are not modeled in GEM. Manufacturers seeking credit for those
technologies that are not modeled in GEM would generally follow the
off-cycle credit program procedures in 40 CFR 1037.610.
(e) Aerodynamics in GEM for Tractor, Vocational Vehicle, and Trailer
Certification
    Phase 2 GEM simulates aerodynamic drag in using CdA (the
product of the drag coefficient and frontal area of the vehicle) rather
than a drag coefficient (Cd). For tractors and trailers we
will continue to use an aerodynamic bin approach similar to the one
that exists in Phase 1 today, although the actual Phase 2 bins are
being revised to reflect new test procedures and our projections for
more aerodynamic tractors and trailers in the future. This approach
allows manufacturers to determine CdA (or delta-
CdA in the case of trailers) from coastdown testing, scale
wind tunnel testing and/or computational fluid dynamics modeling. It
requires tractor manufacturers (but not trailer manufacturers) to
conduct a certain minimum amount of coast-down vehicle testing to
validate their methods. The regulations also provide an alternate path
for trailer manufacturers to rely on testing performed by component
suppliers. See 40 CFR 1037.
    The results of these tests determine into which bin a tractor or
trailer is assigned. GEM uses the aerodynamic drag coefficient
applicable to the bin, which is the same for all tractors (or trailers)
within a given bin. This approach helps to account for limits in the
repeatability of aerodynamic testing and it creates a compliance margin
since any test result which keeps the vehicle in the same aerodynamic
bin is considered compliant. For Phase 2 we are establishing new
boundary values for the bins themselves and we are adding two
additional tractor bins in order to recognize further advances in

aerodynamic drag reduction beyond what was recognized in Phase 1.
Furthermore, while Phase 1 GEM used predefined frontal areas for
tractors where the manufacturers input only a Cd value,
manufacturers will use a measured drag area (CdA) value for
each tractor configuration for Phase 2. See 40 CFR 1037.525. The
agencies do not project that vocational vehicles will need to improve
their aerodynamic performance to comply with the Phase 2 vocational
chassis standards. However, the agencies are providing features in GEM
for vocational vehicles to receive credit for improving the
aerodynamics of vocational vehicles (see 40 CFR 1037.520(m)).
    In addition to these changes, we are making a number of aerodynamic
drag test procedure improvements. One improvement is to update the
``standard trailer'' that is prescribed for use during aerodynamic drag
testing of a tractor. Using the CdA from such testing means
the standard trailer would also be the hypothetical trailer modeled in
GEM to represent a trailer paired with the tractor in actual use.\167\
In Phase 1, a non-aerodynamic 53-foot long box-shaped dry van trailer
was specified as the standard trailer for tractor aerodynamic testing
(see 40 CFR 1037.501(g)). For Phase 2 we are modifying this standard
trailer for tractor testing to make it more similar to the trailers we
expect to be produced during the Phase 2 timeframe. More specifically,
we are prescribing the installation of aerodynamic trailer skirts (and
low rolling resistance tires as applied in Phase 1) on the standard
trailer, as discussed in further in Section III.E.2. As explained more
fully in Sections III and IV, the agencies believe that tractor-trailer
pairings will be optimized aerodynamically to a significant extent in-
use (such as using high-roof cabs when pulling box trailers), and that
this real-world optimization should be reflected in the certification
testing. We are also revising the test procedures to better account for
average wind yaw angle to reflect the true impact of aerodynamic
features on the in-use fuel consumption and CO2 emissions of
tractors, again as discussed in more detail in Section III below. Refer
to the test procedures in 40 CFR 1037.525 through 1037.527 for further
details of these aerodynamic test procedures.
---------------------------------------------------------------------------

    \167\ See Section III. for a discussion of how GEM will model a
more advanced trailer beginning with the 2027 model year.
---------------------------------------------------------------------------

    For trailer certification, the agencies use GEM in a different way
than it is used for tractor certification. As described in Section IV,
the agencies developed a simple equation to replicate GEM performance.
The trailer standards are based on this equation, and trailer
manufacturers use this GEM-based equation for certification. The only
technologies recognized by this GEM-based equation for trailer
certification are aerodynamic technologies, tire technologies
(including tire rolling resistance and tire pressure systems), and
weight reduction. Note that since the purpose of this equation is to
replicate GEM performance, it can be considered as simply another form
of the model using a different input interface. Thus, for simplicity,
the remainder of this Section II.C. sometimes discusses GEM as being
used for trailers, without regard to how manufacturers will actually
input GEM variables. As with all of the standards in Phase 2,
compliance is measured consistent with the same test methods used by
the agencies to establish the standard.
    Similar to tractor certification, trailer manufacturers will use
data from aerodynamic testing (e.g., coastdown testing, scale wind
tunnel testing, computational fluid dynamics modeling, or possibly
aerodynamic component testing) with the equation.\168\ As part of the
protocol for generating these inputs, the agencies are specifying the
configuration of a reference tractor for conducting trailer testing.
Refer to Section IV of this Preamble and to 40 CFR 1037.501 of the
regulations for details on the reference tractor configuration for
trailer test procedures.
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    \168\ The agencies project that more than enough aerodynamic
component vendors will take advantage of proposed optional pre-
approval process to make testing optional for trailer manufacturer.
---------------------------------------------------------------------------

    Finally, GEM has been modified to accept an optional delta
CdA value for vocational chassis, to simulate aerodynamic
improvements relative to pre-specified baseline defined in Chapter 4 of
RIA. For example, a manufacturer that demonstrates that adding side
skirts to a box truck reduces its CdA by 0.2 m\2\ could
input that value into GEM for box trucks that include those skirts. See
40 CFR 1037.520(m).
(f) Tires and Tire Inflation Systems for Truck and Trailer
Certification
    For GEM in Phase 1 tractor and vocational chassis manufacturers
input the tire rolling resistance of steer and drive tires directly
into GEM. The agencies prescribed an internationally recognized tire
rolling resistance test procedure, ISO 28580, for determining the tire
rolling resistance value that is input into GEM, as described in 40 CFR
1037.520(c). For Phase 2 we will continue this same approach and the
use of ISO 28580, and we are expanding these requirements to trailer
tires as well.
    In addition to tire rolling resistance, Phase 2 vehicle
manufacturers will enter into GEM the tire manufacturer's specified
revolutions per distance directly (revs/mile) for the vehicle's drive
tires. This value is commonly reported by tire manufacturers already so
that vehicle speedometers can be adjusted appropriately. This input
value is needed so that GEM can accurately convert simulated vehicle
speed into axle speed, transmission speed, and ultimately engine speed.
    For tractors and trailers, we proposed to allow manufacturers to
specify whether or not an automatic tire inflation system (ATIS) is
installed. 80 FR 40187. Based on comments and as discussed further in
Sections III, IV, and V, in the Phase 2 final rule we are adopting
provisions that allow manufacturers of tractors, trailers, and
vocational vehicle chassis to input a percent decrease in overall fuel
consumption and CO2 emissions into GEM if the vehicle
includes either an ATIS or a tire pressure monitoring system (TPMS).
The value that can be input depends on whether a TPMS or ATIS is
deployed. See 40 CFR 1037.520.
(g) Weight Reduction for Tractor, Vocational Chassis and Trailer
Certification
    Phase 2 GEM continues the weight reduction recognition approach in
Phase 1, where the agencies prescribe fixed weight reductions, or
``deltas,'' for using certain lightweight materials for certain vehicle
components. In Phase 1 the agencies published a list of weight
reductions for using high-strength steel and aluminum materials on a
part by part basis. For Phase 2 we use updated values for high-strength
steel and aluminum parts for tractors and for trailers and we have
scaled these values for use in certifying the different weight classes
of vocational chassis. In addition we use a similar part by part weight
reduction list for tractor parts made from thermoplastic material. We
proposed to assign a fixed weight increase to natural gas fueled
vehicles to reflect the weight increase of natural gas fuel tanks
versus gasoline or diesel tanks, but we are not finalizing that
provision based on comments. 80 FR 40187. Commenters opposing this
provision generally noted that the proposed provision was not
consistent with how the agencies were treating other technologies. We
agree that

natural gas vehicles should be treated consistently with other
technologies and so are not adopting the proposed provision.
    For tractors, we will continue the same mathematical approach in
GEM to assign \1/3\ of a total weight decrease to a payload increase
and \2/3\ of the total weight decrease to a vehicle mass decrease. For
Phase 1, these ratios were based on the average frequency that a
tractor operates at its gross combined weight rating. We will also use
these ratios for trailers in Phase 2. For vocational chassis, for which
Phase 1 did not address weight reduction, we will assign \1/2\ of a
total weight decrease to a payload increase and \1/2\ of the total
weight decrease to a vehicle mass decrease.
(h) GEM Duty Cycles for Tractor, Vocational Chassis and Trailer
Certification
    In Phase 1, there are three GEM vehicle duty cycles that represent
stop-and-go city driving (ARB Transient), urban highway driving (55
mph), and rural interstate highway driving (65 mph). In Phase 1 these
cycles were time-based. That is, they were specified as a function of
simulated time and the duty cycles ended once the specified time
elapsed in simulation. The agencies proposed to continue to use these
three drive cycles in Phase 2, but with some revisions. 80 FR 40187. We
are finalizing revisions similar but not identical to those that were
proposed. First, GEM will simulate these cycles on a distance-based
specification, rather than on a time-based specification. A distance-
based specification ensures that even if a vehicle in simulation does
not always achieve the target vehicle speed, the vehicle will have to
continue in simulation for a longer period to complete the duty cycle.
This ensures that vehicles are evaluated over the complete distance of
the duty cycle and not just the portion of the duty cycle that a
vehicle completes in a given time period. A distance-based duty cycle
specification also facilitates a straightforward specification of road
grade as a function of distance along the duty cycle. As noted in
above, for Phase 2, the agencies have enhanced the 55 mph and 65 mph
duty cycles by adding representative road grade to exercise the
simulated vehicle's engine, transmission, axle, and tires in a more
realistic way. A flat road grade profile over a constant speed test
does not properly simulate a transmission with respect to shifting
gears, and may have the unintended consequence of enabling underpowered
vehicles or excessively down-sped drivetrains to generate credits, when
in actuality the engine does not remain down-sped in-use when the
vehicle encounters road grades. The road grade profile being finalized
is the same hill and valley profile for both the 55 mph and 65 mph duty
cycles, and is based on statistical analysis of the United States'
national distribution of road grades. Although the final profile is
different than that proposed, the agencies provided notice of the
analysis that was used to generate the final profile.\169\ In written
comments, we received in-use engine data from some manufacturers, and
based on this information we made minor adjustments to the road grade
to ensure that engines simulated in GEM operated similarly to that
reported in the in-use engine data submitted to us. See Section
III.E.(2)(b) of this document and Chapter <IP_ADDRESS> of the RIA for more
details on development of the road grade profile. We believe that the
enhancement of the 55 mph and 65 mph duty cycles with road grade is
consistent with the NAS recommendation regarding road grade.\170\
---------------------------------------------------------------------------

    \169\ See National Renewable Energy Laboratory report ``EPA GHG
Certification of Medium- and Heavy-Duty Vehicles: Development of
Road Grade Profiles Representative of US Controlled Access
Highways'' dated May 2015 and EPA memorandum ``Development of an
Alternative, Nationally Representative, Activity Weighted Road Grade
Profile for Use in EPA GHG Certification of Medium- and Heavy-Duty
Vehicles'' dated May 13, 2015, both available in Docket EPA-HQ-OAR-
2014-0827. This docket also includes file
NREL_SyntheticAndLocalGradeProfiles.xlsx which contains numerical
representations of all road grade profiles described in the NREL
report.
    \170\ NAS 2010 Report. Page 189. ``A fundamental concern raised
by the committee and those who testified during our public sessions
was the tension between the need to set a uniform test cycle for
regulatory purposes, and existing industry practices of seeking to
minimize the fuel consumption of medium and heavy-duty vehicles
designed for specific routes that may include grades, loads, work
tasks or speeds inconsistent with the regulatory test cycle. This
highlights the critical importance of achieving fidelity between
certification values and real-world results to avoid decisions that
hurt rather than help real-world fuel consumption.''
---------------------------------------------------------------------------

(i) Workday Idle Operation for Vocational Chassis Certification
    In the Phase 1 program, reduction in idle emissions was recognized
only for sleeper cab tractors, and only with respect to hoteling idle,
where a driver needs power to operate heating, ventilation, air
conditioning and other electrical equipment in order to use the sleeper
cab to eat, rest, or conduct other business. As described in Section V,
GEM for Phase 2 will recognize technologies that reduce workday idle
emissions, such as automatic stop-start systems, daytime parked idle
automatic engine shutdown systems, and transmissions that either
automatically or inherently shift to neutral at idle while in drive.
Many vocational vehicle applications operate on patterns implicating
workday idle cycles, and the agencies use test procedures in GEM to
account specifically for these cycles and potential idle controls. GEM
will recognize these idle controls in two ways. For technologies like
neutral-idle transmissions and stop-start systems that address idle
that occurs during vehicle operation when the vehicle is stopped at a
stop light, GEM will interpolate lower fuel rates from the engine map
during the idle portions of the ARB Transient and during a separate GEM
``drive idle cycle.'' For technologies like start-stop and auto-
shutdown that eliminate some of the idle that occurs when a vehicle is
stopped or parked, GEM will assign a value of zero fuel rate during a
separate GEM ``parked idle cycle.'' The idle cycles will be weighted
along with the 65 mph, 55 mph, and ARB Transient duty cycles, according
to the new vocational chassis duty cycle weighting factors. These
weighting factors are different for each of the three vocational
chassis speed categories for Phase 2. For tractors, only neutral idle
and hotel idle will be addressed in GEM.
(2) Experimental Validation of GEM
    The core simulation algorithms in GEM have not changed
significantly since the proposal. Most of the changes since proposal
focused on streamlining how manufacturers input data into GEM; revising
to the drive cycles in GEM; and updating how GEM weights these
different drive cycles to determine a composite fuel consumption value.
These changes did not alter the fundamental way that GEM simulates
varying vehicle ``road load'' and how GEM converts vehicle speed to
engine speed and then interpolates engine maps to determine vehicle
fuel consumption and CO2 emissions.
    Refinements to GEM since the time of proposal that did alter GEM's
simulation performance include modifying the default transmissions'
shift strategies and their power losses. Another key refinement was
cycle average mapping engines for simulation of the ARB Transient
cycle. Each time the agencies made such modifications to GEM, GEM's
correlation to the agencies collection of laboratory-generated engine
and vehicle data was checked. Potential refinements to GEM were
accepted if GEM's correlation was improved versus this set of
experimental data. If potential refinements resulted in GEM's
correlation to the experimental data

becoming worse, those potential changes were rejected. Chapter 4.3.2 of
the RIA details the GEM validation that was performed to determine if
potential changes to GEM should be accepted or rejected. The first step
of the validation process involves simulating vehicles in GEM using
engine fuel maps and transmission shifting strategies obtained from
manufacturers and comparing GEM results to experiments conducted with
the same engines and transmissions. This first step re-validates all of
the non-powertrain elements of GEM, which were already validated in
Phase 1. The second step is to use GEM's default transmissions' shift
strategies in simulation \171\ and then compare GEM results to
powertrain tests of several transmissions. The only difference between
the first and second step is the shifting strategy and powertrain
energy loss assumptions. This step facilitates tuning of GEM's default
transmission models so that they correlate well to a variety of real
transmissions. The third step is to compare GEM simulations to real-
world in-use recorded data from actual vehicles. This is the most
challenging step because the experimental data includes real-world
effects of wind, road grade, and driver behavior in traffic. The most
important element of this third step is not absolute correlation, but
rather, relative correlation, which demonstrates that when a technology
is added to a real vehicle, the relative improvement in the real world
is simulated in GEM with a high degree of correlation.
---------------------------------------------------------------------------

    \171\ K. Newman, J. Kargul, and D. Barba, ``Development and
Testing of an Automatic Transmission Shift Schedule Algorithm for
Vehicle Simulation, ``SAE Int. J. Engines 8(3):2015, doi:10.4271/
2015-01-1142.
---------------------------------------------------------------------------

    In the first validation step, the agencies compared GEM to over 130
vehicle variants, consistent with the recommendation made by the NAS in
their Phase 2-First Report.\172\ As described in Chapter 4 of the RIA,
good agreement was observed between GEM simulations and test data over
a wide range of vehicles. In general, the model simulations agreed with
experimental test results within 5 percent on an absolute
basis. As pointed out in Chapter 4.3.2 of the RIA, relative accuracy is
more relevant to the intent of this rulemaking, which is to accelerate
the adoption of additional fuel efficiency improving technologies.
Consistent with the intent of this rulemaking, all of the numeric
standards for tractors, trailers and vocational chassis are derived
from running GEM first with Phase 1 ``baseline'' technology packages
and then with various Phase 2 technology packages. The differences
between these GEM results are examined to determine final stringencies.
In other words, the agencies used the same final version of GEM to
establish the numeric standards as will be used by manufacturers to
demonstrate compliance. Therefore, it is most important that GEM
accurately reflects relative changes in emissions for each added
technology. In other words, for vehicle certification purposes it is
less important that GEM's absolute value of the fuel consumption or
CO2 emissions be accurate compared to laboratory testing of
the same vehicle. The ultimate purpose of GEM is to evaluate changes or
additions in technology, and compliance is demonstrated on a relative
basis to the numeric standards that were also derived from GEM.
Nevertheless, the agencies concluded that the absolute accuracy of GEM
is generally within 5 percent, as shown in Figure II.2 2.
Chapter 4.3.2 of the RIA shows that relative accuracy is even better,
2-3 percent.
---------------------------------------------------------------------------

    \172\ National Academy of Science. ``Reducing the Fuel
Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles,
Phase Two, First Report.'' 2014. Recommendation1.2.
[GRAPHIC] [TIFF OMITTED] TR25OC16.002

    In addition to this successful validation against experimental
results, the agencies have also conducted a peer review of the GEM
source code. This peer review has been submitted to Docket number EPA-
HQ-OAR-2014-0827.
    The second validation step was to repeat the first step's GEM
simulations with the agencies' default transmission shift
strategies.\171\ It was expected that GEM's absolute accuracy would
decrease because these shift strategies were tuned for best average
performance and for a particular transmission. Nevertheless, it was
shown that relative accuracy did not suffer; therefore, the agencies
deemed the GEM default shift strategies acceptable for GEM
certification purposes. Further details of this validation step are
presented in Chapter <IP_ADDRESS> of the RIA and in a SwRI final
report.\162\
    As explained above and in Chapter <IP_ADDRESS> of the RIA, it is
challenging to achieve absolute correlation between any computer
simulation and real-world vehicle operation. Therefore, the agencies
focused on relative comparisons. Following the SAE standard procedure
SAE J1321 ``Type II,'' two trucks have been tested and these real-world
results were compared to GEM simulations. In summary, the relative
comparisons between GEM simulations and the real-world testing of
trucks showed a 2.4 percent difference. The details of this testing and
correlation analysis is presented in Chapter <IP_ADDRESS> of the RIA.
    In conclusion, the agencies completed a number of validation steps
to ensure that GEM demonstrates a reasonable degree of absolute
accuracy, but more importantly a high degree of relative accuracy,
versus both laboratory and real-world experimental data.
(3) Supplements to GEM Simulation
    As in Phase 1, for most tractors and vocational vehicles,
compliance with the Phase 2 g/ton-mile vehicle standards could be
evaluated by directly comparing the GEM result to the standard.
However, in Phase 1, manufacturers incorporating innovative or advanced
technologies could apply improvement factors to lower the GEM result
before comparing to the standard.\173\ For example, a manufacturer
incorporating a launch-assist mild hybrid that was pre-approved for a 5
percent benefit would apply a 0.95 improvement factor to its GEM
results for such vehicles. In this example, a GEM result of 300 g/ton-
mile will be reduced to 285 g/ton-mile.
---------------------------------------------------------------------------

    \173\ 40 CFR 1036.610, 1036.615, 1037.610, and 1037.615.
---------------------------------------------------------------------------

    For Phase 2, the agencies largely continue the existing Phase 1
innovative technology approach, but we name it ``off-cycle'' to better
reflect its purpose.
(a) Off-Cycle Technology Procedures
    In Phase 1 the agencies adopted an emissions credit generating
opportunity that applied to new and innovative technologies that reduce
fuel consumption and CO2 emissions, which were not in common
use with heavy-duty vehicles before model year 2010 and are not
reflected over the test procedures or GEM (i.e., the benefits are
``off-cycle''). See 76 FR 57253. As was the case in the development of
Phase 1, the agencies continue this approach for technologies and
concepts with CO2 emissions and fuel consumption reduction
potential that might not be adequately captured over the Phase 2 duty
cycles or are not inputs to GEM. Note, however, that the agencies now
refer to these technologies as off-cycle rather than innovative.
Comments were generally supportive of continuing this provision. See
Section I.C(1)(c) of this document and Section 1 of the RTC for more
discussion of innovative and off-cycle technologies.
    We recognize that the Phase 1 testing burden associated with the
innovative technology credit provisions discouraged some manufacturers
from applying. To streamline recognition of many technologies, default
values have been integrated directly into GEM. For example, automatic
tire inflation systems have fixed default values, and such technologies
are now recognized through a post-simulation adjustment approach,
discussed in Chapter 4 of the RIA. This is similar to the technology
``pick list'' from our light-duty programs. See 77 FR 62833-62835
(October 15, 2012). If manufacturers wish to receive additional credit
beyond these fixed values, then the off-cycle technology credit
provisions provide a regulatory path toward that additional
recognition.
    Beyond the additional technologies that the agencies have added to
GEM, the agencies also believe there are several emerging technologies
that are being developed today, but will not be accounted for in GEM
because we do not have enough information about these technologies to
assign fixed values to them in GEM. Any credits for these technologies
will need to be based on the off-cycle technology credit generation
provisions. These require the assessment of real-world fuel consumption
and GHG reductions that can be measured with verifiable test methods
using representative operating conditions typical of the engine or
vehicle application.
    As in Phase 1, the agencies continue to provide two paths for
approval of the test procedure to measure the CO2 emissions
and fuel consumption reductions of an off-cycle technology used in the
HD tractor. See 40 CFR 1037.610 and 49 CFR 535.7. The first path does
not require a public approval process of the test method. A
manufacturer can use ``pre-approved'' test methods for HD vehicles
including the A-to-B chassis testing, powertrain testing or on-road
testing. A manufacturer may also use any developed test procedure which
has known quantifiable benefits. A test plan detailing the testing
methodology is required to be approved by the agencies prior to
collecting any test data. The agencies will also continue the second
path which includes a public approval process of any testing method
which could have uncertain benefits (i.e., an unknown usage rate for a
technology). Furthermore, the agencies are modifying our provisions to
better clarify the documentation required to be submitted for approval
aligning them with provisions in 40 CFR 86.1869-12, and NHTSA
separately prohibits credits from technologies addressed by any of its
crash avoidance safety rulemakings (i.e., congestion management
systems).
    Sections III and V separately describe tractor and vocational
vehicle technologies, respectively, that the agencies anticipate may
qualify for these off-cycle credit provisions.
(4) Production Vehicle Testing for Comparison to GEM
    As described in Section III.E.(2)(j), The agencies are requiring
tractor manufacturers to annually chassis test five production vehicles
over the GEM cycles to verify that relative reductions simulated in GEM
are being achieved in production. See 40 CFR 1037.665. We do not expect
absolute correlation between GEM results and chassis testing. GEM makes
many simplifying assumptions that do not compromise its usefulness for
certification, but do cause it to produce emission rates different from
what would be measured during a chassis dynamometer test. Given the
limits of correlation possible between GEM and chassis testing, we
would not expect such testing to accurately reflect whether a vehicle
was compliant with the GEM standards. Therefore, we are not applying
GHG compliance liability to such testing. Rather, this testing will be
for data collection and informational purposes only. The agencies will
continue to evaluate in-use compliance

by verifying GEM inputs and testing in-use engines. (Note that NTE
standards for criteria pollutants may apply for some portion of the
test cycles.)
(5) Use of GEM in Establishing the Phase 2 Numerical Standards
    As in Phase 1, the agencies are setting specific numerical
standards against which tractors and vocational vehicles will be
certified using GEM (box trailers will use a GEM-based equation, and
some trailers and custom chassis vocational vehicles may optionally use
a non-GEM certification path). Although these standards are
performance-based standards, which do not specifically require the use
of any particular technologies,\174\ the agencies established these
standards by evaluating specific vehicle technology packages using the
final version of Phase 2 GEM. We note that that this means the final
numerical standards are not directly comparable to the proposed
standards, which were based on an intermediate version of GEM, rather
than on the final version.
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    \174\ The sole exception being the design-based standards for
non-aero and partial aero trailers.
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(a) Relation to In-Use Emissions
    The purpose of this rulemaking is to achieve in-use emission and
fuel consumption reductions by requiring manufacturers to demonstrate
that they meet the promulgated emission standards. Thus, it is
important that GEM simulations be reasonably representative of in-use
operation. Testing that is unrepresentative of actual in-use operation
does not necessarily tell us anything about whether any emission
reductions occur. However, we recognize that certain simplifications
are necessary for practical simulations. In the past, EPA has addressed
this issue by including in our testing regulations a process by which
EPA can work with manufacturers to adjust test procedures to make them
more representative of in-use operation. For engine testing, this
provision is in 40 CFR 1065.10(c)(1), where EPA requires manufacturers
to notify us in cases in which they determine that the specified test
procedures would result in measurements that do not represent in-use
operation.
    Although we are not adopting an equivalent provision for GEM at
this time, we expect similar principles to apply. To the extent that
GEM fails to represent in-use emission, we would expect to work with
manufacturers to address the issue--under the existing regulations
where possible, or by promulgating a new rulemaking.
    We recognize that many compromises must be made between the
practicality of testing/simulation and the matching of in-use
operation. We have considered many aspects of the test procedures in
this respect for the engines, vehicles, and emission controls of which
we are currently aware. We have concluded that the procedures will
generally result in emission simulations that are sufficiently
representative of in-use emissions, even though not all in-use
operation will occur during simulation. Nevertheless, we have
identified several areas that deserve some additional discussion.
    GEM is structured to simulate a single vehicle weight (curb weight
plus payload) per regulatory subcategory. However, we know that actual
in-use weights will rarely be exactly the same as the simulated
weights. Nevertheless, since the representativeness of the simulated
weights (or lack thereof) is being fully considered in the setting of
the standards, there would be no need to modify the procedures to
account for different curb weights or payloads.
    GEM simulates vehicle emissions over three drive cycles plus two
idle cycles, and weights the cycle results based on the type of vehicle
being certified. These cycles and weightings reflect fleet average
driving patterns and the agencies do not expect them to fully match
driving patterns for individual vehicles. Thus, we would generally not
consider GEM's cycles as unrepresentative for vehicles with different
in-use driving patterns. However, if new information became available
that demonstrated that GEM's cycles somehow did not reflect fleet
average driving patterns, the agencies would consider such information
in the context of the principles of representative testing, described
above.
    Finally, GEM includes default values for axle and transmission
efficiency derived from baseline technologies. However, we generally
expect manufacturers to use more efficient axles and transmissions for
Phase 2 vehicles. As noted above, based on comments, the agencies are
allowing manufacturers to optionally input measured efficiencies to
better represent these more efficient technologies. We would not
consider GEM unrepresentative if manufacturers chose to use the default
values rather than measure these efficiencies directly.
(b) Relation to Powertrain Testing
    As already noted, GEM correlates very well with powertrain testing.
To the extent they differ, it would be expected to be primarily related
to how transmission performance is modeled in GEM. Although GEM
includes a sophisticated model of transmissions, it cannot represent a
transmission better than a powertrain test of the same transmission.
Thus, the agencies consider powertrain testing to be as good as or
better than GEM run using engine-only fuel maps; hence the provision in
the final rules allowing results from powertrain testing to be used as
a GEM input.
    In some respects, powertrain testing can be considered to be a
reference method for this rulemaking. Because manufacturers have the
option to perform powertrain testing instead of engine-only fuel
mapping, the stringency of the final standards can be traced to
powertrain testing. In other words, methods that can be shown to be
equivalent to powertrain testing can be considered to be consistent
with the testing that was used as the basis of the final Phase 2
standards.
    In a related context, it may be useful in the future to consider
equivalency to powertrain testing as an appropriate criterion for
evaluating changes to GEM to address new technologies. Consider, for
example, a new technology that is not represented in GEM, but that is
reflected in powertrain testing. The agencies could determine that it
would be appropriate to modify GEM to reflect the technology rather
than to require manufacturers to perform powertrain testing. In such a
case, the agencies would not consider the modification to GEM to impact
the effective stringency of the Phase 2 standards because the new
version of GEM would be equivalent to performing powertrain testing.

D. Engine Test Procedures and Engine Standards

    In addition to the Phase 1 GEM-based vehicle certification of
tractors and vocational chassis, the agencies also set Phase 1 separate
CO2 and fuel efficiency standards for the engines installed
in tractors and vocational chassis. EPA also set Phase 1 separate
engine standards for capping methane (CH4) and nitrous oxide
(N2O) emissions (essentially capping emissions at current
emission levels). Compliance with all of these Phase 1 separate engine
standards is demonstrated by measuring these emissions during an engine
dynamometer test procedure. For Phase 1 the agencies use the same test
procedure specified for EPA's existing heavy-duty engine emissions
standards (e.g., NOX and PM standards). These Phase 1 engine
standards are specified in terms of brake-specific (g/bhp-hr) fuel,
CO2, CH4 and N2O emissions limits.
Since the test procedure already

specified how to measure fuel consumption, CO2 and
CH4, few changes were needed to utilize the test procedure
for Phase 1, the most notable change being a modification specifying
how to measure N2O.
    There are some differences in how these non-GHG test procedures are
applied in Phase 1 and Phase 2. In EPA's non-GHG engine emissions
standards, heavy-duty engines must meet brake-specific standards for
emissions of total oxides of nitrogen (NOX), particulate
mass (PM), non-methane hydrocarbon (NMHC), and carbon monoxide (CO).
These standards must be met by all engines both over a 13-mode steady-
state duty cycle called the ``Supplemental Emissions Test'' (SET) \175\
and over a composite of a cold-start and a hot-start transient duty
cycle called the ``Federal Test Procedure'' (FTP). In contrast, for
Phase 1 the agencies require that engines specifically installed in
tractors meet fuel efficiency and CO2 standards over only
the SET but not the composite FTP. This requirement was intended to
reflect that tractor engines typically operate near steady-state
conditions versus transient conditions. See 76 FR 57159. For Phase 2
the agencies are finalizing, as proposed, slight changes to the 13-
modes' weighting factors to better reflect in-use engine operation.
These weighting factors apply only for determining SET fuel consumption
and CO2 emissions. No changes are being made to the
weighting factors for EPA's non-GHG emission standards. The agencies
adopted the converse for engines installed in vocational vehicles. That
is, these engines must meet fuel efficiency and CO2
standards over the composite FTP but not the SET. This requirement was
intended to reflect that vocational vehicle engines typically operate
under transient conditions versus steady-state conditions (76 FR
57178). For both tractor and vocational vehicle engines in Phase 1, EPA
set CH4 and N2O emissions cap standards over the
composite FTP only and not over the SET duty cycle. See Section II.D.
for details on this final action's engine test procedures for Phase 2.
---------------------------------------------------------------------------

    \175\ The SET cycle is also referred to as the ``ramped-modal
cycle'' because, for criteria pollutants, it is performed as a
continuous cycle with ramped transitions between the individual
modes of the SET.
---------------------------------------------------------------------------

    In response to the agencies' proposed engine standards, we received
a number of public comments. The agencies considered those comments,
and the following list summarizes key changes we've made in response,
and more detailed descriptions of these changes are presented in
Chapter 2.7 of the RIA:
     Recalculated the SET baseline using the new Phase 2 SET
weighting factors.
     Recalculated the FTP baseline, based on MY 2016 FTP
certification data from Cummins, DTNA, Volvo, Navistar, Hino, Isuzu,
Ford, GM and FCA. These included HHD, MHD, and LHD engines.
     Projected how manufacturers would modify maximum fuel
rates as a function of speed to strategically relocate SET mode points
to achieve lowest SET results.
     Projected a higher market penetration of WHR in 2027,
versus what we proposed.
     Decreased our projected impact of engine technology dis-
synergies by increasing the magnitude of our so-called ``dis-synergy
factors;'' accounting for these changes by increasing the research and
development costs needed for this additional optimization.
    The following section first describes the engine test procedures
used to certify engines to the Phase 2 separate engine standards.
Sections that follow describe the Phase 2 CO2,
N2O and CH4 separate engine standards and their
feasibility.
(1) Engine Test Procedures
(a) SET Cycle Weighting
    The SET cycle was adopted by EPA in 2000 and modified in 2005 from
a discrete-mode test to a ramped-modal cycle to broadly cover the most
significant part of the speed and torque map for heavy-duty engines,
defined by three non-idle speeds and three relative torques. The low
speed is called the ``A speed,'' the intermediate speed is called the
``B speed,'' and the high speed is called the ``C speed.'' As is shown
in Table II-1, the SET cumulatively weights these three speeds at 23
percent, 39 percent, and 23 percent.

            Table II-1--SET Modes Weighting Factor in Phase 1
------------------------------------------------------------------------
                                                              Weighting
                       Speed, % Load                          factor in
                                                             Phase 1 (%)
------------------------------------------------------------------------
Idle.......................................................           15
A, 100.....................................................            8
B, 50......................................................           10
B, 75......................................................           10
A, 50......................................................            5
A, 75......................................................            5
A, 25......................................................            5
B, 100.....................................................            9
B, 25......................................................           10
C, 100.....................................................            8
C, 25......................................................            5
C, 75......................................................            5
C, 50......................................................            5
                                                            ------------
  Total....................................................          100
Cumulative A Speed.........................................           23
Cumulative B Speed.........................................           39
Cumulative C Speed.........................................           23
------------------------------------------------------------------------

    The C speed is typically in the range of 1800 rpm for current heavy
heavy-duty engine designs. However, it is becoming much less common for
engines to operate at such a high speeds in real-world driving
conditions, and especially not during cruise vehicle speeds in the 55
to 65 mph vehicle speed range. This trend has been corroborated by
engine manufacturers' in-use data that has been submitted to the
agencies in comments and presented at technical conferences.\176\ Thus,
although the current SET represents highway operation better than the
FTP cycle, it could be improved by adjusting its weighting factors to
better reflect modern trends in in-use engine operation. Furthermore,
the most recent trends indicate that manufacturers are configuring
drivetrains to operate engines at speeds down to a range of 1050-1200
rpm at a vehicle speed of 65 mph.
---------------------------------------------------------------------------

    \176\ ``OEM perspective--Meeting EPA/NHTSA GHG/Efficiency
Standards'', 7th Integer Emissions Summit USA 2014, Volvo Group
North America.
---------------------------------------------------------------------------

    To address this trend toward in-use engine down-speeding, the
agencies are finalizing as proposed refined SET weighting factors for
the Phase 2 CO2 emission and fuel consumption standards. The
new SET mode weightings move most of the C weighting to ``A'' speed, as
shown in Table II-2. To better align with in-use data, these changes
also include a reduction of the idle speed weighting factor. These new
mode weightings do not apply to criteria pollutants or to the Phase 1
CO2 emission and fuel consumption standards.

          Table II-2--New SET Modes Weighting Factor in Phase 2
------------------------------------------------------------------------
                                                              Weighting
                        Speed/% load                          factor in
                                                             Phase 2 (%)
------------------------------------------------------------------------
Idle.......................................................           12
A, 100.....................................................            9
B, 50......................................................           10
B, 75......................................................           10
A, 50......................................................           12
A, 75......................................................           12
A, 25......................................................           12
B, 100.....................................................            9

B, 25......................................................            9
C, 100.....................................................            2
C, 25......................................................            1
C, 75......................................................            1
C, 50......................................................            1
                                                            ------------
  Total....................................................          100
Total A Speed..............................................           45
Total B Speed..............................................           38
Total C Speed..............................................            5
------------------------------------------------------------------------

(b) Engine Test Provisions for SET, FTP, and Engine Mapping for GEM
Inputs
    Although GEM does not apply directly to engine certification, Phase
2 will require engine manufacturers to generate and certify full load
and motoring torque curves and engine fuel rate maps for input into GEM
for tractor and vocational chassis manufacturers to demonstrate
compliance to their respective standards. The full load and motoring
torque curve procedures were previously defined in 40 CFR part 1065,
and these are already required for non-GHG emissions certification. The
Phase 2 final default test procedure for generating an engine map for
GEM's 55 mph and 65 mph drive cycles is the ``steady-state'' mapping
procedure. However, the agencies are finalizing an option for
manufacturers to use the ``cycle average'' mapping procedure for GEM's
55 mph and 65 mph drive cycles. The test procedure for generating an
engine map for GEM's ARB Transient drive cycle is the ``cycle-average''
mapping procedure, and the agencies are not finalizing any other
mapping options for the ARB Transient drive cycle. Note that if an
engine manufacturer elects to conduct powertrain testing to generate
inputs for GEM, then steady-state and cycle-average engine maps would
not be required for those GEM vehicle configurations to which the
powertrain test inputs would apply. The steady-state and cycle-average
test procedures are specified in 40 CFR parts 1036 and 1065. The
technical and confidential business information motivations for
finalizing these test procedures are explained in II. B. (2), along
with a summary of comments we received.
    One important consideration is the need to correct measured fuel
consumption rates for the carbon and energy content of the test fuel.
As proposed, we will continue the Phase 1 approach, which is specified
in 40 CFR 1036.530. We are specifying a similar approach to GEM fuel
maps in Phase 2.
    As proposed, the agencies are requiring that engine manufacturers
certify fuel maps for GEM, as part of their certification to the engine
standards. However, there were a number of manufacturer comments
strongly questioning the particular proposed requirement that engine
manufacturers provide these maps to vehicle manufacturers starting in
MY 2020 for the certification of vehicles commercially marketed as MY
2021 vehicles in calendar year 2020. This is a normal engine and
vehicle manufacturing process, where many vehicles may be produced with
engines having an earlier model year than the commercial model year of
the vehicle. For example, we expect that some MY 2021 vehicles will be
produced with MY 2020 engines. Thus, we proposed to require engine
manufacturers to begin providing GEM fuel maps for MY 2020 engines so
that vehicle manufacturers could run GEM to certify MY 2021 vehicles
with MY 2020 engines. EMA and some of its members commented that MY
2020 engines should not be subject to Phase 2 requirements, based on
NHTSA's statutory 4-year lead-time requirement and because the
potential higher fuel consumption of MY 2020 (i.e., Phase 1) engine
maps could force vehicle manufacturers to install additional
technologies that were not projected by the agencies for compliance.
The agencies considered these comments along with the potential cost
savings for manufacturers to align the timing of both their engines'
and vehicle's Phase 2 product plans and certification paths. The
agencies also considered how this situation would repeat in MY 2024 and
MY 2027 and possibly with future standards as well. Based on these
considerations, we have decided that it would be more appropriate to
harmonize the engine and vehicle standards, starting in MY 2021 so that
vehicle manufacturers will not need fuel maps for 2020 engines. Thus,
we are not finalizing the requirement to provide fuel maps for MY 2020
engines. However, we are requiring fuel maps for all MY 2021 engines,
even those (e.g., small businesses) for which the Phase 2 engine and
vehicle standards have been delayed. See 40 CFR 1036.150.
    The current engine test procedures also require the development of
regeneration emission rate and frequency factors to determine
infrequent regeneration adjustment factors (IRAFs) that account for the
emission changes for criteria pollutants during an exhaust emissions
control system regeneration event. In Phase 1 the agencies adopted
provisions to exclude CO2 emissions and fuel consumption due
to regeneration. However, for Phase 2, we are requiring the inclusion
of CO2 emissions and fuel consumption due to regeneration
over the FTP and SET (RMC) cycles, as determined using the IRAF
provisions in 40 CFR 1065.680. While some commenters opposed this
because of its potential impact on stringency, we do not believe this
will significantly impact the stringency of these standards because
manufacturers have already made great progress in reducing the
frequency and impact of regeneration emissions since 2007. Rather, the
agencies are including IRAF CO2 emissions for Phase 2 to
prevent these emissions from increasing in the future to the point
where they would otherwise become significant. Manufacturers
qualitatively acknowledged the likely already small and decreasing
magnitude of IRAF CO2 emissions in their comments. For
example, EMA stated, ``the rates of infrequent regenerations have been
going down since the adoption of the Phase 1 standards'' and that IRAF
``contributions are minor.'' Nevertheless, we believe it is prudent to
begin accounting for regeneration emissions to discourage manufacturers
from adopting criteria emissions compliance strategies that could
reverse this trend. Manufacturers expressed concern about the
additional test burden, but the only additional requirement would be to
measure and report CO2 emissions for the same tests they are
already performing to determine IRAFs for other pollutants.
    At the time of the proposal, we did not specifically adjust
baseline levels to include additional IRAF emissions because we
believed them to be negligible and decreasing. Commenters opposing this
proposed provision provided no data to dispute this belief. We continue
to believe that regeneration strategies can be engineered to maintain
these negligible rates. Thus, we do not believe they are of fundamental
significance for our baselines in the FRM. Highway operation includes
enough high temperature operation to make active regenerations
unnecessary. Furthermore, recent improvements in exhaust after-
treatment catalyst formulations and exhaust temperature thermal
management strategies, such as intake air throttling, minimize
CO2 IRAF impacts during non-highway operation, where active
regeneration might be required. Finally, as is discussed in Section
II.D.(2), recent significant

efficiency improvements over the FTP cycle suggest that FTP emissions
may actually be even lower than we have estimated in our updated FTP
baselines, which would provide additional margin for manufacturers to
manage any minor CO2 IRAF impacts that may occur.
    We are not including fuel consumption due to after-treatment
regeneration in the creation of fuel maps used in GEM for vehicle
compliance. We believe that the IRAF requirements for the separate SET
and FTP engine standards, along with market forces that already exist
to minimize regeneration events, will create sufficient incentives to
reduce fuel consumption during regeneration over the entire fuel map.
(c) Powertrain Testing
    The agencies are finalizing a powertrain test option to afford a
robust mechanism to quantify the benefits of CO2 reducing
technologies that are a part of the powertrain (conventional or
hybrid), that are not captured in the GEM simulation. Among these
technologies are integrated engine and transmission control and hybrid
systems. We are finalizing a number of improvements to the test
procedure in 40 CFR 1037.550. As proposed we are finalizing the
requirement for Phase 2 hybrid powertrains to mapped using this
powertrain test method. The agencies are also finalizing modifications
to 40 CFR 1037.550 to separate out the hybrid specific testing
protocols.
    To limit the amount of testing under this rule, powertrains can be
divided into families and are tested in a limited number of simulated
vehicles that will cover the range of vehicles in which the powertrain
will be used. A matrix of 8 to 9 tests will be needed per vehicle
cycle, to enable the use of the powertrain results broadly across all
the vehicles in which the powertrain will be installed. The individual
tests differ by the vehicle that is being simulated during the test.
These are discussed in detail in Chapter 3.6 of the RIA.
(i) Powertrain Test Procedure
    The agencies are expanding upon the test procedures defined 40 CFR
1037.550 for Phase 1 hybrid vehicles. The Phase 2 expansion will
migrate the current Phase 1 test procedure to a new 40 CFR 1037.555 and
will modify the current test procedure in 40 CFR 1037.550, allowing its
use for Phase 2 only. The Phase 2 modifications relative to 40 CFR
1037.550 include the addition of the rotating inertia of the driveline
and tires, and the axle efficiency. This revised procedure also
requires that each of the powertrain components be cooled so that the
temperature of each of the components is kept in the normal operation
range. We are extending the powertrain procedure to PHEV powertrains.
    Powertrain testing contains many of the same requirements as engine
dynamometer testing. The main differences are where the test article
connects to the dynamometer and the software that is used to command
the dynamometer and operator demand setpoints. The powertrain procedure
finalized in Phase 2 allows for the dynamometer(s) to be connected to
the powertrain either upstream of the drive axle or at the wheel hubs.
The output of the transmission is upstream of the drive axle for
conventional powertrains. In addition to the transmission, a hydraulic
pump or an electric motor in the case of a series hybrid may be located
upstream of the drive axle for hybrid powertrains. If optional testing
with the wheel hub is used, two dynamometers will be needed, one at
each hub. Beyond these points, the only other difference between
powertrain testing and engine testing is that for powertrains, the
dynamometer and throttle setpoints are not set by fixed speed and
torque targets prescribed by the cycle, but are calculated in real time
by the vehicle model. The powertrain test procedure requires a forward
calculating vehicle model, thus the output of the model is the
dynamometer speed setpoints. The vehicle model calculates the speed
target using the measured torque at the previous time step, the
simulated brake force from the driver model, and the vehicle parameters
(tire rolling resistance, drag area, vehicle mass, rotating mass, and
axle efficiency). The operator demand that is used to change the torque
from the engine is controlled such that the powertrain follows the
vehicle speed target for the cycle instead of being controlled to match
the torque or speed setpoints of the cycle. The emission measurement
procedures and calculations are identical to engine testing.
(ii) Engine Test Procedures for Replicating Powertrain Tests
    As described in Section II.B.(2)(b), the agencies are finalizing
the proposed powertrain test option to quantify the benefits of
CO2-reducing powertrain technologies. This option is very
similar to the cycle average mapping approach, although these
powertrain test results would be used to override both the engine and
transmission (and possibly axle) simulation portions of GEM, not just
the engine fuel map. The agencies are requiring that any manufacturer
choosing to use this option also measure engine speed and engine torque
during the powertrain test so that the engine's performance during the
powertrain test could be replicated in a non-powertrain engine test
cell. Manufacturers would be required to measure or calculate, using
good engineering judgment, the engine shaft output torque, which would
be close-coupled to the transmission input shaft during a powertrain
test. Subsequent engine testing then could be conducted using the
normal part 1065 engine test procedures as specified in 40 CFR
1037.551, and g/bhp-hr CO2 results could be compared to the
levels the manufacturer reported during certification. Such testing
could apply for both confirmatory and selective enforcement audit (SEA)
testing. This would simplify both the certification and SEA testing.
    As proposed, engine manufacturers certifying powertrain performance
(instead of or in addition to the multi-point fuel maps) will be held
responsible for powertrain test results. If the engine manufacturer
does not certify powertrain performance and instead certifies only the
steady-state and/or cycle-average fuel maps, it will held responsible
for fuel map performance rather than the powertrain test results.
Engine manufacturers certifying both will be responsible for both.
    Some commenters objected to the potential liability for such
engine-only tests. However, it appears they do not understand our
intent. This provision states clearly that this approach could be used
only where ``the test engine's operation represents the engine
operation observed in the powertrain test.'' Also, since the
manufacturers perform all SEA testing themselves, this would be an
option for the manufacturer rather than something imposed by EPA. Thus,
this concern should be limited to the narrow circumstance in which EPA
performs confirmatory engine testing of an engine that was certified
using powertrain testing, follows the manufacturer's specified engine
test cycle, and ensures that the test accurately represents the
engine's performance during the powertrain test. However, it is not
clear why this would be problematic. It is entirely reasonable to
assume that testing the engine in this way would result in equivalent
emission results. To the extent manufacturer concerns remain, each
manufacturer would be free to certify their engines based on engine-
only fuel maps rather than powertrain testing.
(d) CO2 From Urea SCR Systems
    For diesel engines utilizing urea SCR emission control systems for
NOX

reduction, the agencies will allow, but not require, correction of the
final engine (and powertrain) fuel maps to account for the contribution
of CO2 from the urea injected into the exhaust. This urea
typically contributes 0.2 to 0.5 percent of the total CO2
emissions measured from the engine, and up to 1 percent at certain map
points. Since current urea production methods use gaseous
CO2 captured from the atmosphere (along with
NH3), CO2 emissions from urea consumption does
not represent a net carbon emission. This adjustment is necessary so
that fuel maps developed from CO2 measurements will be
consistent with fuel maps from direct measurements of fuel flow rates.
This adjustment is also necessary to fully align EPA's CO2
standards with NHTSA's fuel consumption standards. Failing to account
for urea CO2 tailpipe emissions would result in reporting
higher fuel consumption than what was actually consumed. Thus, we are
only allowing this correction for emission tests where CO2
emissions are determined from direct measurement of CO2 and
not from fuel flow measurement, which would not be impacted by
CO2 from urea.
    We note that this correction will be voluntary for manufacturers,
and we expect that some manufacturers may determine that the correction
is too small to be of concern. The agencies will use this correction
for CO2 measurements with any engines for which the engine
manufacturer applied the correction for its fuel maps during
certification.
    We are not allowing this correction for engine test results with
respect to the engine CO2 standards. Both the Phase 1
standards and the new standards for CO2 from diesel engines
are based on test results that included CO2 from urea. In
other words, these standards are consistent with using a test procedure
that does not correct for CO2 from urea.
(2) Engine Standards for CO2 and Fuel Consumption
    We are largely maintaining the existing Phase 1 regulatory
structure for engine standards, which had separate standards for spark-
ignition engines (such as gasoline engines) and compression-ignition
engines (such as diesel engines), and for HHD, MHD and LHD engines, but
we are changing how these standards will apply to alternative fuel
engines as described in Section XII.A.2.
    Phase 1 applied different test cycles depending on whether the
engine is used for tractors, vocational vehicles, or both, and we are
continuing this approach. Tractor engines are subject to standards over
the SET, while vocational engines are subject to standards over the
FTP. Table II-3 shows the Phase 1 standards for diesel engines.

                                      Table II-3--Phase 1 MY 2017 Diesel Engine CO2 and Fuel Consumption Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          Units                                 HHD SET            MHD SET            HHD FTP            MHD FTP            LHD FTP
--------------------------------------------------------------------------------------------------------------------------------------------------------
g/bhp-hr.................................................                460                487                555                576                576
gal/100 bhp-hr...........................................             4.5187             4.7839             5.4519             5.6582             5.6582
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In the Phase 2 proposal we assumed that these numeric values of the
Phase 1 standards were the baselines for Phase 2. We applied our
technology assessments to these baselines to arrive at the Phase 2
standards for MY 2021, MY 2024 and MY 2027. In other words, for the
Phase 2 proposal we projected that starting in MY 2017 engines would,
on average, just meet the Phase 1 standards and not over-comply.
However, based on comments we received on how to consistently apply our
new SET weighting factors in our analysis and based on recent MY 2016
engine certification data, we are updating our Phase 2 baseline
assumptions for both the SET and FTP.
    First, with respect to the SET, in the proposal we compared our
proposed Phase 2 standards, which are based on these new Phase 2
weighting factors, to the Phase 1 numeric standards, which are based on
the current Phase 1 weighting factors. Because we continue to use the
same 13-mode brake specific CO2 and fuel consumption numeric
values we used for the proposal to represent the performance of a MY
2017 baseline engine, we are not projecting a different technology
level in the baseline. Rather, this is simply correcting an ``apples-
to-oranges'' comparison from the proposal by applying the Phase 2
weighting factors to the MY 2017 baseline engine. This was pointed out
to us by UCS, ICCT and EDF in their public comments. While this did not
impact our technology effectiveness or cost analyses, it did impact the
numeric value of our baseline to which we reference the effectiveness
of applying technologies to the 13 individual modes of the SET. Because
the revised SET weighting factors result in somewhat lower brake
specific CO2 and fuel consumption numeric results for the
composite baseline SET value, this correction, in turn, lowers the
numerical values of the final Phase 2 SET standards. Making this
particular update did not result in a change to the relative stringency
of the final Phase 2 numeric engine standards (relative to MY 2017
baseline performance), but our updated feasibility analysis did; see
Section II.D.(2)(a) below).
    Second, the agencies made adjustments to the FTP baselines, but
these adjustments were not made because of a calculation error. Rather,
MY 2016 FTP certification data showed an unexpected step-change
improvement in engine fuel consumption and CO2 emissions.
These data were not available at the time of proposal, so the agencies
relied upon the MY 2017 Phase 1 standard as a baseline. EDF publicly
commented in response to the NODA that the more recent certification
data revealed this new step-change. MY 2016 certification data
submitted to the agencies \177\ as well as to ARB \178\ show that many
engines from many manufacturers already not only achieve the Phase 1
FTP standards, but some were also below the MY 2027 standards proposed
for Phase 2. This was not the case for the SET, where most
manufacturers are still not yet complying with the MY 2017 Phase 1 SET
standards. In view of this situation for the FTP, the agencies are
adjusting the Phase 2 FTP baseline to reflect this shift. The
underlying reasons for this shift are mostly related to manufacturers
optimizing their SCR thermal management strategy over the FTP in ways
that we (mistakenly) thought they already had in MY 2010 (i.e., the
Phase 1 baseline). As background, the FTP includes a cold-start, a hot-
start and significant time spent at engine idle. During these portions
of the FTP, the NOX SCR system can cool down and lose
NOX reducing efficiency. One simplistic strategy to maintain
SCR temperature is to inefficiently consume additional fuel, such that
the fuel energy is lost to the

exhaust system in the form of heat. There are more sophisticated
strategies to maintain SCR temperature, however, but these apparently
required additional time from MY 2010 for research, development and
refinement. In updating these baseline values, the agencies did
consider the concerns raised by manufacturers about the potential
impact of IRAFs on baseline emissions.
---------------------------------------------------------------------------

    \177\ https://www3.epa.gov/otaq/certdata.htm#oh.
    \178\ http://www.arb.ca.gov/msprog/onroad/cert/mdehdehdv/2016/2016.php.
---------------------------------------------------------------------------

    As just noted, at the time of Phase 1 we had not realized that
these improvements were not already in the Phase 1 baseline. These
include optimizing the use of an intake throttle to decrease excess
intake air at idle and SCR catalyst reformulation to maintain SCR
efficiency at lower temperatures. Based on this information, which was
provided to the agencies by engine manufacturers, but only after we
specifically requested this information, the agencies concluded that in
Phase 1 we did not account for how much further these kinds of
improvements could still impact FTP fuel consumption. Conversely, only
by reviewing the new MY 2016 certification data did we realize how
little SCR thermal management optimization actually occurred for the
engine model years that we used to establish the Phase 1 baseline--
namely MY 2009 and MY 2010 engines. Because we never accounted for this
kind of improvement in our Phase 2 proposal's stringency analysis for
meeting the Phase 2 proposed FTP standards, this baseline shift does
not alter our projected effectiveness and market adoption rates from
the proposal. Therefore, we continue to apply the same improvements
that we proposed, but we apply them to the updated FTP baseline. See
Section II.D.(5) for a discussion on how this impacts carry-over of
Phase 1 emission credits.
    Table II-4 shows the Phase 2 diesel engine final CO2
baseline emissions. Note that the gasoline engine CO2
baseline for Phase 2 is the same as the Phase 1 HD gasoline FTP
standard, 627 g/bhp-hr. More detailed analyses on these Phase 2
baseline values of tractor and vocational vehicles can be found in
Chapter 2.7.4 of RIA.

                                   Table II-4--Phase 2 Diesel Engine Final CO2 and Fuel Consumption Baseline Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          Units                                 HHD SET            MHD SET            HHD FTP            MHD FTP            LHD FTP
--------------------------------------------------------------------------------------------------------------------------------------------------------
g/bhp-hr.................................................                455                481                525                558                576
gal/100 bhp-hr...........................................             4.4695             4.7250             5.1572             5.4813             5.6582
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As described below, the agencies are adopting standards for new
compression-ignition engines for Phase 2, commencing in MY 2021, that
will require additional reductions in CO2 emissions and fuel
consumption beyond the Phase 2 baselines. The agencies are not adopting
new CO2 or fuel consumption engine standards for new heavy-
duty gasoline engines. Note, however, that we are projecting some small
improvement in gasoline engine performance that will be recognized over
the vehicle cycles (that is, reflected in the stringency of certain of
the vocational vehicle standards). See Section V.B.2.a below.
    For diesel engines to be installed in Class 7 and 8 combination
tractors, the agencies are adopting the SET standards shown in Table
II-5.\179\ The MY 2027 SET standards for engines installed in tractors
will require engine manufacturers to achieve, on average, a 5.1 percent
reduction in fuel consumption and CO2 emissions beyond the
Phase 2 baselines. We are also adopting SET standards in MY 2021 and MY
2024 that will require tractor engine manufacturers to achieve, on
average, 1.8 percent and 4.2 percent reductions in fuel consumption and
CO2 emissions, respectively, beyond the Phase 2 baselines.
---------------------------------------------------------------------------

    \179\ The agencies note that the CO2 and fuel
consumption standards for Class 7 and 8 combination tractors do not
cover gasoline or LHDD engines, as those are not used in Class 7 and
8 combination tractors.
    \180\ Tractor engine standards apply to all tractor engines,
without regard to the actual fuel (e.g., diesel or natural gas) or
engine-cycle classification (e.g., compression-ignition or spark-
ignition).

           Table II-5--Phase 2 Heavy-Duty Tractor Engine Standards for Engines 180 Over the SET Cycle
----------------------------------------------------------------------------------------------------------------
                                                                                Heavy  heavy-   Medium heavy-
                  Model year                                Standard                   duty            duty
----------------------------------------------------------------------------------------------------------------
2021-2023.....................................  CO2 (g/bhp-hr)..................             447             473
                                                Fuel Consumption (gallon/100 bhp-         4.3910          4.6464
                                                 hr).
2024-2026.....................................  CO2 (g/bhp-hr)..................             436             461
                                                Fuel Consumption (gallon/100 bhp-         4.2829          4.5285
                                                 hr).
2027 and Later................................  CO2 (g/bhp-hr)..................             432             457
                                                Fuel Consumption (gallon/100 bhp-         4.2436          4.4892
                                                 hr).
----------------------------------------------------------------------------------------------------------------

    For diesel engines to be installed in vocational chassis, the
agencies are adopting the FTP standards shown in Table II-6. The MY
2027 FTP standards for engines installed in vocational chassis will
require engine manufacturers to achieve, on average, a 4.2 percent
reduction in fuel consumption and CO2 emissions beyond the
Phase 2 baselines. We are also adopting FTP standards in MY 2021 and MY
2024 that will require vocational chassis engine manufacturers to
achieve, on average, 2.3 percent and 3.6 percent reductions in fuel
consumption and CO2 emissions, respectively, beyond the
Phase 2 baselines.

                Table II-6--Vocational Diesel (CI) Engine Standards Over the Heavy-Duty FTP Cycle
----------------------------------------------------------------------------------------------------------------
                                                                                Medium  heavy-   Light  heavy-
              Model year                        Standard           Heavy  heavy-   duty  diesel    duty  diesel
                                                                    duty \181\         \181\           \182\
----------------------------------------------------------------------------------------------------------------
2021-2023.............................  CO2 (g/bhp-hr)..........             513             545             563
                                        Fuel Consumption (gallon/         5.0393          5.3536          5.5305
                                         100 bhp-hr).
2024-2026.............................  CO2 (g/bhp-hr)..........             506             538             555
                                        Fuel Consumption (gallon/         4.9705          5.2849          5.4519
                                         100 bhp-hr).
2027 and Later........................  CO2 (g/bhp-hr)..........             503             535             552
                                        Fuel Consumption (gallon/         4.9411          5.2554          5.4224
                                         100 bhp-hr).
----------------------------------------------------------------------------------------------------------------

(a) Feasibility of the Diesel (Compression-Ignition) Engine Standards
---------------------------------------------------------------------------

    \181\ Heavy heavy-duty engine standards apply to all heavy
heavy-duty engines, without regard to the actual fuel (e.g., diesel
or natural gas) or engine-cycle classification (e.g., compression-
ignition or spark-ignition).
    \182\ The agencies are not adopting new CO2 or fuel
consumption engine standards for new heavy-duty gasoline engines.
Therefore, the Phase 2 HD gasoline FTP standard is the same as the
Phase 1 HD gasoline FTP standard, 627 g/bhp-hr, 7.0552 gallon/100
bhp-hr.
---------------------------------------------------------------------------

    In this section, the agencies discuss our assessment of the
feasibility of the engine standards and the extent to which they
conform to our respective statutory authorities and responsibilities.
More details on the technologies discussed here can be found in RIA
Chapter 2.3. The feasibility of these standards is further discussed in
RIA Chapter 2.7 for tractor and vocational vehicle engines. While the
projected technologies are discussed here separately, as is discussed
at the beginning of this Section II.D, the agencies also accounted for
dis-synergies between technologies. Note that Section II.D.(2)(e)
discusses the potential for some manufacturers to achieve greater
emission reductions by introducing new engine platforms, and how and
why these reductions are reflected in the tractor and vocational
vehicle standards.
    Based on the technology analysis described below, the agencies
project that a technology path exists that will allow engine
manufacturers to meet the final Phase 2 standards by 2027, and to meet
the MY 2021 and 2024 standards. The agencies also project that these
manufacturers will be able to meet these standards at a reasonable cost
and without adverse impacts on in-use reliability.
    In general, engine performance for CO2 emissions and
fuel consumption can be improved by improving the internal combustion
process and by reducing energy losses. More specifically, the agencies
have identified the following key means by which fuel efficiency can be
improved:
     Combustion optimization
     Turbocharger design and optimization
     Engine friction and other parasitic loss reduction
     Exhaust after-treatment pressure drop reduction
     Intake air and exhaust system pressure drop reduction
(including EGR system)
     Engine down-sizing to improve core engine efficiency
     Engine down-speeding over the SET, and in-use, by lug
curve shape optimization
     Waste heat recovery system installation and optimization
     Physics model based electronic controls for transient
performance optimization
    The agencies are gradually phasing in the separate engine standards
from 2021 through 2027 so that manufacturers can gradually introduce
these technology improvements. For most of these, the agencies project
manufacturers could begin applying these technologies to about 45-50
percent of their heavy-duty engines by 2021, 90-95 percent by 2024, and
ultimately apply them to 100 percent of their heavy-duty engines by
2027. However, for some of these improvements (such as waste heat
recovery and engine downsizing) we project lower application rates in
the Phase 2 time frame. This phase-in structure is consistent with the
normal manner in which manufacturers introduce new technology to manage
limited R&D budgets as well as to allow them to work with fleets to
fully evaluate in-use reliability before a technology is applied fleet-
wide. The agencies believe the phase-in schedule will allow
manufacturers to complete these normal processes. See RIA 2.3.9.
    Based on our technology assessment described below, the engine
standards appear to be consistent with the agencies' respective
statutory authorities. All of the technologies with high penetration
rates above 50 percent have already been demonstrated to some extent in
the field or in research laboratories, although some development work
remains to be completed. We note that our feasibility analysis for
these engine standards is not based on projecting 100 percent
application for any technology until 2027. We believe that projecting
less than 100 percent application is appropriate and gives us
additional confidence that the 2021 and 2024 MY standards are feasible.
    Because this analysis considers reductions from engines meeting the
Phase 1 standards, it assumes manufacturers will continue to include
the same compliance margins as in Phase 1. In other words, a
manufacturer currently declaring FCLs 10 g/bhp-hr above its measured
emission rates (in order to account for production and test-to-test
variability) will continue to do the same in Phase 2. Both the costs
and benefits are determined relative to these baselines, and so are
reflective of these compliance margins.
    The agencies have carefully considered the costs of applying these
technologies, which are summarized in Section II.D.(2)(d). These costs
appear to be reasonable on both a per engine basis, and when
considering payback periods.\183\ The engine technologies are discussed
in more detail below. Readers are encouraged to see the RIA Chapter 2.7
for additional details (and underlying references) about our
feasibility analysis.
---------------------------------------------------------------------------

    \183\ See Section IX.M for additional information about payback
periods.
---------------------------------------------------------------------------

(i) Combustion Optimization
    Although manufacturers are making significant improvements in
combustion to meet the Phase 1 engine standards, the agencies project
that even more improvement is possible after 2018. For example,
improvements to fuel injection systems will allow more flexible fuel
injection capability with higher injection pressure, which can provide
more opportunities to improve engine fuel efficiency. Further
optimization of piston bowls and injector tips will also improve engine
performance and fuel efficiency. We project that a reduction of up to
1.0 percent is feasible in the 2024 model year through the use of

these technologies, although it will likely apply to only 95 percent of
engines until 2027.
    Another important area of potential improvement is advanced engine
control incorporating model based calibration to reduce losses of
control during transient operation. Improvements in computing power and
speed will make it possible to use much more sophisticated algorithms
that are more predictive than today's controls. Because such controls
are only beneficial during transient operation, they will reduce
emissions over the FTP cycle, over the ARB Transient cycle's cycle-
average mapping procedure, and during in-use operation, but this
technology will not reduce emissions over the SET cycle or over the
steady-state engine mapping procedure. Thus, the agencies are
projecting model based control reductions only for vocational engines'
FTP standards and for projecting improvements captured by the cycle-
average mapping over the ARB Transient cycle. Although this control
concept is not currently available and is still under development, we
project model based controls achieving a 2 percent improvement in
transient emissions. Based on model based controls already in
widespread use in engine laboratories for the calibration of simpler
controllers and based on recent model based control development under
the DOE SuperTruck partnership (e.g., DTNA's SuperTruck engine's model
based controls), we project that such controls could be in limited
production for some engine models by 2021. We believe that some
vocational chassis applications would particularly benefit from these
controls in-use (e.g., urban applications with significant in-use
transient operation). Therefore, we project that a modest amount of
engine models will have these controls by MY 2021. We also project that
manufacturers will learn more from the in-use operation of these
technology leading engines, and manufacturers will be able to improve
these controls even further, such that they would additionally benefit
other vocational applications, such as multi-purpose and regional
applications. By 2027, we project that 40 percent of all vocational
diesel engines will incorporate model-based controls at a 2 percent
level of effectiveness.
(ii) Turbocharging System
    Many advanced turbocharger technologies can be brought into
production in the time frame between 2021 and 2027, and some of them
are already in production, such as mechanical or electric turbo-
compounding, more efficient variable geometry turbines, and Detroit
Diesel's patented asymmetric turbocharger. A turbo-compound system,
like those installed on some of Volvo's EURO VI compliant diesels and
on some of DTNA's current U.S. offerings (supplied to DTNA by a
division of Cummins), extracts energy from the exhaust to provide
additional power. Mechanical turbo-compounding includes a power turbine
located downstream of the turbine which in turn is connected to the
crankshaft to supply additional power. On-highway demonstrations of
this technology began in the early 1980s. It was used first in heavy
duty production in the U.S. by Detroit Diesel for their DD15 and DD16
engines and reportedly provided a 3 to 5 percent fuel consumption
reduction. Results are duty cycle dependent, and require significant
time at high load to realize an in-use fuel efficiency improvement.
Lightly loaded vehicles on flat roads or at low vehicle speeds can
expect little or no benefit. Volvo reports two to four percent fuel
consumption improvement in line haul applications.\184\ Because of
turbo-compound technology's drive cycle dependent effectiveness, the
agencies are only projecting a market penetration of 10 percent for all
tractor engines, at slightly less than 2 percent effectiveness over the
SET. The agencies are considering turbo-compound to be mutually
exclusive with WHR because both technologies seek to extract additional
usable work from the same waste heat and are unlikely to be used
together.
---------------------------------------------------------------------------

    \184\ http://www.volvotrucks.us/powertrain/d13/.
---------------------------------------------------------------------------

(iii) Engine Friction and Parasitic Losses
    The friction associated with each moving part in an engine results
in a small loss of engine power. For example, frictional losses occur
at bearings, in the valve train, and at the piston ring-cylinder
interface. Taken together such losses represent a measurable fraction
of all energy lost in an engine. For Phase 1, the agencies projected a
1-2 percent reduction in fuel consumption due to friction reduction.
However, new information leads us to project that an additional 1.4
percent reduction is possible for some engines by 2021 and all engines
by 2027. These reductions are possible due to improvements in bearing
materials, lubricants, and new accessory designs such as variable-speed
pumps.
(iv) After-Treatment Optimization
    All heavy duty diesel engine manufacturers are already using diesel
particulate filters (DPFs) to reduce particulate matter (PM) and
selective catalytic reduction (SCR) to reduce NOX emissions.
The agencies see two areas in which improved after-treatment systems
can also result in lower fuel consumption. First, increased SCR
efficiency could allow re-optimization of combustion for better fuel
consumption because the SCR would be capable of reducing higher engine-
out NOX emissions. We don't expect this to be significant,
however. Manufacturers already optimize the DEF (urea) consumption and
fuel consumption to achieve the lowest cost of operation; taking into
account fuel consumption, DEF consumption and the prices of fuel and
DEF. Therefore, if manufacturers re-optimized significantly for fuel
consumption, it is possible that this would lead to higher net
operating costs. This scenario is highly dependent upon fuel and DEF
prices, so projecting this technology path is uncertain. Second,
improved designs could reduce backpressure on the engine to lower
pumping losses. If manufacturers have opportunities to lower
backpressure within the size constraints of the vehicle, the agencies
project that manufacturers will opt to lower after-treatment back
pressure. The agencies project the combined impact of these
improvements would be 0.6 percent over the SET.
    Note that this improvement is independent of cold-start
improvements made recently by some manufacturers with respect to
vocational engines. Thus, the changes being made to the FTP baseline
engines do not reduce the likelihood of the benefits of re-optimizing
after-treatment projected here.
(v) Engine Intake and Exhaust Systems
    Various high efficiency air handling for both intake air and
exhaust systems could be produced in the 2020 and 2024 time frame. To
maximize the efficiency of such processes, induction systems may be
improved by manufacturing more efficiently designed flow paths
(including those associated with air cleaners, chambers, conduit, mass
air flow sensors and intake manifolds) and by designing such systems
for improved thermal control. Improved turbocharging and air handling
systems will likely include higher efficiency EGR systems and
intercoolers that reduce frictional pressure losses while maximizing
the ability to thermally control induction air and EGR. EGR systems
that often rely upon an adverse pressure gradient (exhaust manifold
pressures greater than intake manifold pressures) must be reconsidered
and their adverse pressure gradients

minimized. Other components that offer opportunities for improved flow
efficiency include cylinder heads, ports and exhaust manifolds to
further reduce pumping losses by about 1 percent over the SET.
(vi) Engine Downsizing and Down Speeding
    Proper sizing of an engine is an important component of optimizing
a vehicle for best fuel consumption. This Phase 2 rule will require
reductions in road load due to aerodynamic resistance, tire rolling
resistance and weight, which will result in a drop in the vehicle power
demand for most operation. This drop moves the engine operating points
down to a lower load zone, which can move the engine away from
operating near its peak thermal efficiency (a.k.a. the ``sweet spot'').
Engine downsizing combined with engine down speeding can allow the
engine to move back to higher loads and a lower speed zone, thus
achieving better fuel efficiency in the real world. However, because of
the way engines are tested, little of the benefit of engine downsizing
would be detected during engine testing (if power density remains the
same) because the engine test cycles are de-normalized based on the
full torque curve. Thus, the separate engine standards are not the
appropriate standards for recognizing the benefits of engine
downsizing. Nevertheless, we project that some small benefit can be
measured over the engine test cycles depending on the characteristics
of the engine fuel map and how the SET points are determined as a
function of the engine's lug curve.
    After the proposal we received comments recommending that we should
recognize some level of engine down speeding within the separate engine
standards. Based on this comment and some additional confidential
business information that we received, we believe that engine lug curve
reshaping to optimize the locations of the 13-mode points is a way that
manufacturers can demonstrate some degree of engine down-speeding over
the engine test. As pointed out in Chapter 2.3.8 and 2.7.5 of the RIA,
down speeding via lug curve reshaping alone can provide SET reductions
in the range of 0.4 percent depending on the engine map
characteristics.
(vii) Waste Heat Recovery
    More than 40 percent of all energy loss in an engine is lost as
heat to the exhaust and engine coolant. For many years, manufacturers
have been using turbochargers to convert some of this waste heat in the
exhaust into usable mechanical power that is then used to compress the
intake air. Manufacturers have also been developing a Rankine cycle-
based system to extract additional heat energy from the engine. Such
systems are often called waste heat recovery (WHR) systems. The
possible sources of waste heat energy include the exhaust, recirculated
exhaust gases, compressed charge air, and engine coolant. The basic
approach with WHR is to use waste heat from one or more of these
sources to evaporate a working fluid, which is passed through a turbine
or equivalent expander to create mechanical or electrical power, then
re-condensed.
    For the proposal, the agencies projected that by 2027, 15 percent
of tractor engines would employ WHR systems with an effectiveness of
better than three percent. We received many comments on this
projection, which are discussed briefly below and in more detail in the
RTC. In particular, we note that some of the comments included
confidential data related to systems not yet on the market. After
carefully considering all of these comments, we have revised our
projections to increase the effectiveness, decrease costs, and project
higher adoption rates than we proposed.
    Prior to the Phase 1 Final Rule, the NAS estimated the potential
for WHR to reduce fuel consumption by up to 10 percent.\185\ However,
the agencies do not believe such levels will be achievable within the
Phase 2 time frame. There currently are no commercially available WHR
systems for diesel engines, although research prototype systems are
being tested by some manufacturers. American Trucking Association,
Navistar, DTNA, OOIDA, Volvo, and UPS commented that because WHR is
still in the prototype stage, it should not be assumed for setting the
stringency of the tractor engine standards. Many of these commenters
pointed to the additional design and development efforts that will be
needed to reduce cost, improve packaging, reduce weight, develop
controls, select an appropriate working fluid, implement expected OBD
diagnostics, and achieve the necessary reliability and durability. Some
stated that the technology has not been thoroughly tested or asked that
more real-world data be collected before setting standards based on
WHR. Some of these commenters provided confidential business
information pertaining to their analysis of WHR system component costs,
failure modes, and projected warranty cost information.
---------------------------------------------------------------------------

    \185\ See 2010 NAS Report, page 57.
---------------------------------------------------------------------------

    Alternatively, a number of commenters including Cummins, ICCT,
CARB, ACEEE, EDF, Honeywell, ARB and others stated that the agencies
should increase the assumed application rate of WHR in the final rule
and the overall stringency of the engine standards. They argued the
agencies' WHR technology assessment was outdated and too conservative,
the fuel savings and GHG reduction estimation for WHR were too low, and
the agencies' cost estimates were based on older WHR systems where
costs were confounded with hybrid component costs and that these have
since been improved upon. In addition, the agencies received CBI
information supporting the arguments of some of these commenters.
    Cummins stated the agencies underestimated the commercial viability
of WHR and that we overstated the development challenges and timing in
the NPRM. They said WHR can provide a 4 to 5 percent improvement in
fuel consumption on tractor drive cycles and that WHR would be
commercially viable and available in production as early as 2020 and
will exceed the agencies' estimates for market penetration over the
period of the rule. According to Cummins, the reliability of their WHR
system has improved with each generation of the technology and they
have developed a smaller system footprint, improved integration with
the engine and vehicle and a low-GWP working fluid, resulting in a much
more compact and integrated system. They added that their system would
be evaluated in extended customer testing by the end of 2015, and that
results of that experience will inform further technology development
and product engineering leading to expected commercial product
availability in the 2020 timeframe. Furthermore, they said multiple
product development cycles over the implementation timeframe of the
rule would provide opportunities for further development for reduced
cost and improved performance and reliability.
    Some commenters, including EDF, said the agencies' assumed design
had little in common with the latest designs planned for production.
They cited several publications, including the NAS 21st Century Truck
Program report #3 and stated WHR effectiveness is much higher than the
agencies estimated. Gentham cited an ICCT study saying that up to a 12
percent fuel consumption reduction from a 2010 baseline engine is
possible with the application of advanced engine technologies and WHR.

    The agencies recognize that much work remains to be done, but we
are providing significant lead time to bring WHR to market. Based on
our assessment of each manufacturer's work to date, we are confident
that a commercially-viable WHR capable of reducing fuel consumption by
over three percent will be available in the 2021 to 2024 time frame.
Concerns about the system's cost and complexity may remain high enough
to limit the use of such systems in this time frame. Moreover,
packaging constraints and lower effectiveness under transient
conditions will likely limit the application of WHR systems to line-
haul tractors. Refer to RIA Chapter 2.3.9 for a detailed description of
these systems and their applicability. For our analysis of the engine
standards, the agencies project that WHR with the Rankine technology
could be used on 1 percent of tractor engines by 2021, on 5 percent by
2024, and 25 percent by 2027, with nearly all being used on sleeper
cabs. We project this sharper increase in market adoption in the 2027
timeframe because we have noted that most technology adoption rate
curves follow an S-shape: Slow initial adoption, then more rapid
adoption, and then a leveling off as the market saturates (not always
at 100 percent).\186\ We assumed an S-shape curve for WHR adoption,
where we project a steeper rise in market adoption in and around the
2027 timeframe. Given our averaging, banking and trading program
flexibilities and that manufacturers may choose from a range of other
technologies, we believe that manufacturers will be able to meet the
2027 standards, which we based on a 25 percent WHR adoption in tractor
engines. Although we project these as steps, it is more likely that
manufacturers will try to gradually increase the WHR adoption in MY
2025 and MY 2026 from the 5 percent in 2024 to generate emission
credits to smooth the transition to the 2027 standards.
---------------------------------------------------------------------------

    \186\ NACFE 2015 Annual Fleet Fuel Study.
---------------------------------------------------------------------------

    Commenters opposing the agencies' WHR projections argued that the
real-world GHG and fuel consumption savings will be less than in
prototype systems. DTNA said a heat rejection increase of 30 percent to
40 percent with WHR systems will require larger radiators, resulting in
more aerodynamic drag and lower fuel savings from WHR systems. DTNA
cited a Volvo study showing a 2 percent loss of efficiency with the
larger frontal areas needed to accommodate heat rejection from WHR
systems. Daimler stated effectiveness may be lower than expected since
there is large drop off in fuel savings when the tractor is not
operating on a steady state cycle and the real world performance of WHR
systems will be hurt by transient response issues. Daimler and ACEEE
said the energy available from exhaust and other waste heat sources
could diminish as tractor aerodynamics improve, thus lowering the
expected fuel savings from WHR. Daimler said because of this, WHR
estimated fuel savings was overestimated by the agencies. Navistar said
WHR working fluids will have a significant GHG impact based on their
high global warming potential. They commented that fuel and GHG
reductions will be lower in the real world with the re-weighting of the
RMC which results in lower engine load, and thus lower available waste
heat. However, none of these commenters have access to the full range
of data available to the agencies, which includes CBI.
    It is important to note that the net cost and effectiveness of
future WHR systems depends on the sources of waste heat. Systems that
extract heat from EGR gases may provide the side benefit of reducing
the size of EGR coolers or eliminating them altogether. To the extent
that WHR systems use exhaust heat, they increase the overall cooling
system heat rejection requirement and likely require larger radiators.
This could have negative impacts on cooling fan power needs and vehicle
aerodynamics. Limited engine compartment space under the hood could
leave insufficient room for additional radiator size increasing. Many
of these issues disappear if exhaust waste heat is not recovered from
the tailpipe and brought under the hood for conversion to mechanical
work. In fact, it is projected that if a WHR system only utilizes heat
that was originally within the engine compartment (e.g., EGR cooler
heat, coolant heat, oil heat, etc.), then any conversion of that heat
to mechanical heat actually reduces the heat rejection demand under the
hood; potentially leading to smaller radiators and lower frontal area,
which would actually lead toward improved aerodynamic performance.
Refer to RIA Chapter 2.3.9 for more discussion.
    Several commenters stated that costs are highly uncertain for WHR
technology, but argued that the agencies' assumption of a $10,523 cost
in 2027 are likely significantly lower than reality. Volvo estimated a
cost of $21,700 for WHR systems. Volvo said that in addition to
hardware cost being underestimated, the agencies had not properly
accounted for other costs such as the R&D needed to bring the
technology into production within a vehicle. Volvo said they would lose
$17,920 per unit R&D alone, excluding other costs such as materials and
administrative expenses. Daimler said that costs almost always inflate
as the complexity of real world requirements drive up need for more
robust designs, sensors, controls, control hardware, and complete
vehicle integration. They added that development costs will be large
and must be amortized over limited volumes. Furthermore, OOIDA said the
industry experience with such complex systems is that maintenance,
repair, and down-time cost can be much greater than the initial
purchase cost. ATA and OOIDA said that potential downtime associated
with an unproven technology is a significant concern for the industry.
    On the other hand, some commenters argued that the agencies had
actually overestimated WHR costs in the proposal. These commenters
generally argued that engineering improvements to the WHR systems that
will go into production in the Phase 2 time frame would lower costs, in
particular by reducing components. The agencies largely agree with
these commenters and we have revised our analysis to reflect these cost
savings. See RIA <IP_ADDRESS> for additional discussion.
(viii) Technology Packages for Diesel Engines Installed in Tractors
    This Section (a)(viii) describes technology packages that the
agencies project could be applied to Phase 1 tractor engines to meet
the Phase 2 SET separate engine standards. Section II.D.(2)(e) also
describes additional improvements that the agencies project some engine
manufacturers will be able to apply to their engines.
    We received comments on the tractor engine standards in response to
the proposal and in response to the NODA. These comments can be grouped
into two general themes. One theme expressed by ARB, non-governmental
environmentally focused organizations, Cummins and some technology
suppliers like Honeywell, recommended higher engine stringencies, up to
10-15 percent in some comments. Another theme, generally expressed by
vertically integrated engine and vehicle manufacturers supported either
no Phase 2 engine standards at all, or they supported the proposal's
standards, but none of these commenters supported standards that were
more stringent than what we proposed. An example of the contrast
between these two themes can be shown in one report submitted to the
docket and another submission rebutting the statements made in the

report. The report was submitted to the agencies by the Environmental
Defense Fund (EDF).\187\ On the other hand, four vertically integrated
engine and vehicle manufacturers, DTNA, Navistar, Paccar, and Volvo,
submitted a rebuttal to EDF's findings.\188\ Some of these individual
vehicle manufacturers also provided their own comments on EDF's
report.189 190 Cummins also provided comments and
recommended stringencies somewhere between EDF's recommendations and
the integrated manufacturers' rebuttal. Cummins recommended achieving
reductions by 2030 in the range of 9-15 percent. CARB's recommendation
from their comments \191\ is 7.1 percent in 2024.
---------------------------------------------------------------------------

    \187\ Environmental Defense Fund, Greenhouse Gas Emission and
Fuel Efficiency Standards for Medium-Duty and Heavy-Duty Engines and
Vehicles--Phase 2--Notice of Data Availability,'' Docket: ID No.
EPA-HQ-OAR-2014-0817, October 1, 2015.
    \188\ Daimler Trucks North America, Navistar, Inc, Paccar Inc,
and Volvo Group,'' Greenhouse Gas Emission and Fuel Efficiency
Standards for Medium-Duty and Heavy-Duty Engines and Vehicles--Phase
2--Notice of Data Availability,'' Docket: ID No. EPA-HQ-OAR-2014-
0817, April 1, 2016.
    \189\ Navistar, Inc., Greenhouse Gas Emission and Fuel
Efficiency Standards for Medium-Duty and Heavy-Duty Engines and
Vehicles--Phase 2--Notice of Data Availability,'' Docket: ID No.
EPA-HQ-OAR-2014-0817, April 1, 2016.
    \190\ Daimler Trucks North America LLC, Detroit Diesel
Corporation, Greenhouse Gas Emission and Fuel Efficiency Standards
for Medium-Duty and Heavy-Duty Engines and Vehicles--Phase 2--Notice
of Data Availability,'' Docket: ID No. EPA-HQ-OAR-2014-0817, April
1, 2016.
    \191\ California Air Resources Board (CARB), Greenhouse Gas
Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty
Engines and Vehicles--Phase 2 (Docket ID No. EPA-HQ-OAR-2014-0827
and Docket ID No. NHTSA-2014-0132).
---------------------------------------------------------------------------

    The agencies carefully considered this wide range of views, and
based on the best data available, the agencies modified some of our
technology projections between the proposal and the final rule.
    Table II-5 lists our projected technologies together with our
projected effectiveness and market adoption rates for tractor engines.
The reduction values shown as ''SET reduction'' are relative to our
Phase 2 baseline values, as shown in Table II-7. It should be pointed
out that the reductions in Table II-7 are based on the Phase 2 final
SET weighting factors, shown in Table II-2. RIA Chapter 2.7.5 details
the reasoning supporting our projection of improvements attributable to
this fleet average technology package.

                         Table II-7--Projected Tractor Engine Technologies and Reduction
----------------------------------------------------------------------------------------------------------------
                                                   SET weighted       Market          Market          Market
                    SET mode                       reduction (%)    penetration     penetration     penetration
                                                     2020-2027      (2021) (%)      (2024) (%)      (2027) (%)
----------------------------------------------------------------------------------------------------------------
Turbo compound with clutch......................             1.9               5              10              10
WHR (Rankine cycle).............................             3.6               1               5              25
Parasitic/Friction (Cyl Kits, pumps, FIE),                   1.5              45              95             100
 lubrication....................................
After-treatment (lower dP)......................             0.6              30              95             100
EGR/Intake & exhaust manifolds/Turbo/VVT/Ports..             1.1              45              95             100
Combustion/FI/Control...........................             1.1              45              95             100
Downsizing......................................             0.3              10              20              30
                                                                 -----------------------------------------------
                                                                              Overall reductions (%)
                                                                 -----------------------------------------------
Weighted reduction (%)..........................  ..............             1.7             4.0             4.8
Down speeding optimization on SET...............  ..............             0.1             0.2             0.3
                                                 ---------------------------------------------------------------
    Total % reduction...........................  ..............             1.8             4.2             5.1
----------------------------------------------------------------------------------------------------------------

    The weighted reductions shown in this table have been combined
using the ``[Pi]-formula,'' which has been augmented to account for
technology dis-synergies that occur when combining multiple
technologies. A 0.85 dis-synergy factor was used for 2021, and a 0.90
dis-synergy factor was used for 2024 and 2027.\192\ RIA Chapter 2.7.4
provides details on the ``[Pi]-formula'' and an explanation for how the
dis-synergy factors were determined. Some commenters argued that use of
a single dis-synergy factor for all technologies is inappropriate.
While we agree that it would be preferable to have a more detailed
analysis of the dis-synergy between each pair or group of technologies,
we do not have the information necessary to conduct such an analysis.
In the absence of such information, the simple single value approach is
a reasonable approximation. Moreover, we note that the degree of dis-
synergy is sufficiently small to make the impact of any errors on the
resulting standards negligible.
---------------------------------------------------------------------------

    \192\ As used in the agencies' analyses, dis-synergy factors
less than one reflect dis-synergy between technologies that reduce
the overall effectiveness, while dis-synergy factors greater than
one would indicate synergy that improves the overall effectiveness.
---------------------------------------------------------------------------

    Figure II.3 2018 HHD Figure II.4 are the samples of the HHD engine
fuel maps used for the agencies' MY 2018 baseline engine and MY 2027
sleeper cab engine for tractors. As can be seen from these two figures,
the torque curve shapes are different. This is because engine down
speeding optimization for the SET is taken into consideration, where
the engine peak torque is increased and the engine speed is shifted to
lower speed. All maps used by GEM for all vehicles are shown in Chapter
2.7 of the RIA.

[GRAPHIC] [TIFF OMITTED] TR25OC16.003

(ix) Technology Packages for Diesel Engines Installed in Vocational
Vehicles
    For diesel engines (and other compression-ignition engines) used in
vocational vehicles, the MY 2021 standards will require engine
manufacturers to achieve, on average, a 2.3 percent reduction in fuel
consumption and CO2 emissions beyond the Phase 2 FTP
baselines. Beginning in MY 2024, the agencies are requiring a 3.6
percent reduction in fuel consumption and CO2 emissions
beyond the Phase 2 FTP baselines for all diesel engines including LHD,
MHD, and HHD, and beginning in MY 2027 this increases to 4.2 percent,
on average. The agencies have based these FTP standards on the
performance of reduced parasitic and friction losses, improved after-
treatment, combustion optimization, superchargers and variable geometry
turbochargers, physics model-based controls, improved EGR pressure
drop, and variable valve timing (only in LHD and MHD engines).

The percent reduction for the MY 2021, MY 2024, and MY 2027 standards
is based on the combination of technology effectiveness and the
respective market adoption rates projected.
    Most of the potential engine technologies discussed previously for
tractor engines can also be applied to vocational engines. However,
neither of the waste heat technologies, Rankine cycle nor turbo-
compound, are likely to be applied to vocational engines because they
are less effective under transient operation, which is weighted more
heavily for all of the vocational sub-categories. Given the projected
cost and complexity of such systems, we believe that for the Phase 2
time frame manufacturers will focus their WHR development work on
tractor applications (which will have better payback for operators),
rather than on vocational applications. In addition, the benefits due
to engine downsizing, which can be realized in some tractor engines,
may not be realized at all in in the vocational sector, again because
this control technology produces few benefits under transient
operation.
    One of the most effective technologies for vocational engines is
the optimization of transient controls with physics model based
control, which would replace current look-up table based controls.
These are described more in detail in Chapter 2.3 of the RIA. We
project that more advanced transient controls, including different
levels of model based control, discussed in Chapter 2.3 of the RIA,
would continue to progress and become more broadly applicable
throughout the Phase 2 timeframe.
    Other effective technologies include parasitic load/friction
reduction, as well as improvements to combustion, air handling systems,
turbochargers, and after-treatment systems. Table II-8 below lists
those potential technologies together with the agencies' projected
market penetration rates for vocational engines. Again, similar to
tractor engines, the technology reduction and market penetration rates
are estimated by combining manufacturer-submitted confidential business
information, together with estimates reflecting the agencies' judgment,
which is informed by historical trends in the market adoption of other
fuel efficiency improving technologies. The reduction values shown as
``percent reduction'' are relative to the Phase 2 FTP baselines, which
are shown in Table II-3. The overall reductions combine the technology
reduction values with their market adoption rates. The same set of the
dis-synergy factors as the tractor are used for MY 2021, 2024, and
2027.

                       Table II-8--Projected Vocational Engine Technologies and Reduction
----------------------------------------------------------------------------------------------------------------
                                                      Percent         Market          Market          Market
                   Technology                        reduction      penetration     penetration     penetration
                                                     2020-2027       2021  (%)       2024 (%)        2027 (%)
----------------------------------------------------------------------------------------------------------------
Model based control.............................             2.0              25              30              40
Parasitic/Friction..............................             1.5              60              90             100
EGR/Air/VVT/Turbo...............................             1.0              60              90             100
Improved AT.....................................             0.5              30              60             100
Combustion Optimization.........................             1.0              60              90             100
Weighted reduction (%)-L/M/HHD..................  ..............             2.3             3.6             4.2
----------------------------------------------------------------------------------------------------------------

    Figure II.5 is a sample of a 2018 baseline engine fuel map for a
MHD vocational engine.
[GRAPHIC] [TIFF OMITTED] TR25OC16.004

(x) Summary of the Agencies' Analysis of the Feasibility of the Diesel
Engine Standards
    The HD Phase 2 standards are based on projected adoption rates for
technologies that the agencies regard as the maximum feasible for
purposes of EISA section 32902 (k) and appropriate under CAA section
202(a) based on the technologies discussed above and in RIA Chapter 2.
The agencies believe these technologies can be adopted at the estimated
rates for these standards within the lead time provided, as discussed
in RIA Chapter 2.7. The 2021 and 2024 MY standards are phase-in
standards on the path to the 2027 MY standards, and these earlier
standards were developed using less aggressive application rates and
therefore have lower technology package costs than the 2027 MY
standards.
    As described in Section II.D.(2)(d) below, the costs to comply with
these standards are estimated to range from $275 to $1,579 per engine.
This is slightly higher than the costs for Phase 1, which were
estimated to be $234 to $1,091 per engine. Although the agencies did
not separately determine fuel savings or emission reductions due to the
engine standards apart from the vehicle program, it is expected that
the fuel savings will be significantly larger than these costs, and the
emission reductions will be roughly proportional to the technology
costs when compared to the corresponding vehicle program reductions and
costs. Thus, we regard these standards as cost-effective. This is true
even without considering payback period. The phase-in 2021 and 2024 MY
standards are less stringent and less costly than the 2027 MY
standards. Given that the agencies believe these standards are
technologically feasible, are highly cost effective, and highly cost
effective when accounting for the fuel savings, and have no apparent
adverse potential impacts (e.g., there are no projected negative
impacts on safety or vehicle utility), they appear to represent a
reasonable choice under section 202(a) of the CAA and the maximum
feasible under NHTSA's EISA authority at 49 U.S.C. 32902(k)(2).
(b) Basis for Continuing the Phase 1 Spark-Ignited Engine Standard
    For gasoline vocational engines, we are not adopting more stringent
engine standards. Today most SI-powered vocational vehicles are sold as
incomplete vehicles by a vertically integrated chassis manufacturer,
where the incomplete chassis shares most of the same technology as
equivalent complete pickups or vans, including the powertrain. Another,
even less common way that SI-powered vocational vehicles are built is
by a non-integrated chassis manufacturer purchasing an engine from a
company that also produces complete and/or incomplete HD pickup trucks
and vans. Gasoline engines used in vocational vehicles are generally
the same engines as are used in the complete HD pickups and vans in the
Class 2b and 3 weight categories, although the operational demands of
vocational vehicles often require use of the largest, most powerful SI
engines, so that some engines fitted in complete pickups and vans are
not appropriate for use in vocational vehicles. Given the relatively
small sales volumes for gasoline-fueled vocational vehicles,
manufacturers typically cannot afford to invest significantly in
developing separate technology for these engines.
    The agencies received many comments suggesting that technologies be
applied to increase the stringency of the SI engine standard. These
comments were essentially misplaced, since the agencies already had
premised the Phase 1 SI MY 2016 FTP engine standards on 100 percent
adoption of these technologies. The commenters thus did not identify
any additional engine technologies that the agencies did not already
consider and account for in setting the MY 2016 FTP engine standard.
Therefore, the Phase 1 SI engine FTP standard for these engines will
remain in place. However, as noted above, projected engine improvements
are being reflected in the stringency of the vehicle standard for the
vehicle in which the engine will be installed. In part this is because
the GEM cycles result in very different engine operation than what
occurs when an engine is run over the engine FTP cycle. We believe that
certain technologies will show a fuel consumption and CO2
emissions reduction during GEM cycles that do not occur over the engine
FTP. We received comments on engine technologies that can be recognized
over the GEM vehicle cycles. As a result, the Phase 2 gasoline-fueled
vocational vehicle standards are predicated on adoption of advanced
engine friction reduction and cylinder deactivation. To the extent any
SI engines do not incorporate the projected engine technologies,
manufacturers of SI-powered vocational vehicles would need to achieve
equivalent reductions from some other vehicle technology to meet the
vehicle standards. See Section V.C of this Preamble for a description
of how we applied these technologies to develop the vocational vehicle
standards. See Section VI.C of this Preamble for a description of the
SI engine technologies that have been considered in developing the HD
pickup truck and van standards.
(c) Engine Improvements Projected for Vehicles Over the GEM Duty Cycles
    As part of the certification process for the Phase 2 vehicle
standards, tractor and vocational vehicle manufacturers will need to
represent their vehicles' actual engines in GEM. Although the vehicle
standards recognize the same engine technologies as the separate engine
standards, each have different test procedures for demonstrating
compliance. As explained earlier in Section II.D.(1), compliance with
the tractor separate engine standards is determined from a composite of
the Supplemental Engine Test (SET) procedure's 13 steady-state
operating points. Compliance with the vocational vehicle separate
engine standards is determined over the Federal Test Procedure's (FTP)
transient engine duty cycle. In contrast, compliance with the vehicle
standards is determined using GEM, which calculates composite results
over a combination of 55 mph, 65 mph, ARB Transient and idle vehicle
cycles. Each of these duty cycles emphasize different engine operating
points; therefore, they can each recognize certain technologies
differently. Hence, these engine improvements can be readily recognized
in GEM and appropriately reflected in the stringency of the vehicle
standards. It is important to note, however, that the tractor vehicle
standards presented in Section III project that some (but not all)
tractor engines will achieve greater reductions than required by the
engine standards. This was reflected in the agencies' feasibility
analysis using projected engine fuel maps that represent engines having
fuel efficiency better than what is required by the engine standards.
Similarly, the vocational vehicle standards in presented in Section V
project that the average vocational engine will achieve greater
reductions than required by the engine standards. These additional
reductions are recognized by GEM and are reflected in the stringency of
the respective vehicle standards.
    Our first step in aligning our engine technology assessment at both
the engine and vehicle levels was to separately identify how each
technology impacts performance at each of the 13 individual test points
of the SET steady-state engine duty cycle. For example, engine friction
reduction technology is expected to have the greatest impact at the
highest engine speeds, where frictional energy losses are the greatest.

As another example, turbocharger technology is generally optimized for
best efficiency at steady-state cruise vehicle speed. For an engine,
this is near its lower peak-torque speed and at a moderately high load
that still offers sufficient torque reserve to climb modest road grades
without frequent transmission gear shifting. The agencies also
considered the combination of certain technologies causing dis-
synergies with respect to engine efficiency at each of these test
points. See RIA Chapter 2.3 and 2.7 for further details. Chapter 2.8
and 2.9 of the RIA details how the engine fuel maps are created for
both tractor and vocational vehicles used for GEM as the default engine
fuel maps.
(d) Engine Technology Package Costs for Tractor and Vocational Engines
(and Vehicles)
    As described in Chapters 2 and 7 of the RIA, the agencies estimated
costs for each of the engine technologies discussed here. All costs are
presented relative to engines projected to at least comply with the
model year 2017 standards--i.e., relative to our Phase 2 baseline
engines. Note that we are not presenting any costs for gasoline engines