Notice of Proposed Rulemaking: Corporate Average Fuel Economy Standards for Model Years 2024-2026 Passenger Cars and Light Trucks Public Comment DEADLINE: September 27, 2021 Hearing: August 25, 2021

August 13, 2021

Print This Article Share it With Friends

(National Highway Traffic Safety Administration) NHTSA, on behalf of the Department of Transportation, is proposing revised fuel economy standards for passenger cars and light trucks for model years 2024-2026.

On January 20, 2021, President Biden signed Executive Order (EO) 13990, “Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis.” In it, the President directed that “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks” (hereafter, “the 2020 final rule”) be immediately reviewed for consistency with our Nation’s abiding commitment to empower our workers and communities; promote and protect our public health and the environment; and conserve our national treasures and monuments, places that secure our national memory.

President Biden further directed that the 2020 final rule be reviewed at once and that (in this case) the Secretary of Transportation consider “suspending, revising, or rescinding” it, via a new proposal, by July 2021. Because of the President’s direction in the EO, NHTSA reexamined the 2020 final rule under its authority to set CAFE standards. In doing so, NHTSA tentatively concluded that the fuel economy standards set in 2020 should be revised so that they increase at a rate of 8 percent year over year for each model year from 2024 through 2026, for both passenger cars and light trucks. This responds to the agency’s statutory mandate to improve energy conservation. This proposal also makes certain minor changes to fuel economy reporting requirements.

DATES:

Comments: Written comments must be received on or before September 27, 2021.

Public Hearing: EPA plans to hold a virtual public hearing on August 25, 2021. An additional session may be held on August 26th if necessary to accommodate the number of testifiers that sign-up to testify. Please refer to the separate Federal Register notice issued by EPA for public hearing details. The hearing notice is available at https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-revise-existing-national-ghg-emissions.

ADDRESSES:

You may send comments, identified by Docket ID No. EPA-HQ-OAR-2021-0208, 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-2021-0208 in the subject line of the message.
Mail: U.S. Environmental Protection Agency, EPA Docket Center, OAR, Docket EPA-HQ-OAR-2021-0208, Mail Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460.
Hand Delivery or Courier (by scheduled appointment only): 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).

...

The proposed amended CAFE standards would increase in stringency from MY 2023 levels by 8 percent per year, for both passenger cars and light trucks over MYs 2024-2026.

NHTSA tentatively concludes that this level is maximum feasible for these model years, as discussed in more detail in Section VI, and seeks comment on that conclusion. The proposal considers a range of regulatory alternatives, consistent with NHTSA’s obligations under the National Environmental Policy Act (NEPA) and Executive Order 12866. While EO 13990 directed the review of CAFE standards for MYs 2021-2026, statutory lead time requirements mean that the soonest model year that can currently be amended in the CAFE program is MY 2024. The proposed standards would remain vehicle footprint-based, like the CAFE standards in effect since MY 2011. Recognizing that many readers think about CAFE standards in terms of the mpg values that the standards are projected to eventually require, NHTSA currently projects that the proposed standards would require, on an average industry fleet-wide basis, roughly 48 miles per gallon (mpg) in MY 2026. NHTSA notes both that real-world fuel economy is generally 20-30 percent lower than the estimated required CAFE level stated above, and also that the actual CAFE standards are the footprint target curves for passenger cars and light trucks, meaning that ultimate fleet-wide levels will vary depending on the mix of vehicles that industry produces for sale in those model years. Table I-1 shows the incremental differences in stringency levels for passenger cars and light trucks, by regulatory alternative, in the model years subject to regulation.

...

This proposal is significantly different from the conclusion that NHTSA reached in the 2020 final rule, but this is because important facts have changed, and because NHTSA has reconsidered how to balance the relevant statutory considerations in light of those facts. NHTSA tentatively concludes that significantly more stringent standards are maximum feasible.

Contrary to the 2020 final rule, NHTSA recognizes that the need of the United States to conserve energy must include serious consideration of the energy security risks of continuing to consume oil, which more stringent fuel economy standards can reduce. Reducing our nation’s climate impacts can also benefit our national security. Additionally, at least part of the automobile industry appears increasingly convinced that improving fuel economy and reducing GHG emissions is a growth market for them, and that the market rewards investment in advanced technology. Nearly all auto manufacturers have announced forthcoming new higher fuel-economy and electric vehicle models, and five major manufacturers voluntarily bound themselves to stricter GHG requirements than set forth by NHTSA and EPA in 2020 through contractual agreements with the State of California, which will result in their achieving fuel economy levels well above the standards set forth in the 2020 final rule.

These companies are sophisticated, for-profit enterprises. If they are taking these steps, NHTSA can be more confident than the agency was in 2020 that the market is getting ready to make the leap to significantly higher fuel economy. The California Framework and the clear planning by industry to migrate toward more advanced fuel economy technologies are evidence of the practicability of more stringent standards.

Moreover, more stringent CAFE standards will help to encourage industry to continue improving the fuel economy of all vehicles, rather than simply producing a few electric vehicles, such that all Americans can benefit from higher fuel economy and save money on fuel.

NHTSA cannot consider the fuel economy of dedicated alternative fuel vehicles like battery electric vehicles when determining maximum feasible standards, but the fact that industry increasingly appears to believe that there is a market for these vehicles is broader evidence of market (and consumer) interest in fuel economy, which is relevant to NHTSA’s determination of whether more stringent standards would be economically practicable. For all of these reasons, NHTSA tentatively concludes that standards that increase at 8 percent per year are maximum feasible.

This proposal is also different from the 2020 final rule in that it is issued by NHTSA alone, and EPA has issued a separate proposal. The primary reason for this is the difference in statutory authority – EPA does not have the same lead time requirements as NHTSA and is thus able to amend MY 2023 in addition to MYs 2024-2026. An important consequence of this is that EPA’s proposed rate of stringency increase, after taking a big leap in MY 2023, looks slower
than NHTSA’s over the same time period.

NHTSA emphasizes, however, that the proposed standards are what NHTSA believes best fulfills our statutory directive of energy conservation, and in the context of the EPA standards, the analysis we have done is tackling the core question of whether compliance with both standards should be achievable with the same vehicle fleet, after manufacturers fully understand the requirements from both proposals. The differences in what the two agencies’ standards require become smaller each year, until alignment is achieved.

While NHTSA recognizes that the last several CAFE standard rulemakings have been issued jointly with EPA, and that issuing separate proposals represents a change in approach, the agencies worked together to avoid inconsistencies and to create proposals that would continue to allow manufacturers to build a single fleet of vehicles to meet both agencies’ proposed standards.

Additionally, and importantly, NHTSA has also considered and accounted for California’s Zero Emission Vehicle (ZEV) program (and its adoption by a number of other states) in developing the baseline for this proposal, and has accounted for the aforementioned “Framework Agreements” between California and BMW, Ford, Honda, VWA, and Volvo, which are national level GHG standards to which these companies committed for several model years.

A number of other improvements and updates have been made to the analysis since the 2020 final rule. Table I-2 summarizes these, and they are discussed in much more detail below and in the documents accompanying this preamble.

...

Table I-13 – Incentives that Encourage Alternative Fuel Vehicles
...
49 U.S.C. 32905(b), (d), and (e); 32906(a)
Fuel economy calculated using 50% operation on alt fuel and 50% on gasoline through MY 2019. Starting with MY 2020, NHTSA uses the SAE defined "Utility Factor" methodology to account for actual potential use, and “F-factor” for FFV; NHTSA will continue to incorporate the 0.15 incentive factor READ MORE

The Acting Administrator of the National Highway Traffic Safety Administration, Steven S. Cliff, Ph.D., signed the following Proposed Rule on August 5, 2021, which the agency is submitting for publication in the Federal Register. While NHTSA has taken steps to ensure the accuracy of this Internet version of the Proposed Rule, it is not the official version of the Proposed Rule. Please refer to the official version in a forthcoming Federal Register publication, which will appear on the Government Printing Office's FDSys website (www.gpo.gov/fdsys/search/home.action) and on Regulations.gov (http://www.regulations.gov) in Docket No. NHTSA-2021-0053. Once the official version is published in the Federal Register, this version will be removed from the Internet and replaced with a link to the official version. READ MORE

UPDATED August 23, 2021 with information about public comments.