Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles-Phase 3

<RULE> ENVIRONMENTAL PROTECTION AGENCY <CFR>40 CFR Parts 86, 1036, 1037, 1039, 1054, and 1065</CFR> <DEPDOC>[EPA-HQ-OAR-2022-0985; FRL-8952-02-OAR]</DEPDOC> <RIN>RIN 2060-AV50</RIN> <SUBJECT>Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles—Phase 3</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Environmental Protection Agency (EPA). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Environmental Protection Agency (EPA) is promulgating new greenhouse gas (GHG) emissions standards for model year (MY) 2032 and later heavy-duty highway vehicles that phase in starting as early MY 2027 for certain vehicle categories. The phase in revises certain MY 2027 GHG standards that were established previously under EPA's Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles—Phase 2 rule (“HD GHG Phase 2”). This document also updates discrete elements of the Averaging Banking and Trading program, including providing additional flexibilities for manufacturers to support the implementation of the Phase 3 program balanced by limiting the availability of certain advanced technology credits initially established under the HD GHG Phase 2 rule. EPA is also adding warranty requirements for batteries and other components of zero-emission vehicles and requiring customer-facing battery state-of-health monitors for plug-in hybrid and battery electric vehicles. In this action, we are also finalizing additional revisions, including clarifying and editorial amendments to certain highway heavy-duty vehicle provisions and certain test procedures for heavy-duty engines. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective on June 21, 2024. The incorporation by reference of certain material listed in this rule is approved by the Director of the Federal Register beginning June 21, 2024. The incorporation by reference of certain other material listed in this rule was previously approved by the Director of the Federal Register as of March 27, 2023. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> <E T="03">Docket:</E> EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2022-0985. Publicly available docket materials are available either electronically at <E T="03">www.regulations.gov</E> or in hard copy at Air and Radiation Docket and Information Center, EPA Docket Center, EPA/DC, EPA WJC West Building, 1301 Constitution Ave. NW, Room 3334, Washington, DC. For further information on EPA Docket Center services and the current status, please visit us online at <E T="03">www.epa.gov/dockets</E> . <E T="03">Public Participation:</E> Docket: All documents in the docket are listed on the <E T="03">www.regulations.gov</E> website. Although listed in the index, some information is not publicly available, <E T="03">e.g.,</E> confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form through the EPA Docket Center at the location listed in the <E T="02">ADDRESSES</E> section of this document. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Brian Nelson, Assessment and Standards Division, Office of Transportation and Air Quality, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4278; email address: <E T="03">nelson.brian@epa.gov</E> . </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD>   <HD SOURCE="HD1">Does this action apply to me?</HD> This action relates to companies that manufacture, sell, or import into the United States new heavy-duty highway vehicles and engines. This action also relates to state and local governments. Potentially affected categories and entities include the following: <GPH SPAN="3" DEEP="108"> <GID>ER22AP24.000</GID> </GPH> This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities potentially affected by this action. This table lists the types of entities that EPA is now aware could potentially be affected by this action. Other types of entities not listed in the table could also be affected. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria found in 40 CFR parts 86, 1036, 1037, 1039, 1054, and 1065. <SU>1</SU> <FTREF/> If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section. <FTNT> <SU>1</SU>  See 40 CFR 1036.1 through 1036.15 and 1037.1 through 1037.15. </FTNT> <HD SOURCE="HD1">What action is the agency taking?</HD> The Environmental Protection Agency (EPA) is promulgating new GHG standards for model year (MY) 2032 and later heavy-duty highway vehicles that phase in starting as early MY 2027 for certain vehicle categories. The phase in revises certain MY 2027 GHG standards that were established previously under EPA's Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles—Phase 2 rule. We believe these “Phase 3” standards are appropriate and feasible considering lead time, costs, and other factors. EPA also finds that it is appropriate (1) to limit the availability of certain advanced technology credits initially established under the HD GHG Phase 2 rule, and (2) to include additional flexibilities for manufacturers in applying credits from these incentives in the early model years of this Phase 3 program. EPA is also adding warranty requirements for batteries and other components of zero-emission vehicles and requiring customer-facing battery state-of-health monitors for plug-in hybrid and battery electric vehicles. We are also finalizing revisions and clarifying and editorial amendments to certain highway heavy-duty vehicle provisions of 40 CFR part 1037 and certain test procedures for heavy-duty engines in 40 CFR parts 1036 and 1065. We also note that EPA included in this action's notice of proposed rulemaking (hereafter referred to as the “HD GHG Phase 3 NPRM”) a proposal to revise its regulations addressing preemption of state regulation of new locomotives and new engines used in locomotives; those revisions were finalized in a separate action on November 8, 2023. <E T="51">2 3</E> <FTREF/> <FTNT> <SU>2</SU>  Notice of Proposed Rulemaking for Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles—Phase 3. 88 FR 25926, April 27, 2023. <SU>3</SU>  Final Rulemaking for Locomotives and Locomotive Engines; Preemption of State and Local Regulations. 88 FR 77004, November 8, 2023. </FTNT> <HD SOURCE="HD1">What is the agency's authority for taking this action?</HD> Clean Air Act (CAA) section 202(a), 42 U.S.C. 7521(a), requires that EPA establish emission standards for air pollutants from new motor vehicles or new motor vehicle engines, which, in the Administrator's judgment, cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. The Administrator has found that GHG emissions from highway heavy-duty vehicles and engines cause or contribute to air pollution that may endanger public health or welfare. Therefore, the Administrator is exercising his authority under CAA section 202(a)(1)-(2) to establish standards for GHG emissions from highway heavy-duty vehicles. See section I.D of this preamble for more information on the agency's authority for this action. <HD SOURCE="HD1">Did EPA conduct a peer review before issuing this action?</HD> This regulatory action is supported by influential scientific information. EPA, therefore, conducted peer review in accordance with the Office of Management and Budget's (OMB) Final Information Quality Bulletin for Peer Review. First, we conducted a peer review of the underlying data and algorithms in MOVES4 that served as the basis for MOVES4.R3 used to estimate the emissions impacts of the final standards. In addition, we conducted a peer review of the Heavy-Duty Technology Resource Use Case Scenario (HD TRUCS) tool used to analyze HD vehicle energy usage and associated component costs. We also conducted a peer review of a Heavy-Duty Vehicle Industry Characterization, Technology Assessment, and Costing Report developed by FEV Consulting. All peer review was in the form of letter reviews conducted by a contractor. The peer review reports for each analysis are in the docket for this action and at EPA's Science Inventory ( <E T="03">https://cfpub.epa.gov/si/</E> ). <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">Executive Summary</FP> <FP SOURCE="FP1-2">A. Purpose of This Regulatory Action</FP> <FP SOURCE="FP1-2">B. The Opportunity for New Standards Based on Advancements in Heavy-Duty Vehicle Technologies Which Prevent or Control GHG Emissions</FP> <FP SOURCE="FP1-2">C. Overview of the Final Regulatory Action</FP> <FP SOURCE="FP1-2">D. Impacts of the Standards</FP> <FP SOURCE="FP1-2">E. Coordination With Federal and State Partners</FP> <FP SOURCE="FP1-2">F. Stakeholder Engagement</FP> <FP SOURCE="FP-2">I. Statutory Authority for the Final Rule</FP> <FP SOURCE="FP1-2">A. Summary of Key Clean Air Act Provisions</FP> <FP SOURCE="FP1-2">B. Authority To Consider Technologies in Setting Motor Vehicle GHG Standards</FP> <FP SOURCE="FP1-2">C. Response to Other Comments Raising Legal Issues</FP> <FP SOURCE="FP-2">II. Final HD Phase 3 GHG Emission Standards</FP> <FP SOURCE="FP1-2">A. Public Health and Welfare Need for GHG Emission Reductions</FP> <FP SOURCE="FP1-2">B. Summary of Comments and the HD GHG Phase 3 Standards and Updates From Proposal</FP> <FP SOURCE="FP1-2">C. Background on the CO2 Emission Standards i ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 2376k characters. 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