diesel trucks, provided the engines' energy efficiency is only 5
percent lower than diesels. However, if the LNG engine is 15 percent
less energy efficient than the diesel fuel engine, the GHG emissions of
the LNG truck would be higher. In addition, an LNG truck with refueling
or high boil-off emissions, would emit about one third more GHG
emissions than diesel fuel trucks. From a lifecycle perspective, LNG
trucks appear higher emitting than CNG trucks largely because of the
low thermal efficiency of the small liquefaction facilities. If a fleet
of LNG trucks were to access LNG from a large, LNG export facility,
which are much more energy efficient than the smaller liquefaction
facilities, the relative lifecycle impacts of the LNG trucks would be
much better.
    It is important to point out the uncertainties associated with the
lifecycle estimates provided in the above figures. As discussed above,
there is uncertainty in both the upstream and downstream methane
emission estimates for natural gas facilities and equipment, and the
trucks that consume natural gas. There is also uncertainty in the
diesel fuel lifecycle analysis conducted by GREET and NETL. Finally,
the lifecycle analysis is sensitive to the GWP factor used to assess
methane and nitrous oxide, and if a different GWP value were to be
used, it would affect the relative lifecycle impact of natural gas
relative to diesel in heavy-duty trucks (see Chapter 13.1.4 of the RIA
for sensitivity analyses regarding upstream methane emissions and the
use of different GWP factors).
    We compared our lifecycle emission estimates for natural gas,
relative to diesel fuel, with the estimates provided by the California
Air Resources Board (CARB) for its Low Carbon Fuel Standard (LCFS). For
our emissions estimate used in the comparison we used the carbon
dioxide-equivalent (CO2eq) emissions estimated for 2014 and
later engines, which must comply with a methane tailpipe emissions
standard, and assumed that the engine was 5 percent less thermally
efficient than a comparable diesel engine. Both analyses used GWPs
based on 100 year timescale (i.e., a GWP of 25 for methane and 298 for
nitrous oxide).\967\ For the CARB emissions estimates, we used the
estimates made for what CARB terms ``illustrative purposes'' using the
values printed in the April 3, 2015 workshop handouts.\968\ CARB
estimates that CNG engines emit 86 percent of the CO2eq
emissions as a diesel truck using the EER-adjusted values which
reflects 11 percent lower energy efficiency than a diesel truck. When
we adjust our analysis to reflect a truck which is 11 percent less
efficient than a diesel truck, our analysis estimates that CNG engines
emit 89 percent of the CO2eq emissions as a diesel truck. An
important reason why CARB estimates lower CNG truck GHG emissions than
our analysis is that a much larger portion of the electricity used to
compress natural gas is renewable in California than the rest of the
country. Also, our analysis accounts for the recent improvements in the
GHG Inventory which shows higher natural gas upstream emissions. Using
the same assumption that natural gas trucks are 11 percent less
efficiently, CARB estimates LNG engines emit about 94

percent of the CO2eq emissions. After adjusting our analysis
to also assume that trucks are 11 percent less efficient, our natural
gas lifecycle analysis estimates LNG trucks emit 106 percent of the
CO2eq emissions as a diesel truck. The reasons why are LNG
truck emission are so much higher than CARB's is because we assume that
LNG liquefaction plants are only 80 percent efficient as opposed to
CARB' assumption that LNG liquefaction plants are 90 percent efficient.
Also CARB assumes no boil-off or venting emissions from LNG trucks and
for this comparison, we used our more modest boil-off and venting
assumption, as described above. Overall, our estimates seem to be
consistent to those estimated by CARB when we account for the different
assumptions used in the respective analyses.
---------------------------------------------------------------------------

    \967\ See Section XI.D.(2)(a) for a discussion of different
values for the GWP of methane.
    \968\ CA-GREET 1.8b versus 2.0 CI Comparison Table, LCFS
Workshop Handout, California Air Resources Board, April 3, 2015.
---------------------------------------------------------------------------

    The lifecycle analysis at proposal comparing the GHG impacts of
natural gas versus diesel fuel use by heavy-duty trucks did receive
some comments. Probably the most prevalent comment is that EPA was
underestimating methane emissions from the upstream natural gas sector.
As noted above, the analysis for this final rule increased the estimate
of methane emissions from the upstream natural gas sector by about one
third. Other comments suggested that the Agencies should find emissions
data or estimate methane emissions from the potential methane emission
points for which there was no data to make such an estimate in our
lifecycle analysis. The final rule natural gas lifecycle analysis does
make methane emission estimates at some of those likely methane
emission points for which we did not have data, nor make any estimates.
Some commenters stated that the natural gas lifecycle analysis should
be dropped because a similar lifecycle analysis was not conducted for
other alternative fuels. The agencies chose to do a natural gas
lifecycle analysis because of some of the projections for a rapid
transition of heavy-duty trucks to natural gas, and because of
methane's potency as a greenhouse gas. Other comments are presented and
discussed in Section 12.3 of the RTC.

C. Projected Use of LNG and CNG

    We reviewed several sources to estimate how much natural gas is
currently being used and is projected to be used by heavy-duty trucks.
Projections for this emerging technology range from 7 percent of new
heavy-duty vehicle sales to over 40 percent by 2040. Large
uncertainties exist even since the 2014 NAS First Report was
written.\969\ We believe the EIA projections are the most credible for
capturing recent trends, and for projecting future natural gas use by
heavy-duty trucks. There are several factors that support this
assessment.
---------------------------------------------------------------------------

    \969\ B. Tita, Slow Going for Natural-Gas Powered Trucks; Wall
Street Journal, 8/26/2014.
---------------------------------------------------------------------------

    First, in its 2014 Annual Energy Outlook (AEO), EIA estimates that
natural gas fueled 0.4 percent of the energy use of heavy-duty trucks
in 2014. This estimate is consistent with the fraction of the heavy-
duty fleet which is fueled by natural gas as estimated by the
industry.\970\
---------------------------------------------------------------------------

    \970\ NGV America estimates that there are 62,000 natural gas
fueled heavy-duty trucks and buses operating in the U.S. out of a
total of 17.5 million heavy-duty trucks and buses operating in the
U.S., which equates to 0.4%.
---------------------------------------------------------------------------

    Second, the EIA projection is based on an economic analysis which
considers the increased cost of manufacturing a natural gas truck over
a diesel truck, the fuel savings for using natural gas instead of
diesel fuel, and whether the payback time of the fuel savings against
the increased truck cost would result in purchases of natural gas
trucks. As part of this analysis, EIA assumes that lighter heavy-duty
trucks would use CNG, which is a lower cost technology suited for the
shorter driving distances for these trucks. The long haul trucks,
however, require larger on-board stores of fuel to extend the driving
range which is satisfied by storing the natural gas as a liquid. As
noted earlier, LNG has about 60 percent of the energy density of diesel
fuel, compared to CNG which has only 25 percent of the energy density
of diesel fuel. To satisfy the long driving range of the long haul
trucks, EIA assumed that they would use LNG rather than CNG. The
assumptions used by EIA for conducting its economic analysis are
reasonable.
    Third, EIA is one of the several organizations in the world which
collects fuel pricing data and projects future fuel prices using a
sophisticated modeling platform. One of the most important assumptions
in projecting the future use of natural gas in the transportation
sector is the relative price of natural gas to the price of diesel
fuel. Thus, we started with the EIA methodology and updated the diesel
and natural gas prices in our analysis using the most recent AEO
projections.
    In 2015, the price of natural gas purchased by industrial users was
less than $5 per million BTU. The price of crude oil has been volatile
during 2015 as the Brent crude oil price started at about $50 per
barrel, but decreased to under $30 per barrel, but now (Spring 2016)
seems to be selling in the range of $30 to $40 dollars per barrel. EIA
reported the average retail diesel fuel price in 2015 was about $2.70
cents per gallon.\971\ When comparing the natural gas spot market price
on a diesel equivalent basis to the diesel fuel price, it appears that
natural gas is priced about one quarter of the diesel fuel price.
However, if used as compressed natural gas, the natural gas must be
distributed through smaller distribution pipeline system that exists in
cities, which increases the price of the natural gas. Then the natural
gas must be compressed and stored at a retail outlet, and then
dispensed to CNG trucks. The estimated retail price of CNG is $2.29 on
a diesel gallon equivalent (DGE) basis, or about $0.41 DGE less than
diesel fuel. LNG plants are assumed to be located close to large
transmission pipelines away from cities, thus, it is sourced from lower
cost natural gas. However, for producing LNG, the natural gas must be
liquefied, shipped to retail outlets, stored and then dispensed to LNG
trucks. These steps add substantially to the price of the LNG and the
estimated retail price of LNG is $2.71 DGE, or about the same as diesel
fuel.
---------------------------------------------------------------------------

    \971\ Weekly Retail Gasoline and Diesel Prices (Including
Taxes), EIA, www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm.
---------------------------------------------------------------------------

    In its 2015 AEO projections, EIA estimates that crude oil prices in
the upcoming years will increase slightly and are projected to reach
$140/bbl in 2040. Natural gas prices are also expected to increase only
slightly over this period.
    Fifth, the assumptions regarding payback used by EIA seemed
reasonable. EIA projects that natural gas trucks begin to be purchased
when the payback times are 4 years or less based on a survey conducted
by the American Trucking Association. The 2014 NAS Phase 2 First Report
cites the payback for the extra cost of natural gas trucks as 2 years,
but other sources report a longer return closer to 4 years.\972\
---------------------------------------------------------------------------

    \972\ Early LNG Adopters Experience Mixed Results; Truck News,
October 1, 2013.
---------------------------------------------------------------------------

    For many fleets, the perceived payback times are too long to be
interested in purchasing natural gas trucks without subsidies to
compensate for the higher purchase price. According to EIA data, half
the natural gas consumption by cars and trucks is in California, a
state that subsidizes the purchase price of natural gas vehicles, and
also subsidizes the cost of natural gas dispensing stations. The Low
Carbon Fuel Standard in place in California also incentivizes natural
gas use because natural gas is considered to

cause less of an impact on the climate than petroleum-based gasoline
and diesel fuel.\973\ The majority of the other half of the NG fleet
resides in states which also subsidize the cost of motor vehicles using
natural gas.
---------------------------------------------------------------------------

    \973\ CARB currently estimates for the LCFS that CNG and LNG
trucks reduce GHG-equivalent emissions by 32% and 17%, respectively,
compared to gasoline and diesel fuel. In August 2014, CARB proposed
reducing the GHG-equivalent benefit of CNG and LNG trucks to 22% and
3%, respectively, compared to gasoline and diesel fuel.
---------------------------------------------------------------------------

    Based on the EIA projections for crude oil and natural gas prices,
the payback time of LNG trucks is expected to remain relatively long
until sometime after 2030 when crude oil prices are projected to begin
increasing and the diesel fuel price increases above $4 per gallon.
Thus, natural gas use by heavy-duty trucks is not projected by EIA to
increase above 1 percent of the heavy-duty fuel demand until after
2030.
    Even when the apparent payback time for CNG and LNG trucks use is
favorable to fleet owners, low fuel availability could still slow the
transition to CNG and LNG. This is because CNG and LNG availability at
service stations is currently 1 percent or less of the availability of
gasoline and diesel fuel and therefore not available for most fleets.
LNG availability is particularly challenging because in addition to an
LNG service station, an LNG liquefaction plant would be needed as well.
    If the number of natural gas truck sales remains a small portion of
the heavy-duty truck fleet, even if natural gas trucks emit either
higher or lower greenhouse gas emissions than diesel fuel trucks, there
would be little impact on overall greenhouse gas emissions. The low
natural gas use by the heavy-duty sector during the Phase 2 timeframe
will give us time to learn more about both upstream and downstream
methane emissions to gain a better understanding of the lifecycle
impacts of natural gas use by heavy-duty trucks. It will allow EPA more
time to consider and put into place the best additional steps to
further reduce upstream and downstream methane emissions which will
improve the lifecycle impacts of natural gas use by heavy-duty trucks
should the heavy duty truck fleet begin consuming natural gas in much
larger quantities.

D. Natural Gas Emission Control Measures

    Although natural gas vehicles are already subject to evaporative
emission standards, the increasing interest in using natural gas as a
heavy-duty fuel has led industry to further investigate how to improve
the overall emission performance of natural gas vehicles, especially
with respect to reducing methane leaks.
(1) Control Measures
    As described in Section XII.A.3, EPA is adopting a 5 day hold time
requirement for LNG fuel tanks to reduce venting emissions.
    As described in Section II., EPA is not adopting the proposed
changes related to crankcase emission control from natural gas engines.
(2) Additional Natural Gas Requirements and Discussion
    The discussion below includes new and revised natural gas program
requirements being finalized. It also address other topics for with the
agencies are not taking any action at this time. We will continue to
monitor the market growth of these vehicles and we plan to review the
greenhouse gas emissions impacts at a future date when natural gas
vehicles comprise a larger percentage of the overall heavy duty fleet.
(a) Changing Global Warming Potential Values in the Credit Program for
CH4 (see also Preamble Section II.(D)(5)(b))
    The Phase 1 GHG rule included a compliance alternative allowing
heavy-duty manufacturers and conversion companies to comply with the
respective methane or nitrous oxide standards by means of over-
complying with CO2 standards (40 CFR 85.525). More
specially, EPA allows manufacturers to use CO2 credits
(generated from the same averaging set) to comply with the methane and
nitrous oxide requirements after adjusting the CO2 emission
credits based on the relative GHG equivalents. To establish the GHG
equivalents used by the CO2 credits program, the Phase 1
heavy-duty vehicle rulemaking incorporated the IPCC Fourth Assessment
Report GWP values of 25 for CH4 and 298 for N2O,
which are assessed over a 100 year lifetime. EPA is largely continuing
this allowance for Phase 2.
    Since the Phase 1 rule was finalized, a new IPCC report has been
released with new GWP estimates. EPA asked for comment on whether the
methane GWP used to establish the GHG equivalency value for the
CO2 Credit program should be updated to those established by
IPCC in its Fifth Assessment Report (AR5). The IPCC AR5 presents four
different potential values for the GWP of methane over a 100 year
lifetime, ranging from 28 to 36. These values are the result of
slightly different calculation methods. Therefore, we not only
requested comment on whether to update the GWP for methane to that of
the AR5, but also on which value to use from this report. The GWPs of
28 and 30 are both a result of using a carbon cycle approach consistent
with that used in the Fourth Assessment Report. This carbon cycle
approach included a climate-carbon feedback when calculating the
lifetime of a pulse of carbon dioxide emissions, but did not include
any climate-carbon feedback when calculating the impacts of a pulse of
non-CO2 greenhouse gas emissions. As the GWP is the ratio of
the impact of a pulse of non-CO2 GHG emissions relative to a
pulse of carbon dioxide emissions, a second approach was presented
where the non-CO2 GHG pulse also included climate-carbon
feedbacks. This second approach yields GWP values of 34 or 36. For the
purposes of this rule, EPA is choosing the approach that includes
climate-carbon feedbacks for both non-CO2 and CO2
pulses, as the agency considers this the approach most likely to be
adopted by the international scientific community in future assessments
on the timescale of this rule. The IPCC presents the value of 34 as the
default value for the methane GWP, but also reports a value of 36 for
``fossil'' methane to take into account the atmospheric CO2
that would result from the oxidation of methane in the atmosphere.
    We received a number of comments on this issue. For the most part,
the environmental community favored using the more recent GWP value and
even some commented that EPA should use a methane GWP based on a 20
year timeframe. On the other hand, the natural gas industry and natural
gas truck manufacturers commented that EPA should not update to the
newer GWP values but continue to use the methane GWP value from the AR4
IPCC report because EPA is still using the methane GWP from the AR4
today in other contexts. Although EPA is currently using AR4 values in
other contexts, it is unlikely that EPA will still be using AR4 values
in 2021 when the Phase 2 requirements begin. Thus, comments opposing
the use the methane GWP from the later IPCC report are not persuasive.
EPA will continue to base the credit adjustment on a 100 year timescale
because it seems to best balance short-term versus long-term effects of
climate change.
    Of the possible 100 year methane GWP values presented in the IPCC
AR5 report, EPA is choosing to use the value of 34 because it is the
primary value presented by the IPCC and because the approach of not
accounting for the CO2 oxidation product within the GWP for

methane is consistent with prior IPCC practice.\974\ The use of this
GWP for credit adjustments will not begin until 2021, when the Phase 2
engine standards go into effect. The choice of this GWP value for
future rules on this timescale does not prejudice the choice of other
GWP values for use in regulations and other purposes in the near term.
---------------------------------------------------------------------------

    \974\ The corresponding N2O value from the AR5 report
is 298, which is the same as the value used in Phase 1.
---------------------------------------------------------------------------

    To be consistent with other lifecycle analyses, the agencies are
continuing to use AR4 value of 25 for the methane GWP in our lifecycle
analyses. However, as discussed in Chapter 13.1 of the RIA, we have
also conducted sensitivity analyses using methane GWP values ranging
from 7.6 to 72.
(b) Appropriate Deterioration Factors for NG Tailpipe Emissions
    EPA requested comment on the current assigned deterioration factors
for CO2, N2O, and CH4 based on diesel
technology. We received one comment on this topic indicating the
commenter knew of no data to support a deterioration analysis and that
our approach for deterioration should remain as is. EPA has decided not
to take action on this topic at this time and will continue the Phase 1
approach.
(c) LNG Vehicle Boil-Off Warning System
    EPA requested comment on the feasibility and appropriateness of a
regulatory requirement that LNG fueled vehicles include a warning
system that would notify the driver of a pending boil-off event as one
means reduce the frequency of such events and thus limit the release of
methane. We received several comments expressing safety concern related
to this approach. While such a system could be beneficial to the owner
of a vehicle, EPA is not taking action at this time. We encourage
innovation for safe technologies to evolve for warning of potential
boil-off events which would also save the vehicle owner the cost of the
fuel in the tank while protecting the atmosphere from large amounts of
methane gas.
(d) Extending the 5-Day Hold Time for LNG Vehicles
    EPA proposed to require manufacturers to comply with the existing
evaporative emission standards by showing compliance with a 5-day hold
time. 80 FR 40510. We also solicited comment on the ability of emerging
technologies to address an extension of 5-day requirement to a longer
period of time such as 10 days. After considering the comments, EPA is
not extending the hold time beyond 5 days in this rule.
    The specifications of the 5-Day Hold Time SAE J2343 safety related
standard will only affect LNG vehicles starting in the year 2021 to
help prevent boil-off events. After speaking to LNG truck manufacturers
and LNG fuel providers, our understanding is that most LNG is dispensed
at about 100 to 120 pounds per square inch gauge (psig), which
corresponds to -200 degrees Fahrenheit) and at that temperature, new
LNG trucks with new LNG storage tanks are achieving more than a 5-day
hold time today. However, over time, the vacuum insulation of the LNG
storage tank scan fail, resulting in degraded LNG hold-time as the
truck ages. The requirement that the LNG truck must meet the 5-day
hold-time over its entire useful life will likely improve the truck's
hold time after the first several years in service. While LNG tank
manufacturers are further developing their technologies for improvement
of hold times and reducing boil-off from LNG storage tanks on trucks,
the 5-day hold time requirement over the truck's useful life will
ensure that they make the improvements to the period of the truck's
life which is most at risk for boil-off events, which is when the truck
is sold off into the secondary market and its use diminishes.
    EPA considered requiring new trucks to have the capability to use
cold fuel. Most of the LNG trucks on the road at this time use the
warmer fuel; therefore, most refueling stations are dispensing the
warmer fuel only. A cold fuel requirement could force refueling
stations to make a large potentially burdensome investment to provide
the colder fuel in addition to the warmer fuel, because only a few cold
fuel LNG trucks might be sold in that area. We would need to study the
implications of this scenario further and gain a better understanding
of the emissions from boil-off events before we would feel confident in
how a cold LNG fuel requirement would affect the refueling industry and
reduce methane emissions. A cold LNG fuel requirement would likely be
more feasible for new fleets since they could design their truck fleet
and their own fueling equipment from the ground up to use the cold LNG
fuel.
    Another possible approach would be to increase the R- value of the
tank to keep the warm fuel colder for longer. This likely would further
reduce boil-off events, although, again, we are uncertain of the
benefits versus the costs. We believe that ensuring that the 5-day hold
time can be met over the truck's useful life is the best, lowest cost
strategy to reduce the number of boil-off events.
(e) Capturing and/or Converting Methane Refueling or Boil-Off Emissions
    Although we are not requiring it, EPA is interested in watching the
progression of innovative technologies that can capture methane
emissions during a boil-off event to prevent large amounts of
greenhouse gas emissions into the atmosphere. We encourage design and
development of ideas such as a methane canister using adsorbents such
as ANG \975\ (adsorbed natural gas) which could be added to capture the
methane which otherwise will be released to the environment during a
refueling or boil-off event. Once captured, steps could be taken to
route the methane to the engine intake once the vehicle is operating
again, or to take steps to converting the methane to less GHG-potent
CO2.
---------------------------------------------------------------------------

    \975\ Menon, V.C., Komarneni, S. ``Porous Adsorbents from
Vehicular natural Gas Storage: A Review,'' Journal of Porous
Materials 5, 43-58 (1998).
---------------------------------------------------------------------------

    Instead of discharging methane to the environment, the methane
potentially could be burned to CO2 using a burner. Another
potential option would be to convert the methane capture in a canister
to CO2 over a catalyst.
(f) Reducing Refueling Emissions
    When refueling a natural gas vehicle, some amount of methane is
vented to the atmosphere. Requirements adopted as part of the Tier 3
rules require use of the ANSI-NGV1-2006 standard practice to meet the
evaporative emissions refueling requirement.\976\ Small emissions of up
to 200 cc/hr (which equates to 72 grams of methane per hour) of leakage
are allowed with these tests. Often there is a vent line which carries
these emissions away from the nozzle interface for safety reasons,
which emissions are then vented to the atmosphere. EPA requested
comment on ways to eliminate or reduce these losses. There was a mixed
response on whether methane gas can be captured during refueling using
systems that route methane emissions back to the fuel storage tank,
whether it is a CNG tank, a CNG pipeline or re-liquefying system for
LNG. Some refueling stations are already doing this as common practice.
---------------------------------------------------------------------------

    \976\ Control of Air Pollution from Motor Vehicles Tier 3 Motor
Vehicle Emission and Fuel Standards, Final Rule April 28, 2014, CFR
86.1(c) (1).
---------------------------------------------------------------------------

    For LNG, in addition to the boil-off issue, there is the issue of
the recurrence of manual venting at refueling by truck operators. Under
high pressure

circumstances, such as when the vehicle has been sitting for some time
period in warmer temperatures, it is necessary to decrease the pressure
in the fuel tank before new fuel can enter the tank. The recommended
practice is to transfer the extra vaporized fuel to the gas station or
natural gas pipeline, but this can take extra time. In some areas it
has turned into common practice to just vent to the atmosphere to keep
the down time at the refueling station to a minimum. In other areas
there is an incentive to reroute the gas into the station storage tank
or natural gas pipeline with credit towards the fuel purchase. Since
this is a stationary source issue, EPA is not taking action at this
time on these issues in this engine/vehicle rulemaking. We also do not
have enough information on the extent of emissions and rate of
occurrence for this problem.
(g) On-Board Monitoring Requirements for Boil-Off Events and Venting at
Refueling
    Onboard diagnostics for engines used in vehicle applications
greater than 14,000 lbs GVWR are already required to detect and warn
the operator when methane leaks occur due to wear of connections and
components of the CNG or LNG fuel system (74 FR 8310, February 24,
2009). We requested comments on requiring on-board monitoring to track
boil-off events, as well as comment on whether the excess vapors were
properly vented to the station storage tanks or NG pipeline or whether
the gaseous methane emissions were vented to atmosphere during
refueling events. 80 FR 40512. Each boil off event has the potential to
release on the order of 5,300-15,800 grams of CH4 which
translates to 132K-400K grams CO2 equivalent with a GWP of
25 for 100 years (see RIA Chapter 13 for more information on LNG boil-
off emissions calculations). EPA is not able to take further action on
OBD requirements at this time since we do not have enough information
on the emissions from leaks and their rate of occurrence. Designing an
OBD system is complicated and expensive if we are to expect any degree
of accuracy for more than just very large leaks. In CNG there is an
odorant and a truck operator could potentially detect a leak if it is
large enough. Even if the leak could be detected from the odor, it
would be difficult to know how much is actually being released if you
can smell it. Different operators will have different degrees of
sensitivity with their olfactory awareness. LNG does not have an
odorant and could benefit from an OBD system even more. We do,
therefore, encourage the development of systems for indicating these
events to vehicle owners to both save on fuel and protect the
environment.
(h) Separate Standards for Natural Gas Vehicles
    As described above, the climate impact of leaks and other methane
emissions that occur upstream of the vehicle can potentially be large
enough to more than offset the CO2 benefit of natural gas
vehicles as measured at the vehicle tailpipe. As described earlier, EPA
has taken some actions, and is considering further separate actions to
control these upstream emissions. We also have some concern that the
impact of upstream and downstream emissions for natural gas could be
much higher than for gasoline or diesel fuel because of the high Global
Warming Potential (GWP) for methane that makes even small leaks of
natural gas a concern. In this way, natural gas is very different than
other alternative fuels. While we are not adopting any provisions to
address this here, we may consider adopting such provisions in a future
rule. As discussed in Section XI.B, EPA is putting in place a series of
regulations in the natural gas sector for upstream leaks. With the
currently available data the uncertainties are very high in calculating
upstream emissions for both natural gas and diesel vehicles. These
uncertainties, the desirability of a unified national program for HD
GHG and fuel consumption standards, combined with the low sales volumes
projected for natural gas vehicles for the foreseeable future make it
inadvisable for us to pursue more than a vehicle based standard at this
time. See also Section I.F.(3) for additional discussion of why EPA is
setting tailpipe standards in this rulemaking.

E. Dimethyl Ether

    Although NAS (2014) focused its recommendations on natural gas, it
also discussed dimethyl ether (DME), which is a potential heavy-duty
truck fuel sourced from natural gas. Dimethyl ether has a high cetane
number (more than 55), although its energy density is about 60 percent
of that of diesel fuel. Dimethyl ether is a volatile fuel, like
liquefied petroleum gas that can be stored as a liquid at normal
ambient temperatures under moderate pressure. Typical DME fuel tanks
would be designed to prevent any significant evaporative emissions.
    A DME fueled truck is only modestly more expensive than a diesel
fuel truck. The fuel tank is more expensive than a diesel fuel tank,
but much less expensive than an LNG tank since it does not need to be
heavily insulated. The engine modifications to enable using DME are
also modest. Because DME does not have carbon-carbon bonds that form
particulate matter particles during combustion, the particulate filter,
which is standard equipment on new diesel trucks, can be eliminated.
This offsets some of the engine and fuel tank costs.
    Although DME is sourced from cheap natural gas, the conversion of
natural gas to DME and moving the fuel to retail outlets greatly
increases the cost of the fuel. Based on the crude oil and natural gas
prices in early 2014 (about $100 per barrel), DME is more expensive
than LNG, but still lower in cost than diesel fuel (DME is estimated to
cost $3.50/DGE, or $0.30 DGE less than diesel fuel.) After the decline
in crude oil prices, DME is estimated to be priced higher than diesel
fuel.
    Because there is very little DME use in the U.S. (there is only a
very small fleet of trucks in California), we did not conduct a
lifecycle assessment of DME, but note here a few aspects of a lifecycle
analysis for DME. First, since DME is sourced from natural gas, the
upstream methane emissions from the natural gas industry would still be
allocated to DME. Second, there are no venting issues associated with
DME as there are with LNG refueling or boil-off. Third, because DME has
a lifetime of less than a week in the atmosphere, it has little direct
climate impacts. Thus, it is likely that DME would have a lower GHG
impact than LNG trucks, and perhaps lower than CNG trucks, although we
would have to study DME use in trucks further to be more certain.

XII. Amendments to Phase 1 Standards

    The agencies are revising the regulatory text specifying test
procedures and compliance provisions used for Phase 1. For the most
part, these amendments apply exclusively to the Phase 2 rules. In a few
limited instances, the agencies are adopting changes to the Phase 1
program. These limited changes to the Phase 1 program are largely
conforming amendments, and are described below, along with other minor
changes to the Phase 1 compliance program. These changes generally
continue to apply under the Phase 2 program.
    For the convenience of the reader, we are republishing 40 CFR parts
1036 and 1037 in their entirety, including text that is not being
amended. We are also republishing Phase 1 text in 40 CFR part 86. We
note, however, that we have not reconsidered, rethought, or reopened
the Phase 1 rules in a general sense. We have also not reconsidered,
rethought, or reopened the stringency of the Phase 1 standards or other
fundamental

aspects of the Phase 1 program that remain unchanged substantively.
    The agencies received very few comments of these changes. Daimler
commented that the agencies should not make any changes to Phase 1
because manufacturers have already developed systems to comply with the
existing requirements. We do not necessarily agree that would be a
sufficient reason to keep us from amending Phase 1 requirements through
notice and comment rulemaking. Nevertheless, we note that we are not
finalizing changes that would have any significant impact on the
manufacturers' Phase 1 compliance structures.

A. EPA Amendments

(1) Pickups and Vans
    EPA is relocating the GHG standards and other regulatory provisions
for chassis-certified HD pickups and vans in the Code of Federal
Regulations from 40 CFR 1037.104 to 40 CFR 86.1819-14. Accordingly,
NHTSA is modifying any of EPA's references in 49 CFR parts 523 and 535
to accommodate the migration. EPA is making this change largely to
address ambiguities regarding the application of additional provisions
from 40 CFR part 86, subpart S, for these vehicles. The approach in 40
CFR 1037.104 was to state that all of 40 CFR part 86, subpart S,
applies except as specified in 40 CFR 1037.104; however, the recent
standards adopted for light-duty vehicles and light-duty trucks
included several changes to 40 CFR part 86, subpart S, that should not
apply for chassis-certified HD pickups and vans. Based on our
experience implementing the Phase 1 program, we believe it is
appropriate to include the GHG standards for chassis-certified HD
pickups and vans in the same part as light-duty vehicles (40 CFR part
86, subpart S). All other certification requirements for these heavy-
duty vehicles--criteria exhaust standards, evaporative and refueling
standards, provisions for onboard diagnostics, and the range of
certification and compliance provisions--are in that subpart. We note
that we have not experienced the same challenges for other heavy-duty
vehicles, and are therefore not relocating the other provisions of 40
CFR part 1037.
    This migration has highlighted a few areas where we need to clarify
how the regulations apply for chassis-certified HD pickups and vans. In
particular, EPA is adopting the following changes:
     Clarify that the GHG standards apply at high-altitude
conditions.
     State that fleet-average calculation of carbon-related
exhaust emissions (CREE) is not required for chassis-certified HD
pickups and vans. Instead, heavy-duty vehicles are subject to
CO2 standards.
     Clarify that requirements related to model types and
production-weighted average calculation apply only for passenger
automobiles and light trucks.
     State that the credit and debit provisions of 40 CFR
86.1865-12(k)(5) do not apply for chassis-certified HD pickups and
vans.
     Clarify that the Temporary Lead Time Allowance Alternative
Standards in 40 CFR 86.1865-12(k)(7) do not apply for chassis-certified
HD pickups and vans.
     State that the early credit provisions of 40 CFR 86.1866-
12, 86.1867-12, 86.1868-12, 86.1869-12, 86.1870-12, and 86.1871-12 do
not apply for chassis-certified HD pickups and vans.
(2) Heavy-Duty Engines
    EPA is revising the approach to classifying gaseous-fuel engines
with respect to both GHG and criteria emission standards. The general
approach is to continue to divide these engines into spark-ignition and
compression-ignition categories, but we will apply the compression-
ignition standards to all engines that qualify as heavy heavy-duty
engines based on the primary intended service class.\977\ Previously,
any gaseous-fuel engine derived from a gasoline engine was subject to
the spark-ignition standards no matter the weight class of the vehicle.
As described in Section II, EPA now believes this approach does not
reflect the reality that engines used in Class 8 vehicles compete
directly with diesel engines. We believe they should therefore be
required to meet the same emission standards. Because all current
gaseous-fuel engines for these large vehicles are already being
certified to the compression-ignition engine standards, we can apply
this approach to engines subject to the HD GHG Phase 1 standards
without adverse impacts on any manufacturers. We proposed this same
approach for medium heavy-duty engines, but have revised the rule in
response to comments objecting to the change; the final rule instead
applies standards to these engines as spark-ignition or compression-
ignition based only on each engine's characteristics. We believe this
is appropriate because a substantial number of medium heavy-duty
vehicles use gasoline-fueled engines, and gaseous-fueled engines used
in these vehicles would therefore not always be competing directly with
diesel-fueled engines as the main alternative.
---------------------------------------------------------------------------

    \977\ Engine classification is set forth in 40 CFR 1036.801.
Spark-ignition means relating to a gasoline-fueled engine or any
other type of engine with a spark plug (or other sparking device)
and with operating characteristics similar to the Otto combustion
cycle. Compression-ignition engines are reciprocating internal-
combustion engines that are not spark-ignition engines.
---------------------------------------------------------------------------

    EPA is also revising the regulation to spell out how to apply
enforcement liability for a situation in which the engine manufacturer
uses deficit credits for one or more model years. Simply put, any time
an engine manufacturer is allowed to carry a deficit to the next year,
all enforcement liability for the engines that generated the deficit
are extended for another year. These provisions are the same as what we
have already adopted for heavy-duty vehicles subject to GHG standards
under 40 CFR part 1037.
(3) Evaporative Emission Testing for Natural Gas Vehicles
    Heavy-duty vehicles fueled by natural gas have for many years been
subject to evaporative emission standards and test procedures. While
fuel systems containing gasoline require extensive design features to
handle vented fuel, fuel systems containing natural gas generally
prevent evaporative losses by remaining sealed. In the case of
compressed natural gas, there is a voluntary consensus standard, ANSI
NGV1-2006, that is designed to ensure that there are no leaks or losses
during a refueling event. Since compressed natural gas systems remain
sealed indefinitely once the refueling event is complete, we understand
that complying with the ANSI refueling standard is sufficient to
demonstrate that the vehicle also complies with all applicable
evaporative emission standards. The Light-Duty Tier 3 final rule
included provisions to clarify that compressed natural gas systems
meeting the applicable ANSI standard are deemed to comply with EPA's
evaporative emission standards. In response to comments received on the
proposed rule, we are adding a reference to a supplemental ANSI
standard that similarly specifies system-integrity requirements for
CNG-fueled heavy-duty vehicles that allow for substantially higher
refueling rates; this supplemental standard will eventually be
incorporated into ANSI NGV1.
    Systems using liquefied natural gas (LNG) behave similarly, except
that the cryogenically stored fuel needs to be vented to prevent an
over-pressure situation if the vehicle is not used for an extended
time, as described in Section XI. Such vehicles are currently subject
to evaporative emission standards and test procedures, though there are
some

substantial questions about how one can best apply the procedures to
these systems; not all of the instructions about preconditioning the
vehicle are straightforward for cryogenic fuel systems with no
evaporative canister. EPA is adopting an approach that is similar to
what applies for compressed natural gas systems, which needs some
additional attention to address boil-off emissions. SAE J2343 is a
voluntary consensus standard that specifies a recommended practice to
establish a minimum five-day hold time before boil-off starts to occur
for LNG systems. EPA is adopting a requirement that manufacturers of
LNG vehicles meet the SAE J2343 standard as a means of demonstrating
compliance with evaporative and refueling emission standards.
    While the hold-time requirements of SAE J2343 are clear, there
appears to be very little description of the procedure to determine how
much time passes between a refueling event and initial venting. To
ensure that all manufacturers are subject to the same set of
requirements, we are adding a minimal set of specifications
corresponding to the demonstration under SAE J2343. In particular, the
regulation specifies that the tank must remain at rest throughout the
measurement procedure, ambient temperatures must remain between 20 and
30 [deg]C, and the hold-time period starts when the tank pressure
reaches 690 kPa (100 psi) after a conventional refueling event. We are
also adopting a simplified standard that translates the five-day hold
time into a maximum allowable pressure build over a shorter time for
parked vehicles. In particular, for vehicles parked for at least 12
hours, tank pressure must not increase by more than an average of 9 kPa
(1.3 psi) per hour. The pressure increase corresponding to the five-day
hold-time standard is about 7.5 kPa per hour. The additional margin is
intended to account for variability related to different ambient
conditions, vehicle handling, nonlinear pressure increases, measurement
instruments, and other factors. This is intended to give vehicle owners
a more practical performance measure to evaluate whether tanks continue
to meet the hold-time requirement.
    Manufacturers may rely on SAE J2343 to meet evaporative and
refueling standards immediately with completion of the final rule; this
demonstration becomes mandatory for vehicles produced on or after
January 1, 2020.
    One commenter suggested that we add a reference to European test
protocols for CNG heavy-duty vehicles to allow for a higher refueling
flow rate than is allowed under the EPA regulations, which are based on
hardware and procedures for light-duty vehicles (ANSI NGV1). We learned
that the European protocol is based on systems up to 3000 psi and is
therefore not valid for most heavy-duty CNG vehicles in the United
States. Representatives of the natural gas industry responded to the
comment suggesting the European protocol by recommending that we
instead reference a recently published supplement to ANSI NGV1, which
accommodates the higher flow rates corresponding to heavy-duty vehicles
and current refueling technology. We are accordingly revising the
regulation to reference this additional ANSI document, which is known
as CSA IR-1-15, ``Compressed Natural Gas Vehicle (NGV) High Flow
Fueling Connection Devices.''
(4) Compliance and Other General Provisions
    EPA is adopting the following changes that apply broadly for
different types of vehicles or engines:
     Providing additional detail about manufacturers
obligations with respect to delegated assembly. In response to
comments, we have delayed the applicability of these provisions until
January 1, 2018 to provide manufacturers with additional lead time. See
40 CFR 1037.150(e) and 1037.621.
     Add a requirement for vehicle manufacturers that sell
incomplete vehicles to secondary vehicle manufacturers to provide
emission-related assembly instructions to ensure that the completed
vehicle will be in a certified configuration.
     Specify parameters for determining a vehicle's curb
weight, consistent with current practice for vehicles certified under
40 CFR part 86, subpart S.
     Revise the recordkeeping requirement to specify a uniform
eight-year retention period for all data supporting an application for
certification. The provision allowing for one-year retention for
``routine data'' is no longer necessary now that data collection is all
recorded in electronic format. EPA is also clarifying that the eight-
year retention period is calculated relative to the latest associated
application for certification, not from the date the data were
generated.
     Change the rounding for analytically derived
CO2 emission rates and target values from the nearest 0.1 g/
mile to the nearest 1 g/mile.
     Clarify how manufacturers may amend an application for
certification after the end of the model year.
     Remove the general recordkeeping provisions from 40 CFR
1037.735 that are already described in 40 CFR 1037.825.
     Clarify how EPA will conduct selective enforcement audits
(SEAs) for engines (in 40 CFR 1036.301) and vehicles and components (in
40 CFR 1037.301-1037.320) with respect to GHG emissions.
     Add provisions to provide a streamlined path for off-cycle
credit for adding Phase 2 technologies to Phase 1 vehicles. See 40 CFR
1037.150.
    EPA proposed a different equation with a ratio of 0.8330 in 40 CFR
1037.525 for the case of full yaw sweep measurements to determine wind-
averaged drag correction as an amendment to the Phase 1 program. Some
commenters argued that this change would impact stringency, but we
disagree because manufacturers are already subject to EPA compliance
using both methods (full yaw sweep and 6 degree
measurements), and this Phase 1 flexibility was not used in setting the
level of the Phase 1 standards. Nevertheless, we are adopting the final
rule without this change to the Phase 1 standards. Other changes in the
existing Phase 1 regulations for MY 2017 will serve to mitigate any
impacts, and the agencies are no longer convinced the potential
disruption to manufacturers' compliance plan is warranted.

B. Other Compliance Provisions for NHTSA

(1) Standards and Credit Alignment
    In Phase 1, the agencies intended GHG and fuel consumption
standards for segments of the National Program to be in alignment so
that manufacturers will not be required to build vehicles to meet in
equivalent standards. Despite the intent, NHTSA and EPA have identified
several scenarios where credits and compliance to both sets of
standards are not aligned. This misalignment can have various impacts
on compliance with the National Program.
    For example, a manufacturer of tractors could have two vehicle
families that with same number of vehicles but with opposite and equal
compliance margins with standards. In this scenario, the first family
will over-comply with the GHG standard while the second family will
under-comply with the GHG standard by the same amount of grams
CO2/ton-mile. In calculating credits, the manufacturer will
have a net of zero

GHG credits and exactly meet compliance; however, based on conversions
and rounding of the standard and performance results that manufacturer
could end up earning credits or having a credit deficit under NHTSA's
fuel efficiency program.
    In order to correct this misalignment, NHTSA proposed to amend the
existing fuel consumption standards and the method for calculating
performance values for all compliance categories by increasing the
significant digits in these conversion values. Increasing the
significant digits in these values will result in more precise
alignment between final compliance credit balances.
    NHTSA proposed that the increase resolution would apply
retroactively starting for the model year 2013 standard. However,
because the Phase 1 fuel consumption standards created a difference in
compliance margins which could potentially have an adversely impact for
certain manufacturers who have already developed engineering plans
considering previous credit balance, NHTSA sought comments on whether
optional to allow manufacturer to continue using the Phase 1 standards.
No comments were received in response.
    NHTSA is finalizing its standards and performances for the Phase 1
and 2 programs with increased significant digits as the only option for
compliance. Retaining the previous accuracy does not maintain a single
national program and aligning credit balances is more important because
it ensures the same compliance outcome. Manufacturers who may have
planned their compliance strategies using the previous approach would
not be able to take advantage of any relaxations in in the NHTSA
program because the national program requires one single compliance
fleet and manufacturers would still need to comply with the more
stringent EPA standards.
(2) Off-Road Exemption Petition Process for Tractors and Vocational
Vehicles
    In the Phase 1 final rule, the agencies added provisions for
certain types of vocational tractors and vocational vehicles that
operate off-road to be exempt from standards, although standards will
still apply to the engines installed in these vehicles. An exemption
was warranted because these vehicles operate in a manner essentially
making them incompatible with fuel saving and emission reduction
technologies, such as performing work in an off-road environment, being
speed restricted, or having off-road components or other features
making them incompatible for roadways. For the Phase 1 program, off-
road vehicle manufacturers meeting the exemption provisions are
required to provide EPA and NHTSA, through the EPA database, a report
within 90 days after the end of each model year identifying its off-
road vehicles. The report must provide a description of each excluded
vehicle configuration, including an explanation of why it qualifies for
the exclusion and the production volume. A manufacturer having an off-
road vehicle that does not meet the criteria under the agencies' off-
road exemptions in 40 CFR 1037.631 and 49 CFR 535.5 is allowed to
submit a petition under 40 CFR 1037.150(h) and 49 CFR 535.8 describing
how and why its vehicles should qualify for exclusion based on criteria
that are equivalent to those specified in 40 CFR 1037.631.
    Under Phase 1 compliance processes, manufacturers have not been
using the petitioning process to get approval of an exemption for off-
road vehicles that do not meet the specified criteria to qualify for an
exemption. Instead, manufacturers have been submitting information to
EPA during production for a given model year to determine whether or
not these vehicles qualify for an exemption, or if they need to get
certificates of conformity for the vehicles they already produced. EPA
and NHTSA collaboratively determine whether manufacturers should
qualify for an exemption under 40 CFR 1037.150(h) and 49 CFR 535.8, and
EPA shares the decision with the manufacturer.
    For the Phase 1 and 2 standards, the agencies are revising the
regulations to clarify the process for vehicle manufacturers to get
approval for an exemption in unusual circumstances in which the vehicle
should be exempt even though it does not automatically qualify for an
exemption under the criteria specified in 40 CFR 1037.631 and 49 CFR
535.5. Most importantly, we now specify at 40 CFR 1037.150(h) and 49
CFR 535.8 that manufacturers must get approval for the exemption before
producing the subject vehicles to avoid violating statutory
prohibitions. EPA and NHTSA will continue to collaborate in making any
final decisions on exemptions.
    Note that vehicles meeting the qualifying criteria under 40 CFR
1037.631 and 49 CFR 535.5 are exempt without request; however, if
manufacturers want to address any uncertainty by getting EPA and NHTSA
to affirm that their vehicles do in fact meet the specified criteria,
they may ask for preliminary approval under 40 CFR 1037.210.
(3) Innovative Technology Request Documentation Specifications
    For vehicle and engine technologies that can reduce GHG and fuel
consumption, but for which there is not yet an established method for
quantifying reductions, the agencies encourage the development of such
technologies through providing ``innovative technology'' credits.
Manufacturers seeking innovative technology credits must quantify the
reductions in fuel consumption and GHG emissions that the technology is
expected to achieve, above and beyond those achieved on the existing
test procedures.
    Manufacturers submitting innovative technology requests must send a
detailed description of the technology and a recommended test plan to
EPA as detailed in 40 CFR 1036.610 and 1037.610. The test plan must
include whether the manufacturer is applying for credits using the
improvement factor method or the separate-credit method. It is
recommended that manufacturers not conduct testing until the agencies
can collaboratively approve the test plan in which a determination is
made on the qualification of the technology as innovative. EPA in
consultation with NHTSA also makes the decision at that time whether to
seek public comments on the test plan if there are unknown factors in
the test methodology.
    The agencies have received feedback from manufacturers that the
final approval process is not clearly defined, which has caused a
substantial time commitment from manufacturers. To address this
feedback, for the final rule, the agencies are adopting further
clarification in 40 CFR 1036.610 and 1037.610 defining the steps
manufacturers must follow after an approval is granted for a test plan.
This includes specifications for submitting the final documentation to
the agencies for final approval and for determining credit amounts. The
agencies are adding the same level of detail as required for the final
documentation required in EPA's light duty off-cycle program in 40 CFR
86.1869-12(e)(2). These specifications should provide manufacturers
with a clear understanding of the required documentation and approval
process to reduce the time burden placed on manufacturers.
    NHTSA is also adding similar provisions from its light duty CAFE
program specified in 49 CFR 531.6(b)(2) and 533.6(c)(2) for limiting
the approval of innovative technologies under its program for those
technologies related to crash-avoidance technologies, safety

critical systems or systems affecting safety-critical functions, or
technologies designed for the purpose of reducing the frequency of
vehicle crashes. NHTSA prohibited credits for these technologies under
any circumstances in its CAFE program (see 77 FR 62730). NHTSA believes
a similar strategy is warranted for heavy-duty vehicle as well.
(4) Credit Acquisition Plan Requirements
    The National Program was designed to provide manufacturers with
averaging, banking and trading (ABT) flexibilities for meeting the GHG
and fuel efficiency standards to optimize the effectiveness of the
program. As a part of these flexibilities, manufacturers generating a
shortfall in fuel consumption credits for a given model year must
submit a credit plan to NHTSA describing how it plans to resolve its
deficits within 3 models year. To assist manufacturers, NHTSA is modify
49 CFR 535.9(a)(6) of its regulation to clarify and provide guidance to
manufacturers on the requirements for a credit allocation plan which
contains provisions to acquire credits from another manufacturer which
will be earned in future model years.
    The current regulations do not specify if future credit acquisition
is permitted or not and the revision is intended to clarity that it is,
with respect to the limitation a credit shortfall can only be carried
forward three years. Providing this clarification is intended to
increase transparency within the program and ensure all manufacturers
are aware of its available flexibilities. NHTSA is adopting the
requirement that in order for a credit allocation plan to be approved,
NHTSA will require an agreement signed by both manufacturers. This
requirement will assist NHTSA with its determination that the credits
will become available to the acquiring manufacturer when they are
earned.
(5) New Vehicle Field Inspections and Recordkeeping Requirements
    Previously, NHTSA decided not to include recordkeeping provisions
in its regulations for the Phase 1 program. EPA regulations include
recordkeeping requirements in 40 CFR 1036.250, 1036.735, 1036.825,
1037.250, 1037.735, and 1037.825. For the Phase 2 program, NHTSA is
adding recordkeeping provisions to facilitate its compliance validation
program for the final rule. For the Phase 1 and 2 programs,
manufacturers test and conduct modeling to determine GHG emissions and
fuel consumption performance, and EPA and NHTSA perform validation
testing. EPA uses the results of the validation tests to create a
finalized report that confirms the manufacturer's final model year GHG
emissions and fuel consumption results. Each agency will use this
report to enforce compliance with its standards.
    NHTSA assesses compliance with fuel consumption standards each
year, based upon EPA final verified data submitted to NHTSA for its
heavy-duty vehicle fuel efficiency program established pursuant to 49
U.S.C. 32902(k). NHTSA may conduct verification testing throughout a
given model year in order to validate data received from manufacturers
and will discuss any potential issues with EPA and the manufacturer.
See 49 CFR 535.9. After the end of the model year, NHTSA may also
decide to conduct field inspections in order to confirm whether or not
a new vehicle was manufactured as originally certified. NHTSA may
conduct field inspections separately or in coordination with EPA. To
facilitate inspections, the agencies will add additional provisions to
the EPA recordkeeping provisions to require manufacturers to keep build
documents for each manufactured tractor or vocational vehicle. Each
build document will be required to contain specific information on the
design, manufacturing, equipment and certified components for a
vehicle. NHTSA will request build documents through EPA and the
agencies will collaborate on the finding of all field inspections.
Manufacturers will be required to keep records of build documents for a
period of 8 calendar years.

XIII. Other Regulatory Provisions

    In addition to the new GHG standards in these rules, EPA and NHTSA
are amending various aspects of the regulations as part of the HD GHG
Phase 1 standards for heavy-duty highway engines and vehicles, as
described in Section XII. EPA is also taking the opportunity to amend
regulatory provisions for other requirements that apply for heavy-duty
highway engines, and for certain types of nonroad engines and
equipment.
    Most of the amendments described in this section represent minor
technical issues and, as such, were not the subject of extensive
comment. Two exceptions are the issues related to glider kits and to
competition vehicles, as noted below. The rest of this section, for
which we received fewer comments, generally includes only references to
the more significant comments, such as comments that impacted our
conclusions for the provisions adopted in the final rule. See the RTC
for a more complete discussion of the comments.
    For the convenience of the reader, we are republishing some related
text that is not being amended. We note, however, that we have not
reopened the standards or other fundamental aspects of these programs
that remain unchanged substantively.

A. Amendments Related to Heavy-Duty Highway Engines and Vehicles

    This section describes a range of regulatory amendments for heavy-
duty highway engines and vehicles that are not directly related to GHG
emission standards. Note that Section XIII. B. describes new
requirements for glider kits and Section XIII. F. describes additional
changes related to test procedures that affect heavy-duty highway
engines.
(1) Alternate Emission Standards for Specialty Heavy-Duty Vehicles
    Motor vehicles conventionally comprise a familiar set of vehicles
within a relatively narrow set of parameters--motorcycles, cars, light
trucks, heavy trucks, buses, etc. The definition of ``motor vehicle;''
however, is written broadly to include a very wide range of vehicles.
Almost any vehicle that can be safely operated on streets and highways
is considered a motor vehicle under 40 CFR 85.1703. Development of
EPA's emission control programs is generally focused on a consideration
of the technology, characteristics, and operating parameters of
conventional vehicles, and typically includes efforts to address
concerns for special cases. For example, the driving schedule for
light-duty vehicles includes a variation for vehicles that are not
capable of reaching the maximum speeds specified in the Federal Test
Procedure.
    Industry innovation in some cases leads to some configurations that
make it particularly challenging to meet regulatory requirements. We
are aware that plug-in hybrid-electric heavy-duty vehicles are an
example of this. An engine for such a vehicle is expected to have a
much lower power rating and duty cycle of engine speeds and loads than
a conventional heavy-duty engine. The costs of regulatory compliance
and the mismatch to the specified duty cycle can make it cost-
prohibitive for engine manufacturers to certify such an engine under
the heavy-duty highway engine program.
    To address concerns about certifying atypical engines to highway
heavy-duty standards for use in hybrid vehicles, we are therefore
adopting a provision allowing manufacturers of heavy-duty

highway vehicles the option to install limited numbers of engines
certified to alternate standards. Qualifying engines would be
considered motor vehicle engines, but they may be certified to
standards that are based on standards adopted for comparable nonroad
engines. EPA's nonroad emission standards have reached a point that
involves near parity with the level of emission control represented by
the emission standards for heavy-duty highway engines. EPA developed
these provisions especially for vehicles with hybrid powertrains;
however, the same principles apply for three other unusual vehicles
types: amphibious vehicles, vehicles with maximum speed at or below 45
miles per hour, and as described below, certain all-terrain vehicles.
We are therefore applying the same provisions to these additional
vehicles.
    California ARB suggested that we limit relief to hybrid vehicles
that have a series configuration, or to hybrid vehicles that have a
minimum all-electric range. We chose not to adopt these limitations
because these features are not fundamental to what we believe is the
basis for accommodating special vehicle designs. For example, if a
vehicle needs a 20-kW gasoline engine to recharge batteries used for
propulsion, and provides a small amount of power directly to the
wheels, we believe this should not be disqualified from using the
specialty-vehicle provisions because there is no expectation that 20 kW
engines will be certified to the conventional highway heavy-duty engine
standards anytime in the foreseeable future.
    We proposed to offer this flexibility for hybrids, amphibious
vehicles, and low-speed vehicles. We also received comment advocating
that certain qualifying all-terrain vehicles are in a similar situation
since they have unique engine-performance requirements that prevent
them from finding compliant highway engines; we have modified the rule
to also apply the specialty vehicle provisions to these all-terrain
vehicles. The regulations will limit this allowance to vehicles that
have portal axles, which are specialized axles that increase ground
clearance. Cost and/or performance limits for such axles preclude their
use for vehicles intended for use primarily on highways. Thus, we
believe vehicles with such axles are designed primarily for off-road
operation, while retaining the ability to occasionally operate on
highways.
    Under approach being adopted for these various vehicles,
compression-ignition engines could be certified to alternate standards
that are equivalent to the emission standards under 40 CFR part 1039,
and spark-ignition engines could be certified to alternate standards
that are equivalent to the Blue Sky emission standards under 40 CFR
part 1048.\978\ In response to a comment from California ARB, we are
adopting a requirement that compression-ignition engines also meet a PM
standard (Family Emission Limit) of 0.020 g/kW-hr corresponding to the
PM standard that applies for heavy-duty highway engines. Similarly, we
are adopting an N2O standard of 0.1 g/kW-hr for SCR-equipped
diesel-fueled engines that corresponds to the N2O standard
that applies for heavy-duty highway engines. This collection of
standards aligns with our expectation that such engines would generally
be expected to use the same technologies to control emissions as
engines certified to the applicable emission standards for heavy-duty
highway engines. (The regulation being finalized disallows this
approach for compression-ignition engines below 56 kW since the nonroad
standards for those engines are substantially less stringent than the
standards that apply for heavy-duty highway engines). Also, since the
nonroad duty cycles generally better represent the in-use operating
characteristics of engines in these specialty vehicles, we expect the
nonroad test procedures to be at least as effective in achieving
effective in-use emission control. The regulations at 40 CFR part 1048
include a simplified form of diagnostic controls, and we are adopting
in these rules a simplified diagnostic control requirement for 40 CFR
part 1039. These engine-based diagnostic controls substitute for the
diagnostic requirements specified in 40 CFR 86.010-18. Note that the
diagnostic requirements apply for engine systems or components; as
such, we generally apply those diagnostic requirements to hybrid
powertrain systems and components only if the engine manufacturer
includes those features or parameters as part of the certified
configuration for their engines. We may revisit issues related to
diagnostic requirements for hybrid systems in a future rulemaking.
---------------------------------------------------------------------------

    \978\ Blue Sky standards are voluntary low-emission standards
under 40 CFR part 1048.
---------------------------------------------------------------------------

    These alternate standards relate primarily to the engine
certification-based emission standards and certification requirements.
All vehicle-based requirements for evaporative emissions continue to
apply as specified in the regulation. In addition, hybrid vehicles
would still be subject to all the standards and requirements that apply
to heavy-duty vehicles under 40 CFR part 1037. For example,
manufacturers would need to perform powertrain testing and run GEM to
determine the applicable g/ton-mile emission rate for hybrid vehicles.
However, the agencies are not requiring vehicle certification for the
three other types of specialty vehicles. Low-speed vehicles are already
excluded from the vehicle requirements under Phase 1, while the
amphibious and all-terrain vehicles would present significant
challenges to the vehicle simulations.
    This allowance is intended to lower the barrier to introducing
innovative technology for motor vehicles. It is not intended to provide
a full alternative compliance path to avoid certifying to the emission
standards and control requirements for highway engines and vehicles. To
accomplish this, EPA will allow a manufacturer to produce no more than
1,000 hybrid vehicles in a single model year under this program, and no
more than 200 amphibious vehicles, all-terrain vehicles, or speed-
limited vehicles. In the case of hybrid vehicles, we are also acting on
California ARB's request that we adopt a sunset provision for hybrid
vehicles; accordingly, the simplified certification applies only
through model year 2027. In the meantime we will monitor implementation
of the program and consider whether there is any long-term need for
these or other streamlined certification provisions for hybrid
vehicles.
    As described in the proposed rule, California ARB is in the process
of developing similar provisions for a reduced compliance burden for
qualifying highway vehicles toward the goal of incentivizing vehicles
with hybrid powertrains and low-NOX engines. The incentives
generally consist of allowing specific OBD variances or deficiencies
(for low-NOX engines) or broadly waiving OBD requirements
(for hybrid vehicles). To the extent that California ARB certifies
vehicles based on approving OBD deficiencies, we would apply a similar
discretion for 49-state certification of the same engine model to allow
for nationwide sale of those products. If California ARB approves
certification of hybrid systems in which the highway OBD requirements
are mostly or entirely waived, we would expect to apply the provisions
described in this section to allow vehicle manufacturers to produce up
to 1000 such vehicles in a given year.
(2) Chassis Certification of Class 4 Heavy-Duty Vehicles
    In the HD Phase 1 rule, the agencies included a provision allowing
manufacturers to certify Class 4 and

larger heavy-duty vehicles to the chassis-based emission standards in
40 CFR part 86, subpart S. This applied for greenhouse gas emission
standards, but not criteria emission standards. EPA revisited this
issue in the recent Tier 3 final rule, where we revised the regulation
to allow this same flexibility relative to exhaust emission standards
for criteria pollutants. However, this change to the regulation
conflicted with our response to a comment in that rulemaking that EPA
should not change the certification arrangement for criteria
pollutants.
    EPA requested comment on how best to address this issue in a way
that resolves the various and competing concerns. Commenters argued for
and against allowing certification of the heavier vehicles to chassis-
based emission standards. In the final rule, we are adopting a limited
allowance to certify vehicles above 14,000 pounds GVWR using chassis-
based certification procedures of 40 CFR part 86, subpart S. In
particular, manufacturers may rely on chassis-based certification for
heavier vehicles only if there is a family with vehicles at or below
14,000 pounds GVWR that can properly accommodate the bigger vehicles as
part of the same family. As part of this arrangement, chassis-certified
vehicles above 14,000 pounds GVWR may not rely on a work factor that is
greater than the largest work factor that applies for vehicles at or
below 14,000 pounds GVWR from the same family.
(3) Nonconformance Penalties (NCPs)
    The Clean Air Act requires that heavy-duty standards for criteria
pollutants such as NOX reflect the greatest degree of
emission reduction achievable through the application of technology
that EPA determines will be available. Such ``technology-forcing''
standards create the risk that one or more manufacturers may lag behind
in the development of their technology to meet the standard and, thus,
be forced out of the marketplace. Recognizing this risk, Congress
enacted CAA section 206(g) (42 U.S.C. 7525(g)), which requires EPA to
establish ``nonconformance penalties'' to protect these technological
laggards by allowing them to pay a penalty for engines that temporarily
are unable to meet the applicable emission standard, while removing any
competitive advantage those technological laggards may have.
    On September 5, 2012, EPA adopted final NCPs for heavy heavy-duty
diesel engines, which were available to manufacturers of heavy-duty
diesel engines unable to meet the current oxides of nitrogen
(NOX) emission standard. On December 11, 2013, the U.S.
Court of Appeals for the District of Columbia Circuit issued an opinion
vacating that Final Rule. It issued its mandate for this decision on
April 16, 2014, ending the availability of the NCPs for the current
NOX standard, as well as vacating certain amendments to the
NCP regulations, due to concerns about inadequate notice. In
particular, the amendments revised the text explaining how EPA
determines when NCPs should be made available. In the NPRM for this
rulemaking, EPA proposed to remove the vacated regulatory text
specifying penalties, and re-proposed most of the other vacated
amendments. Having now provided this additional notice and a full
opportunity for comment, we believe that it is appropriate to finalize
the proposed changes. EPA is also adopting the proposed new 40 CFR
86.1103-2016 to replace the existing 40 CFR 86.1103-87.
(a) Vacated Penalties
    In EPA's regulations, NCP penalties are calculated from inputs
specific to the standards for which NCPs are available. The input
values are specified in 40 CFR 86.1105-87. EPA is removing paragraph
(j) of this section which specifies the vacated inputs for the 2010
NOX emission standard. Since all manufacturers are currently
complying with these standards, and the court vacated the text in
question, it no longer has any purpose.
(b) Re-Proposed Text
    The 2012 rule made amendments to four different sections in 40 CFR
part 86. The amendments to 40 CFR 86.1104-91 and 86.1113-87 were
supported during the rulemaking and were not questioned in the Court's
decision. Nevertheless, these revisions were vacated along with the
rest of the rule. In the NPRM, EPA re-proposed these changes, even
though we had already provided full notice and opportunity for public
comment for these changes. Since we are adopting text that is already
in the CFR, the final rule consists of leaving these sections of the
regulations unchanged.
(i) Upper Limits
    The changes to 40 CFR 86.1104-91 affect the upper limit. The upper
limit (UL) is the emission level established by regulation above which
NCPs are not available. A heavy duty engine cannot use NCPs to be
certified for a level above the upper limit. CAA section 206(g)(2)
refers to the upper limit as a percentage above the emission standard,
set by regulation, that corresponds to an emission level EPA determines
to be ``practicable.'' The upper limit is an important aspect of the
NCP regulations not only because it establishes an emission level above
which no engine may be certified using NCPs, but it is also a critical
component of the cost analysis used to develop the penalty rates. The
regulations specify that the relevant costs for determining the COC50
and the COC90 factors are the difference between an engine at the upper
limit and one that meets the applicable standards (see 40 CFR 86.1113-
87).
    The regulatory approach adopted under the prior NCP rules set the
upper limit at the prior emission standard when a prior emission
standard exists and is then changed to become more stringent. EPA
concluded that this upper limit should be reasonably achievable by all
manufacturers with engines or vehicles in the relevant class. It should
be within reach of all manufacturers of HD engines or HD vehicles that
are currently allowed so that they can continue to sell their engines
and vehicles while finishing their development of fully complying
engines. A manufacturer of a previously certified engine or vehicle
should not be forced to immediately remove a HD engine or vehicle from
the market when an emission standard becomes more stringent. The prior
emission standard generally meets these goals because manufactures have
already certified their vehicles to that standard.
    One of EPA's changes to the regulations in 40 CFR 86.1104-91
clarifies that EPA may set the upper limit at a level below the
previous standard if we determine that the lower level is achievable by
all engines or vehicles in the relevant subclass. This was the case for
the vacated NCP rule. Another change allows us to set the upper limit
at a level above the previous standard in unusual circumstances, such
as where a new standard for a different pollutant, or other
requirement, effectively increases the stringency of the standard for
which NCPs would apply. This occurred for heavy heavy-duty engines with
the 2004 standards.
(ii) Payment of Penalties
    The changes to 40 CFR 86.1113-87 correct EPA organizational units
and mail codes to which manufacturers must send information. The
previous information is no longer valid.
(c) Criteria for the Availability of NCPs
    Since the promulgation of the first NCP rule in 1985, subsequent
NCP rules generally have been described as continuing ``phases'' of the
initial NCP

rule. The first NCP rule (Phase 1), sometimes referred to as the
``generic'' NCP rule, established three basic criteria for determining
the eligibility of emission standards for nonconformance penalties in
any given model year (50 FR 35374, August 30, 1985). (For regulatory
language, see 40 CFR 86.1103-87). The first criterion is that the
emission standard in question must become more difficult to meet. This
can occur in two ways, either by the emission standard itself becoming
more stringent, or due to its interaction with another emission
standard that has become more stringent. Second, substantial work must
be required in order to meet the emission standard. EPA considers
``substantial work'' to mean the application of technology not
previously used in that vehicle or engine class/subclass, or a
significant modification of existing technology, in order to bring that
vehicle/engine into compliance. EPA does not consider minor
modifications or calibration changes to be classified as substantial
work. Third, EPA must find that a manufacturer is likely to be
noncomplying for technological reasons (referred to in earlier rules as
a ``technological laggard''). Prior NCP rules have considered such a
technological laggard to be a manufacturer who cannot meet a particular
emission standard due to technological (not economic) difficulties and
who, in the absence of NCPs, might be forced from the marketplace.
During the 2012 rulemaking, some commenters raised issues relating to
EPA's interpretation of these criteria:
     The extent to which the criteria are intended to constrain
EPA's ability to set NCPs
     The timing for evaluating the criteria
     The meaning of technological laggard
    As its primary finding in the 2013 decision, the Court stated that
EPA had not provided sufficient notice or opportunity for comment
regarding its interpretation of these criteria. To address the Court's
notice and comment concern, EPA solicited comments in the Phase 2 NPRM
on our proposed revisions to these criteria. Note that we proposed
changes that are different from those at issue during the court case.
(i) Constraints on EPA
    Several commenters on the 2012 rule argued (implicitly or
explicitly) that EPA cannot establish NCPs unless all of the regulatory
criteria for NCPs (in 40 CFR 86.1103-87) are met. Some went further to
argue that EPA must demonstrate that the criteria are met. However, the
actual regulatory text has never stated that EPA may establish NCPs
only if all criteria are met, but rather that EPA shall establish NCPs
``provided that EPA finds'' the criteria are met. These criteria were
included in the regulations to clarify that manufacturers should not
expect EPA to initiate a rulemaking to establish NCPs where these
criteria were not met. Moreover, the regulations clearly defer to EPA's
judgment for finding that the criteria are met. While EPA must explain
the basis of our finding, the regulatory language does not require us
to prove or demonstrate that the criteria are met.
    This interpretation is consistent with the text of the Clean Air
Act, which places no explicit restrictions on when EPA can set NCPs. In
fact, it seems to create a presumption that NCPs will be available. The
Act actually requires EPA to allow certification of engines that do not
meet the standard unless EPA determines the practicable upper limit to
be equal to the new emission standard.
    To address this confusion, the revised regulatory text explicitly
states that where EPA cannot determine if all of the criteria have been
met, we may presume that they have. In other words, EPA does not have
the burden to prove they have been met. This policy was opposed by
Volvo in its comments to this current rulemaking. It stated that EPA
findings ``must be subject to public review and scrutiny'' to
``adequately protect complying manufacturers' competitive interests.''
However, EPA sees no basis in the Act to believe that Congress intended
EPA to protect complying manufacturers by denying a request for NCPs.
Rather, Congress directed EPA to set the penalty at a level that would
``remove any competitive disadvantage to manufacturers whose engines or
vehicles achieve the required degree of emission reduction.'' \979\
Under the changes being adopted here, compliant manufacturers would
retain the ability to challenge whether or not EPA had set penalties at
a level that protects them.
---------------------------------------------------------------------------

    \979\ 42 U.S.C. 7525(g)(3)(E).
---------------------------------------------------------------------------

(ii) Timing for Evaluating Criteria
    In order to properly understand the appropriate timing for
evaluating each of the NCP criteria, it is necessary to understand the
purpose of each. When considered together, these criteria evaluate the
likelihood that a manufacturer will be technologically unable to meet a
standard on time. However, when EPA initially proposed the NCP
criteria, we noted that the first two criteria addressed whether there
was a possibility for a technological laggard to develop. When the
first criterion (that there be a new standard) is met, it creates the
possibility for a technological laggard to exist. When manufacturers
must perform substantial work (as required for the second criterion),
it is possible that at least one will be unsuccessful and will become a
laggard. Thus, when evaluating these first two criteria, the purpose is
to determine whether the standard created the possibility for a laggard
to exist. The third criterion is different because it asks whether that
possibility has turned into a likelihood that a technological laggard
has developed. For example, a standard may become significantly more
stringent and substantial effort might be required for compliance, but
all manufacturers may be meeting the applicable standard. In that
situation, a technological laggard is not likely and penalties would be
unnecessary.
    In this context, it becomes clear that since the first two of these
criteria are intended to address the question of whether a given
standard creates the possibility for this to occur, they are evaluated
before the third criterion that addresses the likelihood that the
possibility will actually happen. In most cases, it is possible to
evaluate these criteria at the point a new standard is adopted. This is
the value of these criteria, that they can usually be evaluated long
before there is enough information to know whether a technological
laggard is actually likely. For example, where EPA adopts a new
standard that is not technology-forcing, but rather merely an anti-
backsliding standard, EPA could determine at the time it is adopted
that the second criterion is not met so that manufacturers would know
in advance that no NCPs will be made available for that standard.
    One question that arose in the 2012 rule involved how to evaluate
the second criterion if significant time has passed and some work
toward meeting the standard has already been completed. To address this
question, the revised text clarifies that this criterion is to be
evaluated based on actual work needed to go from meeting the previous
standard to meeting the current standard, regardless of the timing of
such changes. EPA looks at whether ``substantial work'' is or was
required to meet the revised standard at any time after the standard
was issued--the important question is whether manufacturers who were
using technology that met the previous standard would need to build
upon that technology to meet the revised standard.

Other interpretations would seem to be directly contrary to the purpose
of the statute, which is designed to allow technological laggards to be
able to certify engines even if other manufacturers have met the
standard.
(iii) Technological Laggards
    Questions also arose in 2012 about the meaning of the term
``technological laggard.'' While the regulations do not define
``technological laggard,'' EPA has previously interpreted this as
meaning a manufacturer who cannot meet the emission standard due to
technological difficulties, not merely economic difficulties (67 FR
51464-51465, August 8, 2002). Some have interpreted this to mean that
NCPs cannot be made available where a manufacturer tries and fails to
meet a standard with one technology but knew that another technology
would have allowed them to meet the standard. In other words, that it
made a bad business decision. However, EPA's reference to ``economic
difficulties'' applies where a technological path exists--at the time
EPA is evaluating the third criterion--that would allow the
manufacturer to meet the standard on time, but the manufacturer chooses
not to use it for economic reasons. The key question is whether or not
the technological path exists at the time of the evaluation. To address
this confusion, the revised text clarifies that where there is
uncertainty about whether a failure to meet the standards is a
technological failure, EPA may presume that it was. Note that this does
not mean that EPA might declare any failure to meet standards as a
technological failure. The change would only apply where it is not
clear.
(4) In-Use Testing
    EPA and manufacturers have gained substantial experience with in-
use testing over the last four or five years. This has led to important
insights in ways that the test protocol can be adjusted to be more
effective. EPA is accordingly making the following changes to the
regulations in 40 CFR part 86, subparts N and T:
     Revise the NTE exclusion based on aftertreatment
temperature to associate the exclusion with the specific aftertreatment
device that does not meet the temperature criterion. For example, there
should be no NOX exclusion if a diesel oxidation catalyst is
below the temperature threshold. EPA is also revising the exclusion to
consider accommodation of CO emissions when there is a problem with low
temperatures in the exhaust.
     Clarify that exhaust temperatures should be measured
continuously to evaluate whether those temperatures stay above the 250
[deg]C threshold.
     Add specifications to describe where to measure
temperatures for exhaust systems with multiple aftertreatment devices.
     Include a provision to add 0.00042 g/hp-hr to the PM
measurement to account for PM emissions vented to the atmosphere
through the crankcase vent.
     Increase the time allowed for submitting quarterly reports
from 30 to 45 days after the end of the quarter.
(5) Miscellaneous Amendments to 40 CFR Part 86
    As described elsewhere, EPA is making several changes to 40 CFR
part 86. This includes primarily the GHG standards for Class 2b and 3
heavy-duty vehicles in subpart S. EPA is also making regulatory changes
related to hearing procedures, adjustment factors for infrequent
regeneration of aftertreatment devices, and the testing program for
heavy-duty in-use vehicles.
    EPA is making several minor amendments to 40 CFR part 86, including
the following:
     Revise 40 CFR 86.1811-17 to clarify that the Tier 2 SFTP
for 4,000 mile testing applies to MDPVs, alternative fueled vehicles,
and flexible fueled vehicles when operated on a fuel other than
gasoline or diesel fuel, even though these vehicles were not subject to
SFTP standards under the Tier 2 program. We described this in the
Preamble to the Tier 3 final rule, and we are now making this explicit
in the regulations.
     Revise 40 CFR 86.1813-17 to clarify that gaseous-fueled
vehicles are not subject to the bleed emission test or standard.
     Revise 40 CFR 86.1823 to extend the default catalyst
thermal reactivity coefficient for Tier 2 vehicles to also apply for
Tier 3 vehicles. This change was inadvertently omitted from the recent
Tier 3 rulemaking. EPA will also be interested in a broader review of
the appropriate default value for the catalyst thermal reactivity
coefficient in some future rulemaking. EPA will be interested in
reviewing any available data related to this issue.
     Establish a minimum maintenance interval of 1500 hours for
DEF filters for heavy-duty engines. This reflects the technical
capabilities for filter durability and the expected maintenance in the
field.
     Add crankcase vent filters to the list of maintenance
items for heavy-duty engines. This allows manufacturers to specify a
maintenance interval of 50,000 miles, or request a shorter interval
under Sec.  86.004-25. We are also revising consolidating regulatory
provisions in Sec.  86.004-25 to allow us to remove Sec.  86.007-25;
this reorganization does not change any regulatory requirements.
     Remove the idle CO standard from 40 CFR 86.007-11 and 40
CFR 86.008-10. This standard no longer applies, since all engines are
now subject to diagnostic requirements instead of the idle CO standard.
     Revise 40 CFR 86.094-14 to consolidate the streamlined
certification procedures for small-volume manufacturers. The
consolidated section reduces potential confusion by listing only the
provisions that do not apply, rather than trying to create (and
maintain) a comprehensive list of all the provisions that apply, in
addition to the provisions that do not apply. Except for removing
obsolete content, the revised regulation does not include substantive
changes to the specified procedures.
     Revise 40 CFR 86.1301 to remove obsolete content.
    EPA is also adopting several amendments to remove obsolete text,
update cross references, and streamline redundant regulatory text. For
example, paragraph (f)(3) of Appendix I includes a duty cycle for
heavy-duty spark-ignition engines that is no longer specified as part
of the certification process.
(6) Applying 40 CFR Part 1068 to Heavy-Duty Highway Engines and
Vehicles
    As part of the Phase 1 standards, EPA applied the exemption and
importation provisions from 40 CFR part 1068, subparts C and D, to
heavy-duty highway engines and vehicles. EPA also specified that the
defect reporting provisions of 40 CFR 1068.501 were optional. In an
earlier rulemaking, EPA applied the selective enforcement auditing
under 40 CFR part 1068, subpart E (75 FR 22896, April 30, 2010). EPA is
in this rule adopting the rest of 40 CFR part 1068 for heavy-duty
highway engines and vehicles, with certain exceptions and special
provisions.
    40 CFR part 1068 captures a range of compliance provisions that are
common across our engine and vehicle programs. These regulatory
provisions generally provide the legal framework for implementing a
certification-based program. 40 CFR part 1068 works in tandem with the
standard-setting part for each type of engine/equipment. This allows
EPA to adopt program-specific provisions for emission standards and
certification requirements for each type of engine/equipment while
taking a uniform approach to the compliance provisions that apply
generally.

    Many of the provisions in 40 CFR part 1068 were originally written
to align with the procedures established in 40 CFR part 85 and part 86.
EPA expects the following provisions from 40 CFR part 1068 to not
involve a substantive change for heavy-duty highway engines and
vehicles:
     Part 1068, subpart A, describes how EPA handles
confidential information, how the Administrator may delegate decision-
making within the agency, how EPA may enter manufacturers' facilities
for inspections, what information manufacturers must submit to EPA, how
manufacturers are required to use good engineering judgment related to
certification, and how EPA may require testing or perform testing.
There is also a description of labeling requirements that apply
uniformly for different types of engines/equipment.
     The prohibited acts, penalties, injunction provisions, and
related requirements of 40 CFR 1068.101 and 1068.125 correspond to what
is specified in Clean Air Act sections 203 through 207 (also see
section 213(d)).
     40 CFR 1068.103 describes how a certificate of conformity
applies on a model-year basis. With the exception of the stockpiling
provisions in paragraph (g), as described below, these provisions
generally mirror what already applies for heavy-duty highway engines.
     40 CFR 1068.120 describes requirements that apply for
rebuilding engines. This includes more detailed provisions describing
how the rebuild requirements apply for cases involving a used engine to
replace a certified engine.
     40 CFR part 1068, subpart F, describes procedural
requirements for voluntary and mandatory recalls. As noted below, EPA
is modifying these regulations to eliminate a few instances where the
part 1068 provisions differ from what is specified in 40 CFR part 86,
subpart S.
     40 CFR part 1068, subpart G, describes how EPA would hold
a hearing to consider a manufacturer's appeal of an adverse compliance
decision from EPA. These procedures apply for penalties associated with
violations of the prohibited acts, recall, nonconformance penalties,
and generally for decisions related to certification. As noted below,
EPA is migrating these procedures from 40 CFR part 86, including an
effort to align with EPA-wide regulations that apply in the case of a
formal hearing.
    EPA is adopting a requirement for manufacturers to comply with the
defect-reporting provisions in 40 CFR 1068.501. Defect reporting under
40 CFR 1068.501 involves a more detailed approach for manufacturers to
track possible defects and establishes thresholds to define when
manufacturers must perform an investigation to determine an actual rate
of emission-related defects. These thresholds are scaled according to
production volumes, which allows us to adopt a uniform protocol for
everything from locomotives to lawn and garden equipment. Manufacturers
that also produce nonroad engines have already been following this
protocol for several years. These defect-reporting requirements are
also similar to the rules that apply in California.
    40 CFR part 1068 includes a definition of ``engine'' to clarify
that an engine becomes subject to certification requirements when a
crankshaft is installed in an engine block. At that point, a
manufacturer may not ship the engine unless it is covered by a
certificate of conformity or an exemption. Most manufacturers have
opted into this definition of ``engine'' as part of the replacement
engine exemption as specified in 40 CFR 85.1714. We are making this
mandatory for all manufacturers. A related provision is the definition
of ``date of manufacture,'' which we use to establish that an engine's
model year is also based on the date of crankshaft installation. To
address the concern that engine manufacturers might install a large
number of crankshafts before new emission standards start to apply as a
means of circumventing those standards, we state in 40 CFR 1068.103(g)
that manufacturers must follow their normal production plans and
schedules for building engines in anticipation of new emission
standards. In addition to that broad principle, we state that we will
consider engines to be subject to the standards for the new model year
if engine assembly is not complete within 30 days after the end of the
model year with the less stringent standards.
    40 CFR part 1068 also includes provisions related to vehicle
manufacturers that install certified engines. EPA states in 40 CFR
1068.105(b) that vehicle manufacturers are in violation of the
tampering prohibition if they do not follow the engine manufacturers'
emission-related installation instructions, which we approve as part of
the certification process.
    40 CFR part 1068 also establishes that vehicles have a model year
and that installing certified engines includes a requirement that the
engine be certified to emission standards corresponding to the
vehicle's model year. An exception to allow for normal production and
build schedules is described in 40 CFR 1068.105(a). This ``normal-
inventory'' allowance is intended to allow for installation of
previous-tier engines that are produced under a valid certificate by
the engine manufacturer shortly before the new emission standards start
to apply. Going beyond normal inventory is considered to be
``stockpiling.'' Stockpiling such engines will be considered an
unlawful circumvention of the new emission standards. The range of
companies and production practices is much narrower for heavy-duty
highway engines and vehicles than for nonroad engines and equipment.
EPA is therefore finalizing the proposed additional specifications to
define or constrain engine-installation schedules that will be
considered to fall within normal-inventory practices. In particular,
vehicle manufacturers must follow their normal production schedules to
use up their supply of ``previous-tier'' engines once new emission
standards start to apply; the regulation further specifies that this
allowance may not extend beyond three months into the year in which new
standards apply. For any subsequent installation of previous-tier
engines, EPA requires that vehicle manufacturers get EPA approval based
on a demonstration that the excess inventory is a result of
unforeseeable circumstances rather than circumvention of emission
standards. EPA approval in those circumstances will be limited to a
maximum of 50 engines to be installed for up to three additional months
for a single vehicle manufacturer.
    We are finalizing these stockpiling provisions, although we
received two comments that supported changes from the proposal. Daimler
suggested a greater allowance of 1000 or more engines meeting the
earlier tier of standards to correspond to prevailing production
volumes. This comment appears to reflect an expectation that engine
manufacturers would continue to produce these previous-tier engines
after the new emission standards have started to apply; however, this
is not the case. The inventory allowance is focused on vehicle
manufacturers using up their normal inventories of engines that were
built before the change in emission standards over some number of
months into the New Year. Even high-volume vehicle manufacturers should
not be buying large quantities of engines shortly before a change in
emission standard. The inventory allowance rather allows for vehicle
manufacturers to prudently plan to make a reasonable transition to the
new

engines in the months following the point at which the standards start
to apply.
    Gillig also commented on the stockpiling provisions, advocating a
June 30 date for using up their inventory of previous-tier engines.
Their production schedule typically involves building a single bus in a
day, with the transition to new standards depending on engine
manufacturers to provide compliant engines in a timely manner. The
proposed allowance was intended to accommodate current business
practices that involved using up normal inventory of previous-tier
engines within three months after new standards start to apply, with a
possible extension to six months if the manufacturer needs additional
time to use up the last few of its normal inventory of previous-tier
engines. We believe this approach is consistent with Gillig's
recommendation.
    EPA considered applying 40 CFR part 1068 broadly. It is relatively
straightforward to apply the provisions of this part to all engines
subject to the criteria emission standards in 40 CFR part 86, subpart
A, and the associated vehicles. Manufacturers of comparable nonroad
engines are already subject to all these provisions. However, highway
motorcycles and Class 2b and 3 heavy-duty vehicles subject to criteria
emission standards under 40 CFR part 86, subpart S, are covered by a
somewhat different compliance program. EPA is therefore applying only
the hearing procedures from 40 CFR part 1068 for highway motorcycles,
light-duty vehicles, light-duty trucks, medium-duty passenger vehicles,
and chassis-certified Class 2b and 3 heavy-duty vehicles. See Section
XIII.D.(1) for a description of the hearing procedures from 40 CFR part
1068.
    Note that EPA is amending 40 CFR 85.1701 to specify that the
exemption provisions of 40 CFR part 85, subpart R, apply to heavy-duty
engines subject to regulation under 40 CFR part 86, subpart A. This is
intended to limit the scope of this provision so that it does not apply
for Class 2b and 3 heavy-duty vehicles subject to standards under 40
CFR part 86, subpart S. This change corrects an inadvertently broad
reference to heavy-duty vehicles in 40 CFR 85.1701.

B. Amendments Affecting Glider Vehicles and Glider Kits

(1) Background
    EPA proposed several amendments related to both criteria pollutant
and GHG emissions from glider vehicles, as well as related provisions
for glider kits.\980\ With respect to criteria pollutant emissions, EPA
proposed that as of January 1, 2018, most donor engines installed in
glider vehicles would have to meet criteria pollutant standards
corresponding to the year of assembly of the glider vehicle. This would
amend the provision allowing donor engines to meet the standards for
the year of the engine. 40 CFR 1037.150(j). EPA further solicited
comment on an earlier effective date for this provision. 80 FR 40529.
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    \980\ Glider vehicles are motor vehicles produced to accept
rebuilt engines (or other used engines) along with used axles and/or
transmissions. The common commercial term ``glider kit'' is used
here primarily to refer to a chassis into which the used/rebuilt
engine is installed. See Figure I-1 in section I.E.1 of this
Preamble, showing a picture of a glider kit.
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    With respect to GHG emissions, EPA proposed that all glider
vehicles (whether produced by large or small manufacturers) meet the
Phase 2 vehicle standards (which, among other things, would entail
glider kit manufacturers generating fuel maps for each engine that
would be used). This would remove a transition provision from the Phase
1 rules which allowed glider vehicles to use engines not certified to
the Phase 1 standards. 40 CFR 1037.150(j). Glider vehicles produced by
large manufacturers are presently subject to the Phase 1 vehicle
standards, but those produced by small manufacturers are not. 40 CFR
1037.150(c). Put a different way, the combination of these two
provisions means that non-small businesses could use pre-2013 engines
in glider vehicles, but were required to meet (and certify to) the
Phase 1 GHG vehicle standards. EPA proposed to require all glider
vehicles to meet the applicable GHG standards as of January 1, 2018.
See generally 80 FR 40528.
    In the March, 2016 Notice of Data Availability, EPA solicited
further comment on possible exceptions to the proposal.\981\
Specifically, EPA solicited comment with respect to engines meeting
2010 criteria pollutant standards, and for engines still within their
original regulatory useful life. 81 FR 10826.\982\
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    \981\ The NODA requested comment on an EPA memorandum ``Legal
Memorandum Discussing Issues Pertaining to Trailers, Glider
Vehicles, and Glider Kits under the Clean Air Act'', February 2016,
EPA-HQ-OAR-2014-0827-1627, 81 FR 10826.
    \982\ Glider vehicles and glider kits are exempt from NHTSA's
Phase 1 fuel consumption standards. NHTSA did not propose revisions
specific to glider vehicles in this rulemaking.
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    EPA received many comments from manufacturers of both glider kits
and glider vehicles, many comments from manufacturers of engines
meeting current criteria pollutant standards and dealers selling trucks
containing those compliant engines, and comments from the NGO community
and from CARB. Engine and vehicle manufacturers took opposing
positions. Some supported the proposed approach, and urged an earlier
effective date to avoid a pre-buy of glider vehicles with highly
polluting engines. Others stated that the proposed provisions exceeded
EPA's authority to set emission standards for new engines and new
vehicles, in addition to objecting to the proposed provisions as a
matter of policy. See Section I.E.1 of this document and RTC Section
14.2. Some of the comments helped EPA target flexibility for glider
vehicles that serve arguably legitimate purposes (such as reclaiming
relatively new powertrains from vehicles chassis that fail
prematurely), without causing substantial adverse environmental
impacts. All of these comments are fully summarized and responded to in
RTC Section 14.2. We set out here the actions we are taking in this
Phase 2 rule, and then explain the basis for those actions.
(2) Overview of Final Rule Provisions for Glider Kits and Glider
Vehicles
    We are finalizing the proposed glider-related provisions but have
made several revisions in recognition of the differences between glider
vehicles produced to avoid the 2010 criteria pollutant emission
standards and those manufactured for other more legitimate purposes.
The provisions being finalized are intended to allow a transition to a
long-term program in which manufacture of glider vehicles better
reflects the original reason manufacturers began to offer these
vehicles--to allow the reuse of relatively new powertrains from damaged
vehicles.
    Under the provisions being finalized for the long-term program, all
glider vehicles will need to be covered by both vehicle and engine
certificates. The vehicle certificate will require compliance with the
GHG vehicle standards of 40 CFR part 1037. The engine certificate will
require compliance with the GHG engine standards of 40 CFR part 1036,
plus the criteria pollutant standards of 40 CFR part 86. Used/rebuilt/
remanufactured engines may be installed in the glider vehicles without
meeting standards for the year of glider vehicle assembly, provided the
engines are within their regulatory useful life (or meet similar
criteria). These engines would still need to meet criteria pollutant
standards corresponding to the year of the engine.
    EPA is also finalizing a transitional program that will allow
glider vehicle manufacturers additional flexibility. The first step
allows each

manufacturer's combined production of glider kits and glider vehicles
with higher polluting engines to be at the manufacturer's highest
annual production of glider kits and glider vehicles for any year from
2010 to 2014.\983\ Any glider vehicles produced in greater volumes
would need to meet the engine standards corresponding to the year of
the assembly of the glider vehicle. With respect to GHG standards, all
vehicles within this allowance will remain subject to the existing
Phase 1 requirements for both engines and vehicles, so that small
manufacturers would still be exempt from these provisions up to the
allowance. Any glider kits and glider vehicles produced beyond this
allowance will be subject to all requirements applicable to new engines
and new vehicles for MY 2017. Other than the 2017 production limit, EPA
will continue the Phase 1 approach until January 1, 2018. This allows
small businesses to produce glider kits and glider vehicles up to the
production limit without new constraints. Large manufacturers producing
complete glider vehicles remain subject to the 40 CFR part 1037 GHG
vehicle standards, as they have been since the start of Phase 1.
However large manufacturers may provide exempted glider kits to small
businesses during this time frame.
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    \983\ Although discussed here as a limit on the number of glider
vehicles that may be produced, these provisions are actually
exemptions for manufacturers from the more generally applicable
restrictions on the production of glider vehicles, as the following
sentence in the text above makes clear.
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    Effective January 1, 2018, the long-term program begins generally,
but with certain transitional flexibilities. In other words, except for
the following allowances, glider vehicles will need to comply with the
long-term program. The exceptions are:
     Small businesses may produce a limited number of glider
vehicles without meeting either the engine or vehicle standards of the
long-term program. Larger vehicle manufacturers may provide glider kits
to these small businesses without the assembled vehicle meeting the
applicable vehicle standards. This number is limited to the small
vehicle manufacturer's highest annual production volume in 2010 through
2014 or 300, whichever is less.
     Model year 2010 and later engines are not required to meet
the Phase 1 GHG engine standards.
     Used/rebuilt/remanufactured engines may be installed in
the glider vehicles without meeting standards for the year of glider
vehicle assembly, provided the engines are within their regulatory
useful life (this provision continues from the transitional program).
    These 2018 allowances mostly continue after 2020, but effective
January 1, 2021, all glider vehicles will need to meet the Phase 2 GHG
vehicle standards. This means that large manufacturers providing glider
kits to small manufacturers will need to meet the GHG vehicle standards
for the completed vehicle (pursuant to the delegated assembly
provisions), or ship the glider kit to the final glider vehicle
manufacturer pursuant to the incomplete vehicle provisions (where the
final glider vehicle manufacturer would be the certificate holder).
    EPA is thus discontinuing both 40 CFR 1037.150(c) and (j) in this
Phase 2 rulemaking. As finalized, the Phase 2 regulations will
therefore generally treat glider vehicles the same as other new
vehicles.\984\ As a result, glider vehicles must be certified to the
Phase 2 vehicle GHG standards, which (among other things) require a
fuel map for the actual engine in order to run GEM. In other words,
manufacturers producing glider kits need to meet the applicable GHG
vehicle standards and, as part of their compliance demonstration, need
to have a fuel map for each engine used. Alternatively, the final
assembler could be the entity to obtain the certificate, provided it
had substantial control of the overall emissions performance of the
completed vehicle. In either case, manufacturers unable to obtain a
fuel map for an engine may ask to use a default map, consistent with
good engineering judgment.
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    \984\ EPA has structured these regulations for glider vehicles
to lay out a general requirement that treats glider vehicles (and
the engines installed in them) the same as other new vehicles (and
new engines), but also includes several exemptions from this general
requirement.
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    EPA is also providing a limited allowance for small business
manufacturers as described in 40 CFR 1037.150(t), and also providing a
generally-applicable allowance that is conditioned on the age of the
reused engine as described in 1037.635. See Section XIII.B.(4) below.
EPA is also adopting new definitions of ``glider vehicle'' and ``glider
kit'' in 40 CFR 1037.801 that are generally consistent with the common
understanding of these terms as meaning new chassis with a rebuilt or
other used engine and new chassis designed to accept a rebuilt or other
used engine/powertrain. EPA is also clarifying its requirements for
certification and revising its definitions for glider manufacturers, as
described below, to ensure that affected manufacturers understand their
responsibilities under the regulations.
    It is important to emphasize that EPA is not banning gliders.
Rather, as described below, EPA is requiring that glider vehicles meet
the standards that all other new trucks are required to meet, unless
eligible for certain limited exemptions that provide flexibility for
small businesses and for certain other specific applications. Moreover,
the provisions being finalized are more flexible than those proposed,
but focus the additional flexibility on vehicles using relatively clean
engines, and on engines within their regulatory useful life, consistent
with the original purpose of glider kits and vehicles.\985\
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    \985\ Although discussed here as a limit on the number of glider
vehicles that may be produced, these provisions are actually
exemptions for manufacturers from the more generally applicable
restrictions on the production of glider vehicles.
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    EPA proposed to begin these requirements January 1, 2018, but
requested comment on beginning the requirements sooner. Since the NPRM,
production of gliders has surged and now likely exceeds 10,000 per
year. We are concerned that by finalizing restrictions for 2018 in this
rule we risk causing a pre-buy scenario where production surges further
in 2017. This would be both very harmful to the environment and
disruptive to the market. To avoid these problems and to ensure a
smoother transition, we are finalizing a glider kit and glider vehicle
production limit for calendar year 2017 for glider vehicles using high
polluting engines. The allowable production is based on past sales for
all large and small manufacturers. Specifically, each manufacturer's
combined 2017 production of glider kits and glider vehicles using high
polluting engines will be capped at the manufacturer's highest annual
production of glider kits and glider vehicles for any year from 2010 to
2014. All vehicles within this allowance will remain subject to the
existing Phase 1 GHG provisions as they presently apply. Any glider
kits or glider vehicles produced beyond this allowance will be subject
to all requirements applicable to new engines and new vehicles for MY
2017.
(3) Impacts of Current Glider Market
    Current standards for NOX and PM (which began in 2007
and took full effect in 2010) are at least 90 percent lower than the
most stringent previously applicable standards, so the NOX
and PM emissions of any glider vehicles using pre-2007 engines are at
least ten times higher than emissions from equivalent vehicles being
produced with brand new engines.\986\ However,

most gliders being produced today use engines originally manufactured
before 2002.\987\ Since these pre-2002 engines lack both EGR and
exhaust aftertreatment, they would have NOX and PM emissions
20-40 times higher than current engines. If miscalibrated, emissions
could be even higher. Thus, each glider vehicle using an older engine
that is purchased instead of a new vehicle with a current MY engine
results in significantly higher in-use emissions of air pollutants
associated with a host of adverse human health effects, including
premature mortality (see Section VIII above).
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    \986\ The NOX and PM standards for MY 2007 and later
engines are 0.20 g/hp-hr and 0.01 g/hp-hr, respectively. The
standards for MY 2004 through 2006 engines were ten times these
levels, and earlier standards were even higher.
    \987\ See, e.g. http://www.truckinginfo.com/article/story/2013/04/the-return-of-the-glider.aspx, describing the engines used by a
leading manufacturer of glider vehicles (``1999 to 2002-model
diesels were known for reliability, longevity and good fuel mileage.
Fitzgerald favors Detroit's 12.7-liter Series 60 from that era, but
also installs pre-EGR 14-liter Cummins and 15-liter Caterpillar
diesels. All are rebuilt . . . . '') (emphasis added). See also
additional documentation of this point in RTC Section 14.2.
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    These emission impacts have been compounded by the increasing sales
of these vehicles. Estimates provided to EPA indicate that production
of glider vehicles has increased by an order of magnitude from what it
was in the 2004-2006 time frame--from a few hundred each year to
thousands.\988\ Glider vehicle production is not currently being
reported to EPA, but EPA estimates that current production is close to
10,000 each year based on comments--including comments from
manufacturers of glider vehicles. While the few hundred glider vehicles
produced annually in the 2004-2006 timeframe may have been produced for
arguably legitimate purposes, such as salvaging powertrains from
vehicles otherwise destroyed in crashes, EPA believes (as did many
commenters) that the more than tenfold increase in glider kit
production since the MY 2007 criteria pollutant emission standards took
effect reflects an attempt to avoid these more stringent standards and
(ultimately) the Clean Air Act.
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    \988\ ``Industry Characterization of Heavy Duty Glider Kits,''
MacKay & Company, September 30, 2013.
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    At proposal, EPA estimated the environmental impact of 5,000 glider
vehicles per year, which would be roughly 2 percent of the Class 8
vehicles manufactured annually.\989\ We estimated that at that rate,
these gliders could account for as much as one-half of total
NOX and PM emissions from all new Class 8 vehicles. Several
commenters supported EPA's assessment of the environmental impacts of
glider vehicles. Volvo suggested the impacts were even greater,
estimating that 2014 glider sales were ``on the order of 6,000'' and
that they emit twice as many tons of PM as the rest of the 2014
vehicles. In later supplemental comments, Volvo provided evidence that
current sales have grown to 10,000 or more per year. Even some
commenters opposing EPA's proposal acknowledged that glider sales are
now over 10,000 units annually. No commenters disagreed with EPA's
previous (understated) assessment of NOX and PM impacts.
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    \989\ Frequently Asked Questions about Heavy-Duty ``Glider
Vehicles'' and ``Glider Kits,'' EPA-420-F-15-904, July 2015.
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    For the final rule, EPA has updated its analysis of the
environmental impacts of gliders. The updated analysis used the same
emissions modeling tool used to estimate the other emissions impacts of
the rule, described in Section VII of the Preamble. The modeling of
gliders assumed annual glider sales of 10,000 for 2015 and later,
consistent with the comments received on the proposal. The modeling
also assumed that these gliders emit at the level equivalent to the
engines meeting the MY 1998-2001 standards, since most glider vehicles
currently being produced use remanufactured engines of this vintage,
and projects them to have the same usage patterns/lifetimes as similar
new vehicles. (We did not attempt to account for any miscalibration of
these engines). This analysis shows that without the new restrictions,
glider vehicles on the road in 2025 would emit nearly 300,000 tons of
NOX and nearly 8,000 tons of PM annually. Although glider
vehicles would make up only 5 percent of heavy-duty tractors on the
road, their emissions would represent about one third of all
NOX and PM emissions from heavy-duty tractors in 2025. By
restricting the number of glider vehicles with high polluting engines
on the road, these excess PM and NOX emissions will decrease
dramatically, leading to substantial public health-related benefits.
Put into monetary terms using PM-related benefit-per-ton values
described in Section IX.H, the removal of all unrestricted glider
vehicle emissions from the atmosphere would yield between $6 to $14
billion in benefits annually (2013$). It is clear that removing even a
fraction of these glider vehicles with high polluting engines from the
road will yield substantial health-related benefits.
(4) EPA Engine Standards
    EPA is thus amending its rules to generally require that glider
vehicles produced on or after January 1, 2017 use engines certified to
the standards applicable to the calendar year in which assembly of the
glider vehicle is completed, with an exception in 2017 that provides a
larger number of glider vehicles under the transitional production
allowance. (Other exceptions to this general requirement are discussed
later). This requirement applies to all pollutants, and thus
encompasses criteria pollutant standards as well as the separate GHG
standards. Used or rebuilt engines may be used, as long as they have
been certified to the same standards that apply for the calendar year
of glider vehicle assembly. For example, if assembly of a glider
vehicle is completed in calendar year 2020, the engine must generally
meet standards applicable for MY 2020. (If the engine standards for
model year 2020 are the same as for model years 2017 through 2019, then
any model year 2017 or later engine may be used).
    EPA is amending these rules because, with the advent in MY 2007 of
more stringent HD diesel engine criteria pollutant standards,
continuation of provisions allowing unlimited use of rebuilt and reused
engines meeting much earlier MY criteria pollutant standards results in
unnecessarily high in-use emissions. See Section XII.B.(3) above. As
stated there, these emissions form an increasingly high percentage of
the vehicular inventory for such dangerous pollutants as NOX
and diesel exhaust PM (a likely human carcinogen), all of which are
associated with the most serious adverse health effects up to and
including premature mortality. GHG emissions from these engines also
are controllable. As more glider vehicles are produced, EPA believes
these emissions should be controlled to the same levels as other new
engines.
    The older engines currently being used in most glider vehicles
could be retrofitted with exhaust aftertreatment to meet current
standards. However, the primary reason these engines have been used is
because they do not include aftertreatment.\990\ Thus, we believe
retrofitting these engines would not be a preferred path. The more
likely compliance path would be to install a used 2010 or later engine,
since such engines are presently available and it would be probably be
much simpler and less expensive to use a 2010 engine than to retrofit
an older engine to meet current standards. Manufacturers will

likely also seek to qualify under other flexibilities provided in the
Final Rule.
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    \990\ http://www.truckinginfo.com/article/story/2013/04/the-return-of-the-glider.aspx., accessed July 16, 2016.
---------------------------------------------------------------------------

    Recognizing that the environmental impacts of gliders using newer
engines will generally be much smaller, EPA requested comment on
whether we should treat such gliders differently than gliders using
older engines. 80 FR 40528; 81 FR 10826. Based on comments received on
the NODA, EPA is finalizing additional flexibilities for newer engines