Federal Register: December 27, 2006 (Volume 71, Number 248)

DOCID: FR Doc 06-9749

ENVIRONMENTAL PROTECTION AGENCY

U.S. Citizenship and Immigration Services

CFR Citation: 40 CFR Parts 86 and 600

RIN ID: RIN 2060-AN14

EPA ID: [EPA-HQ-OAR-2005-0169; FRL-8257-5]

NOTICE: Part II

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY:

Fuel Economy Labeling of Motor Vehicles: Revisions To Improve Calculation of Fuel Economy Estimates

DATES: This final rule is effective on January 26, 2007. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of January 26, 2007.

DOCUMENT SUMMARY:

The Environmental Protection Agency (EPA) is finalizing changes to the methods used to calculate the fuel economy estimates that are posted on window stickers of all new cars and light trucks sold in the United States. This final rule will greatly improve the EPA fuel economy estimates to more accurately inform consumers about the fuel economy they can expect to achieve in the real world. The new test methods take into account several important factors that affect fuel economy in the real world, but are missing from the existing fuel economy tests. Key among these factors are high speeds, aggressive accelerations and decelerations, the use of air conditioning, and operation in cold temperatures. Under the new methods, the city miles per gallon (mpg) estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates, and city mpg estimates for some vehicles will drop by as much as 30 percent. The highway mpg estimates for most vehicles will drop on average by about 8 percent, with some estimates dropping by as much as 25 percent relative to today's estimates. These changes will take effect starting with 2008 model year vehicles, available at dealers in 2007. We also are adopting a new fuel economy label design with a new look and updated information that should be more useful to prospective car buyers. The new label features more prominent fuel cost information, an easytouse graphic for comparing the fuel economy of different vehicles, clearer text, and a Web site address for more information. Manufacturers will be phasing in the new design during the 2008 model year. Finally, for the first time we are requiring fuel economy labeling of certain passenger vehicles between 8,500 and 10,000 lbs gross vehicle weight rating. Because of the Department of Transportation's recent regulation that brings mediumduty passenger vehicles into the Corporate Average Fuel Economy program starting in 2011, EPA is now statutorily obligated to include these vehicles in the fuel economy labeling program. Mediumduty passenger vehicles are a subset of vehicles between 8,500 and 10,000 lbs gross vehicle weight that includes large sport utility vehicles and vans, but not pickup trucks. Vehicle manufacturers are required to post fuel economy labels on mediumduty passenger vehicles beginning with the 2011 model year.

SUMMARY:

Environmental Protection Agency,

SUPPLEMENTAL INFORMATION

Does This Action Apply to Me?

This action affects companies that manufacture or sell new light duty vehicles, lightduty trucks, and mediumduty passenger
vehicles.\1\ Regulated categories and entities include:
\1\ ``Lightduty vehicle,'' ``lightduty truck,'' and ``medium duty passenger vehicle'' are defined in 40 CFR 86.180301.
Generally, the term ``lightduty vehicle'' means a passenger car, the term ``lightduty truck'' means a pickup truck, sportutility vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating, and ``mediumduty passenger vehicle'' means a sportutility vehicle or passenger van from 8,500 to 10,000 lbs gross vehicle weight rating. Mediumduty passenger vehicles do not include pickup trucks.
Examples of potentially Category NAICS Codes a regulated entities Industry................. 336111, 336112..... Motor vehicle manufacturers. Industry................. 81112, 811198, Commercial importers of 54154. vehicles and vehicle components. \a\ North American Industry Classification System (NAICS)

This list is not intended to be exhaustive, but rather provides a guide regarding entities likely to be regulated by this action. To determine whether particular activities may be regulated by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action to the person listed in FOR FURTHER INFORMATION CONTACT.
Table of Contents
I. Introduction

A. Background

B. What Requirements Are We Adopting?

1. Revised Methods for Calculating City and Highway Fuel Economy Estimates

2. New Labeling Requirement for MediumDuty Passenger Vehicles

3. Improved Fuel Economy Label Design

4. New Vehicle Class Categories and Definitions

5. Test Procedure Modifications

C. Why is EPA Taking This Action?

1. Energy Policy Act of 2005

2. Comparing EPA Estimates to Actual Driving Experience

3. Representing RealWorld Conditions on the Fuel Economy Tests

D. When Will the New Requirements Take Effect?

1. New City and Highway Fuel Economy Estimates

2. Implementation of New Label Design

3. Fuel Economy Labeling of MediumDuty Passenger Vehicles

E. Periodic Evaluation of Fuel Economy Labeling Methods

F. This Final Rule Does Not Impact CAFE Standards or Test Procedures

G. Public Participation
II. New Test Methods and Calculation Procedures for Fuel Economy Labels

A. Derivation of the VehicleSpecific 5Cycle Methodology [[Page 77873]]

1. Overview of Public Comments on the 5Cycle Methodology

2. Changes to the 5Cycle Methodology From Proposal

B. Derivation of the MPGBased Methodology

C. Effect of the New Methods on Fuel Economy Label Values

D. Comparison to Other Onroad Fuel Economy Estimates

E. Implementation of the New Fuel Economy Methods

1. 5Cycle Vehicle Selection Criteria for 2011 and Later Model Years

2. MediumDuty Passenger Vehicle Label Estimates

3. Analytically Derived Fuel Economy
III. Revisions to the Fuel Economy Label Format and Content

A. Background

B. Label Size and Orientation

C. Fuel Economy of Comparable Vehicles

D. Estimated Annual Fuel Cost

E. ``Your Mileage Will Vary'' Statement

F. Environmental Information Statement

G. Government Logos and Web site Link

H. Temporary Transitional Statement

I. Combined Fuel Economy Basis

J. Labeling Requirements for Dual Fueled Vehicles

K. Addition of Final Regulatory Specifications for Label Content and Design

IV. Testing Provisions

A. Testing Requirements for Vehicles Currently Exempt From Certain Emission Tests

1. Diesel Vehicles

2. AlternativeFueled Vehicles

B. Modifications to Existing Test Procedures

1. Splitting the US06 Test Into City and Highway Segments

2. Heater/Defroster Usage During the Cold FTP

3. Hybrid Electric Vehicle Testing Provisions

V. Projected Cost Impacts

A. Incorporation of New Test Cycles Into Fuel Economy Label Calculations

1. Testing Burden for 2008 Through 2010 Model Years (MY)

2. Testing Burden for 2011 and Later Model Years

3. Cost Analysis of the Testing Burden

B. Revised Label Format and New Information Included

C. Reporting of Fuel Economy Data for SC03, US06, and Cold FTP Tests

D. Impact on Confirmatory Testing

E. Fees

F. Summary of Final Cost Estimate
VI. Implementation and Other Provisions

A. Revisions to Classes of Comparable Vehicles

B. Fuel Economy Ranges for Comparable Fuel Economy Graphic

C. Temporary Option To Add ``Old Method'' City and Highway Estimates on Early Introduction Model Year Vehicle Labels

D. Consideration of Fuel Consumption vs. Fuel Economy as a Metric

E. WebBased DriverSpecific Fuel Economy Calculator

F. Fuel Basis for Estimated Annual Fuel Costs

G. Electronic Distribution of DealerSupplied Fuel Economy Booklet
VII. Relevant Statutes and Regulations

A. Energy Policy and Conservation Act

B. Energy Policy Act of 2005

C. Other Statutes and Regulations

1. Automobile Disclosure Act

2. Internal Revenue Code

3. Clean Air Act

4. Additional Provisions in the Energy Policy Act of 2005 and Transportation Equity Act of 2005

5. Federal Trade Commission Guide Concerning Fuel Economy Advertising for New Vehicles

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use

I. National Technology Transfer Advancement Act

J. Congressional Review Act
IX. Statutory Provisions and Legal Authority

I. Introduction

This final rule has three key elements. First, we are finalizing changes to the Environmental Protection Agency's (EPA) fuel economy testing and calculation procedures so that the miles per gallon (mpg) estimates for passenger cars and lightduty trucks will better reflect what consumers achieve in the realworld. Second, we are updating the fuel economy window sticker that appears on all new cars and light trucks sold in the U.S., which will make the window sticker more useful and understandable to consumers. Third, for the first time we are requiring fuel economy labeling of certain passenger vehicles between 8,500 and 10,000 lbs gross vehicle weight rating (GVWR), such as the largest sportutility vehicles (SUVs) and passenger vans.

This final rule follows a Notice of Proposed Rulemaking (NPRM) published on February 1, 2006.\2\ In the NPRM, we proposed changes to the testing and calculation procedures used to calculate the fuel economy estimates that appear on window stickers that are posted on all new cars and light trucks sold in the United States. The NPRM also proposed changes to the fuel economy label design and content. We received comments on the NPRM from a wide variety of stakeholders, including the automobile manufacturing industry, environmental groups, consumer organizations, state governments, and the general public. These comments are available for public viewing in Docket EPAHQOAR 20050169. Docket content can be viewed and/or downloaded at http://www.regulations.gov. \3\ Our responses to these comments are detailed in
the Response to Comments document, which is available in the public docket and on our Web site.\4\ In this section of the final rule we describe some background information and provide a brief description of the content, timing, and rationale for the final program. For additional background and details regarding the proposal, readers should consult the NPRM and related documents.
\2\ See 71 FR 5426 (Feb. 1, 2006), Available in the public docket and on our Web site at http://www.epa.gov/fueleconomy/regulations.htm .
\3\ Enter the docket i.d. number (EPAHQOAR20050169) in the Keyword field and choose ``All Documents (Open and Closed for Comment).''
\4\ See http://www.epa.gov/fueleconomy/[fxsp0]regulations.htm or http://www.regulations.gov. A. Background

With this final rule, EPA is helping car buyers make more informed decisions when considering a vehicle's fuel economy. Fuel economy, or gas mileage, continues to be a major area of public interest for several reasons. Passenger vehicles account for approximately 40 percent of all U.S. oil consumption. Finally, the more miles a car gets per gallon of gasoline, the more money the owner saves on fuel costs. With consumers' renewed interest in fuel savings due to higher gasoline prices, providing mileage estimates that more closely reflect real world driving has once again become important for consumers who comparisonshop.

The EPA fuel economy estimates have appeared on the window stickers of all new cars and light trucks since the late 1970's and are well recognized by consumers. The window sticker displays two fuel economy estimates: One for city driving and one for highway driving. These estimates, in units of miles per gallon, essentially serve two purposes: (1) To provide consumers with a basis on which to compare the fuel economy of different vehicles, and (2) to provide consumers with a reasonable estimate of the fuel economy they can expect to achieve. While the EPA fuel economy estimates have generally been a useful tool for comparing the relative fuel economy of different vehicles, they have been less useful for predicting the fuel economy that consumers can reasonably expect to achieve in the real world. Consumers need to be provided with accurate,
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easily understandable, and relevant information regarding the fuel economy of new vehicles. This final rule improves the information provided to consumers regarding the fuel economy of new vehicles.

The city fuel economy estimate is currently based on the Federal Test Procedure (FTP), which was designed to measure a vehicle's tailpipe emissions under urban driving conditions. The driving cycle used for the FTP was developed in the mid1960's to represent hometo work commuting in Los Angeles. The FTP is also one of the tests used to determine emissions compliance today. The FTP includes a series of accelerations, decelerations, and idling (such as at stop lights). It also includes starting the vehicle after it has been parked for an extended period of time (called a ``cold start''), as well as a start on a warmedup engine (called a ``hot start''). The total distance covered by the FTP is about 11 miles and the average speed is about 21 mph, with a maximum speed of about 56 mph.

The highway fuel economy estimate is currently based on the Highway Fuel Economy Test (HFET), which was developed by EPA in 1974 and was designed to represent a mix of interstate highway and rural driving. It consists of relatively constant higherspeed driving, with no engine starts or idling time. The HFET covers a distance of about 10 miles, at an average speed of 49 mph and a top speed of about 60 mph.

A fundamental issue with today's fuel economy estimates is that the underlying test and calculation procedures do not fully represent current realworld driving conditions. Some of the key limitations are that the highway test has a top speed of only 60 miles per hour, both the city and highway tests are run at mild climatic conditions (75 [deg]F), both tests have mild acceleration rates, and neither test is run with the use of fuelconsuming accessories, such as air conditioning. Over the past few years, there have been several independent studies comparing EPA's fuel economy estimates to the real world experience of consumers. These studies confirm that there is considerable variation in realworld fuel economy, and provide substantial evidence that EPA's mileage ratings often overestimate realworld fuel economy. Although these studies differ in a number of variables, including their test methods, driving conditions, and fuel economy measurement techniques, they indicate that EPA's approach to estimating fuel economy needs to be improved to better represent some key realworld fuel economy impacts.

The methods used today for calculating the city and highway mpg estimates have been in place since the 1970's, and the results of these methods were adjusted only once in the mid1980's to bring them closer to consumer's expectations.\5\ Since that time, there have been many changes affecting the way Americans drivespeed limits are higher, road congestion has increased, vehicle performance has increased, vehicle technologies have changed markedly, and more vehicles are equipped with energyconsuming accessories like air conditioning. Our analysis shows that these changes, along with several other factors, again indicate a need to revise the testing and calculation procedures underlying the fuel economy window sticker estimates.\6\
\5\ In 1984, EPA published new fuel economy labeling procedures that were applicable to 1985 and alter model year vehicles. Based on inuse fuel economy data collected at the time, it was evident that the fuel economy estimates needed to be adjusted downward in order to more accurately reflect consumers' average fuel economy experience. The city values (based on the raw FTP test data) were adjusted downward by 10 percent and the highway values (likewise based on the raw highway test data) were adjusted downward by 22 percent. See 49 FR 13832 (April 6, 1984).
\6\ See the Technical Support Document and ``Vehicle Fuel Economy Labeling and the Effect of Cold Temperature, Air
Conditioning Usage and Aggressive Driving on Fuel Economy,'' by Eldert Bontekoe and Richard A. Rykowski, 2005. These are available in the public docket for review.

We believe the new fuel economy estimates will provide car buyers with useful information when comparing the fuel economy of different vehicles. It is important to emphasize that fuel economy varies from driver to driver for a wide variety of reasons, such as different driving styles, climates, traffic patterns, use of accessories, loads, weather, and vehicle maintenance. Even different drivers of the same vehicle will experience different fuel economy as these and other factors vary. Therefore, it is impossible to design a ``perfect'' fuel economy test that will provide accurate realworld fuel economy estimates for every consumer. With any estimate, there will always be consumers that get better or worse actual fuel economy. The EPA estimates are meant to be a general guideline for consumers, particularly to compare the relative fuel economy of one vehicle to another. Nevertheless, we do believe that the new fuel economy test methods will do a better job of giving consumers a more accurate estimate of the fuel economy they can achieve in the realworld. Under the new methods, the city mpg estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates. City estimates for some of the most fuelefficient vehicles, including gasolineelectric hybrid vehicles, will decrease by 20 to 30 percent. The highway mpg estimates for most vehicles will drop on average by about 8 percent, with some estimates dropping by as much as 25 percent relative to today's estimates.

While the inputs to our estimates are based on data from actual realworld driving behavior and conditions, it is essential that our fuel economy estimates continue to be derived primarily from controlled, repeatable, laboratory tests. Because the test is controlled and repeatable, an EPA fuel economy estimate can be used for comparison of different vehicle models and types. In other words, when consumers are shopping for a car, they can be sure that the fuel economy estimates were measured using a ``common yardstick''that is the same test run under the exact same set of conditions, making the fuel economy estimates a fair comparison from vehicletovehicle. While some organizations have issued their own fuel economy estimates based on realworld driving, such an approach introduces a wide number of often uncontrollable variablesdifferent drivers, driving patterns, weather conditions, temperatures, etc.that make repeatable tests impossible. Our new fuel economy test methods are more representative of realworld conditions than the current fuel economy testsyet we retain our practice of relying on controlled, repeatable, laboratory tests. EPA and manufacturers test over 1,250 vehicle models annually and every test is run under an identical range of conditions and under a precise driver's trace, which assures that the result will be the same for an individual vehicle model no matter when and where the laboratory test is performed. Variations in temperature, road grade, driving patterns, and other variables do not impact the result of the test. While such external conditions impact fuel economy on a tripto trip basis, they do not change the laboratory test result. Therefore, a repeatable test provides a level playing field for all vehicles, which is essential for comparing the fuel economy of one vehicle to another. Finally, EPA must preserve the ability to confirm the values achieved by the manufacturers' testing, and this can only be achieved with a highly repeatable test or set of tests.

In the Energy Policy Act of 2005, Congress required EPA to revise the fuel economy labeling methods to better reflect a variety of real world factors that affect fuel economy. Section 774 of
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the 2005 Energy Policy Act directs EPA to ``* * * update or revise the adjustment factors in [certain sections of the fuel economy labeling regulations] to take into consideration higher speed limits, faster acceleration rates, variations in temperature, use of air conditioning, shorter city test cycle lengths, current reference fuels, and the use of other fuel depleting features.'' This final rule fully addresses this statutory requirement. Section VII contains a detailed analysis of the statute and regulations.

B. What Requirements Are We Adopting?

This final rule establishes new methods for determining the city and highway fuel economy estimates for the sole purpose of fuel economy labeling by incorporating fuel economy results over a broader range of driving conditions. The new methodology will result in EPA fuel economy estimates that better approximate the miles per gallon that consumers achieve in realworld driving. These changes include some revisions to existing test procedures. In addition, we are revising the format and content of the fuel economy label to make the information more useful and easily understandable to consumers. The new rule also requires that mediumduty passenger vehicles (a subset of vehicles 8,500 to 10,000 lbs gross vehicle weight) have fuel economy labels. We also are finalizing minor changes related to the fuel economy information program, including revising the comparable vehicle classes and adding a new provision for the electronic distribution of the annual Fuel Economy Guide. An overview of each of these requirements follows, with additional detail provided in subsequent sections of this final rule. 1. Revised Methods for Calculating City and Highway Fuel Economy Estimates

This final rule revises the test methods by which the city and highway fuel economy estimates are calculated. We are replacing the current method, established in 1984, of adjusting the city (FTP) test result downward by 10 percent and the highway (HFET) test result downward by 22 percent. Instead, we are finalizing the proposed approach that incorporates additional test methods that address factors that impact fuel economy but that are missing from today's tests specifically, higher speeds, more aggressive driving (e.g., higher acceleration rates), the use of air conditioning, and the effect of cold temperature and other factors.

Since 1984 when we last updated the fuel economy estimate methodology, EPA has established several new test cycles for emissions certification. EPA had become concerned that the FTP omitted many critical driving modes and conditions that existed in actual use, and that emissions could be substantially higher during these driving modes compared to the FTP.\7\ Manufacturers frequently designed their vehicles' emission control systems to meet the specified FTP test conditions, often neglecting emissions control over other driving conditions, resulting in higher realworld emissions.
\7\ Emissions from driving modes not reflected on EPA test procedures became known as ``offcycle'' emissions, meaning that they occurred during driving conditions not typically encountered over EPA's emission test cycle.

The need for action to address offcycle emissions was recognized by Congress in the passage of Sections 206(h) and 202(j) of the Clean Air Act Amendments of 1990 (CAAA). Section 206(h) required EPA to study and revise as necessary the test procedures used to measure emissions, taking into consideration the actual current driving conditions under which motor vehicles are used, including conditions relating to fuel, temperature, acceleration, and altitude. Section 202(j) of the CAAA required EPA to establish emission standards for carbon monoxide under cold (20[deg]F) temperature conditions.

In 1992, EPA published rules implementing the 202(j) cold temperature testing requirement, acknowledging that the ambient temperature conditions of the FTP test (run between 68 and 86 [deg]F) did not represent the full range of ambient temperature conditions that exist across the United States and that cold temperature had different emissions effects on different vehicle designs.\8\ EPA's cold temperature emission regulations required manufacturers to conduct FTP testing at 20 [deg]F. By promulgating this new test procedure and associated carbon monoxide emission standard, EPA sought to encourage manufacturers to employ better emission control strategies that would improve ambient air quality across a wider range of inuse temperature conditions.

\8\ See 57 FR 31888 (July 17, 1992).

In fulfillment of the 206(h) CAAA requirement, EPA published a report in 1993 which concluded that the FTP cycle did not represent the full range of urban driving conditions that could impact the inuse driving emission levels.\9\ Consequently, EPA promulgated a rule in 1996 that established two new test procedures, with associated emission standards, that addressed certain shortcomings with the current FTP. Known as the ``Supplemental FTP,'' or ``SFTP,'' these procedures, similar to the cold temperature FTP, encouraged the use of the better emission controls across a wider range of inuse driving conditions in order to improve ambient air quality.\10\
\9\ U.S. Environmental Protection Agency. Federal Test Procedure Review Project: Preliminary Technical Report. U.S. Environmental Protection Agency, No. EPA420R93007, May 1993.

\10\ See 61 FR 54852 (October 22, 1996).

One of the SFTP test cycles, the US06, was designed to address high speed, aggressive driving behavior (with more severe acceleration rates) and rapid and frequent speed fluctuations. The US06 test contains both lowerspeed city driving and higherspeed highway driving modes. Its top speed is 80 mph, and average speed is 48 mph. The top acceleration rate exceeds 8 mph per second. The other SFTP test, the SC03, was designed to address airconditioner operation under a full simulation of high temperature (95 [deg]F), high sunload, and high humidity. The SC03 drive cycle was designed to represent driving immediately following a vehicle startup, and rapid and frequent speed fluctuations. Its top speed is about 55 mph and average speed is 22 mph. The top acceleration rate is about 5 mph per second.

The basis for the SFTP rulemaking was a study of realworld driving in four cities, Baltimore, Spokane, Atlanta and Los Angeles, where driving activity was measured on instrumented vehicles as well as by chase cars.\11\ At that time, it was found that 18 percent of the driving (in Baltimore) occurred outside of the speed/acceleration distribution of the FTP drive schedule. More recent realworld driving activity data indicates that driving has become even more aggressive than it was in 1992. Recent realworld activity data collected in California and Kansas City found that about 28 percent of driving (vehicle miles traveled) is at speeds greater than 60 mph. Further, about 33 percent of recent realworld driving falls outside of the FTP/ HFET speed and acceleration activity region. This is based on extensive chase car studies in California and instrumented vehicle studies in Kansas City.\12\ Our assessment of these
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recent realworld driving activity studies is described in detail in the Technical Support Document.
\11\ These studies were not designed to produce results that would be representative of driving behaviors throughout the U.S. Nonetheless, they were the best and most current data upon which to base design of the new test cycles.
\12\ A ``chase car'' study is a study in which driving behavior is recorded by an instrumented vehicle that follows vehicles on the road to record the behavior of the followed vehicle. In some cases the chase car is equipped with a laser rangefinder to enable the data collection systems to accurately determine the speed of the chased vehicle relative to the chase car. An instrumented vehicle study is a study in which data is collected from customer vehicles where the customer has agreed to allow their vehicle to be equipped with data collection instrumentation.

Clearly, the FTP and HFET tests alone do not fully capture the broad range of realworld driving conditions; indeed, this has already been conclusively demonstrated by the research that led to the revision of the FTP for emission test purposes. In order for EPA's fuel economy tests to be more representative of key aspects of realworld driving, it is critical that we consider the test conditions represented by these additional emission tests. The additional test methods will bring into the fuel economy estimates the test results from the five emissions tests in place today: FTP, HFET, US06, SC03, and Cold FTP. Thus, we refer to this as the ``5cycle'' method. The five test procedures that make up the 5cycle method and some of their key characteristics are summarized in the table below.
Table I1.Characteristics of the Fuel Economy and Emission Tests of the 5Cycle Methodology Avg speed Max speed Max accel Test Designed to represent (mph) (mph) (mph/sec) Ambient conditions Primary use Federal Test Procedure (FTP).......... Urban stopandgo 21 58 3.3 75 [deg]F............... Emissions & fuel economy driving from 1970's. testing. Highway Fuel Economy Test (HFET)...... Rural driving........... 48 60 3.3 75 [deg]F............... Fuel economy testing. US06.................................. High speeds and 48 80 8.5 75 [deg]F............... Emissions testing. aggressive driving. SC03.................................. Air conditioner 22 55 5.1 95 [deg]F & 40% relative Emissions testing. operation. humidity. Cold FTP.............................. Cold temperature 21 58 3.3 20 [deg]F............... Emissions testing. operation.

Under the new requirements, rather than basing the city mpg estimate solely on the adjusted FTP test result, and the highway mpg estimate solely on the adjusted HFET test result, each estimate will be based on a ``composite'' calculation of all five tests, weighting each appropriately to arrive at new city and highway mpg estimates. The new city and highway estimates will each be calculated according to separate city and highway ``5cycle'' formulae that are based on fuel economy results over these five tests. The conditions represented by each test will be ``weighted'' according to how frequently those conditions occur over average realworld city or highway driving. For example, we have derived weightings to represent driving cycle effects, trip length, air conditioner compressoron usage (it is the activity of the compressor that most significantly affects emissions and fuel economy), and operation over various temperatures. This methodology is described in detail in Section II and in the Technical Support Document.

We also are finalizing a downward adjustment to account for effects that are not reflected in our existing five test cycles. There are many factors that impact fuel economy, but are difficult to account for in the test cell on the dynamometer. These include roadway roughness, road grade (hills), wind, low tire pressure, heavier loads, hills, snow/ice, effects of ethanol in gasoline, larger vehicle loads (e.g., trailers, cargo, multiple passengers), and others. We need to account for these factors in our new fuel economy calculation methods, as they will lower a driver's fuel economy beyond those factors represented by our existing test cycles. We are finalizing a 9.5 percent downward adjustment to account for these nondynamometer effects, based on detailed analyses of the impacts of each of these factors using the most recent technical information and studies available. Additional detail regarding this factor can be found in Section II and in the Technical Support Document.

Because the 5cycle method is inherently vehiclespecific, the difference between today's label values and the new fuel economy estimates may vary significantly from vehicle to vehicle. In general, however, the new approach will result in city fuel economy estimates that are about 8 to 15 percent lower than today's labels for the majority of conventional vehicles. The city mpg estimates for the manufacturers of most vehicles will drop by about 12 percent on average relative to today's estimates. For vehicles that achieve generally better fuel economy, such as gasolineelectric hybrid vehicles, new city estimates will be about 20 to 30 percent lower than today's labels. The new highway fuel economy estimates will be about 5 to 15 percent lower for the majority of vehicles, including most hybrids. The highway mpg estimates for the manufacturers of most vehicles will drop on average by about 8 percent, with estimates for most hybrid vehicles dropping by 10 to 20 percent relative to today's estimates.

This final rule will greatly improve the EPA fuel economy estimates, so that they come closer to the fuel economy that consumers achieve in the real world. However, these are still estimates, and even with the improved fuel economy test methods we are finalizing today, some consumers will continue to get fuel economy that is higher or lower than the new estimates. No single test or set of tests can ever account for the wide variety of conditions experienced by every driver. 2. New Labeling Requirement for MediumDuty Passenger Vehicles

Based on the public comments and on specific events that have transpired since the NPRM was published, we are finalizing in this rule a fuel economy labeling program for MediumDuty Passenger Vehicles (MDPVs), a subset of vehicles between 8,500 and 10,000 lbs GVWR.

MDPVs were first defined in the regulation that put in place the ``Tier 2'' emission standards and gasoline sulfur controls.\13\ This newlydefined class of vehicles includes SUVs and passenger vans between 8,500 and 10,000 lbs GVWR, but excludes large pickup trucks. The specific regulatory definition was designed to capture in the lightduty vehicle emissions
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program some of the heavyduty vehicles that are designed and used predominantly for passenger use.

\13\ See 65 FR 6698 (Feb. 10, 2000).

Under the Energy Policy and Conservation Act (EPCA), EPA is required to establish regulations that require a manufacturer to attach a label to each ``automobile'' manufactured in a model year.\14\ ``Automobile'' is defined as a vehicle not more than 6,000 lbs GVWR, and those vehicles between 6,000 and 10,000 lbs GVWR that DOT determines are appropriate for inclusion in the Corporate Average Fuel Economy (CAFE) program.\15\ ``Automobile'' for the purposes of labeling also includes vehicles at no more than 8,500 lbs GVWR whether or not the Department of Transportation (DOT) has included those vehicles in the CAFE program.\16\ EPA has no authority to require labels on vehicles that are not automobiles, therefore EPA has no authority to require labeling of either vehicles above 10,000 lbs GVWR, or vehicles between 8,500 and 10,000 lbs GVWR that are not included by DOT in the CAFE program.
\14\ See 49 U.S.C. 32908(b).
\15\ See 49 U.S.C. 32901(a)(3).

\16\ See 49 U.S.C. 32908(a).

Since the time of EPA's proposal, DOT has included some vehicles above 8,500 lbs GVWR and below 10,000 lbs in its CAFE program, beginning in model year 2011.\17\ Since these vehicles now meet the definition of automobile, EPA is authorized to include these vehicles in labeling program. This final rule requires fuel economy labels on these MDPVs beginning in model year 2011.
\17\ See 71 FR 17565 (April 6, 2006).

3. Improved Fuel Economy Label Design

We are adopting a new fuel economy label format that is easier to read, has improved graphic design, and contains information that should be more useful to prospective car buyers. The final label design reflects input from the public comments received and from market testing of prototype label designs conducted via a series of focus groups. In addition to displaying revised city and highway mpg estimates, the new label features the following items:

  • A new layout featuring an updated fuel pump graphic, a prominent heading, and prominent government logos;
  • More prominent estimated annual fuel cost information, including the addition of the basis for the estimated annual fuel cost (dollars per gallon and miles driven per year);
  • An easytouse graphic that allows quick comparison of the labeled vehicle with other vehicles in its class;
  • A simplified statement noting that ``Your mileage will vary'';
  • A link to the EPA/DOE Web site http://www.fueleconomy.gov; and,
  • A transition statement noting that the mpg estimates are the result of new EPA methods beginning with the 2008 models (for inclusion on labels of model year 2008 and 2009 vehicles only). Details about the label design and content are found in Section III. An example label is shown below (actual size of the label is required by statute to be 4.5 inches tall by 7 inches wide).
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    [GRAPHIC] [TIFF OMITTED] TR27DE06.017

    4. New Vehicle Class Categories and Definitions

    EPCA requires that the label contain ``the range of fuel economy of comparable automobiles of all manufacturers.'' \18\ EPA regulations define what constitutes ``comparable automobiles.'' We proposed and are finalizing changes to the vehicle class categories to better reflect the current vehicle market and to allow consumers to make more appropriate fuel economy comparisons. Specifically, we are finalizing our proposal to add the vehicle class categories of ``Sport Utility Vehicle'' and ``Minivan,'' with appropriate definitions, to the list of categories used to classify vehicles for fuel economy comparison purposes. We are also redefining the ``Small Pickup Truck'' class by increasing the weight limit criteria. Section VI contains additional detail on these changes.
    \18\ See 49 U.S.C. 32908(b)(1)(C).

    5. Test Procedure Modifications

    We are finalizing several changes to existing test procedures to allow the collection of appropriate fuel economy data and to ensure that existing test procedures better represent realworld conditions. Specifically, we are finalizing the following test procedure changes:

  • A revised US06 test protocol that will collect the US06 exhaust emissions in two emissions samples (bags) in order to separately assess city and highway fuel economy over this test, with several alternative methods of determining a twobag result allowed);
  • Mandatory operation of the heater/defroster during the cold temperature FTP for emissions and fuel economy testing;
  • Testing diesel vehicles on the cold temperature FTP; and
  • Requiring hybrid vehicles to perform all four phases/bags of the FTP.
    Details regarding these changes are described in Section IV. C. Why Is EPA Taking This Action?

    1. Energy Policy Act of 2005

    In the Energy Policy Act of 2005, Congress required EPA to update or revise adjustment factors to better reflect a variety of realworld factors that affect fuel economy. Section 774 of the Energy Policy Act directs EPA to `` * * * update or revise the adjustment factors in [certain sections of the fuel economy labeling regulations] to take into consideration higher speed limits, faster acceleration rates, variations in temperature, use of air conditioning, shorter city test cycle lengths, current reference fuels, and the use of other fuel depleting features.'' This final rule does take into account these conditions and will address this statutory requirement. The Energy Policy Act of 2005 and other relevant statutes are discussed in greater detail in Section VII.

    2. Comparing EPA Estimates to Actual Driving Experience

    First, it is important to stress that the EPA city and highway mpg numbers are
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    estimatesthey cannot give consumers an exact indication of the fuel economy they will achieve. The complete range of consumer fuel economy experience can not be represented perfectly by any one number. Fuel economy varies based on a wide range of factors, some of which we have discussed above. There will always be consumers that achieve realworld fuel economy both better and worse than a given estimate.

    In recent years, there have been a number of studies, conducted by a variety of sources, suggesting that there is often a shortfall between the EPA estimates and realworld fuel economy. Several organizations have provided consumers with their own fuel economy estimates, which in some cases vary significantly from EPA's estimates. Each of these studies differs in its test methods, driving cycles, sampling of vehicles, and methods of measuring fuel economy. There are strengths and weaknesses of each study, which we discuss further in the Technical Support Document. Collectively, these studies indicate there are many cases where realworld fuel economy falls below the EPA estimates. The studies also indicate that realworld fuel economy varies significantly depending on the conditions under which it is evaluated. Nevertheless, taken as a whole, these studies reflect a wide range of realworld driving conditions, and show that typical fuel economy can be much lower than EPA's current estimates.
    3. Representing RealWorld Conditions on the Fuel Economy Tests

    The current city and highway fuel economy tests do not represent the full range of realworld driving conditions. The 1985 adjustment factors were designed to ensure that the fuel economy estimates across the vehicle fleet reflected the average impacts of a number of conditions not represented on the tests. However, as we noted earlier, many changes have occurred since then that make it once again desirable to reevaluate the fuel economy test methods and adjustment factors. Given the significant degree of variation that is apparent across vehicles, we believe it is important to reconsider the approach of ``onesizefitsall'' adjustment factors and instead move to an approach that more directly reflects the impacts of fuel economy on individual vehicle models.

    There are several key limitations in the FTP and HFET tests that cause them to not adequately reflect realworld driving today. First, most consumers understandably think ``highway'' fuel economy means the fuel economy you can expect under freeway driving conditions. In fact, the highway test has a top speed of 60 mph, since the test was developed more than 20 years ago to represent rural driving conditions at a time when the national speed limit was 55 miles per hour. The national speed limit has since been eliminated, many states have established speed limits of 65 to 70 miles per hour, and much driving is at even higher speeds. Recent realworld driving studies indicate that about 28 percent of driving (vehicle miles traveled, or VMT) is at speeds of greater than 60 mph. (This analysis is detailed in the Technical Support Document.) These studies also show that 33 percent of realworld driving VMT falls outside the FTP/HFET speed and acceleration activity region. Thus, a substantial amount of high speed driving behavior is not captured in today's FTP or HFET tests. This is a weakness in our current fuel economy test procedures. Since higher speed driving has a negative impact on fuel economy, incorporating these higher speed driving conditions into the fuel economy tests would lower the fuel economy estimates.

    Second, the maximum acceleration rates of both the FTP and HFET tests are a relatively mild 3.3 milesperhour per second (mph/sec), considerably lower than the maximum acceleration rates seen in real world driving. Recent realworld driving studies indicate that maximum acceleration rates are as high as 11 to 12 mph/sec and significant activity occurs beyond 3.3 mph/sec. (This analysis is detailed in the Technical Support Document.) At the time these tests were first developed, the realworld accelerations were higher than 3.3 mph/sec, but the test cycle's acceleration rates were limited to accommodate the mechanical limitation of the dynamometer test equipment. These constraints no longer exist with today's dynamometers, so we now have the ability to incorporate higher maximum acceleration rates that more closely reflect those of actual driving. As with high speed driving, higher acceleration rates have a negative impact on fuel economy; thus, if these higher accelerations were factored into our fuel economy methods, the estimates would be lower.

    The maximum deceleration rate of the FTP and HFET tests is important to consider as well, because it relates to the regenerative breaking effect of hybrid electric vehicles. The FTP and HFET tests include a mild maximum deceleration rate of 3.3 mph/sec; yet in recent realworld driving rates as high as 11 to 17 mph/sec were recorded. (This analysis is detailed in the Technical Support Document.) Under higher deceleration rates, the effects of regenerative breaking for hybrid electric vehicles are diminished, thereby lowering fuel economy. In this regard, today's FTP and HFET tests result in a higher fuel economy for hybrid vehicles than is achieved under typical driving conditions.

    Third, both the FTP and HFET tests are run at mild ambient conditions (approximately 75 [deg]F), while realworld driving occurs at a wide range of ambient temperatures. Moderate conditions tend to be optimal for achieving good fuel economy, and fuel economy is lower at temperatures colder or warmer than the 75 [deg]F test temperature. Only about 20 percent of VMT occurs between 70 and 80 [deg]F, approximately 15 percent of VMT occurs at temperatures above 80 [deg]F, and 65 percent occurs below 70 [deg]F. (This analysis is detailed in the Technical Support Document.) Moreover, neither the FTP nor HFET tests are run with accessories operating, such as air conditioners, heaters, or defrosters. These accessories, most notably air conditioning, can have a significant impact on a vehicle's fuel economy.

    Finally, there are many factors that affect fuel economy that cannot be replicated on dynamometer test cycles in a laboratory. These include road grade, wind, vehicle maintenance (e.g., tire pressure), snow/ice, precipitation, fuel effects, and others. It is not possible to develop a test cycle that captures the full range of factors impacting fuel economy. However, it is clear that the FTP and HFET tests alone are missing some important elements of realworld driving. All of these factors can reduce fuel economy. This largely explains why our current estimates often do not reflect consumers' realworld fuel economy experience.
    D. When Will the New Requirements Take Effect?

    1. New City and Highway Fuel Economy Estimates

    We want the public to benefit from the improved information provided by the new fuel economy estimates as soon as possible. Therefore, these new regulations take effect with the 2008 model year vehicles, which will be available for sale at dealers in 2007. We believe this is the earliest possible date for implementation. Manufacturers can legally begin selling 2008 models as early as January 2, 2007. However, we are phasing in the new test methods in order to provide manufacturers with sufficient lead time to plan for increased fuel economy testing necessitated by the 5cycle approach.

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    For the first three model years (2008 through 2010), we provide manufacturers with the option of deriving the 5cycle fuel economy using a scale of adjustments based on an analysis of data developed from the 5cycle method. This approach, called the ``mpgbased'' method, incorporates the effects of higher speed/aggressive driving, air conditioning use, and colder temperatures, but less directly than the 5cycle vehiclespecific method.\19\ The mpgbased adjustments were derived by applying the 5cycle formulae to a data set of recent fuel economy test data, and developing a regression line through the data. (See Section II for a full description of this approach). These adjustments differ based on the mpg a vehicle obtains over the FTP (City) or HFET (Highway) tests. In other words, every vehicle with the same mpg on the FTP test receives the same adjustment for its city fuel economy label. Likewise, every vehicle with the same mpg on the HFET test will receive the same adjustment for its highway fuel economy label. This method of adjustment would not require any testing beyond the FTP/HFET tests already performed today, thus, it can be implemented sooner than the 5cycle approach as an interim improvement to our fuel economy test methods. However, during this time frame, manufacturers may optionally choose to run full 5cycle testing for any of their vehicle models.\20\ The phasein will provide consumers with more accurate estimates as soon as possible, while allowing the industry the necessary lead time to prepare for the necessary testing under the 5 cycle approach.
    \19\ The ``mpgbased'' method is termed the ``derived 5cycle'' approach in the regulatory text.
    \20\ Any manufacturer that chooses to optionally use the 5cycle approach prior to the 2011 model year must use that approach to determine both city and highway label estimates.

    Starting with the 2011 model year, the 5cycle approach will be required. Under this approach, the manufacturers will be required to implement vehiclespecific 5cycle testing across some portion of their fleet. The manufacturers will use the emission certification test results over the five test procedures to calculate 5cycle city and highway fuel economy values. However, we are finalizing criteria as proposed that will allow continued use of the mpgbased adjustments in cases where we can predict with reasonable certainty that the fuel economy results under the mpgbased approach will not differ significantly from the results achieved by the 5cycle method. These criteria and the methodology by which vehicles are selected for 5cycle testing in the 2011 and later model years are described in detail in Section II.

    2. Implementation of New Label Design

    In order to allow manufacturers to transition to the new label format, we are allowing use of the new label format to be optional until September 1, 2007. This date aligns with the date manufacturers must place National Highway Traffic Safety Administration (NHTSA) crash test ratings on the vehicle pricing labels of all vehicles manufactured as of that date. The September 1, 2007 date allows manufacturers to redesign their vehicle pricing labels only once to incorporate two new federal labeling requirements. However, we encourage manufacturers to implement the new label format as quickly as possible such that the majority of 2008 vehicles on dealer lots exhibit the new label format. All 2008 model year vehicles must use the new methods to calculate fuel economy estimates. Labels on all 2008 models will have a statement indicating that the fuel economy estimates are based on new methods. 3. Fuel Economy Labeling of MediumDuty Passenger Vehicles

    The requirement for MDPVs to be labeled with city and highway fuel economy estimates begins with the 2011 model year. EPA does not have the authority to require labeling of MDPVs sooner because of our authority is linked to NHTSA's determination of CAFE standards for vehicles over 8,500 lbs GVWR.\21\ However, we encourage manufacturers to voluntarily label these vehicles sooner, if at all possible. Many vehicles in the MDPV category have counterpart models below 8,500 lbs GVWR, and these vehicles receive fuel economy labels today. \21\ See 49 U.S.C. 32908, 32901(a)(3)(B), and Section VII for a detailed explanation of EPA's legal authority.

    E. Periodic Evaluation of Fuel Economy Labeling Methods

    In the proposal, we expressed an interest in ensuring that the new methods continue to reflect realworld fuel economy into the future, and we encouraged stakeholders to submit data that would inform future analysis and potential changes to the methodology. We believe it is critical to ensure that the fuel economy methods are periodically evaluated. We are committed to evaluating the 5cycle method every several years (e.g., five years) to ensure that it appropriately accounts for advancements in vehicle technology, changes in driving patterns, and any new data collected on inuse fuel economy. We also remain open to reviewing any valid test data indicating that any of our assumptions were inappropriate for a specific vehicle and considering modifications to the 5cycle formulae overall to account for these differences. In the public comments, some stakeholders expressed an interest in conducting studies of inuse fuel economy. We welcome stakeholders to submit any such future data for use in our periodic evaluation of the fuel economy test methods.

    We are also committed to offering technical guidance to any stakeholder interested in undertaking an inuse testing and data collection program. By seeking our technical input up front, stakeholders can better ensure that the data is collected in a way that is ultimately bestsuited to evaluate potential changes to the methodology. However, we note that collecting inuse fuel economy data alone can only indicate whether or not the 5cycle estimates are accurate; it would not provide the information needed to actually improve the 5cycle equations. The 5cycle approach is based on emission test results over the five test cycles and on the weighting of a number of factors based on their average impact across all U.S. driving. Data on inuse fuel economy alone, without complementary driving behavior and activity data representative of the fleet, is insufficient to initiate changes that may be appropriate to the 5cycle weighting factors.

    Finally, several commenters suggested that EPA conduct an evaluation of the 5cycle method prior to model year 2011, when the 5 cycle method becomes required. If appropriate data is submitted prior to the end of 2008, we would plan to review it in a timely manner. If such data suggests that changes to the 5cycle approach are necessary, we would plan to issue a separate rulemaking to address changes to the methodology, providing adequate lead time to the industry to comply. F. This Final Rule Does Not Impact CAFE Standards or Test Procedures

    This final rule does not alter the FTP and HFET driving cycles, the measurement techniques, or the calculation methods used to determine CAFE. EPCA requires that CAFE for passenger automobiles be determined from the EPA test procedures in place as of 1975 (or procedures that give comparable results), which are the city and highway tests of today, with a few small adjustments for minor procedural changes that have occurred since
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    1975.\22\ This final rule will not impact the CAFE calculations. \22\ See 49 U.S.C. 32904(c).

    G. Public Participation

    A wide variety of interested parties participated in the rulemaking process that culminates with this final rule. This process provided opportunity for public comment following the proposal published on February 1, 2006.\23\ We held a public hearing on the proposal in Romulus, Michigan on March 3, 2006. At that hearing, oral comments on the proposal were received and recorded. A written comment period remained open until April 3, 2006. Comments and hearing testimony have been placed in the docket for this rule. We considered these comments in developing the final rule.

    \23\ See 71 FR 5426 (Feb. 1, 2006).

    We have prepared a detailed Response to Comments document, which describes the comments we received on the proposal and our response to each of these comments. The Response to Comments is available in the docket for this rule and on the EPA Web site.\24\
    \24\ See http://www.epa.gov/fueleconomy/ or http: // http://www.regulations.gov. II. New Test Methods and Calculation Procedures for Fuel Economy Labels

    The current fuel economy label values are based on measured fuel economy over city and highway driving cycles, which are then adjusted downward by 10 and 22 percent, respectively, to account for a variety of factors not addressed in EPA's vehicle test procedures. These adjustments are intended to account for differences between the way vehicles are driven on the road and over the test cycles. Such differences include air conditioning use, higher speeds, more aggressive accelerations and decelerations, widely varying ambient temperature and humidity, varying trip lengths, wind, precipitation, rough road conditions, hills, etc. The purpose of the new methods is to expand the basis for the fuel economy labels to include actual vehicle testing over a wider range of driving patterns and ambient conditions than is currently covered by the city (FTP) and highway (HFET) fuel economy tests.

    For example, vehicles in the real world are often driven more aggressively and at higher speeds than is represented in the FTP and HFET tests. The incorporation of measured fuel economy over the US06 test cycle into the fuel economy label values will make the label values more realistic. Drivers often use air conditioning in warm, humid conditions, while the air conditioner is turned off during the FTP and HFET tests. The incorporation of measured fuel economy over the SC03 test cycle into the fuel economy label values will reflect the added fuel needed to operate the air conditioning system. Vehicles also often are driven at temperatures below 75[deg]F, at which the FTP and HFET tests are performed. The incorporation of measured fuel economy over the cold temperature FTP test into the fuel economy label values will reflect the additional fuel needed to start up a cold engine at colder temperatures.

    The new vehiclespecific, 5cycle approach to calculating fuel economy labels will incorporate estimates of the fuel efficiency of each vehicle during high speed, aggressive driving, air conditioning operation and cold temperatures into each vehicle's fuel economy label. It will combine measured fuel economy over the two current fuel economy tests, the FTP and HFET, as well as that over the US06, SC03 and cold FTP tests into estimates of city and highway fuel economy for labeling purposes. The test results from each cycle (and in some cases, portions of cycles or emission ``bags'')\25\ will be weighted to represent the contribution of each cycle's attributes to onroad driving and fuel consumption. The vehiclespecific, 5cycle approach will eliminate the need to account for the effect of aggressive driving, air conditioning use and colder temperatures on fuel economy through generic factors (as done today) which may not appropriately reflect that particular vehicle's sensitivity to these factors. A generic adjustment is still necessary to account for factors not addressed by any of the five dynamometer tests (e.g., road grade, wind, low tire pressure, gasoline quality, etc.). The derivation of this adjustment factor is discussed further below and in Chapter III of the Technical Support Document. \25\ The FTP consists of two parts, referred to in the regulations as the ``cold start'' test and the ``hot start'' test. Each of these parts is divided into two periods, or ``phases'': a ``transient'' phase and a ``stabilized'' phase. Because the stabilized phase of the hot start test is assumed to be identical to the stabilized phase of the cold start test, only the cold start stabilized phase is typically run. These ``phases'' are often called ``bags,'' terminology that results from the sample bags in which the exhaust samples are collected. The phases are run in the following order: Cold start transient (Bag 1), cold start stabilized (Bag 2), and hot start transient (Bag 3).

    Currently, the US06, SC03 and cold FTP tests are only performed on a subset of new vehicle configurations, and only for emissions compliance purposes. In contrast, for fuel economy purposes, FTP and HFET tests are performed on many more vehicle configurations. In order to minimize the number of additional US06, SC03 and cold FTP tests resulting from the new testing and calculation procedures, we are allowing manufacturers to estimate the fuel economy over these three tests for vehicle configurations that are not normally tested for emissions compliance purposes, using the fuel economy measurements that are normally available. This is currently done on a more limited basis for both the FTP and HFET, and is referred to as analytically derived fuel economy (ADFE).\26\ This method uses test data to determine the sensitivity of fuel economy to various vehicle parameters, and once these relationships are well established, we will issue guidance that provides manufacturers with the appropriate equations to use. We believe that these provisions are designed to represent a reasonable balance between the need for accurate fuel economy data and the need to contain the cost of testing for both industry and EPA, where we reasonably believe that actual testing would not produce a significantly different result. We always retain the right to order actual confirmatory testing where appropriate.
    \26\ EPA's current policy for analytically derived fuel economy estimates for the FTP and HFET tests is contained in the EPA memorandum entitled, ``Updated Analytically Derived Fuel Economy (ADFE) Policy for 2005 Model Year,'' March 11, 2004, CCD0406 (LDV/ LDT). This memorandum is issued under 40 CFR 600.00689(e), which allows manufacturers to use analytical methods to determine fuel economy.

    We also are finalizing the proposed provisions that allow manufacturers to use the interim approach to fuel economy label estimation, the ``mpgbased'' approach described below, when the available 5cycle fuel economy data indicate that a vehicle test group's 5cycle fuel economy is very close to that estimated by the mpgbased curve. The mpgbased method will also be used to determine label values for MDPVs that become mandatory with the 2011 model year, as discussed further in Section II.E.2.

    Even with these provisions, we expect that some manufacturers will have to perform some additional US06, SC03, or cold FTP tests to address differences in vehicle designs which are not covered by the analytical derivation methodology. Other manufacturers may voluntarily choose to perform additional tests voluntarily to improve accuracy over the analytical derivation methodology, especially in cases where [[Page 77882]]
    manufacturers have worked to improve fuel efficiency over the new test cycle conditions (e.g., during cold temperatures or with air conditioning on). Depending on how manufacturers choose to apply this method, this additional testing could prompt the construction or modification of test facilities. (Test burden and cost issues are discussed further in Section V of this preamble.) Therefore, in order to allow sufficient leadtime for the construction of these facilities, we are finalizing the proposed provisions that allow manufacturers the option of using an interim set of adjustments through the 2010 model year. These interim adjustments are not vehiclespecific, but instead reflect the effects of high speeds, hard accelerations, air conditioning use, and cold temperatures, etc., on the average vehicle. The vehiclespecific 5cycle approach becomes mandatory with the 2011 model year. However, a manufacturer can voluntarily use the 5cycle method prior to the 2011 model year for any vehicle model.\27\ \27\ Any manufacturer that chooses to optionally use the 5cycle approach prior to the 2011 model year must use that approach to determine both city and highway label estimates.

    The interim set of adjustments is termed the ``mpgbased'' approach. (See Figure II1 for a graphical depiction of these adjustments.) The mpgbased approach is a sliding scale of adjustments which varies according to a vehicle's measured fuel economy over the FTP and HFET tests. The mpgbased adjustments were developed from applying the 5cycle formulae to 615 recent model year vehicles and determining the average difference between the 5cycle and current city and highway fuel economies.\28\ Thus, because the data used to develop the mpgbased adjustments were derived from 5cycle fuel economies, the mpgbased adjustments include the effects of high speeds, aggressive driving, air conditioning, and colder temperatures. However, they do so based on the impact of these factors on the average vehicle, not the individual vehicle, which is the case with the 5cycle formulae. For example, for vehicles with fuel economy of 2030 mpg over the FTP (i.e., city) test, the mpgbased approach would adjust the city fuel economy downward by 2022 percent (or 4 to 7 mpg), versus today's single 10 percent downward adjustment. Thus, city fuel economy label values under the mpgbased approach tend to be about 11 percent lower on average than today's label values. For vehicles with fuel economy of 2535 mpg over the HFET (i.e., highway) test, the mpgbased approach would adjust the highway fuel economy downward by about 28 percent (or 7 to 10 mpg), versus today's 22 percent downward adjustment. Thus, highway fuel economy label values under the mp

    FOR FURTHER INFORMATION CONTACT

    Rob French, U.S. EPA, Voice-mail (734) 2144636; Email: french.roberts@epa.gov.