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Learn about the history of the rulemaking, past and current regulatory efforts, and what the proposed standards will mean for automakers and consumers. Visit us at http://drivingfueleconomy.com to ...

Learn about the history of the rulemaking, past and current regulatory efforts, and what the proposed standards will mean for automakers and consumers. Visit us at http://drivingfueleconomy.com to learn more.

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    One National Program 101 One National Program 101 Presentation Transcript

    • OneNationalProgram101One National Programto Reduce Greenhouse Gasesand Improve Fuel Economy forCars and Light Duty Trucks1
    • OneNationalProgram101Background2
    • OneNationalProgram101Fuel Economy and Greenhouse Gas RegulatorsDepartment ofTransportationRegulates Fuel Economythrough the CorporateAverage Fuel Economy (CAFE)ProgramState of CaliforniaHas its own GreenhouseGas (GHG) StandardsEnvironmentalProtection AgencyRegulates GreenhouseGas (GHG) Emissions3
    • OneNationalProgram101In 1975, Congress passed the Energy Policy and Conservation Act (EPCA). This law requiresthe Department of Transportation’s (DOT) National Highway Traffic Safety Administration(NHTSA) to issue corporate average fuel economy standards (referred to as “CAFE”standards) for passenger cars and light trucks manufactured in each model year. EPCArequires that CAFE standards must be set at the “maximum feasible” level of vehicle fuelefficiency.Separate standards are set for the car and light duty truck categories. Each standard is seton a fleet-average basis so manufacturers can produce a range of vehicle sizes and types tomeet consumer demand. The fuel economy performance of vehicles is determined bylaboratory tests conducted under EPA procedures, in conjunction with that agency’s airpollutant emissions tests. The law includes a variety of credits to provide manufacturersflexibility in meeting standards and to incentivize various new technologies.In 2007, as part of the Energy Independence and Security Act (EISA), Congress changed theway the CAFE program sets fuel economy standards. Instead of a fleet average, DOT nowsets attribute-based CAFE standards for each manufacturer based on vehicle footprint.Federal Fuel Economy Standards (CAFE)4
    • OneNationalProgram101On April 2, 2007, the U.S. Supreme Court in the Massachusetts v. EPA case ruledthat EPA has the authority under the Clean Air Act to regulate greenhouse gas(GHG) emissions from motor vehicles. The Court held that carbon dioxide and otherGHGs are “pollutants” under the Clean Air Act and can be regulated by EPA if EPAdetermines that they “endanger” public health and welfare.While the Court recognized the overlap between EPA regulating vehicle GHGemissions and NHTSA issuing CAFE standards, it stated that “there is no reason tothink the two agencies cannot both administer their obligations and yet avoidinconsistency.”On December 7, 2009, EPA responded to the Supreme Court’s ruling by making an“endangerment” finding and began the process of developing regulations toestablish light vehicle GHG emissions standards.Federal Motor Vehicle Greenhouse Gas (GHG) Standards5
    • OneNationalProgram101A special provision in the Clean Air Act allows the state of California to adopt its ownemissions standards. Among other requirements, EPA must agree that California’sstandards are in aggregate at least as protective of public health and welfare asfederal standards, and then grant the state a waiver. Other states may not adopttheir own standards generally, but may (under specified conditions) adopt standardsthat are identical to the California standards.In 2004, California issued its own GHG regulations which required fleet-widereductions in emissions of CO2 and other GHG emissions from motor vehiclesbeginning with the MY2009 and ending in MY2016.EPA granted a waiver of Clean Air Act preemption to California for its motor vehicleGHG program. There are 13 states and jurisdictions that adopted the CaliforniaGHG standards. Because these standards are based on fleet-wide averageemissions for each state, automobile manufacturers have to adjust the types ofvehicle models sold in each state to meet the GHG reduction targets required.California GHG Standards6
    • OneNationalProgram101Recent History7
    • OneNationalProgram101On May 19, 2009, President Obama announced a National Program to increase thefuel economy and reduce greenhouse gas (GHG) emissions from passenger cars andlight trucks.The “One National Program” was designed to harmonize differing government-mandated vehicle standards having closely related purposes, including the averagefuel economy standards issued by the DOT’s National Highway Traffic SafetyAdministration (NHTSA) and GHG emissions standards issued by EPA, the State ofCalifornia, and other states that have adopted variations of California’s standards.These separate standards remain in place, but are harmonized and coordinatedunder the One National Program to create a single set of obligations for vehiclemanufacturers.8One National Program: Phase 1, MY2012-2016
    • OneNationalProgram101On September 24, 2009, the California Air Resources Board (CARB) adopted GHGemissions standards for new cars and trucks that are sold in that state in MY2009-2016.On February 25, 2010, California announced its commitment to allow vehicles thatboth meet the National Program standards and are sold in that state to be deemedin compliance with its standards for MY2012-2016.In April 2010, EPA and NHTSA announced the adoption of the first phase of the OneNational Program, including harmonized federal GHG emissions and fuel economystandards for MY2012-2016 cars and light duty trucks, raising the fleet average fueleconomy to 35.5 miles per gallon (mpg) by MY2016.9One National Program: Phase 2, MY2017-2025
    • OneNationalProgram101On May 21, 2010, President Obama directed the federal agencies to extend the OneNational Program to MY2017-2025 cars and light duty trucks.On January 27, 2012, the California Air Resources Board unanimously approved apackage of new emissions rules for cars and light duty trucks through MY2025.On August 28, 2012, the Obama Administration issued the final MY2017-2025Greenhouse Gas and CAFE standards, increasing the fleet average of 35.5 mpg byMY2016 to 54.5 mpg by MY2025. A mid-term review and related rulemaking isrequired by the agencies to assess the feasibility of these standards and, ifnecessary, increase or decrease these standards.One National Program10
    • OneNationalProgram101What are the Benefits of Having a Single National Program to Regulateboth Fuel Economy and Greenhouse Gas Emissions?It allows automobile manufacturers to build a single light-duty nationalfleet that satisfies all requirements under both federal programs and thestandards of the State of California (and other states that have adopted theCalifornia standards).Allowing the production of a single fleet of vehicles avoids unnecessaryeconomic and administrative burdens that would result from theenforcement of differing regulations throughout the country.The One National Program provides critical nationwide environmental andenergy benefits while ensuring that consumers have a full range of vehiclechoices and avoiding unnecessary burdens.QA11
    • OneNationalProgram101What is the Relationship Between Fuel Economy and Greenhouse Gases?Fuel economy is therelationship between thedistance traveled by anautomobile and the amountof fuel consumed over that distance. When fuel is consumed, carbondioxide is produced as a byproduct.GHGs are gases in the atmosphere that absorb and emit radiation withinthe thermal infrared range. The primary naturally occurring GHGs in theEarth’s atmosphere are carbon dioxide, methane, nitrous oxide, watervapor and ozone. Certain synthetic industrial chemicals, such as airconditioning refrigerants, are also GHGs.QA12g/galg/km x 1.6 km/mMPG
    • OneNationalProgram101CONTINUED:What is the Relationship Between Fuel Economy and GreenhouseGases?Carbon dioxide (“CO2”) is the principal GHG gas emitted by gasolinepowered motor vehicles. The amount of CO2 emissions from a vehiclerelates directly to the amount of carbon-containing fuel consumed bythe vehicle. Unlike conventional air pollutants, such as hydrocarbonsand oxides of nitrogen, CO2 emissions cannot be reduced by capturingthem or chemically altering them with pollution control devices.Since the first voluntary fuel economy labeling program in 1973, motorvehicle fuel economy has been determined by measuring the amount ofCO2 and other carbon-containing compounds emitted from the vehicle’stailpipe and using a basic calculation to determine how much fuel wasburned to create those emissions.QA13
    • OneNationalProgram101CONTINUED:What is the Relationship Between Fuel Economy and GreenhouseGases?Fuel economy continues to be measured by EPA based on CO2emissions, and then converted by simple arithmetic into miles-per-gallonfuel economy reports for the general public.By definition, therefore, regulating CO2 emissions is the same thing asregulating fuel economy. As NHTSA has explained, “a tailpipe carbondioxide regulation and a fuel economy regulation are essentiallyequivalent: they each in effect regulate fuel economy.”QA14
    • OneNationalProgram101What National Program Standards Were Initially Adopted?The standards initially adopted were for MY2012-2016. They graduallyincrease in stringency to levels equivalent to 250 grams per miles GHGemissions and 35.5 miles per gallon (mpg) in fuel economy, for MY2016, onan average industry fleet wide basis (including cars, light and mediumtrucks, minivans, vans, and SUVs).QA15
    • OneNationalProgram101CONTINUED:What National Program Standards Are in Place Today?Projected Fleet-Wide Emissions Compliance Levels under the CO2Standards (g/mi) and Corresponding Fuel Economy (mpg)QAVehicle Type 2012 2013 2014 2015 2016Passenger Cars (g/mi) 263 256 247 236 225Light Trucks (g/mi) 346 337 326 312 298Combined Cars & Trucks (g/mi) 295 286 276 263 250Passenger Cars (mpg) 33.8 34.7 36.0 37.7 39.5Light Trucks (mpg) 25.7 26.4 27.3 28.5 29.8Combined Cars & Trucks (mpg) 30.1 31.1 32.2 33.8 35.5Source: EPA April 2010 Fact Sheet on 2012-16 Standards, http://www.epa.gov/otaq/climate/regulations/420f10014.pdf.16
    • OneNationalProgram101What Additional Standards Were Set?In August 2012, final rules governing the second phase of the NationalStandards, covering MY2017-2025 cars and trucks, were issued.Like the MY2012-2016 standards, these requirements will apply to allcars, light and trucks, minivans, vans, and SUVs. The standards areprojected to achieve by 2025 a fleet average of 163 grams per miles GHGemissions, which is equivalent to 54.5 miles per gallon (mpg).QA17
    • OneNationalProgram101CONTINUED:What Additional Standards Were Set?To achieve the 54.5 mpg goal in MY2025, cars’ emissions must improve by five(5) percent per year on average from MY2017-2025, and trucks must improveby an average of three-and-a-half (3.5) percent between MY2017-2021 and anaverage of 5 percent between MY2022-2025.QAProjected Fleet-Wide Emissions Compliance Targets under the Footprint-BasedCO2 Standards (g/mi) and Corresponding Fuel Economy (mpg)Vehicle Type 2016Base2017 2018 2019 2020 2021 2022 2023 2024 2025Passenger Cars (g/mi) 225 212 202 191 182 172 164 157 150 143Light Trucks (g/mi) 298 295 285 277 269 249 237 225 214 203Combined Cars & Trucks(g/mi)250 243 232 222 213 199 190 180 171 163Combined Cars & Trucks(mpg)35.5 36.6 38.3 40.0 41.7 44.7 46.8 49.4 52.0 54.5Source: EPA Regulatory Announcement, August 2012, http://www.epa.gov/oms/climate/documents/420f12051.pdf18
    • OneNationalProgram101How will vehicles change as a result of the new standards?EPA and NHTSA project that a variety of technological changes will beimplemented by vehicle manufacturers in order to comply with theNational Program standards.QA Improvements in the efficiencyof gasoline engines and intransmissions Vehicle weight reduction Lower tire rolling resistance Improvements in vehicleaerodynamics Diesel engines More efficient vehicleaccessories Vehicle air conditioners willcontinue to improve bybecoming more efficient The increased electrification ofthe fleet through the expandedproduction ofstop/start, hybrid, plug-inhybrid electric and electricvehicles19
    • OneNationalProgram101CONTINUED:How will vehicles change as a result of the new standards?The agencies project that the new technologies will add, onaverage, about $2,800 to the cost of new vehicles by 2025.However, the agencies project that this increased cost will be offset bylifetime fuel savings of new 2025 vehicles of $5,700 to $7,400.QA20
    • OneNationalProgram101What Form do the National Standards Take?Separate standards are established to require improved vehicle fueleconomy (NHTSA-CAFE standards) and reduced GHG emissions (EPA-GHGstandards).While the One National Program has a goal of achieving 54.5 mpg inMY2025, each vehicle model has its own individualized fuel economy andGHG targets based on a vehicle size criterion, called the “footprint.” Ingeneral, the smaller the vehicle’s footprint, the more stringent thestandard the vehicle must meet. Each manufacturer’s has a uniquestandard that is calculated by averaging the sales-weighted footprinttargets of all of its vehicles.QA21
    • OneNationalProgram101CONTINUED:What Form do the National Standards Take?Separate emissions standards were also created for the GHGs nitrousoxide and methane.The One National Program also includes a variety of credits and flexibilitymechanisms. Some of the credits are designed to encouragemanufacturers to implement specific advanced technologies. Othermechanisms provide compliance flexibility to manufacturers, whilemaintaining the overall energy and emissions benefits of the program.QA22
    • OneNationalProgram101How Were the MY2017-2025 Standards Developed?Following completion of the first phase of the One NationalProgram, EPA, NHTSA, and CARB conducted research and analysisregarding the development of the MY2017-2025 standards.A dialogue was established involving the governmentagencies, automobile manufacturers, environmental groups, unionsand other interested stakeholders to obtain the views of these partieson the new standards.EPA and NHTSA issued several preliminary documents , which outlinedtheir plans to develop standards for MY2017-2025.QA23
    • OneNationalProgram101What is a “Footprint”?The footprint is a calculationbased on a vehicle’s track width(vehicle width measured betweenthe tires) and the wheelbase(vehicle length between the frontand rear tires).In other words, the footprint is a measurement of a vehicle’s “shadow”area, based on specified locations for measuring the width and length ofthe vehicle.QA24
    • OneNationalProgram101Do Cars and Trucks Have the Same Standards (If They Have the SameFootprint)?QA Model Year 2025 CO2 and Fuel Economy Targets for Various Vehicle TypesVehicle Type Example ModelFootprint (sq. ft.)EPA CO2 Emissions Target(g/mi)*NHTSA Fuel EconomyTarget (mpg)*Example Passenger carsCompact car 40 131 61.1Midsize car 46 147 54.9Full size car 53 170 48.0Example Light-duty TrucksSmall SUV 44 170 47.5Midsize crossover 49 188 43.4Minivan 55 209 39.2Large pickup truck 67 252 33.0*Real World CO2 is typically 25 percent higher and real-world fuel economy is typically 20 percent lower than CO2 and CAFE values discussed hereSource: EPA Regulatory Announcement, August 2012, http://www.epa.gov/oms/climate/documents/420f12051.pdf25
    • OneNationalProgram101What Flexibilities Are Provided?The flexibilities included in the regulations for MY2017-2025 include: Credit Banking and Trading Air Conditioning Improvement Credits Off-Cycle Credits Incentives for Electric Vehicles, Plug-In Hybrid ElectricVehicles, Fuel Cell Vehicles and Compressed Natural Gas Vehicles Incentives for Advanced Technologies; Including Hybridization forFull-Size Pick-Up Trucks Treatment of Compressed Natural Gas, Plug-In Hybrid ElectricVehicles, and Flexible Fuel Vehicles Mid-Term Review of the Standards Provisions for Small Volume ManufacturesQA26
    • OneNationalProgram101What is Credit Banking and Trading?Credit Banking and Trading provides manufacturers flexibility regarding thetiming of implementing new technologies. If a manufacturer implementsimproved technology earlier than necessary to meet standards, it earnscredits that can be used to help meet future model year standards.If a manufacturer defers implementing technologies, it can make up acompliance shortfall by achieving higher levels of efficiency and emissionsperformance in later years, and use the resulting credits to offset theshortfall.QA27
    • OneNationalProgram101CONTINUED:What is Credit Banking and Trading?Credits may be carried forward, or banked, for five years, or carried backthree years to cover a deficit in a previous year. Credit Banking and Tradingwas also allowed under the MY2012-2016 standards.The One National Program allows manufacturers to use credits in twoadditional ways.1. Manufacturers may transfer credits between their car and truckfleets, to offset a shortfall in one of those fleets.2. Manufacturers may trade credits with another manufacturer.QA28
    • OneNationalProgram101CONTINUED:What is Credit Banking and Trading?Under the MY2017-2025 program, EPA is granting an additionalgreenhouse gas (CO2) credit carry-forward provision, allowing creditsgenerated in MY2010-2016 to be used through MY2021.From EPA Fact Sheet: “Together, these provisions help manufacturersin planning and implementing the orderly phase-in of GHG-reducingtechnology in their production, consistent with their typical redesignschedules.”QA29
    • OneNationalProgram101What Are Air Conditioning Improvement Credits?Automobile manufacturers can generate additional credits by reducingGHG emissions produced by vehicle air conditioning (A/C) systems. Thereare three methods to reduce GHG emissions from A/C systems:1. Change the A/C refrigerant. Using a different refrigerant with aGHG potential reduces the environmental impact in the event ofan A/C system leak.2. Improve the efficiency of the A/C system. If the A/C systemsrequires less power to operate, then less GHG emissions resultfrom A/C usage.3. Reduce the potential for A/C system leaks. Improved A/C systemcomponents reduce the likelihood of A/C system leaks, therebyreducing the potential for the A/C refrigerant, which is a GHG, tobe released into the air.QA30
    • OneNationalProgram101What Are Off-Cycle Credits?Some vehicle technologies provide greater emissions and energyefficiency benefits in on-road driving than what is measured in thelaboratory test that is used for regulatory compliance.The One National Program provides “off-cycle” credits to encouragemanufacturers to adopt these technologies. These credits add theadditional “real-world” benefits for these technologies to the laboratorytest results. Examples of these technologies include solar panels onhybrid vehicles, engine start-stop, or active aerodynamics.The standards include a pre-approved list of technologies that qualifyfor off-cycle credits and would also allow manufacturers to apply foroff-cycle technology credits beyond those listed.QA31
    • OneNationalProgram101What Incentives Are Provided for the Production of Electric, Plug-In HybridElectric, Fuel Cell, and Compressed Natural Gas Vehicles?To incentivize the introduction of these technologies, the program wouldprovides two incentives for these vehicles:1. An incentive multiplier for all electric vehicles (EVs), plug-in hybrid electricvehicles (PHEVs), fuel cell vehicles (FCVs), and compressed natural gas (CNG)vehicles sold in MY2017-2021. This approach means that each of thesevehicles that is produced would count as more than a single vehicle, incalculating fleet average compliance.• EVs and FCVs would start with a multiplier value of 2.0 in MY2017,phasing down to a value of 1.5 in MY2021.• PHEVs and CNG vehicles would start at a multiplier value of 1.6 inMY2017 and phase down to a value of 1.3 in MY2021.• There is no multiplier for MY2022-2025.QA32
    • OneNationalProgram101CONTINUED:What Incentives Are Provided for the Production of Electric, Plug-InHybrid Electric, Fuel Cell, and Compressed Natural Gas Vehicles?2. EPA set a value of zero (0) gram per mile tailpipe emissions forEVs/PHEVs/FCVs through MY2021. This means that EPA will not assignany “upstream” emissions to these vehicles, such as emissionsassociated with the generation of electricity to charge the batteries ofelectric vehicles.EPA has placed a cap on the number of these vehicles that qualify forthe zero emission factor beginning in MY2022. Vehicles sold over thecap limit would be assigned an upstream emission factor.QA33
    • OneNationalProgram101What Special Incentives Are Provided for Full-Size Pick-Up Trucks?There are three types of credits available for full-size pick-up trucks toincentivize technology improvements in these vehicles:1. “Mild” hybrid pickup trucks would be eligible for a per vehicle credit of 10grams per mile during MY2017-2021 if the technology is used with at least20 percent of a manufacturer’s MY2017 full-size pickup production andramping up to at least 80 percent in MY2021.2. “Strong” hybrid pickup trucks would be eligible for a 20 gram per milecredit during MY2017-2025 if the technology is used on at least 10 percentof the manufacturer’s full size pickups.3. Credits for the use of other advanced technologies in full size pick-up trucksare available based on the amount by which they reduce GHG emissions.The same truck can only receive credits based on one of these approachesin a model year.QA34
    • OneNationalProgram101How Are the Emissions from Dual Fuel Compressed Natural Gas, Plug-InHybrid Electric Vehicles and Flexible Fuel Vehicles Determined?Plug-in hybrid electric vehicles (PHEVs)1, dual fuel compressed natural gas(CNG)2 vehicles, and flexible fueled vehicles (FFVs)3 can all use twodifferent types of fuel.In order to calculate the GHG emissions from these vehicles, an estimate ofthe amount of each type of fuel that is typically used in the vehicle must bemade, since emission rates will in general vary when differing fuels areused.QA1 Plug-in hybrid electric vehicles (PHEVs) use either electricity, gasoline or a combination of both at the same time.2 Dual fuel compressed natural gas (CNG) vehicles can use either gasoline or CNG.3 Flexible fueled vehicles (FFVs) can use either gasoline or a blend of high ethanol content with gasoline, known as E85. 35
    • OneNationalProgram101CONTINUED:How Are the Emissions from Dual Fuel Compressed Natural Gas, Plug-InHybrid Electric Vehicles and Flexible Fuel Vehicles Determined?The following methods were determined for each vehicle type:• The emission rates for PHEVs and dual fuel CNG vehicles will be based onthe assumption that the consumer will use the cheaper fuel the majority ofthe time after having paid a premium to buy the vehicle. The fuel usageestimates will be based on a Society of Automotive Engineers “utilityfactor” methodology (based on vehicle range on the alternative fuel andtypical daily travel mileage) to determine the assumed percentage ofoperation on gasoline and percentage of operation on the alternative fuel.• FFV GHG emissions will be calculated based on the use of only gasolinefuel, due to the low volume of ethanol fuel (E85) that is sold in the U.S.However, EPA will allow a manufacturer to use an assumption of a higheruse rate of ethanol if a manufacturer demonstrates that E85 is actuallybeing used in its vehicles at the higher rate.QA36
    • OneNationalProgram101What Is the Mid-Term Review of the Standards?Automobile manufacturers need adequate lead time to develop vehiclesthat meet the required standards, but setting standards for model years10-13 years in the future creates uncertainty about the future vehiclemarket, as well as the cost and performance of advanced technologiesthat were projected to be developed for those years.As a result, EPA and NHTSA will conduct a review of the standards forMY2022-2025, issuing a decision no later than April 1, 2018. In this “mid-term review,” EPA and NHTSA will evaluate the newest data and the stateof the vehicle market. The findings from the mid-term review will beprovided to the public for their input prior to an agency decision onwhether to amend or maintain the MY2022-2025 standards.QA37
    • OneNationalProgram101CONTINUED:What Is the Mid-Term Review of the Standards?Under law, NHTSA cannot set standards for more than five years at atime. Therefore it initially finalized standards only for MY2017-2021.In a separate proceeding that will coincide with the mid-termreview, it will promulgate CAFE standards for MY2022-2025.QA38
    • OneNationalProgram101Are the EPA GHG and NHTSA CAFE Standards Identical In Scope andStringency?EPA and NHTSA have generally harmonized their GHG and CAFE programsin order to simplify manufacturers’ compliance obligations.However, although the purposes of the two programs are closely aligned,there are some policy differences and some differences in the legalauthority for the two agencies.These differences have led to differences in the scope and stringency ofthe two sets of standards. For example, EPA has addressed someadditional climate-related concerns with its standards, beyond theprimary focus on CO2 emissions.QA39
    • OneNationalProgram101CONTINUED:Are the EPA GHG and NHTSA CAFE Standards Identical In Scope andStringency?EPA has adopted requirements regarding the emissions of the GHGsmethane and nitrous oxide and the leakage of air conditioning systemrefrigerants. There are also detailed legal restrictions on CAFE standard-setting that were not applied in developing EPA’s standards.For instance, the standards for MY2025 are:• EPA: 163 g/mi GHG, or an equivalent of 54.5 mpg• NHTSA: 49.6 mpgQA40
    • OneNationalProgram101Environmental Protection Agency (EPA)• EPA Fuel Economy Fact Sheet• Fuel Economy• Fuel Economy Guide• Fuel Economy Label• Greenhouse Gases/Corporate Average Fuel Economy National Program• Gases Standards Compliance Information for Light-Duty VehiclesNational Highway Traffic Safety Administration (NHTSA)• Corporate Average Fuel Economy (CAFE)California Air Resources Board (CARB)• CARB Main Page• Regulatory - Advanced Clean CarsReferences41