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Executive Order on Strengthening American Leadership in Clean Cars and Trucks

On August 5, 2021, President Biden issued an Executive Oder that outlines a target to make half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles.  The Executive Order lays out an aggressive schedule for development of fuel efficiency and multi-pollutant emissions standards through model year 2030 for light-duty vehicles and for medium- and heavy-duty vehicles starting as early as model year 2027.  

Specifically, the EO directs EPA to do the following:

• Establish a rule to establish new multi-pollutant emissions standards, including for greenhouse gas emissions, for light- and medium-duty vehicles beginning with model year 2027 and extending through and including at least model year 2030. 
• To begin working on a rulemaking to establish new oxides of nitrogen standards for heavy-duty engines and vehicles beginning with model year 2027 and extending through and including at least model year 2030. 
• To consider updating the existing greenhouse gas emissions standards for heavy-duty engines and vehicles beginning with model year 2027 and extending through and including at least model year 2029.
• To consider beginning work on a rulemaking to establish new greenhouse gas emissions standards for heavy-duty engines and vehicles to begin as soon as model year 2030.

It directs DOT to:

• to establish new fuel economy standards for passenger cars and light-duty trucks beginning with model year 2027 and extending through and including at least model year 2030.
• begin work on a rulemaking under EISA to establish new fuel efficiency standards for heavy-duty pickup trucks and vans beginning with model year 2028 and extending through and including at least model year 2030.
• To consider beginning work on a rulemaking under EISA to establish new fuel efficiency standards for medium- and heavy-duty engines and vehicles to begin as soon as model year 2030.

The EO directs the EPA to establish the new light vehicle standards for 2027-2030 by the end of 2022 and it gives the agencies until July of 2024 to establish the heavy duty standards discussed in the EO.

Regulatory and Legislative Tracking Reports for Vehicle Manufacturers and Suppliers

Since 1999, Kardos & Associates LLC has supplied the auto industry with the most comprehensive regulatory and legislative tracking reports available. We currently offer clients the following:

Motor Vehicle Safety & Emissions Regulatory Update (the REG UPDATE)

The REG UPDATE has been tracking US and Canadian regulatory activity impacting the auto industry for over twenty years. Regulations developed by the NHTSA, FMCSA, EPA, FCC, CARB, Transport Canada, and Environment Canada are the focus. For each rulemaking, the Reg Update provides a description of the rulemaking, comment deadlines, effective dates, a docket reference, and links to documents available online. Deadlines and critical path items are color-coded so that you can quickly identify what’s new and important. In addition to being an excellent tool for tracking regulatory activity, the Reg Update is a great archive of past actions. The report contains information on virtually every rulemaking affecting automakers from the past two decades. Approximately 400 pages in length.

U.S. Safety & Fuel Economy Regulatory & Legislative Update
The U.S. Safety & Fuel Economy Regulatory & Legislative Update provides a snapshot of the past month’s legislative and regulatory activities relating to safety, emissions and fuel economy. The report provides brief summaries of notices issued by DOT, EPA, CARB and others. With regard to federal legislation, the report covers newly introduced bills, information on committee hearings, etc. Activities at the state level pertaining to emerging technologies (e.g., automated vehicles, advance driver assistance systems, EVs and EV infrastructure, etc.) are also covered.

Federal Legislation Tracking Report
Our legislative tracking report focuses on matters relating to environment and energy, safety and fuel economy/climate change. The report covers two years-worth of bills (the length of each Congressional session) and includes summaries and status updates for each tracked bill. Links to bill text and related information are provided.

All of our reports are distributed monthly via email as a PDF. Subscribers also get access to an online archive of past reports.

For pricing, contact Dale Kardos at (202) 3064997 or [email protected]. For more information about Kardos & Associates LLC, see www.kardosllc.com.

For a PDF of this information, click here.

Medium- and Heavy-Duty Truck Fuel Economy

The National Academy of Sciences (NAS) has released the Phase Two Final Report discussing fuel consumption and GHG emissions for medium- and heavy-duty vehicles (downloadable here). The report focuses on a possible third phase of regulations that could be promulgated for the post-2027 timeframe.   Delivered to its sponsor (the US DOT) last October, the report relies on work conducted between 2014 and the end of 2017.  The report was originally to have been delivered by March 2018, however, a prolonged lapse of funding from the US DOT resulted in an extended delay.

SAFE 2 Final Rule

On March 31, 2020, the SAFE 2 joint final rule was issued by EPA and NHTSA.  Per the final rule, the CAFE and CO2 emissions standards will increase in stringency at 1.5 percent per year from MY 2020 levels over MYs 2021-2026.  Under the old rule, the standards would have increased 5% per year.  Per the rule, EPA’s standards are projected to require, on an average industry fleet-wide basis, 201 grams per mile (g/mi) of CO2 in model year 2030, while NHTSA’s standards are projected to require, on an average industry fleet-wide basis, 40.5 miles per gallon (mpg) in model year 2030.  Some important incentives for electrification are being eliminated. Compliance multipliers for BEVs and PHEVs were not extended as requested by automakers; the last year for these incentives remains MY 2021. Incentive credits for strong hybrid pickup trucks and for pickup trucks with significant over-compliance is discontinued after MY 2021 (was MY 2025). Conversely, dedicated and dual-fuel natural gas vehicles receive a new 2x compliance multiplier starting MY22.

A copy of the final rule and associated documents can be found here.

Docket ref: NHTSA-2018-0067; EPA-HQ-OAR-2018-0283.

Automakers Announce New Voluntary Framework with California on Greenhouse Gas Regulations

On July 25, 2019 Ford, Honda, Volkswagen Group of America and BMW of North America announced terms agreed to by the CARB to preserve a single 50-state framework for the regulation of GHG emissions from vehicles. These terms will provide regulatory stability, preserve vehicle affordability for customers, reduce compliance costs and result in increased environmental benefits.

The agreement with CARB is available to all automakers.

The terms are as follows:

• Revised Greenhouse Gas Standards:  GHG standards, beginning in the 2022 model year (MY) and extending through the 2026 MY, with increasing stringency at a nationwide average annual rate of 3.7% (year-over-year). Of the 3.7% annual stringency, 1% can be achieved using the advanced technology multiplier credits, below.
• Appropriate Flexibilities to Promote Zero Emission Technology:  Continue current advanced technology multipliers that now expire after MY 2021, extending them through MY 2024 at the current 2.0x for Battery Electric and Fuel Cell Electric Vehicles (BEV/FCEV), and 1.6x for Plug-in Hybrid Electric Vehicles (PHEV), tapering off at the current MY 2020 and MY 2021 levels in MY 2025 and MY 2026, respectively. 
• Simplify Accounting:  Remove the requirement to account for upstream emissions of fuels, as these can be addressed by other programs.
• Increase Innovation:  Raise the current cap on off-cycle menu credits, which account for actions taken outside the formal test cycle framework, from 10 grams per mile to 15 grams per mile starting in MY 2020.
• Streamlining and Process Improvements: Improve the off-cycle credit program to facilitate timely review and decision-making regarding the approval of new off-cycle technologies. 
• Recognize California’s Authority: Participating companies are choosing to pursue a voluntary agreement in which California accepts these terms as compliance with its program, given its authority, rather than challenge California’s GHG and ZEV programs.

CARB and Canada agreement to advance cleaner vehicles and fuels

On June 26, 2019, CARB issued a press release announcing that Canada’s Minister of Environment and Climate Change, Catherine McKenna, and the Chair of the California Air Resources Board, Mary Nichols signed a new cooperation agreement to advance cleaner vehicles and fuels.

The Memorandum of Understanding commits both governments to work together on developing their respective regulations to cut greenhouse gas emissions from light-duty vehicles, such as those currently in effect in Canada, California and the 13 U.S. states that have adopted California’s standards.  Canada is currently reviewing its light-duty vehicle standards to help make sure people can drive fuel-efficient cars that cut pollution and reduce fuel costs.

The partnership will also see Canada and California work together to accelerate the adoption of zero-emission vehicles like electric cars.

The two jurisdictions will also share technical information and best practices in regulating cleaner fuels, as California does today though its Low-Carbon Fuel Standard.

The cooperation will take a variety of forms, including establishing a working group that meets annually, sharing policy information and program design, providing capacity building and technical support, exchanges of personnel, cooperative research and development, and joint organization of symposia and trainings. The two regulatory agencies will also work together on emissions testing and enforcement of vehicle regulations.

For a copy of the press release, click here.

CAFE Penalties

On March 27, 2018, NHTSA announced that it is proposing to retain the current civil penalty rate in 49 U.S.C. 32912(b) of $5.50 per tenth of a mile per gallon for automobile manufacturers that do not meet applicable CAFE standards and are unable to offset such a deficit with compliance credits. NHTSA’s proposal is based on its tentative determination that the CAFE civil penalty rate is not a “civil monetary penalty,” as defined by the 2015 Act, that must be adjusted for inflation. NHTSA’s previous Federal Register notices on its inflation adjustments under the 2015 Act did not consider whether the CAFE civil penalty rate fit the definition of a “civil monetary penalty” subject to adjustment under the 2015 Act, instead proceeding—without analysis—as if the 2015 Act applied to the CAFE civil penalty rate. After taking the opportunity to fully analyze the issue, NHTSA tentatively concludes that the CAFE civil penalty rate is not covered by the 2015 Act and seeks comment on four ways that the provisions of the 2015 Act could be best approached.

Comments on the notice will be due 30 days after the notice is published in the Federal Register.  A draft version is available here.

EPA Tier 3 Certification Fuel Impacts Test Program Report

On January 11, 2018, EPA released a report entitled, "Tier 3 Certification Fuel Impacts Test Program." The test program discussed in this report was initiated to compare Tier 2 certification fuel, the fuel on which the Phase 1 and Phase 2 GHG and CAFE standards were established for light-duty and heavy duty-vehicles, with the new Tier 3 certification fuel from the Tier 3 program. The test program found an overall fuel economy reduction of 1.76% for the FTP and 2.42% for the HFET for Tier 3 compared to Tier 2 test fuel.  It also found that the overall test fleet showed a reduction in CO2 of 1.78% for the FTP and 1.02% for the HFET.  The program results will be used as a basis for test procedure adjustments to ensure consistent stringency of GHG and fuel economy standards as vehicle certification makes the transition to Tier 3 test fuel.  Additional information on the testing program is available here

Fuel Economy and GHG Performance

On Jan. 11, 2018, EPA issued two annual reports that provide information on fuel economy and greenhouse gas emissions from light duty vehicles in the United States.  

The Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975-2017 report is the authoritative reference for real world fuel economy, technology trends and tailpipe carbon dioxide emissions, for new personal vehicles sold in the U.S. every year since 1975.  The report shows fuel economy for the U.S. fleet continues to improve.  Model year (MY) 2016 vehicle fuel economy was 24.7 mpg, slightly higher than MY 2015, and a record high overall. Since MY 2004, fuel economy and CO2 emissions have improved in ten out of twelve years.

The Manufacturer Performance Report assesses compliance performance for individual automakers and for the U.S. fleet as a whole with the greenhouse gas emissions standards for light duty vehicles.  

Trump's NHTSA

I am in the regulatory affairs business so every year around this time, I put together a list of NHTSA regulations that I think will be issued in the coming year.  Each year I somehow manage to get it wrong and in 2016, things were no different.  Only a handful of my predictions came true.  Yes, rules concerning V2V communications, minimum sound requirements for electric vehicles, fuel consumption rule for heavy trucks were issued as expected.  Many other rules, however, addressing important topics like child restraint side impact testing, bus rollover, and EDRs never made it out. 

What happened in 2016 is that the Administrator called an audible and ran an end-run around regular order and pursued a number of non-regulatory measures – things like the automatic emergency braking agreement, automated vehicle guidance, distraction guidelines for portable devices, cybersecurity guidelines, and a major upgrade to the New Car Assessment Program (NCAP).  Of these initiatives, only the AEB agreement was finalized and now, as a result of the recent lawsuit filed by consumer and safety advocates who think that AEB should be a mandatory, even it may be in jeopardy.

As we prepare for a new era of regulation under Donald Trump, folks are now wondering what will become of these initiatives and the backlog of rules.  To get a hint at how 2017 will play out, we should probably take a look at what transpired back in January of 2001 when George W. Bush took office.  It’s been almost sixteen years since Andy Card (George W. Bush’s Chief of Staff) issued his January 20, 2001 memorandum to heads of agencies advising them not to send any new regulations to the Office of the Federal Register until they could be reviewed by the new administration.   Those of us who were around back then know that this memo had a chilling effect on regulatory activity.  Consequently, in 2001, only a few rules were issued by NHTSA.  Not-so-critical issues like headlight glare and trunk entrapment were addressed.   

If history repeats itself, Reince Priebus will issue a similar directive on January 20, 2017 and there will be few, if any, new regulations published in the year to come. No shocker there.  Afterall, Trump campaigned on eliminating regulations.  But what about all those non-regulatory actions Mark Rosekind initiated in 2016?  What will become of those?  As proposed, the NCAP upgrade will incentivize manufacturers to install important crash avoidance technologies such as forward collision warning, lane departure warning, blind spot detection, semi-automatic headlamp beam switching, rear automatic, and pedestrian automatic emergency braking.  But the NCAP upgrade will also force manufacturers to redesign their vehicles to comply with new oblique crash test and pedestrian protection requirements.  It is fine for NHTSA to push the adoption of crash avoidance technology via NCAP but crash test standards and new injury criteria are probably best pursued via traditional rulemaking procedures.

Then there is NHTSA’s automated vehicle policy.   Pretty much everyone involved in this space would like to see leadership at the federal level.  Every month that goes by where we have a federal policy that lacks the clarity stakeholders require presents another opportunity for state DOTs and their legislatures to create a patchwork of state requirements that could stifle innovation and delay the realization of benefits.  Leadership and swift action in this area is needed.  We cannot afford to have state agencies issuing rule after rule while the new administration does nothing.  We will also need leadership from NHTSA on the V2V communication rule as this is another complex undertaking that requires the support of the federal government.  With distraction rampant and fatalities on the rise in the U.S., we need a V2V framework that will make it possible for important safety applications to be delivered in the future.  If the agency puts the V2V rule on hold or the FCC takes back the spectrum that was granted to our industry, live saving applications life Left Turn Assist and Intersection Movement Assist may never be realized.

So, as we prepare to say goodbye to 2016 and ring in the new year, I hope that the new administration will resolve to follow regular order and take the actions necessary to support the testing and deployment of promising new technological safety advancements.

Dale Kardos

President, Dale Kardos & Associates, Inc.

About Dale Kardos: Dale Kardos is a regulatory affairs consultant based in Washington, DC.  For over 20 years, his firm Dale Kardos & Associates, Inc. has been assisting vehicle OEMs, suppliers, automotive trade associations and others in confronting environment, energy and safety regulation and legislation.  He is also the founder of Mobilis Trading LLC which offers an online auction platform for buying and selling regulatory compliance credits.