By on May 20, 2009

A joint EPA-DOT document (PDF) explaining the updated national CAFE/emissions standards reveals a number of the new loopholes that will help automakers slip under the seemingly high standard. To kick things off, the EPA/DOT remind the reader that new standards were assembled using “the art of the possible.” to wit:

“There is a wide range of technologies available for manufacturers to consider in upgrading vehicles to reduce GHG emissions and improve fuel economy.7 These include improvements to the engines such as use of gasoline direct injection and downsized engines that use turbochargers to provide performance similar to that of larger engines, the use of advanced transmissions, increased use of start-stop technology, improvements in tire performance, reductions in vehicle weight, increased use of hybrid and other advanced technologies, and the initial commercialization of electric vehicles and plug-in hybrids. Although many of these technologies are available today, the emissions reductions and fuel economy improvements under consideration for the proposal would be expected to involve more widespread use of these technologies across the fleet.”

Unless they don’t feel like it, of course. Loopholes are just as important as technology.

That’s when you flip to heading C (Program Flexibilities for Achieving Compliance). There you learn,

“Under the program being considered for proposal, a manufacturer whose fleet generates credits in a given model year would have several options for using those credits, including credit carry-back, credit carry-forward, credit transfers, and credit trading.”

Got an out-of-compliance model? Who cares! If you replace it with a compliant model, your firm can carry-back those credits to pay for up to 3 years of non-compliant model sales. Or, car fleet compliance credits can pay down truck fleet non-compliance, or vice-versa. Credits can also be banked for five years. Or sold to other manufacturers. Not for any scientific reason of course.

The new system also

“provides a statutory incentive for production of FFVs (Flex-Fuel Vehicles) by specifying that their fuel economy is determined using a special calculation procedure that results in those vehicles being assigned a higher fuel economy level than would otherwise occur. This is typically referred to as an FFV credit… For the GHG program, EPA contemplates proposing to allow FFV credits in line with EISA limits only during the period from MYs 2012 to 2015. EPA will also consider allowing FFV credits beyond MY 2015 if manufacturers are able to demonstrate that the alternative fuel is actually being used in the vehicles. EPA is also considering how that demonstration could be made.”

Because why not? Besides, some manufacturers could evade the whole system if they’re lucky.

“EPA is considering a temporary lead-time allowance for manufacturers whose sale of vehicles in the U.S. in a specified time period is below a specified cut-off, such as sales of 400,000 vehicles or less during a specified year, such as MY 2009 or 2010. This would limit the number of vehicles to which the flexibility could apply. The manufacturers that satisfy the threshold criteria would be able to treat a limited number of vehicles as a separate averaging fleet, which would be subject to a less stringent GHG standard.”

But the best is saved for last. Enter the “Super Credit.”

“EPA is currently considering proposing additional credit opportunities to encourage the commercialization of advanced GHG/fuel economy control technology such as electric vehicles and plug-in hybrid electric vehicles. These “super credits” could take the form of a multiplier that would be applied to the number of vehicles sold such that they would count as more than one vehicle in the manufacturer’s fleet average. EPA is also considering allowing such credits to be generated for years prior to MY 2012.”

Shockingly, “using currently available analyses, EPA and NHTSA do not anticipate any significant noncompliance under the program being considered.” Now why would that be?

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24 Comments on “CAFE/GHG Standard Loopholes Appear...”

  • avatar

    Obfuscate everything so the proper payment will get anyone what they want.

    Just like Mugabe.

  • avatar

    The separate standard for cars and trucks (39 vs 30mpg, I think) is itself a loophole, just like the one that spawned SUVs.

  • avatar

    CAFE/GHG Standard Loopholes Appear


  • avatar

    Is there an approximate conversion between current EPA milage and projected CAFE rating for most cars? Judging by the loophole fest you’ve shown (and looking at the pdf it seems you certainly left out a few) it dosen’t seem like it would really be possible.

    And why the new formula for determining CAFE? This is something I really don’t know as much about as I should.

  • avatar

    I don’t like CAFE at all, I have to think that the average ‘US car’ would be a whole lot more like an Australian Falcon or Commodore had CAFE never happened at all.

    That said, if what comes out of this is basically an incentive to build somewhat more alt-fuel vehicles, I won’t complain too loudly.

    There’s rumor-mill that this bill forces yearly smog checks for all cars on all states, if that proves to be fact I’d consider that to be a monstrous evil.

  • avatar

    The FFV credit nonsense is in current regulations as well. I hope it really does phase out unless the mfg. can prove a significant number of vehicles are in fact being run on alternative fuels.

    The small mfg. exemption is the holy grail for the likes of Ferrari & friends. Most auto enthusiasts are in favor of that exemption. The bad side effect is that it might provide an unintened side effect of letting new Chinese or Indian competitors get their foot into the US market without initially having to meet the same requirements as other competitors.

    The special credit for CHG, electric and other alternative vehicles is much like the limited carpool stickers California made available to early adopters of hybrid vehicles.

    I’m not a big fan of any of these loopholes, but they are hardly legislative armageddon either.

  • avatar

    glad to see plenty of loopholes. They will be exploited, but the government will be able to fool most people into believing they’re doing a good job, and any bad things they’ll get to “blame” the “evil” car companies for using such loopholes.

    But again, it won’t do any good if 1) nobody wants to buy them, and 2) nobody can get the fuel to make them run.

    Perfect, the politicans will get all the credit and all the blame will fall on someone else.

    See “Mayor Richard M Daley” for plenty of examples of this in action.

  • avatar

    I’m with Tedward on this..

    I’m trying to figure out if the formula for calculating the mileage is based on the new or old (pre-2008) EPA formula. Anybody have a link or a direction to send us? Thanks!
    Also, this is still just proposed and not finalized?

  • avatar
    bumpy ii

    The current CAFE numbers are based on the old old EPA formula from the ’70s that said old-school carby V8 land barges got 30 on the highway, and that a Fit would get 55 or something silly.

    Taking everyone’s existing models and applying that GM mild hybrid stuff with some regen braking thrown in would take care of almost all the proposed increase by itself.

  • avatar
    George B

    Since I am no fan of the CAFE standard, I’m glad to see that a wide variety of loopholes are provided. The FFV credit may be nonsense, but it is benign nonsense less damaging than either tougher CAFE standards or a FFV mandate implemented badly. I predict even more “trucks” that are really cars and gimics to squeeze out slightly better fuel economy that are easily defeated by the aftermarket. Creative interpretation of the rules is as American as NASCAR.

  • avatar
    Edward Niedermeyer

    Per old-school (2001) NHTSA CAFE FAQ: Three different sets of fuel economy values- NHTSA’s CAFE values, EPA’s unadjusted dynamometer values, and EPA’s adjusted on-road values exist. NHTSA’s CAFE values are used to determine manufacturers’ compliance with the applicable average fuel economy standards and to develop its annual report, the Automotive Fuel Economy Program Annual Update. The EPA’s unadjusted dynamometer values are calculated from the emissions generated during the testing using a carbon balance equation. EPA knows the amount of carbon in the fuel, so by measuring the carbon compounds expelled in the exhaust they can calculate the fuel economy. EPA’s adjusted on-road values are those values listed in the Fuel Economy Guide and on new vehicle labels, adjusted to account for the in-use shortfall of EPA dynamometer test values.

  • avatar

    this is just a fucken game isn’t it?

    ‘super credit multipliers’???

    this is like when you get the super mega combo hits in Street Fighter… or when you get a good running streak on Guitar Hero?

    same as the carbon trading scheme isn’t it? make a car, plant a tree?

    car manufacturers need to hire a small team to interpret the rules and play the ‘game’

  • avatar
    Richard Chen

    Super credit this: I figured that a single Ford Transit Connect EV could offset a dozen F150s to keep the average fuel economy >27mpg. Now, a single EV could factor a hundred or more conventional vehicles.

    That’s not a loophole, that’s a black hole.

  • avatar

    The separate car/truck regulations are complete BS. Do what Subaru did and turn your Forester station wagon in to an SUV and “bang”… you’re 9 mpg closer to your MPG target.

    So this is how you spur domestic sales?

  • avatar

    This is all nonsense so politicians can appear “green” to those who care. These lazy greenies will read the headline, exclaim how wonderful it is that Washington actually gets it, and move on, never realizing the whole thing is a sham.

  • avatar

    We all pay tax money for this shit.

  • avatar

    What a frickin’ joke. How much does it cost to administer this legislative clusterf*ck?

  • avatar

    Its amazing to me how much this sounds like a pro-sports salary cap. Can’t wait until they start the “cap-and-trade” Co2 mandates. That will probably make out heads explode.

  • avatar

    I intend to drive an SVT Raptor or Camaro SS right through these loopholes and right into my garage.
    I’ve mentioned this before and I’ll mention it again. If I was in charge of an auto manufacturer I’d just place an “economy switch” on vehicles. Sell every vehicle (even trucks and performance vehicles), with the switch set to “efficient” as the default setting (thus the car would make government mandated mileage) and customer’s could push a switch or button to set the car to “Middle Finger Mode”. I’d also include a complimentary CD with recordings of prominent politicians and celebrities bitching and whining about your ‘ill-gotten’ freedom from loopholes.

  • avatar

    How difficult does it have to be? Make the nominal measure something to do with weight/mass and torque/power.

    Light car, small power? Low CAFE rating.

    Heavy pickup, stupid power? High CAFE rating.

    #1 rule of government; if there’s a harder way, use it.

  • avatar

    Makes the gas tax seem like kindergarten stuff. This is just dumb.

  • avatar

    What was mentioned in the original posting weren’t loopholes. They are ways to make more efficient cars. From the pdf, these look like loopholes:

    1. CO2/CAFE Credits Earned Based on Fleet Average Performance

    2. Air Conditioning Credits

    3. Flex-fuel and Alternative Fuel Vehicle Credits

    4. Temporary Lead-time Allowance Alternative Standards

    5. Others

    a. EPA is considering opportunities for early credits in MYs 2009-2011 through
    over-compliance with a baseline standard that EPA is considering.

    b. EPA is currently considering proposing additional credit opportunities to
    encourage the commercialization of advanced GHG/fuel economy control technology
    such as electric vehicles and plug-in hybrid electric vehicles.

    c. EPA is also considering an option for generation of credits for employing
    technologies that achieve GHG reductions that are not reflected on current test

    Flex fuel credits are a bad joke. The AC credits are a nice idea, given that r134a is a potent greenhouse gas, but AC systems don’t leak until cars are old, so you really postponing the savings. The rest don’t sound so good.

  • avatar

    I thought R12 was a potent “greenhouse” gas (maybe like water vapor)? You mean the green A/C coolant is no better than the old dirty A/C coolant? GASP!

  • avatar

    The FFV credit nonsense is in current regulations as well. I hope it really does phase out unless the mfg. can prove a significant number of vehicles are in fact being run on alternative fuels.
    The point about the use of alternative fuels is moot: the same EPA has concluded that E85 may increase GHG emissions.

    So even if the car use a ton of alternative fuel, it will only get lousy mileage AND increase GHG emissions. For this the EPA proposes to give the automaker a credit?

    Talk about organizational schizophrenia…

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