EPA proposes vehicle emissions reduction program

By Erin Voegele | November 11, 2009
On Sept. 28 the U.S. EPA and National Highway Traffic Safety Administration published their proposed rulemaking to establish light-duty vehicle greenhouse gas (GHG) emission standards and corporate average fuel economy (CAFE) standards in the Federal Register. In the rulemaking, the EPA proposes that certain GHG emission standards be implemented under the Clean Air Act, while the NHTSA proposes new CAFE standards be implemented under the Energy Policy and Conservation Act. When finalized, the proposed rule will likely impact the flexible fuel vehicle (FFV) industry by eventually requiring FFV manufacturers to demonstrate actual use of alternative fuels in order to earn credit toward meeting GHG reduction standards.

The CAFE program provides incentives for automobile manufacturers to produce FFVs and dedicated alternative fuel vehicles. Dedicated alternative fuel vehicles are capable of operating only an alternative fuel, such as compressed natural gas, but not conventional fuel. Most FFVs are designed to operate on E85 and gasoline.

Under the CAFE program, the production of FFVs provides credits toward meeting the required standards. However, the EPCA incrementally phases out these credits through model year (MY) 2019, after which they are no longer available to help demonstrate CAFE compliance. Credits for dedicated alternative fuel vehicles, however, are not phased out.
For its GHG reduction program, EPA is proposing to allow FFV credits to be generated in the same way as they are generated under the CAFE program for MY 2012 through MY 2015. After this time, FFV credits would only be allowed when the vehicle manufacturer can demonstrate that alternative fuel is actually being used in the FFVs.

Under the EPCA, the availability of the FFV credit is not based on actual use of alternative fuel, such as E85. Rather, it is assumed that a FFV operates 50 percent of the time on alternative fuel and 50 percent of the time on conventional fuel. Emissions for the vehicle are computed using an equation established in the EPCA that results in a carbon dioxide emission value that is lower than the actual emissions level. The EPA is proposing to use the EPCA-sourced equation to establish credits for the GHG reduction program through MY 2015. Starting with MY 2016, the vehicle manufacturer would be required to demonstrate how much alternative fuel is actually being used by an FFV in order to gain extra credits towards meeting the required standard. In addition, alternative fuel would be used in emissions testing for FFVs.

In the proposed rulemaking, the EPA cites several options that could be used to allow vehicle manufacturers to demonstrate use of alternative fuel. One option would be a top-down method based on national E85 usage levels. Under this approach, national E85 sales volumes and national FFV sales would be used to prorate E85 use based on manufacturers' sales volumes and FFVs already in use. The EPA would use its emission inventory MOVES model to analyze vehicle miles travelled by year for all FFVs and use vehicles miles traveled ratios and E85 sales to assign E85 usage to each vehicle. These figures would be adjusted to reflect new data on an annual basis.

According to supporting information in the proposed rule, the ability to generate GHG credits through the demonstration of alternative fuel use would provide an incentive for using the fuel. In addition, the EPA stated there is currently little incentive for vehicle manufacturers to optimize FFVs for alternative fuel use. However, this program could incent car makers to optimize FFV engines and calibration to provide additional carbon dioxide reductions.

The proposed rule is open for public comments until Nov. 27. While nearly 3,000 comments had been posted to the docket by late October, the Big Three U.S. automakers had yet to comment.