EPA Releases Proposed Tier 3 Vehicle Emissions

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EPA released the long-awaited proposed Tier 3 vehicle emissions and gasoline sulfur standards.

The proposed Tier 3 program, to take effect in 2017 and phase in through 2025, would harmonize with California’s Low-Emission Vehicle III (LEV III) program, enabling the auto industry to manufacture and sell one vehicle across the country. The program includes significantly tighter volatile organic compound (VOC), nitrogen oxide (NOx) and particulate matter (PM) tailpipe standards, as well as vehicle evaporative emission standards, a revised certification test fuel to better reflect in-use gasoline in 2017 and regulatory streamlining and harmonizing changes in accordance with the President’s Regulatory Review Initiative. Because compliance with the Tier 3/LEV III tailpipe standards depends on the use of lower-sulfur gasoline, EPA also proposes to reduce sulfur in gasoline by about 60 percent to an average of 10 parts per million in 2017 (versus the current average of 30 ppm); 10-ppm-sulfur fuel is already in use in California as well as in the European Union, Japan and South Korea. EPA further proposes to either retain the per-gallon sulfur caps of 80 ppm at the refinery gate and 95 ppm at retail outlets or reduce the per-gallon caps to 50 ppm and 65 ppm, respectively. Of the 111 refineries potentially affected by Tier 3, EPA estimates that only 16 would have to install new equipment to comply. Twenty-nine of the remaining refineries either already meet the Tier 3 gasoline standard or could do so by making operational changes alone and the other 66 could meet the Tier 3 gasoline standard by modifying existing equipment. Significantly, EPA proposes a number of flexibilities for the Tier 3 fuel program, all of which have been successfully used in other EPA fuel programs, including 1) an annual average standard with a “sufficiently high” per-gallon cap; 2) an early credit program to phase in the sulfur standard between January 1, 2014 and December 31, 2019; 3) relief for small refiners and refineries producing less than 75,000 barrels per day in the form of a three-year delay, until December 31, 2019 (which is consistent with the end of the early credit phase-in for large refiners) – this provision would apply to a total of 35 refineries, which represent 10 percent of gasoline production; 4) economic and technical hardship provisions that would be available to all refiners.

EPA projects that the emissions impact of the Tier 3 program would include, in 2017 when the program takes effect, an 8-percent reduction in the national onroad NOx inventory, 3 percent reduction in VOCs, 4 percent reduction in carbon monoxide (CO), 4 percent reduction in benzene and 3 percent reduction in total air toxics. In 2030, once the program is fully effective, the emission reductions would increase to 28 percent NOx, 23 percent VOCs, 10 percent PM2.5, 30 percent CO, 36 percent benzene and 23 percent total air toxics. Additional emission reductions are expected to accrue after 2030 as the fleet continues to turn over to Tier 3. In terms of costs and benefits, EPA projects the gasoline sulfur standard would cost 0.89 cents per gallon and the vehicle standards would cost $130 per vehicle in 2025. Annual costs in 2030 would be $2.0 billion for the vehicle program and $1.3 billion for the fuel program for a total of $3.3 billion. Compare this to the total monetized benefits of the program in 2030, which are estimated to be between $8 billion and $23 billion. EPA will accept public comments on the Tier 3 proposal for 30 days after publication of the proposal in the Federal Register. Information on the dates and locations of public hearings has not yet been announced. For further information: http://www.epa.gov/otaq/tier3.htm