Comments of the National Coalition for Advanced Transportation
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Comments of the National Coalition for Advanced Transportation On the U.S. Environmental Protection Agency’s and National Highway Traffic Safety Administration’s Notice of Proposed Rulemaking: The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks 83 Fed. Reg. 42986 Docket Nos. NHTSA-2018-0067, EPA-HQ-OAR-2018-0283, NHTSA-2017-0069 October 26, 2018 Submitted via Regulations.gov I. INTRODUCTION AND EXECUTIVE SUMMARY The National Coalition for Advanced Transportation (NCAT or Coalition) submits these comments in response to the Environmental Protection Agency’s (EPA) and National Highway Traffic Safety Administration’s (NHTSA) Notice of Proposed Rulemaking entitled “The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks,” Docket Nos. NHTSA-2018-0067 and EPA-HQ-OAR-2018-0283, 83 Fed. Reg. 42986 (August 24, 2018) (NPRM). In addition, NCAT submits these comments on the Draft Environmental Impact Statement (DEIS) for the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Year 2021–2026 Passenger Cars and Light Trucks, Docket No. NHTSA-2017-0069. NCAT is a coalition of companies and non-profit organizations that support electric vehicle (EV) and other advanced transportation technologies and related infrastructure.1 NCAT’s members include business leaders in auto manufacturing; electricity generation, transmission, storage and distribution; and manufacturing, deployment and operation of electric vehicle supply equipment—as well as non-profit organizations that advocate for EV owners and consumers and for pragmatic policy solutions to energy and environmental challenges. Electric and other advanced vehicles and related technologies and infrastructure provide major economic and energy security benefits, and U.S. leadership in this area is critical to our economic health, global competitiveness and environmental quality. NCAT supports government initiatives and regulatory programs that ensure that these critical investments continue and electric and that other clean vehicle technologies and infrastructure can compete in the marketplace. The Coalition recognizes the critical role that States play in adopting and implementing vehicle standards that support advanced technologies, and supports an approach 1 These comments represent an integrated package that reconciles individual member perspectives that may differ on specific issues; accordingly, no particular position should be attributed to any individual NCAT member. 1 National Coalition for Advanced Transportation Comments that provides regulatory certainty and stable, long-term signals to guide investment by many different stakeholders. NCAT has serious concerns regarding the NPRM, which would freeze vehicle standards at 2020 levels through 2026 and seeks to preempt California and other states’ greenhouse gas (GHG) and zero emission vehicle (ZEV) standards. NCAT strongly opposes any action that would undermine state regulatory authority, which is critical to protecting public health and spurring technology innovation. With regard to the federal corporate average fuel economy (CAFE) and Clean Air Act (CAA) greenhouse gas (GHG) standards, the proposal is based on flawed modeling and analysis and contrary to law. The rulemaking record reveals that NHTSA was almost solely responsible for the analysis on which the proposal is based, that EPA’s expert career staff and managers raised fundamental objections to this analysis, and that these concerns were not addressed. The resulting proposal would have serious adverse effects on U.S. global competitiveness and jobs, energy security, public health and the environment, and would disrupt long-term investment signals on which many U.S. companies, including NCAT’s members, rely. NCAT urges the agencies to adopt an alternative approach—one that would provide a “win-win” for the American public, auto manufacturers, public health and the environment. NCAT reiterates its strong support for an “Advanced Technologies Compliance Flexibilities” approach. This option would preserve state authority and maintain the top-line targets of the existing GHG standards, while providing manufacturers with additional compliance flexibilities focused on promoting the development and deployment of electric and other advanced vehicle technologies. CAFE standards would be harmonized accordingly, consistent with the Energy Policy and Conservation Act’s (EPCA) distinct legal requirements. Such an approach—which is within the scope of the agencies’ proposal—would address manufacturers’ near-term compliance concerns, largely preserve the overall benefits of the program, and prepare the foundation for further progress in fuel savings and GHG reductions in the years beyond 2025. Given the volume and complexity of the NPRM, the DEIS, and the supporting record, and the agencies’ refusal of NCAT’s and other stakeholders’ requests to meaningfully extend the comment period, these comments focus on the most significant issues in the NPRM. NCAT’s key comments, set forth in greater detail below, are as follows: 1. The agencies should adopt the Advanced Technologies Compliance Flexibility Approach, as described above. (Section II) 2. The NPRM’s negative statements regarding EVs—specifically with regard to costs, consumer acceptance, and issues related to charging infrastructure and grid management—are misplaced and should be corrected. The demand for EVs is growing dramatically. Manufacturers are investing tens of billions of dollars and offering dozens of new vehicle models, with significantly expanded range, across vehicle types. EV costs are falling rapidly and many analysts project that they will reach parity with conventional vehicle cost by 2025. Consumer acceptance and demand are growing accordingly. In addition, utilities and others are making substantial investments in charging infrastructure and electric grid upgrades, and increased EV usage will substantially benefit grid operation through increased use of fixed assets, ultimately benefitting all utility customers. (Section III) 2 National Coalition for Advanced Transportation Comments 3. The modeling and analysis upon which the NPRM is based are fundamentally flawed in several respects. These flaws include fleet turnover modeling (including the new vehicle purchase model and the scrappage model) and an inflated estimate of the rebound effect, each of which results in significant overstatement of the vehicle miles traveled (VMT) reductions resulting from the proposal. This in turn results in substantial overstatement of the potential safety benefits of the proposal and underestimation of the proposal’s costs with regard to fuel consumption, GHG and non-GHG pollutant emissions, and other impacts. The agencies’ technology cost estimates—which are over twice what the same agencies estimated just two years ago and which drive much of the agencies’ analysis of fleet turnover, consumer benefits, consumer acceptance, and related issues—are likewise fundamentally flawed. (Section IV) 4. NHTSA’s proposed CAFE standards are not “maximum feasible” as required by EPCA and are otherwise unsupported by the rulemaking record and arbitrary and capricious. (Section V) 5. EPA’s proposed GHG standards do not comply with CAA Section 202(a) and are otherwise unsupported by the rulemaking record and arbitrary and capricious. (Section VI) 6. EPCA does not preempt California’s GHG or ZEV standards. (Section VII) 7. EPA lacks statutory authority to rescind the CAA waiver of preemption for California’s GHG and ZEV standards. In any event, EPA’s proposed waiver rescission, and its separate argument that states other than California are precluded from adopting California’s GHG or ZEV standards under CAA Section 177, are contrary to the statute and otherwise unsupported by the record and arbitrary and capricious. (Section VIII) 8. NHTSA’s DEIS does not comply with the requirements of the National Environmental Policy Act (NEPA). (Section IX) 9. Under the Regulatory Flexibility Act, the agencies must prepare a regulatory flexibility analysis and convene a small business review panel to assess the impacts of the proposed rule on small businesses. (Section X) II. THE AGENCIES SHOULD ADOPT THE ADVANCED TECHNOLOGIES COMPLIANCE FLEXIBILITY OPTION Before turning to NCAT’s concerns with the proposed federal standards (discussed in Sections III-VI and IX and X), this Section outlines NCAT’s recommended approach to achieve a win-win outcome in the final standards. On May 2, 2018, NCAT submitted a letter to the agencies requesting that they propose an “Advanced Technologies Compliance Flexibility Option,” which would maintain the top-line targets in the current model year (MY) 2022-2025 GHG standards but provide manufacturers with certain additional compliance flexibilities. Under this approach, CAFE standards would be calibrated accordingly to maintain comparably robust targets and incorporate similar flexibilities. 3 National Coalition for Advanced Transportation Comments The flexibilities NCAT has supported, summarized below, would include a combination of the following elements: 1. continuing to attribute zero GHG emissions to EVs, plug-in hybrid electric vehicles (PHEVs) when operating on electricity, and hydrogen fuel cell vehicles (FCVs); 2. extending and potentially restructuring credit multipliers for EVs, PHEVs, and FCVs; 3. reforming the current off-cycle credit recognition process while strengthening the integrity