Air Resources Board Mary D. Nichols, Chair 1001 I Street • P.O. Box 2815 Matthew Rodriquez Sacramento, California 95812 • www.arb.ca.gov Edmund G. Brown Jr. Secretary for Governor Environmental Protection October 1, 2015 Administrator Gina McCarthy U.S. Environmental Protection Agency Air and Radiation Docket and Information Center, Mail Code: 28221T 1200 Pennsylvania Avenue, NW Washington, DC 20460 Docket No. EPA-HQ-OAR-2014-0827 Administrator Mark R. Rosekind U.S. Department of Transportation National Highway Traffic Safety Administration Docket Management Facility, M-30 1200 New Jersey Avenue, SE Washington, DC 20590 Docket No. NHTSA-2014-0132 Dear Administrators McCarthy and Rosekind: The California Air Resources Board (CARS) appreciates the opportunity to provide comments on the Notice of Proposed Rulemaking for the U.S. Environmental Protection Agency's (U.S. EPA) and the National Highway Traffic Safety Administration's (NHTSA) Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy­ Duty Engines and Vehicles - Phase 2, as published in the Federal Register on July 13, 2015. Over the past two years, CARS staff has worked closely with the staff of U.S. EPA and NHTSA to develop the technical analyses intended to inform the stringencies of the federal Phase 2 proposal. We commend and appreciate your agencies' significant efforts to build on the success of current Phase 1 standards for the purpose of establishing a strong, national Phase 2 program, particularly one that will support California in achieving its unique climate and petroleum reduction targets. After a thorough assessment by CARB's Phase 2 team of scientists and engineers, we have concluded, unfortunately, that the proposal falls short of the program needed in California. This should come as no surprise in light of my testimony at the August 1a th federal hearing on the proposal in Long Beach, California. At that time, CARS staff was midway through its technical deep dive into the proposal. With that process complete, I The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy consumption. For a list of simple ways you can reduce demand and cut your energy costs, see ourwebsite: http://www.arb.ca.gov. California Environmental Protection Agency Printed on Recycled Paper Administrator Gina McCarthy Administrator Mark R. Rosekind October 1, 2015 Page 2 now offer our detailed recommendations, which are attached, to strengthen the program and to accelerate opportunities to achieve climate benefits nationwide. Overall, CARB believes the proposed federal Phase 2 rule misses opportunities to maximize greenhouse gas reductions and spur development of critical advanced technologies that can provide early climate benefit. These are especially important to California in meeting our 2030 greenhouse gas and petroleum use reduction goals. As proposed, the federal rule would provide less than half of the reductions needed for California to meet its 2030 targets: Furthermore, the proposal lacks any acknowledgement of the need for future national heavy-duty engine standards to reduce emissions of oxides of nitrogen (NOx}, and, in fact, lacks adequate safeguards to protect against NOx increases in some heavy-duty vehicle applications, as noted in our more detailed comments. While CARB's attached comments include significantly more detail and breadth than I provide here, I do want to highlight a few specific recommendations and areas for improvement. 1. Strengthen the overall proposal and adopt the Alternative 4 timeline in order to deliver greater climate benefits earlier CARB strongly recommends that the federal agencies strengthen the overall proposal and adopt the Alternative 4 timeline, rather than adopt the proposed Alternative 3. While the two alternatives are nearly identical in terms of technological feasibility and payback periods for fuel efficient technologies, Alternative 4 accelerates full program phase-in by three years, from 2027 to 2024, and as discussed below, can be strengthened in overall stringency. By 2030, Alternative 4 as proposed would provide about four million metric tons more cumulative greenhouse gas benefits in California than Alternative 3, and together with Phase 1 would reduce petroleum use from the medium- and heavy-duty sector by about 22 percent. Yet, this still is not enough, and even more needs to be done to strengthen the federal Phase 2 proposal, such as including an increase in the engine-only standard, as described in our next recommendation. Overall, a strengthened Alternative 4 would provide an important step toward reaching Governor Brown's climate goals and 50 percent petroleum reduction target for the transportation sector. Administrator Gina McCarthy Administrator Mark R. Rosekind October 1, 2015 Page 3 2. Increase stringency of the proposal, via tighter engine-only standards and consideration of all appropriate technologies As proposed, the Phase 2 tractor and vocational engine standards are expected to achieve only a modest 4 percent fuel efficiency improvement beyond what the current Phase 1 program requires. GARB staff recommends that the tractor engine standard stringency be increased to achieve at least a seven percent reduction in carbon dioxide emissions versus a model year 2017 baseline engine, in conjunction with a corresponding increase in the whole vehicle standards, to levels that capitalize on the full emission reduction potential of efficiency improving technologies. Recent work by the Southwest Research Institute, the U.S. Department of Energy's SuperTruck teams, and Cummins, the largest manufacturer of heavy-duty truck engines, all indicate the feasibility of engine greenhouse gas reductions in the Phase 2 timeframe at levels more than twice the levels being proposed. Additional areas in which the proposal misses opportunities to maximize climate benefits include the lack of consideration of aerodynamic improvements and electrified accessories for vocational vehicles, tighter standards for pickup trucks and vans and trailers, and limitations on the global warming potential of air conditioning refrigerants. 3. Include a greater reliance on advanced technologies The Phase 2 proposal lacks sufficient stringency to drive market development of battery electric or fuel cell electric technologies. The proposal assumes only a modest level of hybrid technology and no use of battery electric or fuel cell electric technology, is generally pessimistic on the future of battery electric and fuel cell electric vehicles, and, in fact, eliminates the advanced technology credits included in the Phase 1 program that were intended to encourage development of these technologies. This is contradictory to CARB's position that the early deployment of advanced technologies is the foundation of California's pathway to achieving both its climate and air quality targets. Furthermore, without any significant reliance on advanced technologies built into the proposed standards, GARB estimates that projected increases in truck activity will completely overtake projected greenhouse gas reductions by 2043 (with respect to the 2010 baseline), resulting in greenhouse gas levels from medium- and heavy-duty trucks in 2050 that are about six percent higher than 2010 levels. To actually offset the expected activity growth, advanced, near-zero emission technologies must be a significant part of the long-term solution. Administrator Gina McCarthy Administrator Mark R Rosekind October 1, 2015 Page 4 4. Address projected diesel PM increases due to the increase use of auxiliary power units The proposal encourages manufacturers to increase the use of auxiliary power units (APUs) to reduce idling. While CARB supports reducing such unnecessary idling, U.S. EPA estimates that this action could increase diesel particulate matter emissions throughout the rest of the country by nearly 1 Opercent, thus exacerbating public health issues associated with exposure to toxic diesel particulate matter. This is one of the largest public health problems tackled by CARB in recent decades, and even after an extensive control program in California, diesel particulate matter remains responsible for about 60 percent of the known risk from toxic air contaminants. As such, CARB supports the development of a federal rule that requires diesel particulate filters on APUs, concurrent with the Phase 2 program, similar to requirements already in place in California. 5. Commit to future NOx control ' California needs dramatic further reductions in NOx emissions beyond what our current programs will achieve by 2031 to attain health-based standards for ozone and fine particulate matter. Reaching these attainment levels in California's South Coast Air Basin will require an approximate 70 percent reduction in NOx from today's levels by 2023, and an overall 80 percent reduction in NOx by 2031. CARB expected the proposal to include a commitment from U.S. EPA to begin efforts to develop lower, mandatory NOx standards for heavy-duty engines and vehicles. Federal action is especially needed for the largest heavy-duty trucks that frequently cross state lines and therefore cannot be effectively regulated by California alone. CARB will begin development of lower, mandatory NOx engine standards in 2017, and will also petition U.S. EPA to establish lower, federal NOx engine standards. If U.S. EPA fails to initiate a timely rulemaking, CARB will continue with its efforts to establish a California-only standard. 6. Address