In 2012, EPA and NHTSA finalized the second set of national program standards for model year 2017-2025 light-duty vehicles with the cooperation of major automakers and the state of California. These standards aimed to raise the fleet-wide equivalent fuel economy to up to 54.5 mpg for model year 2025, nearly double the 27.5 mpg required for Model Year 2010 (before the first set of national program standards were adopted). Canada also adopted standards aligned with the second set of national program standards through Model Year 2025.
The second set of national program standards included features aimed at improving flexibility, making compliance more cost-effective and encouraging technological innovation. These features for greater flexibility included:
- A credit trading system;
- Possibility of compliance for air conditioning improvements;
- Qualifying off-cycle credits (like solar panels on hybrid vehicles, active aerodynamics, or adaptive cruise control) for compliance;
- Alternative Vehicle Incentives; and
- Inclusion of truck hybridization for compliance.
Despite this history, in the August 2018 proposed rule, NHTSA argues that the 1975 Energy Policy and Conservation Act preempts California’s authority to regulate tailpipe CO2 emissions through the LEV, ZEV, and Advanced Clean Cars programs.
Medium- and Heavy-Duty Vehicles
Medium- and heavy-duty trucks make up only 5 percent of vehicles on the road but account for about 20 percent of U.S. transportation emissions. This category includes tractor-trailers, large pickups and vans, delivery trucks, buses, and garbage trucks.
Phase 2 standards developed by EPA and NHTSA currently apply to semi-trucks, large pickup trucks, vans, and all buses and work trucks of model years 2021-2027. Phase 2 standards for box trailers that would have gone into effect in 2018 have been stayed by court order. EPA has proposed to repeal Phase 2 emissions standards for heavy-duty glider vehicles, glider engines, and glider kits.
History of Medium- and Heavy-Duty Standards
In 2007, Congress directed the Department of Transportation to establish efficiency standards for medium- and heavy-duty vehicles after consultation with the Department of Energy and EPA. In 2011, EPA and NHTSA established the heavy-duty national program (known as the Phase 1 standards), the world’s first harmonized GHG emissions standards and fuel economy standards for on-road heavy-duty vehicles of model years 2014-2018. The Phase 1 standards applied to combination tractors, heavy-duty pickup trucks and vans, and vocational vehicles. Some of the standards are exclusively within EPA’s jurisdiction, such as hydrofluorocarbon standards limiting leakage from vehicle air conditioning systems from certain heavy-duty vehicles, and nitrous oxide and methane emissions standards for pickup trucks and vans and heavy-duty engines. The Phase 1 standards did not apply to commercial trailers.
In August 2016, EPA and NHTSA finalized the Phase 2 standards for medium and heavy-duty vehicles. The Phase 2 standards were designed to apply to certain trailers of model years 2018 – 2027 and to semi-trucks, large pickup trucks, vans, and all buses and work trucks of model years 2021-2027.
The Phase 2 standards are divided into five segments and were designed to help provide manufacturers with flexibility.
- Combination Tractors: Class 7 and 8 combination tractors and their engines should reduce fuel consumption by 25 percent from Phase 1 standard levels by model year 2027.
- Trailers: Trailers should reduce fuel consumption by 9 percent by model year 2027, including by improving aerodynamics, reducing weight, and addressing tire pressure and resistance.
- Heavy-Duty Pickup Trucks and Vans: These vehicles should reduce fuel consumption by 16 percent by model year 2027.
- Vocational Vehicles: Delivery trucks, buses, garbage trucks should reduce fuel consumption by 24 percent by model year 2027.
- Engine Standards: Tractor engines should reduce carbon dioxide emissions by 5 percent, and vocational diesel and gasoline engines should reduce carbon dioxide by 4 percent from Phase 1 standard levels by improving air handling, reducing engine friction, or improving emissions after-treatment technologies and waste heat recovery.
To provide manufacturers flexibilities, the program allows averaging, banking, and trading among regulated parties in order to speed up implementation of new technologies and reduce the cost of compliance.
Penalties for Failing to Meet CAFE Standards
In addition to substantive changes to the federal vehicle standards, there may also be changes to how the program is enforced. In March 2018, NHTSA proposed retaining the existing penalty of $5.50 per tenth of a mile per gallon for auto makers that fail to meet the CAFE standards, rather than allowing a scheduled increase to $14 per tenth of a mile per gallon to account for inflation.
In May 2018, a multi-state group led by California and New York expressed opposition to this proposal. Participants included California, Delaware, the District of Columbia, Illinois, Iowa, Maryland, Massachusetts, New Jersey, New York, Oregon, Virginia, Vermont and Washington. They emphasized that without a robust penalty, automakers will not have an appropriate incentive to manufacture fuel-efficient cars.