Proposed Determinations of Light-Duty Vehicle Alternative Greenhouse Gas Emissions Standards for Small Volume Manufacturers |
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Andrew R. Wheeler
Environmental Protection Agency
31 July 2019
[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Notices]
[Pages 37277-37282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16319]
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2019-0210; FRL-9997-56-OAR]
Proposed Determinations of Light-Duty Vehicle Alternative
Greenhouse Gas Emissions Standards for Small Volume Manufacturers
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice.
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SUMMARY: EPA is requesting comment on proposed determinations of
alternative light-duty vehicle greenhouse gas emissions standards for
small volume manufacturers. The alternative standards are proposed
pursuant to small volume manufacturer provisions in EPA's light-duty
vehicle greenhouse gas regulations. Four small volume manufacturers
have applied for alternative standards: Aston Martin, Ferrari, Lotus
and McLaren. The alternative standards in these determinations cover
model years 2017-2021.
DATES: Comments must be received on or before August 30, 2019.
ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2019-0210, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov/
(our preferred method). Follow the online instructions for submitting
comments.
Email: a-and-r-Docket@epa.gov. Include Docket ID No. EPA-
HQ-OAR-2019-0210 in the subject line of the message.
Fax: (202) 566-9744 Include Docket ID No. EPA-HQ-OAR-2019-
0210 on the cover of the fax.
Mail: U.S. Environmental Protection Agency, EPA Docket
Center, OAR, Docket EPA-HQ-OAR-2019-0210, Mail Code 28221T, 1200
Pennsylvania Avenue NW, Washington, DC 20460.
Hand Delivery/Courier: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operations are 8:30 a.m.-4:30 p.m.,
Monday-Friday (except Federal Holidays).
Instructions: All submissions received must include the Docket ID No.
for this rulemaking. Comments received may be posted without change to
https://www.regulations.gov/, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Christopher Lieske, Office of
Transportation and Air Quality, Assessment and Standards Division, U.S.
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105. Telephone: (734) 214-4584. Fax: (734) 214-4816. Email address:
lieske.christopher@epa.gov.
SUPPLEMENTARY INFORMATION:
I. Public Participation
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2019-
0210, at https://www.regulations.gov (our preferred method), or the
other methods identified in the ADDRESSES section. Once submitted,
comments cannot be edited or removed from the docket. 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 https://www.epa.gov/dockets/commenting-epa-dockets.
II. Background
EPA's light-duty vehicle greenhouse gas (GHG) program for model
years (MYs) 2012-2016 provided a conditional exemption for small volume
manufacturers (SVMs) with annual U.S. sales of less than 5,000 vehicles
due to unique feasibility issues faced by these SVMs.\1\ The exemption
was conditioned on the manufacturer making a good faith effort to
obtain credits from larger
[[Page 37278]]
volume manufacturers. For the MY 2017-2025 light-duty vehicle GHG
program, EPA proposed, took public comment on, and finalized specific
regulations allowing SVMs to petition EPA for alternative standards,
again recognizing that the primary program standards may not be
feasible for SVMs and could drive these manufacturers from the U.S.
market.\2\ EPA acknowledged that SVMs may face a greater challenge in
meeting CO2 standards compared to large manufacturers
because they only produce a few vehicle models, mostly focused on high
performance sports cars and luxury vehicles. SVMs have limited product
lines across which to average emissions, and the few vehicles they
produce often have very high CO2 levels on a per vehicle
basis. EPA also noted that the total U.S. annual vehicle sales of SVMs
are much less than 1 percent of total sales of all manufacturers and
contribute minimally to total vehicular GHG emissions, and foregone GHG
reductions from SVMs likewise are a small percentage of total industry-
wide reductions. EPA received only supportive public comments on
allowing alternative standards for SVMs, including from SVMs, their
trade associations, and dealers.\3\ EPA adopted a regulatory pathway
for SVMs to apply for alternative GHG emissions standards for MYs 2017
and later, based on information provided by each SVM on factors such as
technical feasibility, cost, and lead time.\4\
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\1\ 75 FR 25419-25421, May 7, 2010.
\2\ 77 FR 62789-62795, October 15, 2012.
\3\ Docket No. EPA-HQ-OAR-2010-0799.
\4\ 40 CFR 86.1818-12(g).
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The regulations outline eligibility criteria and a framework for
establishing SVM alternative standards. Manufacturer average annual
U.S. sales must remain below 5,000 vehicles to be eligible for SVM
alternative standards.\5\ The regulations specify the requirements for
supporting technical data and information that a manufacturer must
submit to EPA as part of its application.\6\
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\5\ 40 CFR 86.1818-12(g)(1).
\6\ 40 CFR 86.1818-12(g)(4).
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The regulations specify that an SVM applying for an alternative
standard provide the following technical information:
The CO2 reduction technologies employed by the
manufacturer on each vehicle model, or projected to be employed,
including information regarding the cost and CO2-reducing
effectiveness. Include technologies that improve air conditioning
efficiency and reduce air conditioning system leakage, and any ``off-
cycle'' technologies that potentially provide benefits outside the
operation represented by the Federal Test Procedure (FTP) and the
Highway Fuel Economy Test (HFET).
An evaluation of comparable models from other
manufacturers, including CO2 results and air conditioning
credits generated by the models.
A discussion of the CO2-reducing technologies
employed on vehicles offered outside of the U.S. market but not
available in the U.S., including a discussion as to why those vehicles
and/or technologies are not being used to achieve CO2
reductions for vehicles in the U.S. market.
An evaluation, at a minimum, of the technologies projected
by the EPA in a final rulemaking as those technologies likely to be
used to meet greenhouse gas emission standards and the extent to which
those technologies are employed or projected to be employed by the
manufacturer.
The most stringent CO2 level estimated to be
feasible for each model, in each model year, and the technological
basis for this estimate.
For each model year, a projection of the lowest feasible
sales-weighted fleet average CO2 value, separately for
passenger automobiles and light trucks, and an explanation
demonstrating that these projections are reasonable.
A copy of any application, data, and related information
submitted to the National Highway Traffic Safety Administration (NHTSA)
in support of a request for alternative Corporate Average Fuel Economy
standards filed under 49 CFR part 525.
SVMs may apply for alternative standards for up to five model years
at a time. The GHG standards that EPA establishes for MY 2017 may
optionally be met by the manufacturers in MYs 2015-2016.\7\ SVMs may
use the averaging, banking, and trading provisions to meet the
alternative standards, but may not trade credits to another
manufacturer.\8\ The process for approving an SVM application includes
a public comment period of 30 days after which EPA will issue a final
determination establishing alternative standards for the manufacturer,
as appropriate.\9\
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\7\ See 40 CFR 86.1818-12(g). Manufacturers may opt to comply
with their MY 2017 standard in MYs 2015 and 2016 retroactively in
lieu of the Temporary Leadtime Alternative Allowance Standards used
in these model years.
\8\ 40 CFR 86.1818-12(g)(6).
\9\ 40 CFR 86.1818-12(g)(5).
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SVMs have applied for alternative standards due to continued
concern regarding their abilities to meet the primary program GHG
standards. Given that the current production MY for most manufacturers
is 2019, with MY 2020 starting soon, these alternative standards, if
adopted, will provide immediate relief for SVMs as authorized under the
regulation. The GHG program also allows for a 3-year carry-back
provision, which is within the timeframe of this notice and the MYs
under consideration.
The Energy Policy and Conservation Act (EPCA), governing the
establishment of Corporate Average Fuel Economy (CAFE) standards,
contains separate small volume manufacturer alternative standards
provisions that are administered by the National Highway Traffic Safety
Administration (NHTSA) independent of EPA's SVM alternative standards
provisions.\10\ Under EPCA's CAFE provisions, SVMs meeting the CAFE
eligibility criteria may petition NHTSA for less stringent alternative
CAFE standards. Manufacturers generally are also able to pay fines in
lieu of meeting the CAFE standards, which is not an option in EPA's GHG
program under the Clean Air Act. While eligible SVMs may apply for
alternative standards under the CAFE program, and some of the SVMs
covered by this decision document have applied for alternative CAFE
standards, none of those SVMs have been granted alternative CAFE
standards for MYs 2017-2021.\11\
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\10\ 49 U.S.C. 32902(d). Implementing regulations may be found
in 49 CFR part 525. EISA limits eligibility to manufacturers with
worldwide production of fewer than 10,000 passenger cars.
\11\ See https://one.nhtsa.gov/cafe_pic/CAFE_PIC_Mfr_LIVE.html.
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III. Manufacturer Requested GHG Standards
Four manufacturers have applied for SVM alternative standards:
Aston Martin, Ferrari, Lotus and McLaren.\12\ Each manufacturer
provided an application to EPA that contains confidential business
information (CBI). Each manufacturer also provided a public version of
its application with the CBI removed, which EPA has placed in the
public docket established for this proceeding. As part of their
applications, the SVMs requested specific alternative GHG standards for
five model years starting with MY 2017 based on their unique projected
product mix. Table 1 below provides the
[[Page 37279]]
standards requested by the manufacturers.
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\12\ Ferrari was previously owned by Fiat Chrysler Automobiles
(FCA) and petitioned EPA for operationally independent status under
40 CFR 86.1838-01(d). In a separate decision EPA granted this status
to Ferrari starting with the 2012 model year, allowing Ferrari to be
treated as an SVM under EPA's GHG program. Ferrari has since become
an independent company and is no longer owned by FCA.
Table 1--Manufacturer Requested GHG Standards
[g/mile]
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Manufacturer MY 2017 * MY 2018 MY 2019 MY 2020 MY 2021
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Aston Martin.................... 431 396 380 374 376
Ferrari......................... 421 408 395 386 377
Lotus........................... 361 361 344 341 308
McLaren......................... 372 372 368 360 334
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* Manufacturers may optionally meet MY 2017 standards in MYs 2015-2016 (40 CFR 86.1818-12(g).
In May 2017, subsequent to submitting a request for SVM alternative
standards, Lotus was acquired by Zhejiang Geely Holding Group (Geely)
which also owns Volvo Car Company. Under the SVM regulations regarding
eligibility,\13\ Lotus remains eligible for alternative standards for
MY 2017. However, it is possible that Lotus will no longer be eligible
for SVM standards starting in MY 2018 as Lotus may exceed the 5,000
vehicles eligibility threshold under the aggregation provisions of the
regulations, based upon sales volume figures and other information
provided by the manufacturer for MY 2018 which has not yet been
finalized. While EPA is proposing alternative standards for Lotus
through MY 2021, in order to use the alternative standards for MYs
2018-2021 Lotus would need to either demonstrate that they remain
eligible for SVM alternative standards under the aggregation provisions
or apply and be granted operational independence status.\14\ EPA is not
including any determination of SVM eligibility for Lotus for MY 2018
and beyond in this proposed determination notice.
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\13\ 40 CFR 86.1818-12(g)(1)(i).
\14\ 40 CFR 86.1838-01(d).
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The regulations require SVMs to submit information, including cost
information, to EPA as part of their applications, as detailed above.
Each SVM provided its technical basis for the requested standards
including a discussion of technologies that could and could not be
feasibly applied to their vehicles in the time frame of the standards.
As noted above, the non-CBI information provided by the SVMs is
included in the docket for this proceeding. However, much of the data
and information provided by the manufacturers regarding future vehicles
and technology projections is claimed as CBI and not included in the
public versions of the applications.\15\
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\15\ For more information about how EPA addresses claims of
Confidential Business Information, see 40 CFR part 2, subpart B.
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The MY 2017-2025 light-duty GHG program includes opportunities to
generate air conditioning and off-cycle emissions reduction credits
that can be used as part of a manufacturer's strategy in meeting
standards. Each SVM provided EPA with an estimate of its plans for use
of air conditioning and off-cycle credits in addition to their
CO2 emissions measured over the 2-cycle compliance test (FTP
and HFET) for each model year and these credits are reflected in the
performance levels each manufacturer has projected. The breakdown of
each manufacturer's use of credits was submitted as CBI by the
manufacturers and not included in the public materials.
The alternative standards would be unique for each manufacturer and
the regulations providing for 5-year credit carry-forward and 3-year
credit carry-back provisions would apply. As noted above, SVMs would
not be able to trade (i.e., sell) credits to other manufacturers but
would be able to purchase credits from other manufacturers not in the
SVM alternative standards program. The standards would be manufacturer
fleet averages, but not footprint based, as manufacturers did not
request footprint-based standards and EPA believes the level of
complexity added by making the unique SVM standards footprint based is
not warranted given the manufacturers' limited product offerings. For
example, the number of base vehicle models in SVMs' fleets range from
one to four models. Also, in setting unique standards for SVMs, the
product plans of each manufacturer are necessarily considered by EPA in
the standard setting and so footprint-based standards are unnecessary.
IV. EPA Proposed Determinations of SVM Alternative Standards
The SVM alternative standards provisions in the MY 2017-2025 rule
provide for a case-by-case approach reflecting the unique product
offerings of each manufacturer. The preamble to the 2012 final rule
discusses how EPA would set SVM standards, including several factors to
consider in determining what CO2 standards are appropriate
for a given SVM's fleet. These factors include the level of technology
applied to date by the manufacturer, the manufacturer's projections for
the application of additional technology, CO2 reducing
technologies being employed by other manufacturers including on
vehicles with which the SVM competes directly and the CO2
levels of those vehicles, cost information, and the technological
feasibility and reasonableness of employing additional technology not
projected by the manufacturer in the time-frame for which standards are
being established. EPA also considers opportunities to generate A/C and
off-cycle credits that are available to the manufacturer. Lead time is
a key consideration both for the initial years of the SVM standard,
where lead time would be shorter (or in fact has passed, as discussed
below), and for the later years where manufacturers would have more
time to achieve additional CO2 reductions.\16\
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\16\ 77 FR 62792, October 15, 2012.
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The goal of the program is to ensure that SVMs make continued
improvements to reduce GHG emissions, while recognizing that they might
not be able to meet the primary program standards due to their limited
product lines and the types of vehicles they produce.\17\ With this
program goal in mind, EPA has considered the technical, cost, and other
information provided by each SVM regarding its unique product plan
strategy, and the alternative standards requested by the SVMs.
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\17\ 77 FR 62790, October 15, 2012.
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The CO2 emissions for vehicles produced by SVMs are
currently well above their primary program GHG targets but they are not
out of step with some other vehicles produced by large volume
manufacturers, as shown in Figure 1 below. As we discussed above,
although emissions may be comparable in some cases to vehicles produced
by
[[Page 37280]]
other manufacturers, SVMs have the additional challenge of not being
able to average emissions across a diverse product line, as is the case
for larger manufacturers. The SVM alternative standards help provide a
level playing field between the SVMs and large manufacturers that
produce vehicles in the same market segments. The SVM models are
indicated by the ``+'' markers. Given their higher baseline
CO2 emissions, these high performance and luxury vehicles
are likely to continue to have higher CO2 levels relative to
the industry-wide fleet average as the fleetwide standards become more
stringent.
[GRAPHIC] [TIFF OMITTED] TN31JY19.009
For the first four model years of the program, MYs 2017-2020, EPA
is proposing to adopt the manufacturers' requested alternative
standards. These model years are completed, underway, or close to
underway (MY 2020 can start as early as January 2, 2019) and therefore
lead-time is a primary consideration. Based on the absence of or very
minimal lead-time available for these model years and EPA's review of
the manufacturers' submissions and assessment of the capability of each
product and its associated technology adoption, EPA believes this
approach is appropriate for MYs 2017-2020.
For MY 2021, EPA considered the levels requested by the
manufacturers and compared them to levels each SVM would achieve under
an approach where the manufacturers achieved year-over-year reductions
from their MY 2017 baseline through MY 2021, analogous to the overall
declining fleetwide standards in the primary program. The primary
program standards for passenger cars are equivalent to approximately
five percent year-over-year improvements. Although the regulations do
not mandate a specific year-over-year percent reduction for SVMs, EPA
considered an approach based on a minimum level of steady improvement
of three percent year-over-year emissions reduction from each SVM's
baseline CO2 levels. This pace of change is not as
aggressive as the annual improvement in the passenger car standards in
the primary program, but EPA believes it represents a reasonable
minimum pace of meaningful improvements for SVMs, given the SVMs'
limited product lines and limited ability to average among high and low
emitting vehicle models. Historically, EPA has set standards designed
to reduce emissions while providing vehicle manufacturers compliance
flexibility through averaging. Table 2 below provides the projected
CO2 levels for each manufacturer based on three percent
annual improvements, using MY 2017 as the baseline or starting model
year.
Table 2--Three Percent Annual Improvement From MY 2017 Baseline
[g/mile]
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Model year Aston Martin Ferrari Lotus McLaren
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2017 Baseline................................... 431 421 361 372
2018............................................ 418 408 350 361
2019............................................ 406 396 340 350
2020............................................ 393 384 329 340
2021............................................ 382 373 320 329
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Table 3 below compares the levels projected for MY 2021 under the
three percent per year reductions with the levels requested by the
manufacturers. For Aston Martin and Lotus, their requested standards
for MY 2021 are more stringent than the levels represented by the three
percent year-over-year reductions, as shown in Table 3. EPA believes
that the requested MY 2021 standards for Aston Martin and Lotus are
appropriate, and no adjustment is needed.
For Ferrari and McLaren, EPA believes that the MY 2021 standards
should reflect the 3 percent year-over-year reductions shown in Table
3. This approach would require Ferrari and McLaren to achieve a MY 2021
standard that is minimally more stringent than that requested by the
manufacturers. The differences are small, 5 g/mile or less, and based
on EPA's review of the information provided by the manufacturers, EPA
believes this additional emissions reduction can be achieved through
the use of credits, including air conditioning and off-cycle credits,
and the use of program flexibilities including credit carry-forward and
credit carry-back within the lead-time available. EPA believes that MY
2021 standards based on 3 percent year-over-year reductions represent
reasonable progress over time for SVMs as discussed above and a
reasonable balance between the program goal of GHG reductions and the
degree of challenge the standards pose to SVMs, based on EPA's
assessment of the information, including cost information, provided to
the agency.
Table 3--Comparison of Three Percent per Year Reductions With SVM's Projections for MY 2021
[g/mile]
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Aston Martin Aston Martin Ferrari McLaren
Model year requested 3% per year requested Ferrari 3% per Lotus requested Lotus 3% per requested McLaren 3% per
standards reduction standards year reduction standards year reduction standards year reduction
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2021.................................................... 376 382 377 373 308 320 334 329
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In the proposed ``Safer Affordable Fuel-Efficient (SAFE) Vehicles
Rule for Model Years 2021-2026 Passenger Cars and Light Trucks'' issued
by EPA and the National Highway Traffic Safety Administration, EPA
proposed revised less stringent GHG standards for MYs 2021-2026; the
agencies also took public comment on a wide range of alternative
stringencies.\18\ EPA recognizes that the three percent annual
improvement approach for SVM alternative standards for MY 2021
described above differs from the approach for the primary program for
MY 2021 in the SAFE Vehicles proposed rule where EPA has proposed to
retain the MY 2020 standards for MYs 2021-2026. However, the proposed
SVM alternative standards for MY 2021 would remain significantly less
stringent than the primary program standards the SVMs would be required
to meet under the proposed SAFE Vehicles standards and represent
significant relief for the SVMs even if the SAFE Vehicles proposal is
adopted. EPA acknowledges that the standard requested by Aston Martin
for MY 2021 is 2 g/mile less stringent than the standard requested for
MY 2020, but believes the standard requested for MY 2021 is appropriate
since the MYs 2017-2021 standards represent steady progress overall for
Aston Martin with total reductions of 55 g/mile over those five model
years. For Aston Martin, similar to the SAFE proposal, we are not
proposing more stringent standards, or even flatlined standards for MY
2021, because of the significant reductions projected by Aston Martin
to occur prior to MY 2021.
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\18\ 83 FR 42986, August 24, 2018.
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V. Summary of Draft Alternative SVM Standards
A summary of the draft case-by-case alternative SVM standards and
associated per-manufacturer GHG reductions is provided in Table 4. As
discussed above, the draft MY 2017-2020 standards are the
manufacturers' requested alternative standards due to lead time
concerns. For Aston Martin and Lotus, the draft MY 2021 standards also
are their requested standards. The MY 2018-2021 standards for Lotus are
conditional based on its ability to either demonstrate that it remains
eligible for SVM alternative standards under the program's aggregation
provisions or apply and be granted operational independence status, as
discussed in Section III above. For Ferrari and McLaren, the draft MY
2021 standards are based on three percent year-over-year reductions
from their respective MY 2017 baseline. EPA requests comment on the
draft standards shown in Table 4 and the approach used to derive the
standards discussed in Section IV above.
Table 4--Summary of Draft Standards and Per-Manufacturer GHG Reductions
[g/mile]
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Aston Martin Ferrari Lotus McLaren
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MY 2017......................................... 431 421 361 372
MY 2018......................................... 396 408 361 372
MY 2019......................................... 380 395 344 368
MY 2020......................................... 374 386 341 360
MY 2021......................................... 376 373 308 329
g/mile Reduction................................ 55 48 53 43
% Reduction (MY2017 to MY2021).................. 12.8% 11.4% 14.7% 11.6%
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EPA notes that in the SAFE Vehicles proposed rule referenced above,
the agencies proposed to eliminate credits based on air conditioning
refrigerant controls and requested comment on eliminating off-cycle
credits beginning in MY 2021. If EPA finalizes any program changes that
would restrict the use of those credits in MY 2021 where
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the SVM compliance is predicated on the use of those credit provisions,
SVMs would have the option of applying for a further revised
alternative standard for MY 2021.
Dated: July 24, 2019.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2019-16319 Filed 7-30-19; 8:45 am]
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