EPA, NHTSA fail to address high-octane fuel in SAFE Vehicles rule

The U.S. EPA and U.S. Department of Transportation’s National Highway Traffic Safety Administration released the final Safer Affordable Fuel-Efficient (SAFE) Vehicles rule on March 31. The rule sets corporate average fuel economy (CAFE) and CO2 emissions standards for model year (MY) 2021-2026 passenger cars and light trucks. Representatives of the ethanol industry have criticized the rule for failing to provide a pathway to transition to high-octane, low-carbon fuels.

The EPA and NHTSA first released a proposed SAFE Vehicles rule in August 2018. The rulemaking replaces CAFE and greenhouse gas (GHG) standards put in place by the Obama administration. As part of a 2012 rulemaking, the EPA established MY 2017-2025 light-duty vehicle GHG standards and made a regulatory commitment to conduct a midterm evaluation (MTE) of the standards for 2022-2025. That review was originally completed in November 2016 when former EPA Administrator Gina McCarthy proposed to maintain the MY 2022-2025 standards as originally established. McCarthy finalized that determination in early 2017. In March 2017, former EPA Administrator Scott Pruitt announced the EPA would reconsider the mid-term evaluations and McCarthy’s determination. The EPA opened a public comment period on the reconsideration in August 2017 and held a hearing the following month. Growth Energy, the American Coalition for Ethanol and Renewable Fuels Association were among the groups that testified at the event stressing the importance of high-octane fuel blends. The ethanol industry initially applauded the proposed SAFE Vehicles rule released in August 2018 because it addressed the potential of high-octane fuels. The EPA, however, has failed to take action on the potential high-octane fuel provisions included in the proposed rule.

In the final rule, the EPA and NHTSA said they have reviewed comments filed on the proposed rule concerning high octane levels. The agencies said they recognize the potential that high-octane fuels coupled with advanced engine technologies can provide for improvements to fuel economy and tailpipe CO2 emissions. However, they said they also agree with comments submitted by some stakeholders that said “that establishing a higher minimum octane for gasoline is a complex undertaking that would require consideration of a wide array of difficult issues.”

“In light of the complexity of the constellation of issues, the fact that EPA did not propose new octane requirements, and that the EPA’s authority to set fuel requirements resides in [Clean Air Act] section 211(c)(1), the agencies recognize that the present rulemaking is not the appropriate vehicle to set octane levels,” the EPA and NHTSA said in the final rule. “If EPA pursues future rulemaking action on this topic, it would consider these comments in that context and in consideration of the appropriate statutory provisions. The agencies note that the current vehicle certification process provides a path to certify a vehicle requiring the use of high-octane fuel, which allows the impact of such fuels to be captured over the required certification test cycles for CO2 emissions and fuel economy.”

In the final rule, the EPA also said it is declining to adopt new incentives for flex-fueled vehicles (FFVs). “FFV incentives were not identified by EPA in its request for comments in the proposed rule and are outside the scope of this rulemaking,” the agency said.

Regarding emissions standards, the final SAFE Vehicles rule increases the stringency of CAFE and CO2 emissions by 1.5 percent each year through MY 2026. The original Obama-era rule finalized in 2012 would have required annual increases of approximately 5 percent. The projected overall industry average required fuel economy is expected to be at 40.4 miles per gallon (mpg) in MY 2026, compared to a projected 46.7 mgy that would have been required under the 2012 rule. The agencies also said the new rule reduces the number of credits available to meet these standards that are not associated improved with fuel economy.  

Brian Jennings, CEO of ACE, called the rule a missed opportunity to provide a pathway for high-octane, low-carbon fuels. “The final rule is a missed opportunity to provide a roadmap for high octane mid-level ethanol blends after EPA specifically requested comments on the role 100 Research Octane Number (RON) E30 could play to help automakers meet fuel economy and emissions standards,” he said. “We are also disappointed the rule appears to give special treatment to natural gas vehicles but fails to extend much needed incentives for the continued production of flexible fuel vehicles (FFVs), just another example of EPA choosing fossil fuels over low carbon fuels and rural America.

“There are a number of regulatory barriers restricting market access to high octane mid-level ethanol blends that we set forth in our comments in the fall of 2018 and it’s unfortunate that after requesting information from the public on the ‘ideal octane level,’ the ‘benefits of increasing fuel octane,’ and specifically how higher octane fuel will play a role in ‘engine technologies and product offerings’ and ‘improvements to fuel economy and CO₂ reductions,’ EPA failed to incorporate what the agency previously conceded: ‘higher octane fuel can provide auto manufacturers more flexibility to meet more stringent standards by enabling opportunities for use of lower CO₂ emitting technologies.’

“EPA’s failure to act underscores the importance of ACE’s work to advance new Low Carbon Octane Standard legislation to establish a minimum octane standard of 98 RON gasoline from clean sources of octane that reduce lifecycle greenhouse gas emissions such as ethanol,” Jennings continued.

The RFA said the rule ignores the input of automakers, ethanol producers, farmers, environmental groups, retailers and others who called on the agencies to establish a pathway for transitioning to high-octane, low-carbon liquid biofuels. “EPA’s final rule is yet another missed opportunity to bring higher-octane, lower-carbon fuels to the market and enable more efficient internal combustion engine technologies,” said Geoff Cooper, president and CEO of the RFA. “Of all the stakeholders who provided input to EPA on the topic of octane, only the oil industry voiced opposition to EPA using its authority to set standards for higher-octane fuels. Once again, EPA has sided with the oil industry over automakers, biofuel producers, farmers, environmental advocates, and consumers. This rule should have established the roadmap toward cleaner, more efficient, more affordable liquid fuels for our nation’s consumers. Instead, it sends our nation’s vehicles and fuels down yet another pothole-filled road to ruin.”

A full copy of the final rule can be downloaded from the EPA’s website. The discussion of octane-related issues beings on page 397.