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Alternative Methods for Calculating Off-Cycle Credits Under the Light-Duty Vehicle Greenhouse Gas Emissions Program: Application From Volkswagen Group of America, Inc.

American Government Topics:  Volkswagen

Alternative Methods for Calculating Off-Cycle Credits Under the Light-Duty Vehicle Greenhouse Gas Emissions Program: Application From Volkswagen Group of America, Inc.

Byron J. Bunker
Environmental Protection Agency
1 October 2018

[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Pages 49380-49381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21333]



[EPA-HQ-OAR-2018-0575; FRL-9984-82-OAR]

Alternative Methods for Calculating Off-Cycle Credits Under the 
Light-Duty Vehicle Greenhouse Gas Emissions Program: Application From 
Volkswagen Group of America, Inc.

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.


SUMMARY: EPA is requesting comment on an application from Volkswagen 
Group of America, Inc. (``Volkswagen'') for off-cycle carbon dioxide 
(CO2) credits under EPA's light-duty vehicle greenhouse gas 
emissions standards. ``Off-cycle'' emission reductions can be achieved 
by employing technologies that result in real-world benefits, but where 
that benefit is not adequately captured on the test procedures used by 
manufacturers to demonstrate compliance with emission standards. EPA's 
light-duty vehicle greenhouse gas program acknowledges these benefits 
by giving automobile manufacturers several options for generating 
``off-cycle'' CO2 credits. Under the regulations, a 
manufacturer may apply for CO2 credits for off-cycle 
technologies that result in off-cycle benefits. In these cases, a 
manufacturer must provide EPA with a proposed methodology for 
determining the real-world off-cycle benefit. Volkswagen has submitted 
an application that describes methodologies for determining off-cycle 
credits from technologies described in their application. Pursuant to 
applicable regulations, EPA is making the Volkswagen's off-cycle credit 
calculation methodologies available for public comment.

DATES: Comments must be received on or before October 31, 2018.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ- 
OAR-2018-0575, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting 
comments. Once submitted, comments cannot be edited or withdrawn. The 
EPA may publish any comment received to its public docket. Do not 
submit electronically any information you consider to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Multimedia submissions (audio, video, etc.) must 
be accompanied by a written comment. The written comment is considered 
the official comment and should include discussion of all points you 
wish to make. The EPA will generally not consider comments or comment 
contents located outside of the primary submission (i.e., on the web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Roberts French, Environmental 
Protection Specialist, Office of Transportation and Air Quality, 
Compliance Division, U.S. Environmental Protection Agency, 2000 
Traverwood Drive, Ann Arbor, MI 48105. Telephone: (734) 214-4380. Fax: 
(734) 214-4869. Email address: french.roberts@epa.gov.


I. Background

    EPA's light-duty vehicle greenhouse gas (GHG) program provides 
three pathways by which a manufacturer may accrue off-cycle carbon 
dioxide (CO2) credits for those technologies that achieve 
CO2 reductions in the real world but where those reductions 
are not adequately captured on the test used to determine compliance 
with the CO2 standards, and which are not otherwise 
reflected in the standards' stringency. The first pathway is a 
predetermined list of credit values for specific off-cycle technologies 
that may be used beginning in model year 2014.\1\ This pathway allows 
manufacturers to use conservative credit values established by EPA for 
a wide range of technologies, with minimal data submittal or testing 
requirements, if the technologies meet EPA regulatory definitions. In 
cases where the off-cycle technology is not on the menu but additional 
laboratory testing can demonstrate emission benefits, a second pathway 
allows manufacturers to use a broader array of emission tests (known as 
``5-cycle'' testing because the methodology uses five different testing 
procedures) to demonstrate and justify off-cycle CO2 
credits.\2\ The additional emission tests allow emission benefits to be 
demonstrated over some elements of real-world driving not adequately 
captured by the GHG compliance tests, including high speeds, hard 
accelerations, and cold temperatures. These first two methodologies 
were completely defined through notice and comment rulemaking and 
therefore no additional process is necessary for manufacturers to use 
these methods. The third and last pathway allows manufacturers to seek 
EPA approval to use an alternative methodology for determining the off-
cycle CO2 credits.\3\ This option is only available if the 
benefit of the technology cannot be adequately demonstrated using the 
5-cycle methodology. Manufacturers may also use this option for model 
years prior to 2014 to demonstrate off-cycle CO2 reductions 
for technologies that are on the predetermined list, or to demonstrate 
reductions that exceed those available via use of the predetermined 

    \1\ See 40 CFR 86.1869-12(b).
    \2\ See 40 CFR 86.1869-12(c).
    \3\ See 40 CFR 86.1869-12(d).

    Under the regulations, a manufacturer seeking to demonstrate off-
cycle credits with an alternative methodology (i.e., under the third 
pathway described above) must describe a methodology that meets the 
following criteria:
     Use modeling, on-road testing, on-road data collection, or 
other approved analytical or engineering methods;
     Be robust, verifiable, and capable of demonstrating the 
real-world emissions benefit with strong statistical significance;
     Result in a demonstration of baseline and controlled 
emissions over a wide range of driving conditions and number of 
vehicles such that issues of data uncertainty are minimized;
     Result in data on a model type basis unless the 
manufacturer demonstrates that another basis is appropriate and 
    Further, the regulations specify the following requirements 
regarding an application for off-cycle CO2 credits:
     A manufacturer requesting off-cycle credits must develop a 
methodology for demonstrating and determining the benefit of the off-
cycle technology, and carry out any necessary testing and analysis 
required to support that methodology.
     A manufacturer requesting off-cycle credits must conduct 
testing and/or prepare engineering analyses that demonstrate the in-use 
durability of the technology for the full useful life of the vehicle.
     The application must contain a detailed description of the 
off-cycle technology and how it functions to reduce CO2 
emissions under conditions not represented on the compliance tests.

[[Page 49381]]

     The application must contain a list of the vehicle 
model(s) which will be equipped with the technology.
     The application must contain a detailed description of the 
test vehicles selected and an engineering analysis that supports the 
selection of those vehicles for testing.
     The application must contain all testing and/or simulation 
data required under the regulations, plus any other data the 
manufacturer has considered in the analysis.
    Finally, the alternative methodology must be approved by EPA prior 
to the manufacturer using it to generate credits. As part of the review 
process defined by regulation, the alternative methodology submitted to 
EPA for consideration must be made available for public comment.\4\ EPA 
will consider public comments as part of its final decision to approve 
or deny the request for off-cycle credits.

    \4\ See 40 CFR 86.1869-12(d)(2).

II. Off-Cycle Credit Applications

    Using the alternative methodology approach discussed above, 
Volkswagen Group of America (``Volkswagen'') is applying for credits 
for model years prior to 2014, and thus prior to when the list of 
default credits became available. Volkswagen has applied for off-cycle 
credits using the alternative demonstration methodology pathway for the 
following technologies: High efficiency exterior lighting, active 
aerodynamics, active transmission warmup, active engine warmup, and 
several thermal control technologies. EPA has already approved credits 
for these technologies for several other manufacturers, and 
Volkswagen's request is consistent with previously approved 
methodologies and credits. The application covers 2010-2011 model year 
vehicles. These technologies are described in the predetermined list of 
credits available in the 2014 and later model years. The methodologies 
described by Volkswagen are consistent with those used by EPA to 
establish the predetermined list of credits in the regulations, and 
would result in the same credit values as described in the regulations. 
The magnitude of these credits is determined by specification or 
calculations in the regulations based on vehicle-specific measurements 
(e.g., the area of glass or the lighting locations using the specified 
technologies), but would be no higher than the following established 
regulatory values:

                                              Off-cycle      Off-cycle
                Technology                  credit--cars  credit--trucks
                                            (grams/mile)   (grams/mile)
High efficiency lighting..................           1.0            1.0
Active seat ventilation...................           1.0            1.3
Active aerodynamics.......................   Based on measured reduction
                                             in the coefficient of drag.
Active transmission warm-up...............           1.5            3.2
Active engine warm-up.....................           1.5            3.2
Solar reflective glass/glazing............           2.9            3.9
Solar reflective paint....................           0.4            0.5

III. EPA Decision Process

    EPA has reviewed the application for completeness and is now making 
the application available for public review and comment as required by 
the regulations. The off-cycle credit application submitted by the 
manufacturer (with confidential business information redacted) have 
been placed in the public docket (see ADDRESSES section above) and on 
EPA's website at https://www.epa.gov/vehicle-and-engine-certification/compliance-information-light-duty-greenhouse-gas-ghg-standards.
    EPA is providing a 30-day comment period on the applications for 
off-cycle credits described in this notice, as specified by the 
regulations. The manufacturers may submit a written rebuttal of 
comments for EPA's consideration, or may revise an application in 
response to comments. After reviewing any public comments and any 
rebuttal of comments submitted by manufacturers, EPA will make a final 
decision regarding the credit requests. EPA will make its decision 
available to the public by placing a decision document (or multiple 
decision documents) in the docket and on EPA's website at the same 
manufacturer-specific pages shown above. While the broad methodologies 
used by these manufacturers could potentially be used for other 
vehicles and by other manufacturers, the vehicle specific data needed 
to demonstrate the off-cycle emissions reductions would likely be 
different. In such cases, a new application would be required, 
including an opportunity for public comment.

    Dated: September 20, 2018.
Byron J. Bunker,
Director, Compliance Division, Office of Transportation and Air 
Quality, Office of Air and Radiation.
[FR Doc. 2018-21333 Filed 9-28-18; 8:45 am]

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