Monday, August 22, 2016

Light-duty Vehicle Fuel Economy and Greenhouse Gas Emissions Standards

Question of the Month: What are the current and future light-duty vehicle fuel economy and greenhouse gas (GHG) emissions standards?


According to the U.S. Environmental Protection Agency (EPA), light-duty vehicles (LDVs) emit nearly 60% of transportation-related GHG emissions and use more than half of all petroleum transportation fuel in the United States. In 1975, Congress enacted the Energy Conservation and Policy Act, which directed the U.S. Department of Transportation (DOT) to implement the Corporate Average Fuel Economy (CAFE) program. The goal of the CAFE program is to reduce national energy consumption through fuel economy improvements. Specifically, the National Highway Traffic Safety Administration (NHTSA), as part of DOT, develops annual fuel economy requirements for new passenger cars and light-duty trucks. Fuel economy is measured based on the average mileage a vehicle travels per gallon of gasoline, or gallon of gasoline equivalent for other fuels.

In 2009, President Obama announced a new national program to harmonize fuel economy standards with GHG emissions standards for all new light-duty cars and trucks sold in the United States. Under this program, the U.S. Environmental Protection Agency (EPA) develops GHG emissions standards that correspond with NHTSA CAFE standards for each model year (MY). Thus far, the EPA and NHTSA have implemented the program in two parts, beginning with MYs 2012 to 2016 and followed by MYs 2017 to 2025. GHG emissions and CAFE standards have become increasingly stringent from one MY to the next.

In the final rule that established the coordinated standards for MYs 2017 to 2025, the EPA and NHTSA committed to perform a midterm evaluation (MTE) to (i) determine whether any changes should be made to the GHG emissions standards for MY 2022 to 2025, and (ii) set final CAFE standards for those MYs. This past July, the EPA and NHTSA completed the first step of the MTE with their issuance of a draft technical assessment report. For more information on the MTE, please see the EPA Midterm Evaluation of Light-Duty Vehicle GHG Emissions Standards page and the NHTSA Midterm Evaluation for Light-Duty CAFE page.

NHTSA CAFE Standards
NHTSA determines CAFE standards based on each vehicle’s size, or its footprint, which is essentially the distance between where each of its tires touches the ground. In general, the larger the vehicle is, the less stringent the fuel economy target will be. NHTSA then calculates each manufacturer’s fleet-wide compliance obligation, which is weighted based on vehicle sales (e.g., if 15% of a manufacturer’s sales are one model, that model gets a “weight” of 0.15 in average fuel economy calculation), each vehicle’s footprint, and the volume of vehicles the manufacturer actually produces.

Based on previous MY sales, NHTSA estimates that by MY 2025, passenger vehicles and light-duty trucks will need to meet an estimated combined average fuel economy of at least 48.7 to 49.7 miles per gallon. This estimate is subject to change based on the actual individual manufacturer fleet composition and production volumes. To view the annual standards, please refer to page 4 of the NHTSA CAFE Regulations for MY 2017 and Beyond fact sheet.

EPA GHG Emissions Standards
Similar to the NHTSA CAFE standards, the EPA also uses the footprint-based approach to determine carbon dioxide (CO2) emissions standards in grams per mile (g/mi) for each vehicle manufacturer. The EPA GHG emissions requirements are linked to the CAFE standards, and are also based on individual manufacturer fleet and production volumes. The EPA’s passenger car standards call for CO2 emissions reductions of 5% per year from MY 2017 to 2025. Light-duty trucks will have a bit more time to adjust to the standards, beginning with a 3.5% reduction per year from MY 2017 to MY 2021, then ramping up to a 5% reduction per year from MY 2022 to MY 2025. Refer to page 4 of the EPA GHG Emissions Standards for MY 2017-2025 fact sheet to see the projected CO2 emissions targets.

Manufacturers can meet these standards in a variety of ways. In addition to making direct improvements to vehicle components (e.g., engines and transmission efficiency, light-weighting), manufacturers may also achieve compliance by generating credits. First, manufacturers are required to calculate average fleet-wide tailpipe CO2 emissions and average fleet-wide fuel economy. These values serve as the baseline to which any additional earned credits can be added. The regulation also offers incentives to encourage advanced vehicle technologies.

These credits and incentives include:

  • Air Conditioning and Off-Cycle Improvements (EPA and NHTSA): Manufacturers can earn credits from efforts such as air conditioning efficiency improvements, as well as from off-cycle technologies that result in real-world benefits, like engine start-stop or solar panels on plug-in hybrid electric vehicles (PHEVs).
  • Advanced Technology Vehicles (EPA Only): The EPA regulation also includes incentives to encourage the production of advanced technology vehicles. For MYs 2017 to 2021, manufacturers that produce all-electric vehicles, PHEVs, compressed natural gas vehicles, and fuel cell electric vehicles may “count” these vehicles as more than one vehicle in their emissions compliance calculations.
  • Hybrid Electric Full-Size Pickups (EPA and NHTSA): Manufacturers are encouraged to produce a certain percentage of full-size pickup trucks that are hybrid electric vehicles, as they will receive compliance credits for doing so.

For more information on LDV GHG emissions and CAFE standards, please refer to the following resources:

Stay tuned for next month’s Question of the Month, where we will delve into the medium- and heavy-duty engine and vehicle standards.

Clean Cities Technical Response Service Team

Thursday, August 18, 2016

Fuel-Efficiency Standards Finalized for Heavy-Duty Trucks

The "U.S. Environmental Protection Agency and the U.S. Department of Transportation's National Highway Traffic Safety Administration have finalized new standards for medium- and heavy-duty vehicles that will improve fuel efficiency and reduce carbon pollution while also strengthening national energy security and manufacturing innovation."
The final standards are expected to lower CO2 emissions by approximately 1.1 billion metric tons, save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program. Overall, the program will provide $230 billion in net benefits to society, including benefits to the climate and Americans’ public health. Specifically, the EPA says these benefits outweigh costs by about an eight-to-one ratio.

Tuesday, August 16, 2016

Wednesday, August 3, 2016

"Regulators Defend Fuel Standards"

From the Wall Street Journal:
)"Regulators Defend Fuel Standards" (U.S. News, July 19) notes the growing tension between consumer desires for larger, less fuel-efficient light trucks and ambitious automotive emissions and efficiency targets set by the Environmental Protection Agency. There is a proven but unfortunately overlooked solution to this problem: fueling light trucks with natural gas. Natural gas is much better suited for pickups and other large vehicles than electrification and conventional natural gas can reduce greenhouse-gas emissions by 20%. Even better, greenhouse-gas emissions can be reduced by 90% or more with renewable natural gas captured from landfills or dairy farms, which is already providing over half of natural gas-vehicle fueling in California today.

These emissions benefits are easily on par with electric vehicles but regulators and legislators alike have failed to provide the same level of support. In particular, natural-gas vehicles ought to be eligible for the $7,500 federal tax credit that is currently available only to electric vehicles, as well as the considerable regulatory incentives for EVs provided by the EPA and California Air Resources Board. European countries such as Germany and Italy have proved that natural gas can become a low-cost, widely used alternative fuel with the right policies. With similar government support in the U.S., natural gas could allow auto makers to provide low-emission alternatives for the larger vehicles that consumers are gravitating toward.