EPA and NHTSA: The New Auto Greenhouse Gas and CAFE Standards Brent Yacobucci Specialist in Energy and Environmental Policy Congressional Research Service Federal Reserve Bank of Chicago Detroit Branch, May 11, 2010
Agenda Short History of Automotive Standards Discussion of EPA and NHTSA Final Rule Estimated Benefits and Costs Technology Application Heavy Duty Truck Standards Other Mobile Sources Future Auto Standards
Automotive Standards
Why Reduce GHGs from Automobiles? 19% U.S. GHG Emissions 34% Transportation Emissions 3% 10% 35% 22% 30% 19% Electric Power Industry 28% Transportation Other Cars Heavy Trucks Rail Light Trucks Air
Short History of Fuel Economy and Greenhouse Gas Standards 2004 - California issues automotive GHG standards to start in MY2009; 13 other states (plus DC) sign on May 2007 Massachusetts v. EPA December 2007 EISA signed: 35 mpg by 2020 December 2009 EPA issues Endangerment Finding May 2009 Obama Administration secures commitments from CA, automakers September 2009 EPA and NHTSA propose joint rules for MY2012-MY2016 April 1, 2010 Final rule announced
EPA s and NHTSA s Authorities EPA Clean Air Act Authority to regulate greenhouse gas emissions No authority to regulate fuel economy Clean Air Act requires vehicle emissions standards if EPA completes cause or contribute finding California may petition EPA to establish state standards NHTSA Energy Policy and Conservation Act (EPCA) Authority to set CAFE standards No authority to regulate GHGs States explicitly preempted from setting fuel economy standards Energy Independence and Security Act of 2007 Mandates CAFE increase to 35 mpg by2020
Historic CAFE Standards 40 35 30 25 20 15 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Passenger Cars Light Trucks
Future CAFE Standards 40 35 30 25 20 15 2000 2004 2008 2012 2016 2020 Final Rule (Combined) EISA Requirement GHG Equivalent mpg
The Greenhouse Gas Standards: When is 35.5 mpg not 35.5 mpg? Widely stated target of 35.5 mpg CAFE by MY2016 35.5 mpg number derived from EPA s target of 250 g CO 2 eq./mile But CO 2 is not the only greenhouse gas EPA expects savings from HFC reductions Also, some CO 2 emissions not accounted for in CAFE test
CA and Federal Greenhouse Gas Emissions Standards (grams/mile) 450 400 350 300 250 200 150 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 California Std. - CA Fleet CA Stds. - National Fleet Mix Federal Std. Source: California Air Resources Board, EPA and NHTSA Final Rule
Reduction Strategies Under CA Program Higher fuel efficiency (for CO 2 reduction) More efficient engines and transmissions Lower rolling and wind resistance Lighter weight Hybrids, Plug-in hybrids Lower-carbon alternative fuels (CO 2 ) Improved air conditioner systems (HFC-134a) Improved emissions control systems (CH 4, N 2 O)
But CO 2 is the Key Greenhouse Gas Carbon Dioxide Nitrous Oxide HFC-134a Methane Percentage of Uncontrolled CA Passenger Vehicle Emissions in 2020 CO 2 : 97.4% HFC-134a: 1.8% N 2 O: 0.7% CH 4 : 0.1%
14 States Adopted California s Standards Adopted California Considerin
The Agreement One national standard But actually separate standards for CAFE, GHGs NHTSA and EPA to coordinate, and to the extent they can, harmonize standards Commitments from automakers, California California will abandon class-based system for EPA s size-based system; will accept vehicles that meet federal standards
Flexibility Banking, averaging, and trading for both programs Within and among classes, fleets Some limits to trading (e.g., domestic cars under CAFE) Flexible/Alternative Fuel Vehicle (FFV/AFV) credits For GHG rule: Non-CO 2 reductions, advanced technology vehicle credits, early action credits, idle reduction Additional flexibility for small automakers
EPA s Estimate of Costs and Benefits (billion 2007$) $100 $80 $60 $40 $20 $0 2012 2013 2014 2015 2016 Technology Outlays Discounted Benefits Net Benefits Source: EPA and NHTSA, Final Rule, April 1, 2010
Majority of Benefits Come From Reduced Gasoline Consumption (billion 2007$) $41 $17 $182 Fuel Savings GHG Reductions Other* * Other includes: Reduced risk of fuel price shocks, reduced refueling time, reduced particulate matter emissions
EPA s Estimate of Total Costs for Selected Automakers MY2012-MY2016 ($ millions) $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 Chrysler Ford General Motors Honda Hyundai Nissan Toyota $0 Cars Light Trucks Source: EPA and NHTSA, Final Rule, April 1, 2010
EPA s Estimate of Per-Vehicle MY2016 Incremental Cost for Selected Automakers $1,600 $1,200 $800 $400 Chrysler Ford General Motors Honda Hyundai Nissan Toyota $0 Cars Light Trucks Source: EPA and NHTSA, Final Rule, April 1, 2010
Some of the Technology to Be Used Direct-Injection Gasoline Engines Cylinder Deactiviation Turbocharging Diesel Engines 6-Speed Automatic Transmissions Dual-Clutch Manual Transmissions Start-Stop Technologies Hybrids
Technology to be Used (% Market Penetration) 60% 50% 40% 30% 20% 10% Direct Injection Cylinder Deactivation Turbocharging Diesel Engines 6-Speed Automatic Transmission Dual-Clutch Transmission Start-Stop Technology 0% MY2008 MY2011 MY2016 Hybrid
Next Up: Trucks; Auto Standards Part 2
EPA Clean Air Act Authority Section 202(a) same section authorized GHG standards for light duty vehicles requires standards for any class of motor vehicles whose pollution endangers public health or welfare December 15, 2009 endangerment finding explicitly covers medium- and heavy-duty trucks EPA plans to propose GHG standards in June or July
EISA Requirements (P.L. 110-140) Section 102 requires program for mediumand heavy-duty trucks to achieve maximum feasible improvement in fuel efficiency But the timeline for any rule could be several years
GHG Emissions from Mobile Source Categories, 2007 700 Million Metric Tons CO2 eq. 600 500 400 300 200 100 9% of Total U.S. GHG Emissions 8% 6% 3% 0 Cars LDTs Trucks Aircraft Rail* No other mobile source category is greater than 1% of U.S. emissions
Growth of GHG Emissions from Mobile Sources, 1990-2007 80% 60% 40% 20% 0% Aviation Cars/LDTs Rail* Trucks
Emission Reduction Strategies Engine technology Aerodynamic drag Tire rolling resistance Operational factors (e.g., idling) EPA stated in 2008, We see a potential for up to a 40% reduction in GHG emissions from a typical heavy-duty truck in the 2015 timeframe.
Other Mobile Sources Other mobile sources include numerous categories that EPA was slow to regulate for conventional pollutants Aircraft is biggest category: regulation is complicated by international competitive issues Other categories are <1% of total emissions each, so attention is likely to turn to stationary sources
Auto Standards Part 2 MY2017 and Beyond California is working on phase 2 of its vehicle GHG standards (MY2017-MY2025) Could have rules this summer or fall EPA Administrator Jackson informed House Energy & Commerce Committee Next round of rulemaking is coming Negotiations likely to follow model in 2012-2016 rule, and likely to happen soon But negotiations have not yet begun
Thank You byacobucci@crs.loc.gov