ATIS), aerodynamic components, vehicle light-weighting materials, and
Long Combination Vehicles (LCVs).
---------------------------------------------------------------------------

    \783\ Brecher, A., Epstein, A.K., & Breck, A. (2015, June).
Review and analysis of potential safety impacts of and regulatory
barriers to fuel efficiency technologies and alternative fuels in
medium- and heavy-duty vehicles. (Report No. DOT HS 812 159).
Washington, DC: National Highway Traffic Safety Administration.
---------------------------------------------------------------------------

    Chapter 1 provides an overview of the study's rationale,
background, and key objective, namely, to identify the technical and
operational/behavioral safety benefits and disbenefits of MD/HDVs
equipped with FE technologies and using emerging alternative fuels
(AFs). Recent MD/HDV national fleet crash safety statistical averages
are also provided for context, although no information exists in crash
reports relating to specific vehicle FE technologies and fuels. (NHTSA/
FARS and FMCSA/CSA databases do not include detailed information on
vehicle fuel economy technologies, since the state crash report forms
are not coded down to an individual fuel economy technology level).
    Chapters 2 and 3 are organized by clusters of functionally-related
FE technologies for vehicles and trailers (e.g., tire systems, ITS,
light-weighting materials, and aerodynamic systems) and alternative
fuels, which are described and their respective associated potential
safety issues are discussed. Chapter 2 summarizes the findings from a
comprehensive review of available technical and trade literature and
Internet sources regarding the benefits, potential safety hazards, and
the applicable safety regulations and standards for deployed FE
technologies and alternative fuels. Chapter 2 safety-relevant fuel-
specific findings include:
     Both CNG- and LNG-powered vehicles present potential
hazards, and call for well-known engineering and process controls to
assure safe operability and crashworthiness. However, based on the
reported incident rates of NGVs and the experiences of adopting fleets,
it appears that NGVs can be operated at least as safely as diesel MD/
HDVs.
     There are no safety contraindications to the large scale
fleet adoption of CNG or LNG fueled heavy duty trucks and buses, and
there is ample experience with the safe operation of large public
transit fleets. Voluntary industry standards and best practices suffice
for safety assurance, though improved training of CMV operators and
maintenance staff in natural gas safety of equipment and operating
procedures is needed.
     Observing CNG and LNG fuel system and maintenance facility
standards, coupled with sound design, manufacture, and inspection of
natural gas storage tanks will further reduce the potential for leaks,
tank ruptures, fires, and explosions.
     Biodiesel blends used as drop-in fuels have presented some
operational safety concerns dependent on blending fraction, such as
material compatibility, bio-fouling sludge accumulation, or cold-
weather gelling. However, best practices for biodiesel storage, and
improved gaskets and seals that are biodiesel resistant, combined with
regular maintenance and leak inspection schedules for the fuel lines
and components enable the safe use of biodiesel in newer MD/HDVs.
     Propane (LPG, or autogas) presents well-known hazards
including ignition (due to leaks or crash) that are

preventable by using Overfill Prevention Devices (OPDs), which
supplement the automatic stop-fill system on the fueling station side,
and pressure release devices (PRDs). Established best practices and
safety codes (e.g., NFPA) have proven that propane fueled MD/HDVs can
be as operationally safe as the conventionally-fueled counterparts.
     As the market penetration of hybrid and electric
drivetrain accelerates, and as the capacity and reliability of lithium
ion batteries used in Rechargeable Energy Storage Systems (RESS)
improve, associated potential safety hazards (e.g., electrocution from
stranded energy, thermal runaway leading to battery fire) have become
well understood, preventable, and manageable. Existing and emerging
industry technical and safety voluntary standards, applicable NHTSA
regulations and guidance, and the growing experience with the operation
of hybrid and electric MD/HDVs will enable the safe operation and
large-scale adoption of safer and more efficient power-train
electrification technologies.
    The safety findings from literature review pertaining to the
specific FE technologies implemented to date in the MD/HDV fleet
include:
     Telematics--integrating on-board sensors, video, and audio
alerts for MD/HDV drivers--offer potential improvements in both driver
safety performance and fuel efficiency. Both camera and non-camera
based telematics setups are currently integrated with available crash
avoidance systems (such as ESC, RSC, LDWS, etc.) and appear to be well
accepted by MD/HDV fleet drivers.
     Both experience abroad and the cited US studies of trucks
equipped with active speed limiters indicated a safety benefit, as
measured by up to 50 percent reduced crash rates, in addition to fuel
savings and other benefits, with good CMV driver acceptance. Any
negative aspects were small and avoidable if all the speed limitation
devices were set to the same speed, so there would be less need for
overtaking at highway speeds.
     No literature reports of adverse safety impacts were found
regarding implementation of on-board idle-reduction technologies in MD/
HDVs (such as automatic start-stop, direct-fired heaters, and APUs).
     There was no clear consensus from the literature regarding
the relative crash rates and highway safety impacts of LCVs, due to
lack of sufficient data and controls and inconsistent study
methodologies. Recent safety evaluations of LCVs and ongoing MAP-21
mandated studies will clarify and quantify this issue.
     Tire technologies for FE (including ATIS, TPMS, LRR and
single-wide tires) literature raised potential safety concerns
regarding lower stability or loss of control, e.g., when tire pressure
is uneven or a single wide tire blows out on the highway. However,
systems such as automated tire monitoring systems and stability
enhancing electronic systems (ABS, ESC, RSC) may compensate and
mitigate any adverse safety impacts.
     Aerodynamic technologies that offer significant fuel
savings have raised potential concerns about vehicle damage or injury
in case of detached fairings or skirts, although there were no
documented incidents of this type in the literature.
     Some light weighting materials may pose some fire safety
and crashworthiness hazards, depending on their performance in
structural or other vehicle subsystem applications (chassis, power-
train, crash box or safety cage). Some composites (fiberglass,
plastics, CFRC, foams) may become brittle on impact or due to
weathering from UV exposure or extreme cold. Industry has developed
advanced, high performance lightweight material options tailored to
their automotive applications, e.g., thermoplastics resistant to UV and
weathering. No examples of such lightweight material failures on MD/
HDVs were identified in the literature.
    Chapter 3 provides complementary inputs on the potential safety
issues associated with FE technologies and alternative fuels obtained
from Subject Matter Experts (SMEs). The broad cross-section of SMEs
consulted had experience with the operation of ``green'' truck and bus
fleets, were Federal program managers, or were industry developers of
FE systems for MD/HDVs. Safety concerns raised by the SMEs can be
prevented or mitigated by complying with applicable regulations and
safety standards and best practices, and are being addressed by
evolving technologies, such as electronic collision prevention devices.
Although SMEs raised some safety concerns, their experience indicates
that system- or fuel-specific hazards can be prevented or mitigated by
observing applicable industry standards, and by training managers,
operators and maintenance staff in safety best practices. Specific
safety concerns raised by SMEs based on their experience included:
     Alternative fuels did not raise major safety concerns, but
generally required better education and training of staff and
operators. There was a concern expressed regarding high pressure (4000
psi) CNG cylinders that could potentially explode in a crash scenario
or if otherwise ruptured. However, aging CNG fuel tank safety can be
assured by enforcing regulations such as FMVSS No. 304, and by periodic
inspection and end-of-life disposal and replacement. A propane truck
fleet manager stated that the fuel was as safe as or safer than
gasoline, and reported no safety issues with the company's propane, nor
with hybrid gasoline-electric trucks. OEMs of drivetrain hybridization
and electrification systems, including advanced Lithium Ion batteries
for RESS, indicated that they undergo multiple safety tests and are
designed with fail-safes for various misuse and abuse scenarios.
Integration of hybrid components downstream by bodybuilders in
retrofits, as opposed to new vehicles, was deemed a potential safety
risk. Another potential safety concern raised was the uncertain battery
lifetime due to variability of climate, duty-cycles, and aging. Without
state-of-charge indicators, this could conceivably leave vehicles
underpowered or stranded if the battery degrades and is not serviced or
replaced in a timely manner.
     ITS and telematics raised no safety concerns; on the
contrary, fleet managers stated that ``efficient drivers are safer
drivers.'' Monitoring and recording of driver behavior, combined with
coaching, appeared to reduce distracted and aggressive driving and
provided significant FE and safety benefits.
     A wide-base single tire safety concern was the decrease in
tire redundancy in case of a tire blowout at highway speeds. For LRRs,
a concern was that they could negatively affect truck stopping distance
and stability control.
     A speed-limiter safety concern was related to scenarios
when such trucks pass other vehicles on the highway instead of staying
in the right-hand lane behind other vehicles. By combining speed
limiters with driver training programs, overall truck safety could
actually improve, as shown by international practice.
     Aerodynamic systems' safety performance to date was
satisfactory, with no instances of on-road detaching. However, covering
underside or other components with aerodynamic fairings can make them
harder to inspect, such as worn lugs, CNG relief valve shrouds, wheel
covers, and certain fairings. Drivers and inspectors need to be able to
see through wheel covers and to be able to access lug nuts through
them. These covers must also be durable to withstand frequent road
abuse.

     For lightweighting materials, the safety concern raised
was lower crashworthiness (debonding or brittle fracture on impact) and
the potential for decreased survivability in vehicle fires depending on
the specific material choice and its application.
    The key finding from the literature review and SME interviews is
that there appear to be no major safety hazards preventing the adoption
of FE technologies, or the increased use of alternative fuels and
vehicle electrification. In view of the scarcity of hard data currently
available on actual highway crashes that can be directly or causally
attributed to adoption of FE technologies and/or alternative fuels by
MD/HDVs, and the limited experience with commercial truck and transit
bus fleets operations equipped with these technologies, it was not
possible to perform a quantitative, probabilistic risk assessment, or
even a semi-quantitative preliminary hazard analysis (PHA). Chapter 4
employs a deterministic scenario-based hazard analysis of potential
crash or other safety concerns identified from the literature review or
raised by subject matter experts (SMEs) interviewed (e.g., interfaces
with charging or refueling infrastructure). For each specific hazard
scenario discussed, the recommended prevention or mitigation options,
including compliance with applicable NHTSA or FMCSA regulations, and
voluntary industry standards and best practices are identified, along
with FE technology or fuel-specific operator training. SMEs safety
concerns identified in Sec 3.3 were complemented with actual incidents,
and developed into the hazard scenarios analyzed in Chapter 4.
    The scenario-based deterministic hazard analysis reflected not only
the literature findings and SMEs' safety concerns, but also real truck
or bus mishaps that have occurred in the past. Key hazard analysis
scenarios included: CNG-fueled truck and bus vehicle fires or
explosions due to tank rupture, when pressurized fuel tanks were
degraded due to aging or when PRDs failed; LNG truck crashes leading to
fires, or LNG refueling-related mishaps; the flammability or brittle
fracture issues related to lightweighting materials in crashes; reduced
safety performance for either LRR or wide-base tires; highway pile-ups
when LCVs attempt to pass at highway speeds; aerodynamic components
detaching while the vehicle traveled on a busy highway or urban
roadway; and fires resulting in overheated lithium ion batteries in
electric or hybrid buses. These hypothetical worst case scenarios
appear to be preventable or able to be mitigated by observing safety
regulations and voluntary standards, or with engineering and
operational best practices.
    Chapter 5 reviews and discusses the existing federal and state
regulatory framework for safely operating MD/HDVs equipped with FE
technologies or powered by alternative fuels. The review identifies
potential regulatory barriers to their large-scale deployment in the
national fleet that could delay achievement of desired fuel consumption
and environmental benefits, while ensuring equal or better safety
performance.
    Chapter 6 summarizes the major findings and recommendations of this
preliminary safety analysis of fuel efficiency technologies and
alternative fuels adopted by MD/HDVs. The scenario-based hazard
analysis, based on the literature review and experts' inputs, indicates
that MD/HDVs equipped with advanced FE technologies and/or using
alternative fuels have manageable potentially adverse safety impacts.
The findings suggest that the potential safety hazards identified
during operation, maintenance, and crash scenarios can be prevented or
mitigated by complying with safety regulations and voluntary standards
and industry best practices. The study also did not identify any major
regulatory barriers to rapid adoption of FE technologies and
alternative fuels by the MD/HDV fleet.
(5) Oak Ridge National Laboratory (ORNL) Research on Low Rolling
Resistance Truck Tires
    DOT's Federal Motor Carrier Safety Administration and NHTSA
sponsored a test program conducted by Oak Ridge National Laboratory to
explore the effects of tire rolling resistance levels on Class 8
tractor-trailer stopping distance performance over a range of loading
and surface conditions. The objective was to determine whether there is
a relationship between tire rolling resistance and stopping distance
for vehicles of this type. The overall results of this research suggest
that tire rolling resistance is not a reliable indicator of Class 8
tractor-trailer stopping distance. The correlation coefficients (R2
values) for linear regressions of wet and dry stopping distance versus
overall vehicle rolling resistance values did not meet the minimum
threshold for statistical significance for any of the test conditions.
Correlation between CRR and stopping distance was found to be
negligible for the dry tests for both loading conditions. While
correlation was higher for the wet testing (showing a slight trend in
which lower CRRs correspond to longer stopping distances), it still did
not meet the minimum threshold for statistical significance. In terms
of compliance with Federal safety standards, it was found that the
stopping distance performance of the vehicle with the four tire sets
studied in this research (with estimated tractor CRRs which varied by
33 percent), were well under the FMVSS No. 121 stopping distance
requirements.
(6) Additional Safety Considerations
    The agencies' considered the Organic Rankine Cycle waste heat
recovery (WHR) as a fuel saving technology in the rulemaking timeframe.
The basic approach of these systems is to use engine waste heat from
multiple sources to evaporate a working fluid through a heat exchanger,
which is then passed through a turbine or equivalent expander to create
mechanical or electrical power. The working fluid is then condensed as
it passes through a heat exchanger and returns to back to the fluid
tank, and pulled back to the flow circuit through a pump to continue
the cycle. Despite the promising performance of pre-prototype WHR
systems, manufacturers have not yet arrived at a consensus on which
working fluid(s) to be used in WHR systems to balance concerns
regarding performance, global warming potential (GWP), and safety.
Current working fluids have a high GWP (conventional refrigerant), are
expensive (low GWP refrigerant), are hazardous (ammonia, etc.), are
flammable (ethanol/methanol), or can freeze (water). One of the
challenges is determining how to seal the working fluid properly under
the vacuum condition with high temperature to avoid safety issues for
flammable/hazardous working fluids. Because of these challenges,
choosing a working fluid will be an important factor for system safety,
efficiency, and overall production viability. The agencies believe
manufacturers will require additional time and development effort to
assure that a working fluid that is both appropriate, given the noted
challenges, and has a low GWP for use in waste heat recovery systems.
Based on this and other factors, the analysis for the Preferred
Alternative assumes that WHR would not achieve a significant market
penetration for diesel tractor engines (i.e., greater than 5 percent)
until 2027, which would provide time for these considerations to be
addressed. The agencies assume no use of this technology in the HD
pickups and vans and vocational vehicle segments.

(7) The Agencies' Assessment of Potential Safety Impacts
    NHTSA and EPA considered the potential safety impact of
technologies that improve HD vehicle fuel efficiency and GHG emissions
as part of the assessment of regulatory alternatives. The safety
assessment of the technologies in this proposal was informed by two NAS
reports, an analysis of safety effects of HD pickups and vans using
estimates from the DOT report on the effect of mass reduction and
vehicle size on safety, and agency-sponsored safety testing and
research. The agencies considered safety from the perspective of both
direct effects and indirect effects.
    In terms of direct effects on vehicle safety, research from NAS and
Volpe, and direct testing of technologies like the ORNL tire work,
indicate that there are no major safety hazards associated with the
adoption of technologies that improve HD vehicle fuel efficiency and
GHG emissions or the increased use of alternative fuels and vehicle
electrification. The findings suggest that the potential safety hazards
identified during operation, maintenance, and crash scenarios can be
prevented or mitigated by complying with safety regulations and
voluntary standards and industry best practices. Tire testing showed
tire rolling resistance did not impact of Class 8 tractor-trailer
stopping distance for the tires tested. Also, because the majority of
HD pickup and van fleet are above 4,594 lbs, the vehicle mass reduction
in HD pickup and vans is estimated to reduce the net incidence of
highway fatalities. Taken together, these studies suggest that the fuel
efficiency improving technologies assessed in the studies can be
implemented with no degradation in overall safety.
    However, analysis anticipates that the indirect effect of the
proposed standards, by reducing the operating costs, would lead to
increased travel by tractor-trailers and HD pickups and vans and,
therefore, more crashes involving these vehicles.

X. Analysis of the Alternatives

    As discussed throughout this preamble, in developing this proposal
the agencies considered a number of regulatory alternatives that could
result in potentially fewer or greater GHG emission and fuel
consumption reductions than the program we are proposing. This section
summarizes the alternatives we considered and presents estimates of
technology costs, CO2 reductions, fuel savings, and other
costs and benefits associated with each alternative. The agencies
request comment on each of these alternatives, as well as other
potential levels of stringency and implementation timing. Note that
since the impacts of these alternatives differ among the various heavy-
duty vehicle categories, commenters are encouraged to address the
alternatives separately for each vehicle category.
    In developing alternatives, both agencies must consider a range of
stringency. NHTSA must consider EISA's requirement for the MD/HD fuel
efficiency program. In particular, 49 U.S.C. 32902(k)(2) and (3)
contain the following three requirements specific to the MD/HD vehicle
fuel efficiency improvement program: (1) The program must be ``designed
to achieve the maximum feasible improvement''; (2) the various required
aspects of the program must be appropriate, cost-effective, and
technologically feasible for MD/HD vehicles; and (3) the standards
adopted under the program must provide not less than four model years
of lead time and three model years of regulatory stability. In
considering these various requirements, NHTSA will also account for
relevant environmental and safety considerations.
    As explained in the Phase 1 rule, NHTSA has broad discretion in
balancing the above factors in determining the improvement that the
manufacturers can achieve. The fact that the factors may often be
conflicting gives NHTSA significant discretion to decide what weight to
give each of the competing policies and concerns and then determine how
to balance them--as long as NHTSA's balancing does not undermine the
fundamental purpose of the EISA: Energy conservation, and as long as
that balancing reasonably accommodates ``conflicting policies that were
committed to the agency's care by the statute.'' \784\
---------------------------------------------------------------------------

    \784\ Center for Biological Diversity v. National Highway
Traffic Safety Admin., 538 F.3d 1172, 1194 (9th Cir. 2008). For
further discussion see 76 FR 57198.
---------------------------------------------------------------------------

    EPA also has significant discretion in considering a range of
stringency. Section 202(a)(2) of the Clean Air Act requires only that
the standards ``take effect after such period as the Administrator
finds necessary to permit the development and application of the
requisite technology, giving appropriate consideration to the cost of
compliance within such period.'' This language affords EPA considerable
discretion in how to weight the critical statutory factors of emission
reductions, cost, and lead time. See 76 FR 57129-57130.
    As discussed in this Preamble's Sections II (Engines), III
(Tractors), IV (Trailers), V (Vocational Vehicles), And VI (Pickups And
Vans), although NHTSA and EPA are proposing Alternative 3 for each
vehicle category, we have also closely examined the potential
feasibility of Alternative 4 for each category, and specifically direct
commenters' attention to the analysis and discussions contained in
those sections for both Alternatives 3 and 4. As discussed in those
sections, if we reanalyze relevant existing information or receive
relevant comments or new information between the proposal and final
rule that supports a more accelerated implementation of the proposed
standards, the agencies may consider establishing final fuel
consumption and GHG standards at the Alternative 4 levels and timing if
we deem them to be maximum feasible and reasonable for NHTSA and EPA,
respectively. This Section X describes all of the alternatives
considered, and provides context for the relative stringency, costs,
and benefits associated with Alternatives 3 and 4, as compared to the
other alternatives. The agencies seek comment on all of the
alternatives, as well as whether we should consider more, fewer or
different alternatives for the final rule analysis.

A. What are the alternatives that the Agencies considered?

    The five alternatives below represent a broad range of potential
stringency levels, and thus a broad range of associated technologies,
costs and benefits for a HD vehicle fuel efficiency and GHG emissions
program. All of the alternatives were modeled using the same
methodologies described in Chapter 5 of the draft RIA. The alternatives
in order of increasing fuel efficiency and GHG emissions reductions are
as follows:
(1) Alternative 1: No Action (The Baseline for Phase 2)
    OMB guidance regarding regulatory analysis indicates that proper
evaluation of the benefits and costs of regulations and their
alternatives requires agencies to identify a baseline:

``You need to measure the benefits and costs of a rule against a
baseline. This baseline should be the best assessment of the way the
world would look absent the proposed action. The choice of an
appropriate baseline may require consideration of a wide range of
potential factors, including:
     Evolution of the market,
     changes in external factors affecting expected benefits
and costs,

     changes in regulations promulgated by the agency or other
government entities, and
     the degree of compliance by regulated entities with other
regulations.

It may be reasonable to forecast that the world absent the regulation
will resemble the present. If this is the case, however, your baseline
should reflect the future effect of current government programs and
policies. For review of an existing regulation, a baseline assuming no
change in the regulatory program generally provides an appropriate
basis for evaluating regulatory alternatives. When more than one
baseline is reasonable and the choice of baseline will significantly
affect estimated benefits and costs, you should consider measuring
benefits and costs against alternative baselines. In doing so you can
analyze the effects on benefits and costs of making different
assumptions about other agencies' regulations, or the degree of
compliance with your own existing rules. In all cases, you must
evaluate benefits and costs against the same baseline. You should also
discuss the reasonableness of the baselines used in the sensitivity
analyses. For each baseline you use, you should identify the key
uncertainties in your forecast.'' 785

    \785\ OMB Circular A-4, September 17, 2003. Available at http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

    A no-action alternative is also required as a baseline against
which to measure environmental impacts of the proposed standards and
alternatives. NHTSA, as required by the National Environmental Policy
Act, is documenting these estimated impacts in the draft EIS published
with this proposed rule.\786\
---------------------------------------------------------------------------

    \786\ NEPA requires agencies to consider a ``no action''
alternative in their NEPA analyses and to compare the effects of not
taking action with the effects of the reasonable action alternatives
to demonstrate the different environmental effects of the action
alternatives. See 40 CFR 1502.2(e), and 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 analysis 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
National Environmental Policy Act Regulations, 46 FR 18026 (1981)
(emphasis added).
---------------------------------------------------------------------------

    As discussed later in this section, the agencies are requesting
comment on Alternative 1 in order to ensure an appropriate analytical
baseline (also termed `reference case') for the Phase 2 rulemaking.
Alternative 1 is an analytical tool, but, as discussed below, no new
standards beyond Phase 1 is not a potential outcome of the Phase 2
rulemaking, as that outcome would not meet the requirements of either
EISA or the CAA.
    The No Action Alternative for today's analysis, alternatively
referred to as the ``baseline'' or ``reference case,'' assumes that the
agencies would not issue new rules regarding MD/HD fuel efficiency and
GHG emissions. That is, this alternative assumes that the Phase 1 MD/HD
fuel efficiency and GHG emissions program's model year 2018 standards
would be extended indefinitely and without change.
    The agencies recognize that there are a number of factors that
create uncertainty in projecting a baseline against which to compare
the future effects of the proposed action and the remaining
alternatives. The composition of the future fleet--such as the relative
position of individual manufacturers and the mix of products they each
offer--cannot be predicted with certainty at this time. As reflected,
in part, by the market forecast underlying the agencies' analysis, we
anticipate that the baseline market for medium- and heavy-duty vehicles
will continue to evolve within a competitive market that responds to a
range of factors. Additionally, the heavy-duty vehicle market is
diverse, as is the range of vehicle purchasers.
    Heavy-duty vehicle manufacturers have reported that their
customers' purchasing decisions are influenced by their customers' own
determinations of minimum total cost of ownership, which can be unique
to a particular customer's circumstances. For example, some customers
(e.g., less-than-truckload or package delivery operators) operate their
vehicles within a limited geographic region and typically own their own
vehicle maintenance and repair centers within that region. These
operators tend to own their vehicles for long time periods, and
sometimes for the entire service life of the vehicle. Their total cost
of ownership is influenced by their ability to better control their own
maintenance costs, and thus they can afford to consider fuel efficiency
technologies that have longer payback periods, outside of the vehicle
manufacturer's warranty period. Other customers (e.g. truckload or
long-haul operators) tend to operate cross-country, and thus must
depend upon truck dealer service centers for repair and maintenance.
Some of these customers tend to own their vehicles for about four to
seven years, so that they typically do not have to pay for repair and
maintenance costs outside of either the manufacturer's warranty period
or some other extended warranty period. Many of these customers tend to
require seeing evidence of fuel efficiency technology payback periods
on the order of 18 to 24 months before seriously considering evaluating
a new technology for potential adoption within their fleet (NAS 2010,
Roeth et al. 2013, Klemick et al. 2014). Purchasing decisions, however,
are not based exclusively on payback period, but also include the
considerations discussed in this section. For the baseline analysis,
the agencies use payback period as a proxy for all of these
considerations, and therefore the payback period for the baseline
analysis is shorter than the payback period industry uses as a
threshold for the further consideration of a technology.
    Purchasers of HD pickups and vans wanting better fuel efficiency
will demand that fuel consumption improvements pay back within
approximately one to three years, but not all purchasers fall into this
category. Some HD pickup and van owners accrue relatively few vehicle
miles traveled per year, such that they may be less likely to adopt new
fuel efficiency technologies, while other owners who use their
vehicle(s) with greater intensity may be even more willing to pay for
fuel efficiency improvements. Regardless of the type of customer, their
determination of minimum total cost of ownership involves the customer
balancing their own unique circumstances with a heavy-duty vehicle's
initial purchase price, availability of credit and lease options,
expectations of vehicle reliability, resale value and fuel efficiency
technology payback periods. The degree of the incentive to adopt
additional fuel efficiency technologies also depends on customer
expectations of future fuel prices, which directly impacts customer
expectations of the payback period.
    Another factor the agencies considered is that other federal and
state-level policies and programs are specifically aimed at stimulating
fuel efficiency technology development and deployment. Particularly
relevant to this sector are DOE's 21st Century Truck Partnership, EPA's
voluntary SmartWay Transport program, and California's AB32 fleet
requirements.787 788 789 The future availability of more
cost-effective technologies to reduce fuel consumption could provide
manufacturers an incentive to produce

more fuel-efficient medium- and heavy-duty vehicles, which in turn
could provide customers an incentive to purchase these vehicles. The
availability of more cost-effective technologies to reduce fuel
consumption could also lead to a substitution of less cost-effective
technologies, where overall fuel efficiency could remain fairly flat if
buyers are less interested in fuel consumption improvements than in
reduced vehicle purchase prices and/or improved vehicle performance
and/or utility.
---------------------------------------------------------------------------

    \787\ http://energy.gov/eere/vehicles/vehicle-technologies-office-21st-century-truck.
    \788\ http://www.epa.gov/smartway/.
    \789\ State of California Global Warming Solutions Act of 2006
(Assembly Bill 32, or AB32).
---------------------------------------------------------------------------

    Although we have estimated the cost and efficacy of fuel-saving
technologies assuming performance and utility will be held constant,
some uncertainty remains regarding whether these conditions will
actually be observed. In particular, we have assumed payload will be
preserved (and possibly improved via reduced vehicle curb weight);
however, some fuel-saving technologies, such as natural gas fueled
vehicles and hybrid electric vehicles, could reduce payload via
increased curb weight due to the fuel tanks or added electrical
machine, batteries and controls. It is also possible that under
extended high power demand resulting from a vehicle towing up a road
grade, certain types of hybrid powertrains could experience a temporary
loss of towing capacity if the capacity of the hybrid's energy storage
device (e.g., batteries, hydraulic accumulator) is insufficient for the
extended power demand. We have also assumed that fuel-saving
technologies will be no more or less reliable than technologies already
in production. However, if manufacturers pursue risky technologies or
if the agencies provide insufficient lead-time to fully develop new
technologies, they could prove to be less reliable, perhaps leading to
increased repair costs and out-of-service time. This was observed as an
unintended consequence of certain manufacturers' initial introduction
of certain emissions control technologies to meet EPA's most stringent
heavy-duty engine standards. If the fuel-saving technologies considered
here ultimately involve similar reliability problems, overall costs
will be greater than we have estimated. We have assumed drivers will be
as accepting of new fuel-saving technologies as they are of
technologies already in service. However, drivers could be less
accepting of newer technologies--particularly any which must be
deployed manually. Except for increased costs to replace more efficient
tires, we have assumed that routine maintenance costs will not increase
or decrease. However, maintenance of new technologies could involve
unique tools and parts. Therefore, maintenance costs could increase,
and maintenance could involve increased vehicle out-of-service time. On
the other hand new technologies can sometimes prove to be more reliable
and require less maintenance than the technologies they replace. One
example of this is the auxiliary power unit (APU) frequently installed
on heavy-duty sleeper cab tractors. In the past these have been
typically powered by small nonroad diesel engines that can require more
frequent maintenance than the main engine of the tractor itself.
However, more recently, as electric battery technology has advanced,
some tractor manufacturers have introduced battery APUs instead of
engine-driven APUs. A comparison of recent sales of small engine driven
APUs versus battery APUs suggests that customers may prefer battery
APUs,\790\ and some operators and tractor dealerships have also told
the agencies that the decrease in routine maintenance was an important
factor in purchase decisions in favor of battery APUs. Again, insofar
as these unaccounted-for costs or savings actually occur, overall costs
could be larger or smaller than we have estimated. We have also applied
the EIA's AEO estimates of future fuel prices; however, heavy-duty
vehicle customers could have different expectations about future fuel
prices, and could therefore be more inclined or less inclined to apply
new technology to reduce fuel consumption than might be expected based
on EIA's forecast. We expect that vehicle customers will be uncertain
about future fuel prices, and that this uncertainty will be reflected
in the degree of enthusiasm to apply new technology to reduce fuel
consumption.
---------------------------------------------------------------------------

    \790\ Confidence Report: Idle-Reduction Solutions, North
American Council for Freight Efficiency, Lee, Tessa, 2014, p. 13.
---------------------------------------------------------------------------

    Considering all of these factors, the agencies have approached the
definition of the No Action Alternative separately for each vehicle and
engine category covered by today's proposal.
    For trailers, the agencies considered two No Action alternatives to
cover a nominal range of uncertainty. The trailer category is unique in
the context of this rulemaking because it is the only heavy-duty
category not regulated under Phase 1. In both No Action cases, the
agencies projected that the combination of EPA's voluntary SmartWay
program, DOE's 21st Century Truck Partnership, California's AB32
trailer requirements for fleets, and the potential for significantly
reduced operating costs should result in continuing improvement to new
trailers. Taking this into account, the agencies project that in 2018,
50 percent of new 53' dry van and reefer trailers would have
technologies qualifying for the SmartWay label (5 percent aerodynamic
improvements and lower rolling resistance tires) and 50 percent would
have automatic tire inflation systems to maintain optimal tire
pressure. We also project that adoption of those same technologies
would increase 1 percent per year until each technology is being used
on 60 percent of new trailers. In the first case, Alternative 1a, this
means that the agencies project that in the absence of new standards,
the new trailer fleet technology would stabilize in 2027 to a level of
60 percent adoption in 2027 for the No Action alternative. In the
second case, Alternative 1b, the agencies projected that the fraction
of the in-use fleet qualifying for SmartWay would continue to increase
beyond 2027 as older trailers are replaced by newer trailers. We
projected that these improvements would continue until 2040 when 75
percent of new trailers would be assumed to include skirts.
    For vocational vehicles, the agencies considered one No Action
alternative. For the vocational vehicle category the agencies
recognized that these vehicles tend to operate over fewer vehicle miles
travelled per year. Therefore, the projected payback periods for fuel
efficiency technologies available for vocational vehicles are generally
longer than the payback periods the agencies consider likely to lead to
their adoption based solely on market forces. This is especially true
for vehicles used in applications in which the vehicle operation is
secondary to the primary business of the company using the vehicle. For
example, since the fuel consumption of vehicles used by utility
companies to repair power lines would generally be a smaller cost
relative to the other costs of repairing lines, fuel saving
technologies would generally not be as strongly demanded for such
vehicles. Thus, the agencies project that fuel-saving technologies
would either not be applied or only be applied as a substitute for more
expensive fuel efficiency technologies, except as necessitated by the
Phase 1 fuel consumption and GHG standards.
    For tractors, the agencies considered two No Action alternatives to
cover a nominal range of uncertainty. For Alternative 1a the agencies
project that fuel-saving technologies would either not be applied or
only be applied as a substitute for more expensive fuel efficiency
technologies to tractors (thereby enabling manufacturers to offer
tractors that are less expensive to

purchase), except as necessitated by the Phase 1 fuel consumption and
GHG standards. In Alternative 1b the agencies estimated that some
available technologies would save enough fuel to pay back fairly
quickly--within the first six months of ownership. The agencies
considered a range of information to formulate these two baselines for
tractors.
    Both public \791\ and confidential historical information shows
that tractor trailer fuel efficiency improved steadily through
improvements in engine efficiency and vehicle aerodynamics over the
past 40 years, except for engine efficiency which decreased or was flat
between 2000 and approximately 2007 as a consequence of incorporating
technologies to meet engine emission regulations. Today vehicle
manufacturers, the Federal Government, academia and others continue to
invest in research to develop fuel efficiency improving technologies
for the future.
---------------------------------------------------------------------------

    \791\ Committee to Assess Fuel Economy Technologies for Medium-
and Heavy-Duty Vehicles; National Research Council; Transportation
Research Board (2010). ``Technologies and Approaches to Reducing the
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (hereafter,
``NAS 2010''). Washington, DC. The National Academies Press.
Available electronically from the National Academies Press Web site
at http://www.nap.edu/catalog.php?record_id=12845 (last accessed
September 10, 2010).
---------------------------------------------------------------------------

    There is also evidence that manufacturers have, in the past,
applied technologies to improve fuel efficiency absent a regulatory
requirement to do so. Some manufacturers have even taken regulatory
risk in order to increase fuel efficiency; in the 1990s, when fuel was
comparatively inexpensive, some tractor manufacturers designed tractor
engine controls to determine when the vehicle was not being emissions
tested and, under such conditions, shift to more fuel-efficient
operation even though doing so caused the vehicles to violate federal
standards for NOX emissions. Also, some manufacturers have
recently expressed concern that the Phase 1 tractor standards do not
credit them for fuel-saving technologies they had already implemented
before the Phase 1 standards were adopted.
    In public meetings and in meetings with the agencies, the trucking
industry stated that fuel cost for tractors is the number one or number
two expense for many operators, and therefore is a very important
factor for their business. However, the pre-Phase 1 market suggests
that, tractor manufacturers and operators could be slow to adopt some
new technologies, even where the agencies have estimated that the
technology would have paid for itself within a few months of operation.
Tractor operators have told the agencies they generally require
technologies to be demonstrated in their fleet before widespread
adoption so they can assess the actual fuel savings for their fleet and
any increase in cost associated with effects on vehicle operation,
maintenance, reliability, mechanic training, maintenance and repair
equipment, stocking unique parts and driver acceptance, as well as
effects on vehicle resale value. Tractor operators have publicly stated
they would consider conducting an assessment of technologies when
provided with data that show the technologies may payback costs through
fuel savings within 18 to 24 months, based on their assumptions about
future fuel costs. In these cases, an operator may first conduct a
detailed paper study of anticipated costs and benefits. If that study
shows likely payback in 18 to 24 months for their business, the fleet
may acquire one or several tractors with the technology to directly
measure fuel savings, costs and driver acceptance for their fleet.
Small fleets may not have resources to conduct assessments to this
degree and may rely on information from larger fleets or observations
of widespread acceptance of the technology within the industry before
adopting a technology. This uncertainty over the actual fuel savings
and costs and the lengthy process to assess technologies significantly
slows the pace at which fuel efficiency technologies are adopted.
    The agencies believe that using the two baselines addresses the
uncertainties we have identified for tractors. The six-month payback
period of Alternative 1b reflects the agencies' consideration of
factors, discussed above, that could limit--yet not eliminate--
manufacturers' tendencies to voluntarily improve fuel consumption. In
contrast, Alternative 1a reflects a baseline for vehicles other than
trailers wherein manufacturers either do not apply fuel efficiency
technologies or only apply them as a substitute for more expensive fuel
efficiency technologies, except as necessitated by the Phase 1 fuel
consumption and GHG standards.
    For HD pickups and vans, the agencies considered two No Action
alternatives to cover a nominal range of uncertainty. In Alternative 1b
the agencies considered additional technology application, which
involved the explicit estimation of the potential to add specific fuel-
saving technologies to each specific vehicle model included in the
agencies' HD pickup and van fleet analysis, as discussed in Chapter VI.
Estimated technology application and corresponding impacts depend on
the modeled inputs. Also, under this approach a manufacturer that has
improved fuel consumption and GHG emissions enough to achieve
compliance with the standards is assumed to apply further improvements,
provided those improvements reduce fuel outlays by enough (within a
specified amount of time, the payback period) to offset the additional
costs to purchase the new vehicle. These calculations explicitly
account for and respond to fuel prices, vehicle survival and mileage
accumulation, and the cost and efficacy of available fuel-saving
technologies. Therefore, all else being equal, more technology is
applied when fuel prices are higher and/or technology is more cost-
effective. Manufacturers of HD pickups and vans have reported to the
agencies that buyers of these vehicles consider the total cost of
vehicle ownership, not just new vehicle price, and that manufacturers
plan as if buyers will expect fuel consumption improvements to ``pay
back'' within periods ranging from approximately one to three years.
For example, some manufacturers made decisions to introduce more
efficient HD vans and HD pickup transmissions before such vehicles were
subject to fuel consumption and/or GHG standards. However, considering
factors discussed above that could limit manufacturers' tendency to
voluntarily improve HD pickup and van fuel consumption, Alternative 1b
applies a 6-month payback period. In contrast for Alternative 1a the
agencies project that fuel-saving technologies would either not be
applied or only be applied as a substitute for more expensive fuel
efficiency technologies, except as necessitated by the Phase 1 fuel
consumption and GHG standards. The Method A sensitivity analysis
presented above in Section VI also examines other payback periods. In
terms of impacts under reference case fuel prices, the payback period
input plays a more significant role under the No-Action Alternatives
(defined by a continuation of model year 2018 standards) than under the
more stringent regulatory alternatives described next.
(2) Alternative 2: Less Stringent Than the Preferred Alternative
    For vocational vehicles and combination tractor-trailers,
Alternative 2 represents a stringency level which is approximately half
as stringent overall as the preferred alternative. The agencies
developed Alternative 2 to consider a continuation of the Phase 1
approach of applying off-the-shelf technologies rather than requiring
the development of new technologies or

fundamental improvements to existing technologies. For tractors and
vocational vehicles, this also involved less integrated optimization of
the vehicles and engines. Put another way, Alternative 2 is not
technology-forcing. See, e.g., Sierra Club v. EPA, 325 F. 3d 374, 378
(D.C. Cir. 2003) (under a technology-forcing provision, EPA ``must
consider future advances in pollution control capability''); see also
similar discussion in Husqvarna AB v. EPA, 254 F. 3d 195, 201 (D.C.
Cir. 2001).
    The agencies' decisions regarding which technologies could be
applied to comply with Alternative 2 considered not only the use of
off-the shelf technologies, but also considered other factors as well,
such as how broadly certain technologies fit in-use applications and
regulatory structure. The resulting Alternative 2 could be met with
most of the same technologies the agencies project could be used to
meet the proposed standards, although at lower application rates.
Alternative 2 is estimated to be achievable without the application of
some technologies, at any level. These and other differences are
described below by category.
    The agencies project that Alternative 2 combination tractor
standards could be met by applying lower adoption rates of the
projected technologies for Alternative 3. This includes a projection of
slightly lower per-technology effectiveness for Alternative 2 versus 3.
Alternative 2 also assumes that there would be little optimization of
combination tractor powertrains.
    The agencies project that the Alternative 2 vocational vehicle
standard could be met without any use of strong hybrids. Rather, it
could be met with lower adoption rates of the other technologies that
could be used to meet Alternative 3, our proposed standards. This
includes a projection of slightly lower per-technology effectiveness
for Alternative 2 versus 3 and little optimization of vocational
vehicle powertrains.
    The Alternative 2 trailer standards would apply to only 53-foot dry
and refrigerated box trailers and could be met through the use of less
effective aerodynamic technologies and higher rolling resistance tires
versus what the agencies projected could be used to meet Alternative 3.
    As discussed above in Section VI.D., the HD pickup truck and van
alternatives are characterized by an annual required percentage change
(decrease) in the functions defining attribute-based targets for per-
mile fuel consumption and GHG emissions. Under the standards in each
alternative, a manufacturer's fleet would, setting aside any changes in
production mix, be required to achieve average fuel consumption/GHG
levels that increase in stringency every year relative to the standard
defined for MY2018 (and held constant through 2020) that establishes
fuel consumption/GHG targets for individual vehicles. A manufacturer's
specific fuel consumption/GHG requirement is the sales-weighted average
of the targets defined by the work-factor curve in each year.
Therefore, although the alternatives involve steady increases in the
functions defining the targets, stringency increases faced by any
individual manufacturer may not be steady if changes in the
manufacturer's product mix cause fluctuations in the average fuel
consumption and GHG levels required of the manufacturer. See Section
VI.D. for additional discussion of this topic. Alternative 2 represents
a 2.0 percent annual improvement through 2025 in fuel consumption/GHG
emissions relative to the work-factor curve in 2020. This would be 0.5
percent less stringent per year compared to the proposed standards of
Alternative 3.
    For HD pickups and vans the agencies project that most
manufacturers could comply with the standards defining Alternative 2 by
applying technologies similar to those that could be applied in order
to comply with the proposed standards, but at lower application rates
than could be necessitated by the proposed standards. The biggest
technology difference the agencies project between Alternative 2 and
the proposed standards of Alternative 3 would be that we project that
most manufacturers could meet the Alternative 2 standards without any
use of stop-start or other mild or strong hybrid technologies.
    Of course, these estimates depend not only on the stringency of the
standards defining this regulatory alternative, but also on other input
estimates, in particular the detailed composition of the agencies' HD
pickup and van market forecast; the agencies' estimates of the future
availability, cost, and efficacy of fuel-saving HD pickup and van
technologies; and the agencies' estimates of future fuel prices. Even
without changes to the standards defining this regulatory alternative,
changes to analysis inputs would lead to different estimates of the
extent to which various technologies might be applied under this
regulatory alternative.
    The agencies are not proposing Alternative 2 as a matter of both
policy and law. Based on our current analysis for each of the
subcategories, it presently appears that technically feasible alternate
standards are available that provide for greater emission reductions
and reduced fuel consumption, including the proposed standards. Such
alternative standards, including the proposed standards and potentially
Alternative 4, are feasible at reasonable cost, considering both per-
vehicle and per-engine cost, cost-effectiveness, and lead time.
Consequently, at this point the agencies do not believe that the modest
improvements in Alternative 2 would be appropriate or otherwise
reasonable under Section 202(a)(1) and (2) of the Clean Air Act, or
represent the ``maximum feasible improvement'' within the meaning of 49
U.S.C. 32902(k)(2).
(3) Alternative 3: Preferred Alternative and Proposed Standards
    The agencies are proposing Alternative 3 for HD engines, HD pickup
trucks and vans, Class 2b through Class 8 vocational vehicles, Class 7
and 8 combination tractors, and most categories of trailers. Details
regarding modeling of this alternative are included in Chapter 5 of the
draft RIA.
    Unlike the Phase 1 standards where the agencies projected that
manufacturers could meet the Phase 1 standards with off-the-shelf
technologies only, the agencies project that Alternative 3 standards
could be met through a combination of off-the-shelf technologies
applied at higher market penetration rates and new technologies that
are still in various stages of development and not yet in production.
Although this alternative is technology-forcing, it must be kept in
mind that the standards themselves are performance-based and thus do
not mandate any particular technology be used to meet the standards.
The agencies recognize that there is some uncertainty in projecting
costs and effectiveness for those technologies not yet available on the
market, but we do not believe, as discussed comprehensively in Sections
II, III, IV, V, and VI, that such uncertainty is not sufficient to
render Alternative 3 beyond the reasonable or maximum feasible level of
stringency for each of the vehicle categories covered by this program.
Given that all of the proposed standards are performance-based rather
than mandates of specific technologies, and given that the lead time
for the most stringent standards in Alternative 3 is greater than 10
years, the agencies believe that the performance that would be required
by these stringency levels of Alternative 3 would allow each
manufacturer to choose to develop

technology and apply it to their vehicles in a way that balances their
unique business constraints and reflects their specific market position
and customers' needs.
    We have described in detail above, and also in Chapter 2 of the
draft RIA, the precise bases for each of the proposed standards (that
is, for each segment covered under the program). For HD pickups and
vans, Alternative 3 represents a 2.5 percent compounded annual
improvement through 2027 in fuel consumption/GHG emissions relative to
the work-factor curve in 2020.
    Sections II through VI of this notice provide comprehensive
explanations of the consideration that the agencies gave to proposing
standards that are more accelerated than Alternative 3, based on the
agencies' projection of how such standards could be met through the
accelerated application of technologies and our reasons for concluding
that the identified technologies for each of the vehicle and engine
standards that constitute Alternative 3 represent the maximum feasible
(within the meaning of 49 U.S.C. 32902(k)) and reasonable (for purposes
of CAA section 202 (a)) based on all of the information available to
the agencies at the time of this proposal.
(4) Alternative 4: More Accelerated Than the Preferred Alternative
    As indicated by its description in the title above, Alternative 4
represents standards that are effective on a more accelerated timeline
in comparison to the timeline of the proposed standards in Alternative
3. The agencies believe that Alternative 4 could potentially be maximum
feasible and appropriate, but at this time the agencies have identified
sufficient uncertainty in the information that the agencies have
considered with respect to the technologies' readiness, effectiveness
and costs such that the agencies cannot yet conclude that Alternative 4
represents maximum feasible and appropriate standards. Accordingly,
although we are not proposing Alternative 4, we are requesting comment
on adopting some or all of Alternative 4 in the final rule. The
agencies would especially welcome data on the projected readiness,
effectiveness, and costs of technologies the agencies consider for
compliance with Alternative 4 standards, which in many cases are
identical to the technologies considered for the Alternative 3
standards. It would be especially helpful if commenters addressed each
category separately; namely, tractors and vocational vehicles and their
engines; trailers, and pickups and vans. The agencies would consider
adopting Alternative 4's stringencies and lead time for the final rule,
depending on the information and comments received in response to this
notice and based on additional consideration of the information we
already have in-hand.
    Alternatives 3 and 4 were both designed to achieve similar fuel
efficiency and GHG emission levels in the long term but with
Alternative 4 being accelerated in its implementation timeline.
Specifically, alternative 4 reflects the same or similar standard
stringency levels as alternative 3, but 3 years sooner (2 years for
heavy-duty pickups and vans), so that the final phase of the standards
would occur in MY 2024, or (for heavy duty pickups and vans) 2025.
    As discussed above and in the feasibility discussions in Sections
II-VI, we are not proposing Alternative 4. By accelerating the adoption
schedule, this option would result in several model years of
incrementally greater fuel consumption and GHG emission reductions than
Alternative 3, but it does raise concerns about adequacy of lead time.
The agencies have outstanding questions regarding relative risks and
benefits of Alternative 4 due to the timeframe envisioned by that
alternative.
    The agencies recognize the potential for larger net benefits if
Alternative 4 were selected, and we therefore welcome comments
addressing the feasibility and availability of relevant technologies in
the identified lead time. Commenters are particularly encouraged to
address all aspects of feasibility analysis, including effectiveness
and costs, the likelihood of developing available technologies to
achieve sufficient reliability within the proposed lead time, and the
extent to which the heavy-duty vehicle market would accept and utilize
the technology. Comments should ideally address these issues separately
for each type of technology, especially with respect to advanced
technologies like waste heat recovery systems and hybrid powertrains.
Although we summarize the specific differences below, readers are
encouraged to see Sections II through VI for more detailed descriptions
of how the agencies projected how manufacturers could implement certain
technologies in order to meet the standards of Alternative 4.
    The agencies project that Alternative 4 combination tractor
standards could be met by applying initially higher adoption rates of
the projected technologies for Alternative 3. This includes a
projection of slightly higher per-technology effectiveness for
Alternative 4 versus 3. Alternative 4 also assumes that there would be
more optimization of combination tractor powertrains and earlier market
penetration of engine waste heat recovery systems.
    The agencies project that the Alternative 4 vocational vehicle
standard could be met through earlier adoption rates of the same
technology packages projected for Alternative 3. This includes a
projection of slightly higher per-technology effectiveness for
Alternative 4 versus 3.
    The Alternative 4 trailer standards could be met through earlier
implementation of more effective aerodynamic technologies, including
the use of aerodynamic skirts and boat tails. This would be in addition
to implementing lower rolling resistance tires for nearly all trailers.
    HD pickup truck and van standards defining Alternative 4 represent
a 3.5 percent annual improvement in fuel consumption and GHG emissions
through 2025 relative to the work-factor curves in 2020. Of course,
this finding depends not only on the stringency of the standards
defining this regulatory alternative, but also on other input
estimates, in particular the detailed composition of the agencies' HD
pickup and van market forecast; the agencies' estimates of the future
availability, cost, and efficacy of fuel-saving HD pickup and van
technologies; and the agencies' estimates of future fuel prices. Even
without changes to the standards defining this regulatory alternative,
changes to analysis inputs will lead to different estimates of the
extent to which various technologies might be applied under this
regulatory alternative.
(5) Alternative 5: Even More Stringent Standards With No Additional
Lead-Time
    Alternative 5 represents even more stringent standards compared to
Alternatives 3 and 4, as well as the same implementation timeline as
Alternative 4. As discussed above and in the feasibility discussions in
Sections II-VI, we are not proposing Alternative 5 because we cannot
project that manufacturers can develop and introduce in sufficient
quantities the technologies that could be used to meet Alternative 5
standards. We believe that for some or all of the categories, the
Alternative 5 standards are technically infeasible within the lead time
allowed. We have not fully estimated costs for this alternative for
tractors and vocational vehicles because we believe that there would be
such substantial

additional costs related to pulling ahead the development of so many
additional technologies that we cannot accurately predict these costs.
We also believe this alternative could result in a decrease in the in-
use reliability and durability of new heavy-duty vehicles and that we
do not have the ability to accurately quantify the costs that would be
associated with such problems. Instead we merely note that costs would
be significantly greater than the estimated costs for Alternatives 3
and 4.

B. How do these alternatives compare in overall fuel consumption and
GHG emissions reductions and in benefits and costs?

    The following tables compare the overall fuel consumption and GHG
emissions reductions and benefits and costs of each of the regulatory
alternatives the agencies considered.
    Note that for tractors, trailers, pickups and vans the agencies
compared overall fuel consumption and GHG emissions reductions and
benefits and costs relative to two different baselines, described above
in the section on the No Action alternative. Therefore, for tractors,
trailers, pickups and vans two results are listed; one relative to each
baseline, namely Alternative 1a and Alternative 1b.
    Also note that the agencies analyzed pickup and van overall fuel
consumption and emissions reductions and benefits and costs using the
NHTSA's CAFE model (Method A). In addition, the agencies used EPA's
MOVES model to estimate pickup and van fuel consumption and emissions
and a cost methodology that applied vehicle costs in different model
years (Method B). In both cases, the agencies used the CAFE model to
estimate average per vehicle cost, and this analysis extended through
model year 2030.\792\ The agencies concluded that in these instances
the choice of baseline and the choice of modeling approach (Method A
versus Method B) did not impact the agencies' decision to propose
Alternative 3 as the preferred alternative and hence the proposed
standards for HD pickups and vans.
---------------------------------------------------------------------------

    \792\ Although the agencies have considered regulatory
alternatives involving standards increasing in stringency through,
at the latest, 2027, the agencies extended the CAFE modeling
analysis through model year 2030 rather than model year 2027 in
order to obtain more fully stabilized results given projected
product cadence, multiyear planning, and application of earned
credits.
---------------------------------------------------------------------------

    Table X-1 compares fuel savings, technology costs, avoided
emissions, total costs, and benefits for the above regulatory
alternatives as estimated under Method A. Table X-2 provides the same
comparisons for Method B. Subsequent tables summarize segment-specific
results and projections for longer-term impacts. The regulatory impact
analysis (RIA) accompanying today's notice presents more detailed
results of the agencies' analysis.
(1) Method A Tables

 Table X-1--Summary of Costs and Benefits Through MY 2029 by Alternative, Discounted at 3% (Relative to Baseline
                                                 1a), Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               11.7               18.3               22.3               24.8
Vocational Vehicles.................                5.6               18.4               24.3               38.5
Tractors/Trailers...................               88.1              138.4              151.7              196.8
                                     ---------------------------------------------------------------------------
    Total...........................              105.4              175.1              198.3              260.2
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.0                5.0                8.2                9.9
Vocational Vehicles.................                1.2                7.6               10.8               26.0
Tractors/Trailers...................                9.2               12.8               15.3               34.8
                                     ---------------------------------------------------------------------------
    Total...........................               13.4               25.4               34.3               70.6
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.0                4.8                5.9                6.6
Vocational Vehicles.................                1.7                6.1                8.1               13.1
Tractors/Trailers...................               40.7               62.7               67.9               87.7
                                     ---------------------------------------------------------------------------
    Total...........................               45.4               73.7               82.0              107.4
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.5                5.7                9.1               15.2
Vocational Vehicles.................                3.0                9.5               12.8               28.1
Tractors/Trailers...................               11.5               15.5               18.1               37.5
                                     ---------------------------------------------------------------------------
    Total...........................               18.0               30.8               40.0               80.8
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               17.2               27.0               33.0               36.7
Vocational Vehicles.................               12.7               31.2               39.7               60.2
Tractors/Trailers...................              142.5              217.5              236.7              304.2
                                     ---------------------------------------------------------------------------
    Total...........................              172.4              275.8              309.4              401.1
----------------------------------------------------------------------------------------------------------------

                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               13.7               21.3               23.9               21.5
Vocational Vehicles.................                9.6               21.7               26.9               32.1
Tractors/Trailers...................              131.0              202.0              218.7              266.7
                                     ---------------------------------------------------------------------------
    Total...........................              154.3              245.0              269.4              320.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

  Table X-2--Summary of Program Benefits and Costs Through MY 2029, Discounted at 3% (Relative to Baseline 1b),
                                                  Method A \a\
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                9.6               15.9               19.1               22.2
Vocational Vehicles.................                5.6               18.4               24.3               38.5
Tractors/Trailers...................               80.5              130.8              144.0              189.2
                                     ---------------------------------------------------------------------------
    Total...........................               95.6              165.1              187.4              250.0
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.5                5.0                7.2                9.7
Vocational Vehicles.................                1.2                7.6               10.8               25.9
Tractors/Trailers...................                8.9               12.5               15.0               34.4
                                     ---------------------------------------------------------------------------
    Total...........................               12.5               25.0               32.9               70.0
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.8                4.5                5.4                6.3
Vocational Vehicles.................                1.7                6.1                8.1               13.1
Tractors/Trailers...................               37.5               59.4               64.6               84.4
                                     ---------------------------------------------------------------------------
    Total...........................               41.9               70.1               78.2              103.8
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.8                5.5                7.8               10.4
Vocational Vehicles.................                3.0                9.5               12.8               28.0
Tractors/Trailers...................               11.2               15.2               17.7               37.2
                                     ---------------------------------------------------------------------------
    Total...........................               17.0               30.3               38.4               75.7
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               14.1               23.5               28.3               32.9
Vocational Vehicles.................               12.7               31.2               39.7               60.2
Tractors/Trailers...................              131.1              206.2              225.4              292.8
                                     ---------------------------------------------------------------------------
    Total...........................              157.9              260.9              293.3              385.9
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               11.3               18.0               20.4               22.5
Vocational Vehicles.................                9.6               21.7               26.9               32.1
Tractors/Trailers...................              119.9              191.0              207.6              255.6
                                     ---------------------------------------------------------------------------
    Total...........................              140.9              230.7              254.9              310.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    The following two tables summarize results for each of the segments
covered by today's proposal, discounted at 7 percent.

  Table X-3--Summary of Program Benefits and Costs Through MY 2029, Discounted at 7% (Relative to Baseline 1a),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                6.4                9.9               12.2               13.6
Vocational Vehicles.................                2.9                9.7               13.0               20.9
Tractors/Trailers...................               47.7               74.6               82.3              107.3
                                     ---------------------------------------------------------------------------
    Total...........................               57.0               94.2              107.5              141.8
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.1                3.4                5.7                6.9
Vocational Vehicles.................                0.8                5.0                7.3               17.8
Tractors/Trailers...................                6.3                8.7               10.5               23.9
                                     ---------------------------------------------------------------------------
    Total...........................                9.1               17.1               23.5               48.6
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.7                4.3                5.3                5.9
Vocational Vehicles.................                1.4                5.0                6.6               10.6
Tractors/Trailers...................               29.9               46.3               50.4               65.4
                                     ---------------------------------------------------------------------------
    Total...........................               34.0               55.6               62.3               81.8
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.4                3.8                6.2               10.1
Vocational Vehicles.................                1.8                6.1                8.4               19.0
Tractors/Trailers...................                7.6               10.3               12.1               25.5
                                     ---------------------------------------------------------------------------
    Total...........................               11.8               20.2               26.7               54.6
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               10.4               16.3               20.1               22.3
Vocational Vehicles.................                7.3               18.3               23.6               36.2
Tractors/Trailers...................               85.1              130.0              142.2              183.5
                                     ---------------------------------------------------------------------------
    Total...........................              102.9              164.6              185.8              242.1
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                8.1               12.4               13.9               12.2
Vocational Vehicles.................                5.5               12.2               15.2               17.2
Tractors/Trailers...................               77.5              119.7              130.1              158.0
                                     ---------------------------------------------------------------------------
    Total...........................               91.1              144.4              159.1              187.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

  Table X-4--Summary of Program Benefits and Costs Through MY 2029, Discounted at 7% (Relative to Baseline 1b),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                5.2                8.5               10.4               12.2
Vocational Vehicles.................                2.9                9.7               13.0               20.9
Tractors/Trailers...................               44.0               71.0               78.6              103.7
                                     ---------------------------------------------------------------------------
    Total...........................               52.2               89.2              102.0              136.8
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.7                3.4                4.9                6.7
Vocational Vehicles.................                0.8                5.0                7.3               17.8
Tractors/Trailers...................                6.0                8.4               10.3               23.7
                                     ---------------------------------------------------------------------------

    Total...........................                8.5               16.8               22.5               48.2
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.5                4.0                4.8                5.5
Vocational Vehicles.................                1.4                5.0                6.6               10.6
Tractors/Trailers...................               27.5               43.9               48.0               63.0
                                     ---------------------------------------------------------------------------
    Total...........................               31.4               52.9               59.4               79.1
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.9                3.7                5.3                7.1
Vocational Vehicles.................                1.8                6.1                8.4               19.0
Tractors/Trailers...................                7.3               10.0               11.9               25.3
                                     ---------------------------------------------------------------------------
    Total...........................               11.1               19.8               25.6               51.4
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                8.6               14.1               17.1               20.0
Vocational Vehicles.................                7.3               18.3               23.6               36.2
Tractors/Trailers...................               78.9              123.7              135.9              177.3
                                     ---------------------------------------------------------------------------
    Total...........................               94.8              156.2              176.6              233.5
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                6.7               10.5               11.9               12.9
Vocational Vehicles.................                5.5               12.2               15.2               17.2
Tractors/Trailers...................               71.5              113.7              124.0              152.0
                                     ---------------------------------------------------------------------------
    Total...........................               83.7              136.4              151.1              182.2
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    While the agencies' explicit analysis of manufacturers' potential
responses to today's proposed standards extends through model year
2030, the resulting fuel savings and avoided emissions summarized in
the following two tables occur as those vehicles.

Table X-5--Fuel Savings and GHG Emissions Reductions by Vehicle Segment,
                   Relative to Baseline 1a, Method A a
------------------------------------------------------------------------
                                                           Upstream &
        MY 2018-2029 Total           Fuel reductions     downstream GHG
                                    (billion gallons)   reductions (MMT)
------------------------------------------------------------------------
                              Alternative 2
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                5.5               67.5
Vocational Vehicles...............                2.5               33.6
Tractors and Trailers.............               37.8              518.8
                                   -------------------------------------
    Total.........................               45.8              619.9
------------------------------------------------------------------------
                      Alt. 3--Preferred Alternative
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                8.8              107.6
Vocational Vehicles...............                8.3              110.3
Tractors and Trailers.............               59.5              816.4
                                   -------------------------------------
    Total.........................               76.7            1,034.3
------------------------------------------------------------------------
                                 Alt. 4
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               10.7              130.5
Vocational Vehicles...............               10.9              143.8

Tractors and Trailers.............               65.0              892.1
                                   -------------------------------------
    Total.........................               86.7            1,166.4
------------------------------------------------------------------------
                                 Alt. 5
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               12.0              145.4
Vocational Vehicles...............               17.3              226.9
Tractors and Trailers.............               84.2            1,155.1
                                   -------------------------------------
    Total.........................              113.4            1,527.4
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table X-6--Fuel Savings and GHG Emissions Reductions by Vehicle Segment,
                   Relative to Baseline 1b, Method A a
------------------------------------------------------------------------
                                                           Upstream &
        MY 2018-2029 Total           Fuel reductions     downstream GHG
                                    (billion gallons)   reductions (MMT)
------------------------------------------------------------------------
                              Alternative 2
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                4.5               55.5
Vocational Vehicles...............                2.5               33.6
Tractors and Trailers.............               34.4              471.9
                                   -------------------------------------
    Total.........................               41.4              561.0
------------------------------------------------------------------------
                      Alt. 3--Preferred Alternative
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                7.8               94.1
Vocational Vehicles...............                8.3              110.3
Tractors and Trailers.............               56.1              769.4
                                   -------------------------------------
    Total.........................               72.2              973.8
------------------------------------------------------------------------
                                 Alt. 4
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                9.3              112.8
Vocational Vehicles...............               10.9              143.8
Tractors and Trailers.............               61.6              845.2
                                   -------------------------------------
    Total.........................               81.8            1,101.8
------------------------------------------------------------------------
                                 Alt. 5
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               10.8              130.5
Vocational Vehicles...............               17.3              226.9
Tractors and Trailers.............               80.7            1,108.2
                                   -------------------------------------
    Total.........................              108.8            1,465.6
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

    Results presented above are cumulative, spanning model years 2018-
2029. Underlying these results are estimates of impacts for each
specific model year. As an example, Table X-7 shows costs, benefits,
and net benefits specific to model year 2029.

Table X-7--Summary of Costs and Benefits for MY 2029 by Alternative, Discounted at 3% (Relative to Baseline 1b),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                             Total Costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                0.3                0.8                0.9                1.1
Vocational Vehicles.................                0.3                1.5                1.5                2.9
Tractors/Trailers...................                1.2                1.9                1.9                3.9
                                     ---------------------------------------------------------------------------
    Total...........................                1.9                4.1                4.3                7.9
----------------------------------------------------------------------------------------------------------------
                                            Total Benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.9                3.6                3.8                4.2
Vocational Vehicles.................                1.8                5.2                5.2                7.3
Tractors/Trailers...................               14.4               25.4               25.4               32.0
                                     ---------------------------------------------------------------------------
    Total...........................               18.0               34.1               34.4               43.6
----------------------------------------------------------------------------------------------------------------
                                             Net Benefits ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.5                2.8                2.9                3.1
Vocational Vehicles.................                1.4                3.7                3.7                4.4
Tractors/Trailers...................               13.2               23.5               23.5               28.1
                                     ---------------------------------------------------------------------------
    Total...........................               16.1               30.0               30.1               35.6
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(2) Method B Tables

   Table X-8--Annual GHG and Fuel Reductions in 2035 and 2050 Using Method B and Relative to the Less Dynamic
                                                   Baseline a
----------------------------------------------------------------------------------------------------------------
                                      Upstream & downstream GHG reductions    Fuel reductions (billion gallons)
                                                      (MMT)                -------------------------------------
                                     --------------------------------------
                                             2035               2050               2035               2050
----------------------------------------------------------------------------------------------------------------
Alt. 2 Less Stringent--Total........                 72                101                5.2                7.3
    Tractors and Trailers...........                 59                 84                4.2                6.0
    HD Pickup Trucks................                  8                 11                0.7                0.9
    Vocational Vehicles.............                  5                  7                0.3                0.5
Alt. 3 Preferred--Total.............                127                183                9.3               13.4
    Tractors and Trailers...........                 97                141                7.0               10.1
    HD Pickup Trucks................                 14                 19                1.1                1.6
    Vocational Vehicles.............                 16                 23                1.2                1.7
Alt. 4 More Stringent--Total........                132                184                9.7               13.5
    Tractors and Trailers...........                100                141                7.2               10.1
    HD Pickup Trucks................                 15                 19                1.2                1.6
    Vocational Vehicles.............                 17                 23                1.3                1.7
Alt. 5 More Stringent--Total........                168                232               12.4               17.0
    Tractors and Trailers...........                126                176                9.0               12.6
    HD Pickup Trucks................                 17                 22                1.4                1.8
    Vocational Vehicles.............                 26                 34                1.9                2.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-9--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$2.6               -$5.9               -$6.2                 N/A
        Maintenance..............              -$0.06              -$0.13              -$0.14                N/A
        Fuel (pre-tax)...........              $20.9               $37.2               $38.7               $49.4
        Benefits.................              $12.8               $20.5               $21.1               $26.3
        Net benefits.............              $31.1               $51.7               $53.5                 N/A

        GHG reductions (MMT).....               71.9               127.1               132.0               168.3
  2050  Vehicle program..........              -$3.1               -$7.0               -$7.4                 N/A
        Maintenance..............              -$0.06              -$0.13              -$0.14                N/A
        Fuel (pre-tax)...........              $31.5               $57.5               $57.6               $72.7
        Benefits.................              $19.9               $32.9               $32.9               $40.6
        Net benefits.............              $48.3               $83.2               $83.0                 N/A
        GHG reductions (MMT).....              101.2               183.4               183.8               231.8
  NPV,  Vehicle program..........             -$39.8              -$86.8              -$98.6                 N/A
     3%
        Maintenance..............              -$0.88              -$1.80              -$1.91                N/A
        Fuel (pre-tax)...........             $280.0              $495.6              $517.6              $664.3
        Benefits.................             $175.2              $279.7              $289.7              $361.5
        Net benefits.............             $414.5              $686.8              $706.8                 N/A
  NPV,  Vehicle program..........             -$19.3              -$41.1              -$48.4                 N/A
     7%
        Maintenance..............              -$0.42              -$0.86              -$0.92                N/A
        Fuel (pre-tax)...........             $118.1              $206.7              $219.0              $283.0
        Benefits.................             $105.5              $173.5              $180.7              $228.0
        Net benefits.............             $203.8              $338.1              $350.5                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-10--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                             HD Pickup and Vans Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$0.5               -$0.9               -$1.2                 N/A
        Maintenance..............              -$0.01              -$0.01              -$0.01                N/A
        Fuel (pre-tax)...........               $2.5                $4.2                $4.4                $5.0
        Benefits.................               $1.4                $2.2                $2.3                $2.6
        Net benefits.............               $3.4                $5.5                $5.5                 N/A
        GHG reductions (MMT).....                8.1                13.9                14.6                16.6
  2050  Vehicle program..........              -$0.5               -$1.0               -$1.4                 N/A
        Maintenance..............              -$0.01              -$0.01              -$0.01                N/A
        Fuel (pre-tax)...........               $3.5                $6.3                $6.3                $7.2
        Benefits.................               $2.1                $3.5                $3.5                $4.0
        Net benefits.............               $5.1                $8.7                $8.4                 N/A
        GHG reductions (MMT).....               10.8                19.3                19.4                22.1
  NPV,  Vehicle program..........              -$7.5              -$13.5              -$19.6                 N/A
     3%
        Maintenance..............              -$0.18              -$0.18              -$0.18                N/A
        Fuel (pre-tax)...........              $31.4               $53.5               $56.8               $64.9
        Benefits.................              $18.7               $29.2               $30.7               $34.6
        Net benefits.............              $42.4               $69.1               $67.7                 N/A
  NPV,  Vehicle program..........              -$3.7               -$6.5               -$9.7                 N/A
     7%
        Maintenance..............              -$0.08              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $13.1               $21.9               $23.7               $27.1
        Benefits.................              $11.4               $18.2               $19.3               $21.8
        Net benefits.............              $20.7               $33.5               $33.2                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-11--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                            Vocational Vehicles Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$0.2               -$2.1               -$2.1                 N/A
        Maintenance..............              -$0.02              -$0.03              -$0.04                N/A
        Fuel (pre-tax)...........               $1.3                $4.7                $5.1                $7.6
        Benefits.................               $1.1                $2.6                $2.8                $3.9

        Net benefits.............               $2.2                $5.2                $5.8   .................
        GHG reductions (MMT).....                4.7                16.1                17.4                25.8
  2050  Vehicle program..........              -$0.3               -$2.4               -$2.4                 N/A
        Maintenance..............              -$0.02              -$0.03              -$0.04                N/A
        Fuel (pre-tax)...........               $2.0                $7.3                $7.3               $10.7
        Benefits.................               $1.7                $4.2                $4.2                $5.9
        Net benefits.............               $3.4                $9.0                $9.1                 N/A
        GHG reductions (MMT).....                6.5                23.2                23.3                33.9
  NPV,  Vehicle program..........              -$3.6              -$29.6              -$32.8                 N/A
     3%
        Maintenance..............              -$0.22              -$0.42              -$0.52                N/A
        Fuel (pre-tax)...........              $16.9               $60.6               $66.3               $99.9
        Benefits.................              $14.8               $34.8               $37.4               $52.7
        Net benefits.............              $27.9               $65.4               $70.3                 N/A
  NPV,  Vehicle program..........              -$1.7              -$13.8              -$16.0                 N/A
     7%
        Maintenance..............              -$0.10              -$0.19              -$0.24                N/A
        Fuel (pre-tax)...........               $6.9               $24.7               $27.9               $42.5
        Benefits.................               $8.3               $21.5               $23.4               $33.8
        Net benefits.............              $13.4               $32.2               $35.0                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-12--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                              Tractor/Trailers Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$1.9               -$2.9               -$2.9                 N/A
        Maintenance..............              -$0.03              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $17.2               $28.4               $29.2               $36.8
        Benefits.................              $10.3               $15.7               $16.0               $19.7
        Net benefits.............              $25.6               $41.0               $42.2                 N/A
        GHG reductions (MMT).....               59.1                97.2               100.0               125.9
  2050  Vehicle program..........              -$2.3               -$3.6               -$3.6                 N/A
        Maintenance..............              -$0.03              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $26.1               $44.0               $44.0               $54.8
        Benefits.................              $16.1               $25.2               $25.2               $30.7
        Net benefits.............              $39.9               $65.5               $65.6                 N/A
        GHG reductions (MMT).....               83.8               140.9               141.1               175.7
  NPV,  Vehicle program..........             -$28.8              -$43.7              -$46.2                 N/A
     3%
        Maintenance..............              -$0.47              -$1.19              -$1.22                N/A
        Fuel (pre-tax)...........             $231.7              $381.5              $394.5              $499.5
        Benefits.................             $141.7              $215.7              $221.6              $274.2
        Net benefits.............             $344.1              $552.3              $568.8                 N/A
  NPV,  Vehicle program..........             -$13.9              -$20.9              -$22.7                 N/A
     7%
        Maintenance..............              -$0.23              -$0.59              -$0.60                N/A
        Fuel (pre-tax)...........              $98.1              $160.1              $167.5              $213.4
        Benefits.................              $85.8              $133.8              $138.1              $172.4
        Net benefits.............             $169.8              $272.4              $282.3                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

XI. Natural Gas Vehicles and Engines

    Both gasoline and diesel vehicles can be designed or modified to
use natural gas. NGV America estimates that approximately 0.5 percent
of the heavy-duty vehicle fleet use natural gas. A small but growing
number of medium and heavy-duty natural gas vehicles have been produced
and are in current use. Although these natural gas versions are similar
in many ways to their petroleum counterparts, there are significant
differences. There are also both similarities and differences in the
production and distribution of natural gas relative to gasoline and
diesel fuel.
    This combined rulemaking by EPA and NHTSA is designed to regulate
two separate characteristics of heavy duty vehicles: Emissions of GHGs
and fuel consumption. The use of natural gas as

a heavy-duty fuel can impact both of these. In the case of diesel or
gasoline powered vehicles, there is a close relationship between these
two characteristics. For natural gas fueled vehicles, which reduce or
eliminate the use of petroleum, the situation is different. For
example, a natural gas vehicle that achieves approximately the same
fuel efficiency as a diesel powered vehicle would emit about 20 percent
less CO2 when operating on natural gas; and a natural gas
vehicle with the same fuel efficiency as a gasoline vehicle would emit
about 30 percent less CO2. In Phase 1, the agencies balanced
these facts by applying the gasoline and diesel CO2
standards to natural gas engines based on the engine type of the
natural gas engine. Fuel consumption for these vehicles is then
calculated according to their tailpipe CO2 emissions. In
essence, this applies a one-to-one relationship between fuel efficiency
and tailpipe CO2 emissions for all vehicles, including
natural gas vehicles. The agencies determined that this approach would
likely create a small balanced incentive for natural gas use. See 76 FR
57123; see also 77 FR 51705 (August 24, 2012) and 77 FR 51500 (August
27, 2012) (EPA and NHTSA, respectively, further elaborating on basis
for having Phase 1 apply at the tailpipe only, including for
alternative fueled vehicles); see also Delta Construction Co. v. EPA,
783 F. 3d 1291 (D.C. Cir. 2015) U.S. App. LEXIS 6780, F.3d (D.C. Cir.
April 24, 2015) (dismissing challenge to Phase 1 GHG standards as being
arbitrary for applying only on a tailpipe basis).
    For Phase 2, the agencies have reevaluated the potential use of
natural gas in the heavy-duty sector and the impacts of such use. As
discussed below, based on our review of the literature and external
projections we believe that the use of natural gas is unlikely to
become a major fuel source for medium and heavy-duty vehicles during
the Phase 2 time frame. Thus, since we project natural gas vehicles to
have little impact on both overall GHG emissions and fuel consumption
during the Phase 2 time frame, the agencies see no need to propose
fundamental changes to the Phase 1 approach for natural gas engines and
vehicles.
    In the following sections, we present a lifecycle analysis of
natural gas used by the heavy-duty truck sector. We also present the
results of an analysis by the Energy Information Administration
projecting the future use of natural gas by heavy-duty trucks. Finally,
we list a number of potential technologies and discuss the approaches
that could be pursued help to reduce the methane emissions from natural
gas trucks. A more detailed discussion of these analyses and issues can
be found in the draft RIA.

A. Natural Gas Engine and Vehicle Technology

    Several engine parameters and characteristics come into play in
comparing engines powered by natural gas with engines powered by
conventional fuels.
    Gasoline-fueled engines are typically spark-ignition engines that
rely on stoichiometric combustion, which means that essentially all the
oxygen from the engine's intake air is consumed in the combustion
process. Converting a gasoline-fueled engine to run on natural gas
involves changing the hardware used to store and deliver fuel to the
engine, but the combustion strategy remains largely unchanged. The
engine must be recalibrated for the different fuel properties, but
combustion remains stoichiometric. In addition, the catalysts may
require significant changes to enable the heavy-duty engine to comply
with the emission standards.
    Diesel-fueled engines are compression-ignition engines that rely on
lean-burn combustion, which means that the engine takes in a
substantial quantity of excess air (oxygen) that is not consumed in the
combustion process. Engines usually have turbochargers to compress the
intake air, which allows for greater power output and thermodynamic
efficiency. Converting a diesel-fueled engine to run on natural gas may
involve a minimal set of changes to engine calibrations to maintain
lean-burn operation and the overall operating characteristics of a
compression-ignition engine, although there would be substantial
changes to the fuel storage and delivery systems. This could require
the use of a pilot injection of a small amount of diesel fuel to
initiate the combustion event, or more commonly, a mixture (never more
than 50 percent natural gas) of natural gas and diesel fuel is
combusted. It is also possible to convert a diesel-fueled engine to run
on natural gas by adding a spark plug and changing the calibration
strategy to rely on stoichiometric combustion. This allows for simpler
engine design and operation, but comes at a cost of higher fuel
consumption and CO2 emissions.
    Engines running on natural gas are capable of meeting the same
criteria and GHG emission standards that apply for gasoline and diesel
engines. In the case of reducing PM and CO2 emissions, there
is an inherent advantage for natural gas. In contrast, engines must be
properly calibrated and maintained to avoid high emission rates for
NOX, HC, and CO.
    On-vehicle fuel storage for natural gas is also an important design
parameter. The most common method today is compressed natural gas
(CNG), which involves storing the fuel as a gas at very high pressure
(up to ~3500 psi) to increase the density of the fuel. This increases
vehicle weight and generally reduces the range relative to gasoline or
diesel vehicles, but the technology is readily available and does not
involve big changes for operators. The alternative is to cool the fuel
so that it can be stored as liquefied natural gas (LNG), which involves
more extensive hardware changes for managing the fuel as a cryogenic
liquid. LNG fuel storage also involves a substantial weight increase,
but LNG has a higher density than CNG so LNG vehicles can store much
more fuel than CNG vehicles in the same volume. LNG technology is
available for a limited number of truck models, mostly for line-haul
service where range is a paramount consideration. The cryogenic fuel
requires substantial changes in hardware and procedures for refueling
stations and operators. An additional factor in considering LNG
technology is that a parked vehicle could vent the fuel as it takes on
heat from the surrounding environment over a period of several days.

B. GHG Lifecycle Analysis for Natural Gas Vehicles

    This section is organized into three sections. The first section
summarizes the upstream emissions. The second section summarizes the
downstream emissions. The last section summarizes the results of the
lifecycle emissions and provides a comparison between natural gas
lifecycle and diesel fuel lifecycle emissions. Only the overall results
of the lifecycle emissions comparison between natural gas and diesel
fuel are presented here, much more detail is provided in Chapter 13 of
the DRIA.
(1) Upstream Emissions
    Upstream methane emissions, occurring in the natural gas
production, natural gas processing, transmission, storage and
distribution stages of natural gas production, are estimated and
summarized in the annual EPA report Inventory of U.S. Greenhouse Gas
Emissions and Sinks (GHG Inventory) for the United Nations Framework
Convention on Climate Change (UNFCCC). As a basis for estimating the
life-cycle impact of natural gas use by heavy-duty trucks, we used the
year 2012 methane emission estimates in the most recent GHG Inventory,
published

in 2014. The GHG Inventory also includes the quantity of carbon dioxide
which is coproduced with methane throughout the natural gas system and
emitted to the atmosphere through venting, flaring, and as fugitive
emissions.
    The GHG Inventory is updated annually to account for new emission
sources (e.g., new natural gas wells), updated data, emission factors
and/or methodologies, and to account for changes in emissions due to
policy changes, regulatory changes and changes in industry practices.
The GHG Inventory reflects emission reductions due to existing state
regulations, National Emission Standards for Hazardous Air Pollutants
(NESHAP) promulgated by EPA in 1999, the New Source Performance
Standards (NSPS) promulgated by EPA in 2012,\793\ and Natural Gas Star
(a flexible, voluntary partnership that encourages oil and natural gas
companies to adopt proven, cost-effective technologies and practices
that improve operational efficiency and reduce methane emissions).\794\
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