fuel economy; at the same time, manufacturers will foreseeably seek
to continue to maximize profit, and to the extent that plug-in
hybrids and fully-electric vehicles are cost-effective to build and
desired by the market, manufacturers may well build more of these
vehicles, even though NHTSA does not expressly consider them as a
compliance option when we are determining maximum feasible CAFE
stringency. Due to forces other than CAFE standards, however, we do
expect continued growth in electrification technologies (and we
reflect those forces in the analytical baseline).
    \543\ See AEO. 2022. Table 3: Energy Prices by Sector and
Source. Available at: https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-AEO2022&cases=ref2022&sourcekey=0. (Accessed: May 31, 2023).
    \544\ See AEO. 2022. Table 12: Petroleum and Other Liquids
Prices. Available at: https://www.eia.gov/outlooks/aeo/data/browser/#/?id=12-AEO2022&cases=ref2022&sourcekey=0. (Accessed: May 31,
2023).
    \545\ See AEO. 2022. Table 8: Electricity Supply, Disposition,
Prices, and Emissions. Available at: https://www.eia.gov/outlooks/aeo/data/browser/#/?id=8-AEO2022&cases=ref2022&sourcekey=0.
(Accessed May 31, 2023).
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(b) National Balance of Payments
    NHTSA has consistently included consideration of the ``national
balance of payments'' as part of the need of the U.S. to conserve
energy because of concerns that importing large amounts of oil created
a significant wealth transfer to oil-exporting countries and

left the U.S. economically vulnerable.\546\ According to EIA, the net
U.S. petroleum trade value deficit peaked in 2008, but it has fallen
over the past decade as volumes of U.S. petroleum exports increased to
record-high levels and imports decreased.\547\ The 2020 net U.S.
petroleum trade value deficit was $3 billion, the smallest on record,
partially because of less consumption amid COVID mitigation
efforts.\548\ In 2020 and 2021, annual total petroleum net imports were
actually negative, the first years since at least 1949. For petroleum
that was imported in 2021, 51 percent came from Canada, 8 percent came
from Mexico, 8 percent came from Russia, 5 percent came from Saudi
Arabia, and 2 percent came from Colombia.\549\ While transportation
demand is expected to continue to increase as the economy recovers from
the pandemic, it is foreseeable that the trend of trade in consumer
goods and services continuing to dominate the national balance of
payments, as compared to petroleum, will continue during the rulemaking
time frame.\550\ Regardless, the U.S. does continue to rely on oil
imports. Moreover, because the oil market is global in nature, the U.S.
is still subject to price volatility, as recent global events have
demonstrated. NHTSA recognizes that reducing the vulnerability of the
U.S. to possible oil price shocks remains important. This proposal aims
to improve fleet-wide fuel efficiency and to help reduce the amount of
petroleum consumed in the U.S., and therefore aims to improve this part
of the U.S. balance of payments as well as to protect consumers from
global price shocks.
---------------------------------------------------------------------------

    \546\ For the earliest discussion of this topic, see 42 FR
63184, 63192 (Dec. 15, 1977).
    \547\ EIA. Today in Energy: U.S. energy trade lowers the overall
2020 U.S. trade deficit for the first time on record. September 22,
2021. Available at https://www.eia.gov/todayinenergy/detail.php?id=49656#. (Accessed: May 31, 2023).
    \548\ EIA. Oil and Petroleum Products explained, Oil imports and
exports. Updated Nov. 2, 2022. Available at https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php.
(Accessed May 31, 2023).
    \549\ Id.
    \550\ Id.
---------------------------------------------------------------------------

(c) Environmental Implications
    Higher fleet fuel economy reduces U.S. emissions of CO2
as well as various other pollutants by reducing the amount of oil that
is produced and refined for the U.S. vehicle fleet but can also
potentially increase emissions by reducing the cost of driving, which
can result in increased vehicle miles traveled (i.e., the rebound
effect). Thus, the net effect of more stringent CAFE standards on
emissions of each pollutant depends on the relative magnitudes of its
reduced emissions in fuel refining and distribution and any increases
in emissions from increased vehicle use. Fuel savings from CAFE
standards also result in lower emissions of CO2, the main
GHG emitted as a result of refining, distribution, and use of
transportation fuels.
    NHTSA has considered environmental issues, both within the context
of EPCA and the context of NEPA, in making decisions about the setting
of standards since the earliest days of the CAFE program. As courts of
appeal have noted in three decisions stretching over the last 20
years,\551\ NHTSA defined ``the need of the United States to conserve
energy'' in the late 1970s as including, among other things,
environmental implications. In 1988, NHTSA included climate change
considerations in its CAFE notices and prepared its first environmental
assessment addressing that subject.\552\ It cited concerns about
climate change as one of the reasons for limiting the extent of its
reduction of the CAFE standard for MY 1989 passenger cars.\553\
---------------------------------------------------------------------------

    \551\ CAS, 793 F.2d 1322, 1325 n. 12 (D.C. Cir. 1986); Public
Citizen, 848 F. 2d 256, 262-63 n. 27 (D.C. Cir. 1988) (noting that
``NHTSA itself has interpreted the factors it must consider in
setting CAFE standards as including environmental effects''); CBD,
538 F.3d 1172 (9th Cir. 2007).
    \552\ 53 FR 33080, 33096 (Aug. 29, 1988).
    \553\ 63 FR 39275, 39302 (Oct. 6, 1988).
---------------------------------------------------------------------------

    NHTSA also considers EJ issues as part of the environmental
considerations under the need of the United States to conserve energy,
consistent with E.O.s and DOT Order 5610.2(c), ``U.S. [DOT] Actions to
Address EJ in Minority Populations and Low-Income Populations.'' \554\
The affected environment for EJ is nationwide, with a focus on areas
that could contain communities with EJ concerns who would most likely
be exposed to the environmental and health effects of oil production,
distribution, and consumption, or the impacts of climate change. This
includes areas where oil production and refining occur, areas near
roadways, coastal flood-prone areas, and urban areas that are subject
to the heat island effect.
---------------------------------------------------------------------------

    \554\ Department Of Transportation. 2021. Updated Environmental
Justice Order 5610.2(c).
---------------------------------------------------------------------------

    Numerous studies have found that some environmental hazards are
more prevalent in areas where minority and low-income populations
represent a higher proportion of the population compared with the
general population. In terms of effects due to criteria pollutants and
air toxics emissions, the body of scientific literature points to
disproportionate representation of minority and low-income populations
in proximity to a range of industrial, manufacturing, and hazardous
waste facilities that are stationary sources of air pollution, although
results of individual studies may vary. While the scientific literature
specific to oil refineries is limited, disproportionate exposure of
minority and low-income populations to air pollution from oil
refineries is suggested by other broader studies of racial and
socioeconomic disparities in proximity to industrial facilities
generally. Studies have also consistently demonstrated a
disproportionate prevalence of minority and low-income populations
living near mobile sources of pollutants (such as roadways) and
therefore are exposed to higher concentrations of criteria air
pollutants in multiple locations across the United States. Lower-
positioned socioeconomic groups are also generally more exposed to air
pollution, and thus generally more vulnerable to effects of exposure.
    In terms of exposure to climate change risks, the literature
suggests that across all climate risks, low-income communities, some
communities of color, and those facing discrimination are
disproportionately affected by climate events. Communities overburdened
by poor environmental quality experience increased climate risk due to
a combination of sensitivity and exposure. Urban populations
experiencing inequities and health issues have greater susceptibility
to climate change, including substantial temperature increases. Some
communities of color facing cumulative exposure to multiple pollutants
also live in areas prone to climate risk. Indigenous peoples in the
United States face increased health disparities that cause increased
sensitivity to extreme heat and air pollution. Together, this
information indicates that climate impacts disproportionately affect
minority and low-income populations because of socioeconomic
circumstances, including location of lower-income housing, histories of
discrimination, and inequity. Furthermore, high temperatures can
exacerbate poor air quality, further compounding the risk to
overburdened communities. Finally, health-related sensitivities in low-
income and minority populations increase risk of damaging impacts from
poor air quality under climate change, underscoring the potential
benefits of improving air quality to communities overburdened by poor
environmental quality. Chapter

7 of the Draft EIS discusses EJ issues in more detail.
    In the Draft EIS, Chapters 3 through 5 discuss the connections
between oil production, distribution, and consumption, and their health
and environmental impacts. Electricity production and distribution also
have health and environmental impacts, discussed in those chapters as
well.
    All of the action alternatives in this NPRM reduce carbon dioxide
emissions and, thus, the effects of climate change, as compared to the
baseline. Effects on criteria pollutants and air toxics emissions are
more varied, with more stringent standards generally reducing
downstream emissions but potentially increasing upstream emissions of
certain pollutants due to greater electricity use (in the standard-
setting analysis, by PHEVs during the standard setting years). Chapters
4 and 5 of the Draft EIS discuss this in more detail.
    As discussed above, while our analysis suggests that the majority
of LDVs will continue to be powered by ICEs in the near- to mid-term
under all regulatory alternatives, greater electrification in the mid-
to longer-term is foreseeable. While NHTSA is prohibited from
considering the fuel economy of EVs in determining maximum feasible
CAFE standards, EVs (which appear both in NHTSA's baseline and which
may be produced in MYs following the period of regulation as an
indirect effect of more stringent standards, or in response to other
non-NHTSA standards, or in response to tax incentives and other
government incentives, or in response to market demand) produce few to
zero combustion-based emissions. As a result, electrification
contributes meaningfully to the decarbonization of the transportation
sector, in addition to having additional environmental, health, and
economic development benefits, although these benefits may not yet be
equally distributed across society. They also present new environmental
(and social) questions, like the consequences of upstream electricity
production, minerals extraction for battery components, and ability to
charge an EV. The upstream environmental effects of extraction and
refining for petroleum are well-recognized; minerals extraction and
refining can also have significant downsides. NHTSA's Draft EIS
discusses these and other effects (such as production and end-of-life
issues) in more detail in Chapter 6, and NHTSA will continue to monitor
these issues going forward insofar as CAFE standards may end up causing
increased electrification levels even if NHTSA does not consider
electrification in setting those standards, because NHTSA does not
control what technologies manufacturers use to meet those standards,
and because NHTSA is required to consider the environmental effects of
its standards under NEPA.
    NHTSA carefully considered the environmental effects of this
rulemaking, both quantitative and qualitative, as discussed in the
Draft EIS and in Sections V.C and V.D of this preamble.
(d) Foreign Policy Implications
    U.S. consumption and imports of petroleum products impose costs on
the domestic economy that are not reflected in the market price for
crude petroleum or in the prices paid by consumers for petroleum
products such as gasoline. These costs include (1) higher prices for
petroleum products resulting from the effect of U.S. oil demand on
world oil prices; (2) the risk of disruptions to the U.S. economy, and
the effects of those disruptions on consumers, caused by sudden
increases in the global price of oil and its resulting impact of fuel
prices faced by U.S. consumers; (3) expenses for maintaining the
Strategic Petroleum Reserve (SPR) to provide a response option should a
disruption in commercial oil supplies threaten the U.S. economy, to
allow the U.S. to meet part of its International Energy Agency
obligation to maintain emergency oil stocks, and to provide a national
defense fuel reserve; and (4) the threat of significant economic
disruption, and the underlying effect on U.S. foreign policy, if an
oil-exporting country threatens the United States and uses, as part of
its threat, its power to upend the U.S. economy. Reducing U.S.
consumption of crude oil or refined petroleum products (by reducing
motor fuel use) can reduce these external costs.
    In addition, a 2006 report by the Council on Foreign Relations
identified six foreign policy costs that it said arose from U.S.
consumption of imported oil: (1) The adverse effect that significant
disruptions in oil supply will have for political and economic
conditions in the U.S. and other importing countries; (2) the fears
that the current international system is unable to secure oil supplies
when oil is seemingly scarce and oil prices are high; (3) political
realignment from dependence on imported oil that limits U.S. alliances
and partnerships; (4) the flexibility that oil revenues give oil-
exporting countries to adopt policies that are contrary to U.S.
interests and values; (5) an undermining of sound governance by the
revenues from oil and gas exports in oil-exporting countries; and (6)
an increased U.S. military presence in the Middle East that results
from the strategic interest associated with oil consumption.
    CAFE standards over the last few decades have conserved significant
quantities of oil, and the petroleum intensity of the U.S. fleet has
decreased significantly. Continuing to improve energy conservation and
reduce U.S. oil consumption by raising CAFE standards further has the
potential to continue to help with all of these considerations. Even if
the energy security picture has changed since the 1970s, due in no
small part to the achievements of the CAFE program itself in increasing
fleetwide fuel economy, energy security in the petroleum consumption
context remains extremely important. Congress' original concern with
energy security was the impact of supply shocks on American consumers
in the event that the U.S.'s foreign policy objectives lead to
conflicts with oil-producing nations or that global events more
generally lead to fuel disruptions. Moreover, oil is produced, refined,
and sold in a global marketplace, so events that impact it anywhere,
impact it everywhere. The world is dealing with these effects
currently. Oil prices have fluctuated dramatically in recent years and
reached over $100/barrel in 2022. A motor vehicle fleet with greater
fuel economy is better able to absorb increased fuel costs,
particularly in the short-term, without those costs leading to a
broader economic crisis, as had occurred in the 1973 and 1979 oil
crises. Ensuring that the U.S. fleet is positioned to take advantage of
cost-effective technology innovations will allow the U.S. to continue
to base its international activities on foreign policy objectives that
are not limited, at least not completely, by petroleum issues. Further,
when U.S. oil consumption is linked to the globalized and tightly
interconnected oil market, as it is now, the only means of reducing the
exposure of U.S. consumers to global oil shocks is to reduce their oil
consumption and the overall oil intensity of the U.S. economy. Thus,
the reduction in oil consumption driven by fuel economy standards
creates an energy security benefit.
    This benefit is the original purpose behind the CAFE standards. Oil
prices are inherently volatile, in part because geopolitical risk
affects prices. International conflicts, sanctions, civil conflicts
targeting oil production infrastructure, pandemic-related economic
upheaval, cartels, all of these have had dramatic and sudden effects on
oil prices in recent years. For all of these reasons, energy security
remains

quite relevant for NHTSA in determining maximum feasible CAFE
standards.\555\ There are extremely important energy security benefits
associated with raising CAFE stringency that are not discussed in the
Draft TSD Chapter 6.2.4, and which are difficult to quantify, but have
weighed importantly for NHTSA in developing the proposed standards in
this NPRM.
---------------------------------------------------------------------------

    \555\ Draft TSD Chapter 6.2.4 also discusses emerging energy
security considerations associated with vehicle electrification, but
NHTSA only considers these effects for decision-making purposes
within the framework of the statutory restrictions applicable to
NHTSA's determination of maximum feasible CAFE standards.
---------------------------------------------------------------------------

(5) Factors That NHTSA Is Prohibited From Considering
    EPCA also provides that in determining the level at which it should
set CAFE standards for a particular MY, NHTSA may not consider the
ability of manufacturers to take advantage of several EPCA provisions
that facilitate compliance with CAFE standards and thereby reduce the
costs of compliance.\556\ NHTSA cannot consider the trading,
transferring, or availability of compliance credits that manufacturers
earn by exceeding the CAFE standards and then use to achieve compliance
in years in which their measured average fuel economy falls below the
standards. NHTSA also must consider dual fueled automobiles to be
operated only on gasoline or diesel fuel, and it cannot consider the
possibility that manufacturers would create new dedicated alternative
fueled automobiles--including battery-electric vehicles--to comply with
the CAFE standards in any MY for which standards are being set. EPCA
encourages the production of AFVs by specifying that their fuel economy
is to be determined using a special calculation procedure; this
calculation results in a more-generous fuel economy assignment for
alternative-fueled vehicles compared to what they actually achieve
under a strict energy efficiency conversion calculation. Of course,
manufacturers are free to use dedicated and dual-fueled AFVs and
credits in achieving compliance with CAFE standards.
---------------------------------------------------------------------------

    \556\ 49 U.S.C. 32902(h).
---------------------------------------------------------------------------

    The effect of the prohibitions against considering these statutory
flexibilities (like the compliance boosts for dedicated and dual-fueled
alternative vehicles, and the use and availability of overcompliance
credits) in setting the CAFE standards is that NHTSA cannot set
standards that assume the use of these flexibilities in response to
those standards--in effect, that NHTSA cannot set standards as
stringent as NHTSA would if NHTSA could account for the availability of
those flexibilities. For example, NHTSA cannot set standards based on
an analysis that modeled technology pathway that includes additional
BEV penetration specifically in response to more stringent CAFE
standards.
    In contrast, for the non-statutory fuel economy improvement value
program that NHTSA developed by regulation, NHTSA has determined that
these fuel economy adjustments are not subject to the 49 U.S.C.
32902(h) prohibition. The statute is very clear as to which
flexibilities are not to be considered in determining maximum feasible
CAFE standards. When NHTSA has introduced additional compliance
mechanisms such as AC efficiency and ``off-cycle'' technology fuel
improvement values, NHTSA has considered those technologies as
available in the analysis. Thus, the analysis for this proposal
includes assumptions about manufacturers' use of those technologies, as
detailed in Chapter 2 of the accompanying Draft TSD.
    NHTSA recognizes that some stakeholders have requested that we
interpret 32902(h) to erase completely all knowledge of BEVs' existence
from the analysis, not only restricting their application during the
standard-setting years, but restricting their application entirely, for
any reason, and deleting them from the existing fleet that NHTSA uses
to create an analytical baseline. PHEVs would correspondingly be
counted simply as strong hybrids, considered only in ``charge-
sustaining'' mode. NHTSA continues to restrict the application of BEVs
(and other dedicated alternative fueled vehicles) during standard-
setting years (except as is necessary to model compliance with state
ZEV mandates), and to count PHEVs only in charge-sustaining mode during
that time frame, which for this proposal is MYs 2027-2032. NHTSA's
analysis also mandates the same compliance solution (based on
compliance with the baseline standards) for all regulatory alternatives
for the MYs 2022-2026 period. This ensures that the model does not
simulate manufacturers creating new BEVs prior to the standard-setting
years in anticipation of the need to comply with the CAFE standards
during those standard-setting years. Additionally, because the model is
restricted (for purposes of the standard-setting analysis) from
applying BEVs during MYs 2027-2032 (again, except as is necessary to
model compliance with state ZEV mandates), it literally cannot apply
BEVs in those MYs in an effort to reach compliance in subsequent MYs.
NHTSA has not taken the additional step of removing BEVs from the
baseline fleet, and we continue to assume that manufacturers will meet
their California ZEV obligations whether or not NHTSA sets new CAFE
standards. We reflect those manufacturer efforts in the baseline fleet.
We interpret the 32902(h) prohibition as preventing NHTSA from setting
CAFE standards that effectively require additional application of
dedicated alternative fueled vehicles in response to those standards,
not as preventing NHTSA from being aware of the existence of dedicated
alternative fueled vehicles that are already being produced for other
reasons besides CAFE standards. Modeling the application of BEV
technology in MYs outside the standard-setting years allows NHTSA to
account for BEVs that manufacturers may produce for reasons other than
the CAFE standards, without accounting for those BEVs that would be
produced because of the CAFE standards. This is consistent with
Congress' intent, made evident in the statute, that NHTSA does not
consider the potential for manufacturers to comply with CAFE standards
by producing additional dedicated alternative fuel automobiles.
Moreover, OMB Circular A-4 directs agencies to conduct cost-benefit
analyses against a baseline that represents the world in the absence of
further regulatory action. An artificial baseline that pretends that
dedicated alternative fueled vehicles do not exist would not be
consistent with that directive, and we could not fulfill our statutory
mandate to set maximum feasible CAFE standards without understanding
these real-world baseline effects. NHTSA is aware of challenges to this
approach in Natural Resources Defense Council v. NHTSA, No. 22-1080
(D.C. Cir.), and our analysis will account for any judgment in that
case that may be final before the issuance of the final rule.
    In order to test the possible effects of this interpretation on
NHTSA's analysis, NHTSA conducted several sensitivity cases: one which
applied the EPCA restrictions from MYs 2027-2035, one which applied the
EPCA restrictions from MYs 2027-2050, and one which applied the EPCA
restrictions for all MYs covered by the analysis. Even under the most
extreme scenario, applying the restrictions to all MYs in the analysis,
fuel consumption (both gasoline and electricity) fell relative to the
RC: gasoline consumption did not fall by as much as the RC, and
electricity consumption increased by

less than the RC, but this should be foreseeable in a scenario where
fewer BEVs are available to be applied over time. The amount of carbon
dioxide reduced also fell compared to the RC, and per-vehicle
regulatory costs and fuel savings also dropped--but even so, the net
impact on consumers was really not that much different (still slightly
positive), and the order of alternatives, in terms of results for all
of these metrics, did not change from the RC. Chapter 9 of the PRIA
describes the results in much more detail. NHTSA does not believe that
the results of this sensitivity analysis are significant enough to
change our position on what regulatory alternative is maximum feasible
for purposes of this proposal, as will be discussed further in Section
V.D.
(6) Other Considerations in Determining Maximum Feasible CAFE Standards
    NHTSA has historically considered the potential for adverse safety
effects in setting CAFE standards. This practice has been upheld in
case law.\557\ NHTSA's findings are discussed in Section IV.B of this
preamble and in Chapter <IP_ADDRESS> of the accompanying PRIA, and NHTSA
discusses its consideration of these effects in Section V.D below.
---------------------------------------------------------------------------

    \557\ As courts have recognized, ``NHTSA has always examined the
safety consequences of the CAFE standards in its overall
consideration of relevant factors since its earliest rulemaking
under the CAFE program.'' Competitive Enterprise Institute v. NHTSA,
901 F.2d 107, 120 n. 11 (D.C. Cir. 1990) (``CEI-I'') (citing 42 FR
33534, 33551 (Jun. 30, 1977)). Courts have consistently upheld
NHTSA's implementation of EPCA in this manner. See, e.g.,
Competitive Enterprise Institute v. NHTSA, 956 F.2d 321, 322 (D.C.
Cir. 1992) (``CEI-II'') (in determining the maximum feasible
standard, ``NHTSA has always taken passenger safety into account'')
(citing CEI-I, 901 F.2d at 120 n. 11); Competitive Enterprise
Institute v. NHTSA, 45 F.3d 481, 482-83 (D.C. Cir. 1995) (``CEI-
III'') (same); Center for Biological Diversity v. NHTSA, 538 F.3d
1172, 1203-04 (9th Cir. 2008) (upholding NHTSA's analysis of vehicle
safety issues associated with weight in connection with the MYs
2008-2011 CAFE rulemaking).
---------------------------------------------------------------------------

b. Heavy-Duty Pickups and Vans
    Statutory authority for the fuel consumption standards proposed in
this document for HDPUVs is found in Section 103 of EISA, codified at
49 U.S.C. 32902(k). That section authorizes a fuel efficiency
improvement program, designed to achieve the maximum feasible
improvement, to be created for (among other things) HDPUVs. Congress
directed that the standards, test methods, measurement metrics, and
compliance and enforcement protocols for HDPUVs be ``appropriate, cost-
effective, and technologically feasible,'' while achieving the
``maximum feasible improvement'' in fuel efficiency. These three
factors are similar to and yet somewhat different from the four factors
that NHTSA considers for passenger car and light truck standards, but
they still modify ``feasible'' in ``maximum feasible'' in the context
of the HDPUV proposal beyond a plain meaning of ``capable of being
done.'' \558\ Importantly, NHTSA interprets them as giving NHTSA
similarly broad authority to weigh potentially conflicting priorities
to determine maximum feasible standards.\559\ Thus, as with passenger
car and light truck standards, NHTSA believes that it is firmly within
our discretion to weigh and balance the HDPUV factors in a way that is
technology-forcing, as evidenced by this proposal, but not in a way
that requires the application of technology that will not be available
in the lead time provided by this proposal, or that is not cost-
effective.
---------------------------------------------------------------------------

    \558\ See Center for Biological Diversity v. NHTSA, 538 F. 3d
1172, 1194 (9th Cir. 2008).
    \559\ Where Congress has not directly spoken to a potential
issue related to such a balancing, NHTSA's interpretation must be a
``reasonable accommodation of conflicting policies . . . committed
to the agency's care by the statute.'' Id. at 1195.
---------------------------------------------------------------------------

    While NHTSA has sought in the past to set HDPUV standards that are
maximum feasible by balancing the considerations of whether standards
are appropriate, cost-effective, and technologically feasible, NHTSA
has not sought to interpret those factors more specifically. In the
interest of helping NHTSA ground the elements of its analysis in the
words of the statute, without intending to restrict NHTSA's
consideration of any important factors, NHTSA proposes to interpret the
32902(k)(2) factors as follows.
(1) Appropriate
    Given that the overarching purpose of EPCA is energy conservation,
the amount of energy conserved by standards should inform whether
standards are appropriate. When considering energy conservation, NHTSA
may consider things like average estimated fuel savings to consumers,
average estimated total fuel savings, and benefits to our nation's
energy security, among other things. Environmental benefits are another
facet of energy conservation, and NHTSA may consider carbon dioxide
emissions avoided, criteria pollutant and air toxics emissions avoided,
and so forth. Given NHTSA's additional mission as a safety agency,
NHTSA may also consider the possible safety effects of different
potential standards in determining whether those standards are
appropriate. Effects on the industry that do not relate directly to
``cost-effectiveness'' may be encompassed here, such as estimated
effects on sales and employment, and effects in the industry that
appear to be happening for reasons other than NHTSA's regulations may
also be encompassed. NHTSA interprets ``appropriate'' broadly, as not
prohibiting consideration of any relevant elements that are not already
considered under one of the other factors.
(2) Cost-Effective
    Congress' use of the term ``cost-effective'' in 32902(k) appears to
have a more specific aim than the broader term ``economic
practicability'' in 32902(f). In past rulemakings covering HDPUVs,
NHTSA has considered the ratio of estimated technology (or regulatory)
costs to the estimated value of GHG emissions avoided, and also to
estimated fuel savings. In setting passenger car and light truck
standards, NHTSA often looks at consumer costs and benefits, like the
estimated additional upfront cost of the vehicle (as above, assuming
that the cost of additional technology required to meet standards gets
passed forward to consumers) and the estimated fuel savings. Another
way to consider cost-effectiveness could be total industry-wide
estimated compliance costs compared to estimated societal benefits.
Other similar comparisons of costs and benefits may also be relevant.
NHTSA interprets ``cost-effective'' as encompassing these kinds of
comparisons.
(3) Technologically Feasible
    Technological feasibility in the HDPUV context is similar to how
NHTSA interprets it in the passenger car and light truck context. NHTSA
has previously interpreted ``technological feasibility'' to mean
``whether a particular method of improving fuel economy can be
available for commercial application in the MY for which a standard is
being established,'' as discussed above. NHTSA has further clarified
that the consideration of technological feasibility ``does not mean
that the technology must be available or in use when a standard is
proposed or issued.'' \560\ Consistent with these previous
interpretations, NHTSA believes that a technology does not necessarily
need to be currently available or already in use for all regulated
parties to be ``technologically feasible'' for these proposed
standards,

as long as it is reasonable to expect, based on the evidence before us,
that the technology will be available in the MY in which the relevant
standard takes effect.
---------------------------------------------------------------------------

    \560\ Center for Auto Safety v. NHTSA, 793 F.2d 1322, 1325 n. 12
(D.C. Cir. 1986), quoting 42 FR 63, 184 (1977).
---------------------------------------------------------------------------

B. Administrative Procedure Act

    The APA governs agency rulemaking generally and provides the
standard of judicial review for agency actions. To be upheld under the
``arbitrary and capricious'' standard of judicial review under the APA,
an agency rule must be rational, based on consideration of the relevant
factors, and within the scope of authority delegated to the agency by
statute. The agency must examine the relevant data and articulate a
satisfactory explanation for its action, including a ``rational
connection between the facts found and the choice made.'' \561\ The APA
also requires that agencies provide notice and comment to the public
when proposing regulations,\562\ as NHTSA is doing with this NPRM and
its accompanying materials.
---------------------------------------------------------------------------

    \561\ Burlington Truck Lines, Inc. v. United States, 371 U.S.
156, 168 (1962).
    \562\ 5 U.S.C. 553.
---------------------------------------------------------------------------

C. National Environmental Policy Act

    The National Environmental Policy Act (NEPA) directs that
environmental considerations be integrated into Federal decision making
process, considering the purpose and need for agencies' actions.\563\
As discussed above, EPCA requires NHTSA to determine the level at which
to set CAFE standards for passenger cars and light trucks by
considering the four factors of technological feasibility, economic
practicability, the effect of other motor vehicle standards of the
Government on fuel economy, and the need of the U.S. to conserve
energy, and to set fuel efficiency standards for HDPUVs by adopting and
implementing appropriate test methods, measurement metrics, fuel
economy standards,\564\ and compliance and enforcement protocols that
are appropriate, cost-effective, and technologically feasible.\565\ To
explore the potential environmental consequences of this proposal,
NHTSA prepared a Draft EIS for this NPRM. The purpose of an EIS is to
``. . . provide full and fair discussion of significant environmental
impacts and [to] inform decision makers and the public of reasonable
alternatives that would avoid or minimize adverse impacts or enhance
the quality of the human environment.'' \566\ This section of the
preamble describes results from NHTSA's Draft EIS, which is being
publicly issued simultaneously with this NPRM.
---------------------------------------------------------------------------

    \563\ NEPA is codified at 42 U.S.C. 4321-47. The Council on
Environmental Quality (CEQ) NEPA implementing regulations are
codified at 40 CFR parts 1500 through 1508.
    \564\ In the Phase 1 HD Fuel Efficiency Improvement Program
rulemaking, NHTSA, aided by the National Academies of Sciences
report, assessed potential metrics for evaluating fuel efficiency.
NHTSA found that fuel economy would not be an appropriate metric for
HD vehicles. Instead, NHTSA chose a metric that considers the amount
of fuel consumed when moving a ton of freight (i.e., performing
work). As explained in the Phase 2 HD Fuel Efficiency Improvement
Program Final Rule, this metric, delegated by Congress to NHTSA to
formulate, is not precluded by the text of the statute. The agency
concluded that it is a reasonable way by which to measure fuel
efficiency for a program designed to reduce fuel consumption.
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium-
and Heavy-Duty Engines and Vehicles--Phase 2; Final Rule, 81 FR
73478, 73520 (Oct. 25, 2016).
    \565\ 49 U.S.C. 32902(k)(2).
    \566\ 40 CFR 1502.1.
---------------------------------------------------------------------------

    EPCA and EISA require that the Secretary of Transportation
determine the maximum feasible levels of CAFE standards in a manner
that sets aside the potential use of CAFE credits or application of
alternative fuel technologies toward compliance in MYs for which NHTSA
is issuing new standards. NEPA, however, does not impose such
constraints on analysis; instead, its purpose is to ensure that
``Federal agencies consider the environmental impacts of their actions
in the decision-making process.'' \567\ As the environmental impacts of
this action depend on manufacturer's actual responses to proposed
standards, and those responses are not constrained by the adoption of
alternative fueled technologies or the use of compliance credits, the
Draft EIS is based on ``unconstrained'' modeling rather than ``standard
setting'' modeling. The ``unconstrained'' analysis considers
manufacturers' potential use of CAFE credits and application of
alternative fuel technologies in order to disclose and allow
consideration of the real-world environmental consequences of the
Proposed Action and alternatives.
---------------------------------------------------------------------------

    \567\ 40 CFR 1500.1(a).
---------------------------------------------------------------------------

    NHTSA conducts modeling both ways in order to reflect the various
statutory requirements of EPCA/EISA and NEPA. The rest of the preamble,
and importantly, NHTSA's balancing of relevant EPCA/EISA factors
explained in Section V.D, employs the ``standard setting'' modeling in
order to aid the decision-maker in avoiding consideration of the
prohibited items in 49 U.S.C. 32902(h) in determining maximum feasible
standards, but as a result, the impacts reported here may differ from
those reported elsewhere in the preamble.\568\ However, NHTSA is
informed by the impacts reported in the Draft EIS, in addition to the
other information presented in this preamble, the Draft TSD, and the
PRIA, as part of its decision-making process.
---------------------------------------------------------------------------

    \568\ ``Unconstrained'' modeling results are presented for
comparison purposes only in some sections of the PRIA and
accompanying databooks.
---------------------------------------------------------------------------

    NHTSA's overall EIS-related obligation is to ``take a `hard look'
at the environmental consequences'' as appropriate.\569\ Significantly,
``[i]f the adverse environmental effects of the proposed action are
adequately identified and evaluated, the agency is not constrained by
NEPA from deciding that other values outweigh the environmental
costs.'' \570\ The agency must identify the ``environmentally
preferable'' alternative but need not adopt it.\571\ ``Congress in
enacting NEPA . . . did not require agencies to elevate environmental
concerns over other appropriate considerations.'' \572\ Instead, NEPA
requires an agency to develop and consider alternatives to the proposed
action in preparing an EIS.\573\ The statute and implementing
regulations do not command an agency to favor an environmentally
preferable course of action, only that it make its decision to proceed
with the action after taking a hard look at the potential environmental
consequences and consider the relevant factors in making a decision
among alternatives.\574\
---------------------------------------------------------------------------

    \569\ Baltimore Gas & Elec. Co. v. Natural Resources Defense
Council, Inc., 462 U.S. 87, 97 (1983).
    \570\ Robertson v. Methow Valley Citizens Council, 490 U.S. 332,
350 (1989).
    \571\ See 40 CFR 1505.2(a)(2). Vermont Yankee Nuclear Power
Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 558 (1978).
    \572\ Baltimore Gas, 462 U.S. at 97.
    \573\ 42 U.S.C. 4332(2)(c)(iii).
    \574\ See 40 CFR 1505.2(a)(2).
---------------------------------------------------------------------------

    When preparing an EIS, NEPA requires an agency to compare the
potential environmental impacts of its proposed action and a reasonable
range of alternatives. Because NHTSA intends to set standards for
passenger cars, light trucks, and HDPUVs,\575\ and because evaluating
the environmental impacts of this rulemaking requires consideration of
the impacts of the standards for all three vehicle classes, the main
analyses of direct and indirect effects of the action alternatives
presented in the Draft EIS reflect: (1) the environmental

impacts associated with the proposed CAFE standards for LDVs, and (2)
the environmental impacts associated with the proposed HDPUV FE
standards. The analyses of cumulative impacts of the action
alternatives presented in this Draft EIS reflect the cumulative or
combined impact of the two sets of standards that are being proposed by
NHTSA in this NPRM.
---------------------------------------------------------------------------

    \575\ Under EPCA, as amended by EISA, NHTSA is required to set
the fuel economy standards for passenger cars in each MY at the
maximum feasible level and to do so separately for light trucks.
Separately, and in accordance with EPCA, as amended by EISA, NHTSA
is required to set FE standards for HDPUVs in each MY that are
``designed to achieve the maximum feasible improvement'' (49 U.S.C.
32902(k)(2)).
---------------------------------------------------------------------------

    In the Draft EIS, NHTSA has analyzed a CAFE No-Action Alternative
and four action alternatives for passenger car and light truck
standards, along with a HDPUV FE No-Action Alternative and three action
alternatives for HDPUV FE standards. The alternatives represent a range
of potential actions NHTSA could take, and they are described more
fully in Section III of this preamble, Chapter 1 of the Draft TSD, and
Chapter 3 of the PRIA. The estimated environmental impacts of these
alternatives, in turn, represent a range of potential environmental
impacts that could result from NHTSA's setting maximum feasible fuel
economy standards for passenger cars and light trucks and fuel
efficiency standards for HDPUVs.
    To derive the direct, indirect, and cumulative impacts of the CAFE
standard action alternatives and the HDPUV FE standard action
alternatives, NHTSA compared each action alternative to the relevant
No-Action Alternative, which reflects baseline trends that would be
expected in the absence of any further regulatory action. More
specifically, the CAFE No-Action Alternative in the Draft EIS assumes
that the CAFE standards set in the 2022 final rule for MYs 2024-2026
passenger cars and light trucks would remain in effect. The HDPUV FE
No-Action Alternative in the Draft EIS assumes that the fuel efficiency
standards set in the 2016 ``Phase 2'' final rule for MYs 2027 and later
HDPUVs would remain in effect. Like all of the action alternatives, the
No-Action Alternatives also include other considerations that will
foreseeably occur during the rulemaking time frame, as discussed in
more detail in Section III above. The No-Action Alternatives assume
that manufacturers will comply with ZEV mandates set by California and
other Section 177 states.\576\ The No-Action Alternatives also assume
that manufacturers would make production decisions in response to
estimated market demand for fuel economy or fuel efficiency,
considering estimated fuel prices; estimated product development
cadence; estimated availability, applicability, cost, and effectiveness
of fuel-saving technologies; and available tax credits. The No-Action
Alternatives further assume the applicability of recently passed tax
credits for battery-based vehicle technologies, which improve the
attractiveness of those technologies to consumers. The No-Action
Alternatives provide a baseline (i.e., an illustration of what would be
occurring in the world in the absence of new Federal regulations)
against which to compare the environmental impacts of other
alternatives presented in the Draft EIS.\577\
---------------------------------------------------------------------------

    \576\ Section 177 of the CAA allows states to adopt motor
vehicle emissions standards California has put in place to make
progress toward attainment of national ambient air quality
standards. At the time of writing, Colorado, Connecticut, Maine,
Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island,
Vermont, and Washington have adopted California's ZEV mandate. See
CARB. States that have Adopted California's Vehicle Standards under
section 177 of the Federal CAA. Available at: https://ww2.arb.ca.gov/resources/documents/states-have-adopted-californias-vehicle-standards-under-section-177-federal. (Accessed: May 31,
2023).
    \577\ See 40 CFR 1502.2(e), 1502.14(d). CEQ has explained that
``[T]he regulations require the analysis of the No-Action
Alternative even if the agency is under a court order or legislative
command to act. This analysis provides a benchmark, enabling
decision makers to compare the magnitude of environmental effects of
the action alternatives [See 40 CFR 1502.14(c).] . . . Inclusion of
such an analsyis in the EIS is necessary to inform Congress, the
public, and the President as intended by NEPA. [See 40 CFR
1500.1(a).]'' Forty Most Asked Questions Concerning CEQ's NEPA
Regulations, 46 FR 18026 (Mar. 23, 1981).
---------------------------------------------------------------------------

    The range of CAFE and HDPUV FE standard action alternatives, as
well as the relevant No-Action Alternative in the Draft EIS,
encompasses a spectrum of possible fuel economy and fuel efficiency
standards that NHTSA could determine were maximum feasible based on the
different ways NHTSA could weigh the applicable statutory factors.
NHTSA analyzed four CAFE standard action alternatives, Alt. PC1LT3,
Alt. PC2LT4, Alt. PC3LT5, and Alt. PC6LT8 for passenger cars and light
trucks, and three HDPUV FE standard action alternatives, Alt. HDPUV4,
Alt. HDPUV10, and Alt. HDPUV14 for HDPUVs. Under PC1LT3, fuel economy
stringency would increase, on average, 1 percent per year, year over
year for MY 2027-2032 passenger cars, and 3 percent per year, year over
year for MY 2027-2032 light trucks. Under PC2LT4, fuel economy
stringency would increase, on average, 2 percent per year, year over
year for MY 2027-2032 passenger cars, and 4 percent per year, year over
year for MY 2027-2032 light trucks (PC2LT4 is NHTSA's Preferred
Alternative for CAFE standards). Under PC3LT5, fuel economy stringency
would increase, on average, 3 percent per year, year over year for MY
2027-2032 passenger cars, and 5 percent per year, year over year for MY
2027-2032 light trucks. Under PC6LT8, fuel economy stringency would
increase, on average, 6 percent per year, year over year for MY 2027-
2032 passenger cars, and 8 percent per year, year over year for MY
2027-2032light trucks. Under HDPUV4, FE stringency would increase, on
average, 4 percent per year, year over year, for MY 2030-2035 HDPUVs.
Under HDPUV10, FE stringency would increase, on average, 10 percent per
year, year over year, for MY 2030-2035 HDPUVs (HDPUV10 is NHTSA's
Preferred Alternative for HDPUV FE standards). Under HDPUV14, FE
stringency would increase on average, 14 percent per year, year over
year, for MY 2030-2035 HDPUVs. NHTSA also analyzed three CAFE and HDPUV
FE alternative combinations for the cumulative impacts analysis,
Alternatives PC1LT3 and HDPUV4 (the lowest stringency CAFE and HDPUV FE
alternatives), Alternatives PC2LT4 and HDPUV10 (the Preferred CAFE and
HDPUV FE alternatives), and Alternatives PC6LT8 and HDPUV14 (the
highest stringency CAFE and HDPUV FE alternatives). Throughout the
Draft EIS, estimated impacts were shown for all of these action
alternatives, as well as for the relevant No-Action Alternative. For a
more detailed discussion of the environmental impacts associated with
the alternatives, see Chapters 3-8 of the Draft EIS, as well as Section
IV.C of this preamble.
    The Draft EIS describes potential environmental impacts to a
variety of resources, including fuel and energy use, air quality,
climate, land use and development, hazardous materials and regulated
waste, EJ, and historic and cultural resources. The Draft EIS also
describes how climate change resulting from global GHG emissions
(including CO2 emissions attributable to the U.S. LD
transportation sector under the alternatives considered) could affect
certain key natural and human resources. Resource areas are assessed
qualitatively and quantitatively, as appropriate, in the Draft EIS, and
the findings of that analysis are summarized here. As explained above,
the qualitative impacts presented below come from the Draft EIS'
``unconstrained'' modeling so that NHTSA is appropriately informed
about the potential environmental impacts of this action. Qualitative
discussions of impacts related to life-cycle assessment of vehicle
materials, EJ, and historic and cultural resources are located in the
Draft EIS, while the impacts summarized here focus on energy, air
quality, and climate change.

1. Environmental Consequences
a. Energy
(1) Direct and Indirect Impacts
    As the stringency of the CAFE standard alternatives increases,
total U.S. passenger car and light truck fuel consumption for the
period of 2022 to 2050 decreases. Total LDV fuel consumption from 2022
to 2050 under the No-Action Alternative is projected to be 2,761
billion gasoline gallon equivalents (GGE). LDV fuel consumption from
2022 to 2050 under the action alternatives is projected to range from
2,744 billion GGE under PC1LT3 to 2,548 billion GGE under PC6LT8. Under
PC2LT4, LDV fuel consumption from 2022 to 2050 is projected to be 2,727
billion GGE. Under PC3LT5, LDV fuel consumption from 2022 to 2050 is
projected to be 2,688 billion GGE. All of the CAFE standard action
alternatives would decrease fuel consumption compared to the relevant
No-Action Alternative, with fuel consumption decreases that range from
17 billion GGE under PC1LT3 to 212 billion GGE under PC6LT8. For the
preferred alternative, fuel consumption decreases by 34 billion GGE.
    As the stringency of the HDPUV FE standard alternatives increases,
total U.S. HDPUV fuel consumption for the period of 2022 to 2050
decreases. Total HDPUV vehicle fuel consumption from 2022 to 2050 under
the No-Action Alternative is projected to be 412.2 billion GGE. HDPUV
fuel consumption from 2022 to 2050 under the action alternatives is
projected to range from 412.1 billion GGE under HDPUV4 to 403.3 billion
GGE under HDPUV14. Under HDPUV10, HDPUV vehicle fuel consumption from
2022 to 2050 is projected to be 410.3 billion GGE. All of the HDPUV
standard action alternatives would decrease fuel consumption compared
to the relevant No-Action Alternative, with fuel consumption decreases
that range from 0.1 billion GGE under HDPUV4 to 8.9 billion GGE under
HDPUV14. For the preferred alternative, fuel consumption decreases by
1.9 billion GGE.
(2) Cumulative Impacts
    Energy cumulative impacts are composed of both LD and HDPUV energy
use in addition to other past, present, and reasonably foreseeable
future actions. As the CAFE Model includes many foreseeable trends,
like gas price projections from AEO 2022's RC, NHTSA examined two AEO
2022 side cases that could proxy a range of future outcomes where oil
consumption is lower based on a range of macroeconomic factors. Since
the results of the CAFE and HDPUV FE standards are a decline in oil
consumption, examining side cases that also result in lower oil
consumption while varying macroeconomic factors provides some insights
into the cumulative effects of CAFE standards paired other potential
future events. Energy production and consumption from those side cases
is presented in comparison to the RC qualitatively in the Draft EIS.
Below, we present the combined fuel consumption savings from the LD
CAFE and HDPUV FE standards.
    Total LDV and HDPUV fuel consumption from 2022 to 2050 under the
No-Action Alternatives is projected to be 3,173 billion GGE. LDV and
HDPUV fuel consumption from 2022 to 2050 under the action alternatives
is projected to range from 3,156 billion GGE under Alternatives PC1LT3
and HDPUV4 to 2,952 billion GGE under Alternatives PC6LT8 and HDPUV14.
Under Alternatives PC2LT4 and HDPUV10, the total LDV and HDPUV fuel
consumption from 2022 to 2050 is projected to be 3,138 billion GGE. All
of the action alternatives would decrease fuel consumption compared to
the No-Action Alternatives, with decreases ranging from 17 billion GGE
under Alternatives PC1LT3 and HDPUV4 to 221 billion GGE under
Alternatives PC6LT8 and HDPUV14. For the proposed alternatives, fuel
consumption decreases by 36 billion GGE.
    Changing CAFE and HDPUV FE standards are expected to reduce
gasoline and diesel fuel use in the transportation sector but are not
expected to have any discernable effect on energy consumption by other
sectors of the U.S. economy because petroleum products account for a
very small share of energy use in other sectors. Gasoline and diesel
(distillate fuel oil) account for less than 5 percent of energy use in
the industrial sector, less than 4 percent of energy use in the
commercial building sector, 2 percent of energy use in the residential
sector, and only about 0.2 percent of energy use in the electric power
sector.
b. Air Quality
(1) Direct and Indirect Impacts
    The relationship between stringency and criteria and air toxics
pollutant emissions is less straightforward, reflecting the complex
interactions among the vehicle-based emissions rates of the various
vehicle types (passenger cars and light trucks, HDPUVs, ICE vehicles
and EVs, older and newer vehicles, etc.), the technologies assumed to
be incorporated by manufacturers in response to CAFE and HDPUV FE
standards, upstream emissions rates, the relative proportions of
gasoline, diesel, and electricity in total fuel consumption, and
changes in VMT from the rebound effect. In general, emissions of
criteria and toxic air pollutants increase very slightly in the short
term, and then decrease dramatically in the longer term, across all
action alternatives, with some exceptions. In addition, the action
alternatives would result in decreased incidence of PM2.5-
related health impacts in most years and alternatives due to the
emissions decreases. Decreases in adverse health outcomes include
decreased incidences of premature mortality, acute bronchitis,
respiratory emergency room visits, and work-loss days.
(e) Criteria Pollutants
    In 2035, emissions of NO, PM2.5, and
SO2 increase, and emissions of CO and VOCs decrease, under
all CAFE standard action alternatives compared to the CAFE No-Action
Alternative. Relative to the CAFE No-Action Alternative, the modeling
results suggest NOX, PM2.5, and SO2
emissions increases in 2035 get larger from Alternative PC1LT3 through
Alternative PC6LT8 (the most stringent alternative in terms of
estimated required mpg). The increases in NOX,
PM2.5, and SO2 emissions reflect the projected
increase in EV use in the later years, which would result in greater
emissions from fossil-fueled power plants to generate the electricity
for charging the EVs even as the electric grid that charges EVs gets
progressively cleaner in later years. For CO and VOCs, the emissions
decrease in 2035 get larger from Alternative PC1LT3 through Alternative
PC6LT8 relative to the CAFE No-Action Alternative.
    In 2050, emissions of NOX and SO2 increase
under some CAFE standard action alternatives and decrease under others,
compared to the CAFE No-Action Alternative. NOX emissions
decrease under Alternatives PC1LT3 and PC2LT4 but increase under
Alternatives PC3LT5 and PC6LT8, compared to the CAFE No-Action
Alternative. SO2 emissions decrease under Alternative PC1LT3
but increase under Alternatives PC2LT4 through PC6LT8, and the
increases get larger from Alternative PC2LT4 through Alternative
PC6LT8. PM2.5 emissions in 2050 decrease under all action
alternatives, but the decrease under Alternative PC3LT5 is less than
the decrease under Alternative PC2LT4. As in 2035, emissions in 2050 of
CO and VOCs decrease under the action alternatives compared to the CAFE
No-Action Alternative. The CO and VOC

emissions decreases get larger from Alternative PC1LT3 through
Alternative PC6LT8. SO2 increases are largely due to higher
upstream emissions associated with electricity use by greater numbers
of electrified vehicles being produced in response to the standards.
    Under each CAFE standard action alternative compared to the CAFE
No-Action Alternative, the largest relative increases in emissions
among the criteria pollutants would occur for SO2, for which
emissions would increase by as much as 16.8 percent under Alternative
PC6LT8 in 2035 compared to the CAFE No-Action Alternative. The largest
relative decreases in emissions would occur for CO, for which emissions
would decrease by as much as 27.8 percent under Alternative PC6LT8 in
2050 compared to the CAFE No-Action Alternative. Percentage increases
and decreases in emissions of NOX, PM2.5, and
VOCs would be less, as small as less than 1 percent. The smaller
differences are not expected to lead to measurable changes in
concentrations of criteria pollutants in the ambient air. The larger
differences in emissions could lead to changes in ambient pollutant
concentrations.
    In 2035, emissions of NOX, PM2.5, and
SO2 increase under the HDPUV FE standard action alternatives
compared to the HDPUV FE No-Action Alternative, while emissions of CO
and VOCs decrease. Relative to the HDPUV FE No-Action Alternative, the
modeling results suggest NOX, PM2.5, and
SO2 emissions increases in 2035 get larger from Alternative
HDPUV4 through Alternative HDPUV14 (the most stringent alternative in
terms of the estimated required fuel consumption [gallons of fuel per
100 ton-mile]). For CO and VOCs, the emissions decrease in 2035 get
larger from Alternative HDPUV4 through Alternative HDPUV14 relative to
the HDPUV FE No-Action Alternative.
    In 2050, emissions of NOX and SO2 increase
under all HDPUV FE standard action alternatives compared to the HDPUV
FE No-Action Alternative, and the increases get larger from Alternative
HDPUV4 through Alternative HDPUV14. Emissions of CO, PM2.5,
and VOCs decrease under all action alternatives compared to the HDPUV
FE No-Action Alternative, and the decreases get larger from Alternative
HDPUV4 through Alternative HDPUV14. Under each HDPUV FE standard action
alternative compared to the HDPUV FE No-Action Alternative, the largest
relative increases in emissions among the criteria pollutants would
occur for SO2, for which emissions would increase by as much
as 4.2 percent under Alternative HDPUV14 in 2050 compared to the HDPUV
FE No-Action Alternative. The largest relative decreases in emissions
would occur for CO and VOCs, for which emissions would decrease by as
much as 5.7 percent under Alternative HDPUV14 in 2050 compared to the
HDPUV FE No-Action Alternative. Percentage increases and reductions in
emissions of NOX and PM2.5 would be less, as
small as less than 1 percent. The smaller differences are not expected
to lead to measurable changes in concentrations of criteria pollutants
in the ambient air. The larger differences in emissions could lead to
changes in ambient pollutant concentrations.
(f) Toxic Air Pollutants
    Under each CAFE standard action alternative in 2035 and 2050
relative to the CAFE No-Action Alternative, decreases in emissions
would occur for all toxic air pollutants. The decreases get larger from
Alternative PC1LT3 through Alternative PC6LT8. The largest relative
decreases in emissions would occur for acetaldehyde, acrolein, 1,3-
butadiene, and formaldehyde, for which emissions would decrease by as
much as 36 percent under Alternative PC6LT8 in 2050. Percentage
decreases in emissions of benzene and diesel particulate matter (DPM)
would be less, in some cases less than 1 percent.
    Under each HDPUV FE standard action alternative in 2035 and 2050
relative to the HDPUV FE No-Action Alternative, emissions either remain
the same or decrease for all toxic air pollutants. The decreases get
larger from Alternative HDPUV4 through Alternative HDPUV14. The largest
relative decreases in national emissions of toxic air pollutants among
the HDPUV FE standard action alternatives, compared to the HDPUV FE No-
Action Alternative, generally would occur for acetaldehyde, acrolein,
benzene, 1,3-butadiene, and formaldehyde, for which emissions would
decrease by as much as 7 percent under Alternative HDPUV14 in 2050.
Percentage decreases in emissions of DPM would be less, in some cases
less than 1 percent.
(g) Health Impacts
    In 2035 and 2050, all CAFE standard action alternatives would
result in decreases in adverse health impacts (mortality, acute
bronchitis, respiratory emergency room visits, and other health
effects) nationwide compared to the CAFE No-Action Alternative. The
improvements to health impacts (or decreases in health incidences)
would get larger from Alternative PC1LT3 to Alternative PC6LT8 in 2035
and 2050. These decreases reflect the generally increasing stringency
of the action alternatives as they become implemented.
    In 2035 and 2050, all HDPUV FE standard action alternatives would
remain the same or decrease nationwide compared to the HDPUV FE No-
Action Alternative.
(2) Cumulative Impacts
(h) Criteria Pollutants
    In 2035, emissions of NOX, PM2.5, and
SO2 increase under the CAFE and HDPUV FE alternative
combinations compared to the No-Action Alternatives, while emissions of
CO and VOCs decrease. Relative to the No-Action Alternatives, the
modeling results suggest NOX, PM2.5, and
SO2 emissions increases in 2035 get smaller from
Alternatives PC1LT3 and HDPUV4 to Alternatives PC2LT4 and HDPUV10, then
larger from Alternatives PC2LT4 and HDPUV10 to Alternatives PC6LT8 and
HDPUV14 (the combination of the most stringent CAFE and HDPUV FE
standard alternatives). For CO and VOCs, the emissions decrease in 2035
get smaller from Alternatives PC1LT3 and HDPUV4 to Alternatives PC2LT4
and HDPUV10, then larger from Alternatives PC2LT4 and HDPUV10 to
Alternatives PC6LT8 and HDPUV14, relative to the No-Action
Alternatives.
    In 2050, emissions of NOX decrease under Alternatives
PC1LT3 and HDPUV4 and Alternatives PC2LT4 and HDPUV10 but increase
under Alternatives PC6LT8 and HDPUV14, compared to the No-Action
Alternatives. Emissions of SO2 decrease under Alternatives
PC1LT3 and HDPUV4 but increase under Alternatives PC2LT4 and HDPUV10
and Alternatives PC6LT8 and HDPUV14, compared to the No-Action
Alternatives. Emissions of CO, PM2.5, and VOCs decrease
under all CAFE and HDPUV alternative combinations compared to the No-
Action Alternatives, and the decreases get larger from Alternatives
PC1LT3 and HDPUV4 through Alternatives PC6LT8 and HDPUV14 for CO and
VOCs, while the decreases for PM2.5 get smaller from
Alternatives PC1LT3 and HDPUV4 to Alternatives PC2LT4 and HDPUV10, and
then larger from Alternatives PC2LT4 and HDPUV10 to Alternatives PC6LT8
and HDPUV14, compared to the No-Action Alternatives.
    Under each CAFE and HDPUV FE alternative combination compared to
the No-Action Alternatives, the largest relative increases in emissions
among the criteria pollutants would occur for SO2, for which
emissions would increase by as much as 15.2 percent

under Alternatives PC6LT8 and HDPUV14 in 2035, compared to the No-
Action Alternatives. The largest relative decreases in emissions would
occur for CO, for which emissions would decrease by as much as 25.2
percent under Alternatives PC6LT8 and HDPUV14 in 2050, compared to the
No-Action Alternatives. Percentage increases and decreases in emissions
of NOX and PM2.5 would be less, as small as less
than 1 percent. The smaller differences are not expected to lead to
measurable changes in concentrations of criteria pollutants in the
ambient air. The larger differences in emissions could lead to changes
in ambient pollutant concentrations.
(b) Toxic Air Pollutants
    Toxic air pollutant emissions across the CAFE and HDPUV FE
alternative combinations remain the same or decrease in 2035 and 2050,
relative to the No-Action Alternatives. The decreases in 2035 get
smaller from Alternatives PC1LT3 and HDPUV4 to Alternatives PC2LT4 and
HDPUV10 and then larger from Alternatives PC2LT4 and HDPUV10 to
Alternatives PC6LT8 and HDPUV14; the decreases in 2050 get larger from
Alternatives PC1LT3 and HDPUV4 through Alternatives PC6LT8 and HDPUV14.
    The largest relative decreases in emissions generally would occur
for acetaldehyde, acrolein, benzene, 1,3-butadiene, and formaldehyde,
for which emissions would decrease by as much as 29 percent under
Alternatives PC6LT8 and HDPUV14 in 2050, compared to the No-Action
Alternatives. Percentage decreases in emissions of DPM would be less,
as small as less than 1 percent.
(c) Health Impacts
    Adverse health impacts (mortality, acute bronchitis, respiratory
emergency room visits, and other health effects) from criteria
pollutant emissions would remain the same or decrease nationwide in
2035 and 2050 under all CAFE and HDPUV FE alternative combinations,
relative to the No-Action Alternatives. The improvements to health
impacts (or decreases in health incidences) in 2035 would get smaller
or stay the same from Alternatives PC1LT3 and HDPUV4 to Alternatives
PC2LT4 and HDPUV10 and then get larger from Alternatives PC2LT4 and
HDPUV10 to Alternatives PC6LT8 and HDPUV14. In 2050, the improvements
would get larger from Alternatives PC1LT3 and HDPUV4 to Alternatives
PC6LT8 and HDPUV14. These decreases reflect the generally increasing
stringency of the CAFE and HDPUV FE standard action alternatives as
they become implemented.
    As mentioned above, changes in assumptions about modeled technology
adoption; the relative proportions of gasoline, diesel, and other fuels
in total fuel consumption changes; and changes in VMT from the rebound
effect would alter these health impact results; however, NHTSA believes
that these assumptions are reasonable.
c. Greenhouse Gas Emissions and Climate Change
(1) Direct and Indirect Impacts
    In terms of climate effects, the action alternatives would decrease
both U.S. passenger car and light truck, and HDPUV fuel consumption and
CO2 emissions compared with the relevant No-Action
Alternative, resulting in reductions in the anticipated increases in
global CO2 concentrations, temperature, precipitation, sea
level, and ocean acidification that would otherwise occur. They would
also, to a small degree, reduce the impacts and risks associated with
climate change. The impacts of the action alternatives on atmospheric
CO2 concentration, global mean surface temperature,
precipitation, sea level, and ocean pH would be small in relation to
global emissions trajectories. Although these effects are small, they
occur on a global scale and are long lasting; therefore, in aggregate,
they can have large consequences for health and welfare and can make an
important contribution to reducing the risks associated with climate
change.
(a) Greenhouse Gas Emissions
    The CAFE standard action alternatives would have the following
impacts related to GHG emissions: Passenger cars and light trucks are
projected to emit 52,800 million metric tons of carbon dioxide
(MMTCO2) from 2027 through 2100 under the CAFE No-Action
Alternative. Compared to the No-Action Alternative, projected emissions
reductions from 2027 to 2100 under the CAFE action alternatives would
range from 300 to 8,600 MMTCO2. Under Alternative PC2LT4,
emissions reductions from 2027 to 2100 are projected to be 1,100
MMTCO2. The CAFE action alternatives would reduce total
CO2 emissions from U.S. passenger cars and light trucks by a
range of 0.6 to 16.3 percent from 2027 to 2100 compared to the CAFE No-
Action Alternative. Alternative PC2LT4 would decrease these emissions
by 2.1 percent through 2100. All CO2 emissions estimates
associated with the CAFE standard action alternatives include upstream
emissions.
    The HDPUV FE standard action alternatives would have the following
impacts related to GHG emissions: HDPUVs are projected to emit 9,800
million metric tons of carbon dioxide (MMTCO2) from 2027
through 2100 under the HDPUV FE No-Action Alternative. Compared to the
No-Action Alternative, projected emissions reductions from 2027 to 2100
under the HDPUV action alternatives would range from 0 to 400
MMTCO2. Under Alternative HDPUV10, emissions reductions from
2027 to 2100 are projected to be 100 MMTCO2. The action
alternatives would decrease these emissions by a range of less than 0.1
percent under HDPUV4 to 4.1 percent under HDPUV14 through 2100.
Alternative HDPUV10 would decrease these emissions by 1 percent over
the same period. All CO2 emissions estimates associated with
the HDPUV FE standard action alternatives include upstream emissions.
    Compared with total projected CO2 emissions of 559
MMTCO2 from all passenger cars and light trucks under the
CAFE No-Action Alternative in the year 2100, the CAFE standard action
alternatives are expected to decrease CO2 emissions from
passenger cars and light trucks in the year 2100 less than 1 percent
under Alternative PC1LT3, 7 percent under Alternative PC3LT5, and 21
percent under Alternative PC6LT8. Under Alternative PC2LT4, the 2100
total projected CO2 emissions for all passenger cars and
light trucks are 546 MMTCO2, reflecting a 2 percent
decrease.
    Compared with total projected CO2 emissions of 115
MMTCO2 from all HDPUVs under the HDPUV FE No-Action
Alternative in the year 2100, the HDPUV FE standard action alternatives
are expected to decrease CO2 emissions from HDPUVs in the
year 2100 by a range of less than 1 percent under Alternative HDPUV4 to
5 percent under Alternative HDPUV14. Under Alternative HDPUV10, the
2100 total projected CO2 emissions for all HDPUVs are 113
MMTCO2, reflecting a 2 percent decrease.
    To estimate changes in CO2 concentrations and global
mean surface temperature, NHTSA used a reduced-complexity climate model
(MAGICC). The reference scenario used in the direct and indirect
analysis is the SSP3-7.0 scenario, which the Intergovernmental Panel on
Climate Change (IPCC) describes as a high emissions scenario that
assumes no successful, comprehensive global actions to mitigate GHG
emissions and

yields atmospheric CO2 levels of 800 ppm and an effective
radiative forcing (ERF) of 7.0 watts per square meter (W/m\2\) in 2100.
Compared to SSP3-7.0 total global CO2 emissions projection
of 4,991,547 MMTCO2 under the CAFE No-Action Alternative
from 2027 through 2100, the CAFE standard action alternatives are
expected to reduce global CO2 by 0.01 percent under
Alternative PC1LT3, 0.02 percent under Alternative PC2LT4, 0.06 percent
under Alternative PC3LT5, and 0.17 percent under Alternative PC6LT8 by
2100.
    Compared to SSP3-7.0 total global CO2 emissions
projection of 4,991,547 MMTCO2 under the HDPUV No-Action
Alternative from 2027 through 2100, the HDPUV action alternatives are
expected to reduce global CO2 by less than 0.01 percent
under Alternatives HDPUV4 and HDPUV10, and 0.01 percent under
Alternative HDPUV14 by 2100.
    The emissions reductions from all passenger cars and light trucks
in 2035 compared with emissions under the CAFE No-Action Alternative
are approximately equivalent to the annual emissions from 2,481,083
vehicles under Alternative PC1LT3, 4,006,611 vehicles under Alternative
PC2LT4, 8,125,856 vehicles under Alternative PC3LT5, and 21,921,146
vehicles under Alternative PC6LT8. (A total of 260,514,221 passenger
cars and light trucks are projected to be on the road in 2035 under the
No-Action Alternative).
    The emissions reductions from HDPUVs in 2032 compared with
emissions under the HDPUV FE No-Action Alternative are approximately
equivalent to the annual emissions from 2,325 vehicles under
Alternative HDPUV4, 59,962 vehicles under Alternative HDPUV10, and
297,812 vehicles under Alternative HDPUV14. (A total of 18,607,101
HDPUVs are projected to be on the road in 2032 under the No-Action
Alternative.)
(b) Climate Change Indicators (Carbon Dioxide Concentration, Global
Mean Surface Temperature, Sea Level, Precipitation, and Ocean pH)
    CO2 emissions affect the concentration of CO2
in the atmosphere, which in turn affects global temperature, sea level,
precipitation, and ocean pH. For the analysis of direct and indirect
impacts, NHTSA used the SSP3-7.0 scenario to represent the RC emissions
scenario (i.e., future global emissions assuming no comprehensive
global actions to mitigate GHG emissions). NHTSA selected the SSP3-7.0
scenario for its incorporation of a comprehensive suite of GHG and
pollutant gas emissions, including carbonaceous aerosols and a global
context of emissions with a full suite of GHGs and ozone precursors.
    The CO2 concentrations under the SSP3-7.0 emissions
scenario in 2100 are estimated to be 838.31 ppm under the CAFE No-
Action Alternative. CO2 concentrations under the CAFE
standard action alternatives could reach 837.48 ppm under Alternative
PC6LT8, indicating a maximum atmospheric CO2 decrease of
approximately 0.83 ppm compared to the CAFE No-Action Alternative.
Atmospheric CO2 concentrations under Alternative PC1LT3
would decrease by 0.03 ppm compared with the CAFE No-Action
Alternative.
    Under the HDPUV FE standard action alternatives, CO2
concentrations under the SSP3-7.0 emissions scenario in 2100 are
estimated to decrease to 838.27 ppm under Alternative HDPUV14,
indicating a maximum atmospheric CO2 decrease of
approximately 0.04 ppm compared to the HDPUV FE No-Action Alternative.
Atmospheric CO2 concentrations under Alternative HDPUV4
would decrease by 0.01 ppm compared with the HDPUV FE No-Action
Alternative.
    Under the SSP3-7.0 emissions scenario, global mean surface
temperature is projected to increase by approximately 4.34 [deg]C (7.81
[deg]F) under the CAFE No-Action Alternative by 2100. Implementing the
most stringent alternative (Alternative PC6LT8) would decrease this
projected temperature rise by 0.004 [deg]C (0.007 [deg]F), while
Alternative PC1LT3 would decrease projected temperature rise by 0.001
[deg]C (0.002 [deg]F).
    Under the SSP3-7.0 emissions scenario, global mean surface
temperature is projected to increase by approximately 4.34 [deg]C (7.81
[deg]F) under the HDPUV FE No-Action Alternative by 2100. The range of
temperature increases under the HDPUV FE standard action alternatives
would decrease this projected temperature rise by a range of less than
0.0001 [deg]C (0.0002 [deg]F) under Alternative HDPUV4 to 0.0002 [deg]C
(0.003 [deg]F) under Alternative HDPUV14.
    Under the CAFE standard action alternatives, projected sea-level
rise in 2100 under the SSP3-7.0 scenario ranges from a high of 83.24
centimeters (32.77 inches) under the CAFE No-Action Alternative to a
low of 83.16 centimeters (32.74 inches) under Alternative PC6LT8.
Alternative PC6LT8 would result in a decrease in sea-level rise equal
to 0.08 centimeter (0.03 inch) by 2100 compared with the level
projected under the CAFE No-Action Alternative. Alternative PC1LT3
would result in a decrease of less than 0.01 centimeter (0.004 inch)
compared with the CAFE No-Action Alternative.
    Under the HDPUV FE standard action alternatives, projected sea-
level rise in 2100 under the SSP3-7.0 scenario varies less than .01
centimeter (.004 inch) from a high of 83.24 centimeters (32.77 inches)
under HDPUV FE No-Action Alternative.
    Under the SSP3-7.0 scenario, global mean precipitation is
anticipated to increase by 7.42 percent by 2100 under the CAFE No-
Action Alternative. Under the CAFE standard action alternatives, this
increase in precipitation would be reduced by 0.00 to 0.01 percent.
    Under the SSP3-7.0 scenario, global mean precipitation is
anticipated to increase by 7.42 percent by 2100 under the HDPUV FE No-
Action Alternative. HDPUV FE standard action alternatives would see a
reduction in precipitation in the range of 0.00 to 0.01 percent.
    Under the SSP3-7.0 scenario, ocean pH in 2100 is anticipated to be
8.1937 under Alternative PC6LT8, about 0.0004 more than the CAFE No-
Action Alternative. Under Alternative PC1LT3, ocean pH in 2100 would be
8.1933, or less than 0.0001 more than the CAFE No-Action Alternative.
    Under the SSP3-7.0 scenario, ocean pH in 2100 is anticipated to be
8.1933 under Alternative HDPUV14, or less than 0.0001 more than the
HDPUV FE No-Action Alternative.
    The action alternatives for both CAFE and HDPUV FE standards would
reduce the impacts of climate change that would otherwise occur under
the No-Action Alternative. Although the projected reductions in
CO2 and climate effects are small compared with total
projected future climate change, they are quantifiable and
directionally consistent and would represent an important contribution
to reducing the risks associated with climate change.
(2) Cumulative Impacts
(a) Greenhouse Gas Emissions
    The CAFE and HDPUV alternative combinations would have the
following impacts related to GHG emissions: Projections of total
emissions reductions from 2027 to 2100 under the CAFE and HDPUV
alternative combinations and other reasonably foreseeable future
actions compared with the No-Action Alternatives range from 300
MMTCO2 under Alternatives PC1LT3 and HDPUV4 to 9,000
MMTCO2 under Alternatives PC6LT8 and HDPUV14. Under
Alternatives PC2LT4 and HDPUV10, emissions reductions from 2027 to 2100
are projected to be 1,200 MMTCO2. The action alternatives
would decrease total vehicle emissions by between 0.5 percent under
Alternatives PC1LT3 and HDPUV4 and 14.4 percent

under Alternatives PC6LT8 and HDPUV14 by 2100. Alternatives PC2LT4 and
HDPUV10 would decrease these emissions by 1.9 percent over the same
period. Compared with projected total global CO2 emissions
of 2,484,191 MMTCO2 from all sources from 2027 to 2100 using
the moderate climate scenario, the incremental impact of this
rulemaking is expected to decrease global CO2 emissions
between 0.01 percent under Alternatives PC1LT3 and HDPUV4 and 0.36
percent under Alternatives PC6LT8 and HDPUV14 by 2100. Alternatives
PC2LT4 and HDPUV10 would decrease these emissions by .05 percent over
the same period.
(b) Climate Change Indicators (Carbon Dioxide Concentration, Global
Mean Surface Temperature, Sea Level, Precipitation, and Ocean pH)
    Estimated atmospheric CO2 concentrations in 2100 range
from 587.78 ppm under the No-Action Alternatives to 587.00 ppm under
Alternatives PC6LT8 and HDPUV14 (the combination of the most stringent
CAFE and HDPUV FE standard alternatives). This is a decrease of 0.78
ppm compared with the No-Action Alternatives.
    Global mean surface temperature decreases for the CAFE and HDPUV
alternative combinations compared with the No-Action Alternatives in
2100 range from a low of less than 0.001 [deg]C (0.002 [deg]F) under
Alternatives PC1LT3 and HDPUV4 to a high of 0.004 [deg]C (0.007 [deg]F)
under Alternatives PC6LT8 and HDPUV14.
    Global mean precipitation is anticipated to increase 6.11 percent
under the No-Action Alternatives, with the CAFE and HDPUV alternative
combinations reducing this effect up to 0.01 percent.
    Projected sea-level rise in 2100 ranges from a high of 67.12
centimeters (26.42 inches) under the No-Action Alternatives to a low of
67.03 centimeters (26.39 inches) under Alternatives PC6LT8 and HDPUV14,
indicating a maximum decrease in projected sea-level rise of 0.08
centimeter (0.03 inch) by 2100.
    Ocean pH in 2100 is anticipated to be 8.3333 under Alternatives
PC6LT8 and HDPUV14, about 0.005 less than the No-Action Alternatives.
(c) Health, Societal, and Environmental Impacts of Climate Change
    The action alternatives would reduce the impacts of climate change
that would otherwise occur under the No-Action Alternatives. The
magnitude of the changes in climate effects that would be produced by
the most stringent action alternatives combination, which are
Alternatives PC6LT8 and HDPUV14. Using the three-degree sensitivity
analysis by the year 2100 CO2 would have a .78 ppm lower
concentration, a four-thousandths-of-a-degree increase in the rate of
temperature rise, a small percentage change in the rate of
precipitation increase, between 0.10 and 0.11 centimeter (0.04 inch)
decrease in projected sea-level rise, and an increase of 0.0005 in
ocean pH. Although the projected reductions in CO2 and
climate effects are small compared with total projected future climate
change, they are quantifiable, directionally consistent, and would
represent an important contribution to reducing the risks associated
with climate change.
    Although NHTSA does quantify the changes in monetized damages that
can be attributable to each action alternative, many specific impacts
of climate change on health, society, and the environment cannot be
estimated quantitatively. Therefore, NHTSA provides a qualitative
discussion of these impacts by presenting the findings of peer-reviewed
panel reports including those from IPCC, the Global Change Research
Program, the Climate Change Science Program, the NRC, and the Arctic
Council, among others. While the action alternatives would decrease
growth in GHG emissions and reduce the impact of climate change across
resources relative to the No-Action Alternative, they would not
themselves prevent climate change and associated impacts. Long-term
climate change impacts identified in the scientific literature are
briefly summarized below, and vary regionally, including in scope,
intensity, and directionality (particularly for precipitation). While
it is difficult to attribute any particular impact to emissions that
could result from this rulemaking, the following impacts are likely to
be beneficially affected to some degree by reduced emissions from the
action alternatives:
     Freshwater Resources: Projected risks to freshwater
resources are expected to increase due to changing temperature and
precipitation patterns as well as the intensification of extreme events
like floods and droughts, affecting water security in many regions of
the world and exacerbating existing water-related vulnerabilities.
     Terrestrial and Freshwater Ecosystems: Climate change is
affecting terrestrial and freshwater ecosystems, including their
component species and the services they provide. This impact can range
in scale (from individual to population to species) and can affect all
aspects of an organism's life, including its range, phenology,
physiology, and morphology.
     Ocean Systems, Coasts, and Low[hyphen]Lying Areas: Climate
change-induced impacts on the physical and chemical characteristics of
oceans (primarily through ocean warming and acidification) are exposing
marine ecosystems to unprecedented conditions and adversely affecting
life in the ocean and along its coasts. Anthropogenic climate change is
also worsening the impacts on non-climatic stressors, such as habitat
degradation, marine pollution, and overfishing.
     Food, Fiber, and Forest Products: Through its impacts on
agriculture, forestry and fisheries, climate change adversely affects
food availability, access, and quality, and increases the number of
people at risk of hunger, malnutrition, and food insecurity.
     Urban Areas: Extreme temperatures, extreme precipitation
events, and rising sea levels are increasing risks to urban
communities, their health, wellbeing, and livelihood, with the
economically and socially marginalized being most vulnerable to these
impacts.
     Rural Areas: A high dependence on natural resources,
weather-dependent livelihood activities, lower opportunities for
economic diversity, and limited infrastructural resources subject rural
communities to unique vulnerabilities to climate change impacts.
     Human Health: Climate change can affect human health,
directly through mortality and morbidity caused by heatwaves, floods
and other extreme weather events, changes in vector-borne diseases,
changes in water and food-borne diseases, and impacts on air quality as
well as through indirect pathways such as increased malnutrition and
mental health impacts on communities facing climate-induced migration
and displacement.
     Human Security: Climate change threatens various
dimensions of human security, including livelihood security, food
security, water security, cultural identity, and physical safety from
conflict, displacement, and violence. These impacts are interconnected
and unevenly distributed across regions and within societies based on
differential exposure and vulnerability.
     Stratospheric Ozone: There is strong evidence that
anthropogenic influences, particularly the addition of GHGs and ozone-
depleting substances to the atmosphere, have led to a detectable
reduction in stratospheric ozone concentrations and contributed to
tropospheric warming and related

cooling in the lower stratosphere. These changes in stratospheric ozone
have further influenced the climate by affecting the atmosphere's
temperature structure and circulation patterns.
     Compound events: Compound events consist of combinations
of multiple hazards that contribute to amplified societal and
environmental impacts. Observations and projections show that climate
change may increase the underlying probability of compound events
occurring. To the extent the Proposed Action and alternatives would
decrease the rate of CO2 emissions relative to the relevant
No-Action Alternative, they would contribute to the general decreased
risk of extreme compound events. While this rulemaking alone would not
necessarily decrease compound event frequency and severity from climate
change, it would be one of many global actions that, together, could
reduce these effects.
     Tipping Points and Abrupt Climate Change: Tipping points
represent thresholds within Earth systems that could be triggered by
continued increases in the atmospheric concentration of GHGs,
incremental increases in temperature, or other relatively small or
gradual changes related to climate change. For example, the melting of
the Greenland ice sheet, Arctic sea-ice loss, destabilization of the
West Antarctic ice sheet, and deforestation in the Amazon and dieback
of boreal forests are seen as potential tipping points that can cause
large-scale, abrupt changes in the climate system and lead to
significant impacts on human and natural systems. We note that all of
these adverse effects would be mitigated to some degree by our proposed
standards.
2. Conclusion
    In most cases, NHTSA presents the findings of a literature review
of scientific studies in the Draft EIS, such as in Chapter 6, where
NHTSA provides a literature synthesis focusing on existing credible
scientific information to evaluate the most significant lifecycle
environmental impacts from some of the technologies that may be used to
comply with the alternatives. In Chapter 6, NHTSA describes the life-
cycle environmental implications related to the vehicle cycle phase
considering the materials and technologies (e.g., batteries) that NHTSA
forecasts vehicle manufacturers might use to comply with the CAFE and
HDPUV FE standards. In Chapter 7, NHTSA discusses EJ and qualitatively
describes potential disproportionate impacts on low-income and minority
populations. In Chapter 8, NHTSA qualitatively describes potential
impacts on historic and cultural resources. In these chapters, NHTSA
concludes that impacts would vary between the action alternatives.
Based on the foregoing, NHTSA concludes from the Draft EIS that
Alternative PC6LT8 is the overall environmentally preferable
alternative for MYs 2027-2032 CAFE standards and Alternative HDPUV14 is
the overall environmentally preferable alternative for MYs 2030-2035
HDPUV FE standards because, assuming full compliance were achieved
regardless of NHTSA's assessment of the costs to industry and society,
it would result in the largest reductions in fuel use and
CO2 emissions among the alternatives considered. In
addition, Alternative PC6LT8 and Alternative HDPUV14 would result in
lower overall emissions levels over the long term of criteria air
pollutants and of the toxic air pollutants studied by NHTSA. Impacts on
other resources would be proportional to the impacts on fuel use and
emissions, as further described in the Draft EIS, with Alternative
PC6LT8 and Alternative HDPUV10 being expected to have the fewest
negative environmental impacts. Although the CEQ regulations require
NHTSA to identify the environmentally preferable alternative, NHTSA
need not adopt it, as described above. The following section explains
how NHTSA balanced the relevant factors to determine which alternative
represented the maximum feasible standards, including why NHTSA does
not believe that the environmentally preferable alternative is maximum
feasible.
    NHTSA is informed by the discussion above and the Draft EIS in
arriving at its tentative conclusion that Alternative PC2LT4 and
HDPUV10 is maximum feasible, as discussed below. The following section
(Section VI.D) explains how NHTSA balanced the relevant factors to
determine which alternatives represented the maximum feasible standards
for passenger cars, light trucks, and HDPUVs.

D. Evaluating the EPCA/EISA Factors and Other Considerations To Arrive
at the Proposed Standards

    Accounting for all of the information presented in this preamble,
in the Draft TSD, in the PRIA, and in the Draft EIS, consistent with
our statutory authorities, NHTSA continues to approach the decision of
what standards would be ``maximum feasible'' as a balancing of relevant
factors and information, both for passenger cars and light trucks, and
for HDPUVs. The different regulatory alternatives considered in this
proposal represent different balancings of the factors--for example,
PC1LT3, an alternative less stringent than the preferred alternative,
would represent a balancing in which NHTSA determined that economic
practicability significantly outweighed the need of the U.S. to
conserve energy for purposes of the rulemaking time frame. By contrast,
PC6LT8, a more stringent alternative, would represent a balancing in
which NHTSA determined that the need of the U.S. to conserve energy
significantly outweighed economic practicability during the same
period. Because the statutory factors that NHTSA must consider are
slightly different between passenger cars and light trucks on the one
hand, and HDPUVs on the other, the following sections separate the
segments and describe NHTSA's balancing approach for each proposal.
1. Passenger Cars and Light Trucks
    NHTSA's purpose in setting CAFE standards is to conserve energy, as
directed by EPCA/EISA. Energy conservation provides many benefits to
the American public, including better protection for consumers against
changes in fuel prices, significant fuel savings and reduced impacts
from harmful pollution. NHTSA continues to believe that strong fuel
economy standards function as an important insurance policy against oil
price volatility, particularly to protect consumers even as the U.S.
has improved its energy independence over time. The U.S. participates
in the global market for oil and petroleum fuels. As a market
participant--on both the demand and supply sides--the nation is exposed
to fluctuations in that market. The fact that the U.S. may produce more
petroleum in a given period does not in and of itself protect the
nation from the consequences of these fluctuations. Accordingly, the
nation must conserve petroleum and reduce the oil intensity of the
economy to insulate itself from the effects of market volatility. The
primary mechanism for doing so in the transportation sector is to
continue to improve fleet fuel economy. In addition, better fuel
economy saves consumers money at the gas pump. For example, our
preferred alternative would reduce fuel consumption by 88 billion
gallons through CY 2050 and save buyers of new MY 2032 vehicles an
average of $1,043 in gasoline over the lifetime of the vehicle.
Moreover, as climate change progresses, the U.S. may face new energy-
related security risks if climate effects exacerbate geopolitical
tensions and destabilization. Thus, mitigating climate effects by
increasing fuel economy standards, as all of the action

alternatives in this proposal would do, can also potentially improve
energy security.
    Maximum feasible CAFE standards look to balance the need of the
U.S. to conserve energy with the technological feasibility and economic
impacts of more stringent standards, while also considering other motor
vehicle standards of the Government that may affect automakers' ability
to meet CAFE standards. In order to comply with our statutory
constraints, NHTSA disallows the application of BEVs (and other
dedicated AFVs) in our analysis in response to potential new CAFE
standards, and PHEVs are applied only with their charge-sustaining mode
fuel economy.
    In considering this proposal, NHTSA is mindful of the fact that the
standards for MYs 2024-2026 included year-by-year improvements compared
to the standards established in 2020 that were faster than had been
typical since the inception of the CAFE program in the late 1970s and
early 1980s. Those standards were intended to correct for the lack of
adequate consideration of the need for energy conservation in the 2020
rule and were intended to reestablish the appropriate level of
consideration of these effects that had been included in the initial
2012 rule. Thus, though the standards increased significantly when
compared to the 2020 rule, they were comparable to the standards that
were initially projected as augural standards for the MYs included in
the 2012 final rule. The world has changed considerably in some ways,
but less so in others. Since May 2022, the U.S. economy continues to
have strengths and weaknesses; the auto industry remains in the middle
of a major transition for a variety of reasons besides the CAFE
program. Similarly, our technical analysis has changed considerably in
some ways, but less so in others. Since May 2022, NHTSA has updated
technologies considered in our analysis (removing some, adding others);
updated macroeconomic input assumptions as with each round of analysis;
improved user control of various input parameters; updated its approach
to modeling the ZEV program; expanded accounting for Federal
incentives; expanded procedures for estimating new vehicle sales and
fleet shares; updated inputs for projecting aggregate LD VMT; and added
various output values and options. Further stringency increases at a
comparable rate, immediately on the heels of the increases for MYs
2024-2026, may therefore be beyond maximum feasible for MYs 2027-2032.
    NHTSA tentatively concludes Alternative PC2LT4 is the maximum
feasible alternative that best balances all relevant factors for
passenger cars and light trucks built in MYs 2027-2032. Energy
conservation is still our paramount objective, for the consumer
benefits, energy security benefits, and environmental benefits that it
provides. NHTSA believes that a large percentage of the fleet will
remain propelled by ICEs through 2032, despite the potential
significant transformation being driven by reasons other than the CAFE
standards. NHTSA believes that the alternative we are proposing will
encourage those ICE vehicles produced during the standard-setting time
frame to achieve and maintain significant fuel economies, improve
energy security, and reduce GHG emissions and other air pollutants. At
the same time, NHTSA is proposing standards that our estimates suggest
will continue to reduce petroleum dependence, saving consumers money
and fuel over the lifetime of their vehicles, particularly light truck
buyers, among other benefits, while being economically practicable for
manufacturers to achieve.
    Although Alternatives PC3LT5 and PC6LT8 would conserve more energy
and provide greater fuel savings benefits and carbon dioxide emissions
reductions, NHTSA currently estimates that those alternatives may
simply not be achievable for many manufacturers in the rulemaking time
frame, particularly given NHTSA's statutory restrictions on the
technologies we may consider when determining maximum feasible
standards. Additionally, compliance with those more stringent
alternatives would impose significant costs on individual consumers
without corresponding fuel savings benefits large enough to, on
average, offset those costs. Within that framework, NHTSA's analysis
suggests that the more stringent alternatives could push more
technology application than would be economically practicable, given
the rate of increase for the MYs 2024-2026 standards, given anticipated
baseline activity on which our standards will be building, and given a
realistic consideration of the rate of response industry is capable of
achieving. In contrast to Alternatives PC3LT5 and PC6LT8, Alternative
PC2LT4 comes at a cost we believe the market can bear, appears to be
much more achievable, and will still result in consumer net benefits on
average. The proposed alternative also achieves large fuel savings
benefits and significant reductions in carbon dioxide emissions. NHTSA
tentatively concludes Alternative PC2LT4 is a better choice than PC3LT5
and PC6LT8 given these factors.
    The following text will walk through the four statutory factors in
more detail and discuss NHTSA's decision-making process more
thoroughly. The tentative balancing of factors presented here
represents NHTSA's thinking at the present time, based on all of the
information presented in the record for this proposal. NHTSA
acknowledges that a different balancing may turn out to be appropriate
for the final rule depending on information that arrives between now
and then, both through the public comment process and otherwise. NHTSA
seeks comment on this discussion and NHTSA's tentative conclusions.
    For context and the reader's reference, here again are the
regulatory alternatives among which NHTSA has tentatively chosen
maximum feasible CAFE standards for MYs 2027-2032, representing
different annual rates of stringency increase over the required levels
in MY 2026:

Table V-1--Regulatory Alternatives Under Consideration for MYs 2027-2032
                     Passenger Cars and Light Trucks
------------------------------------------------------------------------
                                           Passenger car    Light truck
                                            stringency      stringency
          Name of  alternative              increases,      increases,
                                            year- over-   year-over-year
                                             year (%)           (%)
------------------------------------------------------------------------
No-Action Alternative...................             n/a             n/a
Alternative PC1LT3......................               1               3
Alternative PC2LT4 (Preferred                          2               4
 Alternative)...........................
Alternative PC3LT5......................               3               5

Alternative PC6LT8......................               6               8
------------------------------------------------------------------------

    In evaluating the statutory factors to determine maximum feasible
standards, EPCA's overarching purpose of energy conservation suggests
that NHTSA should begin with the need of the U.S. to conserve energy.
According to the analysis presented in Section IV and in the
accompanying PRIA, Alternative PC6LT8 is estimated to save consumers
the most in fuel costs. Even in the rulemaking time frame of MYs 2027-
2032, when many forces other than CAFE standards will foreseeably be
driving higher rates of passenger car and light truck electrification,
NHTSA believes that gasoline will still likely be the dominant fuel
used in LD transportation. This means that consumers, and the economy
more broadly, remain subject to fluctuations in gasoline price that
impact the cost of travel and, consequently, the demand for mobility.
The American economy is largely built around the availability of
affordable personal transportation. Vehicles are long-lived assets, and
the long-term price uncertainty and volatility of petroleum prices
still represents a risk to consumers. By increasing the fuel economy of
vehicles in the marketplace, more stringent CAFE standards help to
better insulate consumers, and the economy more generally, against
these risks over longer periods of time. Fuel economy improvements that
reduce demand are an effective hedging strategy against price
volatility, because gasoline prices are linked to global oil prices.
Continuing to reduce the amount of money that consumers spend on
vehicle fuel thus remains an important consideration for the need of
the U.S. to conserve energy. Additionally, by reducing U.S.
participation in global oil markets, fuel economy standards also
improve U.S. energy security and our national balance of payments.
Again, by reducing the most fuel consumed, Alternative PC6LT8 would
likely best serve the need of the U.S. to conserve energy in these
respects.
    With regard to pollution effects, Alternative PC6LT8 would also
result in the greatest reduction in CO2 emissions over time,
and thus have the largest (relative) impact on climate change. The
effects of other pollutants are more mixed--while the emissions of
NOX and PM2.5 eventually decrease over time, with
effects being greater as stringency increases, SOX emissions
increase in all action alternations as compared to the No-Action
Alternative, again with effects being greater as stringency
increases.\578\ Chapter 8.5 and 8.6 of the PRIA discuss estimated
environmental effects of the regulatory alternatives in more detail.
---------------------------------------------------------------------------

    \578\ We note also that some of the increase in certain
pollutants, notably SOX, results from estimated increases
in electricity usage over time, as a result of greater
electrification in the fleet, both in the baseline/No-Action
Alternative and in the later years of the rulemaking analysis, 2040-
2050. While 49 U.S.C. 32902(h) prohibits NHTSA from considering the
fuel economy of BEVs and the electric-only-operation fuel economy of
PHEVs during the rulemaking time frame, NHTSA believes it would be
remiss to fail to account for the emissions consequences of the
energy consumed to power those vehicles. Fuel economy and emissions
consequences are actually different things for purposes of this
proposal and analysis--fuel economy is simply an input to
calculating manufacturer compliance positions, while emissions are
estimated based on estimated on-road vehicle use. Emissions are
affected by fuel economy, but they are not literally fuel economy.
Moreover, as explained, these specific emissions effects from
greater electrification are extremely small, and even if the agency
retained ``standard setting'' constraints through MY 2050, the
effects would not be significant enough to change the agency's
tentative determination of which regulatory alternative is maximum
feasible for the rulemaking time frame. NHTSA notes that recent
projections available since NHTSA finished modeling for this
proposal show notable decreases in power sector emissions that would
likely affect the CAFE Model emissions result. NHTSA intends to
analyze those projections and update them for the final rule.
Finally, NHTSA notes that power sector emissions projections using
more up-to-date data do not project this increase in SOX
emissions.
---------------------------------------------------------------------------

    These results are a direct consequence of the input assumptions
used for this analysis, as well as the uncertainty surrounding these
assumptions. However, both relative and absolute effects for
NOX, PM2.5, and SOX under each
regulatory alternative are quite small in the context of overall U.S.
emissions of these pollutants, and even in the context of U.S.
transportation sector emissions of these pollutants. CAFE standards are
not a primary driver for these pollutants; the estimated effects
instead come largely from potential changes in travel demand that may
result from improved fuel economy, rather than from the standards
themselves. NHTSA would thus say, generally speaking, that Alternative
PC6LT8 likely best meets the need of the U.S. to conserve energy in
terms of environmental effects, because it saves the most fuel, which
consequently means that it (1) maximizes consumer savings on fuel
costs, (2) reduces a variety of pollutant emissions by the greatest
amount, and (3) most reduces U.S. participation in global oil markets,
with attendant benefits to energy security and the national balance of
payments.
    However, even though Alternative PC6LT8 may best meet the need of
the U.S. to conserve energy, NHTSA is concerned that it may be beyond
maximum feasible in the rulemaking time frame. NHTSA is arriving at the
current tentative conclusion based on the other factors that we
consider, because all of the statutory factors must be considered in
determining maximum feasible CAFE standards. The need of the U.S. to
conserve energy nearly always works in NHTSA's balancing to push
standards more stringent, while other factors may work in the opposite
direction.
    Specifically, based on the information currently available, NHTSA
is concerned that the more stringent regulatory alternatives considered
in this analysis may land past the point of economic practicability in
this time frame. In considering economic practicability, NHTSA tries to
evaluate where the tipping point in the balancing of factors might be
through a variety of metrics and considerations, examined in more
detail below. For example, if the amounts of technology or the per-
vehicle cost increases required to meet the standards appear to be
beyond what we believe the market could bear in the relevant time
frame; or sales and employment appear to be unduly impacted, NHTSA
could decide that the future standards represented by a regulatory
alternative under consideration may not be economically practicable.
    We underscore again that the modeling analysis does not dictate the

``answer,'' it is merely one source of information among others that
aids NHTSA's balancing of the standards. We similarly underscore that
there is no single bright line beyond which standards might be
economically impracticable, and that these metrics are not intended to
suggest one; they are simply ways to think about the information before
us. The discussion of trying to identify a ``tipping point'' is simply
an attempt to grapple with the information, and the ultimate decision
rests with the decision-maker's discretion.
    While the need of the U.S. to conserve energy may encourage NHTSA
to be more technology-forcing in its balancing, regulatory alternatives
that can only be achieved by the extensive application of advanced
technologies besides BEVs (that may have known or unknown consumer
acceptance issues) may not be economically practicable in the MY 2027-
2032 time frame and may thus be beyond maximum feasible. Technology
application can be considered as ``which technologies, and when''--both
the technologies that NHTSA's analysis suggests would be used, and how
that application occurs given manufacturers' product lifecycles. NHTSA
does not mean to preclude the possibility that future fuel economy
standards may be even more technology-forcing than the ones proposed
here, because we anticipate that, among other things, consumer
acceptance toward advanced fuel economy-improving technologies will
continue to grow, as it is clearly doing at the present time. One
important question would be how fast that consumer acceptance of
advanced technologies grows, which is difficult to know in advance with
much certainty. If consumer acceptance is outpaced by technological
developments, it is possible that there could be sales impacts
unforeseen by our analysis, and thus not accounted for in our decision-
making. It is crucially important to remember that NHTSA's decision-
making with regard to economic practicability and what standards are
maximum feasible overall must be made in the context of the 32902(h)
restrictions against considering the fuel economy of BEVs and the full
fuel economy of PHEVs. Our results comply with those restrictions, and
it is those results that inform NHTSA's decision-making.
    Additionally, as discussed in Section V.A, NHTSA is less certain in
this proposal that some of the more stringent alternatives are
technologically feasible, a point that was not a concern in prior
rulemakings due to the state of technology development at that time.
NHTSA has historically understood technological feasibility as
referring to whether a particular method of improving fuel economy is
available for deployment in commercial application in the MY for which
a standard is being established. While all of the technology in NHTSA's
analysis is already available for deployment, the statutory requirement
to exclude fuel economy improvements due to electrification from
consideration of maximum feasible standards means that NHTSA must focus
on technology available to improve the fuel economy of ICEs, and on the
remaining vehicles that are not yet anticipated to be fully electric
during the rulemaking time frame. When excluding various forms of
electrification, we believe that more stringent standards may not be
technologically feasible. NHTSA seeks comment on this question. NHTSA
also notes that whether or not such standards would be technologically
feasible, they would likely not be economically practicable (and thus
beyond maximum feasible).
    In terms of the levels of technology required and which
technologies those may be, NHTSA's analysis estimates manufacturers'
product ``cadence,'' representing them in terms of estimated schedules
for redesigning and ``freshening'' vehicles, and assuming that
significant technology changes will be implemented during vehicle
redesigns--as they historically have been. Once applied, a technology
will be carried forward to future MYs until superseded by a more
advanced technology. If manufacturers are already applying technology
widely and intensively to meet standards in earlier years, requiring
them to add yet more technology (which may be less available and/or
more expensive) in the MYs subject to the rulemaking may be less
economically practicable. Conversely, if the preceding MYs require less
technology, more technology during the rulemaking time frame may be
more economically practicable.
    The tables below illustrate how NHTSA has modeled that process of
manufacturers applying technologies to comply with different
alternative standards. The Draft TSD accompanying this proposal
described the technologies and corresponding input estimates (of, e.g.,
efficacy and cost) in detail in Chapter 3. The accompanying PRIA and
appendices provide extensive detail regarding the estimated application
of specific technologies to each manufacturer's fleets of passenger
cars and light trucks in each MY. Finally, the underlying model outputs
available on NHTSA's website provide estimates of the potential to
apply specific technologies to specific vehicle model/configurations in
each MY. We remind readers that the analysis represents estimates for
purposes of determining feasibility, and that it does not provide ``the
answer'' or mandate a specific technology path that industry must
follow.
    The following two tables show average incremental application
rates--that is, levels beyond those projected under the No-Action
Alternative--by regulatory alternative for selected technologies, given
the statutory constraints under which NHTSA must determine maximum
feasible CAFE standards. For example, Alternative PC1LT3 would require
hardly any technology application change for passenger cars, while
Alternative PC6LT8 would require an additional 37 percent of the fleet
to have strong hybrid technology and 49 percent to have advanced levels
of MR by MY 2032 and would reduce the percentage of vehicles with
advanced engines by 38 percentage points. Alternative PC2LT4 would
require strong hybrids to increase by 8 percentage points by MY 2032,
would decrease advanced engines by a similar amount, and would increase
advanced MR by 19 percentage points.

         Table V-2--Estimated Application of Selected Technologies Relative to No-Action Alternative, Passenger Cars, Standard Setting Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Technology                            Alternative             2022 (%)   2027 (%)   2028 (%)   2029 (%)   2030 (%)   2031 (%)   2032 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Strong Hybrid (all types).................  PC1LT3                           .........         1%         2%         3%         2%         3%         3%
PHEV (all types)..........................  PC1LT3                           .........          0          0          0          0          0          0
Advanced Engines..........................  PC1LT3                           .........         -1         -2         -3         -2         -3         -3
Advanced AERO.............................  PC1LT3                           .........          0          1          1          1          1          1
Advanced MR...............................  PC1LT3                           .........          1         -1          2          4          6          7

Strong Hybrid (all types).................  PC2LT4                           .........          2          4          7          8          8          8
PHEV (all types)..........................  PC2LT4                           .........          0          0          0          0          0          0
Advanced Engines..........................  PC2LT4                           .........         -2         -4         -7         -8         -8         -8
Advanced AERO.............................  PC2LT4                           .........          0          1          1          1          1          1
Advanced MR...............................  PC2LT4                           .........          2          3          6         12         15         19
Strong Hybrid (all types).................  PC3LT5                           .........          2          5          9         10         12         12
PHEV (all types)..........................  PC3LT5                           .........          0          0          0          0          0          0
Advanced Engines..........................  PC3LT5                           .........         -2         -5         -9        -10        -12        -12
Advanced AERO.............................  PC3LT5                           .........          0          2          2          2          2          2
Advanced MR...............................  PC3LT5                           .........          4         11         15         21         26         32
Strong Hybrid (all types).................  PC6LT8                           .........          2         13         20         25         31         37
PHEV (all types)..........................  PC6LT8                           .........          0          0          0          1          1          1
Advanced Engines..........................  PC6LT8                           .........         -2        -14        -20        -26        -33        -38
Advanced AERO.............................  PC6LT8                           .........          0         10         10         10         10         14
Advanced MR...............................  PC6LT8                           .........          4         12         16         23         33         49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Advanced Engines: Combined penetration of advanced cylinder deactivation, advanced turbo, variable compression ratio, high compression ratio, and diesel
  engines.\579\
Advanced AERO: Combined penetration of 15 and 20 percent aerodynamic improvement.
Advanced MR (mass reduction): Combined penetration of MR4 and MR5.

    For light trucks, Alternative PC1LT3 would require hardly any
change in technology application, while Alternative PC6LT8 would
require an additional 25 percent of the fleet to have strong hybrid
technology and 57 percent to have advanced levels of MR by MY 2032.
Alternative PC6LT8 would also reduce the percentage of vehicles with
advanced engines by 38 percentage points. Alternative PC2LT4 would
require strong hybrids to increase by 18 percentage points by MY 2032,
would increase PHEVs \580\ by 13 percentage points, would decrease
advanced engines by 25 percentage points, and would increase advanced
MR by 38 percentage points.
---------------------------------------------------------------------------

    \579\ Specifically, this includes technologies with the
following codes in the CAFE Model: TURBO0, TURBOE, TURBOD, TURBO1,
TURBO2, ADEACD, ADEACS, HCR, HRCE, HCRD, VCR, VTG, VTGE, TURBOAD,
ADSL, DSLI.
    \580\ We note again that PHEVs, for purposes of standard-setting
analysis and this discussion of potential maximum feasible CAFE
standards, are counted only in charge-sustaining mode, so that their
electric-only operation is not counted, as required by 49 U.S.C.
32902(h).
    \581\ Specifically, this includes technologies with the
following codes in the CAFE Model: TURBO0, TURBOE, TURBOD, TURBO1,
TURBO2, ADEACD, ADEACS, HCR, HRCE, HCRD, VCR, VTG, VTGE, TURBOAD,
ADSL, DSLI.

          Table V-3--Estimated Application of Selected Technologies Relative to No-Action Alternative, Light Trucks, Standard Setting Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Technology                            Alternative             2022 (%)   2027 (%)   2028 (%)   2029 (%)   2030 (%)   2031 (%)   2032 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Strong Hybrid (all types).................  PC1LT3                           .........         3%         9%        10%        11%        13%        15%
PHEV (all types)..........................  PC1LT3                           .........          2          2          3          3          3          5
Advanced Engines..........................  PC1LT3                           .........         -5        -11        -13        -14        -16        -19
Advanced AERO.............................  PC1LT3                           .........          0          1          1          1          1          1
Advanced MR...............................  PC1LT3                           .........          6          6          9          9         17         21
Strong Hybrid (all types).................  PC2LT4                           .........          3          9         11         13         16         18
PHEV (all types)..........................  PC2LT4                           .........          2          3          5          5          5          7
Advanced Engines..........................  PC2LT4                           .........         -5        -12        -15        -17        -21        -25
Advanced AERO.............................  PC2LT4                           .........          1          1          2          2          2          2
Advanced MR...............................  PC2LT4                           .........          7         10         14         16         23         28
Strong Hybrid (all types).................  PC3LT5                           .........          3         10         13         16         19         22
PHEV (all types)..........................  PC3LT5                           .........          2          2          4          5          5          7
Advanced Engines..........................  PC3LT5                           .........         -5        -13        -17        -20        -24        -29
Advanced AERO.............................  PC3LT5                           .........          1          2          2          2          2          2
Advanced MR...............................  PC3LT5                           .........         10         15         20         22         31         38
Strong Hybrid (all types).................  PC6LT8                           .........          3         11         14         16         20         25
PHEV (all types)..........................  PC6LT8                           .........          2          2          5          8          9         13
Advanced Engines..........................  PC6LT8                           .........         -6        -13        -20        -25        -29        -38
Advanced AERO.............................  PC6LT8                           .........          1          3          5          5          5          5
Advanced MR...............................  PC6LT8                           .........         10         15         21         25         39         57
--------------------------------------------------------------------------------------------------------------------------------------------------------
Advanced Engines: Combined penetration of advanced cylinder deactivation, advanced turbo, variable compression ratio, high compression ratio, and diesel
  engines.\581\
Advanced AERO: Combined penetration of 15 and 20 percent aerodynamic improvement.
Advanced MR: Combined penetration of MR4 and MR5.

    The estimated increases in technology application shown in the
preceding two tables are all computed relative to the No-Action
Alternative. As discussed above and in the TSD and PRIA accompanying
this proposal, the No-Action Alternative includes a considerable amount
of fuel-saving technology applied in response to (1) the baseline (set
in 2022) CAFE and CO2 standards, (2) fuel prices and
technology cost-effectiveness (which accounts for recently-developed
tax incentives), (3) the California Framework Agreements (albeit only
for some intervening MYs), and (4) ZEV mandates in place in California
and other States. The effects of this baseline application of
technology are not attributable to this action, and NHTSA has therefore
excluded these from our estimates of the incremental technology
application, benefits, and costs that could result from each action
alternative considered here. NHTSA's obligation is to understand and
evaluate the effects of potential future CAFE standards, as compared to
what is happening in the baseline. We realize that manufacturers face a
combination of regulatory requirements simultaneously, which is why
NHTSA seeks to account for those in its analytical baseline, and to
determine what the additional incremental effects of different
potential future CAFE standards would be, within the context of our
statutory restrictions.
    Additionally, for both passenger cars and light trucks, NHTSA notes
that in considering the various technology penetration rates for
fleets, readers (and NHTSA) must keep in mind that due to the statutory
restrictions, NHTSA's analysis considers these technologies as
applicable to the remaining ICE vehicles that have not yet electrified
for reasons reflected in the baseline. This means that the rates apply
to only a fraction of each overall fleet, and thus represent a higher
rate for that fraction.
    Another consideration for economic practicability is the extent to
which new standards could increase the average cost to acquire new
vehicles. Even though the underlying application of technology leads to
reduced fuel costs over the useful lives of the affected vehicles,
these per-vehicle cost changes provide both a measure of the degree of
effort faced by manufacturers to comply with CAFE standards, and also
the degree of adjustment, in the form of potential vehicle price
increases, that will ultimately be required of vehicle purchasers.
Because our analysis includes estimates of manufacturers' indirect
costs and profits, as well as civil penalties that some manufacturers
(as allowed under EPCA/EISA) might choose to pay in lieu of achieving
compliance with CAFE standards,\582\ we report cost increases as
estimated average increase in vehicle price (as MSRP).\583\ The
technology costs described here are what NHTSA elsewhere calls
``regulatory costs,'' which means the combination of additional costs
of technology added to meet the standards, plus any civil penalties
paid in lieu of meeting standards. NHTSA assumes for purposes of this