EPA & NHTSA Final Rule Sets GHG & Fuel Economy Standards

The rule is effective July 6, 2010.

GHG and CAFE Standards Would Affect Model Year 2012-2016 Cars and Trucks

The new standards would apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles, covering model years 2012 through 2016. According to the final rule, these new standards will create a harmonized and consistent national program, under which automobile manufacturers will be able to build a single light-duty fleet that satisfies all EPA and NHTSA requirements while ensuring that consumers maintain a full range of vehicle choices.

New Standards Affect Manufacturers, Sellers, and Commercial Importers

The rule affects companies that manufacture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles as defined in EPA regulations, and passenger cars and light trucks as defined by NHTSA.

The final rule also states that affected entities include commercial importers of vehicles and vehicle components. In addition, the Clean Air Act, which underlies EPA’s regulations and this final rule, defines the term manufacturer to include importers.

GHG Conditional Exemption for Certain Small Manufacturers

The final rule establishes a conditional exemption to the GHG standards for manufacturers with 2008-2009 model year sales of more than zero and fewer than 50,000 vehicles.

Declaration required. To be eligible for the exemption, these manufacturers will have to submit a declaration to EPA that contains a detailed, written description of how the manufacturer qualifies for the exemption. The declaration must be submitted at least 30 days prior to the introduction in commerce of any vehicles for each model year for which the exemption is requested and not later than December of the prior calendar year. The declaration must be signed by a chief officer of the company.

Deferment of standards. The final rule states that EPA will consider appropriate GHG standards for these entities as part of a future regulatory action, likely in 2012.

Unconditional Exemption for SBA-Defined Small Businesses, ICIs, Etc.

The final rule exempts unconditionally small entities meeting the Small Business Administration (SBA) criteria of a small business as described in 13 CFR 121.201 from the GHG standards. These small entities are in three distinct categories of businesses for light-duty vehicles: small volume manufacturers, independent commercial importers (ICIs), and alternative fuel vehicle converters. EPA has identified about 13 entities that fit the Small Business Administration (SBA) criterion of a small business.

The final rule clarifies that both U.S.-based and non-U.S. based businesses are eligible for this exemption.

Exemption declaration not required. EPA had proposed that SBA-defined small businesses, etc. also submit a declaration to EPA containing a detailed written description of how they qualify as a small entity under the provisions of 13 CFR 121.201. Because of the limited number of affected entities in this category (13), EPA reconsidered the need for submission of a declaration and determined that an exemption declaration is unnecessary. The final rule, therefore, does not contain this requirement.

New Prohibited Acts Added to Clean Air Act

The final rule also adds a provision describing certain acts, and the causing thereof, that are prohibited by statute, to EPA’s Clean Air Act regulations. These prohibited acts include:

In the case of a manufacturer of new motor vehicles or new motor vehicle engines for distribution in commerce, the sale or offering for sale, or the introduction, or delivery for introduction, into commerce, or in the case of the importation into the U.S. of any new motor vehicle or new motor vehicle engine, unless covered by a certificate of conformity.

For a person or manufacturer, prohibited acts, and the causing thereof, also includes (partial list):

• with regard to vehicles, for a person to fail to allow or refuse to permit entry, testing, or inspection; to fail or refuse to permit access to or copying of records or fail to make reports or provide information required; to fail or refuse to perform tests, or to have tests performed as required; or fail to establish or maintain records as required.
• with regard to vehicles, for any manufacturer to fail to make required information available.
• for any person to remove or rendering inoperative any device or element of design installed on or in a covered vehicle or engine prior to its sale and delivery to its purchaser, or knowingly removing or rendering inoperative any such device or element of design after such a sale or delivery to the ultimate purchaser.
• for any person to manufacture, sell, offer to sell or install, any part or component intended for use with (or as a part of ) any vehicle or engine where the principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed in compliance with the new standards.

¹EPA is proposing the new GHG standards under the CAA (Clean Air Act), as amended, and NHTSA is proposing new CAFE standards under the Energy Policy and Conservation Act of 1975, as amended by the Energy Independence and Security Act of 2007 (EISA).

(See ITT Online Archives or 09/30/09 daily news, (Ref: 09093025), for BP summary of EPA, NHTSA proposed rule on vehicle GHG emission and fuel economy standards)

EPA Contact -- Tad Wysor (734) 314-4332

NHTSA Contact -- Rebecca Yoon (202) 366-2992

EPA, NHTSA final rule on vehicle GHG emission and fuel economy standards (FR Pub 05/07/10) available at http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf.