Title 40

SECTION 86.1871-12

86.1871-12 Optional early CO2 credit programs.

§ 86.1871-12 Optional early CO2 credit programs.

Manufacturers may optionally generate CO2 credits in the 2009 through 2011 model years for use in the 2012 and later model years subject to EPA approval and to the provisions of this section. The provisions of § 86.1819-14(k)(1) and (2) apply instead of the provisions of this section for non-MDPV heavy-duty vehicles. Manufacturers may generate early fleet average credits, air conditioning leakage credits, air conditioning efficiency credits, early advanced technology credits, and early off-cycle technology credits. Manufacturers generating any credits under this section must submit an early credits report to the Administrator as required in this section. The terms “sales” and “sold” as used in this section shall mean vehicles produced for U.S. sale, where “U.S.” means the states and territories of the United States. The expiration date of unused CO2 credits is based on the model year in which the credits are earned, as described in § 86.1865-12(k)(6).

(a) Early fleet average CO2 reduction credits. Manufacturers may optionally generate credits for reductions in their fleet average CO2 emissions achieved in the 2009 through 2011 model years. To generate early fleet average CO2 reduction credits, manufacturers must select one of the four pathways described in paragraphs (a)(1) through (4) of this section. The manufacturer may select only one pathway, and that pathway must remain in effect for the 2009 through 2011 model years. Fleet average credits (or debits) must be calculated and reported to EPA for each model year under each selected pathway.

(1) Pathway 1. To earn credits under this pathway, the manufacturer shall calculate an average carbon-related exhaust emission value to the nearest one gram per mile for the classes of motor vehicles identified in this paragraph (a)(1), and the results of such calculations will be reported to the Administrator for use in determining compliance with the applicable CO2 early credit threshold values.

(i) An average carbon-related exhaust emission value calculation will be made for the combined LDV/LDT1 averaging set, where the terms LDV and LDT1 are as defined in § 86.1803.

(ii) An average carbon-related exhaust emission value calculation will be made for the combined LDT2/HLDT/MDPV averaging set, where the terms LDT2, HLDT, and MDPV are as defined in § 86.1803.

(iii) Average carbon-related exhaust emission values shall be determined according to the provisions of § 600.510-12 of this chapter, except that:

(A) [Reserved]

(B) The average carbon-related exhaust emissions for alcohol fueled model types shall be calculated according to the provisions of § 600.510-12(j)(2)(ii)(B) of this chapter, without the use of the 0.15 multiplicative factor.

(C) The average carbon-related exhaust emissions for natural gas fueled model types shall be calculated according to the provisions of § 600.510-12(j)(2)(iii)(B) of this chapter, without the use of the 0.15 multiplicative factor.

(D) The average carbon-related exhaust emissions for alcohol dual fueled model types shall be the value measured using gasoline or diesel fuel, as applicable, and shall be calculated according to the provisions of § 600.510-12(j)(2)(vi) of this chapter, without the use of the 0.15 multiplicative factor and with F = 0. For the 2010 and 2011 model years only, if the California Air Resources Board has approved a manufacturer's request to use a non-zero value of F, the manufacturer may use such an approved value.

(E) The average carbon-related exhaust emissions for natural gas dual fueled model types shall be the value measured using gasoline or diesel fuel, as applicable, and shall be calculated according to the provisions of § 600.510-12(j)(2)(vii) of this chapter, without the use of the 0.15 multiplicative factor and with F = 0. For the 2010 and 2011 model years only, if the California Air Resources Board has approved a manufacturer's request to use a non-zero value of F, the manufacturer may use such an approved value.

(F) Carbon-related exhaust emission values for electric, fuel cell, and plug-in hybrid electric model types shall be included in the fleet average determined under paragraph (a)(1) of this section only to the extent that such vehicles are not being used to generate early advanced technology vehicle credits under paragraph (c) of this section.

(iv) Fleet average CO2 credit threshold values.

Model year	LDV/LDT1	LDT2/HLDT/MDPV
2009	323	439
2010	301	420
2011	267	390

(v) Credits are earned on the last day of the model year. Manufacturers must calculate, for a given model year, the number of credits or debits it has generated according to the following equation, rounded to the nearest megagram:

CO2 Credits or Debits (Mg) = [(CO2 Credit Threshold − Manufacturer's Sales Weighted Fleet Average CO2 Emissions) × (Total Number of Vehicles Sold) × (Vehicle Lifetime Miles)] ÷ 1,000,000 Where: CO2 Credit Threshold = the applicable credit threshold value for the model year and vehicle averaging set as determined by paragraph (a)(1)(iv) of this section; Manufacturer's Sales Weighted Fleet Average CO2 Emissions = average calculated according to paragraph (a)(1)(iii) of this section; Total Number of Vehicles Sold = The number of vehicles domestically sold as defined in § 600.511-80 of this chapter; and Vehicle Lifetime Miles is 195,264 for the LDV/LDT1 averaging set and 225,865 for the LDT2/HLDT/MDPV averaging set.

(vi) Deficits generated against the applicable CO2 credit threshold values in paragraph (a)(1)(iv) of this section in any averaging set for any of the 2009-2011 model years must be offset using credits accumulated by any averaging set in any of the 2009-2011 model years before determining the number of credits that may be carried forward to the 2012. Deficit carry forward and credit banking provisions of § 86.1865-12 apply to early credits earned under this paragraph (a)(1), except that deficits may not be carried forward from any of the 2009-2011 model years into the 2012 model year, and credits earned in the 2009 model year may not be traded to other manufacturers.

(2) Pathway 2. To earn credits under this pathway, manufacturers shall calculate an average carbon-related exhaust emission value to the nearest one gram per mile for the classes of motor vehicles identified in paragraph (a)(1) of this section, and the results of such calculations will be reported to the Administrator for use in determining compliance with the applicable CO2 early credit threshold values.

(i) Credits under this pathway shall be calculated according to the provisions of paragraph (a)(1) of this section, except credits may only be generated by vehicles sold in a model year in California and in states with a section 177 program in effect in that model year. For the purposes of this section, “section 177 program” means State regulations or other laws that apply to vehicle emissions from any of the following categories of motor vehicles: Passenger automobiles, light-duty trucks up through 6,000 pounds GVWR, and medium-duty vehicles from 6,001 to 14,000 pounds GVWR, as these categories of motor vehicles are defined in the California Code of Regulations, Title 13, Division 3, Chapter 1, Article 1, Section 1900.

(ii) A deficit in any averaging set for any of the 2009-2011 model years must be offset using credits accumulated by any averaging set in any of the 2009-2011 model years before determining the number of credits that may be carried forward to the 2012 model year. Deficit carry forward and credit banking provisions of § 86.1865-12 apply to early credits earned under this paragraph (a)(1), except that deficits may not be carried forward from any of the 2009-2011 model years into the 2012 model year, and credits earned in the 2009 model year may not be traded to other manufacturers.

(3) Pathway 3. Pathway 3 credits are those credits earned under Pathway 2 as described in paragraph (a)(2) of this section in California and in the section 177 states determined in paragraph (a)(2)(i) of this section, combined with additional credits earned in the set of states that does not include California and the section 177 states determined in paragraph (a)(2)(i) of this section and calculated according to this paragraph (a)(3).

(i) Manufacturers shall earn additional credits under Pathway 3 by calculating an average carbon-related exhaust emission value to the nearest one gram per mile for the classes of motor vehicles identified in this paragraph (a)(3). The results of such calculations will be reported to the Administrator for use in determining compliance with the applicable CO2 early credit threshold values.

(ii) An average carbon-related exhaust emission value calculation will be made for the passenger automobile averaging set. The term “passenger automobile” shall have the meaning given by the Department of Transportation at 49 CFR 523.4 for the specific model year for which the calculation is being made.

(iii) An average carbon-related exhaust emission value calculation will be made for the light truck averaging set. The term “light truck” shall have the meaning given by the Department of Transportation at 49 CFR 523.5 for the specific model year for which the calculation is being made.

(iv) Average carbon-related exhaust emission values shall be determined according to the provisions of § 600.510-12 of this chapter, except that:

(A) Vehicles sold in California and the section 177 states determined in paragraph (a)(2)(i) of this section shall not be included.

(D) The average carbon-related exhaust emissions for alcohol dual fueled model types shall be calculated according to the provisions of § 600.510-12(j)(2)(vi) of this chapter, without the use of the 0.15 multiplicative factor and with F = 0.

(E) The average carbon-related exhaust emissions for natural gas dual fueled model types shall be calculated according to the provisions of § 600.510-12(j)(2)(vii) of this chapter, without the use of the 0.15 multiplicative factor and with F = 0.

(F) Electric, fuel cell, and plug-in hybrid electric model type carbon-related exhaust emission values shall be included in the fleet average determined under paragraph (a)(1) of this section only to the extent that such vehicles are not being used to generate early advanced technology vehicle credits under paragraph (c) of this section.

(v) Pathway 3 fleet average CO2 credit threshold values.

(A) For 2009 and 2010 model year passenger automobiles, the fleet average CO2 credit threshold value is 323 grams/mile.

(B) For 2009 model year light trucks the fleet average CO2 credit threshold value is 381 grams/mile, or, if the manufacturer chose to optionally meet an alternative manufacturer-specific light truck fuel economy standard calculated under 49 CFR 533.5 for the 2009 model year, the gram per mile fleet average CO2 credit threshold shall be the CO2 value determined by dividing 8887 by that alternative manufacturer-specific fuel economy standard and rounding to the nearest whole gram per mile.

(C) For 2010 model year light trucks the fleet average CO2 credit threshold value is 376 grams/mile, or, if the manufacturer chose to optionally meet an alternative manufacturer-specific light truck fuel economy standard calculated under 49 CFR 533.5 for the 2010 model year, the gram per mile fleet average CO2 credit threshold shall be the CO2 value determined by dividing 8887 by that alternative manufacturer-specific fuel economy standard and rounding to the nearest whole gram per mile.

(D) For 2011 model year passenger automobiles the fleet average CO2 credit threshold value is the value determined by dividing 8887 by the manufacturer-specific passenger automobile fuel economy standard for the 2011 model year determined under 49 CFR 531.5 and rounding to the nearest whole gram per mile.

(E) For 2011 model year light trucks the fleet average CO2 credit threshold value is the value determined by dividing 8887 by the manufacturer-specific light truck fuel economy standard for the 2011 model year determined under 49 CFR 533.5 and rounding to the nearest whole gram per mile.

(vi) Credits are earned on the last day of the model year. Manufacturers must calculate, for a given model year, the number of credits or debits it has generated according to the following equation, rounded to the nearest megagram:

CO2 Credits or Debits (Mg) = [(CO2 Credit Threshold − Manufacturer's Sales Weighted Fleet Average CO2 Emissions) × (Total Number of Vehicles Sold) × (Vehicle Lifetime Miles)] ÷ 1,000,000 Where: CO2 Credit Threshold = the applicable credit threshold value for the model year and vehicle averaging set as determined by paragraph (a)(3)(v) of this section. Manufacturer's Sales Weighted Fleet Average CO2 Emissions = average calculated according to paragraph (a)(3)(iv) of this section. Total Number of Vehicles Sold = The number of vehicles domestically sold as defined in § 600.511 of this chapter except that vehicles sold in California and the section 177 states determined in paragraph (a)(2)(i) of this section shall not be included. Vehicle Lifetime Miles is 195,264 for the LDV/LDT1 averaging set and 225,865 for the LDT2/HLDT/MDPV averaging set.

(vii) Deficits in any averaging set for any of the 2009-2011 model years must be offset using credits accumulated by any averaging set in any of the 2009-2011 model years before determining the number of credits that may be carried forward to the 2012. Deficit carry forward and credit banking provisions of § 86.1865-12 apply to early credits earned under this paragraph (a)(3), except that deficits may not be carried forward from any of the 2009-2011 model years into the 2012 model year, and credits earned in the 2009 model year may not be traded to other manufacturers.

(4) Pathway 4. Pathway 4 credits are those credits earned under Pathway 3 as described in paragraph (a)(3) of this section in the set of states that does not include California and the section 177 states determined in paragraph (a)(2)(i) of this section and calculated according to paragraph (a)(3) of this section. Credits may only be generated by vehicles sold in the set of states that does not include California and the section 177 states determined in paragraph (a)(2)(i) of this section.

(b) Early air conditioning leakage and efficiency credits. (1) Manufacturers may optionally generate air conditioning refrigerant leakage credits according to the provisions of § 86.1867 and/or air conditioning efficiency credits according to the provisions of § 86.1868 in model years 2009 through 2011. Credits must be tracked by model type and model year.

(2) Manufacturers must be participating in one of the early fleet average credit pathways described in paragraphs (a)(1), (2), or (3) of this section in order to generate early air conditioning credits for vehicles sold in California and the section 177 states as determined in paragraph (a)(2)(i) of this section. Manufacturers that select Pathway 4 as described in paragraph (a)(4) of this section may not generate early air conditioning credits for vehicles sold in California and the section 177 states as determined in paragraph (a)(2)(i) of this section. Manufacturers not participating in one of the early fleet average credit pathways described in this section may generate early air conditioning credits only for vehicles sold in states other than in California and the section 177 states as determined in paragraph (a)(2)(i) of this section.

(c) Early advanced technology vehicle incentive. Vehicles eligible for this incentive are electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles, as those terms are defined in § 86.1803-01. If a manufacturer chooses to not include electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles in their fleet averages calculated under any of the early credit pathways described in paragraph (a) of this section, the manufacturer may generate early advanced technology vehicle credits pursuant to this paragraph (c).

(1) The manufacturer shall record the sales and carbon-related exhaust emission values of eligible vehicles by model type and model year for model years 2009 through 2011 and report these values to the Administrator under paragraph (e) of this section.

(2) Manufacturers may use the 2009 through 2011 eligible vehicles in their fleet average calculations starting with the 2012 model year, subject to a five-year carry-forward limitation.

(i) Eligible 2009 model year vehicles may be used in the calculation of a manufacturer's fleet average carbon-related exhaust emissions in the 2012 through 2014 model years.

(ii) Eligible 2010 model year vehicles may be used in the calculation of a manufacturer's fleet average carbon-related exhaust emissions in the 2012 through 2015 model years.

(iii) Eligible 2011 model year vehicles may be used in the calculation of a manufacturer's fleet average carbon-related exhaust emissions in the 2012 through 2016 model years.

(3)(i) To use the advanced technology vehicle incentive, the manufacturer will apply the 2009, 2010, and/or 2011 model type sales volumes and their model type emission levels to the manufacturer's fleet average calculation.

(ii) The early advanced technology vehicle incentive must be used to offset a deficit in one of the 2012 through 2016 model years, as appropriate under paragraph (c)(2) of this section.

(iii) The advanced technology vehicle sales and emission values may be included in a fleet average calculation for passenger automobiles or light trucks, but may not be used to generate credits in the model year in which they are included or in the averaging set in which they are used. Use of early advanced technology vehicle credits is limited to offsetting a deficit that would otherwise be generated without the use of those credits. Manufacturers shall report the use of such credits in their model year report for the model year in which the credits are used.

(4) Manufacturers may use zero grams/mile to represent the carbon-related exhaust emission values for the electric operation of 2009 through 2011 model year electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles subject to the limitations in § 86.1866. The 2009 through 2011 model year vehicles using zero grams per mile shall count against the 200,000 or 300,000 caps on use of this credit value, whichever is applicable under § 86.1866.

(d) Early off-cycle technology credits. Manufacturers may optionally generate credits for the implementation of certain CO2-reducing technologies according to the provisions of § 86.1869 in model years 2009 through 2011. Credits must be tracked by model type and model year.

(e) Early credit reporting requirements. Each manufacturer shall submit a report to the Administrator, known as the early credits report, that reports the credits earned in the 2009 through 2011 model years under this section.

(1) The report shall contain all information necessary for the calculation of the manufacturer's early credits in each of the 2009 through 2011 model years.

(2) The early credits report shall be in writing, signed by the authorized representative of the manufacturer and shall be submitted no later than 90 days after the end of the 2011 model year.

(3) Manufacturers using one of the optional early fleet average CO2 reduction credit pathways described in paragraph (a) of this section shall report the following information separately for the appropriate averaging sets (e.g. LDV/LDT1 and LDT2/HLDT/MDPV averaging sets for pathways 1 and 2; LDV, LDT/2011 MDPV, LDV/LDT1 and LDT2/HLDT/MDPV averaging sets for Pathway 3; LDV and LDT/2011 MDPV averaging sets for Pathway 4):

(i) The pathway that they have selected (1, 2, 3, or 4).

(ii) A carbon-related exhaust emission value for each model type of the manufacturer's product line calculated according to paragraph (a) of this section.

(iii) The manufacturer's average carbon-related exhaust emission value calculated according to paragraph (a) of this section for the applicable averaging set and region and all data required to complete this calculation.

(iv) The credits earned for each averaging set, model year, and region, as applicable.

(4) Manufacturers calculating early air conditioning leakage and/or efficiency credits under paragraph (b) of this section shall report the following information for each model year separately for passenger automobiles and light trucks and for each air conditioning system used to generate credits:

(i) A description of the air conditioning system.

(ii) The leakage and efficiency credit values and all the information required to determine these values.

(iii) The total credits earned for each averaging set, model year, and region, as applicable.

(5) Manufacturers calculating early advanced technology vehicle credits under paragraph (c) of this section shall report, for each model year and separately for passenger automobiles and light trucks, the following information:

(i) The number of each model type of eligible vehicle produced.

(ii) The carbon-related exhaust emission value by model type and model year.

(6) Manufacturers calculating early off-cycle technology credits under paragraph (d) of this section shall report, for each model year and separately for passenger automobiles and light trucks, all test results and data required for calculating such credits.

[77 FR 63175, Oct. 15, 2012, as amended at 81 FR 73998, Oct. 25, 2016]