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Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles

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American Government

Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles

Donald S. Clark
Federal Register
June 1, 2011


[Federal Register Volume 76, Number 105 (Wednesday, June 1, 2011)]
[Proposed Rules]
[Pages 31513-31517]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13520]


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FEDERAL TRADE COMMISSION

16 CFR Part 309


Labeling Requirements for Alternative Fuels and Alternative 
Fueled Vehicles

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Commission seeks public comment on its Labeling 
Requirements for Alternative Fuels and Alternative Fueled Vehicles 
(``Alternative Fuels Rule'' or ``Rule''). As part of its systematic 
review of all FTC rules and guides, the Commission requests public 
comment on the overall costs, benefits, necessity, and regulatory and 
economic impact of the Alternative Fuels Rule. The Commission also 
seeks comment on whether to merge its alternative fueled vehicle (AFV) 
labels with fuel economy labels proposed by the Environmental 
Protection Agency (EPA) and the National Highway Traffic Safety 
Administration (NHTSA); add new definitions for AFVs contained in 
recent legislation; and change labeling requirements for used AFVs.

DATES: Written comments must be received on or before July 25, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Regulatory Review for 
Alternative Fuels Rule, (16 CFR part 309, Matter No. R311002, Program 
Code M04)'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/altfuelsreviewanpr, by following the 
instructions on the Web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
N), 600 Pennsylvania Avenue, NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, Attorney, Division of 
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-2889.

SUPPLEMENTARY INFORMATION:

I. Background

    The Energy Policy Act of 1992 (EPAct 92 or Act) \1\ established 
federal programs that encourage the development of alternative fuels 
and alternative fueled vehicles (AFVs). Section 406(a) of the Act 
directed the Commission to establish uniform labeling requirements for 
alternative fuels and AFVs. Under the Act, such labels should provide 
``appropriate information with respect to costs and benefits [of 
alternative fuels and AFVs], so as to reasonably enable the consumer to 
make choices and comparisons.'' \2\ In addition, the required labels 
must be ``simple and, where appropriate, consolidated with other labels 
providing information to the consumer.'' \3\
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    \1\ Public Law 102-486, 106 Stat. 2776 (1992).
    \2\ 42 U.S.C. 13232(a).
    \3\ Id. The provision also states that the Commission ``shall 
give consideration to the problems associated with developing and 
publishing useful and timely cost and benefit information, taking 
into account lead time, costs, the frequency of changes in costs and 
benefits that may occur, and other relevant factors.''
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    In response to EPAct 92, the Commission published the Alternative 
Fuels Rule in 1995, addressing both alternative fuels and AFVs.\4\ The 
Rule requires labels on fuel dispensers for non-liquid alternative 
fuels, such as electricity, compressed natural gas, and hydrogen.\5\ 
The labels for electricity provide the dispensing system's kilowatt 
capacity, voltage, and other related information. The labels for other 
non-liquid fuels disclose the fuel's commonly used name and principal 
component (expressed as a percentage).\6\ Examples of the fuel labels 
appear below.
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    \4\ 60 FR 26926 (May 19, 1995).
    \5\ The Commission's Fuel Labeling Rule, 16 CFR Part 306, 
addresses labeling for liquid alternative fuels, such as ethanol and 
liquefied natural gas.
    \6\ The Rule requires fuel importers, producers, or distributors 
to have a reasonable basis for the information disclosed on the 
label, maintain records, and provide certifications when 
transferring fuel. 16 CFR 309.11-14.

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[[Page 31514]]

[GRAPHIC] [TIFF OMITTED] TP01JN11.018

    The Rule also requires labels on new and used AFVs that run on 
liquid and non-liquid fuels, such as ethanol and other alcohols 
including E85 ethanol-gasoline mixtures, natural gas, liquefied 
petroleum gas, hydrogen, coal-derived liquid fuels, fuels derived from 
biological materials (e.g., 100% biodiesel), and electricity. The 
labels for new AFVs disclose the vehicle's estimated cruising range 
(i.e., the travel distance on a single charge or tank of fuel), general 
factors consumers should consider before buying an AFV, and toll free 
telephone numbers and Web sites for additional information from the 
Department of Energy (DOE) and NHTSA.\7\ An example of the label for 
new AFVs appears below. Labels for used AFVs contain only the general 
buying factors and DOE/NHTSA contact information.\8\
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    \7\ The Rule requires manufacturers to have a reasonable basis 
for the vehicle cruising range, and, for certain AFVs, specifies the 
test method for calculating that range. 16 CFR 309.22.
    \8\ The general factors listed on the current label are 
information concerning fuel type, operating costs, fuel 
availability, performance, convenience, energy security, energy 
renewability, and emissions. See 16 CFR Part 309, Appendix A.

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[[Page 31515]]

[GRAPHIC] [TIFF OMITTED] TP01JN11.019

II. Regulatory Review

    The Commission is accelerating its regularly scheduled review of 
the Alternative Fuels Rule, previously set for 2014, to ensure that 
FTC-required vehicle labels and EPA fuel economy labeling requirements 
are consistent. Regulatory reviews seek information about the costs and 
benefits of rules and guides as well as their regulatory and economic 
impact. The information obtained assists in identifying rules and 
guides that warrant modification or rescission. As part of this review, 
the Commission seeks comment on the current Alternative Fuels Rule. 
Among other things, commenters should address the economic impact of, 
and the continuing need for the Rule; the Rule's benefits to 
alternative fuel and AFV purchasers; and burdens the Rule places on 
firms subject to its requirements. In addition, the Commission seeks 
comment on three specific issues related to the Rule (Section III 
below) and response to general questions about the Rule (Section IV 
below).

III. Specific Issues For Comment

    In conducting this regulatory review, the Commission seeks comment 
on the following three specific issues: (1) Whether to consolidate its 
AFV labels with EPA/NHTSA fuel economy labels; (2) how to address new 
definitions for AFVs that are contained in recent legislation; and (3) 
whether to change labeling requirements for used AFVs.

A. EPA and NHTSA Fuel Economy Labels

    The Commission requests comment on whether it should consolidate 
its AFV labels with fuel economy labels recently proposed by EPA and 
NHTSA to ensure consistency between the two.\9\ The proposed new fuel 
economy labels apply to both conventional and alternative fuel 
vehicles, including most AFVs subject to the FTC's labeling 
requirements.\10\ The content of the proposed labels differs slightly 
depending on the type of AFV, as described below.
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    \9\ See 75 FR 58078 (Sept. 23, 2010).
    \10\ Although EPA regulations (40 CFR Part 600) require labeling 
for all vehicles covered under the Alternative Fuels Rule, EPA did 
not propose a specific label for several vehicle types not generally 
available to individual consumers including those fueled by 
liquefied petroleum gas, hydrogen, coal-derived liquid fuels, or 
fuels (other than alcohol) derived from biological materials. See 
http://www.fueleconomy,gov (availability of vehicle types).
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    For various types of electric vehicles (including those operating 
solely on batteries and those operating on a combination of battery and 
conventional engine power) as well as compressed natural gas powered 
vehicles, EPA's proposed labels disclose the vehicle's fuel economy, 
CO2 and other emissions, cruising range, and estimated annual fuel 
cost.\11\ The proposed labels also reference http://www.fueleconomy.gov, which provides comprehensive consumer information 
about fuel economy and alternative fuels.
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    \11\ EPA has requested comment on three different formats which 
vary in their presentation of information.
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    For ethanol-fueled vehicles, including flexible fuel vehicles 
(FFVs) that operate on a combination of gasoline and ethanol, the EPA 
proposed three label

[[Page 31516]]

options: (1) Disclosing the fuel economy obtained using gasoline and a 
statement that alternative fuel use will yield different results;\12\ 
(2) disclosing fuel economy for both gasoline and alternative fuel use 
(e.g., E85); and (3) disclosing fuel economy for gasoline as well as 
miles per gallon equivalent information for the alternative fuel.\13\
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    \12\ According to the EPA, 99% of FFV owners run their vehicles 
only on gasoline and never use alternative fuel. 75 FR at 58112.
    \13\ According to EPA, miles per gallon of gasoline-equivalent 
information provides a way to communicate the fact that E85 provides 
greater miles per unit of energy than gasoline even though E85 
provides lower miles per gallon. 75 FR at 58112. Although this 
information may help some consumers, the Commission is concerned it 
may mislead many others by implying that E85 will provide better 
fuel economy (i.e., miles per gallon) than gasoline.
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    In light of these proposals, the Commission seeks comment on 
whether it is appropriate to consolidate its label with EPA's by 
allowing use of the EPA label in lieu of FTC's. Although there are some 
differences between the labels (e.g., the EPA label for ethanol FFVs 
would not disclose cruising range), all of the EPA's proposed labels 
provide vehicle-specific fuel economy information. The EPA's proposed 
labels also would not include the general buying tips that appear on 
the FTC's label, but would refer consumers to a website to obtain more 
information about fuel economy and alternative fuels. The Commission, 
therefore, requests comment on whether the EPA label accomplishes the 
EPAct 92's goal of providing appropriate information regarding the 
costs and benefits of AFVs and reasonably enabling consumers to make 
choices and comparisons. Consolidating the FTC and EPA labels would 
benefit consumers and industry by eliminating potential confusion 
caused by duplicative and possibly inconsistent labels,\14\ and 
reducing the burden on manufacturers to create and post two labels.
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    \14\ For example, proposed consolidation would eliminate current 
inconsistencies between cruising range values on FTC and EPA 
electric vehicle labels. To address new electric vehicles introduced 
before the completion of this rulemaking, the Commission has issued 
a policy stating that it will not enforce current FTC labeling 
requirements for any electric vehicle bearing an EPA-mandated fuel 
economy label and will encourage vehicle manufacturers to use the 
EPA label in lieu of the FTC label. See http://www.ftc.gov/opa/2011/05/afr.shtm.
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B. Definition of Alternative Fueled Vehicles

    The National Defense Authorization Act for Fiscal Year 2008 
extended coverage of the EPAct 92 to hydrogen fuel cell motor vehicles 
(as defined in 26 U.S.C. 30B (b)(3)), advanced lean burn technology 
motor vehicles (as defined in 26 U.S.C. 30B(c)(3)), and hybrid motor 
vehicles (as defined in 26 U.S.C. 30B(d)(3)). Specifically, it added 
these three types of vehicles to the statutory definition of 
``alternative fuel vehicle.'' \15\ Therefore, the Commission is now 
considering how the Rule should address these vehicles. Because the 
Alternative Fuels Rule already covers hydrogen fuel cell vehicles, 
additional labeling requirements for them appear unnecessary. 
Similarly, lean burn and hybrid vehicles already bear the EPA fuel 
economy label because they qualify as conventional vehicles under that 
program. Thus, it appears unlikely that new FTC labels for those models 
would provide significant benefit. Accordingly, the Commission seeks 
comment on whether to issue new labels for lean burn and hybrid 
vehicles or, instead, to allow the EPA label on these vehicles in lieu 
of a new FTC label.
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    \15\ 42 U.S.C. 13211(3)(B). According to the legislative 
history, the purpose of these amendments is to ``allow additional 
types of vehicles to be used to meet minimum'' requirements for 
vehicle and fuel use by Federal agencies (i.e., ``Federal fleet 
requirements''). Congressional Record 153:147 (Oct. 1, 2007) p. 
S12355.
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C. Used AFV Labels

    The Commission seeks comment on whether to change the Rule's 
labeling requirements for used AFVs.\16\ Currently, used AFVs must bear 
labels with general tips and references to telephone numbers and 
websites that provide additional information. However, these labels do 
not contain any vehicle-specific information, such as cruising range. 
Because these used vehicle labels provide limited information and are 
likely to impose increasing burdens on used car dealers as the AFV 
market expands, the Commission seeks comment on whether to retain the 
requirement and, if so, whether to change the label's current content. 
Commenters should address whether the used vehicle labels provide 
``appropriate information''; whether the benefits to consumers justify 
the burdens imposed on used vehicle dealers; and whether other 
resources, such as http://www.fueleconomy.gov, provide used vehicle 
shoppers with adequate information. Comments should also address 
whether vehicle specific information (e.g., cruising range) is 
appropriate for used AFV labels. For example, will an electric 
vehicle's original cruising range estimate, as determined by the 
manufacturer, remain valid when the vehicle is later sold in the used 
market?
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    \16\ 16 CFR 309.21. The Act contains no specific requirement for 
used AFV labels nor does it specifically exclude used vehicles from 
its coverage. See 42 U.S.C. 13211 and 13232(a). In promulgating the 
original Rule in 1994, the Commission determined that used AFV 
labeling was ``appropriate'' because ``consumers would likely have 
the same need for information, and would consider the same factors, 
whether they were contemplating a new or used AFV acquisition.'' 60 
FR at 26941.
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IV. General Questions for Comment

    In addition to the specific issues discussed in Section II, the 
Commission solicits comment on the following questions related to the 
Rule:
    (1) Is there a continuing need for the Rule as currently 
promulgated? Why or why not?
    (2) What benefits has the Rule provided to consumers? What evidence 
supports the asserted benefits?
    (3) What modifications, if any, should the Commission make to the 
Rule to increase its benefits to consumers?
    (a) What evidence supports your proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, particularly small businesses?
    (4) What impact, if any, has the Rule had on the flow of 
appropriate information to consumers about alternative fuels and AFVs?
    (5) What significant costs has the Rule imposed on consumers? What 
evidence supports the asserted costs?
    (6) What modifications, if any, should be made to the Rule to 
reduce the costs imposed on consumers?
    (a) What evidence supports your proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, particularly small businesses?
    (7) Please provide any evidence that has become available since 
2005 concerning consumer perception of AFV and non-liquid alternative 
fuel labeling. Does this new information indicate that the Rule should 
be modified? If so, why, and how? If not, why not?
    (8) Please provide any evidence that has become available since 
2005 concerning consumer interest in alternative fuel and AFV labeling. 
Does this new information indicate that the Rule should be modified? If 
so, why, and how? If not, why not?
    (9) What benefits, if any, has the Rule provided to businesses, and 
in particular to small businesses? What evidence supports the asserted 
benefits?

[[Page 31517]]

    (10) What modifications, if any, should be made to the Rule to 
increase its benefits to businesses, and particularly to small 
businesses?
    (a) What evidence supports your proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses?
    (11) What significant costs, including costs of compliance, has the 
Rule imposed on businesses, particularly small businesses? What 
evidence supports the asserted costs?
    (12) What modifications, if any, should be made to the Rule to 
reduce the costs imposed on businesses, particularly on small 
businesses?
    (a) What evidence supports your proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses?
    (13) What evidence is available concerning the degree of industry 
compliance with the Rule? Does this evidence indicate that the Rule 
should be modified? If so, why, and how? If not, why not?
    (14) Are any of the Rule's requirements no longer needed? If so, 
explain. Please provide supporting evidence.
    (15) What modifications, if any, should be made to the Rule to 
account for changes in relevant technology, including development of 
new alternative fuels, or economic conditions?
    (a) What evidence supports the proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers and businesses, particularly small businesses?
    (16) Does the Rule overlap or conflict with other federal, state, 
or local laws or regulations? If so, how?
    (a) What evidence supports the asserted conflicts?
    (b) With reference to the asserted conflicts, should the Rule be 
modified? If so, why, and how? If not, why not?
    (c) Is there evidence concerning whether the Rule has assisted in 
promoting national uniformity with respect to the rating, certifying, 
and posting the rating of non-liquid alternative fuels and AFV 
labeling? If so, please provide that evidence.
    (17) Are there foreign or international laws, regulations, or 
standards with respect to the rating, certifying, and posting the 
rating of non-liquid alternative fuels and AFV labeling that the 
Commission should consider as it reviews the Rule? If so, what are 
they?
    (a) Should the Rule be modified to harmonize with these foreign or 
international laws, regulations, or standards? If so, why, and how? If 
not, why not?
    (b) How would such harmonization affect the costs and benefits of 
the Rule for consumers and businesses, particularly small businesses?

V. Instructions for Comment Submissions

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before July 25, 2011. 
Write ``Regulatory Review for Alternative Fuels Rule, (16 CFR part 309, 
Matter No. R311002, Program Code M04)'' on your comment. Your comment--
including your name and your state--will be placed on the public record 
of this proceeding, including, to the extent practicable, on the public 
Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a 
matter of discretion, the Commission tries to remove individuals' home 
contact information from comments before placing them on the Commission 
Website.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\17\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \17\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/altfuelsreviewanpr, by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that website.
    If you file your comment on paper, write ``Regulatory Review for 
Alternative Fuels Rule, (16 CFR part 309, Matter No. R311002, Program 
Code M04)'' on your comment and on the envelope, and mail or deliver it 
to the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex N), 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Website at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before July 25, 2011. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-13520 Filed 5-31-11; 8:45 am]
BILLING CODE 6750-01-P



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