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RFF Publishes New Report on Credit Trading

A new report entitled "New Markets for Pollution and Energy Efficiency: Credit Trading under Automobile Greenhouse Gas and Fuel Economy Standards" examines the prospects and implications for credit trading under the new CAFE and GHG rules.  In the report, the authors, Virginia McConnell and Benjamin Leard of Resources for the Future, evaluate the current functionality of the CAFE and GHG credit markets and assess the potential for there to exist well-functioning markets in the future.

Based on their research, the authors make the finding that the trading of credits has been somewhat limited to date for a number of reasons, such as a lack of price transparency and the fact that CAFE and GHG standards, though increasing in stringency, still do not result in noncompliant fleets for most automakers.  The authors predict, however, that as the standards become increasingly more stringent, and as manufacturers begin to utilize more efficient and transparent trading processes (such as the auction platform operated by Mobilis), CAFE and GHG credit markets will likely become more robust in time and help drive costs of compliance down for manufacturers

For a copy of the paper, click here.

ARB Symposium on California’s Development of its Phase 2 Greenhouse Gas Emission Standards for On-Road Heavy-Duty Vehicles

On March 27, 2015, CARB announced that it will hold a symposium on its Phase 2 GHG Emission Standards for On-Road Heavy-Duty Vehicles.  The symposium will be held in Diamond Bar, CA on April 22 from 9 am to 5:30 pm.  Participation via webcast will be available.  For more information about Phase 2 GHG emission standards for on-road heavy-duty vehicles, see http://www.arb.ca.gov/msprog/onroad/caphase2ghg/caphase2ghg.htm.

Questions regarding the symposium should be directed to Krista Fregoso at (916) 445-5035 or [email protected].

EPA Dear Mfr Letter CD-15-04 – Determination and Use of Vehicle Road-Load Force and Dynamometer Settings

On February 23, 2015, EPA published Dear Manufacturer Letter CD-15-04 which discusses the agency’s revised and clarified procedures to be used by vehicle manufacturers in establishing vehicle road-load force and dynamometer settings.  The letter clarifies manufacturer responsibilities when using the allowed flexibilities in determining road-load settings, sets the acceptable road-load force tolerance for production vehicle audits, and highlights consequences for testing compliance vehicles with inaccurate road-load force specifications.

For a copy, click here.

EPA Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975-2014

EPA has published the 2014 version of its Trends Report which the agency refers to as the authoritative reference for CO2 emissions, fuel economy and powertrain technology trends for new personal vehicles in the U.S. The report has been published annually since 1975.  Highlights from the report include:

• Avg. vehicle CO2 emissions rate and fuel economy achieved record levels in MY 2013 and have improved in 8 of the last 9 years;
• Light truck market share increased slightly in MY2013 after several years of volatility;
• Vehicle weight trend is flat and vehicle power trend is increasing more slowly;
• Many new technologies are rapidly gaining market share;
• Consumers have an increasing number of high fuel economy/low CO2 vehicle choices;
• Nearly every manufacturer increased fuel economy and decreased CO2 emissions in MY 2013
• Manufacturers are selling many vehicles today that can meet future CO2 emissions targets

For a copy of the report and related documents, click here.

GHG Emissions Credits Update

On April 25, 2014, EPA published a first of its kind report on light duty vehicle manufacturers' compliance with the agency's GHG emissions standards.  The report provides credit balances before and after credit trades or transfers through the 2012 model year.  For the 2012 model year, the report indicates that with respect to 2012My performance only (i.e., not counting trades and transfers), half of the manufacturers had net credit deficit and that about half the manufacturers used credits from transfers or trades to achieve a positive credit balance for the 2012 model year. 

With regard specifically to credit trading, the report indicates that six manufacturers participated in credit transactions as buyers or sellers of credits. Buyers of credits were Mercedes-Benz, Chrysler and Ferrari.  Sellers were Nissan, Honda and Tesla.  In the report, EPA stated "...this is the first time in an EPA light-duty vehicle emissions standards program that credit trading activity has occurred on such a scale, and it is clear that buying credits may be an important way for some manufacturers to bring their fleet into compliance and an incentive for other manufacturers to bring lower GHG vehicles to market early."  In the report, EPA also stated that "[t]he use of trading provisions in EPA's light-duty GHG program is a historic development, and one that EPA welcomes because we believe it will allow greater GHG reductions, lower compliance costs, and greater consumer choice." 

Based on the data contained in the report and the comments made by EPA, it appears that credit trading is here for the long haul.  Dale Kardos of Mobilis Trading believes that manufacturers looking to procure credits in the future will be able to obtain them at the least possible cost by running reverse auctions via the Mobilis Trading auction platform where a large supply of credits from multiple manufacturers will yield competitive market-based pricing.  He similarly believes that manufacturers with credits to sell can earn the most from their credits by initiating forward auctions via Mobilis where bidding from multiple buyers will ensure the best price possible at any given point in time.   

The new report from EPA can be found on the EPA website here.  Detailed credit balance data for each manufacturer for model years 2009-2012 is also available from EPA here.

CARB Board Hearing to Address Heavy Duty Vehicles and Engines

This week, CARB announced that on December 12-13, 2013 it will conduct a public hearing to consider proposed GHG regulations for medium- and heavy-duty engines and vehicles, optional low NOx emission standards for heavy-duty engines, amendments to the tractor-trailer GHG regulation, amendments to the diesel-fueled commercial motor vehicle idling rule, and certification procedures for heavy-duty hybrid-electric vehicles. Details on all five proposals are contained in the Initial Statement of Reasons document which is available online here.  Documents specifically relating to the GHG rulemaking are available here.  Written comments are due by noon on Dec. 11^th.

Status of Early Credit Program for Model Years 2009-2011

EPA has published a report, “Status of Early Credit Program for Model Years 2009-2011” summarizing and explaining the credits reported by each manufacturer in the 2009-2011 model years.  The report also explains the options for earning and using early credits. According to EPA, the report is intended to be used as a reference for users of the early credits data, which they are making available in formats appropriate for importing into spreadsheets or database applications.  For a copy of the report, click Download EPA 2009-to-2011-early-credit-report-25mar13. 

Manufacturers interested in trading GHG credits should contact Dale Kardos at Mobilis Trading.

Energy Department Study Examines Potential to Reduce Transportation Petroleum Use and Carbon Emissions

On March 14, 2013, DOE, the National Renewable Energy Laboratory, and Argonne National Laboratory released a new study that finds the United States has the potential to reduce petroleum use and GHG emissions in the transportation sector by more than 80% by 2050. The Transportation Energy Futures (TEF) study identifies possible paths to a low-carbon, low-petroleum future in the U.S. transportation sector.

The transportation sector accounts for 71% of total U.S. petroleum consumption and 33% of our nation's total carbon emissions. The TEF study assesses the avenues and identifies possible strategies to achieve deep cuts in petroleum use and GHG emissions in this sector. According to the study, achieving deep reductions will require an inclusive approach, combining strategies to increase fuel economy for all types of vehicles, reduce use of transportation while providing comparable service, and expand use of low-carbon fuels, including biofuels, electricity, and hydrogen.

The nine reports that are part of the TEF study include:

Light Duty Vehicles (Personal Cars and Light Trucks)

• Deployment pathways issues including the development of, transition to, and challenges of advanced technology
• Non-cost barriers to advanced vehicles such as range anxiety, refueling availability, technology reliability, and consumer familiarity.

Non-Light-Duty Vehicles (Trucks, Rail, Aircraft, and Other Modes)

• Opportunities to improve non-light-duty vehicle efficiency for medium- and heavy-duty trucks, off-road vehicles and equipment, aircraft, marine vessels, and railways
• Opportunities for switching modes of transporting freight, such as moving freight from trucks to rail and ships.

Fuels

• Infrastructure expansion required for deployment of low-GHG fuels, including electricity, biofuels, hydrogen, and natural gas
• Balance of biomass resource demand and supply, including allocations for various transportation fuels, electric generation, and other applications.

Transportation Demand

• Opportunities to save energy and abate GHG emissions through community development and built environment strategies
• Trip reduction through mass transit, tele-working, tele-shopping, carpooling, and improvement of vehicle performance through efficient driving
• Freight demand patterns, including trends in operational needs and projections of future use levels.

Click here for more information. 

CARB Heavy-duty Vehicle Public Workshop

On March 11, 2013, CARB will hold a public workshop to discuss proposals for several regulations and regulation amendments related to on-road heavy-duty vehicles.    At this workshop, staff will be soliciting input on the following proposals: 

- Adopting a new regulation to harmonize with the GHG Emissions Standards for Medium- and Heavy-Duty Engines and Vehicles that the U.S. EPA adopted in 2011;

- Making amendments to ARB’s existing Heavy-Duty Vehicle GHG Emission Reduction Regulation (Tractor-Trailer GHG regulation) to align with the proposed new regulation above;

- Adopting a new set of optional oxides of nitrogen (NOx) standards for heavy-duty vehicle engines more stringent than the current 2010 model year standard; and

- Making amendments to the Airborne Toxic Control Measure (ATCM) to Limit Diesel-fueled Commercial Motor Vehicle Idling to expand compliance responsibility.

For a copy of the workshop notice, click here.

California Advanced Clean Cars Program

California's Office of Administrative Law approved the Air Resources Board's (ARB) final rule on the "GHG Conforming" Amendments on December 31, 2012. This rule allows manufacturers to comply with ARB's MY 2017-2025 GHG standards based on compliance with the federal GHG program.