On Friday August 24, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) published a proposed rule in the Federal Register: The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (“Proposed Rule”).  83 Fed. Reg. 42817.

The long-anticipated rulemaking has garnered media attention for its proposed measures to indefinitely freeze fuel economy and greenhouse gas emissions standards, and to strip California’s long-held authority under the Clean Air Act to set its own tailpipe emissions rules.  EPA’s decision to reconsider its own determination that the previous standards were appropriate as set through the year 2025 has been challenged in court by eighteen states, private parties, and environmental NGOs.

But another set of stakeholders may be interested in the rule: autonomous and connected vehicles manufacturers and parts suppliers.

Buried deep within the Proposed Rule is a request for comment from EPA and NHTSA as to how incentives such as eligibility for credits under the rule’s off-cycle program might be deployed to “facilitate increased use of these technologies, including some level of assurance that they will lead to future additional emissions reductions.”  83 Fed. Reg. 43463.  The Proposed Rule acknowledges that connected and autonomous cars have the potential to impact vehicle emissions in the future, “with their aggregate impact being either positive or negative.”  Id. 

 EPA and NHTSA go into some detail as to how a credit regime for connected and autonomous vehicles might work.  For example, allocating set credit amounts allocated for vehicles capable of Vehicle-to-Vehicle (V2V) or Vehicle-to-Infrastructure (V2I) communications as an incentive to enable future transportation system efficiencies.  Similarly, the Proposed Rule discusses providing credits for vehicle automation, so long as such credits incentivized emissions reductions.  EPA also seeks comment as to whether connected and autonomous vehicles that are placed in ridesharing or “other high mileage applications” should be eligible for credits under the final rule.  Such credits would contemplate the per-mile emission reduction benefits that might accrue across fleets of shared vehicles.

EPA and NHTSA are careful to note that none of these technologies has yet to prove its emissions reduction capability.  The Proposed Rule accordingly asks for comment that illustrates how manufacturers using such connected, autonomous, and ridesharing technologies would demonstrate “real world emissions benefits.”  Many observers have noted that such benefits would accrue with the increased usage of autonomous and connected vehicles so long as those vehicles were low- or zero-emission vehicles.  This is an idea that has been tested to some degree already in the states: in California, for example, the Zero Emission Vehicle (ZEV) Regulation has contemplated that manufacturers placing zero emission vehicles into “Advanced Technology Demonstration Programs” could earn additional ZEV credits.  But as a general matter, this so-called “transportation systems” credit opportunity has not driven a significant portion of the California ZEV credit generation.

Comments are due for this Proposed Rule by October 23, 2018.  Please feel free to contact Jake Levine at jclevine@cov.com for further information.

This blog is part of Covington’s IoT autonomous vehicles series.  Please check back here for periodic updates and insights on the industry.  Other recent posts include:

Photo of Jake Levine Jake Levine

Jake Levine is a member of the firm’s Public Policy Practice Group, and its Clean Energy and Climate Industry Group. Mr. Levine advises clients on a variety of public policy, legislative, regulatory, and business matters related to clean energy, climate, water, transportation, and…

Jake Levine is a member of the firm’s Public Policy Practice Group, and its Clean Energy and Climate Industry Group. Mr. Levine advises clients on a variety of public policy, legislative, regulatory, and business matters related to clean energy, climate, water, transportation, and technology.

Prior to joining Covington, Mr. Levine held a number of senior positions at the intersection of clean energy policy and technology. Mr. Levine served most recently as Senior Counsel and Principal Consultant to California State Senator Fran Pavley, where he led a team focused on state policy related to climate change, electric vehicles, energy storage, drought and water policy. As part of his duties in the State Senate, Mr. Levine led the successful campaign to draft, design, and enact SB 32 (Pavley) and AB 197 (Garcia), new climate and environmental justice legislation in California.

Mr. Levine also served as Chief of Staff to the President of Opower, a software firm that uses big data and behavioral science technology to help consumers take control their energy use. In this role, Mr. Levine managed a series of cross-organizational projects, including development of policy innovation, partnerships, and sales opportunities in Latin American and Asia, as well as federal and state-level regulatory reforms related to the U.S. utility sector.

Mr. Levine also has experience in the White House Office of Energy and Climate Change, where he worked on a host of innovative energy policies, including the most stringent fuel economy standards ever set and the first-ever greenhouse gas emissions standards for cars and trucks. He served as a member of President Obama’s delegation to the U.N. Conference of Parties in Copenhagen, as a member of the 2009 Presidential Inaugural Committee, and during the 2008 presidential campaign, traveled with Senator Obama to more than 20 states and Europe, managing the national press corps.