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Federal Register / Vol. 86, No. 169 / Friday, September 3, 2021 / Proposed Rules
lotter on DSK11XQN23PROD with PROPOSALS2

and adjustments for advanced technologies in full-size pickup trucks, including adjustments for mild and strong hybrid electric full-size pickup trucks and performance-based incentives in full-size pickup trucks.
The fuel consumption improvement benefits of these technologies measured by various testing methods can be used by manufacturers to increase the CAFE
performance of their fleets.
a Available Credit Flexibilities Under NHTSA regulations, credit holders including, but not limited to manufacturers have credit accounts with NHTSA where they can, hold credits, and use them to achieve compliance with CAFE standards, by carrying forward, carrying back, or transferring credits across compliance categories, subject to several restrictions. Manufacturers with excess credits in their accounts can also trade credits to other manufacturers, who may use those credits to resolve a shortfall currently or in a future model year. A
credit may also be cancelled before its expiration date if the credit holder so chooses. Traded and transferred credits are subject to an adjustment factor to ensure total oil savings are preserved.526
Credit carryback means that manufacturers are able to use recently earned credits to offset a deficit that had accrued in a prior model year, while credit carry-forward means that manufacturers can bank credits and use them towards compliance in future model years. EPCA, as amended by EISA, allows manufacturers to carryback credits for up to three model years, and to carry-forward credits for up to five model years.527 Credits expire the model year after which the credits may no longer be used to achieve compliance with fuel economy regulations.528
Manufacturers seeking to use carryback credits must submit a carryback plan to NHTSA, for NHTSAs review and approval, demonstrating their ability to earn sufficient credits in future MYs that can be carried back to resolve the current MYs credit shortfall.
Credit trading refers to the ability of manufacturers or persons to sell credits to, or purchase credits from, one another while credit transfer means the ability to transfer credit between a manufacturers compliance fleets to resolve a credit shortfall. EISA gave NHTSA discretion to establish by regulation a CAFE credit trading program, to allow credits to be traded between vehicle manufacturers, now 526 See
Section VII.B.3.b for details.
U.S.C. 32903a.
528 49 CFR 536.3b.
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codified at 49 CFR part 536.529 EISA
prohibits manufacturers from using traded credits to meet the minimum domestic passenger car CAFE
standard.530
b Fuel Savings Adjustment Factor Under NHTSAs credit trading regulations, a fuel savings adjustment factor is applied when trading occurs between manufacturers and those credits are used, or when a manufacturer transfers credits between its compliance fleets and those credits are used, but not when a manufacturer carries credits forward or backwards within the same fleet.531
NHTSA is including in this proposal a restoration of certain definitions that are part of the adjustment factor equation that had been inadvertently deleted in the 2020 final rule. The 2020
final rule had intended to add a sentence to the adjustment factor term in 49 CFR 536.4c, simply to make clear that the figure should be rounded to four decimal places. While the 2020
final rule implemented this change, the amendatory instruction for doing so unintentionally deleted several other definitions from that paragraph. NHTSA
had not intended to modify or delete those definitions, so they are simply being added back into the paragraph.
c VMT Estimates for Fuel Savings Adjustment Factor NHTSA uses VMT estimates as part of its fuel savings adjustment equation.
Including VMT is important as fuel consumption is directly related to vehicle use, and in order to ensure trading credits between fleets preserves oil savings, VMT must be considered.532
For MYs 2017 and later, NHTSA
finalized VMT values of 195,264 miles for passenger car credits, and 225,865
miles for light truck credits.533
d Fuel Economy Calculations for Dual and Alternative Fueled Vehicles As discussed at length in prior rulemakings, EPCA, as amended by EISA, encouraged manufacturers to build alternative-fueled and dualor flexiblefueled vehicles by providing special fuel economy calculations for dedicated that is, 100 percent alternative fueled vehicles and dualfueled that is, capable of running on either the alternative fuel or gasoline/
diesel vehicles.
529 49

U.S.C. 32903f.
U.S.C. 32903f2.
531 See Section III.C for details about carry forward and back credits.
532 See 49 CFR 536.4c.
533 77 FR 63130 Oct. 15, 2012.
530 49

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Dedicated alternative-fuel automobiles include electric, fuel cell, and compressed natural gas vehicles, among others. The statutory provisions for dedicated alternative fuel vehicles in 49 U.S.C. 32905a state that the fuel economy of any dedicated automobile manufactured after MY 1992 shall be measured based on the fuel content of the alternative fuel used to operate the automobile. A gallon of liquid alternative fuel used to operate a dedicated automobile is deemed to contain 0.15 gallon of fuel. There are no limits or phase-out for this special fuel economy calculation within the statute.
EPCAs statutory incentive for dualfueled vehicles at 49 U.S.C. 32906 and the measurement methodology for dualfueled vehicles at 49 U.S.C. 32905b and d expired after MY 2019. In the 2012 final rule, NHTSA and EPA
concluded that it would be inappropriate and contrary to the intent of EPCA/EISA to measure duel-fueled vehicles fuel economy like that of conventional gasoline vehicles with no recognition of their alternative fuel capability. The agencies determined that for MY 2020 and later vehicles, the general statutory provisions authorizing EPA to establish testing and calculation procedures provide discretion to set the CAFE calculation procedures for those vehicles. The methodology for EPAs approach is outlined in the 2012 final rule for MYs 2017 and later at 77 FR
63128 Oct. 15, 2012.
e Flexibilities for Air-Conditioning Efficiency, Off-Cycle Technologies, and Full-Size Pickup Trucks 1 Incentives for Advanced Technologies in Full-Size Pickup Trucks Under its EPCA authority for CAFE
and under its CAA authority for GHGs, EPA established fuel consumption improvement values FCIVs for manufacturers that hybridize a significant quantity of their full-size pickup trucks, or that use other technologies that significantly reduce fuel consumption of these full-sized pickup trucks. More specifically, CAFE
FCIVs were made available to manufacturers that produce full-size pickup trucks with Mild HEV or Strong HEV technology, provided the percentage of production with the technology is greater than specified percentages.534 In addition, CAFE FCIVs were made available for manufacturers that produce full-size pickups with other technologies that enable full-size 534 77

E:FRFM03SEP2.SGM

FR 62651 Oct. 15, 2012.

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