UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20480

May 22 1997	OFFICE of AIR AND RADIATION

MEMORANDUM

SUBJECT:	Clean Fuel Fleet Implementation

FROM:	Margo T. Oge, Director

Office of Mobile Sources

TO:	Directors, Air, Pesticides and Toxics Management Division, Regions I&IV

Director, Air and Waste Management Division, Region II

Director, Air, Radiation and Toxics Division, Region III

Director, Air and Radiation Division, Region V

Director, Air, Pesticides and Toxics Division, Region VI

Directors, Air and Toxics Division, Regions VII, VIII, IX & X

The Clean Air Act Amendments (CAAA) of 1990 mandated the implementation of a fuel neutral Clean Fuel Fleet Program (CFFP) beginning in Model Year 1998 (MY98) for those nonattainment areas designated as serious, severe or extreme for ozone or with a design value above 16.0 ppm for carbon monoxide. The Act, however, specifically prohibits the Environmental Protection Agency (EPA) from requiring vehicle manufacturers to produce clean fuel fleet vehicles (CFVs). The statute also provided an opt-out opportunity for those areas wishing to use other methods to meet their air quality objectives. Of the original twenty-two areas covered by the CAAA, only six areas have not opted-out. They are Atlanta, Metropolitan Washington D.C., Chicago-Gary-Lake County, Milwaukee-Racine, Denver-Boulder, and Baton Rouge.

We believe that Congress' governing vision in establishing the Clean Fuel Fleet provisions was to encourage the alternative fuel vehicle market and provide states an incentive to promote the use of CFVs in centrally-fueled fleets. EPA believes these congressional goals are both attainable and worthwhile. This has been demonstrated by the excellent work done in the Atlanta area by the Georgia Department of Natural Resources and Department of Administrative Services in moving toward a successful program start-up in MY98. However, we do realize that there is a shortage of CFVs to meet the current needs of some fleets in the covered areas and that MY98 may not be an achievable start date for all areas.

After numerous discussions of policy options involving the Office of Mobile Sources (OMS), EPA Regional Offices, the affected states, fleet operators, other affected stakeholders (such as representatives from the American Trucking Association, the Natural Gas Vehicle Coalition, the Texas Land Commission and others), and vehicle and engine manufacturers, we have decided to allow a one year delay of the CFFP in those areas that are unable to meet the purchase requirements cited in the CAAA. Our decision is based on input from all of the program stakeholders and our overarching goal of fulfilling our commitment to improving quality. OMS recognizes that ideally, there would be CFVs available at this time and the program could proceed accordingly; however, the requisite types and numbers of vehicles are simply not available in MY98. I believe this action provides states and fleet owners the necessary flexibility demanded by the current situation and my staff and I are committed to working with your offices, states, fleet operators, vehicle and engine manufacturers, fuel suppliers and others to ensure the success of this program.

In the coming months my staff will prepare regulations specifying that states' CFFP SIP revisions shall provide for implementation of the fleet operator purchase requirements beginning in MY99. As a part of our effort to provide clear information regarding the CFFP, we are organizing a meeting of CFFP stakeholders in July to address issues raised by this guidance, and to clarify other program issues, such as vehicle certification and conversions of existing vehicles to CFVs. Further details for the July meeting will be communicated to you in the coming weeks. Additionally, we will coordinate our CFFP efforts with the Department of Energy's Clean Cities program to ensure consistency between the programs and promote the use of CFVs to meet fleet transportation needs. Finally, we will work with vehicle and engine manufactures, the states, environmentalists, fleet operators and their associations and fuel providers in the coming year to encourage and facilitate certification of CFVs in order to increase their availability in MY99.

I would like to thank you for the efforts that you and your staffs have put into this effort. Please be certain to communicate this decision to the relevant state agencies in your Regions upon receipt of this package. We must continue to work together over this next year to ensure a smooth implementation for MY99. To that end, it is imperative that the Regional Offices remain involved in all future meetings and discussions.

Attached to this memorandum are guidelines for pursuing a one year program delay. Additional details regarding State Implementation Plan resubmittals are also included in the attachments. If, after reviewing these materials, you have further questions, please contact Jim Lindner (313-668-4558) of the Regional and State Programs Division for further information.

Attachments

Clean Fuel Fleet Program Guidance

May 20,1997

The United States Environmental Protection Agency (EPA) is proposing to postpone the mandatory implementation date of the Clean Fuel Fleet Program (CFFP) in certain ozone and carbon monoxide nonattainment areas for one model year, so that the program will begin to phase in with model year 1999. This document provides guidance to EPA regions in approving revisions to State Implementation Plans (SIPS) that provide for implementation of a CFFP as required by Section 246 of the Clean Air Act (CAA or "the Act'). This guidance will help ensure that CFFPs are implemented in an effective manner that promotes clean fuel vehicles (CFVS) and clean alternative fuels in the national market.

Background

The Clean Air Act requires certain states to adopt and submit to EPA SIP revisions containing a CFFP for nonattainment areas with 1980 populations greater than 250,000 that are classified as serious or worse for ozone, or with a design value of at least 16.0 ppm for carbon monoxide (CO). The areas currently covered by the requirement to adopt and submit a CFFP are: Atlanta, Washington DC metropolitan area, Chicago-Gary-Lake Counties, Milwaukee- Racine, Baton Rouge, and Denver-Boulder.

The CAA provides that states' SIP revisions must require fleet operators with 10 or more centrally fueled vehicles to include a specified percentage of clean-fuel vehicles in their vehicle purchases each year. There are additional specifications in Section 246 with which states' SIP revisions must also comply, including the requirement that covered fleet operators must operate their CFVs in covered nonattainment areas on a clean alternative fuel, defined as a fuel on which the vehicle meets EPA's CFV standards. EPA promulgated emissions standards for CFVs in September 1994. (See 40 CFR Part 88.) EPA estimates that the Model Year 1998 (MY98) fleet demand for clean-fuel vehicles under the CFFP would be approximately 47,000 light-duty vehicles and 12,000 heavy-duty vehicles.

Start Date for Purchase Requirement Implementation

The CAA provides that the specified percentage of new covered fleet vehicle purchases by fleet operators that must be CFVs in a given model year (MY) shall be 30% in MY 1998,50% in MY 1999,and 70% in MY 2000 and later years, if certain categories of new vehicles (light duty trucks below 6000 lbs Gross Vehicle Weight Rating (GVWR) and light duty vehicles) certified to the Phase II clean-fuel vehicle exhaust emissions standards are offered for sale in California.

In March 1993, EPA stated its expectation that the specified vehicles would be offered for sale in California by MY 1997, and therefore states' SIP revisions should provide for implementation of the CFFP's purchase requirements beginning in MY 1998. EPA also stated that it would propose to delay this implementation start date if it is later determined that the requisite vehicles would not be offered for sale in California in MY 1997.

For the reasons described in this document, EPA has determined that it is appropriate to approve SIP revisions that implement the CFFP purchase requirements beginning in MY 1999 rather than in MY 1998. EPA has received infomation from various stakeholders, including states, fleet operators, and vehicle manufacturers on this issue, and concludes that MY 1999 implementation should result in an effective fleet program that advances the penetration of CFVs and clean alternative fuels into the national market, and is consistent with the provisions of section 246(c) of the Act. The Agency will propose regulations requiring states' CFFP SIP revisions to provide for implementation of the fleet operator purchase requirements beginning in MY 1999. As under the current regulations, fleet operators may claim credits for early purchase of CFVs.

The specification that certain vehicles meeting CFV exhaust emissions standards must be available for sale in California for implementation of the CFFP to begin in MY 1998 was intended to provide a minimum level of reasonable assurance that complying vehicle technology was available and being produced. Without some such evidence of vehicle availability, fleet operators cannot realistically be expected to comply with the CFFPs purchase requirements. However, CAA Section 246 is not clear on the issue of how many such vehicles must be offered for sale in California before triggering implementation of the CFFP purchase requirements.

The legislative history of the 1990 amendments to the CAA indicates that, in adopting the CFFP, Congress made a clear choice between two alternatives: requiring auto manufacturers to produce and sell CFVS, or creating a market for CFVs and for clean alternative fuels by requiring fleet operators to purchase such vehicles. In choosing the latter option, Congress attempted to minimize the burden on fleet operators by requiring some evidence of vehicle availability in California as a precondition to implementation of the purchase requirement before MY 2001. However, the Act does not provide a clear indication of congressional intent regarding the number of vehicles in each weight category specified in Section 246(c) that must be offered for sale in California to trigger the fleet operator's purchase requirement in other states. Because the CAA is silent on this particular issue, and in the absence of a clear indication of Congressional intent, it is appropriate for EPA to reasonably exercise its discretion in a way that furthers the goals of the CFFP provisions, and determine whether a sufficient number of requisite vehicle models are offered for sale in California to require other states to implement the CFFP in MY 1998,

Auto manufacturers have certified a number of vehicle models to the LEV standards in California on California reformulated gasoline. EPA expects these vehicles would quality for certification as federal CFVs. Certain new light duty trucks (LDTs) below 6000 pounds GVWR and new light duty vehicles (LDVs) certified to LEV exhaust emissions standards are currently being offered for sale in California (See Attachment A). However, only a limited number of LDTs below 6000 lbs. GVWR were certified to California's LEV standards and offered for sale in California in MY1997.

In order to meet the MY98 purchase requirements, fleet operators must place vehicle orders now, however, the supply of federally certified CFVs is limited. Based on the limited numbers of light duty vehicles and trucks offered for sale in California in MY 1997, EPA believes that a short delay of the required implementation date of the CFFP for one model year is reasonable to avoid the potential for serious disruption of the initial implementation of this program from an inadequate supply of vehicles.

Information provided to EPA by vehicle and engine manufacturers indicates that light-duty vehicles available in MY 1999 will include an increased production of sedans, pick-ups, and vans fueled by compressed natural gas (CNG) and electricity. MY 1999 heavy-duty products will include additional CNG and diesel powered engines. Attachment B contains a listing of light-duty vehicles and heavy-duty engines that have been certified to meet EPA's LFV standards for MY 1998.

EPA will work with fleet operators, state agencies, vehicle and engine manufacturers, and other stakeholders to ensure increased availability of different types of CFVs in the coming year. Furthermore, the demand for alternative fueled vehicles will increase in the coming year as all government fleets are required to comply with Executive Order 13031. which mandates the use of alternative fuels. OMS believes this Executive Order will specifically result in a larger selection of certified CNG powered LEVs that will be certified as CFVs.

Original memo signed by Margo T. Oge May 22, 1997 original on file.

Attachment A

List of Currently Certified CA LEVs

(As of April 30, 1997)

Manufacturer Certification Number Models Type Standard Fuel Ford FORD-LDV-97-01-00 Escort, Escort Wagon LDV LEV CA RFG FORD-LDV-97-38-00 Sable, Sable Wagon, Taurus, Taurus Wagon LDV LEV CA RFG General Motors GM-LDT-97-29-00 Astro AWD (C&P)*, Safari (C&P) LDT LEV CA RFG GM-LDT-97-40-00 Safari AWD (P), Astro AWD (C&P) LDT LEV CA RFG Honda HONDA-LDV-97-19-00 Civic, del Sol LDV LEV CA RFG HONDA-LDV-97-20-00 Civic LDV LEV CA RFG HONDA-LDV-97-21-00 Civic, del Sol LDV LEV CA RFG HONDA-LDV-97-22-00 Civic LDV LEV CA RFG Nissan NISSN-LDV-97-06-00 Sentra/200SX LDV LEV CA RFG Suzuki SUZUK-LDV-97-05-00 Metro LDV LEV CA RFG SUZUK-LDV-97-06-00 Metro, Swift LDV LEV CA RFG Toyota TOYOT-LDV-97-11-00 Camry LDV LEV CA RFG TOYOT-LDV-97-12-00 Camry LDV LEV CA RFG * P=Passanger, C=Cargo

Attachment B

List of Currently Certified CFVs

(As of April 30, 1997)

Light Duty

Manufacturer Certification Number Models Type Standard Fuel IMPCO Tech* IMPCO-LDCNGT-97-01 Sierra C Pickup LDT LEV CNG, indolene Chrysler** CHRYSLER-LDCLT-97-01- 00 Caravan(2WD), Voyager(2WD) LDCLT ILEV + ULEV CNG CHRYS-ZEV-97-01 Caravan(2WD), Voyager(2WD) LDT ZEV Electricity Ford FORD-LDCNGV-97-01 Crown Victoria LDV ILEV + ULEV CNG FORD-LDCNGT-97-01 F250(2WD) LDT ILEV + ULEV CNG FORD-LDCNGT-97-02 E250(2WD), E350(2WD) LDT ILEV + ULEV CNG General Motors GM-ZEV-97-01 EV1 LDV ILEV + ZEV Electricity GN-ZEV-LDT-97-01 S10 Pickup LDT ILEV + ZEV Electricity Honda HN-ZEV-97-01 EV Plus LDV ILEV + ZEV Electricity * Dual fueled- meets LEV standards on both indolene and CNG.

** Chrysler has no plans to produce any of these vehicles for sale.

Heavy Duty

Manufacturer Certification Number Models Standard Fuel Cummins CUMMINS-NGE(MHDD)-97-18 B5.9-195G LEV CNG CUMMINS-NGE(MHDD)-97-19 B5.9-195F LEV CNG CUMMINS-NGE(MHDD)-97-22 C8.3-250G LEV CNG CUMMINS-NGE(MHDE)-97-01 B5.9-195G ULEV CNG Detroit Diesel DDC-NGE(LHDDE)-97-01 Series 30G LEV CNG