into an absence of discussion of global air pollution problems in the
legislative history. The structure of section 209, both as adopted in
1967 and as amended in 1977, is notable in its focus on limiting the
ability of EPA to deny a waiver, and thereby preserves discretion for
California to construct its motor vehicle program as it deems
appropriate to protect the health and welfare of its citizens. The
legislative history indicates Congress quite intentionally restricted
and limited EPA's review of California's standards, and its express
legislative intent was to ``provide the broadest possible discretion
[to California] in selecting the best means to protect the health of
its citizens and the public welfare.'' \79\ The DC Circuit recognized
that ``[t]he history of the congressional consideration of the
California waiver provision, from its original enactment up through
1977, indicates that Congress intended the State to continue and expand
its pioneering efforts at adopting and enforcing motor vehicle emission
standards different from and in large measure more advanced than the
corresponding federal program. In short, to act as a kind of laboratory
for innovation. * * * For a court [to limit California's authority]
despite the absence of such an indication would only frustrate the
congressional intent.'' \80\
---------------------------------------------------------------------------

    \79\ H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-302 (1977).
See MEMA I, 627 F. 2d at 1110-11.
    \80\ MEMA I, 627 F. 2d at 1111.
---------------------------------------------------------------------------

    EPA also determined that it was fully consistent with the expressed
intention of Congress to interpret section 209(b)(1)(B) the same way
both for standards designed to address local and regional air pollution
problems, and standards designed to address global air pollution
problems. Congress intended to provide California the broadest possible
discretion to develop its motor vehicle emissions program. Neither the
text nor the legislative history of section 209(b) indicates that
Congress intended to limit this broad discretion to a certain kind of
air pollution problem, or to take away all discretion with respect to
global air pollution problems.\81\ In addition, EPA reasoned that
applying the traditional interpretation to GHG standards does not
change the basic nature of the compromise established by Congress--
California could act as the laboratory for the nation with respect to
motor vehicle emission control, and manufacturers would continue to
face just two sets of emissions standards--California's and EPA's.
---------------------------------------------------------------------------

    \81\ This broad interpretation of section 209(b) is similar to
the broad reading the Court provided to section 302(g) of the Clean
Air Act when it held that the term ``air pollutant'' included
greenhouse gases, rejecting among other things the argument that
Congress limited the term to apply only to certain kinds of air
pollution. Massachusetts v. EPA, 549 US 497, 532 (2007) (footnote
26).
---------------------------------------------------------------------------

    EPA further explained that this interpretation was consistent with
Congressional purpose, as compared to the interpretation adopted in the
GHG waiver denial relied on the discussion in the legislative history
of local conditions in California leading to air pollution problems
like ozone. While this was properly read to support the view that
section 209(b) should be interpreted to address California's need for a
motor vehicle program as a whole, the GHG waiver denial went further
and inferred that by discussing such local conditions, Congress also
intended to limit California's discretion to only these kinds of local
or regional air pollution problems. The GHG waiver denial pointed to no
particular language in the legislative history or the text of section
209(b) indicating such, instead, congressional intent to limit
California's discretion was inferred from the discussion of local
conditions. However, basing a limitation on such an inference is not
appropriate given the express indication that Congress intended to
provide California the ``broadest possible discretion'' in selecting
the best means to protect the health of its citizens and the public
welfare.
    Additionally, EPA explained that the text of section 209(b) and the
legislative history, when viewed as a whole, led to the conclusion that
the interpretation adopted in the GHG waiver denial should be rejected.
The better way to interpret this provision is to apply the traditional
interpretation to the evaluation of California's GHG standards for
motor vehicles. If California needs a separate motor vehicle program to
address the kinds of compelling and extraordinary conditions discussed
in the traditional

interpretation, then Congress intended that California could have such
a program. Congress also intentionally provided California the broadest
possible discretion in adopting the kind of standards in its motor
vehicle program that California determines are appropriate to address
air pollution problems that exist in California, whether or not those
problems are local or regional in nature, and to protect the health and
welfare of its citizens. The better interpretation of the text and
legislative history of this provision is that Congress did not intend
this criterion to limit California's discretion to a certain category
of air pollution problems, to the exclusion of others. In this context
it is important to note that air pollution problems, including local or
regional air pollution problems, do not occur in isolation. Ozone and
PM air pollution, traditionally seen as local or regional air pollution
problems, occur in a context that to some extent can involve long range
transport of this air pollution or its precursors. This long-range or
global aspect of ozone and PM can have an impact on local or regional
levels, as part of the background in which the local or regional air
pollution problem occurs.
    EPA further stated that this approach does not make section
209(b)(1)(B) a nullity, as some had suggested. EPA must still determine
whether California does not need its motor vehicle program to meet the
compelling and extraordinary conditions discussed in the legislative
history. If that is the case, then a waiver would be denied on those
grounds, but that was not the case at that point. EPA observed that
conditions in California may one day improve such that it no longer had
the need for a separate motor vehicle program and that the statute
contemplates that such improvement is possible. In addition, we noted
that the opponents of a waiver always have the ability to raise their
legal, policy, and other concerns in the State administrative process,
or through judicial review in State courts. We concluded, however, that
Congress provided EPA a much more limited role under section 209(b) in
considering objections raised by opponents of a waiver.
3. Response to Comments Received
    CARB states in its Waiver Support Document that the relevant
inquiry under section 209(b)(1)(B) is whether California needs it own
motor vehicle pollution control program to meet compelling and
extraordinary conditions and not whether any particular standard is
needed to meet such conditions. CARB notes that EPA has consistently
determined that the phrase ``compelling and extraordinary conditions''
refers to:

* * * Certain general circumstances, unique to California, primarily
responsible for causing its air pollution [including] * * *
geographical and climate factors [as well as] * * * the presence and
growth of California's vehicle population, whose emissions were
thought to be responsible for ninety percent of the air pollution
problem in certain parts of California.

    CARB also submits that the 2012 ZEV and LEV amendments (the ACC
program) meet the same compelling and extraordinary conditions
justifying previous waivers (e.g., the South Coast and San Joaquin Air
basins continue to experience some of the worst air quality in the
nation and that California has an ongoing need for dramatic emission
reductions generally and from passenger cars specifically). CARB also
submits that as in 1967, EPA's previous waivers have noted that
California continued to have geographic and climatic conditions that,
when combined with the large numbers and high concentrations of
automobiles, created a serious air pollution problem.
    EPA received only one comment requesting a denial of the waiver for
the GHG and ZEV standards based on the grounds of section
209(b)(1)(B)--that ``such State does not need such State standards to
met compelling and extraordinary conditions.'' This commenter raised
specific objections to both the GHG and ZEV elements of CARB's ACC
program but none of them addressed whether California's geographic,
climactic and air quality conditions remain the same as they were under
prior waiver determinations.\82\
---------------------------------------------------------------------------

    \82\ NADA at 7-9, 12-14.
---------------------------------------------------------------------------

4. CARB's GHG Emission Standards
    With regard to CARB's GHG standards, the Dealers state there is no
need and no discernible environmental benefit from such standards
because of EPA's GHG regulations for motor vehicles that CARB has
agreed to accept as compliance for its own program. According to the
commenter, this amounts to a legal admission that CARB does not need
its own GHG standards. In addition, because manufacturers are already
under a legal obligation to comply with the NHTSA/EPA 2017-2025 GHG
standards there is no environmental benefit associated with separate
CARB GHG standards. This commenter cited 1967 legislative history as
support that Congress decided that federal preemption of new vehicle
emission standards would be available for California but only where
California promulgated standards necessary to address ``the unique
problems facing the state.'' \83\ Had Congress intended to give
California discretion to adopt whatever standards it liked, without any
consideration as to whether these standard are `needed,' Congress would
have omitted Sec. 209(b)(1)(B) altogether.'' This commenter also
suggests that the ``alternative arguments'' in the 2009 GHG waiver
decision, wherein California's need for its GHG standards standing
alone was evaluated, should also be applied here. As such, this
commenter suggests that since CARB does not intend to rely on its own
regulations to meet environmental goals there can be no ``rational
connection'' between the CARB's regulation and the state's air quality
issues. Finally, the commenter notes that CARB's statement that a
waiver ``will remain an important backstop in the event the national
program is weakened or terminated'' is an identified ``political need''
outside the scope of Section 209.
---------------------------------------------------------------------------

    \83\ H.R. Rep. No. 90-728 (1967), at 22.
---------------------------------------------------------------------------

    CARB, in response to NADA's comments referenced above, states that
while there may not be binding precedent that requires EPA to treat
California's program as a whole in reviewing the need for specific
standards, it previously has demonstrated that EPA's longstanding
administrative practice to review the need for separate standard
standards in the context of the ongoing compelling and extraordinary
conditions justifying California's motor vehicle program remains sound.
    CARB also notes that its commitment to accept compliance with the
federal GHG emission standards is no different from the numerous times
that EPA has followed California's lead--blazing a new trail as a
laboratory for innovation--by catching up to or harmonizing with
California's standards. In addition, rather than viewing CARB's actions
an impermissible political backstop, CARB maintains that its actions
are simply furthering the Congressional design of Section 209(b): to
ensure that California can protect public health and welfare by
ensuring its ability to separately implement and enforce necessary
emission reductions through its own regulatory mechanisms. Therefore
CARB can continue to set standards that in the first instance are more
stringent, then may become as stringent and subsequently--under the
NADA hypothetical--become more stringent should EPA lessen the
stringency of the

federal GHG emission standards. In addition, CARB points to NADA's
concession by acknowledging that CARB's standards must be as or more
stringent--i.e., as protective as--the federal standards.
    As discussed above, EPA believes that the better interpretation of
the section 209(b)(1)(B) criterion is the traditional approach of
evaluating California's need for a separate motor vehicle emission
program to meet compelling and extraordinary conditions. Applying this
approach with the reasoning noted above, with due deference to
California, I cannot deny the waiver.
    CARB has repeatedly demonstrated the need for its motor vehicle
program to address compelling and extraordinary conditions in
California. As discussed above, the term compelling and extraordinary
conditions ``does not refer to the levels of pollution directly.''
Instead, the term refers primarily to the factors that tend to produce
higher levels of pollution--geographical and climatic conditions (like
thermal inversions) that, when combined with large numbers and high
concentrations of automobiles, create serious air pollution problems.
California still faces such conditions. For example, as stated in
CARB's waiver request and additional written comment, California and
particularly the South Coast and San Joaquin Valley Air Basins continue
to experience some of the worst air quality in the nation and continue
to be in non-attainment with national ambient air quality standards
(NAAQS) for PM2.5 and ozone.\84\ In its recent announcement
of new PM2.5 ambient air quality standards, EPA projected
that only seven of approximately 3,000 counties in the country may
require state or local action to reduce fine particle pollution in
order to meet the new standards by 2020. All seven counties are in
California.
---------------------------------------------------------------------------

    \84\ 76 FR 40652, 40654 (July 11, 2011).
---------------------------------------------------------------------------

    Further, EPA has not received any adverse comments suggesting that
California no longer needs a separate motor vehicle emissions program
to address the various conditions that lead to serious and unique air
pollution problems in California.
    Based on the record, I am unable to identify any change in
circumstances or any evidence to suggest that the conditions that
Congress identified as giving rise to serious air quality problems in
California no longer exist. Therefore, using the traditional approach
of reviewing the need for a separate California program to meet
compelling and extraordinary conditions, I cannot deny the ACC waiver
request (including the GHG and ZEV components, along with LEV III
criteria pollutants) based on this criterion.
    To the extent that it is appropriate to examine the need for CARB's
GHG standards to meet compelling and extraordinary conditions, as EPA
discussed at length in its 2009 GHG waiver decision, California does
have compelling and extraordinary conditions directly related to
regulations of GHG. EPA's prior GHG waiver contained extensive
discussion regarding the impacts of climate change in California.\85\
In addition, CARB has submitted additional evidence in comment on the
ACC waiver request that evidences sufficiently different circumstances
in California.\86\ CARB notes that ``Record-setting fires, deadly heat
waves, destructive storm surges, loss of winter snowpack--California
has experienced all of these in the past decade and will experience
more in the coming decades. California's climate--much of what makes
the state so unique and prosperous--is already changing, and those
changes will only accelerate and intensify in the future. Extreme
weather will be increasingly common as a result of climate change. In
California, extreme events such as floods, heat waves, droughts and
severe storms will increase in frequency and intensity. Many of these
extreme events have the potential to dramatically affect human health
and well-being, critical infrastructure and natural systems.'' \87\
CARB provides a summary report on the third assessment from the
California Climate Change Center (2012) \88\ which describes dramatic
sea level rises and increases in temperatures. The Commenter does not
take issue with that analysis, but instead relies on the existence of
the federal GHG standards and the ``deemed to comply'' language to
claim that there is no need for CARB's GHG standards. Separate from
EPA's stated interpretation and determinations noted above, EPA
believes that the commenter does not appropriately appreciate the role
that Congress envisioned California to play as an innovative laboratory
that may set standards that EPA may ultimately harmonize with or that
California or EPA may otherwise accept compliance with the others
emission program as compliance with their own. EPA's longstanding
interpretation of section 209(b)(1)(B) is that EPA does not look at
whether the specific standards at issue are needed to meet compelling
and extraordinary conditions related to that air pollutant. As
explained above, EPA reviewed this issue in some detail in both EPA's
2008 GHG waiver denial and subsequent 2009 GHG waiver decision and EPA
continues to believe that our traditional interpretation is
appropriate. The structure of section 209, both as adopted in 1967 and
as amended in 1977, is notable in its focus on limiting the ability of
EPA to deny a waiver, and thereby preserves discretion for California
to construct it motor vehicle program as it deems appropriate to
protect the health and welfare of its citizens.\89\ EPA has previously
considered NADA's argument that CARB no longer has a need for its GHG
emission standards once CARB adopts a ``deemed to comply'' provision.
In EPA's within the scope decision in 2011, where EPA considered CARB's
previous ``deemed to comply'' provision applicable to the 2012 through
2016 MYs, EPA stated:
---------------------------------------------------------------------------

    \85\ 74 FR 32744, 32764-7265.
    \86\ EPA-HQ-OAR-2012-0562-0371.
    \87\ Id.
    \88\ Our Changing Climate 2012 Vulnerability & Adaptation to the
Increasing Risks from Climate Change in California. Publication
 CEC-500-2012-007. Posted: July 31, 2012; available at
http://www.climatechange.ca.gov/adaptation/third_assessment/.
    \89\ See H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-302
(1977).

    NADA's comments do not indicate that, as a result of the
amendments, California no longer needs a separate motor vehicle
emissions program to address compelling and extraordinary conditions
in California, or provide any indication that EPA's prior
determination on this issue is undermined in any way. Therefore, its
comments do not show that California's amendments raise any new
issues relevant to EPA's initial waiver decision.
    Moreover, although NADA's comments reference the words of the
section 209(b)(1)(B), ``need * * * to meet compelling and
extraordinary circumstances'' criterion, they do not appear to be
directed towards the geographical or climatological conditions that
are being referred to by the words ``compelling and extraordinary
circumstances.'' Instead, NADA's comments appear to be directed at
the stringency of the greenhouse gas standards. The stringency of
California's standards is at issue in section 209(b)(1)(A), where
Congress addressed the comparison of California standards to federal
standards, but it is not an issue under section 209(b)(1)(B). As
noted in EPA's underlying waiver decision, section 209(b)(1)(A)
calls for a review of California standards ``in the aggregate,'' and
EPA can only deny a waiver if it finds that California was arbitrary
and capricious in its finding that ``its standards will be, in the
aggregate, at least as protective of public health and welfare as
applicable Federal standards.'' EPA notes that the language of
section 209(b)(1)(A) clearly indicates Congress's determination that
EPA review the effect of stringency on the protectiveness of
California's standards ``in

the aggregate,'' and that EPA cannot deny a waiver on the grounds of
protectiveness if California standards are at least equally
protective as Federal standards. ``Redundancy'' is not the
criterion; it is whether California's standards are, in the
aggregate, at least as protective as applicable Federal standards.
Furthermore, NADA does not address California's standards ``in the
aggregate'' and, as noted above, does not provide any evidence to
suggest, even with regard to California's greenhouse gas standards,
that California was arbitrary and capricious in its finding that its
standards are at least as protective as comparable federal
standards. The stringency issue raised by NADA is not relevant under
section 209(b)(1)(B), and it would be inconsistent with the intent
of Congress to deny a waiver or a within-the-scope determination
based on section 209(b)(1)(B) for reasons Congress clearly addressed
and clearly determined should not be the basis for a denial under
section 209(b)(1)(A). NADA's comments, therefore, do not raise any
new issues regarding our preexisting waiver for California
greenhouse gas emission standards.\90\
---------------------------------------------------------------------------

    \90\ 76 FR 34693, 34697-34698 (June 14, 2011).

    EPA believes this interpretation of section 209(b)(1)(B) continues
to be appropriate and therefore finds that CARB's GHG emission
standards cannot be denied a waiver based on NADA's argument that there
is no need for such standards given the existence of EPA GHG emission
standards.
5. CARB's ZEV Emission Standards
    The Dealers also requested that EPA deny a waiver of CARB's ZEV
standards for MY 2018 and beyond because they were not necessary to
meet compelling and extraordinary circumstances, under the section
209(b)(1)(B) criterion.\91\ According to the commenter, the
``compelling and extraordinary conditions'' in California today are
nothing like they were when Congress first enacted section 209. In
addition, the commenter notes that CARB claims no criteria emissions
benefit from the ZEV standards in terms of vehicle TTW emissions and
subsequently notes several problems with CARB's upstream WTW emissions
analysis and projected benefits. For example, the commenter disputes
CARB's assumptions that reductions of fuel production by refineries
will result from reductions in fuel consumption by the vehicle fleet in
California. According to the commenter, refineries in California could
simply shift fuel production to address either off-shore or out-of
state needs. The commenter further states that CARB has not and cannot
show that its ZEV standards will achieve any reductions in criteria
pollutants. With respect to the relationship between the GHG and ZEV
programs, the commenter also states that the ZEV standards do not
provide any additional GHG emission benefits beyond the underlying GHG
standards and the ZEV standards are therefore not necessary to meet any
potential compelling and extraordinary conditions associated with GHG
emissions from new motor vehicles. In addition, the commenter suggests
that because CARB is providing a variety of compliance flexibilities,
including over compliance with GHG standards producing ZEV credits and
other alternative compliance path options, confirms that the underlying
ZEV mandates are not ``necessary.''
---------------------------------------------------------------------------

    \91\ NADA at 13.
---------------------------------------------------------------------------

    CARB notes in its written response that to the extent commenters
question California's need for additional criteria pollutant reductions
from its new motor vehicle fleet, there remains no question that such
reductions are essential to meet federal health-based ambient air
quality standards. CARB notes that California and particularly the
South Coast and San Joaquin Valley Air Basins continue to experience
some of the worst air quality in the nation and continue to be in non-
attainment with national ambient air quality standards (NAAQS) for
PM2.5 and ozone.\92\ California's unique geographical and
climatic conditions, and the tremendous growth in its on- and off-road
vehicle population, which moved Congress to authorize the state to
establish separate on-road motor vehicle standards in 1967 and off-road
engine standards in 1990, still exist today.\93\ In addition, CARB
provides extensive evidence of its current and serious air quality
problems and the increasingly stringent health-based air quality
standards and federally required state planning efforts to meet those
standards firmly in order to establish the need for the additional
emission reductions from its motor vehicle emissions program.\94\
---------------------------------------------------------------------------

    \92\ 76 FR 40652, 40654 (July 11, 2011). CARB waiver request at
17-18.
    \93\ 74 FR 32744, 32762 (July 8, 2009); 76 FR 77515, 77518
(December 13, 2011).
    \94\ EPA-HQ-OAR-2012-0562-0371.
---------------------------------------------------------------------------

    As stated above, EPA believes that the better interpretation of the
section 209(b)(1)(B) criterion is the traditional approach of
evaluating California's need for a separate motor vehicle emission
program to meet compelling and extraordinary conditions. The issue of
whether any particular standard provides comparable emission reductions
is not a relevant criterion under section 209(b)(1)(B). Applying this
approach with the reasoning noted above, with due deference to
California, I cannot deny the waiver.
    As discussed in their written comments, CARB has repeatedly
demonstrated the need for its motor vehicle program to address
compelling and extraordinary conditions in California. As discussed
above, the term compelling and extraordinary conditions ``does not
refer to the levels of pollution directly. Instead, the term refers
primarily to the factors that tend to produce higher levels of
pollution--geographical and climatic conditions (like thermal
inversions) that, when combined with large numbers and high
concentrations of automobiles, create serious air pollution problems.
California still faces such conditions. For example, California and
particularly the South Coast and San Joaquin Valley Air Basins continue
to experience some of the worst air quality in the nation and continue
to be in non-attainment with national ambient air quality standards
(NAAQS) for PM2.5 and ozone.\95\ In addition, EPA believes,
and the record does not otherwise indicate, the underlying geographical
and climatic conditions continue to exist in California and continue to
give rise to serious air quality problems.
---------------------------------------------------------------------------

    \95\ 76 FR 40652, 40654 (July 11, 2011).
---------------------------------------------------------------------------

    EPA has not received any adverse comments suggesting that
California no longer needs a separate motor vehicle emissions program
to address the various conditions that lead to serious and unique air
pollution problems in California.
    Based on the record, I am unable to identify any change in
circumstances or any evidence to suggest that the conditions that
Congress identified as giving rise to serious air quality problems in
California no longer exist. Therefore, using the traditional approach
of reviewing the need for a separate California program to meet
compelling and extraordinary conditions, I cannot deny the ACC waiver
request (including the GHG and ZEV components, along with LEV III
criteria pollutants) based on this criterion.
    As CARB notes in its waiver request, the goal of the CARB Board in
directing CARB staff to redesign the ZEV regulation was to focus
primarily on zero emission drive--that is BEV, FCV, and PHEVs in order
to move advanced, low GHG vehicles from demonstration phase to
commercialization. CARB also analyzed pathways to meeting California's
long term 2050 GHG reduction targets in the light-duty vehicle sector
and determined that ZEVs would need to reach nearly 100 percent

of new vehicle sales between 2040 and 2050. CARB also notes that the
``critical nature of the LEV III regulation is also highlighted in the
recent effort to take a coordinated look at strategies to meet
California's multiple air quality and climate goals well into the
future. This coordinated planning effort, Vision for Clean Air: A
Framework for Air Quality and Climate Planning (Vision for Clean Air)
\96\ demonstrates the magnitude of the technology and energy
transformation needed from the transportation sector and associated
energy production to meet federal standards and the goals set forth by
California's climate change requirements. In addition to considering
the level of change needed to implement the current SIP and reduce GHG
emissions by 80 percent below 1990 levels by 2050, the 2032 attainment
date for the 0.075 ppm standard set in 2008 was used as an interim
target. Adopted or pending rules, such as the LEV III regulation, were
considered essential as baseline reductions assumed for the future, yet
California identified still more transformative changes to achieve the
2032 and 2050 targets. The Vision for Clean Air effort illustrates that
in addition to the cleanup of passenger vehicles (at issue here) as
soon as possible as required in the LEV III regulation, transition to
zero- and near-zero emission technologies in all on- and off-road
engine categories is necessary to achieve the coordinated goals.
---------------------------------------------------------------------------

    \96\ EPA-HQ-OAR-2012-0562-0371 at 5-6, citing Vision for Clean
Air: A Framework for Air Quality and Climate Planning, June 27,
2012,
---------------------------------------------------------------------------

    Therefore, EPA believes that CARB's 2018 and later MY ZEV standards
represent a reasonable pathway to reach these longer term goals. Under
EPA's traditional practice of affording CARB the broadest discretion
possible, and deferring to CARB on its policy choices, we believe there
is a rational connection between California ZEV standards and its
attainment of long term air quality goals. Whether or not the ZEV
standards achieve additional reductions by themselves above and beyond
the LEV III GHG and criteria pollutant standards, the LEV III program
overall does achieve such reductions, and EPA defers to California's
policy choice of the appropriate technology path to pursue to achieve
these emissions reductions. The ZEV standards are a reasonable pathway
to reach the LEV III goals, in the context of California's longer term
goals.
6. CARB's PM Standards
    EPA received comments suggesting that the PM standards promulgated
within California's LEV III regulation were infeasible. The
Manufacturers in particular commented that the technological
feasibility of the one milligram per mile PM standard, that commences
its phase in starting with the 2025 MY, has not been demonstrated (this
issue is discussed below in the Section VI). The Manufacturers appear
to raise issue with whether additional PM emission reductions from
light-duty vehicles are needed since they represent so small a fraction
of the PM inventory in California. CARB's supplemental comments assert
that ``while PM emission from LDVs are not a major contributor to the
inventory, they are a significant contributor to urban pollution and
human exposure, particularly near heavily travelled roadways, many of
which are located in major urban centers in areas classified as non-
attainment for health based PM ambient air quality standards.'' CARB
also notes that the exact amount of pollution reduced through any given
emission standard and the cost-effectiveness of any particular
California standards are not waiver criteria and therefore not relevant
to EPA's determination.
    EPA does not believe that it is necessarily the Manufacturers'
contention that the PM standards are not needed to meet compelling and
extraordinary conditions. Nevertheless, EPA believes it appropriate to
note, once again, that the compelling and extraordinary conditions
Congress identified as giving rise to serious air quality problems
continue to give rise to the need for a separate California new motor
vehicle emissions program. EPA believes this includes CARB's serious PM
air quality problems. EPA agrees that the PM standards will result in
reductions in PM emissions, however small. It is not appropriate for
EPA to second-guess CARB's policy choices, including how best to
address their air quality concerns.
7. Section 209(b)(1)(B) Conclusion
    With respect to the need for California's state standards to meet
compelling and extraordinary conditions, I continue to apply the
traditional interpretation of the waiver provision. As stated in the
GHG waiver decision,\97\ the best way to interpret this provision is to
determine whether California continues to have compelling and
extraordinary conditions giving rise to a need for its own new motor
vehicle emission program. Congress did not use this criterion to limit
California's discretion to a certain category of air pollution
problems, nor does EPA believe this criterion limits California's
discretion to adopt or retain emission standards that are similar to
EPA's standards. In addition, it is inappropriate for EPA to second
guess CARB's policy choices and objectives in adopting ZEV standards
designed to achieve long term emission benefits as well as projected to
reasonably achieve some reduction in criteria pollutant emissions.
---------------------------------------------------------------------------

    \97\ 74 FR 32766. EPA incorporates this prior GHG waiver
decision, and associated reasoning and interpretations, into today's
waiver decision.
---------------------------------------------------------------------------

    Under this interpretation and application of this criterion, EPA
cannot find that the opponents of the waiver have demonstrated that
California does not need its state standards to meet compelling and
extraordinary conditions. The opponents of the waiver have not
adequately demonstrated that California no longer has a need for its
motor vehicle emission program. Therefore, I determine that I cannot
deny CARB's ACC waiver request under section 209(b)(1)(B).

C. Are the California ACC standards consistent with Section 202(a) of
the Clean Air Act?

    EPA has reviewed the information submitted to the record of this
proceeding to determine whether the parties opposing, or seeking a
deferral of, this waiver request have met their burden to demonstrate
that the ACC standards are not consistent with section 202(a). In its
initial Waiver Request, CARB submitted information and argument that
the ACC standards are consistent with section 202(a). CARB notes that
in developing the LEV III requirements it considered several factors
(e.g., technical feasibility, lead time available to meet the
requirements, and the cost of compliance and the technical and resource
challenges manufacturers face in complying with the requirement to
simultaneously reduce criteria and GHG emissions). CARB notes that that
criteria emissions elements of LEV III occur over an 11-year period
(2015 through 2025) while the GHG emission element is implemented over
a 9-year period from 2017 through 2025. CARB sets forth its belief that
both the stringency and implementation schedules for its PM standards
are technologically feasible within the available lead time. With
regard to LEV III GHG regulations, CARB noted that California
coordinated with the EPA and NHTSA on technical and economic areas, and
CARB has

moved in parallel with the federal rulemaking in terms of stringency of
the standards and lead time for compliance. CARB maintains that the
standards and lead time are technologically feasible ``even before CARB
proposes to amend its LEV III GHG regulations to allow National Program
compliance to serve as compliance in California. It will be undeniably
true should California adopt its ``deemed to comply'' rule as
planned.'' \98\ With regard to the ZEV amendments, CARB noted the lack
of objections from the regulated parties during CARB's rulemaking and
the regulated parties' announcements of their planned ability to
comply.
---------------------------------------------------------------------------

    \98\ At the time of CARB's waiver request EPA's GHG emission
rule had not yet been finalized. Subsequent to EPA's final rule CARB
has adopted the deemed to comply and has provided the regulation for
EPA's consideration. See also CARB Resolution 12-11 at 20.
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    The Manufacturers have submitted information and argument that
their members see no way to measure and meet the 1 mg/mile PM standard
beginning in 2025 (as part of the LEV III standards) and ask EPA to
withhold issuing a waiver for this standard at this time. The
Manufactures have commented that they do not oppose California's GHG
emission standards for the 2017 through 2025 MYs but suggests that EPA
should grant California's waiver request after CARB has finalized its
regulatory amendments to allow for a national compliance option.\99\
Finally, while the Manufacturers agree that CARB's ZEV amendments, as
they affect 2017 and earlier MYs, are within the scope of existing
waivers, they are opposed to granting the waiver for the ZEV program
past the 2017 MY based on argument that those standards will not be
feasible either in California or in the individual Section 177 States
given the status of the infrastructure and the level of consumer demand
for ZEVs.
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    \99\ The Manufacturers note that both the federal and the
California GHG emission standards provide for a comprehensive mid-
term evaluation of the MYs 2022-2025. Therefore, the Manufacturers
clearly state that ``Any amendments to California's GHG emission
standards made as a result of the mid-term evaluation will require
analysis to determine whether the amendments fall within the scope
of this waiver, or, if not, whether they qualify for a separate
waiver under Section 209(b) of the Clean Air Act.
---------------------------------------------------------------------------

    EPA also received comment from the Dealers suggesting that EPA
should not grant California a waiver for its GHG emission standards
past MY 2021 since the technical capabilities after that time are
uncertain. In addition, like the Manufacturers, NADA does not oppose
CARB's ZEV amendments through the 2017 MY. However, NADA believes
CARB's ZEV amendments, as they affect 2018 and later MYs, raise serious
technological feasibility concerns including their economic feasibility
(including their marketability when compared to non-ZEV vehicles).
EPA's analysis of the consistency of the CARB standards with section
202(a) of the Act follows.
1. Historical Approach
    Under section 209(b)(1)(C), EPA must deny California's waiver
request if the Agency finds that California standards and accompanying
enforcement procedures are not consistent with section 202(a) of the
Act. The scope of EPA's review under this criterion is narrow. EPA has
previously stated that the determination is limited to whether those
opposed to the waiver have met their burden of establishing that
California's standards are technologically infeasible, or that
California's test procedures impose requirements inconsistent with the
federal test procedure.\100\ Previous waivers of federal preemption
have stated that California's standards are not consistent with section
202(a) if there is inadequate lead time to permit the development of
technology necessary to meet those requirements, giving appropriate
consideration to the cost of compliance within that time.\101\
California's accompanying enforcement procedures would be inconsistent
with section 202(a) if the federal and California test procedures
conflict, i.e., if manufacturers would be unable to meet both the
California and federal test requirements with the same test
vehicle.\102\
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    \100\ MEMA I, 627 F.2d at 1126.
    \101\ See e.g., 38 FR 30136 (November 1, 1973) and 40 FR 30311
(July 18, 1975).
    \102\ To be consistent, the California certification test
procedures need not be identical to the Federal test procedures.
California procedures would be inconsistent, however, if
manufacturers would be unable to meet both the state and Federal
test requirements with the same test vehicle in the course of the
same test. See, e.g., 43 FR 32182, (July 25, 1978).
---------------------------------------------------------------------------

    EPA does not believe that there is any reason to review these
criteria any differently for EPA's evaluation of California's ACC
program request. There is nothing inherently different about how ACC
control technologies should be reviewed when making a determination
about technological feasibility or consistency of test procedures.
    In the ACC waiver proceeding, opponents of the waiver have
presented evidence for EPA's consideration which they believe will
require EPA to make the finding of inconsistency with section 202(a),
and therefore require EPA to deny or defer granting all or parts of the
waiver request (e.g., a deferral on the 2025 and later MY phase-in of
the 1 mg/mile PM standard of LEV III, a denial of the GHG emission
standards for MY 2022 and later, and a denial of the 2018 through 2025
MY ZEV requirements or a deferral on the 2021 and later MYs). As noted
above, the commenters believe this finding should be made on one or
more grounds, including: there exists either a lack of information or
certainty of technological solutions based on the remoteness in time
from the implementation of the standards; that there are questions of
economic feasibility and marketability, including consumer demand; that
technological consistency must include consideration of feasibility in
section 177 states; and, that either the cost effectiveness of certain
standards is unreasonable or that the standards are not needed for air
quality purposes. EPA's process for evaluating lead time is discussed
immediately below and in subsequent parts of this section. The industry
opponents also raise arguments based on the cost of compliance with the
standards (including cost-effectiveness), which will be discussed below
and in other parts of this section. To the extent the commenters raise
questions about the need for CARB's PM standards and that it could be
the basis for EPA's waiver consideration, we address such concerns in
the discussion above concerning section 209(b)(1)(B). EPA has already
addressed the Dealers suggestions that CARB's ZEV requirements are not
needed within the same discussion.
    Regarding lead time, EPA historically has relied on two decisions
from the U.S. Court of Appeals for the D.C. Circuit for guidance
regarding the lead time requirements of section 202(a). Section 202(a)
provides that an emission standard shall 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. In Natural Resources Defense
Council v. EPA (NRDC), 655 F.2d 318 (DC Cir. 1981), the court reviewed
claims that EPA's PM standards for diesel cars and light trucks were
either too stringent or not stringent enough. In upholding the EPA
standards, the court concluded:

    Given this time frame [a 1980 decision on 1985 model year
standards]; we feel that there is substantial room for deference to
the EPA's expertise in projecting the likely course of development.
The essential question in this case is the pace of that development,
and absent a revolution in the study of industry, defense of such a
projection can never possess the inescapable

logic of a mathematical deduction. We think that the EPA will have
demonstrated the reasonableness of its basis for projection if it
answers any theoretical objections to the [projected control
technology], identifies the major steps necessary in refinement of
the technology, and offers plausible reasons for believing that each
of those steps can be completed in the time available (emphasis
added).\103\
---------------------------------------------------------------------------

    \103\ Natural Resources Defense Council v. EPA, 655 F.2d 318,
331. (emphasis added)

    Another key case addressing the lead time requirements of section
202(a) is International Harvester v. Ruckelshaus (International
Harvester), 478 F 2.d 615 (DC Cir. 1979). In International Harvester,
the court reviewed EPA's decision to deny applications by several
automobile and truck manufacturers for a one-year suspension of the
1975 emission standards for light-duty vehicles. In the suspension
proceeding, the manufacturers presented data which, on its face, showed
little chance of compliance with the 1975 standards, but which, at the
same time, contained many uncertainties and inconsistencies regarding
test procedures and parameters. In a May 1972 decision, the
Administrator applied an EPA methodology to the submitted data, and
concluded that ``compliance with the 1975 standards by application of
present technology can probably be achieved,'' and so denied the
suspension applications.\104\ In reviewing the Administrator's
decision, the court found that the applicants had the burden of coming
forward with data showing that they could not comply with the
standards, and if they did, then EPA had the burden of demonstrating
that the methodology it used to predict compliance was sufficiently
reliable to permit a finding of technological feasibility. In that
case, EPA failed to meet this burden.
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    \104\ International Harvester v. Ruckelshaus, 478 F 2d. 615,
626.
---------------------------------------------------------------------------

    With respect to lead time, the court in NRDC pointed out that the
court in International Harvester ``probed deeply into the reliability
of EPA's methodology'' because of the relatively short amount of lead
time involved (a May 1972 decision regarding 1975 MY vehicles, which
could be produced starting in early 1974), and because ``the hardship
resulting if a suspension were mistakenly denied outweigh the risk of a
suspension needlessly granted.'' \105\ The NRDC court compared the
suspension proceedings with the circumstances concerning the diesel
standards before it: ``The present case is quite different; `the base
hour' for commencement of production is relatively distant, and until
that time the probable effect of a relaxation of the standard would be
to mitigate the consequences of any strictness in the final rule, not
to create new hardships.'' \106\ The NRDC court further noted that
International Harvester did not involve EPA's predictions of future
technological advances, but an evaluation of presently available
technology.
---------------------------------------------------------------------------

    \105\ NRDC, 655 F.2d 318, 330.
    \106\ Id. The ``hardships'' referred to are hardships that would
be created for manufacturers able to comply with the more stringent
standards being relaxed late in the process.
---------------------------------------------------------------------------

    EPA also evaluates CARB's request in light of congressional intent
regarding the waiver program generally. This is consistent with the
motivation behind section 209(b) to foster California's role as a
laboratory for motor vehicle emission control, in order ``to continue
the national benefits that might flow from allowing California to
continue to act as a pioneer in this field.'' \107\
---------------------------------------------------------------------------

    \107\ 40 FR 23102, 23103 (waiver decision citing views of
Congressman Moss and Senator Murphy) (May 28, 1975).
---------------------------------------------------------------------------

    For these reasons, EPA believes that California must be given
substantial deference when adopting motor vehicle emission standards
which may require new and/or improved technology to meet challenging
levels of compliance. This deference was discussed in an early waiver
decision when EPA approved the waiver request for California's 1977 MY
standards:

    Even on this issue of technological feasibility I would feel
constrained to approve a California approach to the problem which I
might also feel unable to adopt at the Federal level in my own
capacity as a regulator. The whole approach of the Clean Air Act is
to force the development of new types of emission control technology
where that is needed by compelling the industry to `catch up' to
some degree with newly promulgated standards. Such an approach to
automotive emission control might be attended with costs, in the
shape of a reduced product offering, or price or fuel economy
penalties, and by risks that a wider number of vehicle classes may
not be able to complete their development work in time. Since a
balancing of these risks and costs against the potential benefits
from reduced emissions is a central policy decision for any
regulatory agency, under the statutory scheme outlined above I
believe I am required to give very substantial deference to
California's judgment on that score.'' \108\
---------------------------------------------------------------------------

    \108\ Id. at 23103.

    CARB, while maintaining that the NRDC approach is the correct
measurement here, commented that the technological sophistication of
ZEVs currently being produced is anticipated to continue to advance,
making commercial production and compliance of these vehicles by MY
2018 and later more feasible. CARB also notes that the only relevance
of costs in a section 209(b) waiver proceeding is in the context of
technological feasibility. ``Past waiver determinations have made clear
that for the cost of compliance to be found excessive it would need to
be ``very high'' such that the cost to customers who purchased a
complying vehicle would be doubled or tripled.\109\ Additionally, the
relevance of the cost of compliance analysis is limited to the question
of whether such costs will adversely affect the timing of an emission
standard.'' \110\
---------------------------------------------------------------------------

    \109\ 74 FR 32744, 32774 (July 8, 2009).
    \110\ CARB's waiver request at 25-26. MEMA I, 627 F.2d at 1105,
1114 n. 40 (``[T]he `cost of compliance' consideration relates to
the timing of standards and procedures.'') CARB notes that EPA has
recognized that the only relevance of costs is their impact on
timing, e.g. ``Manufacturers do not contend that the cost of
compliance will be significantly reduced by extending lead time
beyond the minimal period required for compliance.'' (36 FR 17459
(August 31, 1971)).
---------------------------------------------------------------------------

    Under NRDC, when compliance with CARB standards is phased-in over a
lengthy time period, the reasonableness of a projection of
technological feasibility can be based on answering any theoretical
objections to the projected control technology; identifying the major
steps necessary in refinement of the technology; and offering plausible
reasons for believing that each of those steps can be completed in the
time available.\111\ EPA's review of the evidence on the technological
feasibility of CARB's ACC standards, in particular the standards which
EPA received comment, follows.
---------------------------------------------------------------------------

    \111\ NRDC, 655 F.2d 318, 331.
---------------------------------------------------------------------------

    Congress has stated that the consistency requirement of section
202(a) relates to technological feasibility.\112\ Section 202(a)(2)
states, in part, that any regulation promulgated under its authority
``shall take effect after such period as the Administrator finds
necessary to permit the development and application of the relevant
technology, considering the cost of compliance within that time.''
Section 202(a) thus requires the Administrator to first review whether
adequate technology already exists, or if it does not, whether there is
adequate time to develop and apply the technology before the standards
go into effect.
---------------------------------------------------------------------------

    \112\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
---------------------------------------------------------------------------

    In MEMA I, the court addressed the cost of compliance issue at some
length in reviewing a waiver decision. According to the court:

    Section 202's cost of compliance concern, juxtaposed as it is
with the requirement that the Administrator provide the requisite
lead

time to allow technological developments, refers to the economic
costs of motor vehicle emission standards and accompanying
enforcement procedures. See S. Rep. No. 192, 89th Cong., 1st Sass.
5-8 (1965); H.R. Rep. No. 728 90th Cong., 1st Sass. 23 (1967),
reprinted in U.S. Code Cong. & Admin. News 1967, p. 1938. It relates
to the timing of a particular emission control regulation rather
than to its social implications. Congress wanted to avoid undue
economic disruption in the automotive manufacturing industry and
also sought to avoid doubling or tripling the cost of motor vehicles
to purchasers. It, therefore, requires that the emission control
regulations be technologically feasible within economic parameters.
Therein lies the intent of the cost of compliance requirement
(emphasis added).\113\

    \113\ MEMA I at 1118 (emphasis added). See also id. at 1114 n.
40 (A[T]he `cost of compliance' criterion relates to the timing of
standards and procedures.).
---------------------------------------------------------------------------

    Previous waiver decisions are fully consistent with MEMA I, which
indicates that the cost of compliance must reach a very high level
before the EPA can deny a waiver. Therefore, past decisions indicate
that the costs must be excessive to find that California's standards
are inconsistent with section 202(a).\114\ It should be noted that, as
with other issues related to the determination of consistency with
section 202(a), the burden of proof regarding the cost issue falls upon
the opponents of the grant of the waiver.
---------------------------------------------------------------------------

    \114\ See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982), 43 FR 25735
(Jun. 14, 1978), and 46 FR 26371, 26373 (May 12, 1981).
---------------------------------------------------------------------------

    Consistent with MEMA I, the Agency has evaluated costs in the
waiver context by looking at the actual cost of compliance in the time
provided by the regulation, not the regulation's cost-effectiveness.
The appropriate level of cost-effectiveness is a policy decision of
California that is considered and made when California adopts the
regulations, and EPA, historically, has deferred to these policy
decisions. EPA has stated in this regard, ``the law makes it clear that
the waiver request cannot be denied unless the specific findings
designated in the statute can be made. The issue of whether a proposed
California requirement is likely to result in only marginal improvement
in air quality not commensurate with its cost or is otherwise an
arguably unwise exercise of regulatory power is not legally pertinent
to my decision under section 209 * * *.'' \115\ Thus, EPA will look at
the compliance costs for manufacturers in developing and applying the
technology and not at cost effectiveness when making a waiver decision.
---------------------------------------------------------------------------

    \115\ 36 FR 17158 (August 31, 1971). See also 40 FR 23102,
23104; 58 FR 4166 (January 7, 1993), LEV Waiver Decision Document at
20.
---------------------------------------------------------------------------

2. LEV III Criteria Pollutant Standards
    California has adopted new standards for exhaust emissions of non-
methane organic gases (NMOG), NOX, and PM, as well as
evaporative emissions standards. These standards phase in beginning
with MY 2015. The LEV III standards are similar, in many respects, in
structure to those in the existing federal Tier 2 program. As with the
Tier 2 program, the proposed standards would apply to all light-duty
vehicles (LDVs, or passenger cars, light-duty trucks (LDT1s, LDT2s,
LDT3s, and LDT4s)) below 8,500 pounds GVWR (Gross Vehicle Weight
Rating), and Medium-Duty Passenger Vehicles, or MDPVs (8,500 to 10,000
lbs GVWR). Based on our review of the LEV III criteria pollutant
standards, and because EPA did not receive any comments objecting to
CARB's LEV III criteria pollutant standards, with the exception of the
PM standard issue discussed below, we find it unnecessary to provide a
full written review whether such standards are consistent with section
202(a), as those opposing the waiver have clearly not met their burden
regarding the issue, and we otherwise cannot make a finding that such
standards are inconsistent with section 202(a).
a. Particulate Matter Standards
    The Manufacturers generally note that testing for and complying
with the revised particulate matter standards will present significant
burdens on the industry. In short, the Manufacturers recommend that EPA
withhold issuing a waiver for the MY 2025 PM standard. While noting
that the phase in of the 3 mg/mile FTP PM standard beginning in MY 2017
will be very challenging, they nevertheless state that the
Manufacturers are optimistic that vehicles will achieve this level with
time. Recognizing that there are long lead time changes, the
Manufacturers appear to be agreeing with CARB's planned phased-in
approach starting in the 2017 MY. Also, the Manufacturers are not
objecting to EPA issuing a waiver for the 3 mg/mile PM standards based
on their stated testing concerns.
    However, the Manufacturers believe the 1 mg/mile PM standard, which
begins its phase-in starting in the 2025 MY, raises further feasibility
issues. Based on their knowledge of PM measurement and vehicle PM
control technology, the Manufacturers state that their members ``see no
way to both measure and meet this standard.'' The Manufacturers believe
that setting a standard that is unachievable today is inappropriate,
and they do not believe EPA should issue a waiver for these standards
at this time.
    Finally, the Manufacturers note that there is ample time to revisit
the waiver request without interfering with CARB's implementation of
standards should they be deemed feasible (during CARB's planned review
of the standard).
    CARB's supplemental comments note that the LEV III PM standards are
based on a particular concern for their impact on public health and
safety. As noted in their LEV III Technical Support Document, CARB
acknowledges that while PM emissions from LDVs are not a major
contributor to the inventory, they are a significant contributor to
urban pollution and human exposure. CARB also notes that the exact
amount of pollution reduced and the cost-effectiveness of particular
California standards is not relevant to EPA's waiver determination.
    What is relevant, CARB maintains, is that thirteen years of lead
time (from the date of its adopted regulations to the first model year
of the phase-in standards in 2025) are provided to improve the test
procedure and for industry to incorporate needed improvements to their
engines and fuel systems. CARB maintains that it has consistently
demonstrated PM measurement capability at 1 mg/mi using new test
procedures under development by EPA under 40 CFR Part 1066.\116\ CARB
suggests that EPA apply the rationale of NRDC and find that CARB has
identified barriers to implementation of needed technologies and a
viable path to overcome these barriers. For example, CARB states test
data that they have presented demonstrates PM levels from current port
fuel injected (PFI) engines below 1 mg/mi and from late model gasoline
direct injection engines (GDI) approaching 1 mg/mi. CARB expects
further technical improvements over the extensive lead time
provided.\117\ CARB has also identified that some of the low carbon
technologies with proven track records that are most likely to be used
(to meet GHG emission requirements) are: Advanced port fuel injection
engines, GDI engines, boosted and downsized engines, clean diesel
engines, hybrid, and plug-in hybrid technology among others. CARB notes

that each of these technologies will have a particular impact on PM
emissions. CARB notes that many of these technologies may be able to
currently meet 2025 MY PM standards and that further improvements are
reasonable. For example: (1) CARB's Technical Support Document states
``Some current, well-maintained PFI-equipped LDVs emit PM mass levels
below 1 mg/mi. For example, published research reports PM emissions
rates for both PFI ULEV and SULEV vehicles of approximately 0.7 mg/mi
or much less over the Federal Test Procedure (FTP or FTP-75) cycle''
and (2) ``Car makers who choose to pursue gasoline-fueled,
CO2 friendlier GDI internal combustion engines for their
future vehicles will have two principal technical solutions for further
reduction of PM mass emissions. One solution can utilize next
generation state-of-the-art engines (e.g., start-stop system where the
ICE automatically shuts down and starts up at idle) with optimized fuel
injection strategies (e.g., spray-guided central injector) at nearly no
net cost increase. The second solution employs post-combustion control
in the form of the gasoline particle filter (GPF) at an additional
cost.'' \118\
---------------------------------------------------------------------------

    \116\ CARB notes that EPA has identified areas of improvement to
Part 1066 it intends to evaluate in cooperation with CARB and
industry (see pp. 54-59 of CARB's Technical Support Document at:
http://www.arb.ca.gov/regact/2012/leviiighg2012/levappp.pdf).
    \117\ Id. at P-8 through P-20. CARB's Board has provided
direction to its staff (Resolution 12-11 at 21) to conduct a review
of the 1 mg/mi PM standard in the 2015 timeframe and report back to
the Board its results.
    \118\ Id.
---------------------------------------------------------------------------

b. EPA's Response to Comments
    As explained below, EPA believes CARB presents a proper view of how
lead time should be evaluated, for purposes of waiver review by EPA,
and that CARB has provided reasonable responses to any theoretical
objections to the projected control technology; identified the major
steps necessary in refinement of the technology; and offered plausible
reasons for believing that each of those steps can be completed in the
time available.
    We also believe that CARB has properly set forth the role of EPA in
reviewing California standards which require new and/or improved
technology to meet challenging levels of compliance. EPA is not setting
its own standards under section 202(a) of the Clean Air Act, rather
EPA's role within its waiver review is more limited and takes place in
the context of deference that Congress envisioned for California. This
deference was discussed in an early waiver decision when EPA approved
the waiver request for California's 1977 model year standards:

    Even on this issue of technological feasibility I would feel
constrained to approve a California approach to the problem which I
might also feel unable to adopt at the Federal level in my own
capacity as a regulator. The whole approach of the Clean Air Act is
to force the development of new types of emission control technology
where that is needed by compelling the industry to `catch up' to
some degree with newly promulgated standards. Such an approach to
automotive emission control might be attended with costs, in the
shape of a reduced product offering, or price or fuel economy
penalties, and by risks that a wider number of vehicle classes may
not be able to complete their development work in time. Since a
balancing of these risks and costs against the potential benefits
from reduced emissions is a central policy decision for any
regulatory agency, under the statutory scheme outlined above I
believe I am required to give very substantial deference to
California's judgment on that score.\119\
---------------------------------------------------------------------------

    \119\ 40 FR 23102, 23103 (May 28, 1975).

    Regarding the feasibility of the CARB 1 mg/mile PM standard that
commences its phase-in starting with the 2025 MY, EPA believes that it
is proper to review this through the NRDC prism. In other words, EPA
believes it appropriate to provide substantial room for deference to
CARB's projections. Although the Manufacturers have raised a variety of
concerns they have not provided any data or other information to
demonstrate why the pathways and steps identified by CARB are
unreasonable. EPA believes having given appropriate deference that CARB
has reasonably projected possible pathways to address the theoretical
concerns with the 2025 phased-in PM standard, including concerns
relating to testing capability. The Manufacturers have provided no data
or other information to demonstrate why CARB's identified path of
improvements in testing technology and procedures is not feasible in
the lead time provided. Similarly, the Manufacturers have provided no
data or other information to demonstrate why CARB's identified
technology solutions and possible refinements are infeasible,
especially given the amount of lead time provided. Given the amount of
lead time provided by CARB and their identified paths for improvements,
EPA believes the opponents to the waiver have not met their burden of
proof in regards to the PM standards commencing in MY 2025.
    Therefore, based on the record before us, EPA cannot find that the
opponents of the PM standard in 2025 have met their requisite burden of
proof to demonstrate that such standards are inconsistent with section
202(a). Thus EPA cannot deny CARB's ACC waiver request on this basis.
3. LEV III GHG Emission Standards
    CARB has worked closely with EPA and NHTSA throughout the
development of the MY 2017-2025 GHG emission standards and has moved in
parallel with the agencies in setting standards that are essentially
equivalent in terms of lead time and stringency. CARB projects that its
GHG emissions standards for MYs 2017-2025 will reduce fleet average
CO2 levels by about 34 percent from MY 2016 levels of 251 g/
mile down to about 166 g/mile, based on the projected mix of vehicles
sold in California. The basic structure of the GHG standards is
consistent with that of EPA's GHG standards. CARB uses two vehicle
categories, passenger cars and light trucks. CARB projects that the
standards will reduce car CO2 emissions by approximately
4.9%/year, reduce truck CO2 emissions by approximately 4.1%/
year (the truck CO2 standard target curves move downward at
approximately 3.5%/year through the 2016-2021 period and about 5%/year
from 2021-2025), and reduce combined light-duty CO2
emissions by approximately 4.5%/year from 2016 through 2025.
    CARB notes that the CO2 emission reduction estimates are
approximate because the required emission level to achieve compliance
with the standards for each vehicle manufacturer depends on each
manufacturer's ultimate sales mix of vehicles.\120\ Within the two
categories, the CO2 standard targets for vehicle models sold
by each automaker are indexed to the vehicles' footprint, which is
calculated as each vehicle model`s wheelbase times its average track
width. As a result of this regulatory structure, the precise
CO2 emission rates that will result from the standards in
each year from 2017 through 2025 will depend on the ultimate sales-
weighted mix of vehicles (i.e., according to vehicle sales in each
category and the footprint of the models) sold in each year.
---------------------------------------------------------------------------

    \120\ EPA-HQ-OAR-2012-0562-0011 at ES-6.
---------------------------------------------------------------------------

    CARB also adopted separate nitrous oxide (N2O) and
methane (CH4) standards that are harmonized with the
standards EPA first adopted in the MY 2012-2016 rulemaking. As with the
EPA program, manufacturers may use CO2 credits to meet the
N2O and CH4 standards on a CO2-
equivelent basis.
    CARB includes most of the flexibilities established by EPA for MYs
2017-2025. CARB includes averaging, banking, and trading provisions
which allow for 5-year credit carry-forward and 3-year credit carry-
back and credit trading between manufacturers. Manufacturers may
generate air conditioning system credits through system efficiency
improvements, low refrigerant leakage designs, and use of low global
warming potential

refrigerants. Manufacturers may generate up to 18.8 g/mile
CO2-equivalent credit for cars and 24.4 g/mile
CO2-equivelent credits for trucks from air conditioning
system improvements. CARB also moved to harmonize air conditioning
system test procedures with EPA, replacing the A/C idle test
requirement with the AC17 test procedure.
    In addition CARB adopted off-cycle credits provisions similar to
those adopted by EPA, which provide credits to manufacturers based on
real world improvements in CO2 emissions not captured on the
2-cycle test procedure. CARB adopted a list of pre-approved credits
that manufacturers may claim by using pre-approved technologies. As
with the EPA program, off-cycle credits based on the pre-approved
credits list is capped at 10 g/mile. CARB also provides full-size
pickup truck technology credits of 10 or 20 g/mile per vehicle
depending on the level of technology employed, similar to the EPA
program. Manufacturers may generate technology incentive credits by
using hybrid technologies or by meeting performance-based criteria over
a specified minimum percentage of full size pickup truck production.
    The EPA and CARB programs differ in their treatment of advanced
technology vehicles, specifically plug-in hybrids, battery electric
vehicles, and fuel cell vehicles. EPA's program encourages the
production of these advanced technology vehicles in two ways; by
providing incentive multipliers for these technologies and by not
counting the upstream emissions associated with electric operation for
the first several model years of the program.\121\ CARB does not
provide a multiplier incentive or allow for the use of a 0 g/mile
compliance value. CARB explains that incentives are not needed for
plug-in hybrids, battery electric vehicles, and fuel cell vehicles
under their GHG program because the California ZEV program requires
manufacturers to produce vehicles using these technologies.
---------------------------------------------------------------------------

    \121\ EPA allows a 0 g/mile compliance value to be used for
vehicles sold in MY2017-2021 and caps the cumulative number of
vehicles that a manufacturer may use the 0 g/mile compliance value
for in MYs 2022-2025.
---------------------------------------------------------------------------

    In its Final Statement of Reasons, CARB reiterated its commitment,
as directed by Board Resolution 12-11, to accept compliance with EPA's
GHG emission standards for MY 2017-2025 as compliance with California's
GHG standards if CARB determines that EPA's final rule preserves the
GHG reduction benefits set forth in EPA's proposed rule.\122\ CARB also
notes their plan to adopt a ``deemed to comply'' rule within their
waiver request to EPA. EPA stated in the Federal Register notice
announcing the opportunity for hearing and comment on CARB's June 27,
2012 ACC waiver request that ``EPA invites comment on all aspects of
CARB's waiver request, and specifically invites comment on CARB's
waiver request in light of CARB's plans concerning adoption of a
``deemed to comply'' provision into its LEV III GHG standards. This
will allow EPA to consider any ``deemed to comply'' provision and
comments on it when taking action on CARB's request for a waiver.''
\123\
---------------------------------------------------------------------------

    \122\ California Air Resources Board, EPA-HQ-OAR-2012-0562-0021,
at 16.
    \123\ 77 FR 53199, 53200 (August 31, 2012).
---------------------------------------------------------------------------

    On September 14, 2012, CARB proposed amendments to their program to
permit compliance based on compliance with EPA's GHG standards. In its
discussion of the differences between the EPA and CARB programs with
regard to the treatment of advanced technology vehicles, CARB notes
that manufacturers will have the option to comply with the federal
program and utilize the EPA accounting provisions for these
vehicles.\124\ On November 15, 2012, the Air Resources Board agreed to
accept compliance with federal standards as equivalent to compliance
with California's, approving the amendment for ``deemed to comply.''
\125\ On December 7, 2012, CARB submitted additional information to EPA
noting that CARB had approved further amendments to the ACC program,
including the ``deemed to comply'' regulation, and therefore California
has met its commitment to the National Program. CARB requested that EPA
consider and take action on these amendments concurrent with the
request set forth in CARB's June 27, 2012 ACC waiver request.\126\
---------------------------------------------------------------------------

    \124\ Air Resources Board, EPA-HQ-OAR-2012-0562-0011, at 135.
    \125\ CARB Resolution 12-35 (November 15, 2012).
    \126\ EPA-HQ-OAR-2012-0562-0374.
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a. Comments on CARB's 2017 Through 2025 GHG Emission Standards
    CARB's waiver request notes that in 2010, President Barack Obama
directed EPA and NHTSA to work with California to develop GHG fleet
standards for MY 2017 through 2025 light-duty vehicles. In response,
the three agencies developed the Interim Joint Technical Assessment
Report (TAR), released in September 2010. The TAR was major milestone
in the technical work done collaboratively by EPA, NHTSA, and CARB.
CARB held four public technical workshops covering topics of
efficiency, mass-reduction, and safety technology; collaborative
technical contract work (e.g., with FEV, Ricardo, Lotus); and extensive
meetings with a wide range of stakeholders to gather input. This
collaboration ensured that the three agencies had a common set of
technical information on which to inform their proposals, allowing the
agencies to develop standards that are harmonized in terms of their
stringency.
    CARB further notes that the feasibility analysis underlying its
standards is based on several existing and emerging technologies that
increase engine and transmission efficiency, reduce vehicle energy
loads, improve auxiliary and accessory efficiency, and that would
increasingly electrify vehicle subsystems with hybrid and electric
drivetrains. The technology assessment conducted by CARB for the MY
2017-2025 standards builds on the original technical basis established
in the previous rulemakings for California's MY 2009-2016 and federal
MY 2012-2016 standards. CARB notes that several individual technologies
offer substantial CO2 reduction potential and that many of
the technologies have only seen limited deployment in new vehicle
models.\127\
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    \127\ California Air Resources Board, EPA-HQ-OAR-2012-0562-0011,
at 102-103.
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    In its Initial Statement of Reasons staff report, CARB highlights
several CO2 reduction technologies that manufacturers can
employ to meet the standards.\128\ The list of technologies cited by
CARB is very similar to the list of technologies considered by EPA and
NHTSA in evaluating standards for MYs 2017-2025.\129\ Vehicle road load
and accessory energy loads can be improved, for example, through mass
reduction, improved accessories, electric power steering, improved
aerodynamics, and low rolling resistance tires. CARB notes several
considerable opportunities for engine efficiency improvements. Engine
efficiency technologies include turbo charging and downsizing, gasoline
direct injection, continuously variable valve lift, cylinder
deactivation, and diesel-fueled engines. CARB also describes
transmission efficiency improvements important in allowing the
operation of the engine in its lowest fuel consumption operating points
more frequently. These include more gears

(e.g., 8 speed transmissions), closer gear ratio spacing, optimized
controls, and dual clutch transmissions that allow essentially the same
efficiency as manual transmissions.
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    \128\ California Air Resources Board, EPA-HQ-OAR-2012-0562-0011,
at 103-108.
    \129\ Joint Technical Support Document: Final Rulemaking for
2017-2025 Light-duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards, Chapter 3, EPA-420-R-12-
901, August 2012.
---------------------------------------------------------------------------

    CARB's analysis also includes various hybrid systems that offer
significant potential CO2 reductions through the elimination
of engine idling, reduction in fuel consumption during deceleration,
reduction of acceleration power requirement through launch assist, and
the recovery of vehicle energy losses through regenerative braking
during deceleration. Finally, CARB also includes emerging electric
drive technologies including plug-in hybrids, electric, and hydrogen
fuel cell vehicles.
    EPA received several comments on CARB's waiver request generally
supporting the California GHG standards as feasible and consistent with
CAA section 202(a). The Environmental Defense Fund (EDF) and the
Natural Resources Defense Council (NRDC) commented that CARB
coordinated with EPA and NHTSA in the development of the GHG standards
and the California GHG standards are aligned with the federal GHG
standards in terms of stringency and lead time. EDF further commented
that EPA received letters from 13 automakers supporting the federal GHG
standards, and based on this coordination and support EPA can only
determine that the CARB GHG standards are feasible.\130\
---------------------------------------------------------------------------

    \130\ EDF's comment at EPA-HQ-OAR-2012-0562-0025 and 0353; and
NRDC's comment at EPA-HQ-OAR-2012-0562-0347.
---------------------------------------------------------------------------

    EPA received comments from the Dealers that EPA should not provide
a waiver to California for the MY 2022-2025 GHG standards because the
standards for these years are not consistent with CAA section 202(a).
The commenter states that by committing to a mid-term evaluation in its
own GHG program, EPA has already determined that ``technological
capabilities after MY 2022 are too remote to be accurately predicted.''
The commenter argues that it is inappropriate for CARB to obtain a
waiver for years where it cannot demonstrate technological feasibility
regardless of the fact that California has agreed to participate in the
mid-term review. The Dealers assert that by agreeing to participate in
the mid-term evaluation, CARB ``has admitted that the technological
feasibility of its GHG standards for MYs 2022-2025 is not knowable at
this time.''
    As part of the waiver decision process, CARB's supplemental
comments provided a response to comments submitted by NADA, including a
response to NADA's comments regarding the feasibility of the MY 2022-
2025 standards.\131\ CARB comments that NADA concerns are not supported
by relevant case law and should be dismissed. CARB comments that NADA
is disregarding decades of precedent that clearly sets out the
appropriate ``technological feasibility'' analysis under section
202(a). Citing Natural Resources Defense Council v. U.S. Environmental
Protection Agency, (1981) 655 F.2d 318, 331, CARB notes CAA section
202(a) has historically been interpreted to allow for projections of
likely future technological development. Such projections do not need
to ``possess the inescapable logic of a mathematical deduction.''
Instead, such a projection is considered sufficient if it ``answers any
theoretical objections to the [projected technology], identifies the
major steps necessary in refinement of the technology, and offers
plausible reasons for believing that each of those steps can be
completed in the time available.'' Moreover, where the requirements of
a standard are phased in over a lengthy period of time it bears on the
likelihood of a proper finding of technological feasibility. CARB notes
that the great length of time provided--until after MY 2022--supports a
finding of technological feasibility under NRDC, and would be in line
with past EPA waiver decisions.
---------------------------------------------------------------------------

    \131\ EPA-HQ-OAR-2012-0562-0373 at 8.
---------------------------------------------------------------------------

b. EPA Response to Comments
    EPA disagrees with NADA's characterization of the mid-term review
as it relates to the technological feasibility of the standards for MYs
2022-2025. As discussed in the final rule for the EPA's GHG emission
standards, EPA has found that its standards are technologically
feasible under CAA section 202(a), based on available information
regarding technology and costs.\132\ EPA could not have adopted the
standards for MYs 2022-2025 if it did not find the standards to be
consistent with CAA section 202(a) which requires EPA to consider
issues of technological feasibility, cost, and available lead-
time.\133\ As EPA discusses in the final rule in response to comments,
``EPA does not agree that the mid-term evaluation is legally required,
or that the standards adopted today would be arbitrary and capricious
or without substantial evidence to support them absent such a mid-term
evaluation. The final rule and supporting information and analysis
amply justify the reasonableness and appropriateness of the final GHG
standards adopted by EPA, irrespective of the provisions for a mid-term
evaluation.'' \134\ EPA is committed to conducting a mid-term
evaluation for MYs 2022-2025 in close coordination with NHTSA and CARB
given the long time frame in implementing standards out to MY 2025 and
given NHTSA's obligation to conduct a separate rulemaking in order to
establish final standards for vehicles for those years.\135\ With
respect to the waiver, however, EPA believes that NADA's reference to
the mid-term review does not demonstrate technological infeasibility
(or any requisite level of uncertainty) or that the CARB standards are
inconsistent with section 202(a), particularly given that the CARB
standards are closely aligned to those adopted by EPA. In addition,
compliance with EPA's GHG standards will be deemed to be compliance
with CARB's GHG standards. EPA agrees with CARB's response to the NADA
concerns and believes that a reasonable technology path forward has
been projected in support of the MY 2022-2025 standards, which is
further supported by the substantial amount of lead-time provided for
these standards. EPA believes that the substantial amount of lead-time
provided also accords with a finding of technological feasibility under
NRDC, and would be in line with past EPA waiver decisions.
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    \132\ 77 FR 62880-62882 and 62777.
    \133\ See 77 FR 62671-62673 for discussion on EPA statutory
authority.
    \134\ 77 FR 62786.
    \135\ 77 FR 62784-62788.
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    EPA did not receive any additional comments on the waiver decision
regarding the technology assessment or cost analysis done by CARB in
support of their GHG standards. CARB has adopted GHG standards that are
closely aligned to those adopted by EPA for MYs 2017-2025. In EPA's
final rule establishing the MY 2017-2025 standards, EPA concluded that
the standards are feasible in the lead time provided and the costs are
reasonable, as required under Section 202(a) of the CAA.\136\ The
technical basis for the standards was developed jointly by EPA, NHTSA,
and CARB. The methodology and underlying data used by CARB to assess
technologies and costs, as summarized above, are very similar and in
many cases the same as those used by EPA to assess the standards.\137\
The extended lead time

provides the necessary time for manufacturers to combine individual
technologies, many of which are currently available, into optimized
packages and apply them across their vehicle fleets.
---------------------------------------------------------------------------

    \136\ 77 FR 62624.
    \137\ See 77 FR 62702-62713 for a description of the EPA and
NHTSA joint technology and cost assessment. More detail is provided
in the joint Technical Support Document for the rule.
---------------------------------------------------------------------------

    It is also important to note that the EPA and CARB GHG programs are
very similar in terms of the structure of the programs and
flexibilities contained in the programs. The CO2 standards
are attribute-based fleet average standards, based on vehicle footprint
curves that are identical. The programs include averaging, banking, and
trading provisions. Both GHG programs offer credits for air
conditioning system improvements, off-cycle CO2 reductions,
and full-size pickup truck technology incentives. Both GHG programs
contain the same N2O and CH4 standards and
essentially the same provisions for small volume manufacturer and small
businesses.
    There are some aspects of the CARB program that differ from the EPA
program but, as discussed below, EPA does not believe that these
differences change the feasibility of the standards in any significant
way. CARB has explained in detail how these standards can be met using
technologies that are reasonably expected to be available in the
regulatory timeframe. NADA does not substantially undermine this
explanation.
    CARB estimated an average per vehicle cost in MY 2025 of $1,340
without the new ZEV requirements and $1,840 with the new ZEV
requirements. In its final rule, EPA estimated an average per vehicle
cost of about $1,800 in MY 2025 for the EPA GHG standards. Both
agencies conclude that these up-front per vehicle costs will be more
than offset by consumer fuel savings over the life of the vehicles.
    Perhaps the most significant differences between the CARB and EPA
vehicle programs involve the new California ZEV requirements which
mandate use of ZEV-type technologies for a portion of a manufacturer's
fleet, and therefore may alter the technology pathways that
manufacturers might otherwise choose to meet the GHG standards. EPA has
reviewed the consistency of the ZEV requirements with section 202(a)
separately below
    The CARB and EPA programs also differ in the treatment of vehicles
capable of electric operation. EPA provides an advanced technology
incentive multiplier through MY 2021 to encourage the increased sales
of plug-in hybrids (PHEVs), electric vehicles (BEVs), and fuel cell
vehicles (FCVs). CARB does not provide advanced technology incentive
credits for these vehicles because these types of vehicles are required
under the ZEV program and an incentive is not necessary. CARB also
accounts for upstream emissions from electric operation starting in MY
2017 while EPA phases in upstream accounting for MY 2022-2025 vehicles
after vehicle sales thresholds are exceeded. These differences mean
that PHEVs, BEVs, and FCVs do not receive as much credit in the CARB
program compared to the EPA program. However, these vehicles still
offer significantly lower CO2 levels in the CARB program
compared to more conventional technologies, lowering a manufacturer's
CO2 fleet average.
    There are other minor differences between the CARB and EPA programs
but EPA does not believe the differences have a significant impact on
feasibility. Many of the differences in the programs arise from changes
EPA made to various provisions between the proposal and final rules in
response to comments. CARB delineates these minor differences in the
Initial Statement of Reasons for their proposal to accept compliance
with EPA's GHG emission standards as compliance with California's GHG
emission standards (aka ``deemed to comply'').\138\ These include
revisions to the off-cycle credits, air conditioning system credits,
and full-size pick-up credits. While most of the changes made by EPA in
its final rule directionally provide somewhat more flexibility to
manufacturers, the changes do not ultimately change the level of
credits potentially available. CARB concludes and EPA agrees that the
programs remain sufficiently comparable.
---------------------------------------------------------------------------

    \138\ EPA-HQ-OAR-2012-0562-0374 at 6-13.
---------------------------------------------------------------------------

    Finally, as discussed below, most if not all manufacturers will
very likely opt to comply with the California program by complying with
the EPA GHG emission standards, as permitted by the ``deemed to
comply'' regulation. Therefore, the small differences between the
programs will not in such cases have any practical implications for
manufacturers. As CARB notes in its waiver request, ``Throughout the
development of the LEV III GHG regulations, California coordinated with
the EPA and NHTSA on technical and economic areas, and CARB has moved
in parallel with the federal rulemaking in terms of stringency of the
standards and lead time for compliance.'' Given this coordination,
commenters have not shown that the LEV III GHG regulations are
technologically infeasible or that the lead time provided is
inadequate.
    The Manufacturers note that they do not oppose California's request
for a Section 209(b) waiver for its GHG emission standards but state
that it would not be appropriate for the waiver to be granted until
after California has finalized its regulatory amendments to allow for a
national compliance option.\139\ ``This national compliance option is
integral to the commitment letters the industry and California signed
in July 2011 and to the single national GHG/fuel economy program all
stakeholders sought to achieve.''
---------------------------------------------------------------------------

    \139\ The Manufacturers note that California does not believe
that another waiver request is necessary once the amendments are
finalized, further supporting its request to wait until after CARB
finalizes its rule.
---------------------------------------------------------------------------

    As noted above, CARB notified EPA by letter dated December 7, 2012
that CARB has approved further amendments to its ACC program, including
the ``deemed to comply'' regulation.\140\ Included in CARB's December
7, 2012 letter to EPA is CARB's ``Final `Clean' Version of California's
2017-2025 Advanced Clean CAR Program, including its Passenger Vehicle
Greenhouse Gas Regulations and LEV/GHG Test Procedures, and its ZEV
regulations and Test Procedures'' all as amended December 6, 2012.\141\
---------------------------------------------------------------------------

    \140\ See CARB's Resolution 12-35 (November 15, 2012) at EPA-HQ-
OAR-2012-0562-0374 (attachment 64), Executive Order R-12-016
(December 6, 2012) at EPA-HQ-OAR-2012-0562-0374 (attachment 66).
    \141\ See EPA-HQ-OAR-2012-0562-0374 (attachment 65).
---------------------------------------------------------------------------

    EPA has not received any comment, based on its August 31, 2012
Federal Register Notice, that CARB's ``deemed to comply'' regulation
raises any issues regarding technological feasibility. EPA did receive
comment from the Manufacturers requesting that EPA not grant CARB a
waiver for its GHG emission standards until after CARB has finalized
their ``deemed to comply'' regulations. Today's waiver applies to
CARB's final regulation as adopted on December 6, 2012.
    After review of the information in this proceeding, EPA believes
that those opposing the waiver have not met their burden of showing
that compliance with California's GHG standards is infeasible, even
without the deemed to comply provision, based upon the current and
future availability of the described technologies in the lead-time
provided and considering the cost of compliance. The CARB technical
information presented in this record clearly indicates that these
requirements are feasible. In addition, California's regulations
include a ``deemed to comply'' provision which provides further strong
support for this view. EPA therefore determines that those opposing the
waiver have not met the

burden of producing the evidence necessary for EPA to find that
California's GHG standards, including the ``deemed to comply''
provision, are not consistent with Section 202(a).
4. California's ZEV Amendments as They Affect 2018 Through 2025 Model
Years
    As noted above, after a thorough review of CARB's ZEV amendments,
we have determined that such amendments, as they affect 2017 and
earlier MYs, are within the scope of previous waivers of preemption.
However, EPA recognizes that such amendments add significant new
requirements, as they affect 2018 and later MYs, and therefore such
amendments are reviewed under the full waiver criteria.
a. Comments on CARB's ZEV Amendments
    CARB notes in its waiver request that to date, all vehicle
manufacturers operating in California are in full compliance with the
ZEV mandate. Nearly 5,600 ZEVs (BEVs and FCVs) are in operation
statewide and 380,000 AT PZEVs are also in operation. Fuel cell vehicle
and infrastructure is progressing with several automakers moving toward
commercialization sometime after 2015. Cumulatively, automakers plan to
have 50,000 FCVs operational in California by 2017, according to
CARB.\142\ CARB also notes that most manufacturers have near-term
production plans to meet or over comply with the regulatory
requirements through MY 2017. In addition, recently a number of
manufacturers have announced aggressive production plans for PHEVs and
BEVs for the next three MYs. CARB maintains that these announcements
reflect technological advancement in lithium-ion battery technology and
a general shift in customer demand and concern about environmental
stewardship. CARB provides a table in its waiver request that
summarizes manufacturers' current ZEV and TZEV program commitments, by
technology category and as publicly stated.\143\ CARB suggests that the
table reveals that nearly every manufacturer will be introducing BEV
and PHEV products within the next one to three years, and five
manufacturers will commercially introduce FCVs by 2015. CARB states
that the technological sophistication of ZEVs currently being produced
is anticipated to advance, making commercial production and compliance
of these vehicles by MY 2018 and later more feasible. A new feature of
the ZEV amendments is that manufacturers will be allowed to use a
variety of battery and fuel cell vehicle technologies to comply with
the ZEV requirement, making compliance still more feasible. Finally,
CARB notes that during its rulemaking proceedings for the adopting of
the 2012 ZEV amendments they did not receive any comments questioning
the overall technological feasibility of the amended standards.
---------------------------------------------------------------------------

    \142\ See CARB's Initial Statement of Reasons (ISOR), EPA-HQ-
OAR-2012-0562-0008 at 11.
    \143\ CARB waiver request at 27-28.
---------------------------------------------------------------------------

    With regard to the manufacturer costs associated with the ZEV
emission requirements CARB states that the ``ZEV regulation must be
considered in conjunction with the proposed LEV III amendments.
Vehicles produced as a result of the ZEV regulation are part of a
manufacturer's light-duty fleet and are therefore included when
calculating fleet averages for compliance with the LEV III GHG
amendments. Because the ZEVs have ultra-low GHG emission levels that
are far lower than non-ZEV technology, they are a critical component of
automakers' LEV III GHG standard compliance strategies. As such the ZEV
program cost is considered as the difference in complying with the LEV
III GHG fleet standard without the proposed amendments to the ZEV
regulation versus with the proposed amendments to the ZEV regulation.
Assuming that all of the associated direct manufacturing and ICMs are
passed on to consumers, the average incremental price increase that
results from the proposed LEV III GHG fleet standards and proposed ZEV
regulation over the 2017 through 2025 timeframe will differ from the
average increase resulting from compliance with only the LEV III GHG
amendments. The average incremental vehicle price due to proposed LEV
III GHG standards, but with no amendments to the current ZEV
regulation, in 2025 is expected to be $1,340. The average incremental
vehicle price considering the proposed LEV III GHG fleet standards and
the proposed ZEV requirements in 2025 MY increases to $1,840, a $500
incremental increase. * * * In the broader context of the overall
fleet, the ultra-low GHG ZEV technology is a major component of
compliance with the LEV III GHG fleet standards for the overall light
duty fleet. In that fleet context, the overall cost of the ZEV program
is the difference in costs between the ``GHG-plus-ZEV'' and the ``GHG
only'' scenarios.'' \144\
---------------------------------------------------------------------------

    \144\ CARB's ISOR at pp. 62-63.
---------------------------------------------------------------------------

    EPA has also received comment from several consumer and
environmental groups that support CARB's ZEV amendments. The Consumer
Federation of America (CFA) provided comment that ``California's
ability to set these strong standards is vitally important to the
advancement of the auto industry and for meeting consumer demand for
cleaner and more efficient cares in states across the nation. Consumers
understand the benefits and have consistently voiced support for
California's leadership on clean car standards. In fact, CFA's latest
poll on the subject found that ``more than 70% of Americans support
states being allowed to continue setting tailpipe emission standards
that, as a result, increase fuel economy for motor vehicles.'' This
commenter also provides the latest from a Consumer Reports poll on the
subject, including ``Seventy-five percent of California consumers think
California should require automakers to build fleets that include
increasing numbers of zero emission vehicles including electric and
hydrogen fuel cell cars.'' \145\ EPA received comment from Consumer
Reports/Consumers Union (Consumer Reports) in support of CARB's ACC
program and notes the survey above. In addition, Consumer Reports notes
that vehicle manufacturers are already offering plug-in hybrids and
BEVs, with new models appearing all the time. ``Consumers, particularly
in California, are very open to buying alt-fuel vehicles. Importantly,
some of the cleanest vehicles or alt-fuel vehicles are also proving
very satisfying to vehicle owners.'' \146\ EPA also received oral
testimony from Calvert Investments noting that CARB's ACC program will
help drive innovation, investment, and job creation and thus they
strongly support both the LEV III (including GHG standards) and ZEV
requirements in the ACC program. ``Customers want and in an increasing
number of countries require cleaner cars and trucks, to go further on
every gallon of gas, while cutting back on GHG emissions that
contribute to climate change. Companies that fail to embrace relevant
new technologies, from improving mileage for conventional internal
combustion engines to developing hybrid, electric, and fuel cell
vehicles, are putting themselves at risk.'' \147\
---------------------------------------------------------------------------

    \145\ EPA-HQ-OAR-2012-0562-0032.
    \146\ EPA-HQ-OAR-2012-0562-0354.
    \147\ EPA Hearing Transcript at 83. EPA-HQ-OAR-2012-0562-0026.
---------------------------------------------------------------------------

    In addition, EPA received comment from NRDC that provided specific
input on the criterion for consistency with CAA Section 202(a). NRDC
states that the forecasted ZEV sales in California exceed ZEV
requirements. In a report jointly published with NRDC, auto industry
analysts Baum and Associates

projected potential ZEV sales from 2015 to 2020. The 2012 ZEV
amendments expect ZEV sales of about 75,000 vehicles in MY 2018 and
130,000 vehicles in 2020. The Baum Associates assessment, conducted
before the ZEV amendments were proposed, projected ZEV sales of as much
as 160,000 in MY 2018 and 180,000 in MY 2020. Baum and Associates also
forecasts on an ongoing basis for the introduction of new ZEV models
into the marketplace in the next few years, demonstrating the technical
feasibility of ZEV technologies today. The Baum and Associates
forecasts are based on detailed information about supplier and OEM
production plans. NRDC compared the Baum and Associates forecast for
BEVs, PHEVs, and FCVs to the ZEV and TZEV production announcements
included by CARB in their waiver request. NRDC found that there are
even more models that will be introduced than identified by CARB.\148\
---------------------------------------------------------------------------

    \148\ EPA-HQ-OAR-2012-0562-0347. See Baum and Mui, ``The Zero
Emission Vehicle Program: An Analysis of Industry's Ability to Meet
the Standards'', May 2010. Available at http://docs.nrdc.org/energy/files/ene_10070701a.pdf.
---------------------------------------------------------------------------

    EPA received comment both from the Manufacturers and the Dealers
stating their objections to CARB's ZEV amendments as they affect 2018
and later MYs. The Manufacturers provide essentially three arguments
for their assertion that the ZEV regulations are infeasible,
particularly when applied individually in section 177 States. (The
Manufacturers state that the amendments before EPA require an
increasing number of ZEVs in California and each of the section 177
States.) \149\ The Manufacturers claim that: 1) the infrastructure for
BEVs will not be sufficient by MY 2018 to support increased sales of
BEVS and that CARB has not explained how it determined that the
infrastructure and the level of consumer demand in the Section 177
States will be sufficient to justify the ending of the travel
provisions for ZEVs after MY 2017; 2) the cost of the ZEV program far
exceeds its environmental benefits, especially when compared to the LEV
III and GHG programs in terms of cost per ton of CO2
removed: and 3) the current data on consumer demand for ZEVs indicates
that it will not be feasible to meet the sales requirements for 2018 MY
and beyond. In conjunction with this third argument the Manufacturers
contend that the market for these types of vehicles has not developed
as quickly as anticipated and therefore there is no basis to conclude
that BEV sales will reach required levels by 2025. (The Manufacturers
also state that it is ``highly unlikely that the required
infrastructure and level of consumer demand for ZEVs will be sufficient
by MY 2018 in either California or in the individual Section 177 States
to support the ZEV sales requirements mandated by CARB.) Because of
these concerns the Manufacturers suggest that EPA deny the ZEV waiver
for 2018 and later MYs, or at least defer the program for MY 2021 and
later, until California, EPA, and the auto industry have conducted a
mid-term review of ZEV similar to the GHG program.
---------------------------------------------------------------------------

    \149\ EPA believes the Manufacturers have mischaracterized the
nature of CARB's waiver request. CARB has only submitted its own ACC
regulations to EPA and it has not submitted, nor has any other State
submitted, section 177 state regulations.
---------------------------------------------------------------------------

    As noted above, the Manufacturers provide EPA with current vehicle
sales and registration data. These data include current sales figures
for hybrids (approximately 3% of annual sales nationally and
approximately 6.1% in California according to registration data). The
Manufacturers note that registration of hybrids in section 177 states
is far lower. The Manufacturers maintain that the low sales numbers are
due substantially to the increased cost relative to traditional
vehicles, and that the demand for BEVs in section 177 States is
particularly ``sluggish.'' However, the comments EPA received did not
include forecasts, projections, data, or other evidence to support the
Manufacturer's conclusions about future ZEV sales, or in particular, to
demonstrate that the CARB ZEV requirements are infeasible.
    The Dealers maintain that technological feasibility requires that
not only certain technologies be possible, but they also be
``economically achievable.'' \150\ The Dealers maintain that in order
for ZEV vehicles to be marketable they must: (1) Be at least as safe as
comparable conventionally-fueled vehicles, (2) offer a range comparable
to conventionally-fueled vehicles, (3) offer a refueling time
comparable to conventionally-fueled vehicles, (4) offer similar
performance and capacities, and (5) come to market at a cost comparable
to conventionally-fueled vehicles. The Dealers maintain that CARB's
estimates that ZEVs and TZEVs that will cost approximately $10,000 more
than comparable traditional vehicles, with at best no performance
advantages, are by definition not feasible as they will be unable to
compete in the marketplace.
---------------------------------------------------------------------------

    \150\ NADA points to CARB's waiver request at 25 wherein CARB
states ``It is well established that EPA will find a regulation to
be technically feasible if `a reasonable basis [exists] that a new
technology will be available and economically achievable.'' However,
NADA fails to reference CARB's subsequent (and EPA believe the
appropriate view of cost) statement on the same page: ``The only
relevance of costs in a Section 209(b) waiver proceeding is in the
context of technological feasibility. Past waiver determinations
have made clear that for the cost of compliance to be found
excessive it would need to be `very high' such that the cost to
consumers when purchased a complying vehicle would be doubled or
tripled.''
---------------------------------------------------------------------------

    CARB provides several responses to the comments submitted by the
Manufacturers. In terms of the applicability of section 177 within
EPA's section 209 waiver deliberations, and consideration of the
technological feasibility of CARB's amendments adopted in such states,
CARB notes that the proper scope of EPA's inquiry is limited by the
express terms of section 209(b). This is well illustrated both in past
waiver determinations and in case law.\151\ While CARB discredits the
view that EPA should consider the feasibility of ZEV in other states,
it also notes that charging infrastructure in states other than
California does not seem to be a concern as both Nissan and General
Motors are currently marketing advanced technology vehicles nationally,
and Ford will begin 50-state marketing in early 2013. EPA notes that
although it is unclear whether the Manufacturers are contesting the
current or future adequacy of infrastructure in California (other than
a sentence that states it is ``highly unlikely''), CARB nevertheless
sets forth that there is much activity in the field of electric vehicle
charging infrastructure, and that public charging programs are being
funded by the California Energy Commission, U.S. DOE EV Everywhere
program, the U.S. DOE EV Project, and other programs to address the
needs of plug in vehicles. CARB also states that it appears that
charging infrastructure is sufficient and efforts underway to address
infrastructure needs (through the programs noted above and CARB's own
ZEV Executive Order) are focused on highest priority charging
locations, namely multi-family dwellings and workplace charging.
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    \151\ CARB's supplemental comments at 6. See 49 FR 18887, 18889
(May 3, 1984) and 58 FR 4166 (January 7, 1993). See also MEMA I 627
F.2d 1095, 1114-20 (Administrator properly declined to review
potential anti-trust and constitutional implications of CARB
regulations under 209(b)).
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    CARB also responds to concerns expressed about the feasibility of
ZEV vehicles in terms of consumer demand. They note that current sales
data for plug in vehicles show sales growing rapidly--faster than
conventional hybrids grew when they were first launched. CARB states
that these early sales data, aggressive programs for community
readiness, public education, infrastructure development and

incentives are in place to support as much as possible consumer
acceptance and adoption of ZEV technologies. CARB also notes that the
Dealers comments in this regard can be addressed by examining relevant
case law and EPA's past application of the law. CARB notes that the
Dealers' statement that it is inappropriate for EPA to grant a waiver
unless the Agency can ``demonstrate technological feasibility for all
the years in which those standards would be in effect'' is disregarding
decades of waiver precedent that clearly sets out the appropriate
``technological feasibility'' analysis under section 202(a).'' Section
202(a) has historically been interpreted to allow for projections of
likely future technological development. Such projections do not need
to `possess the inescapable logic of a mathematical deduction.'
Instead, such a projection is considered sufficient if it ``answers any
theoretical objections to the [projected technology], identifies the
major steps necessary in refinement of the technology, and offers
plausible reasons for believing that each of those steps can be
completed in the time available.'' \152\
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    \152\ CARB supplemental comments at 8, citing NRDC v EPA, 655
F.2d 318, 331.
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    CARB also addresses the Dealers' stated concerns about the
marketability of ZEVs.\153\ CARB notes that a more appropriate measure
of ZEV market success and growth potential is to examine the recent
years when ZEVs have actually been available to consumers. In the last
two years, with the introduction of Nissan Leaf, Ford Focus EV, Honda
Fit EV, Mitsubishi IMiEV, and others, BEV sales have grown 228
percent.\154\ As discussed below, CARB also points to the Joint
Technical Assessment Report (TAR), which was developed by EPA, NHTSA,
and CARB, and released in September 2010.
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    \153\ CARB notes that it is important to recognize that the ZEV
regulations do not place requirements on dealers to offer for sale
or sell ZEVs; rather the requirement is on the automakers. Since the
obligation to sell and place ZEVs in service falls to the
automakers, it is the automakers' responsibility to make the subject
cars marketable and sellable by the dealers.
    \154\ CARB supplemental comments at 11, citing Natural Resources
Defense Council post (October 31, 2012) attached as item 52 to
supplemental comments.
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    CARB states that the Dealers disregard well established law and
create their own definition of ``technological feasibility'' in
suggesting that EPA consider in its assessment a comparison of ZEVs and
conventional vehicles on cost, safety, and performance features such as
range and refueling time. CARB relies upon cost (MEMA I at 1118),
performance (International Harvester at 641-647), and durability (NRDC
at 333-335). CARB states:

    The ZEVs produced for the regulation will meet the same safety
requirements that conventionally fueled vehicles meet. They already
achieve acceleration and power characteristics expected on
traditional vehicles and have demonstrated adequate durability.
Range and refueling times are characteristics not traditionally
taken into consideration. The automakers are targeting range for
battery electric vehicles that match up with the vast majority of
daily driving needs or most consumers (typical trips and typical
daily needs are under 30 miles). For fuel cell vehicles, automakers
have demonstrated range capability equal to or greater than
conventionally fueled vehicles. With regard to refueling time, BEV
drivers look at refueling differently; 30 seconds a day at home to
plug in (with charging occurring overnight or while at work) and
have a full range daily instead of visiting a gasoline station
weekly is characterized as much more convenient. Fuel cell vehicles
refuel in about the same amount of time as a gasoline car. By all of
these measures ZEVs are more than technologically feasible for
commercialization, certainly so with the abundant nine to 12 years
of lead time for the 2022-2025 model years that are the focus of the
comments.\155\
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    \155\ CARB's supplemental comments at 12.

    CARB also relies upon the projections and explanations submitted
with its initial waiver request and notes that the Dealers are taking
issue with standards that do not come into effect until after a lengthy
lead time. In addition to CARB's waiver request projections and
explanations noted at the outset of this section CARB also provides an
explanation of the Joint Technical Assessment Report (TAR), which was
developed by EPA, NHTSA, and CARB, and released in September 2010. The
report concluded ``electric drive vehicles including hybrid(s) * * *
battery electric vehicles * * * plug-in hybrid(s) * * * and hydrogen
fuel cell vehicles * * * can dramatically reduce petroleum consumption
and GHG emissions compared to conventional technologies * * *. The
future rate of penetration of these technologies into the vehicle fleet
is not only related to future GHG and corporate average fuel economy
(CAFE) standards, but also to future reductions in HEV/PHEV/EV battery
costs, [and] the overall performance and consumer demand for the
advance technologies * * *.'' \156\ CARB notes that the TAR stated that
``* * * [A] number of the firms suggested that in the 2020 timeframe
their U.S. sales of HEVs, PHEVs, and EVs combined could be on the order
of 15-20 percent of their production.'' \157\
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    \156\ EPA, 2010. United States Environmental Protection Agency,
National Highway Safety and Traffic Administration and California
Air Resources Board. September 2010. ``Interim Joint Technical
Assessment Report: Light-Duty Vehicle Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards for Model
Years 2017-2025'' (p. vii). http://www.epa.gov/otaq/climate/regulations/ldv-ghg-tar.pdf.
    \157\ Id. at 2-5.
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    Lastly, CARB addresses the Manufacturers' comments regarding the
cost-effectiveness of CARB ZEV amendments, in terms of cost per ton of
CO2 removal, in a manner similar to its response to the
section 177 arguments--that such comments are irrelevant to EPA's
209(b) waiver consideration. CARB notes EPA's 2009 GHG waiver decision
wherein EPA described the appropriate cost of compliance analysis under
section 202(a): ``Consistent with MEMA I, the Agency has to evaluate
costs in the waiver context by looking at the actual cost of compliance
in the time provided by the regulation, not the regulation's cost
effectiveness. Cost effectiveness is a policy decision of California
that is considered and made when California adopts the regulations, and
EPA, historically, has deferred to these policy decision * * *.The
issue of whether a proposed California requirement is likely to result
in only marginal improvement in air quality not commensurate with its
cost or is otherwise an arguably unwise exercise of regulatory power is
not legally pertinent to my decision under section 209.''\158\
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    \158\ CARB's supplemental comments at 9, citing 74 FR 32744,
32775 (July 8, 2009). CARB provides additional information
explaining how the ZEV program was considered in conjunction with
the LEV program and that the ZEV regulation remains an important
part of California's plans to reach attainment of health based air
quality standards.
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    In addition to the above facts, we believe additional information
can help inform our review of the required increases in the sale of
PHEVs, BEVS, and FCVs in California during the 2018 through 2025
timeframe.
    EPA reviewed two additional studies of the market potential of ZEVs
from the Electric Power Research Institute (EPRI) and the U.S. Energy
Information Administration's Annual Energy Outlook (AEO) that are
relevant to CARB's ZEV mandate. EPRI, a leading electric utility
research organization published a July 2011 technical report,
Transportation Electrification, A Technology Overview,\159\ which
presents three market projection scenarios for EVs and PHEVs. The
scenarios project a range of Low, Medium, and High sales volumes. The

EPRI projection for national EV and PHEV sales in 2018 ranges from a
low of 500,000 vehicles to a high of 1,920,000 vehicles. In 2025, the
EPRI projections range from a low of 1,144,000 to a high of 5,073,000
vehicles. The Low projection mimics the historical market penetration
of HEVs from 2000 through 2008, applying their rate of sales growth to
PHEVs and EVs. The Medium projection is based on a ``ground up''
analysis of sales projections derived from PHEV and EV product
announcements and production estimates. These projections are
extrapolated past 2015 based on the aforementioned product
announcements and the past sales performance of HEVs. The High
projection is based on the average of the top third (more optimistic)
of publicly available sales projections from several sources. In each
of EPRI's three cases, projected PHEV and EV national sales far exceed
CARB's ZEV mandate. EPA acknowledges that the EPRI study did not
specifically project California sales but we believe it reasonable to
assume that the supply of and demand for such vehicles will be
significantly greater in California (and to some extent in section 177
states with ZEV programs) than it will be in states without a ZEV
mandate. The EPRI study indicates that it would take less than 25
percent of the total national sales of ZEV in the Low scenario in order
to exceed the necessary ZEV sales percentages during the 2018 through
2025 timeframe in California.
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    \159\ EPRI, Transportation Electrification, A Technology
Overview, 2011 Technical Report, EPRI 1021334, July 2011. Http://www.epri.com/abstracts/pages/productabstract.aspx?ProductID=000000000001021334.
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    The U.S. Energy Information Administration (AEO) also analyzed two
scenarios of market penetration for PHEVs and EVs in their Annual
Energy Outlook 2012 (AEO2012).\160\ AEO's reference case indicates a
national market potential of around 165,000 EVs and PHEVs in 2018 which
is more than twice the CARB ZEV requirement. In 2025, the AEO reference
case indicates a national market potential of 283,000 ZEVs, which still
exceeds CARB's proposed ZEV requirement of nearly 271,000. AEO's
reference case assumes EV technology cost, especially batteries,
remains high through 2030. AEO's High Technology Battery case, assumes
the Department of Energy's (DOE) battery cost goals are met in 2015.
Generally, these battery costs are more comparable to battery costs
used by CARB and EPA in the 2010 Joint Technical Assessment Report
(TAR) \161\ than those used in the reference case. The AEO High
Technology Battery case indicates a market potential of ZEVs in 2018 as
805,000 units, increasing to 1,394,000 in 2025. As with the EPRI study
above, using the projections of the AEO High Technology Battery case,
it would take less than 25 percent of the total national sales of ZEV
to exceed the necessary ZEV sales percentages during the 2018 through
2025 timeframe in California.
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    \160\ U.S. Energy Information Administration, Annual Energy
Outlook 2012, Data Tables, Table 57 accessed 12/13/12 at http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2012&subject=0-AEO2012&table=48-AEO2012®ion=1-0&cases=hp2012-d022112a.
    \161\ ``Interim Joint Technical Assessment Report: Light-Duty
Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel
Economy Standards for Model Years 2017-2025,'' September 2010.
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    While both the EPRI and AEO market projections are for national
sales, EPA believes it is reasonable to assume that a significant
percentage of these vehicles will be sold in California as has been the
past practice with HEVs and EVs.
b. EPA's Response to Comments
    After a review of the information in this proceeding, EPA has
determined that the opponents of the ZEV standards have not
demonstrated that the necessary increase in PHEV and ZEV sales
necessary to meet the ZEV standards in the 2018 through 2025 MYs is
infeasible. A review of the record, indicates that compliance with the
ZEV standards, as they affect the 2018 through 2025 MYs, is feasible
giving consideration to cost and lead time available. CARB has answered
any theoretical objections to the projected technology, identified the
major steps necessary in refinement of the technology, and offers
plausible reasons for believing that each of those steps can be
completed in the time available. This assessment is based upon the
current technology available along with projected improvements in
technology and expected cost reductions (in addition to continuing
increases in consumer demand in response to preferences for advance
technologies, fuel savings, available and improved infrastructure,
incentives, regulatory mandates, etc) and given the significant lead
time provided. As discussed in detail below, EPA cannot find that those
opposing the waiver request have met their burden of showing that
California's regulations are inconsistent with section 202(a).
Therefore, we cannot deny the waiver on that ground.
Basic Feasibility of ZEV Technology
    At the outset we note that manufacturers are meeting the ZEV
requirements today. As CARB noted in its waiver request, most
manufacturers have near-term production plans to meet or over comply
with regulatory requirements through 2017. More importantly, a number
of manufacturers have clearly demonstrated the feasibility of ZEV
technology with in-production or planned PHEV, BEV and FCV models
within the next few years. Manufacturers are also afforded the
flexibility to determine the appropriate mix between BEVs and FCVs. We
note that no commenter suggested that the underlying technology is not
available today nor is there any evidence in the record that
contradicts CARB's assertions that improvements and technology path
moving forward will continue in the ZEV area in regards to range and
other capabilities. The objections raised by those opposing the waiver
on this point have to do less with the basic feasibility of ZEVs than
with their acceptability/marketability, supporting infrastructure, and
cost.
    Regarding the lead time provided by California to meet the ZEV
phase-in requirements, the commenters have not met their burden to show
that the lead time is insufficient. While the commenters noted general
concerns about marketability, infrastructure and cost they made no
claims that inadequate lead time exists or that CARB's requirements
would be feasible if more lead time were provided.
    Regarding the cost component of the technological feasibility test,
EPA believes that the opponents of the waiver have not met their burden
to show that the ZEV standards are not technologically feasible because