CAFE and GHG

Industry Perspectives on the Mid-term Evaluation, Off-cycle Credits and Autonomous Tech

Chris Nevers | Apri l 7, 2017

/autoalliance/auto_allianceAutoAlliance.org

Agenda

• CAFE/ GHG, the Basics

• Past Performance

• Current Fleet Performance

• Status of Midterm Evaluation

• Off-Cycle Process

• AV Off-Cycle Benefits/ Barriers

• Next Steps

One National Program

ARBAdvanced Clean Cars

GHG (GHG and Petroleum Use)

LEV III(Ozone, criteria Emissions)

ZEV(Ozone, GHG, Petroleum Use)

U.S. EPA

GHG(GHG, Petroleum Use)

Tier 3(Ozone, Criteria Emissions)

NHTSA

CAFE(Petroleum Use, GHG)

OneNationalProgram

50 Years of Progress, Criteria Emissions

0

2

4

6

8

10

12

Gra

ms/

Mile

(H

C +

No

x)

Year / Technology

HC NOx

99.7% Cleaner (ARB)

10.4

1994 → 2000 2004 → 2014

0.03

2015 → 2025

Source: California Code of Regulations

Alliance Members Committed to Improved Efficiency

• The Alliance supports reducing greenhouse gas (“GHG”) emissions associated with the operation of light-duty vehicles, but believes that reductions must be made in a manner that accounts for market realities.

• Automakers are committed to zero emission vehicle technology (electric) not just to meet regulatory requirments, but to meet global demands.

Industry R&D Spending

2015

High Mileage Vehicles201640+

MPG(Highway)

30+ MPG

(Highway)

Hybrid & Electric Models for Sale2016

Hybrid & Plug-in Electric

Source: https://autoalliance.org/

80Models

25 Models

60 Models

509 Models

$ 109Billion

Fuel Economy Progress

25

30

35

40

45

50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Fuel

Eco

no

my

[MP

G]

U.S. Fleet Fuel Economy

Source: NHTSA, Novation AnalyticsIncludes flexible fuel vehicle credits (phase-out starting 2015)

7

Even more progress is needed: 45% increase over the next nine years

LDV CAFE Compliance Trend

1.0 1.3 1.2

0.6

(0.7)

(1.2)

2012 2013 2014 2015 2016Projected

2017Projected

Industry Average Annual CAFE (Fuel Economy) Compliance Margin [miles per gallon, mpg]

Source: NHTSA

Trends observed for CAFE (fuel economy) compliance

• Between 2012 and 2014, manufacturers averaged 1.0 to 1.3 miles per gallon (mpg) better fuel economy than their standards.

• In 2015, this compliance margin dropped in half to 0.6 mpg.

• In 2016, manufacturers on average are expected to fail to meet the CAFE standards.

• In 2017, manufacturers are expected to fall even further behind.

ONP Process

Joint Draft TARJuly 18

Proposed Determination

Nov. 30

Comment Period Closed Dec. 30

Final Determination Issued Jan. 13

FD Reconsideration

March 22

Joint Draft TARJuly 18

NHTSA de novo NPRM

NHTSA Final Rule Before

April 2020

Joint Draft TARJuly 18

CARB Releases MTE Report

MTE/ZEV Hearing

Mar 23 Affirms Withdrawn FD

Workshops, Hearings, Waiver

Request

Alliance Perspective: Early Final Determination

10

Draft Technical Assessment Report (TAR)• Over 1,300 pages• Over 1 gigabytes of modeling data (compressed)• 60 days for stakeholders to review and comment

Proposed Determination• Issued just over two months after TAR comments• Nearly 1,000 pages• Over 1.5 gigabytes of additional modeling data• 30 days for review and comment

Final Determination• Issued only 13 days after Proposed

Determination comments• Concluded the EPA midterm evaluation process

over a year in advance of the requirement

EPA bypassed procedural requirements

EPA action conflicted with commitment to a single National Program

Multiple technical flaws remained in the analysis

Our Ask:Return to the process as originally envisioned and re-engage with the auto industry to understand and address its concerns

Off-Cycle Pathways

3 Pathways to obtain EPA and post 2017-MY NHTSA “Off-Cycle” credits

• Pre-defined Table Values

• 5- Cycle or “Five minus Two”

• Alternative Method

Off-cycle credits can only be requested by vehicle manufacturers

40 CFR 86.1869-12 CO2 credits for off-cycle CO2-reducing technologies

Off-Cycle Process

Predefined Table of Technologies

• Growing use by manufacturers

• Evidence that some technologies have greater benefit than first estimated

• EPA questioning manufacturer application of some technologies

• EPA resistant to expanding list

“5-Cycle” Test Method

• No known use (yet)

• Potential EPA concerns?

Alternative Method

• Strong interest from manufacturers and suppliers

• Suppliers excluded from process in the U.S.

• Efforts to harmonize with E.U. eco-innovation process are challenging

• Significant data requirements and long process following application

• Almost all applications approved thus far are for on-table technologies applied before 2014

• Only application with significant expansion of credit met with significant resistance

GHG/ FE AV Benefits

Source: https://autoalliance.org/

• Congestion mitigation due to

• Accident avoidance

• Route navigation

• Efficient traffic patterns, for example, traffic lights, speed optimization, closer following distance

• Panic braking reduced (sun, fog, merging, etc.)

• “Platooning” to decrease wind resistance

• Vehicle sharing can reduce costs of more expensive/ efficient vehicles

• When combined with ride sharing, could reduce vmt

• EV remote charging possible

AV Off-Cycle Credit Pathway/ Barriers

• Only the “Alternative Method” would be available for autonomy GHG credits

• Agency concerns with AV• AV technology could increase vehicle miles traveled due to “non-occupant” vmt, increase sprawl due to

better traffic flow, and increase vmt by providing transport to those that otherwise would not travel (elderly and young).

• Benefits would be difficult to quantify and could change based on penetration rate.• Gains could vary based on vehicle, driver demographics, and topography.

• If AV technology was to be a safety requirement, AV credits could be construed as a “give-away” regardless of real world GHG/ CAFE benefits.

• Barriers• An agency accepted baseline driving and traffic pattern (control case) is needed beyond the National

Household Transportation Survey (NHTS) data.

• Extensive data requirements may change based on model and age of vehicle.• Expect a multi-year approval process.

• Agencies do not have a “trail blazer” type of off-cycle approval process.

AV Off-Cycle Next Steps

• A National Dataset of driving behavior and conditions is needed. The National Labs are ideally suited to develop this.

• Modeling required to estimate real world GHG/ CAFE benefits based on penetration rates and level of automation.

• Convince agencies to accept manufacturer system data applied to “driving templates”.

• Work with vehicle manufacturers to get the off-cycle alternative method started.

• Comments count; comment on future Federal Register Notices.