GHG regs fuel need for infrastructure

By Holly Jessen | May 21, 2010
The first-ever U.S. regulation of greenhouse gas (GHG) emissions has fueled an even greater urgency to expand E85 infrastructure.

April 1, the U.S. EPA and the Department of Transportation's National Highway Traffic Safety Administration announced a program to regulate GHG emissions and fuel economy in light-duty vehicles. It was announced at that time that automakers can continue to get credits for making flex-fuel vehicles (FFV) through 2015, after which it must be shown that the fuel is being utilized.

Currently, there are more than 7 million FFVs on the roadmore than any other type of alternate fuel vehicle, said Charles Territo, spokesperson for the Alliance of Automobile Manufacturers, which represents 11 car and light truck manufacturers, including the Big Three. With the phase-out date looming, it's important that consumers have access to E85, Territo said. Otherwise, without the FFV credit or the ability to prove that E85 is being utilized, manufacturers won't have the incentive to offer those types of vehicles.

President Barack Obama announced in May 2009 that a national program would be established to reduce GHG emissions and improve fuel economy. The final rule was a joint project, with the EPA finalizing GHG emissions and NHTSA finalizing its corporate average fuel economy (CAFE) standards. It applies to passenger cars, light-duty trucks, and medium-duty passenger vehicles, for model years 2012 through 2016. These vehicles will be required to meet an estimated combined average emissions level of 250 grams of CO2 per mile. That's equal to a fuel economy of 35.5 miles per gallon, if the industry met this reduction through fuel economy improvements alone. The new standards are expected to gut GHG emissions by about 960 million metric tons and 1.8 billion barrels of oil.

Under CAFE, the maximum increase for FFV credits is an additional 1.2 miles per gallon for vehicles years 1993 to 2014, according to information from NHTSA. After 2014, the FFV credits decrease by 0.2 mpg each yearmeaning there's a 1.0 mpg credit in 2015 model year and 0.8 mpg credit in 2016 model year. By model year 2019, there are no more credits. In the final rule, the EPA provides methodology to calculate the national usage of all alternative fuels. However, if a manufacturer believes its vehicles use more alternative fuels than the national average it can go after greater credits by providing a basis for that belief.

According to an EPA fact sheet, mobile sources, including certain off-highway sources, were responsible for 31 percent of all GHG emissions in 2007 in the U.S. Transportation sources, which have been the fastest growing source of GHGs since 1990, accounted for 28 percent. In addition, in the same year, the CO2 emissions from light-duty vehicles represented about 94 percent of total transportation GHG emissions.

The changes will come at an estimated cost of $52 billion to automakers. The net benefit, however, was estimated at $240 billion due to reduced gasoline use and lower emissions. Other benefits mentioned by the EPA include decreased CO2 and particulate matter, improved energy security and less frequent refueling. Consumers will see a $985 increase in vehicle prices by 2016, however, vehicle owners will get that back in an average of three years due to increased fuel efficiencies, EPA administrator Lisa Jackson said. The payback should be sooner when the vehicle is purchased on an extended payment plan. The average consumer who purchases a 2016 vehicle should save $3,000 during the life of the car, the EPA said.

The national program gives auto makers a single set of regulations so it can build a light-duty fleet that satisfies all requirements on the federal and state level. That's good news for the Alliance of Automobile Manufacturers. A year ago the auto industry was facing a "regulatory maze," said Dave McCurdy, president and CEO of the group. NHTSA was working on new fuel economy standards required by the Energy Independence and Security Act of 2007 and the EPA was preparing GHG standards under the Clean Air Act. To make it even more complicated, 14 states, including California, were planning their own state-specific programs. "When our engineers struggle with changing or conflicting laws, it derails efforts to introduce new technologies with long-term research and development timeframes," he said. "The national program announced makes sense for consumers, for government policymakers and for automakers."

The group said the new regulations will result in a 30 percent decrease in CO2 emissions and a 40 percent increase in fuel economy. "America needs a roadmap to reduced dependence on foreign oil and greenhouse gases, and only the federal government can play this role," McCurdy said. "The federal government has laid out a course of action through 2016, and now we need to work on 2017 and beyond."