dominated by petroleum).
When manufacturers occasionally marketed a non-conventional technology,
such as a compressed natural gas (CNG) vehicle, EPA generally addressed
labels for new technology vehicles on a case-by-case basis.
    Over the next several model years, however, the agencies expect to
see increasing numbers of advanced technology vehicles entering the
marketplace. By 2012, it is expected that there will be at least one
original equipment manufacturer offering of a CNG vehicle, an electric
vehicle (EV) and a plug-in hybrid electric vehicle (PHEV) with
nationwide availability.\13\

In the next few years, it is highly likely that there will be many more
advanced technology vehicles offered for general sale, possibly
including fuel cell vehicles (FCV) as well. The agencies believe that
it is better to have a single unified approach for these advanced
technology vehicle labels,\14\ rather than addressing them on a case-
by-case basis. This final rule specifically provides example labels for
gasoline vehicles, diesel vehicles, ethanol flexible fuel vehicles, CNG
vehicles, EVs, PHEVs,\15\ and hydrogen FCVs. Communicating the energy
and environmental performance of some of these advanced technologies
can be challenging. For example, PHEVs use two fuels, with blended PHEV
designs using the two fuels simultaneously. The two fuels--gasoline and
electricity--are very different in many respects, and consumer behavior
can have a large impact on PHEV energy and environmental performance
(e.g., the relative use of electricity and gasoline can vary greatly
depending on the miles driven between battery charges as well as the
frequency of battery charging). These technical complexities could lead
to significant consumer confusion when multiple advanced technology
vehicles begin to compete in the marketplace. We have tried to design
the new labels to reduce the confusion and allow consumers to make more
informed vehicle purchase decisions. The agencies expect to refine
advanced technology vehicle labels over time as we have done with
conventional vehicle labels. We also acknowledge the potential for
other advanced technology vehicles to enter the marketplace in the
future and, as we have historically done, will adapt the labels as
needed to accommodate emerging technologies.
---------------------------------------------------------------------------

    \13\ Honda has sold a dedicated CNG Civic in selected states for
several years, and has announced plans to expand sales to the rest
of the U.S. later this year--see ``2012 Honda Civic Concepts,''
Michael Harley, January 11, 2011, last accessed on March 15, 2011 at
http://www.vehix.com/articles/auto-previews--trends/2012-honda-
civic-concepts; Nissan began limited deliveries of its LEAF EV in
December 2010 and plans to expand availability to the rest of the
country in 2012--see ``Nissan Delivers Hawaii's First 100% Electric
Nissan LEAF,'' January 31, 2011, last accessed on March 15, 2011 at
http://www.nissanusa.com/leaf-electric-car/index?intcmp=home_ev_micro.Promo.Homepage.Home.P1#/leaf-electric-car/news/press-releases;
the luxury Tesla Roadster EV is also on the U.S. market--see http://www.teslamotors.com/roadster, last accessed on March 15, 2011;
Chevrolet introduced the Volt PHEV in December 2010 and plans to
expand to nationwide availability later this year--see ``Curious
About Chevy Volt Availability?'', Andrew Bornhop, February 2, 2011,
last accessed on March 15, 2011 at http://blog.roadandtrack.com/curious-about-chevy-volt-availability/.
    \14\ The agencies do not claim that every advanced technology
vehicle label is or will be exactly the same, that is not always
possible due to unique vehicle designs and/or fuel properties,
rather that the overall approach to advanced technology labels is
consistent.
    \15\ Plug-in hybrid electric vehicles entail a family of
different engineering approaches, and will continue to evolve based
on technology maturation and consumer preferences. In Section IV,
two basic PHEV label designs are provided that reflect current PHEV
energy management strategies and the resultant operating modes. In
the future, labels will be tailored to accommodate the operating
modes specific to new PHEV designs as they are introduced into the
market.
---------------------------------------------------------------------------

    Finally, the agencies believe these new labeling requirements will
improve the presentation of relevant information to consumers and thus
promote more informed choices, and that the new requirements fit well
with current consumer interests and potential changes in coming years.
Based on projections from the U.S. Energy Information Administration
that future inflation-adjusted gasoline prices will increase over
coming decades due to global economic growth and oil demand, we expect
that it is likely that consumer interest in fuel economy will continue
to grow over time.\16\ Manufacturers are providing more high fuel
economy vehicle offerings, and one manufacturer is now including fuel
economy information in its monthly sales reports.\17\ In addition,
providing information on environmental performance can help people who
value this kind of information to make a more informed choice among
different vehicles.
---------------------------------------------------------------------------

    \16\ Annual Energy Outlook 2010, Department of Energy, Energy
Information Administration, DOE/EIA-0383 (2010), May 11, 2010,
available at http://www.eia.doe.gov/oiaf/aeo/index.html.
    \17\ ``A Magic Mark: As Fuel Prices Rise, Shoppers Can Get High
MPG Without Sticker Shock,'' Rich Kranz, Automotive News, March 28,
2011, which projects that by Fall 2011 there could be ten
conventional gasoline, i.e., non-hybrid, models with EPA highway
ratings of 40 mpg or more; the automaker Hyundai recently began
monthly reporting of vehicle sales with 40 mpg EPA highway fuel
economy ratings as well as sales-weighted corporate average fuel
economy data (see ``Hyundai Motor America Begins Voluntary Monthly
Fuel Economy Reporting,'' February 3, 2011, last accessed on March
15, 2011 at http://www.hyundaiusa.com/about-hyundai/news/Corporate_Fuel_economy_Reporting_release-20110203.aspx).
---------------------------------------------------------------------------

    The new labels also have the potential to help consumers learn
about fuel economy and vehicle emissions, and informed consumers may
decide to place more weight on fuel economy and vehicle emissions for
economic or environmental reasons. In this domain, consumers' tastes
and values change over time. Of course, individual consumers will
always determine the relative priority of fuel economy and
environmental considerations vis-a-vis the many factors that go into a
new vehicle purchase decision.

D. Market Research

    As discussed above, the fuel economy and environment label must
contain certain pieces of information by statute and may also contain
other pieces of related information EPA considers helpful to consumers.
Given that all of the label information should be presented so as to
maximize usefulness and minimize confusion for the consumer, EPA and
NHTSA embarked upon a consumer research program.
    When EPA last redesigned the fuel economy label in 2006, consumer
research was valuable in helping to inform the development of that
label.\18\ Since this final rule addresses important new elements being
added to the existing label as well as new labels for advanced
technology vehicles, EPA and NHTSA conducted more comprehensive
research than that undertaken in 2006 to help inform the final label
content and design. Our research program included a review of
literature on the vehicle buying process,\19\ three sets of consumer
focus groups and a day-long facilitated consultation with an expert
panel that helped inform the development of the proposed label designs,
and an Internet survey to test the proposed labels with a wider
audience.
---------------------------------------------------------------------------

    \18\ The current label was redesigned and implemented for model
year (MY) 2008 vehicles. See 71 FR 77871-77969 (December 27, 2006).
    \19\ Environmental Protection Agency Fuel Economy Label:
Literature Review, EPA420-R-10-906, August 2010.
---------------------------------------------------------------------------

    Focus groups were held beginning in late February through May 2010
in four cities: Charlotte, Houston, Chicago, and Seattle. Overall, 32
focus groups were convened with a total of 256 participants. The focus
groups were valuable in helping us to identify individual metrics that
consumers wanted to see on labels as well as effective label designs.
Overall, focus groups indicated that redesigned labels should:

 Create an immediate first impression for consumers
 Be easy to read and understand quickly
 Clearly identify vehicle technology (e.g., gasoline, electric,
plug-in hybrid)
 Utilize color
 Chunk information to allow people to deal with ``more
information''
 Be consistent in content and design across technologies
 Allow for comparison across technologies
 Make it easy to identify the most fuel efficient and
environmentally friendly vehicles \20\
---------------------------------------------------------------------------

    \20\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010; Environmental Protection
Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904,
August 2010; and Environmental Protection Agency Fuel Economy Label:
Phase 3 Focus Groups, EPA420-R-10-905, August 2010.

    Following the focus group research, we convened an expert panel for
a one-day consultation on June 9, 2010, in Washington, DC. The expert
panel provided individual feedback on the draft label designs we
developed based on key findings from the focus groups.

We also asked the panel to assist us in identifying additional
opportunities and strategies to provide information to consumers to
help them assess the costs, emissions, and energy efficiency of
different vehicles. The experts came from a variety of fields such as
advertising and product development and were chosen because they had
led successful national efforts to introduce new products or had
spearheaded successful national educational campaigns.\21\ After
viewing the draft labels, the various members of the expert panel
offered the agencies the following insights and guidance that were key
in developing one of the co-proposed label designs (Label 1) and also
---------------------------------------------------------------------------
informed the label content and design being required today, including:

    \21\ More information on the expert panel, including a list of
participants is available in the docket: Environmental Protection
Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908,
August 2010.
---------------------------------------------------------------------------

 Keep it simple
     Consumers are likely to view the labels for a very short
time--roll ratings and metrics up into a single score
     Use cost savings information--a very strong consumer
motivator
     Develop a Web site that would be launched in conjunction
with the new label. This consumer-focused Web site could provide more
detailed information, along with access to tools, applications, and
social media.\22\
---------------------------------------------------------------------------

    \22\ Environmental Protection Agency Fuel Economy Label: Expert
Panel Report, EPA420-R-10-908, August 2010.
---------------------------------------------------------------------------

    We also undertook an Internet survey that was administered at the
time of the release of the proposed rule in September, 2010, to
determine whether any of the label designs had flaws that could
undermine their ability to convey the desired information to the U.S.
new car buying population. For the co-proposed labels and the
alternative label, we designed the survey to test the understandability
of the labels as well as whether the label designs affected consumers'
abilities to select efficient and environmentally-friendly vehicles,
given their typical travel pattern. The survey had nearly 3200
respondents of self-identified U.S. new vehicle purchasers, each of
whom saw only one of the three label designs. Respondents were asked
questions that sought to reveal understanding of the information on the
label, as well as questions that sought to reveal variations in vehicle
selection based on label design.
    Overall, the results showed that the differences between the three
label designs with respect to understandability were small in
magnitude, with label 2 appearing to be a little more understandable
than label 1.\23\ Likewise, the variations with regard to vehicle
selection were relatively small. Although in all cases the majority of
people selected the vehicle with lower projected fuel costs and higher
savings, label 1 somewhat enhanced this effect over label 2.\24\
Because the survey did not uncover any ``fatal flaw'' with any of the
three labels that would exclude it or any of its key elements from
serious consideration in the final rule, the agencies continued to
consider all elements of the three labels in developing the final rule.
A report on that survey and its results is available in the public
docket and on the Web site for this rule.\25\
---------------------------------------------------------------------------

    \23\ PRR, ``Internet Survey Results on the Effects of Fuel
Economy Labels on Understanding and Selection'' November 2010, p. 1-
8.
    \24\ Ibid, p. 9-12.
    \25\ PRR, ``Internet Survey Results on the Effects of Fuel
Economy Labels on Understanding and Selection'' November 2010. The
agencies are acutely aware of the central importance of the best
available research to inform judgments about disclosure requirements
and will continue to consider such research in the future
(including, where feasible and appropriate, randomized controlled
trials).
---------------------------------------------------------------------------

II. Statutory Provisions and Legal Authority

A. Energy Policy and Conservation Act (EPCA)

    Under EPCA, EPA is responsible for developing the fuel economy
labels that are posted on all new light duty cars and trucks sold in
the U.S and, beginning in MY 2011, all new medium-duty passenger
vehicles as well. Medium-duty passenger vehicles are a subset of
vehicles between 8,500 and 10,000 pounds gross vehicle weight that
includes large sport utility vehicles and vans, but not pickup
trucks.\26\ EPCA requires the manufacturers of automobiles to attach
the fuel economy label in a prominent place on each automobile
manufactured in a model year and also requires auto dealerships to
maintain the label on the automobile.\27\
---------------------------------------------------------------------------

    \26\ EPA's 2006 labeling rule applied to passenger cars, light-
trucks, and medium-duty passenger vehicles. Under section 32908(b),
a manufacturer is to label each ``automobile,'' and EPA interpreted
that provision as requiring labeling for vehicles that meet the
definition of ``automobile'' under section 32901(a)(3), as well as
vehicles under 8,500 pounds gross vehicle weight, whether or not
they meet the definition of automobile, pursuant to section
32908(a)(1). See 71 FR 77872, 77876-87, 77915 (December 27, 2006).
Since the 2006 rule, EISA revised the definition of automobile in
section 32901(a)(3). As with the interpretation discussed in the
2006 rule, the requirements of section 32908(b) continue to apply to
passenger cars, light-duty trucks, and medium-duty passenger
vehicles.
    \27\ 49 U.S.C. 32908(b)(1).
---------------------------------------------------------------------------

    EPCA specifies the information that is minimally required on every
fuel economy label.\28\ As stated above, labels must include:
---------------------------------------------------------------------------

    \28\ 49 U.S.C. 32908(b)(2)(A) through (F).
---------------------------------------------------------------------------

     The fuel economy of the automobile,
     The estimated annual fuel cost of operating the
automobile.
     The range of fuel economy of comparable automobiles of all
manufacturers,
     A statement that a booklet is available from the dealer to
assist in making a comparison of fuel economy of other automobiles
manufactured by all manufacturers in that model year,
     The amount of the automobile fuel efficiency tax imposed
on the sale of the automobile under section 4064 of the Internal
Revenue Code of 1986; \29\ and
---------------------------------------------------------------------------

    \29\ 26 U.S.C. 4064.
---------------------------------------------------------------------------

     Other information required or authorized by the
Administrator that is related to the information required [within the
first four items].
    Under the provision for ``other information'' EPA has previously
required the statements ``your actual mileage will vary depending on
how you drive and maintain your vehicle,'' and cost estimates ``based
on 15,000 miles at $2.80 per gallon'' be placed on vehicle labels. EPA
is adopting all of the labeling requirements discussed below and
specified in EPA's regulations, based on its authority under section
32908(b). In addition, the regulations adopted by EPA satisfy the
requirement to develop criteria for purposes of section 32908(g).
    Additional labeling requirements are found in EPCA for
``dedicated'' automobiles and ``dual fueled'' automobiles. A dedicated
automobile is an automobile that operates only on an alternative
fuel.\30\ Dedicated automobile labels must also display the information
noted above.
---------------------------------------------------------------------------

    \30\ 49 U.S.C. 32901(a)(1) defines ``alternative fuel'' as
including --(A) methanol; (B) denatured ethanol; (C) other alcohols;
(D) except as provided in subsection (b) of this section, a mixture
containing at least 85 percent of methanol, denatured ethanol, and
other alcohols by volume with gasoline or other fuels; (E) natural
gas; (F) liquefied petroleum gas; (G) hydrogen; (H) coal derived
liquid fuels; (I) fuels (except alcohol) derived from biological
materials; (J) electricity (including electricity from solar
energy); and (K) any other fuel the Secretary of Transportation
prescribes by regulation that is not substantially petroleum and
that would yield substantial energy security and environmental
benefits.''
---------------------------------------------------------------------------

    A dual fueled vehicle is a vehicle which is ``capable of operating
on alternative fuel or a mixture of biodiesel and diesel fuel * * *,
and on gasoline or diesel fuel'' for the minimum driving range (defined
by the DOT).\31\ Dual fueled vehicle labels must:
---------------------------------------------------------------------------

    \31\ 49 U.S.C. 32901(a)(9), (c).

---------------------------------------------------------------------------

     Indicate the fuel economy of the automobile when operated
on gasoline or diesel fuel.
     Clearly identify the automobile as a dual fueled
automobile.
     Clearly identify the fuels on which the automobile may be
operated; and
     Contain a statement informing the consumer that the
additional information required by subsection (c)(2) [the information
booklet] is published and distributed by the Secretary of Energy.\32\
---------------------------------------------------------------------------

    \32\ 49 U.S.C. 32908(b)(3).
---------------------------------------------------------------------------

    EPCA defines ``fuel economy'' for purposes of these vehicles as
``the average number of miles traveled by an automobile for each gallon
of gasoline (or equivalent amount of other fuel) used, as determined by
the Administrator [of the EPA] under section 32904(c) [of this
title].'' \33\
---------------------------------------------------------------------------

    \33\ 49 U.S.C. 32901(a)(11).
---------------------------------------------------------------------------

    Moreover, EPA is required under EPCA to prepare a fuel economy
booklet containing information that is ``simple and readily
understandable.'' \34\ The booklet is commonly known as the annual
``Fuel Economy Guide.'' EPCA further instructs DOE to publish and
distribute the booklet. EPA is required to ``prescribe regulations
requiring dealers to make the booklet available to prospective
buyers.'' \35\ While the booklet continues to be available in paper
form, in 2006, EPA finalized regulations allowing manufacturers and
dealers to make the Fuel Economy Guide available electronically to
customers as an option.\36\
---------------------------------------------------------------------------

    \34\ 49 U.S.C. 32908(c).
    \35\ Id.
    \36\ 71 FR 77915, Dec. 27, 2006.
---------------------------------------------------------------------------

    In this rule where we refer to EPA's statutory authority under
EPCA, we are referring to these provisions.

B. Energy Independence and Security Act (EISA)

    The 2007 passage of the Energy Independence and Security Act (EISA)
amended EPCA by introducing additional new vehicle labeling
requirements, to be implemented by the National Highway Traffic Safety
Administration (NHTSA).\37\ While EPA retained responsibility for
establishing test methods and calculation procedures for determining
the fuel economy estimates of automobiles for the purpose of posting
fuel economy information on labels and in an annual Fuel Economy Guide,
NHTSA gained responsibility for requiring automobiles to be labeled
with additional performance metrics and rating systems to help
consumers compare vehicles to one another more easily at the point of
purchase.
---------------------------------------------------------------------------

    \37\ Public Law 110-140.
---------------------------------------------------------------------------

    Specifically, and for purposes of this rulemaking, subsection ``(g)
Consumer Information'' was added to 49 U.S.C. 32908. Subsection (g), in
relevant part, directed the Secretary of Transportation (by delegation,
the NHTSA Administrator) to ``develop and implement by rule a program
to require manufacturers--
    (A) to label new automobiles sold in the United States with--
    (i) information reflecting an automobile's performance on the basis
of criteria that the [EPA] Administrator shall develop, not later than
18 months after the date of the of the Ten-in-Ten Fuel Economy Act, to
reflect fuel economy and greenhouse gas and other emissions over the
useful life of the automobile:
    (ii) a rating system that would make it easy for consumers to
compare the fuel economy and greenhouse gas and other emissions of
automobiles at the point of purchase, including a designation of
automobiles--
    (I) with the lowest greenhouse gas emissions over the useful life
of the vehicles; and
    (II) the highest fuel economy* * *''

In this rule where we refer to NHTSA's statutory authority under EISA,
we are referring to these provisions.
    Thus, both EPA and NHTSA have authority over labeling requirements
related to fuel economy and environmental information under EPCA and
EISA, respectively. In order to implement that authority in the most
coordinated and efficient way, the agencies are issuing this joint
final rule with the revised labels presented below.

III. Public Participation and Comment

    The agencies proposed the joint label rule on September 23,
2010,\38\, and received over 6000 comments representing many
perspectives. The agencies received oral testimony at two public
hearings: one in Chicago on October 14, 2010, and one in Los Angeles on
October 21, 2010. Additionally, the agencies received written comments
from more than 50 organizations, including auto manufacturers and
dealers, state and local governments, environmental groups, consumer
organizations, other non-governmental organizations, and thousands of
comments from private citizens.
---------------------------------------------------------------------------

    \38\ 75 FR 58078 (Sept. 23, 2010).
---------------------------------------------------------------------------

    This section addresses the key issues on which public comments were
received on the proposed rule and discusses the agencies' final
decisions on those issues. Our more detailed responses to public
comments are available in the docket in the Response to Comments
document associated with this final rule.

A. Energy Metrics

1. Fuel Economy
    The agencies proposed to retain the current practice of placing MPG
on the label for vehicles that use liquid fuels such as gasoline and
diesel. There are two main reasons for this. First, representing the
vehicle's fuel economy performance on the label with an estimate of
miles per gallon is a core element of the fuel economy information
requirements of EPCA, which specifically states that the label must
display ``the fuel economy of the automobile'' \39\ and defines ``fuel
economy'' as ``the average number of miles travelled by an automobile
for each gallon of gasoline (or equivalent amount of other fuel) used,
as determined by the Administrator.'' \40\ Historically, the label has
presented this information in terms of gallons of purchased fuel, since
this is the most meaningful for the consumer. Thus, gasoline vehicle
labels have historically displayed miles per gallon of gasoline, while
diesel vehicle labels have displayed miles per gallon of diesel.\41\
The proposal retained this approach. Second, consumers are very
familiar with the MPG metric, as it has been the ubiquitous fuel
economy metric for liquid fuels on vehicle labels since 1977. The
familiarity and ubiquity of the metric argue for its continued use
(despite its limitation, as discussed below).
---------------------------------------------------------------------------

    \39\ 49 U.S.C. 32908(b)(1)(A). EISA also requires fuel economy
information. See 32908(g)(1)(A).
    \40\ 49 U.S.C. 32901(a)(11).
    \41\ Similarly, for those manufacturers who elect to put E85
information on the label for a flexible-fueled vehicle, it would be
displayed as miles per gallon of E85.
---------------------------------------------------------------------------

    For those vehicles that do not use liquid fuels--such as EVs, PHEVs
operating on electricity, and CNG vehicles \42\-- we proposed to use
miles

per gallon of gasoline-equivalent (MPGe). This metric is similar to
MPG, but, instead of presenting miles per gallon of the vehicle's fuel
type, it represents miles per amount of energy used, conveyed as the
gallons of gasoline that have the equivalent amount of energy. We
proposed MPGe for three reasons. First, as previously noted, EPCA
requires a fuel economy value for all labels, defined as the miles
travelled for each ``gallon of gasoline (or equivalent amount of other
fuel) used.'' \43\ Second, non-liquid fuels are not typically dispensed
by the gallon, which makes it challenging to derive a metric reflecting
gallons dispensed. However, a gasoline-equivalent gallon--that is, the
amount of energy in the non-liquid fuel that is equivalent to that in a
gallon of gasoline--can be derived for each fuel type.\44\ Third,
consumer groups preferred some type of comparative fuel economy metric
that could be used across technologies, and MPGe allows such a
comparison.\45\
---------------------------------------------------------------------------

    \42\ While EPA did not propose explicit labels for hydrogen fuel
cell vehicles (FCVs), we are including a label design for FCVs
because the label design issues for FCVs are very similar to those
for other dedicated, non-petroleum vehicles such as CNG vehicles and
EVs. In addition, EPA has designed FCV labels in the past on an as-
needed basis. EPA did not propose, and is therefore not finalizing,
fuel economy and range test procedures for FCVs. Test procedures
will continue to be as specified by EPA under the authority of 40
CFR 600.111-08(f), which allows the Administrator to prescribe
``special test procedures'' under certain circumstances. However,
EPA expects to continue to specify the use of SAE J2572,
(``Recommended Practice for Measuring Fuel Consumption and Range of
Fuel Cell and Hybrid Fuel Cell Vehicles Fuelled by Compressed
Gaseous Hydrogen''). Manufacturers of FCVs should continue to work
with EPA to ensure that the procedures are applied according to EPA
requirements.
    \43\ 49 U.S.C. 32901(a)(11).
    \44\ While some non-liquid fuels are sold on a gasoline-
equivalent basis (e.g., CNG), some are not (e.g., electricity), and
some are not yet widely sold as a vehicle fuel (e.g., hydrogen),
    \45\ Environmental Protection Agency Fuel Economy Label: Phase 3
Focus Groups, EPA420-R-10-905, August 2010, p. 35.
---------------------------------------------------------------------------

    On the other hand, the agencies discussed in the proposal that MPGe
has some drawbacks for a fuel such as electricity: electricity is never
purchased by the gallon, and MPGe requires the conversion of
electricity to an energy-equivalent amount of gasoline, a fuel which is
very different in many ways. An alternative approach for such vehicles
that the agencies considered is miles per unit of purchased fuel--for
example, miles per kilowatt-hour. Such a metric would be in terms of
the fuel that the consumer purchases, which could be more useful for
calculating fuel costs and for comparing with other vehicles of the
same technology but would not be comparable across technologies. The
agencies specifically asked for comments on the merits of using MPGe
for non-liquid fuels.
    Comments overwhelmingly supported the use of MPG for liquid fuels,
although one commenter advocated that diesel vehicle fuel economy
values be calculated on an MPGe basis in order to reflect the higher
energy content of diesel fuel. The agencies are requiring the use of
MPG for liquid fuels for the same reasons articulated in the proposal:
Historical implementation of the EPCA requirements, consumer
familiarity, and the fact that these fuels are purchased by the gallon.
We believe that changing to MPGe for the fuel economy of diesel
vehicles would be very confusing to consumers, as label MPGe values
would then be inconsistent with all consumer calculations of fuel
economy (since diesel is sold in volumetric gallons) as well as fuel
economy values shown on vehicle dashboard displays.
    The agencies proposed a range of options for ethanol flexible fuel
vehicles, including maintaining the current policy of requiring only
gasoline-based MPG on the label (with optional inclusion of E85-based
MPG), requiring the addition of E85-based MPG, and requiring the
addition of E85-based MPGe. Only a few commenters addressed ethanol
flexible fuel vehicles, and most who commented on this option supported
the current policy. The agencies are requiring a label for ethanol
flexible fuel vehicles that is consistent with the principles of the
current policy: All label metrics are based on gasoline operation, a
statement is provided so that the consumer knows that the values are
based on gasoline operation,\46\ and EPA is finalizing that
manufacturers may voluntarily include fuel economy estimates on E85
(which would be based on miles per gallon of E85, given that E85 is a
liquid fuel).\47\ Data show that, on average, FFVs operate on operate
on gasoline nearly 99% of the time, and on E85 fuel about 1% of the
time.\48\ In light of this, the agencies believe it is appropriate to
require only gasoline values on the label, and to provide E85
information on the Web site.
---------------------------------------------------------------------------

    \46\ ``Values are based on gasoline and do not reflect
performance and ratings on E85.''
    \47\ In addition, as required under EPA's authority in EPCA, the
Fuel Economy Guide and Web site will continue to provide the fuel
economy estimates on E85, the driving range on E85, and information
about how the performance might change when operating on mixtures of
E85 and gasoline.
    \48\ In 2007, about 7.1 million FFVs were on the road,
comprising about 2.8% of the 247,000,000 cars and trucks in use in
the U.S. These vehicles used 54 million gallons of E85, which is
about 0.04% of the transportation fuel used for automobiles and
light trucks (8.8 million BPD or 135 billion gallons per year). The
result is that about 1.4% of fuel used in FFVs is E85; the remainder
is gasoline. All data from Transportation Energy Data book: Edition
29. U.S. Department of Energy, July 2010. Tables 1.14, 2.4, 3.3, and
6.1.
---------------------------------------------------------------------------

    For non-liquid fuels, the comments on the use of MPGe as a fuel
economy metric were split. Supportive comments focused on the value of
having a metric that consumers could use to compare across technologies
and that was similar to the MPG metric with which people are
accustomed. These commenters supported the use of energy equivalency,
as proposed, and agreed that this mathematical conversion was the best
approach to create a practical comparative tool. One automaker
explicitly viewed the MPGe metric to be in direct alignment with EPCA
statutory authority for the new label to show a comparison of fuel
economy of comparable automobiles.
    Those opposed to the use of MPGe for non-liquid fuels directly
challenged whether it was, in fact, a good comparative tool for
consumers. These commenters argued that MPGe would be misleading by
implying that different fuel types were substantially equivalent and
ignoring the many effects of obtaining and using very different fuels,
such as shifting dependence on foreign oil; that is, that MPGe
oversimplifies a complex situation. Some also commented that
mathematically converting between gasoline and other fuels on an energy
equivalency basis ignores the energy loss inherent in any conversion
process. As an alternative, one automaker suggested using miles per
purchased unit of energy. No commenter, however, suggested an
alternative fuel economy metric that would allow consumers to compare
across technologies.
    The agencies are requiring the use of MPGe as the fuel economy
metric for non-liquid fuels.\49\ Although we understand the concern of
some commenters over using energy equivalency for different types of
fuels, we continue to believe that one of the primary purposes of the
label is to allow such comparisons, and to do so with metrics that do
not allow direct comparisons would diminish the usefulness of the
label. We believe that the purpose of the fuel economy metric on the
label is not to address the differing effects of obtaining and using
different fuels, or to consider the energy losses of converting from
one to another, but rather to address the energy use of the vehicle
itself. Thus, for example, MPGe allows consumers to compare the
relative energy consumption of various EVs, thus providing a metric
that differentiates between EVs on a factor that is within the
automakers' control. We have also concluded, as a result of the market
research that was undertaken for this rulemaking, that many

consumers are likely to find it most useful to have an energy metric
that allows them to compare vehicle energy efficiency across fuel types
and vehicle technologies; the MPGe metric accomplishes this goal as
well. In addition, as discussed above, there is a statutory requirement
to provide a fuel economy metric per ``equivalent amount of other
fuel,'' which MPGe clearly provides.
---------------------------------------------------------------------------

    \49\ As with MPG, the MPGe metric is based on the energy used by
the vehicle over the EPA fuel economy and GHG test procedures. For
an EV, this is the energy necessary to recharge the battery to its
full charge after the test, as measured at the electrical outlet;
thus, it includes the energy used to propel the vehicle as well as
charging losses. It does not include transmission losses or the
energy used at the powerplant.
---------------------------------------------------------------------------

2. Fuel Consumption
    In the past few years, many stakeholders and academics have
suggested that a fuel consumption metric--such as gallons per 100
miles--could be beneficial on the fuel economy label as either a
replacement for, or a complement to, MPG. The use of a fuel consumption
metric could serve to address the fact that, with fuel economy, there
is a non-linear relationship between gallons (or gasoline-equivalent
gallons) used over a given distance and MPG (or MPGe). Accordingly, a
certain MPG improvement at a lower MPG level saves much more fuel (and
thus money) than the same MPG improvement at a higher MPG level. If a
consumer trades in a car with a 14 MPG rating for one with a 17 MPG
rating, he or she will save approximately as much gas and money for a
given distance as does a consumer who replaces a 33 MPG car with a 50
MPG car. The non-linearity of the MPG measure is not widely understood
and hence many consumers misunderstand the measure. In the empirical
literature, this is known as the ``MPG illusion.'' \50\
---------------------------------------------------------------------------

    \50\ Larrick, R.P. and J.B. Soll, ``The MPG illusion,'' Science
320:1593-1594 (2008). To understand the ``MPG illusion,'' note that
a 20 MPG vehicle uses 25% less fuel than a 15 MPG vehicle, while a
40 MPG vehicles uses only 12.5% less fuel than a 35 MPG vehicle;
that is, the same 5 MPG improvement will have different effects on
fuel consumption (and fuel costs) depending on the starting point
for the improvement. An extreme example is that, at a fuel economy
of 1000 MPG, the fuel consumption is so minute (0.001 gallons per
mile) that it no longer matters whether the fuel economy is
increased to 1010 MPG, 2000 MPG, or even 1,000,000 MPG; the only
fuel that can be further saved is some fraction of that 0.001
gallons per mile.
---------------------------------------------------------------------------

    Pointing to the MPG illusion, some stakeholders suggest that the
public would be better equipped to make economically sound purchasing
decisions with a metric that directly reflects fuel consumption and,
correspondingly, fuel costs. In response to these suggestions and
concerns over the MPG illusion, the proposal introduced fuel
consumption on the label, in the form of gallons per 100 miles for
combined city/highway operation, as a complement to the MPG metric for
liquid fuels.
    For non-petroleum fuels, EPA proposed to include fuel consumption
based on the units in which each fuel is sold. For example, CNG is sold
in gasoline-equivalent gallons; we proposed the fuel consumption metric
of gasoline-equivalent gallons per 100 miles. Similarly, for EVs and
PHEVs with all-electric operation, EPA proposed to show fuel
consumption in kilowatt-hours per 100 miles. For blended PHEVs, EPA
proposed gallons of gasoline equivalent per 100 miles, which represents
the inverse of MPGe and combines the two fuels into one consumption
metric; for the sake of reducing label clutter, EPA proposed to not
show separate electricity and gasoline consumption values.
    We received many comments on the general question of whether a fuel
consumption metric should be added to gasoline vehicle labels, and
there was broad support for doing so. Most supporters cited the non-
linearity associated with the MPG illusion and suggested that it was
important to begin the process of educating consumers about fuel
consumption, while also keeping fuel economy metrics. There were a few
opponents to including fuel consumption metrics, who generally argued
that it was not important enough to warrant adding yet more numbers to
the label.
    The widespread commenter support for including fuel consumption
metrics echoed EPA's concerns about the MPG illusion. EPA agrees that a
fuel consumption metric is a better tool for making economically sound
decisions and recognize that it will not become widely utilized if it
is not first introduced on the label. Therefore, EPA is requiring the
use of fuel consumption on the label--in the form of gallons per 100
miles for combined city/highway operation for liquid fuels--though in
reduced prominence relative to the traditional MPG metric. As with
MPGe, a further advantage of the energy consumption metric is that it
allows consumers to compare the relative energy use of various EVs,
thus providing an additional metric that differentiates between EVs.
    The issue of the specific fuel consumption metrics for most types
of vehicles that operate on non-liquid fuels generated little or no
comment, with the exception of PHEVs operated in blended mode. EPA
continues to believe that the metrics for vehicles other than blended
PHEVs are reasonable and appropriate and are therefore requiring the
proposed approaches for EVs and all-electric operation for PHEVs
(kilowatt-hours per 100 miles) and for CNG vehicles (gasoline
equivalent gallons per 100 miles). EPA is similarly requiring kilograms
per 100 miles as the consumption metric for hydrogen FCVs, since
hydrogen is sold by the kilogram.
    Several comments were received on how to treat blended PHEVs, which
use electricity and gasoline simultaneously. The commenters who opposed
the use of MPGe also generally opposed the proposed approach of a
single fuel consumption metric for blended PHEVs, pointing out that
this would not allow a PHEV shopper to compare the relative use of
electricity and gasoline. A few commenters suggested that labels for
blended PHEVs should report both electricity and gasoline consumption.
    While EPA recognizes the tradeoffs associated with adding yet more
values to an already busy PHEV label, upon further consideration, EPA
agrees with the commenters who suggested that consumers need to be able
to differentiate between electricity and gasoline use in a blended
PHEV. This will allow the consumer to assess and weigh the relative use
of each type of energy as they deem appropriate. In addition, the fuel
consumption metric for all other fuels is being finalized on the basis
of the units in which the fuel is purchased, and it is reasonable to
adopt a parallel approach for blended PHEVs. Accordingly, EPA is
requiring fuel consumption separately for both gasoline (in gallons per
100 miles) and electricity (in kilowatt-hours per 100 miles) for a
blended PHEV, rather than the gasoline-equivalent gallons per 100 miles
as proposed. EPA believes that the combination of the MPGe metric (for
those who want a simple comparative metric) and the two separate fuel
consumption metrics (for those who want to compare relative gasoline
and electricity use) will help to satisfy different consumer needs.

B. Rating Systems

1. Scope of the Ratings
    EISA requires that the label include a ``rating system that would
make it easy for consumers to compare the fuel economy and greenhouse
gas and other emissions at the point of purchase . . . '', including a
designation of the automobiles with the lowest greenhouse gas emissions
over the useful life of the vehicles, and the highest fuel economy . .
. '' \51\
---------------------------------------------------------------------------

    \51\ 49 U.S.C. 32908(g)(1)(A)(iii).
---------------------------------------------------------------------------

    The co-proposed label designs presented two primary variations on
ratings systems for fuel economy and greenhouse gas emissions, based on
two interpretations of the statutory language. The first approach,
shown on labels 1

and 3, combined fuel economy and greenhouse gas emissions into a single
relative rating; we also sought comment on integrating emissions of
other pollutants into this rating. The second approach, shown on labels
1 and 2, retained separate ratings for fuel economy, greenhouse gas
emissions, and other pollutants. We noted that the two approaches are
not mutually exclusive, and a label could display both.
    The majority of those who commented on this topic said that these
factors should each be displayed separately on the label. The key
reason cited was that individual ratings would best provide clarity and
transparency for those wishing to take these factors into
consideration. On the other hand, some commenters felt that it is
appropriate for the government to combine factors into a single rating
in order to distill complex information into a more useable format.
These commenters focused primarily on the relationship between energy
consumption and greenhouse gas emissions, and suggested that a combined
rating made sense. Other commenters on this topic contended that it was
important for the ratings to show that greenhouse gases and fuel
economy do diverge across fuel types, and so the ratings should be
separate. Commenters also stated that there was no clear methodology
for incorporating emissions of other air pollutants with greenhouse
gases and did not support the proposed methodologies for doing so.
    We are requiring separate ratings for fuel economy, greenhouse
gases, and other emissions. The fuel economy and greenhouse gas ratings
will be displayed on the same slider bar, and vehicles that have the
same ratings for both factors will combine the two ratings with a
single indicator. Vehicles operating on gasoline will always combine
the two ratings since they will, by definition, receive the same score
for both ratings. The agencies believe that this approach is consistent
with the language in EISA, is allowed under the EPCA provisions, and
will best allow consumers to compare each of these elements. The
agencies also believe that using one slider bar for the fuel economy
and greenhouse gas rankings will simplify the design of the label (an
important consideration) and will improve the effectiveness of the
label. The ratings for fuel economy, greenhouse gases, and other
emissions are subsequently described in sections III.C, III.D, and
III.F.
2. Span of the Ratings
    Each of the ratings systems, as proposed, would include all new
vehicles for which labeling is required in a single rating system; \52\
that is, the ratings would be universal across all new vehicles, rather
than broken out by vehicle class. This approach was based on the text
of EISA requiring a rating ``that would make it easy for consumers to
compare the fuel economy and greenhouse gas and other emissions of
automobiles at the point of purchase * * *'' \53\ rather than the EPCA
provisions in the statute.\54\ NHTSA's interpretation was that this
language was meant to require rating systems that would allow consumers
to compare new vehicles against each other without restriction, and
that it would not be satisfied by rating systems that spanned less than
the entire fleet.
---------------------------------------------------------------------------

    \52\ This currently includes all passenger automobiles and light
trucks as defined by NHTSA at 49 CFR part 523. More specifically,
the rating system would span all automobiles up to 8,500 pounds
gross vehicle weight, plus some vehicles (large SUVs and some
passenger vans) between 8,500 and 10,000 pounds gross vehicle
weight.
    \53\ 49 U.S.C. 32908(g)(1)(A)(ii).
    \54\ 49 U.S.C. 32908(b)(1)(F)
---------------------------------------------------------------------------

    Many commenters supported the proposed approach of having universal
rating systems that apply across all vehicle classes. These commenters
stated that most people shop in more than one class, and, therefore, a
rating system that was solely within class was not particularly useful
because it would not allow these consumers to compare the vehicles in
which they had interest. Commenters stated that a within-class approach
could be misleading by displaying ratings that appear to be comparable
but in fact are not, since ratings based on individual classes are not
broadly applicable across all vehicles; they are applicable only within
the class on which they are based. As such, a within-class approach
could assign a high rating to a vehicle that does relatively well
within its class, but which emits at relatively high levels compared to
vehicles in other, lower-emitting classes. For example, a large car
that is low-emitting relative to other large cars could score a 7,
while a midsize car with average emissions for its class would score a
5, even though the midsize is lower-emitting than the large car. With a
purely within-class approach, the consumer who is considering both of
these vehicles would have no way to know that the midsize car is a
better environmental choice.
    On the other hand, several auto manufacturers commented that many
consumers shop solely within vehicle classes, and that therefore a
rating that applied across all classes would not be helpful, as it
would not indicate the best performers within a class. One auto
manufacturer further commented that NHTSA's interpretation of the EISA
language is overly restrictive, stating that, in its view, the most
useful information to consumers would compare among vehicles of the
same class, and that doing so would be consistent with the EISA
requirement for easy comparisons.
    We are requiring, as proposed, ratings that span all vehicle
classes for which labels are required. Although the agencies' consumer
research indicates that many consumers narrow their vehicle choices
early in the buying decision, our research also indicates that many and
perhaps most do not focus narrowly on a single class. Focus group
participants indicated that they shopped, on average, across two to
three vehicle classes.\55\ For these consumers to be able to compare
vehicles in different classes, the information must necessarily span
those classes, or it will be of little use or, worse, misleading: A
vehicle that is ``best'' in one class, in terms of the metrics
presented on the label, may be less so when compared to other classes.
For those consumers shopping across classes who wish to know the
relative performance of those choices, a single all-vehicles rating
system will enable them to make accurate comparisons across whichever
vehicles they choose to shop. Such an approach would still be useful
within a class, since each metric will differentiate vehicles
regardless of their class.
---------------------------------------------------------------------------

    \55\ Environmental Protection Agency Fuel Economy Label: Pre-
Focus Groups Online Survey Report, EPA420-R-10-907, August 2010, p.
18.
---------------------------------------------------------------------------

    Additionally, as discussed in the NPRM, NHTSA believes that the
clearest interpretation of EISA is that fuel economy, GHG, and other
emissions rating systems should apply to all automobiles rather than to
specific classes. 49 U.S.C. 32908(g)(1)(A)(ii) states that the agency
must develop label rating systems ``that would make it easy for
consumers to compare the fuel economy and greenhouse gas and other
emissions of automobiles at the point of purchase,'' in clear contrast
to EPCA's requirement, codified at 49 U.S.C. 32908(b)(1)(C) that fuel
economy range information be presented for ``comparable automobiles.''
32908(g)(1)(A)(ii) also requires that rating systems include
designations of the automobiles with the ``lowest greenhouse gas
emissions'' and ``highest fuel economy,'' which NHTSA believes

is most meaningfully fulfilled by designating the automobiles with the
best GHG and fuel economy ratings in the entire fleet. Given this
statutory language, NHTSA believes that it is reasonable and
appropriate to conclude that if Congress had intended the 32908(g)
rating systems to apply only within class, it would have used language
more like 32908(b)(1)(C), and that therefore rating systems for fuel
economy, GHGs, and other emissions as described in 32908(g) should most
reasonably apply to the entire fleet. And even if the statute were
taken as ambiguous, NHTSA believes that the chosen approach is the most
reasonable way of implementing the statutory goals.
    In order to satisfy EPCA requirements,\56\ the label also indicates
the range of fuel economy values for the relevant vehicle class. This
approach allows those consumers who shop within one class to see the
fuel economy of the vehicle under consideration relative to other
vehicles within its class. The agencies also believe it addresses the
concern of the OEM commenter who argued that within-class comparisons
might be more useful to certain consumers--in essence, the EISA and
EPCA requirements, when combined, are able to provide consumers with
both in-class and fleet-wide information on the metric that many have
identified as most important to them, as discussed below.
---------------------------------------------------------------------------

    \56\ 49 U.S.C. 32908 (b)(1)(C).
---------------------------------------------------------------------------

C. Form of the Ratings

1. Fuel Economy Rating
    EISA requires that the label include a ``rating system that would
make it easy for consumers to compare the fuel economy and greenhouse
gas and other emissions at the point of purchase . . .'' \57\ This
section addresses the rating for fuel economy, while sections III.D.
and III.F. describe the ratings for greenhouse gases and for other
emissions, respectively.
---------------------------------------------------------------------------

    \57\ 49 U.S.C. 32908(g)(1)(A)(iii).
---------------------------------------------------------------------------

    In addition to this new EISA requirement, EPCA specifies that fuel
economy labels must include the range of fuel economy of comparable
vehicles.\58\ This requirement is currently met with a slider bar
indicating the combined city/highway fuel economy of the vehicle model
type, anchored at each end with the highest and lowest fuel economy
values for all new vehicles within that fuel economy vehicle class.
---------------------------------------------------------------------------

    \58\ 49 U.S.C. 32908(b)(1)(C).
---------------------------------------------------------------------------

    The agencies proposed an absolute slider bar-type fuel economy
rating system bounded by specific MPG values for the ``best'' and the
``worst'' vehicles in the fleet, and with specific fuel economy values
for the vehicle model type in question identified in the appropriate
location on the scale. The scales proposed on label 2 were essentially
larger versions of those on label 1, with the addition of a within-
class indicator on the fuel economy scale to meet the EPCA requirement
for comparison across comparable vehicles. This latter requirement was
addressed on label 1 through text indicating the fuel economy for all
new vehicles in the model's fuel economy class.
    The agencies received relatively few comments on this topic. One
auto manufacturer supported the graphical representation of the within-
class information as proposed on label 2. A government laboratory
commented that the comparison should be on the basis of fuel
consumption rather than fuel economy, to provide a linear comparison of
the vehicle's energy use and to avoid a visual representation of the
fuel economy illusion.
    The agencies are requiring a one-to-ten relative fuel economy
slider bar similar to the one on alternative label 3 included in the
NPRM, which is combined with a one-to-ten relative greenhouse gas
slider bar as discussed below. While the rating is expressed in terms
of fuel economy, the methodology for determining vehicle ratings will
be defined based on fuel consumption in order to mitigate the ``MPG
illusion'' and to provide a more linear representation of vehicle
energy use between ratings. The EISA requirement for indicating the
highest fuel economy vehicle and the EPCA requirement for providing the
fuel economy of vehicles in a comparable class will be met with text
located near the vehicle's fuel economy numbers. The methodology for
determining the combined fuel economy and greenhouse gas ratings is
provided in section III.D.
2. Greenhouse Gas Rating
    The agencies proposed several systems to address the EISA
requirement for a rating that allows consumers to compare greenhouse
gas emissions across new vehicles. Specifically, both labels 1 and 2
included an absolute rating scale that presented the specific tailpipe
GHG emission values for the vehicle in grams per mile, bounded by
emission rates for the ``best'' and ``worst'' vehicles in the fleet in
the model year. In addition, label 1 featured a prominent letter grade
that reflected the relative levels of tailpipe greenhouse gas emissions
(and, for gasoline vehicles, fuel economy, given the inverse
relationship of tailpipe GHG emissions and fuel consumption for
gasoline vehicles) on an A+ to D scale. The agencies also sought
comment on label 3, which, like label 1, included a rating that
reflected relative tailpipe GHG emission rates; this approach
substituted the letter grade with a numerical rating on a scale of one
to ten. NHTSA sought comment on whether this would be an appropriate
interpretation of EISA's requirements. The agencies proposed that GHG
ratings would be based on combined 5-cycle tailpipe CO2
emission rates.
    About two-thirds of the more than 6,000 public comments expressed a
preference either for or against the letter grade, and nearly every one
of the more detailed comments submitted by corporations and
organizations addressed the topic, indicating the strong level of
interest in this proposed element. As a general rule, the letter grade
was supported by consumer organizations, environmental organizations,
and academics; about half of the general public that commented on the
letter grade supported it. Conversely, it was opposed by most auto
companies, auto dealers and their organizations, Federal laboratories,
and about half of the general public that commented on this topic.
    Commenters in favor of the letter grade spoke to its ease of use
and eye-catching appeal; many said that it would be useful for those
who do not find more detailed numerical information helpful or
compelling and would, for the first time, take their needs into
consideration on the label. The letter grade was likened to the New Car
Assessment Program (NCAP) safety stars in its potential ability to
spark public demand for new vehicle attributes--in this case, relative
environmental and energy impact. For these commenters, the influential
nature of the letter grade was viewed as a positive attribute.
    On the other hand, those opposed to the letter grade commented that
it implied an inappropriate value judgment of the vehicle, either in
whole or in part. Many commenters indicated that letter grades, in
particular, convey an assessment that is value-laden and not in
accordance with the intent of the label. These commenters suggested
that a prominent letter grade could be misleading insofar as it might
imply an assessment of a vehicle's overall quality on a number of
attributes beyond fuel economy and tailpipe greenhouse gas emissions.
Finally, some commenters felt that its prominence was problematic,
either by minimizing other important label elements, such as MPG,

or by overshadowing other Monroney \59\ label elements, such as the
NCAP safety stars.
---------------------------------------------------------------------------

    \59\ The Monroney label, placed on the window of every new
vehicle sold in the U.S., was mandated by the Automobile Information
Disclosure Act of 1958, and since amended. It typically includes
manufacturer's suggested retail price, vehicle specifications,
equipments lists and pricing, warranty information, NHTSA crash test
ratings, and the EPA fuel economy label requirements (as allowed
under EPCA at 49 U.S.C. 32908(b)). Manufacturers may provide the
fuel economy information on a separate label but have historically
chosen to incorporate it into the Monroney sticker.
---------------------------------------------------------------------------

    A few commenters stated that the absolute tailpipe greenhouse gas
rating in grams per mile was the most straightforward approach and felt
that it would be helpful for those wishing to compare emissions across
vehicles and clearly meet the EISA requirement. Others found the
absolute scale unhelpful, stating that today's public has little
awareness of tailpipe greenhouse gas emissions expressed in grams per
mile. In particular, these commenters said that an absolute scale for
GHGs would be confusing, given that the label also contained a one to
ten rating for other emissions, and suggested that a consistent one to
ten system for both ratings would be more understandable. Several
commenters noted that one to ten ratings are readily understood and are
in use today for vehicle emission ratings on both the EPA Green Vehicle
Guide Web site and on the California Environmental Performance Label,
and that it would be logical to extend that approach to this label.
    The agencies are requiring a relative greenhouse gas rating on a
one to ten scale, based on combined 5-cycle tailpipe CO2
emission rates, as measured by EPA; this rating will be combined with
the relative fuel economy rating scale discussed above. The relative
GHG rating is intended to address the large number of comments received
in support of a relative rating that allows a quick and easy assessment
of a vehicle's relative environmental impact. While a letter grade
rating can be readily understood, the agencies agree with some
commenters' concerns that it may imply more meaning about overall
vehicle attributes--such as an assessment of overall quality on a
number of factors--than was intended. We recognize that the letter
grade is a fairly significant departure from the current fuel economy
label, which provides absolute numerical values and no relative
ratings. The agencies believe that the one to ten rating fills a middle
ground between the absolute numerical values of the current label and a
letter grade rating, providing a similar ease of use without the risk
of conveying any perceived value judgment that may be associated with a
letter grade.
    We also agree that having consistent systems for the two
environmental ratings on the label may help to minimize confusion and
increase comprehension. Finally, the use here of a one to ten system is
a logical extension of its use on the EPA Green Vehicle Guide Web site
and the California Environmental Performance Label, where it serves a
similar purpose. The absolute tailpipe greenhouse gas emissions in
grams per mile of the best performing vehicle will be noted in text
near the slider bar. This approach meets the EISA requirements for
displaying GHG performance information \60\ and for indicating the
lowest greenhouse gas vehicle.
---------------------------------------------------------------------------

    \60\ 49 U.S.C. 32908(g)(1)(A)(i).
---------------------------------------------------------------------------

    Finally, to address concerns raised by some commenters that fuel
economy ratings overshadow safety ratings component of the Monroney
label, NHTSA is planning to conduct comprehensive consumer research to
develop revised safety ratings based on revisions to the fuel economy
component of the label under this rule. NHTSA will publish details of
the consumer testing in a future Federal Register notice.

D. Fuel Economy and Greenhouse Gas Rating Methodology

    The agencies proposed a variety of ways to provide information that
would rank or rate a vehicle model compared to the rest of the fleet,
based on its performance on greenhouse gases and fuel economy,
including both absolute and relative scales. In the proposal, one
method for a relative fuel economy and greenhouse gas rating was laid
out, based on even increments of greenhouse gas emissions. One proposed
rating system used a letter grade to represent relative performance.
Since fuel economy and greenhouse gases are closely related, this
rating was used to represent both of these factors. The CO2
emission rates and the gasoline-equivalent MPG values were both
provided in the preamble's table of ratings thresholds, with the
CO2 ratings proposed to be controlling. There was no
differentiation across fuels.\61\
---------------------------------------------------------------------------

    \61\ For example, for both gasoline and diesel vehicles the
CO2 emissions rates would determine the rating, not the
mpg rate. A gasoline and diesel vehicle with the same mpg
performance would have different CO2 emissions
performance, given the difference in the energy content of the two
fuels. The proposed rating thresholds would be determined based on
the CO2 emissions performance irrespective of the fuel at
issue.
---------------------------------------------------------------------------

    For this rating scale, the agencies proposed a system that assigned
a letter grade rating for each vehicle relative to the tailpipe GHG
emissions of all new vehicle models. Specifically, each of the ratings
corresponded to a distinct range of combined 5-cycle tailpipe
CO2 emission rates. The middle of the rating system was
defined as the tailpipe CO2 emission rate for the median new
vehicle and the range of each rating was defined using equal-sized
increments of CO2. Because vehicle GHG values clustered
around the middle, the proposed rating system resulted in the majority
of vehicles receiving ``average'' ratings, with the number of vehicles
receiving higher or lower ratings falling off quickly. Very few
vehicles received the highest or lowest ratings.
    The majority of comments on this rating system focused on the form
of the rating, generally, the use of a letter grade and its merits and
drawbacks. However, some manufacturers and consumer organizations did
provide feedback specific to the methodology used to define the
ratings. These commenters all examined the distribution of vehicle
ratings that resulted from the proposed methodology and requested that
the agencies consider strategies to somewhat ``flatten'' the
distribution. This would, in effect, provide more differentiation
between vehicles and prevent the ratings from not being--or appearing
to not be--technology-neutral. On the other hand, one automaker
requested that the agencies consider reserving the highest rating
exclusively for specific, pre-defined vehicle technologies.
    Commenters also provided feedback on the impact of basing the fuel
economy rating on greenhouse gases. Several noted that they are closely
related and that having a single rating represent both is appropriate.
Others indicated that the relationship between these two factors varies
across fuels and that it is important for the label to reflect this
fact.
    As discussed previously, the label we are adopting will provide
relative one to ten ratings for fuel economy and for greenhouse gases.
Since fuel economy and tailpipe greenhouse gas emissions are closely
related, the agencies have decided to simplify the label by using one
slider bar for the two ratings and to combine the two ratings for
vehicles that receive the same fuel economy and greenhouse gas scores.
We will define the range of CO2 emissions and MPG
performance assigned to each number in the rating systems (1-10) on the
basis of corresponding gasoline CO2 emissions performance
and gasoline mpg performance. The 1-10 ratings assigned to a model will
be based on the tailpipe CO2 emissions and MPG (or MPGe)

performance of that model, irrespective of the fuel. Gasoline vehicles
will by definition have the same rating for both fuel economy and
greenhouse gases. For those vehicles for which the greenhouse gas
ratings diverge from the fuel economy ratings, such as some diesel and
compressed natural gas vehicles, the slider bar will have a second
indicator to reflect this fact. Thus, the fuel economy and greenhouse
gas rating will demonstrate both that these factors are closely related
and that this relationship is not the same across all fuels.\62\
---------------------------------------------------------------------------

    \62\ This could occur, for example, if a diesel vehicle receives
a certain number rating based on mpg performance, which is measured
in terms of gallons of diesel fuel, but achieves a different number
rating based on CO2 emissions performance, which is based
on both the volume of fuel consumed as well as the carbon content of
the fuel. This difference in rating can be expected to occur in a
limited number of situations with another example being the mpg
performance of a compressed natural gas fueled vehicle and its
corresponding lower CO2 emissions.
---------------------------------------------------------------------------

    We agree with some commenters that the ratings would be more
meaningful and useful for both relative scales if it allowed greater
differentiation between vehicles, and that therefore it would be
beneficial to alter the rating methodology such that the resulting
distribution of vehicle ratings is flatter than proposed, while still
reflecting the distribution of the fleet. We also agree with the
majority of commenters on this topic that the ratings should avoid the
appearance of not being technology-neutral. The challenge to the
agencies was to implement this change with a methodology that is simple
to implement, robust enough to work for future vehicle fleets, and
results in an appropriately flatter distribution of vehicle ratings
over the fleet. Finally, the agencies also agreed with some commenters
that the fuel economy rating would be most beneficial to consumers if
it were in fact based on fuel consumption instead of fuel economy.
Basing the rating on fuel consumption allows it to be directly
proportional to the actual amount of energy used by the vehicle (and
hence to refueling costs) and avoids the ``MPG illusion'' discussed
previously. The range of performance that defines each number in the
rating system is determined based on approximately equal increments of
fuel consumption, with one adjustment. The use of a system based on
equal increments means that the distribution of the fleet will be
reflected in the distribution of the ratings.
    We believe that, since fuel economy and fuel consumption are simply
different mathematical representations of the same characteristic, that
a fuel consumption-based rating system is consistent with the EISA
requirement for a fuel economy rating system. To ensure that the fuel
economy ratings correspond to the MPG or MPGe values displayed on the
label, the thresholds for purposes of assigning this rating will be in
terms of fuel economy (MPG or MPGe).
    The fuel economy rating scale will be created by converting the
fuel consumption thresholds into their corresponding fuel economy
values and assigning a numeric one to ten rating based on 5-cycle
combined fuel economy, rounded to the nearest integer (as reflected on
the label). The combined fuel economy value prominently displayed on
the label will be used by vehicle manufacturers to determine the fuel
economy rating, thus making the connection between the two unambiguous
and avoiding situations where two vehicles with the same fuel economy
value would receive different fuel economy ratings--an outcome the
agencies believe would be confusing to the public.\63\ All liquid fuel
vehicles will be evaluated in terms of volumetric gallons of fuel per
mile, and all vehicles operating on non-liquid fuels will be evaluated
in terms of gallons of gasoline equivalent per mile. The GHG rating
scale, in turn, will assign a one to ten numeric rating based on the
vehicle's 5-cycle combined tailpipe CO2 emissions. For
gasoline vehicles, the fuel economy rating and the greenhouse gas
rating will be the same, and will be displayed as one rating on the
fuel economy and greenhouse gas slider bar. For other fuel types, the
ratings may diverge, reflecting the differing carbon content of various
fuels. EPA will provide the thresholds that will define the range of
values assigned to each of the one to ten ratings applicable to the
upcoming model year in annual guidance based on the methodology
described below. Ratings will be based on fuel economy data submitted
by manufacturers to the EPA, using data from the most recent complete
model year. The break point of the ratings (that is, the fuel economy
value in integer terms that divides the ``5'' and 6'' categories on the
ratings scale) will then be adjusted to reflect the projected achieved
fleet wide CAFE level for the model year for which the ratings will
apply.
---------------------------------------------------------------------------

    \63\ For PHEVs, the ratings will be based on the combination of
MPGs across driving modes using the utility factor approach
described in section III.N.
---------------------------------------------------------------------------

    In the proposal, the agencies divided the range of all vehicle
CO2 emissions (and, accordingly, gasoline equivalent fuel
consumption), from the highest to lowest, into even increments to
define the range of each individual letter grade or numeric rating. For
the final label methodology, using fuel economy and tailpipe
CO2 emission data for all model year 2011 new light duty
vehicles, the agencies considered several alternative methodologies for
defining both rating scales. For all approaches, we first defined the
center of the rating systems as either the mean or median of the fleet
data. The analysis focused on two subsequent issues: First, how to
define the upper and lower boundaries of the rating system and, second,
how to define the range of each individual ratings within the upper and
lower boundaries.
    For example, we considered a system where the range of each rating
effectively ``grows'' by 25% with each step away from the mean. This
approach does somewhat flatten the distribution of ratings over the
fleet. However, the agencies decided not to pursue this or similar
options because choices such as the rate of bin growth appeared too
subjective and would likely have to be reevaluated every year. We also
considered a decile system, in which an equal number of vehicles are
distributed into each rating, thus completely flattening the
distribution. However, because vehicles tend to be clustered on the
basis of fuel economy values, it is not possible to equally distribute
them across the ratings. This approach also goes further than
commenters suggested in flattening the curve.
    The fuel consumption rate, and correspondingly, the CO2
emissions rate of all new vehicle models, follows a roughly normal
distribution. For a set of data with a normal distribution,
approximately 95% of all data will fall within plus or minus two
standard deviations of the mean. This allows for a mathematically
robust methodology that can be applied each model year. The 1-10 rating
system will be defined for each model year, using the most recent model
year for which we have a complete data set, using an approach in which
any vehicle model with a 5-cycle combined fuel consumption rate more
than two standard deviations away from the mean vehicle model would
receive either the lowest (1) or highest (10) rating. We acknowledge
that fuel consumption for new vehicles does not perfectly follow a
normal distribution; however, historically, approximately 97% of the
fleet has been captured within this two standard deviation range.
Assuming this trend continues, approximately 1-2% of new vehicle models
will receive the top rating, and

approximately1-2% of new vehicle models will receive the lowest rating.
    Thus, for a given year, the highest rating, a 10, will be defined
by subtracting two standard deviations from the mean of the data from
the most recent model year available, such that any vehicle that
achieves a fuel consumption rate less than or equal to two standard
deviations below the mean will receive a rating of 10. Conversely, any
vehicle that is more than or equal to two standard deviations above the
mean will receive the lowest rating, which is a 1. The ratings of 2
through 9, in turn, are defined based on even increments of 5-cycle
combined fuel consumption rates between the highest and lowest ratings,
with the following adjustment.
    The break point of the rating system, which denotes the difference
between a CO2 emission and fuel economy rating of 5 and of 6
(that is, between the top half (6-10) and bottom half (1-5) of the
rating scale), will be pegged to the CO2 emissions and MPG
values that correspond to the projected achieved CAFE values estimated
by the agencies in advance for the fleet as a whole for the applicable
model year of the label. That is, after the analysis to determine two
standard deviations is complete and the thresholds for each of the
ratings are established, the break point between a rating of 5 and a
rating of 6 will be adjusted to reflect the projected average fleet
label value that would correspond with the projected fleet wide CAFE
value that the agencies estimate would be achieved for the model year
to which the label applies.\64\ This midpoint correction is important
from a policy perspective, as the agencies believe it is appropriate to
assign an above-average rating (6 or higher) only to those vehicles
whose label value for fuel economy is at or above the projected fleet
average for that model year. For model years 2012-2016, the projected
achieved fuel economy values from the recent joint light-duty vehicle
fuel economy and greenhouse gas rulemaking will be used as the basis
for the midpoint defining the threshold between a 5 and a 6. Setting
this break point in advance has the added advantage of allowing
manufacturers to know their target to achieve an above average rating.
---------------------------------------------------------------------------

    \64\ For this purpose, the agencies used the projected fleet-
wide achieved CAFE levels for the MY2012-2016 CAFE standards (Table
I.B.2-2, 75 Federal Register 25331, May 7, 2010).
---------------------------------------------------------------------------

    Because the 2012-2016 estimated achieved CAFE levels intended to be
used to anchor the break point of the rating scale are based on the 2-
cycle test, while label values are based in the 5-cycle test, EPA
evaluated vehicle test data across all new light duty vehicles to
determine an adjustment factor between the projected achieved fleet
wide CAFE fuel economy values and the label values. This adjustment
factor is derived in the same manner as an individual model's mpg value
for CAFE compliance is adjusted for use on the label. Using this
adjustment, EPA determined that the fuel economy midpoint values from
2012-2016 will be as shown in Table D.1.

         Table D.1--Label Breakpoint Values for MY2012-2016 \65\
------------------------------------------------------------------------

------------------------------------------------------------------------
2012....................................................              22
2013....................................................              23
2014....................................................              23
2015....................................................              24
2016....................................................              25
------------------------------------------------------------------------

    Using this approach, the fuel economy ratings for model year 2012,
based on 2011 fuel consumption data and with a break point adjustment
reflecting the average fuel economy projected to be achieved for model
year 2012, would be assigned on the basis of the fuel economy integer
values as shown in Table D-2.
---------------------------------------------------------------------------

    \65\ French, R. Memorandum to Docket No. EPA-HQ-OAR-2009-0865,
``Adjusting Combined City/Highway CAFE Fleet Values to Determine
Equivalent 5-Cycle Label Values.'' May 18, 2011.

             Table D.2--MY2012 Rating Scale for Fuel Economy
------------------------------------------------------------------------
                                                           Fuel economy
                                                          (Combined city/
                   Fuel economy rating                      highway 5-
                                                           cycle MPG or
                                                            MPGe value)
------------------------------------------------------------------------
10......................................................             38+
9.......................................................           31-37
8.......................................................           27-30
7.......................................................           23-26
6.......................................................              22
5.......................................................           19-21
4.......................................................           17-18
3.......................................................           15-16
2.......................................................           13-14
1.......................................................            0-12
------------------------------------------------------------------------

    The agencies then had to consider how to structure the rating scale
for GHG emissions, since it is combined for the final labels with the
rating scale for fuel economy. Given the close relationship between
fuel economy and greenhouse gases, the rating scales will be defined to
give the same rating on each of these factors for gasoline vehicles,
since gasoline-fueled vehicles constitute the great majority of the
vehicles sold. Thus, the GHG rating scale will be determined by
converting the fuel economy rating thresholds into gasoline equivalent
GHG rating thresholds using a constant conversion factor of 8887 grams
of tailpipe carbon dioxide emissions per gallon of consumed
gasoline.\66\ Accordingly, by definition, for vehicles that operate on
gasoline only, the fuel economy score will equal the greenhouse gas
score, and that combined score will be displayed on the label using one
slider bar and one indicator for the combined score.\67\ Because
vehicles that operate on fuels other than gasoline will not necessarily
have the same fuel economy and GHG scores, those vehicles will have
their GHG rating determined by comparing their 5-cycle combined
tailpipe CO2 emission rate against the GHG ranges applicable
for the model year to determine if their GHG score is different from
their fuel economy score. If it is different, the GHG score must be
indicated on the same slider bar as the fuel economy score; however,
the GHG score will use a pointer below the slider bar and the fuel
economy score will use a pointer above the slider bar. Using this
approach, the GHG ratings for model year 2012, based on 2011 data with
a break point adjustment reflecting model year 2012, would be assigned
as shown in Table D-3.
---------------------------------------------------------------------------

    \66\ This reflects the direct relationship between CO, emissions
and fuel consumption for gasoline, and the fact that the mpg values
in the Table are derived from fuel consumption values which in turn
are derived from CO, emissions values. Note that the GHG thresholds
correspond to the MPG value that will round to the integer values
shown in the table. For example, the GHG threshold corresponding to
the fuel economy thresholds between a 1 and 2 is calculated as 8887
g CO2/gallon divided by 12.5 miles/gallon, or 711 g/mile.
    \67\ For gasoline vehicles whose values are close to the
threshold, the tables may occasionally reflect different scores on
each of these factors. For purposes of the fuel economy and
greenhouse gas rating for gasoline vehicles, the fuel economy
thresholds will be controlling and only one rating will be
displayed. Under this approach, vehicles with the same combined MPG
value, which is prominently displayed on the label, will always have
the same rating as other vehicle with the same value. Different
ratings formed on the basis of rounding would not be helpful to
consumer comprehension.

           Table D.3--MY2012 Rating Scale for Greenhouse Gases
------------------------------------------------------------------------
                                                           Tailpipe GHG
                                                              rating
                                                          (combined city/
                  Greenhouse gas rating                     highway  5-
                                                           cycle CO2  g/
                                                               mile)
------------------------------------------------------------------------
10......................................................           0-236
9.......................................................         237-290
8.......................................................         291-334
7.......................................................         335-394
6.......................................................         395-412
5.......................................................         413-479

4.......................................................         480-538
3.......................................................         539-612
2.......................................................         613-710
1.......................................................            711+
------------------------------------------------------------------------

    The methodology for determining the fuel economy and GHG rating
scales defined above is based on a simple statistical approach that
should be applicable to a changing fleet of vehicles over time. The
agencies believe that this is a straightforward and robust methodology
for rating vehicle fuel economy and tailpipe GHG emissions that will
result in a flatter distribution of vehicle ratings across the entire
fleet. We intend to update the scoring thresholds in the future to
reflect the prevailing CAFE and GHG standards and the evolution of the
vehicle fleet. Any updates to the rating scale will be included in the
annual label manufacturer guidance document or in the regulations via
rulemaking.

E. Upstream GHGs

    In the proposal, the agencies recognized that upstream GHG
emissions are associated with the production and distribution of all
automotive fuels used by motor vehicles, that certain emerging
automotive fuels might have very different upstream and tailpipe GHG
characteristics depending on how those fuels are produced, that
providing accurate upstream GHG emissions values for individual
consumers can be a complex challenge, and that whether, and if so how,
to account for these upstream GHG emissions was an important decision.
    We proposed to limit the label to tailpipe-only GHG emissions,
while providing more detailed information on upstream GHG emissions on
a Web site. For details on the Web site content and accessibility,
please refer to Section III.I. In addition, the agencies requested
comment on alternative options for the label that, in addition to
presenting tailpipe emissions, refer to or identify in some manner the
upstream GHG emissions associated with fuel production and
distribution. One such alternative would continue to base the label's
GHG emissions value on tailpipe emissions values only but would
supplement the numerical value with a symbol or asterisk and
explanatory text such as ``the only CO2 emissions are from
electricity generation'' (for EVs), ``does not include CO2
from electricity generation'' (for PHEVs), or ``the CO2
emissions listed here are from gasoline combustion only and do not
reflect the use of renewable biofuels'' (for ethanol flexible fuel
vehicles).
    A second alternative for the label would be to, provide a tailpipe-
only GHG emissions value and also to provide a numerical value for
upstream GHG emissions associated with production and distribution of
the fuel(s) used by the vehicle. While recognizing the arguments for
this approach, the agencies identified many challenges associated with
developing a single numerical value for upstream GHG emissions. For
electricity, for example, challenges include significant regional
variability in electricity feedstocks and GHG emissions, potential
changes in feedstocks and GHG emissions over time, and potential
differences in GHG emissions between daytime and nighttime charging
depending on the energy source used. The agencies asked for comments on
how they could best address these complexities on a consumer label.
    The agencies received a large number of comments on this topic,
almost all of which focused primarily on the upstream GHG emissions
issues associated with the electricity used in EVs and PHEVs.
    Automotive associations, electric vehicle associations, electric
utility companies, and nearly all automakers who commented on this
topic supported the proposal to include only tailpipe GHG emissions on
the label and provide more detailed information on upstream GHG
emissions on a Web site. Automakers typically stated that labels have
always reflected vehicle performance only and have not addressed
upstream petroleum emissions, that they have no control over upstream
emissions, and that including electricity upstream GHG emissions on the
label could discourage future sales of EVs and PHEVs. EV and PHEV
advocacy organizations generally supported the proposal as well, also
citing that past label designs focused exclusively on vehicle
performance and arguing that regional differences in electricity
feedstocks make it impossible to provide a single upstream GHG
emissions value for EVs and PHEVs that would be meaningful to
consumers. One environmental group supported the proposal, but argued
for a more prominent display of the text indicating that the values are
tailpipe-only.
    Nearly all environmental groups, academics, a Federal lab, and non-
electricity fuel advocacy groups who commented on this topic opposed
the proposal and endorsed the concept of including upstream GHG
emissions on the label. The primary argument was that providing
tailpipe-only GHG emissions would be confusing and/or misleading, as
some consumers might infer that operating a vehicle on grid electricity
has no greenhouse gas emissions impacts, and that this could lead to
adverse consumer purchase decisions if ``zero emissions'' was an
overriding selling point for a consumer.
    A second argument from many of these commenters, as well as from
one automaker, was that the primary purpose of the label should be to
provide relevant consumer information, and that a label is not an
appropriate way to promote an individual technology, which they argued
this approach would do for electric vehicles if upstream emissions were
not included on the label. California Air Resources Board (ARB) stated
that upstream emissions would need to be reflected on the label in
order to adopt the national label in California. ARB later indicated
that, in the interest of a unified national label, this requirement
could be met through a label statement about additional emissions and
reference to a Web site where upstream values could be obtained.
    However, only a few commenters endorsed a specific methodology for
determining upstream GHG emissions values. One joint environmental
group comment supported a universal upstream GHG emissions factor for
all vehicle operation off of the electric grid, similar to the approach
currently used by the ARB. Another environmental group suggested that
the label CO2 value for both EVs and PHEVs be an asterisk
instead of a numerical value, and the asterisk would be coupled with
label text directing the consumer to the Web site for customized,
regional-based upstream GHG emissions values.
    The agencies are requiring a label which, as was proposed, will be
limited to tailpipe-only GHG emissions but will have more prominent
text to better emphasize the tailpipe-only metric. EVs will include the
clarifying statement, ``Does not include emissions from producing
electricity.'' Vehicles fueled without grid electricity will include
the statement, ``Producing and distributing fuel also create emissions;
learn more at fueleconomy.gov.'' For PHEVs, the text ``& electricity''
will be added after the word ``fuel.'' Detailed information (including
regional-specific values, when appropriate) regarding upstream
emissions for fuels will be provided on a Web site. For details on the
Web site

content and accessibility, please refer to Section III.I.
    The agencies considered the merits of arguments both for and
against inclusion of upstream emissions information on the label itself
but ultimately concluded that retaining a tailpipe-only approach is
more appropriate for this consumer-oriented label. While the agencies
acknowledge, as discussed above, that substantial GHG emissions can be
created during the upstream production and distribution of various
automotive fuels, our reasoning for adopting a tailpipe-only approach
starts with the fact that the label's fundamental purpose is to present
information about the vehicle itself, rather than on a broader system.
Emissions from the tailpipe fall under the automaker's control; they
are a result of the product that the manufacturer produces.
    The agencies agree that information on a vehicle's upstream
emissions may be useful for consumers, even if it is not central to the
purpose of the label. We also concluded that including upstream GHG
emissions on a Web site instead of the label is a more appropriate way
to communicate information regarding upstream emissions to consumers.
Because of the substantial variation in emissions associated with
electricity production from region to region, a label that presented a
single national average of upstream emissions could be more likely to
confuse consumers rather than help them, particularly if consumers are
aware that their regional electricity generation mix is different from
the national average, and could thereby detract from the label's
purpose. Due to different electricity generation fuels and
technologies, this level of variation is significant: from one region
to another, the highest-to-lowest upstream average GHG emission ratios
are roughly 3-to-1.\68\ If examined from a utility-by-utility
perspective, the ratio is even greater, at 75-to-1.\69\ For a national
label to present a single national average would be misleading and
inaccurate given such a wide range. The agencies are aware of arguments
that variation is also present in the gasoline prices used to calculate
fuels costs and/or savings on the label, but the typical range in
regional gasoline prices is much narrower (approximately 1.25-to-1)
\70\ than the range in upstream GHG emissions, and therefore adopting a
single average value for national gasoline prices seems more
appropriate.
---------------------------------------------------------------------------

    \68\ Pechan & Associates, Inc., ``The Emissions & Generation
Resource Integrated Database for 2010 (eGRID2010 version 1.0) year
2007 Summary Tables,'' prepared for the U.S. Environmental
Protection Agency, Washington, DC, March 2011.
    \69\ M. J. Bradley & Associates. (2010). Benchmarking Air
Emissions of the 100 Largest Electric Power Producers in the United
States.
    \70\ . See EIA's Retail Gasoline Prices http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html
where, as of May 16, 2011, the highest city gasoline price, of the
10 cities represented, was $4.40 in Chicago, Illinois, and the
lowest was $3.70 in Denver, Colorado. This represents a high-to-low
range of 19%.
---------------------------------------------------------------------------

    Even if the agencies were to conclude that including upstream GHG
emissions on the label were appropriate, given our concerns that a
national-average upstream value might not be helpful, we do not believe
that it would be practical for the label to present regional-specific
upstream data for every vehicle sold. Under that scenario, automakers
would not only need to reflect regional differences in power generation
fuel mixes but would also need to consider how state regulations could
affect emissions from electricity generation in the future; that is, a
label that adequately reflects expected GHG emissions over the
vehicle's useful life would need to project future changes in electric
utility emission rates on a regional-specific basis, which would be
challenging to accomplish in a meaningful way. Further, producing
individualized labels would be difficult and would introduce additional
complexity and costs for manufacturers, which the agencies did not
account for in our proposal.
    However, the agencies believe that it is important and beneficial
to provide information on upstream GHG emissions to consumers for
certain advanced technology vehicles and are in the process of
developing a Web site in order to make such information available. We
believe that providing such data on a Web site has advantages over
presenting upstream information on the label. A Web site allows
consumers to access regionally specific data on electricity upstream
emissions and allows the agencies to present further information on
methodologies as needed. The information can also be updated more
quickly as new data becomes available. Further, presenting the
information online, rather than on the label, allows the label to
present more comprehensive information in a clearer, simpler manner,
which we believe will benefit consumers.
    The agencies recognize that biofuels, such as the E85 that FFVs
use, will play an important role in reducing the nation's dependence on
foreign oil, thereby increasing domestic energy security. While the
majority of comments on upstream emissions pertained to emissions from
electricity production, the agencies also recognize that biofuels have
unique GHG emission characteristics. When considered on a lifecycle
basis (including both tailpipe and upstream emissions), the net GHG
emission impact of individual biofuels can vary significantly from both
petroleum-based fuels and from one biofuel to another. EPA's Renewable
Fuel Standard program, as modified by EISA, examined these differences
in lifecycle emissions in detail.\71\ For example, EPA found that with
respect to aggregate lifecycle emissions including non-tailpipe GHG
emissions (such as feedstock growth, transportation, fuel production,
and land use), lifecycle GHG emissions in 2022 for ethanol from corn,
using certain advanced production technologies, are about 20 percent
less than gasoline from oil.
---------------------------------------------------------------------------

    \71\ http://www.epa.gov/otaq/renewablefuels/420f10006.htm
---------------------------------------------------------------------------

    The agencies recognize that in the case of biofuels, ``upstream
emissions'' include not only GHG emissions, but also any biological
sequestration that takes place. For purposes of this discussion, the
term ``upstream emissions,'' when considered in the case of biofuels,
should be construed to encompass both GHG emissions and sequestration.
    The agencies note that to the extent future policy decisions
involve upstream emissions, the agencies will need to consider not only
upstream emissions from electricity production, but also the unique
emission characteristics associated with biofuels.
    Finally, the agencies agree with one commenter's suggestion to
indicate more clearly that the GHG emission values presented on the
label represent tailpipe-only emissions. In response, the agencies are
adopting a label with more prominent ``tailpipe only'' text as well as
a statement that information on upstream emissions can be found at the
Web site.
    We have made this decision on the treatment of upstream emissions
for the fuel economy label for the reasons explained in this preamble.
This conclusion does not necessarily reflect any decisions that will be
made regarding upstream emissions in future greenhouse gas and fuel
economy rulemakings. In addition, the agencies will continue to
consider this issue over time.
    In summary, the agencies are requiring a label with a tailpipe-only
GHG emissions rating as well as more clear and prominent text that the
rating includes only tailpipe GHG emissions

and that the consumer can go to the Web site for information on
upstream GHG emissions.

F. Smog Rating

    In addition to fuel economy and greenhouse gas information, EISA
also requires that new vehicles be labeled with information reflecting
a vehicle's performance in terms of ``other emissions,'' using a rating
system that would make it easy for consumers to compare the other
emissions of automobiles at the point of purchase.\72\ The agencies