take, capture, kill, attempt to take, capture, or kill, possess, offer
for sale, sell, offer for barter, barter, offer to purchase, purchase,
deliver for shipment, ship, export, import, cause to be shipped,
exported, or imported, deliver for transportation, carry or cause to be
carried, or receive for shipment, transportation, carriage, or export''
any migratory bird covered under the statute.\1340\
---------------------------------------------------------------------------

    \1340\ 16 U.S.C. 703(a).
---------------------------------------------------------------------------

    The BGEPA (16 U.S.C. 668-668d) makes it illegal to ``take, possess,
sell, purchase, barter, offer to sell, purchase or barter, transport,
export or import'' any bald or golden eagles.\1341\ Executive Order
13186, ``Responsibilities of Federal Agencies to Protect Migratory
Birds,'' helps to further the purposes of the MBTA by requiring a
Federal agency to develop a Memorandum of Understanding (MOU) with FWS
when it is taking an action that has (or is likely to have) a
measurable negative impact on migratory bird populations.
---------------------------------------------------------------------------

    \1341\ 16 U.S.C. 668(a).
---------------------------------------------------------------------------

    NHTSA concludes that the MBTA, BGEPA, and Executive Order 13186 do
not apply to this final rule because there is no disturbance, take,
measurable negative impact, or other covered activity involving
migratory birds or bald or golden eagles involved in this rulemaking.
10. Department of Transportation Act (Section 4(f))
    Section 4(f) of the Department of Transportation Act of 1966 (49
U.S.C. 303), as amended, is designed to preserve publicly owned park
and recreation lands, waterfowl and wildlife refuges, and historic
sites. Specifically, Section 4(f) provides that DOT agencies cannot
approve a transportation program or project that requires the use of
any publicly owned land from a public park, recreation area, or
wildlife or waterfowl refuge of national, State, or local significance,
unless a determination is made that:
    (1) There is no feasible and prudent alternative to the use of
land, and
    (2) The program or project includes all possible planning to
minimize harm to the property resulting from the use.
    These requirements may be satisfied if the transportation use of a
Section 4(f) property results in a de minimis impact on the area.
    NHTSA concludes that Section 4(f) does not apply to this final rule
because this rulemaking is not an approval of a transportation program
nor project that requires the use of any publicly owned land.
11. Executive Order 12898: ``Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations''
    Executive Order 12898, ``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations'' (Feb. 16,
1994), directs Federal agencies to ``promote nondiscrimination in
federal programs substantially affecting human health and the
environment, and provide minority and low-income communities access to
public information on, and an opportunity for public participation in,
matters relating to human health or the environment.'' E.O. 12898 also
directs agencies to identify and consider any disproportionately high
and adverse human health or environmental effects that their actions
might have on minority and low-income communities and provide
opportunities for community input in the NEPA process. CEQ has provided
agencies with general guidance on how to meet the requirements of the
E.O. as it relates to NEPA. A White House Environmental Justice
Interagency Council established under E.O. 14008, ``Tackling the
Climate Crisis at Home and Abroad,'' is expected to advise CEQ on ways
to update E.O. 12898, including the expansion of environmental justice
advice and recommendations. The White House Environmental Justice
Interagency Council will advise on increasing environmental justice
monitoring and enforcement.
    Additionally, the 2021 DOT Order 5610.2(c), ``U.S. Department of
Transportation Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations'' (May 14, 2021), describes the
process for DOT agencies to incorporate environmental justice
principles in programs, policies, and activities. The DOT's
Environmental Justice Strategy specifies that environmental justice and
fair treatment of all people means that no population be forced to bear
a disproportionate burden due to transportation decisions, programs,
and policies. It also defines the term minority and low-income in the
context of DOT's environmental justice analyses. Minority is defined as
a person who is Black, Hispanic or Latino, Asian American, American
Indian or Alaskan Native, or Native Hawaiian or other Pacific Islander.
Low-income is defined as a person whose household income is at or below
the Department of Health and Human Services poverty guidelines. Low-
income and minority populations may live in geographic proximity or be
geographically dispersed/transient. In 2021, DOT reviewed and updated
its environmental justice strategy to ensure that it continues to
reflect its commitment to environmental justice principles and
integrating those principles into DOT programs, policies, and
activities.
    NHTSA's Draft SEIS provided a qualitative analysis of the affected
environment for environmental justice and the environmental
consequences for impacted communities. Specifically, NHTSA identified
that minority and low-income communities near where oil production and
refining occur, areas near roadways, coastal flood-prone areas, and
urban heat islands subject to the head island effect would most likely
be exposed to the environmental and health effects of oil production,
distribution, and consumption, or the impacts of climate change. NHTSA
described several ways in which environmental justice communities may
be disproportionately impacted by these activities. However, NHTSA
concluded that the magnitude of changes in upstream air pollutant
emissions would not be characterized as high and adverse, and similarly
that the changes in exposure to downstream emissions would be small in
comparison to existing conditions. NHTSA also described how climate
change could disproportionately affect minority and low-income
communities; the agency concluded that even though the impacts of this
action on minority and low-income communities would be

attenuated by a lengthy causal chain, the changes to climate values
would be very small and incremental compared to expected changes
associated with future global emissions trajectories. NHTSA concluded
that the alternatives considered in the proposal and Draft SEIS would
not result in disproportionately high and adverse human health effects
or environmental effects on minority or low-income populations. This is
because the rule sets standards nationwide, and although minority and
low-income populations may experience some disproportionate effects or
face inequities in receiving some benefits, impacts of the alternatives
on human health and the environment would not be high and adverse.
    Several commenters, including the California Department of Justice,
Office of the Attorney General et al., the American Lung Association,
the Environmental Law & Policy Center, the Alliance of Nurses for
Healthy Environments, the Asthma and Allergy Foundation of America,
Greenlatinos, New Mexico Interfaith Power and Light, National Parks
Conservation Association, and the National Religious Partnership for
the Environment stated that the projected impacts of NHTSA's proposed
standards are likely to be magnified in communities with higher
percentages of Black, Asian American, and Latinx residents because
refineries and major roadways are disproportionately located in those
communities. More specifically, the California Department of Justice,
Office of the Attorney General et al. stated that ``improvements in air
quality anticipated by the proposal will serve [our States and Cities']
environmental justice goals, by improving air quality in communities
historically impacted by greater pollution.'' Other commenters urged
NHTSA to consider more stringent alternatives to combat the economic
effects to lower-income households as well as the environmental justice
effects from changes to criteria and toxic pollution.
    NHTSA agrees that minority and low-income populations are
disproportionately affected by changes in criteria and air toxic
pollutant emissions, as noted by numerous commenters. Based on comments
and additional information available since the Draft SEIS, NHTSA
updated its qualitative discussion of environmental justice impacts in
the Final SEIS to incorporate peer-reviewed sources and additional data
points on public health and vulnerable populations. In addition, the
Final SEIS incorporates new information from EPA on health effects due
to PM2.5 and differential vulnerabilities due to climate
change.
    Based on the analysis presented in the Final SEIS, the agency has
determined that this rulemaking (and alternatives considered) would not
result in disproportionately high and adverse human health or
environmental effects on minority or low-income populations. To the
extent that minority and low-income populations live closer to oil
refining facilities, these populations may be more likely to be
adversely affected by the emissions of the Proposed Action and
alternatives. As noted, a correlation between proximity to oil
refineries and the prevalence of minority and low-income populations is
suggested in the scientific literature. However, the magnitude of the
change in emissions relative to the baseline is minor and would not be
characterized as high and adverse. To the extent that minority and low-
income populations disproportionately live or attend schools near major
roadways, these populations may be more likely to be adversely affected
by the Proposed Action and alternatives. However, the change in the
level of exposure would be small in comparison to the existing
conditions in these areas.
    NHTSA's Final SEIS finds that all action alternatives would bring
benefits to air quality and human health by reducing air-quality-
related adverse health impacts nationwide by 2025, 2035, and 2050. In
general, Alternative 1 provides the largest decrease in adverse health
impacts by 2025, while Alternative 3 would provide the largest decrease
by 2035 and 2050. In all alternatives, adverse health impacts would
decrease over time due to increasing stringency as action alternatives
are implemented.
    Finally, any impacts of this rulemaking on low-income and minority
communities due to climate change would be attenuated by a lengthy
causal chain; but if one could attempt to draw those links, the changes
to climate values would be very small and incremental compared to the
expected changes associated with the future global emissions
trajectories.
    This rulemaking would set standards nationwide, and although
minority and low-income populations may experience some
disproportionate effects, in particular locations, the overall impacts
on human health and the environment would not be ``high and adverse''
under E.O. 12898. Section VI and the Final SEIS contain further
discussion of NHTSA's consideration of environmental justice issues
associated with this action.
12. Executive Order 13045: ``Protection of Children From Environmental
Health Risks and Safety Risks''
    This action is subject to Executive Order 13045 (62 FR 19885, Apr.
23, 1997) because it is an economically significant regulatory action
as defined by E.O. 12866, and NHTSA has reason to believe that the
environmental health and safety risks related to this action, although
small, may have a disproportionate effect on children. Specifically,
children are more vulnerable to adverse health effects related to
mobile source emissions, as well as to the potential long-term impacts
of climate change. Pursuant to E.O. 13045, NHTSA must prepare an
evaluation of the environmental health or safety effects of the planned
regulation on children and an explanation of why the planned regulation
is preferable to other potentially effect and reasonably feasible
alternatives considered by NHTSA. Further, this analysis may be
included as part of any other required analysis.
    All of the action alternatives would reduce CO2
emissions relative to the baseline and thus have positive effects on
mitigating global climate change, and thus environmental and health
effects associated with climate change. While environmental and health
effects associated with criteria pollutant and toxic air pollutant
emissions vary over time and across alternatives, negative effects,
when estimated, are extremely small. This preamble and the agency's
Final SEIS discuss air quality, climate change, and their related
environmental and health effects, noting where these would
disproportionately affect children. In addition, Section VI of this
preamble explains why NHTSA believes that the final standards are
preferable to other alternatives considered. Together, this preamble
and Final SEIS satisfy NHTSA's responsibilities under E.O. 13045.
13. Executive Order 13211: ``Energy Effects''
    Executive Order 13211, ``Energy Effects'', requires agencies
prepare a Statement of Energy Effects that describes the effects of
certain regulatory actions on energy supply, distribution, and use.
This action is not a ``significant energy action'' under the Executive
order because it is not likely to have a significant adverse effect on
the supply, distribution, or use of energy. We have outlined the energy
effects in Table I-3 above and elsewhere in this preamble and
associated FRIA, and those results are briefly summarized

here. This action reduces fuel use for passenger cars and light trucks
under revised fuel economy standards, which will result in significant
reductions of the consumption of petroleum, will achieve energy
security benefits, and have no adverse energy effects. Because our
final fuel economy standards result in significant fuel savings, this
rule encourages more efficient use of fuels. We estimate that the final
standards will save approximately 234 billion gallons of gasoline
through 2050.

E. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a notice
of proposed rulemaking or final rule, it must prepare and make
available for public comment a regulatory flexibility analysis that
describes the effect of the rule on small entities (i.e., small
businesses, small organizations, and small governmental jurisdictions).
No regulatory flexibility analysis is required if the head of an agency
certifies the rule will not have a significant economic impact on a
substantial number of small entities. SBREFA amended the Regulatory
Flexibility Act to require Federal agencies to provide a statement of
the factual basis for certifying that a rule will not have a
significant economic impact on a substantial number of small entities.
    We have considered the impacts of this final rule under the
Regulatory Flexibility Act and certify that this final rule will not
have a significant economic impact on a substantial number of small
entities. The following is NHTSA's statement providing the factual
basis for this certification pursuant to 5 U.S.C. 605(b).
    Small businesses are defined based on the North American Industry
Classification System (NAICS) code.\1342\ One of the criteria for
determining size is the number of employees in the firm. For
establishments primarily engaged in manufacturing or assembling
automobiles, as well as light duty trucks, the firm must have less than
1,500 employees to be classified as a small business. This rule would
affect motor vehicle manufacturers. As shown in Table VIII-1, the
agency has identified 14 small manufacturers of passenger cars, light
trucks, and SUVs of electric, hybrid, and internal combustion engines.
We acknowledge that some newer manufacturers may not be listed.
However, many of those new manufacturers tend to have transportation
products that are not part of the light-duty vehicle fleet and have yet
to start production of light-duty vehicles. Moreover, we do not believe
that there are a ``substantial number'' of these newer companies.\1343\
---------------------------------------------------------------------------

    \1342\ Classified in NAICS under Subsector 336--Transportation
Equipment Manufacturing for Automobile Manufacturing (336111), Light
Truck (336112), and Heavy Duty Truck Manufacturing (336120). https://www.sba.gov/document/support--table-size-standards (accessed:
February 10, 2022).
    \1343\ 5 U.S.C. 605(b).
    [GRAPHIC] [TIFF OMITTED] TR02MY22.255

    We believe that the final rulemaking would not have a significant
economic impact on small vehicle manufacturers because under 49 CFR
part 525, passenger vehicle manufacturers building fewer than 10,000
vehicles per year can petition NHTSA to have alternative standards set
for those manufacturers. Listed manufacturers producing ICE vehicles do
not currently meet the standard and must already petition the agency
for relief. If the standard is raised, it has no meaningful impact on
these manufacturers--they still must go through the same process and
petition for relief. Given there already is a mechanism for relieving
burden on small businesses, which is the purpose of the Regulatory
Flexibility Act, a regulatory flexibility analysis was not prepared.
---------------------------------------------------------------------------

    \1344\ Estimated number of employees as of June 2021, source:
Linkedin.com and other websites reporting company profiles.
    \1345\ Rough estimate of light duty vehicle production for MY
2020.
---------------------------------------------------------------------------

    Further, small manufacturers of electric vehicles would not face a
significant economic impact. The method for earning credits applies
equally across manufacturers and does not place small entities at a
significant competitive disadvantage. In any event, even if the rule
had a ``significant economic impact'' on these small EV manufacturers,
the amount of these companies is not ``a substantial number.'' \1346\
For these reasons, their existence does not alter the agency's analysis
of the applicability of the Regulatory Flexibility Act.
---------------------------------------------------------------------------

    \1346\ 5 U.S.C. 605.
---------------------------------------------------------------------------

F. Executive Order 13132 (Federalism)

    Executive Order 13132 requires Federal agencies to develop an
accountable process to ensure ``meaningful and timely input by State
and local officials in the development of regulatory policies that have
federalism implications. The order defines the term ``[p]olicies that
have federalism implications'' to include regulations that have
``substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.'' Under
the order, agencies may not issue a regulation that has federalism
implications, that imposes substantial direct compliance costs, unless
the Federal Government provides the funds necessary to pay the direct
compliance costs incurred by the State and local governments, or the
agencies consult with State and local officials early in the process of
developing the proposed regulation. Similar to the CAFE preemption
final rule,\1347\ NHTSA does not believe that this final rule
implicates E.O. 13132, because it neither imposes substantial direct
compliance costs on State, local, or Tribal governments, nor does it
preempt State law. Thus, this final rule does not implicate the
consultation procedures that E.O. 13132 imposes on agency regulations
that would either preempt State law or impose substantial direct
compliance costs on State, local, or Tribal governments, because the
only entities subject to this final rule are vehicle manufacturers.
Nevertheless, NHTSA has complied with the Order's requirements and
consulted directly with the California Air Resources Board in
developing a number of elements of this final rule.
---------------------------------------------------------------------------

    \1347\ See 86 FR 74236, 74365 (Dec. 29, 2021).
---------------------------------------------------------------------------

    NHTSA received several comments on CAFE preemption under 49 U.S.C.
32919: Some stating that State regulations like California's were
preempted, and others urging NHTSA to take a substantive stance beyond
what the preemption final rule set forth. With regard to the federalism
implications of the final rule, NHTSA has spoken to this issue
separately at 86 FR 74236 (Dec. 29, 2021), ``Corporate Average Fuel
Economy (CAFE) Preemption'' final rule. NHTSA is taking no positions on
EPCA preemption in this final rule beyond those already expressed in
that separate preemption final rule. Moreover, to the extent that any
analysis in this final rule discusses State regulatory programs,
including any from California under Section 209 of the Clean Air Act or
other states under Section 177 of the Clean Air Act, such analysis also
does not implicate E.O. 13132. As explained previously herein in
response to commenters, this final rule does not entail a legal
determination of the validity of such programs, including any
assessment of how or whether any such programs may be affected by 49
U.S.C. 32919. In fact, as NHTSA recently explained in the CAFE
preemption final rule, NHTSA lacks the legal authority to legally
dictate the scope of EPCA preemption in this manner and, instead, the
legal status of any such programs is more appropriately adjudicated in
a judicial forum.\1348\
---------------------------------------------------------------------------

    \1348\ Id. at 74238. As a result, NHTSA determined in the CAFE
preemption final rule that ``While this final rule concerns matters
of preemption, it does not entail either type of regulation covered
by Executive Order 13132's consultation requirements.'' Id. at
74265.
---------------------------------------------------------------------------

G. Executive Order 12988 (Civil Justice Reform)

    Pursuant to Executive Order 12988, ``Civil Justice Reform'' (61 FR
4729, Feb. 7, 1996), NHTSA has considered whether this rulemaking would
have any retroactive effect. This final rule does not have any
retroactive effect.

H. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)

    This final rule does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, Nov. 9, 2000). This final rule will
be implemented at the Federal level and will impose compliance costs
only on vehicle manufacturers. Thus, Executive Order 13175, which
requires consultation with Tribal officials when agencies are
developing policies that have ``substantial direct effects'' on Tribes
and Tribal interests, does not apply to this final rule.

I. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a written assessment of the costs,
benefits, and other effects of a proposed or final rule that includes a
Federal mandate likely to result in the expenditure by State, local, or
Tribal governments, in the aggregate, or by the private sector, of more
than $100 million in any one year (adjusted for inflation with base
year of 1995). Adjusting this amount by the implicit gross domestic
product price deflator for 2018 results in $153 million (110.296/71.868
= 1.53).\1349\ Before promulgating a rule for which a written statement
is needed, section 205 of UMRA generally requires NHTSA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objective of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows NHTSA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
agency publishes with the rule an explanation of why that alternative
was not adopted.
---------------------------------------------------------------------------

    \1349\ Bureau of Economic Analysis, National Income and Product
Accounts (NIPA), Table 1.1.9 Implicit Price Deflators for Gross
Domestic Product. https://bea.gov/iTable/index_nipa.cfm (accessed:
February 10, 2022).
---------------------------------------------------------------------------

    This final rule will not result in the expenditure by State, local,
or Tribal governments, in the aggregate, of more than $153 million
annually, but it will

result in the expenditure of that magnitude by vehicle manufacturers
and/or their suppliers. In developing this final rule, we considered a
range of alternative fuel economy standards. As explained in detail in
Section VI of the preamble, NHTSA believes that our selected
alternative is the maximum feasible alternative that achieves the
objectives of this rulemaking, as required by EPCA/EISA.

J. Regulation Identifier Number

    The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. The RIN
contained in the heading at the beginning of this document may be used
to find this action in the Unified Agenda.

K. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) requires NHTSA evaluate and use existing voluntary
consensus standards in its regulatory activities unless doing so would
be inconsistent with applicable law (e.g., the statutory provisions
regarding NHTSA's vehicle safety authority) or otherwise
impractical.\1350\
---------------------------------------------------------------------------

    \1350\ 15 U.S.C. 272.
---------------------------------------------------------------------------

    Voluntary consensus standards are technical standards developed or
adopted by voluntary consensus standards bodies. Technical standards
are defined by the NTTAA as ``performance-based or design-specific
technical specification and related management systems practices.''
They pertain to ``products and processes, such as size, strength, or
technical performance of a product, process or material.''
    Examples of organizations generally regarded as voluntary consensus
standards bodies include the ASTM International, the Society of
Automotive Engineers (SAE), and the American National Standards
Institute (ANSI). If NHTSA does not use available and potentially
applicable voluntary consensus standards, it is required by the Act to
provide Congress, through OMB, an explanation of the reasons for not
using such standards. There are currently no consensus standards that
NHTSA administers relevant to these final CAFE standards.

L. Department of Energy Review

    In accordance with 49 U.S.C. 32902(j)(2), NHTSA submitted this rule
to the Department of Energy for review.

M. Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of
1995 (PRA), a person is not required to respond to a collection of
information by a Federal agency unless the collection displays a valid
Office of Management and Budget (OMB) control number. This final rule
modifies NHTSA's existing information collection request (ICR) for its
Corporate Average Fuel Economy (CAFE) program (OMB control number 2127-
0019). NHTSA sought comment on its intention to seek approval from OMB
for this modification in the proposal and forwarded the ICR to the
Office of Management and Budget (OMB) for approval. OMB deferred
approval of this ICR and instructed NHTSA to resubmit the ICR with
publication of the final rule. NHTSA is now resubmitting its request
for revision of its existing CAFE information collection.
    NHTSA's ICR describes the nature of the information collections for
the CAFE program and their expected burden. As described in the NPRM,
the ICR covers requirements for manufacturers to submit information on
CAFE standards, exemptions, vehicles, technologies, and CAFE compliance
test results. Manufacturers also provide information on any of the
flexibilities and incentives they use during the model year to comply
with CAFE standards. These reporting requirements are necessary to
ensure compliance with its CAFE program.
    In the NPRM, NHTSA proposed changes to the CAFE program's
standardized reporting templates for manufacturers to submit
information to NHTSA on their vehicle production and CAFE credits used
to comply with the CAFE standards. NHTSA proposed making changes to its
reporting template for PMY and MMY reports. As noted in the NPRM, these
changes are expected to result in additional burden hours to
respondents.
    NHTSA estimates the total burden of this ICR is 4,861 hours and $0.
This is a change of 843 hours and $0 (from 4,018 hours and $0). Most of
this burden is a result of the correction of 550 hours for NHTSA's CAFE
Credit Value Reporting Requirement. An additional 268 hours are a
result of increased trade contracts received by NHTSA since the last
PRA. Five of the hours are a result of additional information to be
collected in new data fields in the PMY and MMY reports and the
remaining 2 hours are a result of correcting calculations errors from
the prior ICR. While NHTSA did not receive any comments about its
burden estimates, NHTSA did receive comments on the proposed changes to
the templates. NHTSA discusses these comments and the agency's response
in the relevant sections above ((See Section VII.A.2.b).1-4). After
reviewing the comments, NHTSA is revising the templates to address
comments, as discussed above. However, NHTSA determined that no changes
to the information collection are warranted. Accordingly, NHTSA is
finalizing the burden estimates for the reporting requirements that
were proposed in the NPRM. For additional information, see the
supporting documentation for this information collection request that
is posted to the docket.\1351\
---------------------------------------------------------------------------

    \1351\ This information is forwarded to OMB with the ICR.
---------------------------------------------------------------------------

List of Subjects in 49 CFR Parts 531, 533, 536, and 537

    Fuel economy, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, the National Highway
Traffic Safety Administration amends 49 CFR chapter V as follows:

0
1. Revise part 531 to read as follows:

PART 531--PASSENGER AUTOMOBILE AVERAGE FUEL ECONOMY STANDARDS

Sec.
531.1 Scope.
531.2 Purpose.
531.3 Applicability.
531.4 Definitions.
531.5 Fuel economy standards.
531.6 Measurement and calculation procedures.
Appendix A to Part 531--Example of Calculating Compliance Under
Sec.  531.5(c)

    Authority: 49 U.S.C. 32902; delegation of authority at 49 CFR
1.95.

Sec.  531.1  Scope.

    This part establishes average fuel economy standards pursuant to
section 502(a) and (c) of the Motor Vehicle Information and Cost
Savings Act, as amended, for passenger automobiles.

Sec.  531.2  Purpose.

    The purpose of this part is to increase the fuel economy of
passenger automobiles by establishing minimum levels of average fuel
economy for those vehicles.

Sec.  531.3  Applicability.

    This part applies to manufacturers of passenger automobiles.

Sec.  531.4  Definitions.

    (a) Statutory terms. (1) The terms average fuel economy,
manufacture, manufacturer, and model year are used as defined in
section 501 of the Act.
    (2) The terms automobile and passenger automobile are used as
defined in section 501 of the Act and in accordance with the
determination in part 523 of this chapter.
    (b) Other terms. As used in this part, unless otherwise required by
the context--
    (1) Act means the Motor Vehicle Information and Cost Savings Act,
as amended by Public Law 94-163.
    (2) [Reserved]

Sec.  531.5  Fuel economy standards.

    (a) Except as provided in paragraph (f) of this section, each
manufacturer of passenger automobiles shall comply with the fleet
average fuel economy standards in Table 1 to this paragraph (a),
expressed in miles per gallon, in the model year specified as
applicable:

                       Table 1 to Sec.   531.5(a)
------------------------------------------------------------------------
                                                          Average fuel
                                                        economy standard
                      Model year                           (miles per
                                                            gallon)
------------------------------------------------------------------------
1978.................................................               18.0
1979.................................................               19.0
1980.................................................               20.0
1981.................................................               22.0
1982.................................................               24.0
1983.................................................               26.0
1984.................................................               27.0
1985.................................................               27.5
1986.................................................               26.0
1987.................................................               26.0
1988.................................................               26.0
1989.................................................               26.5
1990-2010............................................               27.5
------------------------------------------------------------------------

    (b) For model year 2011, a manufacturer's passenger automobile
fleet shall comply with the fleet average fuel economy level calculated
for that model year according to Figure 1 to this paragraph (b) and the
appropriate values in Table 2 to this paragraph (b).
[GRAPHIC] [TIFF OMITTED] TR02MY22.256

Where:

N is the total number (sum) of passenger automobiles produced by a
manufacturer;
Ni is the number (sum) of the ith passenger automobile
model produced by the manufacturer; and
Ti is the fuel economy target of the ith model passenger
automobile, which is determined according to the following formula,
rounded to the nearest hundredth:
[GRAPHIC] [TIFF OMITTED] TR02MY22.257

Where:

Parameters a, b, c, and d are defined in Table 2 to this paragraph
(b);
e = 2.718; and
x = footprint (in square feet, rounded to the nearest tenth) of the
vehicle model.

            Table 2 to Sec.   531.5(b)--Parameters for the Passenger Automobile Fuel Economy Targets
----------------------------------------------------------------------------------------------------------------
                                                                          Parameters
                                             -------------------------------------------------------------------
                 Model year                                                        c (gal/mi/
                                                  a (mpg)          b (mpg)           ft\2\)         d (gal/mi)
----------------------------------------------------------------------------------------------------------------
2011........................................           31.20            24.00            51.41             1.91
----------------------------------------------------------------------------------------------------------------

    (c) For model years 2012-2026, a manufacturer's passenger
automobile fleet shall comply with the fleet average fuel economy level
calculated for that model year (MY) according to Figure 2 to this
paragraph (c) and the appropriate values in Table 3 to this paragraph
(c).
[GRAPHIC] [TIFF OMITTED] TR02MY22.259

Where:

CAFErequired is the fleet average fuel economy standard for a given
fleet (domestic passenger automobiles or import passenger
automobiles);
Subscript i is a designation of multiple groups of automobiles,
where each group's designation, i.e., i = 1, 2, 3, etc., represents
automobiles that share a unique model type and footprint within the
applicable fleet, either domestic passenger automobiles or import
passenger automobiles;
Productioni is the number of passenger automobiles produced for sale
in the United States within each ith designation, i.e., which share
the same model type and footprint; and
TARGETi is the fuel economy target in miles per gallon (mpg)
applicable to the footprint of passenger automobiles within each ith
designation, i.e., which share the same model type and footprint,
calculated according to Figure 3 to this

paragraph (c) and rounded to the nearest hundredth of a mpg, i.e.,
35.455 = 35.46 mpg, and the summations in the numerator and
denominator are both performed over all models in the fleet in
question.
[GRAPHIC] [TIFF OMITTED] TR02MY22.260

Where:

TARGET is the fuel economy target (in mpg) applicable to vehicles of
a given footprint (FOOTPRINT, in square feet);
Parameters a, b, c, and d are defined in Table 3 to this paragraph
(c); and
The MIN and MAX functions take the minimum and maximum,
respectively, of the included values.

            Table 3 to Sec.   531.5(c)--Parameters for the Passenger Automobile Fuel Economy Targets
                                                 [MYs 2012-2026]
----------------------------------------------------------------------------------------------------------------
                                                                      Parameters
             Model year              ---------------------------------------------------------------------------
                                           a (mpg)            b (mpg)        c (gal/mi/ft\2\)      d (gal/mi)
----------------------------------------------------------------------------------------------------------------
2012................................              35.95              27.95          0.0005308           0.006057
2013................................              36.80              28.46          0.0005308           0.005410
2014................................              37.75              29.03          0.0005308           0.004725
2015................................              39.24              29.90          0.0005308           0.003719
2016................................              41.09              30.96          0.0005308           0.002573
2017................................              43.61              32.65          0.0005131           0.001896
2018................................              45.21              33.84          0.0004954           0.001811
2019................................              46.87              35.07          0.0004783           0.001729
2020................................              48.74              36.47          0.0004603           0.001643
2021................................              49.48              37.02           0.000453            0.00162
2022................................              50.24              37.59           0.000447            0.00159
2023................................              51.00              38.16           0.000440            0.00157
2024................................              55.44              41.48           0.000405            0.00144
2025................................              60.26              45.08           0.000372            0.00133
2026................................              66.95              50.09           0.000335            0.00120
----------------------------------------------------------------------------------------------------------------

    (d) In addition to the requirements of paragraphs (b) and (c) of
this section, each manufacturer shall also meet the minimum fleet
standard for domestically manufactured passenger automobiles expressed
in Table 4 to this paragraph (d):

     Table 4 to Sec.   531.5(d)--Minimum Fuel Economy Standards for
             Domestically Manufactured Passenger Automobiles
                             [MYs 2011-2026]
------------------------------------------------------------------------
                                                                Minimum
                          Model year                            standard
------------------------------------------------------------------------
2011.........................................................       27.8
2012.........................................................       30.7
2013.........................................................       31.4
2014.........................................................       32.1
2015.........................................................       33.3
2016.........................................................       34.7
2017.........................................................       36.7
2018.........................................................       38.0
2019.........................................................       39.4
2020.........................................................       40.9
2021.........................................................       39.9
2022.........................................................       40.6
2023.........................................................       41.1
2024.........................................................       44.3
2025.........................................................       48.1
2026.........................................................       53.5
------------------------------------------------------------------------

    (e) The following manufacturers shall comply with the standards
indicated in paragraphs (e)(1) through (15) of this section for the
specified model years:
    (1) Avanti Motor Corporation.

      Table 5 to Sec.   531.5(e)(1)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1978.........................................................       16.1
1979.........................................................       14.5
1980.........................................................       15.8
1981.........................................................       18.2
1982.........................................................       18.2
1983.........................................................       16.9
1984.........................................................       16.9
1985.........................................................       16.9
------------------------------------------------------------------------

    (2) Rolls-Royce Motors, Inc.

      Table 6 to Sec.   531.5(e)(2)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1978.........................................................       10.7
1979.........................................................       10.8
1980.........................................................       11.1
1981.........................................................       10.7
1982.........................................................       10.6
1983.........................................................        9.9

1984.........................................................       10.0
1985.........................................................       10.0
1986.........................................................       11.0
1987.........................................................       11.2
1988.........................................................       11.2
1989.........................................................       11.2
1990.........................................................       12.7
1991.........................................................       12.7
1992.........................................................       13.8
1993.........................................................       13.8
1994.........................................................       13.8
1995.........................................................       14.6
1996.........................................................       14.6
1997.........................................................       15.1
1998.........................................................       16.3
1999.........................................................       16.3
------------------------------------------------------------------------

    (3) Checker Motors Corporation.

      Table 7 to Sec.   531.5(e)(3)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1978.........................................................       17.6
1979.........................................................       16.5
1980.........................................................       18.5
1981.........................................................       18.3
1982.........................................................       18.4
------------------------------------------------------------------------

    (4) Aston Martin Lagonda, Inc.

      Table 8 to Sec.   531.5(e)(4)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1979.........................................................       11.5
1980.........................................................       12.1
1981.........................................................       12.2
1982.........................................................       12.2
1983.........................................................       11.3
1984.........................................................       11.3
1985.........................................................       11.4
------------------------------------------------------------------------

    (5) Excalibur Automobile Corporation.

      Table 9 to Sec.   531.5(e)(5)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1978.........................................................       11.5
1979.........................................................       11.5
1980.........................................................       16.2
1981.........................................................       17.9
1982.........................................................       17.9
1983.........................................................       16.6
1984.........................................................       16.6
1985.........................................................       16.6
------------------------------------------------------------------------

    (6) Lotus Cars Ltd.

     Table 10 to Sec.   531.5(e)(6)--Average Fuel Economy Standards
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1994.........................................................       24.2
1995.........................................................       23.3
------------------------------------------------------------------------

    (7) Officine Alfieri Maserati, S.p.A.

      Table 11 to Sec.   531.5(e)(7)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1978.........................................................       12.5
1979.........................................................       12.5
1980.........................................................        9.5
1984.........................................................       17.9
1985.........................................................       16.8
------------------------------------------------------------------------

    (8) Lamborghini of North America.

      Table 12 to Sec.   531.5(e)(8)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1983.........................................................       13.7
1984.........................................................       13.7
------------------------------------------------------------------------

    (9) LondonCoach Co., Inc.

      Table 13 to Sec.   531.5(e)(9)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1985.........................................................       21.0
1986.........................................................       21.0
1987.........................................................       21.0
------------------------------------------------------------------------

    (10) Automobili Lamborghini S.p.A./Vector Aeromotive Corporation.

       Table 14 Sec.   531.5(e)(10)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1995.........................................................       12.8
1996.........................................................       12.6
1997.........................................................       12.5
------------------------------------------------------------------------

    (11) Dutcher Motors, Inc.

     Table 15 to Sec.   531.5(e)(11)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1986.........................................................       16.0
1987.........................................................       16.0
1988.........................................................       16.0
1992.........................................................       17.0
1993.........................................................       17.0
1994.........................................................       17.0
1995.........................................................       17.0
------------------------------------------------------------------------

    (12) MedNet, Inc.

     Table 16 to Sec.   531.5(e)(12)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                                Average
                                                                  fuel
                                                                economy
                          Model year                            standard
                                                                 (miles
                                                                  per
                                                                gallon)
------------------------------------------------------------------------
1996.........................................................       17.0
1997.........................................................       17.0
1998.........................................................       17.0
------------------------------------------------------------------------

    (13) Vector Aeromotive Corporation.

     Table 17 to Sec.   531.5(e)(13)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
1998.........................................................       12.1
------------------------------------------------------------------------

    (14) Qvale Automotive Group Srl.

     Table 18 to Sec.   531.5(e)(14)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
2000.........................................................       22.0
2001.........................................................       22.0
------------------------------------------------------------------------

    (15) Spyker Automobielen B.V.

     Table 19 to Sec.   531.5(e)(15)--Average Fuel Economy Standard
------------------------------------------------------------------------
                                                               Miles per
                          Model year                             gallon
------------------------------------------------------------------------
2006.........................................................       18.9
2007.........................................................       18.9
------------------------------------------------------------------------

Sec.  531.6  Measurement and calculation procedures.

    (a) The fleet average fuel economy performance of all passenger
automobiles that are manufactured by a manufacturer in a model year
shall be determined in accordance with procedures established by the
Administrator of the Environmental Protection Agency (EPA) under 49
U.S.C. 32904 and set forth in 40 CFR part 600.
    (b) For model years 2017 and later, a manufacturer is eligible to
increase the fuel economy performance of passenger

cars in accordance with procedures established by the EPA set forth in
40 CFR part 600, subpart F, including any adjustments to fuel economy
the EPA allows, such as for fuel consumption improvements related to
air conditioning efficiency and off-cycle technologies. Manufacturers
must provide reporting on these technologies as specified in Sec.
537.7 of this chapter by the required deadlines.
    (1) Efficient air conditioning technologies. A manufacturer that
seeks to increase its fleet average fuel economy performance through
the use of technologies that improve the efficiency of air conditioning
systems must follow the requirements in 40 CFR 86.1868-12. Fuel
consumption improvement values resulting from the use of those air
conditioning systems must be determined in accordance with 40 CFR
600.510-12(c)(3)(i).
    (2) Off-cycle technologies on EPA's predefined list or using 5-
cycle testing. A manufacturer that seeks to increase its fleet average
fuel economy performance through the use of off-cycle technologies must
follow the requirements in 40 CFR 86.1869-12. A manufacturer is
eligible to gain fuel consumption improvements for predefined off-cycle
technologies in accordance with 40 CFR 86.1869-12(b) or for
technologies tested using the EPA's 5-cycle methodology in accordance
with 40 CFR 86.1869-12(c). The fuel consumption improvement is
determined in accordance with 40 CFR 600.510-12(c)(3)(ii).
    (3) Off-cycle technologies using the alternative EPA-approved
methodology. A manufacturer is eligible to increase its fuel economy
performance through use of an off-cycle technology requiring an
application request made to the EPA in accordance with 40 CFR 86.1869-
12(d).
    (i) Eligibility under the corporate average fuel economy (CAFE)
program requires compliance with paragraphs (b)(3)(i)(A) through (C) of
this section. Paragraphs (b)(3)(i)(A), (B), and (D) of this section
apply starting in model year 2024.
    (A) A manufacturer seeking to increase its fuel economy performance
using the alternative methodology for an off-cycle technology, if prior
to the applicable model year, the manufacturers submits to EPA a
detailed analytical plan and is approved (i.e., for its planned test
procedure and model types for demonstration) in accordance with 40 CFR
86.1869-12(d).
    (B) A manufacturer seeking to increase its CAFE program fuel
economy performance using the alternative methodology for an off-cycle
technology must also submit an official credit application to EPA and
obtain approval in accordance with 40 CFR 86.1869-12(e) prior to
September of the given model year.
    (C) A manufacturer's plans, applications and requests approved by
the EPA must be made in consultation with the National Highway Traffic
Safety Administration (NHTSA). To expedite NHTSA's consultation with
the EPA, a manufacturer must concurrently submit its application to
NHTSA if the manufacturer is seeking off-cycle fuel economy improvement
values under the CAFE program for those technologies. For off-cycle
technologies that are covered under 40 CFR 86.1869-12(d), NHTSA will
consult with the EPA regarding NHTSA's evaluation of the specific off-
cycle technology to ensure its impact on fuel economy and the
suitability of using the off-cycle technology to adjust the fuel
economy performance.
    (D) A manufacturer may request an extension from NHTSA for more
time to obtain an EPA approval. Manufacturers should submit their
requests 30 days before the deadlines in paragraphs (b)(3)(i)(A)
through (C) of this section. Requests should be submitted to NHTSA's
Director of the Office of Vehicle Safety Compliance at [email protected].
    (ii) Review and approval process. NHTSA will provide to EPA its
views on the suitability of using the off-cycle technology to adjust
vehicle fuel economy performance. NHTSA's evaluation and review will
consider:
    (A) Whether the technology has a direct impact upon improving fuel
economy performance;
    (B) Whether the technology is related to crash-avoidance
technologies, safety critical systems or systems affecting safety-
critical functions, or technologies designed for the purpose of
reducing the frequency of vehicle crashes;
    (C) Information from any assessments conducted by the EPA related
to the application, the technology and/or related technologies; and
    (D) Any other relevant factors.
    (iii) Safety. (A) Technologies found to be defective or non-
compliant, subject to recall pursuant to part 573 of this chapter, due
to a risk to motor vehicle safety, will have the values of approved
off-cycle credits removed from the manufacturer's credit balance or
adjusted to the population of vehicles the manufacturer remedies as
required by 49 U.S.C. Chapter 301. NHTSA will consult with the
manufacturer to determine the amount of the adjustment.
    (B) Approval granted for innovative and off-cycle technology
credits under NHTSA's fuel efficiency program does not affect or
relieve the obligation to comply with the Vehicle Safety Act (49 U.S.C.
Chapter 301), including the ``make inoperative'' prohibition (49 U.S.C.
30122), and all applicable Federal motor vehicle safety standards
(FMVSSs) issued thereunder (part 571 of this chapter). In order to
generate off-cycle or innovative technology credits manufacturers must
state--
    (1) That each vehicle equipped with the technology for which they
are seeking credits will comply with all applicable FMVSS(s); and
    (2) Whether or not the technology has a fail-safe provision. If no
fail-safe provision exists, the manufacturer must explain why not and
whether a failure of the innovative technology would affect the safety
of the vehicle.

Appendix A to Part 531--Example of Calculating Compliance Under Sec.
531.5(c)

    Assume a hypothetical manufacturer (Manufacturer X) produces a
fleet of domestic passenger automobiles in MY 2012 as follows:

                                                                   Appendix A--Table I
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Model type
------------------------------------------------------------------------------------------------                              Actual
                                                      Basic engine                                     Description         measured fuel      Volume
           Group                  Carline name             (L)           Transmission class                               economy  (mpg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.........................  PC A FWD...............             1.8  A5........................  2-door sedan...........            34.0           1,500
2.........................  PC A FWD...............             1.8  M6........................  2-door sedan...........            34.6           2,000
3.........................  PC A FWD...............             2.5  A6........................  4-door wagon...........            33.8           2,000
4.........................  PC A AWD...............             1.8  A6........................  4-door wagon...........            34.4           1,000
5.........................  PC A AWD...............             2.5  M6........................  2-door hatchback.......            32.9           3,000
6.........................  PC B RWD...............             2.5  A6........................  4-door wagon...........            32.2           8,000

7.........................  PC B RWD...............             2.5  A7........................  4-door sedan...........            33.1           2,000
8.........................  PC C AWD...............             3.2  A7........................  4-door sedan...........            30.6           5,000
9.........................  PC C FWD...............             3.2  M6........................  2-door coupe...........            28.5           3,000
                           -----------------------------------------------------------------------------------------------------------------------------
    Total.................  .......................  ..............  ..........................  .......................  ..............          27,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note to Table I to this appendix: Manufacturer X's required fleet average fuel economy standard level would first be calculated by determining the fuel
  economy targets applicable to each unique model type and footprint combination for model type groups 1-9 as illustrated in Table II to this appendix.
Manufacturer X calculates a fuel economy target standard for each unique model type and footprint combination.

                                                                  Appendix A--Table II
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Model type                                                                                Fuel
-------------------------------------------------------------------                                             Track                           economy
                                        Basic                          Description     Base tire   Wheelbase  width F&R  Footprint    Volume     target
      Group           Carline name      engine      Transmission                          size      (inches)   average    (ft\2\)               standard
                                         (L)           class                                                   (inches)                          (mpg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................  PC A FWD.........        1.8  A5...............  2-door sedan....    205/75R14       99.8       61.2       42.4      1,500      35.01
2................  PC A FWD.........        1.8  M6...............  2-door sedan....    215/70R15       99.8       60.9       42.2      2,000      35.14
3................  PC A FWD.........        2.5  A6...............  4-door wagon....    215/70R15      100.0       60.9       42.3      2,000      35.08
4................  PC A AWD.........        1.8  A6...............  4-door wagon....    235/60R15      100.0       61.2       42.5      1,000      35.95
5................  PC A AWD.........        2.5  M6...............  2-door hatchback    225/65R16       99.6       59.5       41.2      3,000      35.81
6................  PC B RWD.........        2.5  A6...............  4-door wagon....    265/55R18      109.2       66.8       50.7      8,000      30.33
7................  PC B RWD.........        2.5  A7...............  4-door sedan....    235/65R17      109.2       67.8       51.4      2,000      29.99
8................  PC C AWD.........        3.2  A7...............  4-door sedan....    265/55R18      111.3       67.8       52.4      5,000      29.52
9................  PC C FWD.........        3.2  M6...............  2-door coupe....    225/65R16      111.3       67.2       51.9      3,000      29.76
                  --------------------------------------------------------------------------------------------------------------------------------------
    Total........  .................  .........  .................  ................  ...........  .........  .........  .........     27,500  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note to Table II to this appendix: With the appropriate fuel economy targets determined for each unique model type and footprint combination,
  Manufacturer X's required fleet average fuel economy standard would be calculated as illustrated in Figure 1 to this appendix.

BILLING CODE 4910-59-P
[GRAPHIC] [TIFF OMITTED] TR02MY22.261

[GRAPHIC] [TIFF OMITTED] TR02MY22.262

BILLING CODE 4910-59-C

Note to Figure 2 to this appendix: Since the actual fleet average fuel
economy performance of Manufacturer X's fleet is 32.0 mpg, as compared
to its required fleet fuel economy standard of 31.6 mpg, Manufacturer X
complied with the CAFE standard for MY 2012 as set forth in Sec.
531.5(c).

0
2. Revise part 533 to read as follows:

PART 533--LIGHT TRUCK FUEL ECONOMY STANDARDS

Sec.
533.1 Scope.
533.2 Purpose.
533.3 Applicability.
533.4 Definitions.
533.5 Requirements.
533.6 Measurement and calculation procedures.
Appendix A to Part 533--Example of Calculating Compliance Under
Sec.  533.5(i)

    Authority:  49 U.S.C. 32902; delegation of authority at 49 CFR
1.95.

Sec.  533.1  Scope.

    This part establishes average fuel economy standards pursuant to
section 502(b) of the Motor Vehicle Information and Cost Savings Act,
as amended, for light trucks.

Sec.  533.2  Purpose.

    The purpose of this part is to increase the fuel economy of light
trucks by establishing minimum levels of average fuel economy for those
vehicles.

Sec.  533.3  Applicability.

    This part applies to manufacturers of light trucks.

Sec.  533.4  Definitions.

    (a) Statutory terms. (1) The terms average fuel economy, average
fuel economy standard, fuel economy, import, manufacture, manufacturer,
and model year are used as defined in section 501 of the Act.
    (2) The term automobile is used as defined in section 501 of the
Act and in accordance with the determinations in part 523 of this
chapter.
    (3) The term domestically manufactured is used as defined in
section 503(b)(2)(E) of the Act.
    (b) Other terms. As used in this part, unless otherwise required by
the context--
    (1) Act means the Motor Vehicle Information Cost Savings Act, as
amended by Public Law 94-163.
    (2) Light truck is used in accordance with the determinations in
part 523 of this chapter.
    (3) Captive import means with respect to a light truck, one which
is not domestically manufactured but which is imported in the 1980
model year or thereafter by a manufacturer whose principal place of
business is in the United States.
    (4) 4-wheel drive general utility vehicle means a 4-wheel drive,
general purpose automobile capable of off-highway operation that has a
wheelbase of not more than 280 centimeters, and that has a body shape
similar to 1977 Jeep CJ-5 or CJ-7, or the 1977 Toyota Land Cruiser.
    (5) Basic engine means a unique combination of manufacturer, engine
displacement, number of cylinders, fuel system (as distinguished by
number of carburetor barrels or use of fuel injection), and catalyst
usage.
    (6) Limited product line light truck means a light truck
manufactured by a manufacturer whose light truck fleet is powered
exclusively by basic engines which are not also used in passenger
automobiles.

Sec.  533.5  Requirements.

    (a) Each manufacturer of light trucks shall comply with the
following fleet average fuel economy standards, expressed in miles per
gallon, in the model year (MY) specified as applicable:

                                           Table 1 to Sec.   533.5(a)
----------------------------------------------------------------------------------------------------------------
                                                            2-wheel drive light   4-wheel drive light   Limited
                                                                  trucks                trucks          product
                        Model year                        --------------------------------------------    line
                                                            Captive               Captive                light
                                                            imports     Other     imports     Other      trucks
----------------------------------------------------------------------------------------------------------------
1979.....................................................       17.2       15.8  .........  .........  .........
1980.....................................................       16.0       16.0       14.0       14.0       14.0
1981.....................................................       16.7       16.7       15.0       15.0       14.5
----------------------------------------------------------------------------------------------------------------

                                           Table 2 to Sec.   533.5(a)
----------------------------------------------------------------------------------------------------------------
                                                  Combined standard    2-wheel drive light   4-wheel drive light
                                               ----------------------        trucks                trucks
                  Model year                                         -------------------------------------------
                                                 Captive     Others    Captive               Captive
                                                 imports               imports     Others    imports     Others
----------------------------------------------------------------------------------------------------------------
1982..........................................       17.5       17.5       18.0       18.0       16.0       16.0
1983..........................................       19.0       19.0       19.5       19.5       17.5       17.5
1984..........................................       20.0       20.0       20.3       20.3       18.5       18.5
1985..........................................       19.5       19.5       19.7       19.7       18.9       18.9
1986..........................................       20.0       20.0       20.5       20.5       19.5       19.5
1987..........................................       20.5       20.5       21.0       21.0       19.5       19.5
1988..........................................       20.5       20.5       21.0       21.0       19.5       19.5
1989..........................................       20.5       20.5       21.5       21.5       19.0       19.0
1990..........................................       20.0       20.0       20.5       20.5       19.0       19.0
1991..........................................       20.2       20.2       20.7       20.7       19.1       19.1
----------------------------------------------------------------------------------------------------------------

                       Table 3 to Sec.   533.5(a)
------------------------------------------------------------------------
                                                      Combined standard
                                                   ---------------------
                    Model year                       Captive
                                                     imports     Other
------------------------------------------------------------------------
1992..............................................       20.2       20.2
1993..............................................       20.4       20.4
1994..............................................       20.5       20.5
1995..............................................       20.6       20.6
------------------------------------------------------------------------

                       Table 4 to Sec.   533.5(a)
------------------------------------------------------------------------
                       Model year                            Standard
------------------------------------------------------------------------
2001....................................................            20.7
2002....................................................            20.7
2003....................................................            20.7
2004....................................................            20.7
2005....................................................            21.0
2006....................................................            21.6
2007....................................................            22.2
2008....................................................            22.5
2009....................................................            23.1
2010....................................................            23.5
------------------------------------------------------------------------

                                                          [GRAPHIC] [TIFF OMITTED] TR02MY22.263

Where:

N is the total number (sum) of light trucks produced by a
manufacturer;
Ni is the number (sum) of the ith light truck model type
produced by a manufacturer; and
Ti is the fuel economy target of the ith light truck
model type, which is determined according to the following formula,
rounded to the nearest hundredth:
[GRAPHIC] [TIFF OMITTED] TR02MY22.264

Where:

Parameters a, b, c, and d are defined in Table 5 to this paragraph
(a);
e = 2.718; and
x = footprint (in square feet, rounded to the nearest tenth) of the
model type.

             Table 5 to Sec.   533.5(a)--Parameters for the Light Truck Fuel Economy Targets for MYs
                                                   [2008-2011]
----------------------------------------------------------------------------------------------------------------
                                                                        Parameters
                                         -----------------------------------------------------------------------
               Model year                                                        c  (gal/mi/
                                              a  (mpg)          b  (mpg)           ft\2\)          d  (gal/mi)
----------------------------------------------------------------------------------------------------------------
2008....................................             28.56             19.99             49.30              5.58
2009....................................             30.07             20.87             48.00              5.81
2010....................................             29.96             21.20             48.49              5.50
2011....................................             27.10             21.10             56.41              4.28
----------------------------------------------------------------------------------------------------------------

                                                                                [GRAPHIC] [TIFF OMITTED] TR02MY22.265

Where:

CAFErequired is the fleet average fuel economy standard
for a given light truck fleet;
Subscript i is a designation of multiple groups of light trucks,
where each group's designation, i.e., i = 1, 2, 3, etc., represents
light trucks that share a unique model type and footprint within the
applicable fleet;
Productioni is the number of light trucks produced for
sale in the United States within each ith designation,
i.e., which share the same model type and footprint; and
TARGETi is the fuel economy target in miles per gallon
(mpg) applicable to the footprint of light trucks within each ith
designation, i.e., which share the same model type and footprint,
calculated according to either Figure 3 or 4 to this paragraph (a),
as appropriate, and rounded to the nearest hundredth of a mpg, i.e.,
35.455 = 35.46 mpg, and the summations in the numerator and
denominator are both performed over all models in the fleet in
question.
[GRAPHIC] [TIFF OMITTED] TR02MY22.266

Where:

TARGET is the fuel economy target (in mpg) applicable to vehicles of
a given footprint (FOOTPRINT, in square feet);
Parameters a, b, c, and d are defined in Table 6 to this paragraph
(a); and
The MIN and MAX functions take the minimum and maximum,
respectively, of the included values.

            Table 6 for Sec.   533.5(a)--Parameters for the Light Truck Fuel Economy Targets for MYs
                                                   [2012-2016]
----------------------------------------------------------------------------------------------------------------
                                                                        Parameters
                                         -----------------------------------------------------------------------
               Model year                                                        c  (gal/mi/
                                              a  (mpg)          b  (mpg)           ft\2\)          d  (gal/mi)
----------------------------------------------------------------------------------------------------------------
2012....................................             29.82             22.27         0.0004546          0.014900
2013....................................             30.67             22.74         0.0004546          0.013968
2014....................................             31.38             23.13         0.0004546          0.013225
2015....................................             32.72             23.85         0.0004546          0.011920
2016....................................             34.42             24.74         0.0004546          0.010413
----------------------------------------------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TR02MY22.267

Where:

TARGET is the fuel economy target (in mpg) applicable to vehicles of
a given footprint (FOOTPRINT, in square feet);
Parameters a, b, c, d, e, f, g, and h are defined in Table 7 to this
paragraph (a); and
The MIN and MAX functions take the minimum and maximum,
respectively, of the included values.

                                 Table 7 to Sec.   533.5(a)--Parameters for the Light Truck Fuel Economy Targets for MYs
                                                                       [2017-2026]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Parameters
                                                 -------------------------------------------------------------------------------------------------------
                   Model year                                                c (gal/mi/                                          g (gal/mi/
                                                    a (mpg)      b (mpg)       ft\2\)     d (gal/mi)    e (mpg)      f (mpg)       ft\2\)     h (gal/mi)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2017............................................        36.26        25.09    0.0005484     0.005097        35.10        25.09    0.0004546     0.009851
2018............................................        37.36        25.20    0.0005358     0.004797        35.31        25.20    0.0004546     0.009682
2019............................................        38.16        25.25    0.0005265     0.004623        35.41        25.25    0.0004546     0.009603
2020............................................        39.11        25.25    0.0005140     0.004494        35.41        25.25    0.0004546     0.009603
2021............................................        39.71        25.63     0.000506      0.00443           NA           NA           NA           NA
2022............................................        40.31        26.02     0.000499      0.00436           NA           NA           NA           NA
2023............................................        40.93        26.42     0.000491      0.00429           NA           NA           NA           NA
2024............................................        44.48        26.74     0.000452      0.00395           NA           NA           NA           NA
2025............................................        48.35        29.07     0.000416      0.00364           NA           NA           NA           NA
2026............................................        53.73        32.30     0.000374      0.00327           NA           NA           NA           NA
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (b)(1) For model year 1979, each manufacturer may:
    (i) Combine its 2- and 4-wheel drive light trucks and comply with
the average fuel economy standard in paragraph (a) of this section for
2-wheel drive light trucks; or
    (ii) Comply separately with the two standards specified in
paragraph (a) of this section.
    (2) For model year 1979, the standard specified in paragraph (a) of
this section for 4-wheel drive light trucks applies only to 4-wheel
drive general utility vehicles. All other 4-wheel drive light trucks in
that model year shall be included in the 2-wheel drive category for
compliance purposes.
    (c) For model years 1980 and 1981, manufacturers of limited product
line light trucks may:
    (1) Comply with the separate standard for limited product line
light trucks in Table 1 to paragraph (a) of this section; or
    (2) Comply with the other standards specified in paragraph (a) of
this section, as applicable.
    (d) For model years 1982-91, each manufacturer may:
    (1) Combine its 2- and 4-wheel drive light trucks (segregating
captive import and other light trucks) and comply with the combined
average fuel economy standard specified in paragraph (a) of this
section; or
    (2) Comply separately with the 2-wheel drive standards and the 4-
wheel drive standards (segregating captive import and other light
trucks) specified in paragraph (a) of this section.
    (e) For model year 1992, each manufacturer shall comply with the
average fuel economy standard specified in paragraph (a) of this
section (segregating captive import and other light trucks).
    (f) For each model year 1996 and thereafter, each manufacturer
shall combine its captive imports with its other light trucks and
comply with the fleet average fuel economy standard in paragraph (a) of
this section.
    (g) For model years 2008-2010, at a manufacturer's option, a
manufacturer's light truck fleet may comply with the fuel economy
standard calculated for each model year according to Figure 1 to
paragraph (a) of this section and the appropriate values in Table 5 to
paragraph (a) of this section, with said option being irrevocably
chosen for that model year and reported as specified in Sec.  537.8 of
this chapter.
    (h) For model year 2011, a manufacturer's light truck fleet shall
comply with the fleet average fuel economy standard calculated for that
model year according to Figure 1 to paragraph (a) of this section and
the appropriate values in Table 5 to paragraph (a) of this section.
    (i) For model years 2012-2016, a manufacturer's light truck fleet
shall comply with the fleet average fuel economy standard calculated
for that model year according to Figures 2 and 3 to paragraph (a) of
this section and the appropriate values in Table 6 to paragraph (a) of
this section.
    (j) For model years 2017-2026, a manufacturer's light truck fleet
shall comply with the fleet average fuel economy standard calculated
for that model year according to Figures 2 and 4 to paragraph (a) of
this section and the appropriate values in Table 7 to paragraph (a) of
this section.

Sec.  533.6  Measurement and calculation procedures.

    (a) Any reference to a class of light trucks manufactured by a
manufacturer shall be deemed--
    (1) To include all light trucks in that class manufactured by
persons who control, are controlled by, or are under common control
with, such manufacturer;
    (2) To include only light trucks which qualify as non-passenger
vehicles in accordance with Sec.  523.5 of this chapter based upon the
production measurements of the vehicles as sold to dealerships; and
    (3) To exclude all light trucks in that class manufactured (within
the meaning of paragraph (a)(1) of this section) during a model year by
such manufacturer which are exported prior to the expiration of 30 days
following the end of such model year.
    (b) The fleet average fuel economy performance of all light trucks
that are manufactured by a manufacturer in a model year shall be
determined in accordance with procedures established by the
Administrator of the Environmental Protection Agency (EPA) under 49
U.S.C. 32904 and set forth in 40 CFR part 600.
    (c) For model years 2017 and later, a manufacturer is eligible to
increase the fuel economy performance of light trucks in accordance
with procedures established by the EPA set forth in 40 CFR part 600,
subpart F, including any adjustments to fuel economy the EPA allows,
such as for fuel consumption improvements related to air conditioning
efficiency, off-cycle technologies, and hybridization and other
performance-based technologies for full-size pickup trucks that meet
the requirements specified in 40 CFR 86.1803. Manufacturers must
provide reporting on these technologies as specified in Sec.  537.7 of
this chapter by the required deadlines.
    (1) Efficient air conditioning technologies. A manufacturer that
seeks to increase its fleet average fuel economy performance through
the use of technologies that improve the efficiency of air conditioning
systems must follow the requirements in 40 CFR 86.1868-12. Fuel
consumption improvement values resulting from the use of those air
conditioning systems must be determined in accordance with 40 CFR
600.510-12(c)(3)(i).
    (2) Incentives for advanced full-size light-duty pickup trucks. For
model year 2023 and 2024, the eligibility of a manufacturer to increase
its fuel economy using hybridized and other performance-based
technologies for full-size pickup trucks must follow 40 CFR 86.1870-12
and the fuel consumption improvement of these full-size pickup truck
technologies must be determined in accordance with 40 CFR 600.510-
12(c)(3)(iii). Manufacturers may also combine incentives for full size
pickups and dedicated alternative fueled vehicles when calculating fuel
economy performance values in 40 CFR 600.510-12.
    (3) Off-cycle technologies on EPA's predefined list or using 5-
cycle testing. A manufacturer that seeks to increase its fleet average
fuel economy performance through the use of off-cycle technologies must
follow the requirements in 40 CFR 86.1869-12. A manufacturer is
eligible to gain fuel consumption improvements for predefined off-cycle
technologies in accordance with 40 CFR 86.1869-12(b) or for
technologies tested using the EPA's 5-cycle methodology in accordance
with 40 CFR 86.1869-12(c). The fuel consumption improvement is
determined in accordance with 40 CFR 600.510-12(c)(3)(ii).
    (4) Off-cycle technologies using the alternative EPA-approved
methodology. A manufacturer is eligible to increase its fuel economy
performance through use of an off-cycle technology requiring an
application request made to the EPA in accordance with 40 CFR 86.1869-
12(d).
    (i) Eligibility under the corporate average fuel economy (CAFE)
program requires compliance with paragraphs (c)(4)(i)(A) through (C) of
this section. Paragraphs (c)(4)(i)(A), (B), and (D) of this section
apply starting in model year 2024.
    (A) A manufacturer seeking to increase its fuel economy performance
using the alternative methodology for an off-cycle technology, if prior
to the applicable model year, the manufacturers submits to EPA a
detailed analytical plan and is approved (i.e., for its planned test
procedure and model types for demonstration) in accordance with 40 CFR
86.1869-12(d).
    (B) A manufacturer seeking to increase its fuel economy performance
using the alternative methodology for an off-cycle technology must also
submit an official credit application to EPA and obtain approval in
accordance with 40 CFR 86.1869-12(e) prior to September of the given
model year.
    (C) A manufacturer's plans, applications and requests approved by
the EPA must be made in consultation with the National Highway Traffic
Safety Administration (NHTSA). To expedite NHTSA's consultation with
the EPA, a manufacturer must concurrently submit its application to
NHTSA if the manufacturer is seeking off-cycle fuel economy improvement
values under the CAFE program for those technologies. For off-cycle
technologies that are covered under 40 CFR 86.1869-12(d), NHTSA will
consult with the EPA regarding NHTSA's evaluation of the specific off-
cycle technology to ensure its impact on fuel economy and the
suitability of using the off-cycle technology to adjust the fuel
economy performance.
    (D) A manufacturer may request an extension from NHTSA for more
time to obtain an EPA approval. Manufacturers should submit their
requests 30 days before the deadlines in paragraphs (c)(4)(i)(A)
through (C) of this section. Requests should be submitted to NHTSA's
Director of the Office of Vehicle Safety Compliance at [email protected].
    (ii) Review and approval process. NHTSA will provide to EPA its
views on the suitability of using the off-cycle technology to adjust
vehicle fuel economy performance. NHTSA's evaluation and review will
consider:
    (A) Whether the technology has a direct impact upon improving fuel
economy performance;
    (B) Whether the technology is related to crash-avoidance
technologies, safety critical systems or systems affecting safety-
critical functions, or technologies designed for the purpose of
reducing the frequency of vehicle crashes;
    (C) Information from any assessments conducted by the EPA related
to the application, the technology and/or related technologies; and
    (D) Any other relevant factors.
    (E) NHTSA will collaborate to host annual meetings with EPA at
least once by July 30th before the model year begins to provide general
guidance to the industry on past off-cycle approvals.
    (iii) Safety. (A) Technologies found to be defective or non-
compliant, subject to recall pursuant to part 573 of this chapter, due
to a risk to motor vehicle safety, will have the values of approved
off-cycle credits removed from the manufacturer's credit balance or
adjusted to the population of vehicles the manufacturer remedies as
required by 49 U.S.C. Chapter 301. NHTSA will consult with the
manufacturer to determine the amount of the adjustment.
    (B) Approval granted for innovative and off-cycle technology
credits under NHTSA's fuel efficiency program does not affect or
relieve the obligation to comply with the Vehicle Safety Act (49 U.S.C.
Chapter 301), including the ``make inoperative'' prohibition (49 U.S.C.
30122), and all applicable Federal motor vehicle safety standards
issued thereunder (FMVSSs) (part 571 of this chapter). In order to
generate off-

cycle or innovative technology credits manufacturers must state--
    (1) That each vehicle equipped with the technology for which they
are seeking credits will comply with all applicable FMVSS(s); and
    (2) Whether or not the technology has a fail-safe provision. If no
fail-safe provision exists, the manufacturer must explain why not and
whether a failure of the innovative technology would affect the safety
of the vehicle.

Appendix A to Part 533--Example of Calculating Compliance Under Sec.
533.5(i)

    Assume a hypothetical manufacturer (Manufacturer X) produces a
fleet of light trucks in MY 2012 as follows:

                                                                   Appendix A--Table I
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Model type
------------------------------------------------------------------------------------------------                              Actual
                                                      Basic engine                                     Description         measured fuel      Volume
           Group                  Carline name             (L)           Transmission class                                economy (mpg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.........................  Pickup A 2WD...........               4  A5........................  Reg cab, MB............            27.1             800
2.........................  Pickup B 2WD...........               4  M5........................  Reg cab, MB............            27.6             200
3.........................  Pickup C 2WD...........             4.5  A5........................  Reg cab, LB............            23.9             300
4.........................  Pickup C 2WD...........               4  M5........................  Ext cab, MB............            23.7             400
5.........................  Pickup C 4WD...........             4.5  A5........................  Crew cab, SB...........            23.5             400
6.........................  Pickup D 2WD...........             4.5  A6........................  Crew cab, SB...........            23.6             400
7.........................  Pickup E 2WD...........               5  A6........................  Ext cab, LB............            22.7             500
8.........................  Pickup E 2WD...........               5  A6........................  Crew cab, MB...........            22.5             500
9.........................  Pickup F 2WD...........             4.5  A5........................  Reg cab, LB............            22.5           1,600
10........................  Pickup F 4WD...........             4.5  A5........................  Ext cab, MB............            22.3             800
11........................  Pickup F 4WD...........             4.5  A5........................  Crew cab, SB...........            22.2             800
                           -----------------------------------------------------------------------------------------------------------------------------
    Total.................  .......................  ..............  ..........................  .......................  ..............           6,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note to Table I to this appendix: Manufacturer X's required fleet average fuel economy standard level would first be calculated by determining the fuel
  economy targets applicable to each unique model type and footprint combination for model type groups 1-11 as illustrated in Table II to this appendix.
Manufacturer X calculates a fuel economy target standard for each unique model type and footprint combination.

                                                                  Appendix A--Table II
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Model type                                                                                Fuel
-------------------------------------------------------------------                                             Track                           economy
                                        Basic                          Description     Base tire   Wheelbase  width F&R  Footprint    Volume     target
      Group           Carline name      engine      Transmission                          size      (inches)    average   (ft\2\)               standard
                                         (L)           class                                                   (inches)                          (mpg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................  Pickup A 2WD.....          4  A5...............  Reg cab, MB.....    235/75R15      100.0       68.8       47.8        800      27.30
2................  Pickup B 2WD.....          4  M5...............  Reg cab, MB.....    235/75R15      100.0       68.2       47.4        200      27.44
3................  Pickup C 2WD.....        4.5  A5...............  Reg cab, LB.....    255/70R17      125.0       68.8       59.7        300      23.79
4................  Pickup C 2WD.....          4  M5...............  Ext cab, MB.....    255/70R17      125.0       68.8       59.7        400      23.79
5................  Pickup C 4WD.....        4.5  A5...............  Crew cab, SB....    275/70R17      150.0       69.0       71.9        400      22.27
6................  Pickup D 2WD.....        4.5  A6...............  Crew cab, SB....    255/70R17      125.0       68.8       59.7        400      23.79
7................  Pickup E 2WD.....          5  A6...............  Ext cab, LB.....    255/70R17      125.0       68.8       59.7        500      23.79
8................  Pickup E 2WD.....          5  A6...............  Crew cab, MB....    285/70R17      125.0       69.2       60.1        500      23.68
9................  Pickup F 2WD.....        4.5  A5...............  Reg cab, LB.....    255/70R17      125.0       68.9       59.8      1,600      23.76
10...............  Pickup F 4WD.....        4.5  A5...............  Ext cab, MB.....    275/70R17      150.0       69.0       71.9        800      22.27
11...............  Pickup F 4WD.....        4.5  A5...............  Crew cab, SB....    285/70R17      150.0       69.2       72.1        800      22.27
    Total........  .................  .........  .................  ................  ...........  .........  .........  .........      6,700  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note to Table II to this appendix: With the appropriate fuel economy targets determined for each unique model type and footprint combination,
  Manufacturer X's required fleet average fuel economy standard would be calculated as illustrated in Figure 1 to this appendix:

BILLING CODE 4910-59-P

[GRAPHIC] [TIFF OMITTED] TR02MY22.268

[GRAPHIC] [TIFF OMITTED] TR02MY22.269

BILLING CODE 4910-59-C

Note to Figure 2 to this appendix: Since the actual fleet average fuel
economy performance of Manufacturer X's fleet is 23.3 mpg, as compared
to its required fleet fuel economy standard of 23.7 mpg, Manufacturer X
did not comply with the CAFE standard for MY 2012 as set forth in Sec.
533.5(i).

0
3. Revise part 536 to read as follows:

PART 536--TRANSFER AND TRADING OF FUEL ECONOMY CREDITS

Sec.
536.1 Scope.
536.2 Application.
536.3 Definitions.
536.4 Credits.
536.5 Trading infrastructure.
536.6 Treatment of credits earned prior to model year 2011.
536.7 Treatment of carryback credits.
536.8 Conditions for trading of credits.
536.9 Use of credits with regard to the domestically manufactured
passenger automobile minimum standard.
536.10 Treatment of dual-fuel and alternative fuel vehicles--
consistency with 49 CFR part 538.

    Authority:  49 U.S.C. 32903; delegation of authority at 49 CFR
1.95.

Sec.  536.1  Scope.

    This part establishes regulations governing the use and application
of corporate average fuel economy (CAFE)

credits up to three model years before and five model years after the
model year in which the credit was earned. It also specifies
requirements for manufacturers wishing to transfer fuel economy credits
between their fleets and for manufacturers and other persons wishing to
trade fuel economy credits to achieve compliance with prescribed fuel
economy standards.

Sec.  536.2  Application.

    This part applies to all credits earned (and transferable and
tradable) for exceeding applicable average fuel economy standards in a
given model year for domestically manufactured passenger cars, imported
passenger cars, and light trucks.

Sec.  536.3  Definitions.

    (a) Statutory terms. All terms defined in 49 U.S.C. 32901(a) are
used pursuant to their statutory meaning.
    (b) Other terms. (1) Above standard fuel economy means, with
respect to a compliance category, that the automobiles manufactured by
a manufacturer in that compliance category in a particular model year
have greater average fuel economy (calculated in a manner that reflects
the incentives for alternative fuel automobiles per 49 U.S.C. 32905)
than that manufacturer's fuel economy standard for that compliance
category and model year.
    (2) Adjustment factor means a factor used to adjust the value of a
traded or transferred credit for compliance purposes to ensure that the
compliance value of the credit when used reflects the total volume of
oil saved when the credit was earned.
    (3) Below standard fuel economy means, with respect to a compliance
category, that the automobiles manufactured by a manufacturer in that
compliance category in a particular model year have lower average fuel
economy (calculated in a manner that reflects the incentives for
alternative fuel automobiles per 49 U.S.C. 32905) than that
manufacturer's fuel economy standard for that compliance category and
model year.
    (4) Compliance means a manufacturer achieves compliance in a
particular compliance category when:
    (i) The average fuel economy of the vehicles in that category
exceed or meet the fuel economy standard for that category; or
    (ii) The average fuel economy of the vehicles in that category do
not meet the fuel economy standard for that category, but the
manufacturer proffers a sufficient number of valid credits, adjusted
for total oil savings, to cover the gap between the average fuel
economy of the vehicles in that category and the required average fuel
economy. A manufacturer achieves compliance for its fleet if the
conditions in paragraph (b)(4)(i) of this section or this paragraph
(b)(4)(ii) are simultaneously met for all compliance categories.
    (5) Compliance category means any of three categories of
automobiles subject to Federal fuel economy regulations in this
chapter. The three compliance categories recognized by 49 U.S.C.
32903(g)(6) are domestically manufactured passenger automobiles,
imported passenger automobiles, and non-passenger automobiles (``light
trucks'').
    (6) Credit holder (or holder) means a legal person that has valid
possession of credits, either because they are a manufacturer who has
earned credits by exceeding an applicable fuel economy standard in this
chapter, or because they are a designated recipient who has received
credits from another holder. Credit holders need not be manufacturers,
although all manufacturers may be credit holders.
    (7) Credits (or fuel economy credits) means an earned or purchased
allowance recognizing that the average fuel economy of a particular
manufacturer's vehicles within a particular compliance category and
model year exceeds that manufacturer's fuel economy standard for that
compliance category and model year. One credit is equal to \1/10\ of a
mile per gallon above the fuel economy standard per one vehicle within
a compliance category. Credits are denominated according to model year
in which they are earned (vintage), originating manufacturer, and
compliance category.
    (8) Expiry date means the model year after which fuel economy
credits may no longer be used to achieve compliance with fuel economy
regulations in this chapter. Expiry dates are calculated in terms of
model years: For example, if a manufacturer earns credits for model
year 2011, these credits may be used for compliance in model years
2008-2016.
    (9) Fleet means all automobiles that are manufactured by a
manufacturer in a particular model year and are subject to fuel economy
standards under parts 531 and 533 of this chapter. For the purposes of
this part, a manufacturer's fleet means all domestically manufactured
and imported passenger automobiles and non-passenger automobiles
(``light trucks''). ``Work trucks'' and medium and heavy trucks are not
included in this definition for purposes of this part.
    (10) Light truck means the same as ``non-passenger automobile,'' as
that term is defined in 49 U.S.C. 32901(a)(17), and as ``light truck,''
as that term is defined at Sec.  523.5 of this chapter.
    (11) Originating manufacturer means the manufacturer that
originally earned a particular credit. Each credit earned will be
identified with the name of the originating manufacturer.
    (12) Trade means the receipt by the National Highway Traffic
Administration (NHTSA) of an instruction from a credit holder to place
one of its credits in the account of another credit holder. A credit
that has been traded can be identified because the originating
manufacturer will be a different party than the current credit holder.
Traded credits are moved from one credit holder to the recipient credit
holder within the same compliance category for which the credits were
originally earned. If a credit has been traded to another credit holder
and is subsequently traded back to the originating manufacturer, it
will be deemed not to have been traded for compliance purposes.
    (13) Transfer means the application by a manufacturer of credits
earned by that manufacturer in one compliance category or credits
acquired be trade (and originally earned by another manufacturer in
that category) to achieve compliance with fuel economy standards with
respect to a different compliance category. For example, a manufacturer
may purchase light truck credits from another manufacturer, and
transfer them to achieve compliance in the manufacturer's domestically
manufactured passenger car fleet. Subject to the credit transfer
limitations of 49 U.S.C. 32903(g)(3), credits can also be transferred
across compliance categories and banked or saved in that category to be
carried forward or backwards later to address a credit shortfall.
    (14) Vintage means, with respect to a credit, the model year in
which the credit was earned.

Sec.  536.4  Credits.

    (a) Type and vintage. All credits are identified and distinguished
in the accounts by originating manufacturer, compliance category, and
model year of origin (vintage).
    (b) Application of credits. All credits earned and applied are
calculated, per 49 U.S.C. 32903(c), in tenths of a mile per gallon by
which the average fuel economy of vehicles in a particular compliance
category manufactured by a manufacturer in the model year in which the
credits are earned exceeds the applicable average fuel economy
standard, multiplied by the number of vehicles sold in that compliance

category. However, credits that have been traded between credit holders
or transferred between compliance categories are valued for compliance
purposes using the adjustment factor specified in paragraph (c) of this
section, pursuant to the ``total oil savings'' requirement of 49 U.S.C.
32903(f)(1).
    (c) Adjustment factor. When traded or transferred and used, fuel
economy credits are adjusted to ensure fuel oil savings is preserved.
For traded credits, the user (or buyer) must multiply the calculated
adjustment factor by the number of shortfall credits it plans to offset
in order to determine the number of equivalent credits to acquire from
the earner (or seller). For transferred credits, the user of credits
must multiply the calculated adjustment factor by the number of
shortfall credits it plans to offset in order to determine the number
of equivalent credits to transfer from the compliance category holding
the available credits. The adjustment factor is calculated according to
the following formula in figure 1 to this paragraph (c):
[GRAPHIC] [TIFF OMITTED] TR02MY22.270

Where:

A = Adjustment factor applied to traded and transferred credits. The
quotient shall be rounded to 4 decimal places;
VMTe = Lifetime vehicle miles traveled as provided in the following
Table 1 to this paragraph (c) for the model year and compliance
category in which the credit was earned;
VMTu = Lifetime vehicle miles traveled as provided in the following
Table 1 to this paragraph (c) for the model year and compliance
category in which the credit is used for compliance;
MPGse = Required fuel economy standard for the originating (earning)
manufacturer, compliance category, and model year in which the
credit was earned;
MPGae = Actual fuel economy for the originating manufacturer,
compliance category, and model year in which the credit was earned;
MPGsu = Required fuel economy standard for the user (buying)
manufacturer, compliance category, and model year in which the
credit is used for compliance; and
MPGau = Actual fuel economy for the user manufacturer, compliance
category, and model year in which the credit is used for compliance.

                                               Table 1 to Sec.   536.4(c)--Lifetime Vehicle Miles Traveled
                                                                          [VMT]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Lifetime vehicle miles traveled  (VMT)
                       Model year                        -----------------------------------------------------------------------------------------------
                                                               2012            2013            2014            2015            2016          2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passenger Cars..........................................         177,238         177,366         178,652         180,497         182,134         195,264
Light Trucks............................................         208,471         208,537         209,974         212,040         213,954         225,865
--------------------------------------------------------------------------------------------------------------------------------------------------------

Sec.  536.5  Trading infrastructure.

    (a) Accounts. NHTSA maintains ``accounts'' for each credit holder.
The account consists of a balance of credits in each compliance
category and vintage held by the holder.
    (b) Who may hold credits. Every manufacturer subject to fuel
economy standards under part 531 or 533 of this chapter is
automatically an account holder. If the manufacturer earns credits
pursuant to this part, or receives credits from another party, so that
the manufacturer's account has a non-zero balance, then the
manufacturer is also a credit holder. Any party designated as a
recipient of credits by a current credit holder will receive an account
from NHTSA and become a credit holder, subject to the following
conditions:
    (1) A designated recipient must provide name, address, contacting
information, and a valid taxpayer identification number or Social
Security number;
    (2) NHTSA does not grant a request to open a new account by any
party other than a party designated as a recipient of credits by a
credit holder; and
    (3) NHTSA maintains accounts with zero balances for a period of
time, but reserves the right to close accounts that have had zero
balances for more than one year.
    (c) Automatic debits and credits of accounts. (1) To carry credits
forward, backward, transfer credits, or trade credits into other credit
accounts, a manufacturer or credit holder must submit a credit
instruction to NHTSA. A credit instruction must detail and include:
    (i) The credit holder(s) involved in the transaction.
    (ii) The originating credits described by the amount of the
credits, compliance category and the vintage of the credits.
    (iii) The recipient credit account(s) for banking or applying the
originating credits described by the compliance category(ies), model
year(s), and if applicable the adjusted credit amount(s) and adjustment
factor(s).
    (iv) For trades, a contract authorizing the trade signed by the
manufacturers or credit holders or by managers legally authorized to
obligate the sale and purchase of the traded credits.
    (2) Upon receipt of a credit instruction from an existing credit
holder, NHTSA verifies the presence of sufficient credits in the
account(s) of the credit holder(s) involved as applicable and notifies
the credit holder(s) that the credits will be debited from and/or
credited to the accounts involved, as specified in the credit
instruction. NHTSA determines if the credits can be debited or credited
based upon the amount of available credits, accurate application of any
adjustment factors

and the credit requirements prescribed by this part that are applicable
at the time the transaction is requested.
    (3) After notifying the credit holder(s), all accounts involved are
either credited or debited, as appropriate, in line with the credit
instruction. Traded credits identified by a specific compliance
category are deposited into the recipient's account in that same
compliance category and model year. If a recipient of credits as
identified in a credit instruction is not a current account holder,
NHTSA establishes the credit recipient's account, subject to the
conditions described in paragraph (b) of this section, and adds the
credits to the newly-opened account.
    (4) NHTSA will automatically delete unused credits from holders'
accounts when those credits reach their expiry date.
    (5) Starting January 1, 2022, all parties trading credits must also
provide NHTSA the price paid for the credits including a description of
any other monetary or non-monetary terms affecting the price of the
traded credits, such as any technology exchanged or shared in exchange
for the credits, any other non-monetary payment for the credits, or any
other agreements related to the trade.
    (6) Starting September 1, 2022, manufacturers or credit holders
issuing credit instructions or providing credit allocation plans as
specified in paragraph (d) of this section, must use and submit the
NHTSA Credit Template fillable form (Office of Management and Budget
(OMB) Control No. 2127-0019, NHTSA Form 1475). In the case of a trade,
manufacturers or credit holders buying traded credits must use the
credit transactions template to submit trade instructions to NHTSA.
Manufacturers or credit holders selling credits are not required to
submit trade instructions. The NHTSA Credit Template must be signed by
managers legally authorized to obligate the sale and/or purchase of the
traded credits from both parties to the trade. The NHTSA Credit
Template signed by both parties to the trade serves as an
acknowledgement that the parties have agreed to trade a certain amount
of credits, and does not dictate terms, conditions, or other business
obligations of the parties.
    (7) NHTSA will consider claims that information submitted to the
agency under this section is entitled to confidential treatment under 5
U.S.C. 552(b) and under the provisions of part 512 of this chapter if
the information is submitted in accordance with the procedures of part
512. The NHTSA Credit Template is available for download on the CAFE
Public Information Center website. Manufacturers must submit the cost
information to NHTSA in a PDF document along with the Credit Template
through the CAFE email, [email protected]. NHTSA reserves the right to
request additional information from the parties regarding the terms of
the trade.
    (d) Compliance. (1) NHTSA assesses compliance with fuel economy
standards each year, utilizing the certified and reported CAFE data
provided by the Environmental Protection Agency (EPA) for enforcement
of the CAFE program pursuant to 49 U.S.C. 32904(e). Credit values are
calculated based on the CAFE data from the EPA. If a particular
compliance category within a manufacturer's fleet has above standard
fuel economy, NHTSA adds credits to the manufacturer's account for that
compliance category and vintage in the appropriate amount by which the
manufacturer has exceeded the applicable standard.
    (2) If a manufacturer's vehicles in a particular compliance
category have below standard fuel economy, NHTSA will provide written
notification to the manufacturer that it has failed to meet a
particular fleet target standard. The manufacturer will be required to
confirm the shortfall and must either: submit a plan indicating how it
will allocate existing credits or earn, transfer and/or acquire
credits; or pay the appropriate civil penalty. The manufacturer must
submit a plan or payment within 60 days of receiving agency
notification.
    (3) Credits used to offset shortfalls are subject to the three- and
five-year limitations as described in Sec.  536.6.
    (4) Transferred credits are subject to the limitations specified by
49 U.S.C. 32903(g)(3) and this part.
    (5) The value, when used for compliance, of any credits received
via trade or transfer is adjusted, using the adjustment factor
described in Sec.  536.4(c), pursuant to 49 U.S.C. 32903(f)(1).
    (6) Credit allocation plans received from a manufacturer will be
reviewed and approved by NHTSA. Starting in model year 2022, credit
holders must use the NHTSA Credit Template (OMB Control No. 2127-0019,
NHTSA Forms 1475) to record the credit transactions. The template is a
fillable form that has an option for recording and calculating credit
transactions for credit allocation plans. The template calculates the
required adjustments to the credits. The credit allocation plan and the
completed transaction templates must be submitted to NHTSA. NHTSA will
approve the credit allocation plan unless it finds that the proposed
credits are unavailable or that it is unlikely that the plan will
result in the manufacturer earning sufficient credits to offset the
subject credit shortfall. If the plan is approved, NHTSA will revise
the respective manufacturer's credit account accordingly. If the plan
is rejected, NHTSA will notify the respective manufacturer and request
a revised plan or payment of the appropriate fine.
    (e) Reporting. (1) NHTSA periodically publishes the names and
credit holdings of all credit holders. NHTSA does not publish
individual transactions, nor respond to individual requests for updated
balances from any party other than the account holder.
    (2) NHTSA issues an annual credit status letter to each party that
is a credit holder at that time. The letter to a credit holder includes
a credit accounting record that identifies the credit status of the
credit holder including any activity (earned, expired, transferred,
traded, carry-forward and carry-back credit transactions/allocations)
that took place during the identified activity period.

Sec.  536.6  Treatment of credits earned prior to model year 2011.

    (a) Credits earned in a compliance category before model year 2008
may be applied by the manufacturer that earned them to carryback plans
for that compliance category approved up to three model years prior to
the year in which the credits were earned, or may be applied to
compliance in that compliance category for up to three model years
after the year in which the credits were earned.
    (b) Credits earned in a compliance category during and after model
year 2008 may be applied by the manufacturer that earned them to
carryback plans for that compliance category approved up to three years
prior to the year in which the credits were earned, or may be held or
applied for up to five model years after the year in which the credits
were earned.
    (c) Credits earned in a compliance category prior to model year
2011 may not be transferred or traded.

Sec.  536.7  Treatment of carryback credits.

    (a) Carryback credits earned in a compliance category in any model
year may be used in carryback plans approved by NHTSA, pursuant to 49
U.S.C. 32903(b), for up to three model years prior to the year in which
the credit was earned.
    (b) For purposes of this part, NHTSA will treat the use of future
credits for compliance, as through a carryback

plan, as a deferral of penalties for non-compliance with an applicable
fuel economy standard.
    (c) If NHTSA receives and approves a manufacturer's carryback plan
to earn future credits within the following three model years in order
to comply with current regulatory obligations, NHTSA will defer levying
fines for non-compliance until the date(s) when the manufacturer's
approved plan indicates that credits will be earned or acquired to
achieve compliance, and upon receiving confirmed CAFE data from EPA. If
the manufacturer fails to acquire or earn sufficient credits by the
plan dates, NHTSA will initiate compliance proceedings.
    (d) In the event that NHTSA fails to receive or approve a plan for
a non-compliant manufacturer, NHTSA will levy fines pursuant to
statute. If within three years, the non-compliant manufacturer earns or
acquires additional credits to reduce or eliminate the non-compliance,
NHTSA will reduce any fines owed, or repay fines to the extent that
credits received reduce the non-compliance.
    (e) No credits from any source (earned, transferred and/or traded)
will be accepted in lieu of compliance if those credits are not
identified as originating within one of the three model years after the
model year of the confirmed shortfall.

Sec.  536.8  Conditions for trading of credits.

    (a) Trading of credits. If a credit holder wishes to trade credits
to another party, the current credit holder and the receiving party
must jointly issue an instruction to NHTSA, identifying the quantity,
vintage, compliance category, and originator of the credits to be
traded. If the recipient is not a current account holder, the recipient
must provide sufficient information for NHTSA to establish an account