New Fuel Economy and GHG Rules in US Support NGV Industry

| USA, Washington DC

The credits reward manufacturers for producing NGVs. (NGVAmerica)

The Obama Administration has finalized standards in the USA, that will increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by Model Year 2025. NGVAmerica, the national natural gas vehicle association, says the rules “allow automakers to earn GHG and FE (fuel economy) credits, in part by producing natural gas vehicles (NGVs) and other advanced technology vehicles, so actual fleet averages are expected to be less than 54.5 mpg. NHTSA’s (National Highway Traffic Safety Administration) fuel economy regulations actually specify a fuel economy average of 49.6 mpg by 2025.”

The Administration’s national program to improve fuel economy and reduce greenhouse gas emissions is estimated to achieve savings for consumers of more than USD 1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

These standards, issued by the U.S. Department of Transportation (DOT) and the U.S. Environmental Protection Agency (EPA), build on the Administration’s standards for cars and light trucks for Model Years 2011-2016. Those standards raised average fuel efficiency by 2016 to the equivalent of 35.5 mpg.

The final standards were developed by DOT’s NHTSA and EPA following extensive engagement with automakers, the United Auto Workers, consumer groups, environmental and energy experts, states, and the public. NGVAmerica submitted comments and recommendations to the agencies, and, while not all of them were accepted, several were.

NGVAmerica says:

“Under the new rules, manufacturers that produce dedicated and bi-fuel NGVs will receive additional credits for such vehicles since the new rules add to the fuel economy incentives already in place for NGVs by providing temporary greenhouse gas emission credits for model years 2017–2021. The credits reward manufacturers for producing NGVs. Each NGV sold counts as 1.6 NGVs in MY 2017–2019, 1.45 in MY 2020, and 1.3 in MY 2021. Since NGVs have lower greenhouse gas emissions than comparable gasoline vehicles, the sales multiplier helps to lower a manufacturer’s overall emissions average.”

“The new rules also finalize changes to existing greenhouse gas regulations for 2012–2016 that will allow NGV bi-fuel manufacturers to make use of “utility factors.” The utility factors are based on the driving range of the NGV and enable manufacturers to substitute a much higher natural gas utilization rate for purposes of the greenhouse gas calculations. The current rules assume a default utilization rate of 50 percent natural gas and 50 percent gasoline for bi-fuel vehicles. Under the new rules, most bi-fuel vehicles will be credited with a much higher natural gas utilization rate, which results in slightly improved greenhouse gas emissions credit for NGVs. The final rules, however, include two conditions not included in the proposed rules. To qualify for the utility factors, the bi-fuel NGV (1) must operate on natural gas until it runs out of natural gas and (2) the vehicle must have a 2:1 driving range on natural gas (go twice as far on natural gas). Another major benefit of the utility factors is that they will be used to measure fuel economy for bi-fuel NGVs beginning with model year 2020.”

In 2011, 13 major automakers, which together account for more than 90 percent of all vehicles sold in the United States, announced their support for the new standards. By aligning Federal and state requirements and providing manufacturers with long-term regulatory certainty and compliance flexibility, the standards encourage investments in clean, innovative technologies that will benefit families, promote U.S. leadership in the automotive sector, and curb pollution.

The standards also represent historic progress to reduce carbon pollution and address climate change. Combined, the Administration’s standards will cut greenhouse gas emissions from cars and light trucks in half by 2025, reducing emissions by 6 billion metric tons over the life of the program – more than the total amount of carbon dioxide emitted by the United States in 2010.

President Obama announced the proposed standard in July 2011, joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo, as well as the United Auto Workers. The State of California and other key stakeholders also supported the announcement and were integral in developing this national program.

“It’s rewarding to see our efforts paid off as the final standards now offer natural gas vehicles the same credits offered to other alternative fuel technologies,” said Oklahoma Governor, Mary Fallin, in a Tulsa World article. “Auto manufacturers now will be given greater flexibility to respond to the demand states are signaling with the CNG initiative.”


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