EPA & NHTSA FINALIZE 2017–2025 FUEL ECONOMY & GHG RULES

On Tuesday, EPA and the National Highway Traffic Safety Administration (NHTSA) finalized new greenhouse gas (GHG) and fuel economy (FE) rules for model years 2017–2025 light duty vehicles. The new GHG emission rules, when fully phased in, will require an average fuel economy of 54.5 miles per gallon (mpg) (fleet average of 163 grams/mile of CO2 equals 54.5 mpg). The rules, however, allow automakers to earn GHG and FE credits by producing NGVs and other advanced technology vehicles, so actual fleet averages are expected to be less than 54.5 miles. NHTSA’s fuel economy regulations actually specify a fuel economy average of 49.6 mpg by 2025.

NGVAmerica submitted comments and recommendations to the agencies, and, while not all of them were accepted, several were. Consequently, NGVAmerica issued a news release praising the agencies for the NGV incentives provided in the final rules.

Under the new rules, manufacturers that produce dedicated and bi-fuel NGVs will receive additional credits for such vehicles since the new rules add to the fuel economy incentives already in place for NGVs by providing temporary greenhouse gas emission credits for model years 2017–2021. The credits reward manufactures for producing NGVs. Each NGV sold counts as 1.6 NGVs in MY 2017–2019, 1.45 in MY 2020, and 1.3 in MY 2021. Since NGVs have lower greenhouse gas emissions than comparable gasoline vehicles, the sales multiplier helps to lower a manufacture’s overall emissions average.

The new rules also finalize changes to existing greenhouse gas regulations for 2012–2016 that will allow NGV bi-fuel manufacturers to make use of “utility factors.” The utility factors are based on the driving range of the NGV and enable manufacturers to substitute a much higher natural gas utilization rate for purposes of the greenhouse gas calculations. The current rules assume a default utilization rate of 50 percent natural gas and 50 percent gasoline for bi-fuel vehicles. Under the new rules, most bi-fuel vehicles will be credited with a much higher natural gas utilization rate, which results in slightly improved greenhouse gas emissions credit for NGVs. The final rules, however, include two conditions not included in the proposed rules. To qualify for the utility factors, the bi-fuel NGV (1) must operate on natural gas until it runs out of natural gas and (2) the vehicle must have a 2:1 driving range on natural gas (go twice as far on natural gas). Another major benefit of the utility factors is that they will be used to measure fuel economy for bi-fuel NGVs beginning with model year 2020. NGVAmerica had requested that the utility factors be used for fuel economy as early as 2012 but the agencies objected to this, arguing their statutory authority would not permit this.

The final rule and supporting document may be viewed at: http://www.epa.gov/oms/climate/regs-light-duty.htm#new1. NGVAmerica has developed a one-page overview of the rules.