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Statement of Need: EPA recently proposed to find that emissions of greenhouse gases from new motor vehicles and engines cause or contribute to air pollution that may reasonably be anticipated to endanger public health and welfare. Therefore, there is a need to reduce GHG emissions from medium- and heavy-duty vehicles to protect public health and welfare. The medium- and heavy-duty truck sector accounts for approximately 18 percent of the U.S. mobile source GHG emissions and is the second largest mobile source sector. GHG emissions from this sector are forecast to continue increasing rapidly; reflecting the anticipated impact of factors such as economic growth and increased movement of freight by trucks. This rulemaking would significantly reduce GHG emissions from future medium- and heavy-duty vehicles by setting GHG standards that will lead to the introduction of GHG reducing vehicle and engine technologies.

Summary of the Legal Basis: The Clean Air Act section 202(a)(1) states that "The Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare." Section 202(a) covers all on-highway vehicles including medium- and heavy-duty trucks. In April 2007, the Supreme Court found in Massachusetts v. EPA that greenhouse gases fit well within the Act’s capacious definition of “air pollutant” and that EPA has statutory authority to regulate emission of such gases from new motor vehicles. Lastly, in April 2009, EPA issued the Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act. The endangerment proposal stated that greenhouse gases from new motor vehicles and engines cause or contribute to air pollution that may reasonably be anticipated to endanger public health and welfare.

Alternatives: The rulemaking proposal will include an evaluation of regulatory alternatives that can be considered in addition to the Agency's primary proposal. In addition, the proposal is expected to include tools such as averaging, banking, and trading of emissions credits as an alternative approach for compliance with the proposed program.

Anticipated Costs and Benefits: Detailed analysis of economy-wide cost impacts, greenhouse gas emission reductions, and societal benefits will be performed during the rulemaking process. Initial estimates indicate that the vehicles produced during the first 5 years after implementation of the program could achieve reductions of up to 250 million metric ton of CO2 emissions during the lifetime of these trucks. The costs associated with the GHG control technologies are expected to pay for themselves through fuel cost savings within the first 2 to 5 years of the vehicle's life.

Risks: The failure to set new GHG standards for medium- and heavy-duty trucks risks continued increases in GHG emissions from the trucking industry and therefore increased risk of unacceptable climate change impacts.