EPA proposes most stringent vehicle emission standards ever for model years 2027-2032

On April 12, 2023, the Environmental Protection Agency (EPA) issued the notice of proposed rulemaking for “Multi-Pollutant Emission Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles” (the “proposed rule” or “NPRM”), covering MY2027-32. The proposed standards are the most stringent federal standards to date for GHG and criteria pollutants from motor vehicles.  While the proposal falls short of an electric vehicle (EV) mandate, EPA estimates that up to 67% of new vehicles sold in 2032 could be electric to meet proposed fleet average requirements.  In addition, the proposed rule includes significant changes to the off-cycle and air conditioning credit programs, as well as proposes new warranty and durability requirements beginning in MY2027, including for electric vehicles/powertrains, and would take the historic step of designating EV powertrain components as emission-related.

(See pre-pub copy of the proposed rule linked here: “Multi-Pollutant Emission Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles”.)

Overview of EPA proposed MY2027-2032 GHG and criteria pollutant emission standards

GHG standards

The proposed light-duty standards would reduce the fleet average GHG emissions target levels by 56% from the MY2026 standards. EPA proposes separate passenger car and light truck standards (as well as a proposed new definition for “light truck” that would be consistent between the criteria pollutant standards and GHG standards). EPA also is proposing more stringent fleet-wide CO2 emissions standards which are projected to result in an industry-wide average target of 82 g/mile of CO2 in MY 2032 based on EPA fleet-mix projections.

See Tables 8, 9 and 10, NPRM.

The agency considered three alternatives to the proposed standards, as follows (showing only alternatives considered for car standards, see NPRM for truck and fleet-wide alternatives):

See Table 8, NPRM.

Criteria and toxic pollutant emissions standards

EPA proposes changes to emissions standards for the following criteria pollutants, with multiple phase in scenarios (and early compliance options) available for manufacturers to choose:

  • Nonmethane organic gases (“NMOG”) plus nitrogen oxides (“NOx“): Phase-down to fleet average level of 12 mg/mi NMOG + NOX by MY2032 (60% reduction from MY2025, with option for early compliance pathway) and proposed cold temperature (-7°C) standards for light- and medium-duty vehicles.

 See Table 41, NPRM.

  • Particulate matter (PM): 0.5 mg/mi cap (per vehicle) and requirement to meet standard across three test cycles (including a cold temperature test)

  • Carbon monoxide (CO): CO emissions cap of 1.7 g/mile must be met across four test cycles and a 10.0 g/mile cap for the -7°C test procedure

  • Formaldehyde (HCHO): 4 mg/mile emission cap

Proposed changes to flexibilities and incentives

The NPRM retains some of the current compliance incentives and flexibilities, including the Credit Averaging, Banking, and Trading (ABT) program.  EPA is not proposing to restore multiplier incentives for battery electric vehicles (BEV), plug-in hybrids (PHEV), or fuel cell electric vehicles (FCEV).  In addition, EPA proposes significant changes/phase-outs to the following flexibilities:

  • Air Conditioning (“A/C”) Efficiency Credits:  Two major revisions to the A/C credit program including:

    • Limit A/C efficiency credit eligibility beginning in MY2027 to vehicles with internal combustion engines (ICE) only

    • Remove refrigerant-based A/C credits for LD and MD vehicles

  • Off-Cycle Credit Program:  Sunset the off-cycle credit program for light- and medium-duty vehicles by:

  1. Reducing menu credit cap year-over-year (YOY) so that MY2030 is the last year manufacturers can generate such credits (proposal is a declining cap of 10/8/6/3/0 g/mile over MY2027-2031)

  2. Eliminating 5-cycle and public process pathways beginning in MY2027

  3. Limiting eligibility for off-cycle credits to only vehicles with tailpipe emissions greater than zero (i.e., ICE vehicles)

  • MDV Multiplier:  Multiplier incentives for MDVs through MY2027 (as previously proposed) to end one year earlier in MY2026.

  • PEV and FCEV Fleet Average Calculation:  Under the GHG program EPA proposes that for MYs 27 and later, BEVs and FCEVs would be counted as 0 g/mile and PHEVs would apply the 0 g/mile factor to electric-only vehicle operation for compliance calculations.

Proposed BEV/PHEV battery durability and warranty requirements

Battery durability

EPA is proposing new battery durability monitoring and performance requirements for light-duty BEVs and PHEVs, and battery durability monitoring requirements for Class 2b and 3 BEVs and PHEVs, beginning with MY 2027.  The proposal would classify BEV and PHEV batteries and associated electronic powertrain components under existing emission warranty provisions.  The proposal also includes new grouping definitions for BEVs and PHEVs, new reporting requirements, and a new calculation for the PHEV charge depletion test. 

Under the proposal, light-duty and Class 2b and 3 BEVs and PHEVs would be required to include a customer-readable battery state-of-health (SOH) monitor that reports the vehicle’s state of certified energy (SOCE).  Light-duty BEVs and PHEVs would also be subject to a minimum performance requirement (MPR) for the SOH, as follows:

See Table 64, NPRM.

Manufacturers would be required to demonstrate compliance via an accuracy standard for the on-board SOCE monitors and, for light-duty vehicles, in-use testing for MPR compliance.  Manufacturers whose monitor and/or durability families that fail accuracy/durability requirements would be subject to recall and/or adjustment of their credit balance, as applicable.

Battery warranty

EPA is proposing new warranty requirements for BEV and PHEV batteries and associated electronic powertrain components (e.g., electric machines, inverters, and similar key electric powertrain components).  For light-duty BEVs and PHEVs, EPA is proposing to designate the high-voltage battery and associated electric powertrain components as specified major emission control components under Clean Air Act (CAA) section 207(i)(2), subject to a warranty period of 8 years or 80,000 miles.  For medium-duty (Class 2b and 3) BEVs and PHEVs, EPA is proposing to specify the warranty period of 8 years or 80,000 miles for the battery and associated electric powertrain components on such vehicles.

Proposed emissions warranty for certain ICE components

Importantly, EPA also is proposing to designate several emission control components and systems of light-duty ICE vehicles as specified major emission control components (subject to 8 years or 80,000 miles for warranty coverage), including: components of the diesel Selective Reductant Catalysts (SRC) system, components of the diesel Exhaust Gas Recirculation (EGR) system, and diesel and gasoline particulate filters (DPFs and GPFs).


The proposed rule also seeks comment regarding potential changes to GHG compliance and enforcement provisions (including methods for preventing/accounting for deviations in manufacturer in-use CO2 results), revisions to the certification application and AECD disclosure requirements, OBD monitoring requirements, and more.

Next steps

EPA will hold a virtual public hearing on the NPRM on May 9 and 10, 2023. An additional session may be held on May 11, 2023, if necessary.  More information is available on EPA’s rule summary website and Fact Sheet.  Comments on the NPRM are due 60 days following publication in the Federal Register.



Authored by Joanne Rotondi, Hannah Graae, Christina Bassick, and Allisa Newman.


This website is operated by Hogan Lovells International LLP, whose registered office is at Atlantic House, Holborn Viaduct, London, EC1A 2FG. For further details of Hogan Lovells International LLP and the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses ("Hogan Lovells"), please see our Legal Notices page. © 2024 Hogan Lovells.

Attorney advertising. Prior results do not guarantee a similar outcome.