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Federal Register / Vol. 86, No. 169 / Friday, September 3, 2021 / Proposed Rules
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but those improvements are not fully reflected on the two-cycle test. EPA
established this alternative for a manufacturer to demonstrate the benefits of off-cycle technologies using 5-cycle testing. The additional emissions test allows emission benefits to be demonstrated over some elements of real-world driving not captured by the two-cycle CO2 compliance tests including high speeds, rapid accelerations, hot temperatures, and cold temperatures. Under this pathway, manufacturers submit test data to EPA, and EPA determines whether there is sufficient technical basis to approve the off-cycle credits. No public comment period is required for manufacturers seeking credits using the EPA menu or using 5-cycle testing.
The third pathway allows manufacturers to seek EPA review, through a notice and comment process, to use an alternative methodology other than the menu or 5-cycle methodology for determining the off-cycle technology CO2 credits.546 Manufacturers must provide supporting data on a case-bycase basis demonstrating the benefits of the off-cycle technology on their vehicle models. Manufacturers may also use the third pathway to apply for credits and FCIVs for menu technologies where the manufacturer is able to demonstrate credits and FCIVs greater than those provided by the menu.
a The Off-Cycle Process In meetings with EPA and manufacturers, NHTSA examined the processes for bringing off-cycle technologies into market. Two distinct processes were identified: 1 The manufacturers off-cycle pre-production process, and; 2 the manufacturers regulatory compliance process. During the pre-production process, the off-cycle program for most manufacturers begins as early as four to 6 years in advance of the given model year. Manufacturers design teams or suppliers identify technologies to develop capable of qualifying for off-cycle credits after careful considering of the possible benefits. Manufacturer then identify the opportunities for the technologies finding the most optimal condition for equipping the technology given the availability in the production cycle of either new or multiple platforms capitalizing on any commonalities to increase sales volumes and reduce costs.
After establishing their new or series platform development plans, manufacturers have two processes for off-cycle technologies on the predefined menu list or using 5-cycle 546 See
40 CFR 86.186912d.

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testing and for those for which benefits are sought using the alternative approval methodology. For those on the menu list or 5-cycle testing, technologies whose credit amounts are defined by EPA regulation, manufacturers confirm that: 1 New candidate technologies meet regulatory definitions; and 2 for qualifying technologies, there is real fuel economy FE benefit based on good engineering judgement and/or testing. For these technologies, manufacturers conduct research and testing independently without communicating with EPA or NHTSA. For non-menu technologies, those not defined by regulation, manufacturers pre-production processes include: 1 Determining the credit amounts based on the effectiveness of the technologies; 2 developing suitable test procedures; 3 identifying any necessary studies to support effectiveness; 4 and identifying the necessary equipment or vehicle testing using good engineer judgement to confirm the vehicle platform benefits of the technology.
While for the regulatory compliance process, the first step for manufacturers begins by providing EPA with early notification in their pre-model year GHG reports e.g., 2025MY Pre-GHG are due in 2023CY of their intention to generate any off-cycle credits in accordance with 40 CFR 600.51412.
Next, manufacturers present a brief overview of the technology concept and planned model types for their off-cycle technologies as a part of annual precertification meetings with EPA.
Manufacturers typical hold their precertification meetings with EPA
somewhere between September through November two years in advance of each model year. These meetings are designed to give EPA a holistic overview of manufacturers planned product offerings for the upcoming compliance model year and since 2012
information on the A/C and off-cycle programs. Thus, a manufacturer complying in the 2023 compliance model year would arrange its precertification meeting with EPA in September 2021 and would be required to share information on the A/C and offcycle technologies its plans to equip during the model year. After this, manufacturers report projected information on off-cycle technologies as a part of their CAFE reports to NHTSA
in accordance with 49 CFR part 537
CAFE due by December 31st before the end of the model year.
According to EPA and NHTSA
regulations, eligibility to gain benefits for off-cycle technologies only require manufacturers to reporting information
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in advance of the model year notifying the agencies of a manufacturers intent to claim credits. More specifically, manufacturers must notify EPA in their pre-model year reports, and in their applications for certification, of their intention to generate any A/C and offcycle credits before the model year, regardless of the methodology for generating credits. Similarly, for NHTSA, manufacturers are also required to provide data in their premodel year reports required by 49 CFR
part 537 including projected information on A/C, off-cycle, and fullsize pickup truck incentives. These regulations require manufacturers to report information on factors such as the approach for determining the benefit of the technology, projected production information and the planned model types for equipping the off-cycle technology.
If a manufacturer is pursuing credits for a non-menu off-cycle technology, EPA also encourages manufacturers to seek early reviews for the eligibility of a technology, the test procedure, and the model types for testing in advance of the model year. EPA emphasizes the critical importance for manufacturers to seek these reviews prior to conducting testing or any analytical work. Yet, some manufacturers have decided not to seek EPAs early reviews which resulted in significant delays in the process as EPA
has had to identify and correct multiple testing and analytical errors after the fact. Consequently, EPAs goal is to provide approvals for manufacturers as early as possible to ensure timely processing of their credit requests.
NHTSA shares the same goals and views as EPA for manufacturers submissions but to-date neither agency has created any required deadlines for these reviews. For NHTSA, its only requirement is for manufacturers to submit copies of all information sent to EPA at the same time.
The next step in the credit review process is for manufacturers to submit an analytical plan defining the required testing to derive the exact benefit of a non-menu off-cycle technology before the model year begins and then to start testing. It is noted that some manufacturers failed to seek EPAs early reviews which delayed finalizing their analytical plans and then the start of their testing. These delays had greater impacts depending upon the required testing for the technology. For example, some manufacturers were required to conduct a four-season testing methodology lasting almost a year to evaluate the performance of a technology during all environmental conditions.

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