[Federal Register Volume 65, Number 107 (Friday, June 2, 2000)]
[Proposed Rules]
[Pages 35430-35559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12952]
[[Page 35429]]
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Part II
Environmental Protection Agency
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40 CFR Parts 69, 80, and 86
Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and
Vehicle Standards; Highway Diesel Fuel Sulfur Control Requirements;
Proposed Rules
Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed
Rules
[[Page 35430]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 69, 80, and 86
[AMS-FRL-6705-2]
RIN 2060-AL69
Control of Air Pollution From New Motor Vehicles: Proposed Heavy-
Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur
Control Requirements
AGENCY: Environmental Protection Agency.
ACTION: Notice of proposed rulemaking.
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SUMMARY: Diesel engines contribute considerable pollution to our
nation's continuing air quality problems. Even with more stringent
heavy-duty highway engine standards set to take effect in 2004, these
engines will continue to emit large amounts of nitrogen oxides and
particulate matter, both of which contribute to serious public health
problems in the United States. These problems include premature
mortality, aggravation of respiratory and cardiovascular disease,
aggravation of existing asthma, acute respiratory symptoms, chronic
bronchitis, and decreased lung function. Numerous studies also link
diesel exhaust to increased incidence of lung cancer.
The diesel engine is a vital workhorse in the United States, moving
much of the nation's freight, and carrying out much of its farm,
construction, and other labor. Diesel engine sales have grown over the
last decade, so that now about a million new diesel engines are put to
work in the U.S. every year. Diesels overwhelmingly dominate the bus
and large truck markets and have been capturing a growing share of the
light heavy-duty vehicle market over the last decade.
We are proposing a comprehensive national control program that
would regulate the heavy-duty vehicle and its fuel as a single system.
We are proposing new emission standards that would begin to take effect
in 2007, and would apply to heavy-duty highway engines and vehicles.
These proposed standards are based on the use of high-efficiency
catalytic exhaust emission control devices or comparably effective
advanced technologies. Because these devices are damaged by sulfur, we
are also proposing to reduce the level of sulfur in highway diesel fuel
significantly by the middle of 2006.
Diesel engines are more durable and get better fuel economy than
gasoline engines, but also pollute significantly more. If this program
is implemented as proposed, diesel trucks and buses will have
dramatically reduced emission levels. This proposed program will bring
heavy-duty diesel emissions on par with new cars. The results of this
historic proposal would be comparable to the advent of the catalytic
converter on cars, as the proposed standards would, for the first time,
result in the widespread introduction of exhaust emission control
devices on diesel engines.
By 2007, we estimate that heavy-duty trucks and buses will account
for as much as 30 percent of nitrogen oxides emissions from
transportation sources and 14 percent of particulate matter emissions.
In some urban areas, the contribution will be even greater. The
standards for heavy-duty vehicles proposed in this rule would have a
substantial impact on the mobile source inventories of oxides of
nitrogen and particulate matter. Beginning the program in the 2007
model year ensures that emission reductions start early enough to
counter the upward trend in heavy-duty vehicle emissions that would
otherwise occur because of the increasing number of vehicle miles
traveled each year.
This proposed program would result in particulate matter and oxides
of nitrogen emission levels that are 90% and 95% below current
standards levels, respectively. In order to meet these more stringent
standards for diesel engines, the proposal calls for a 97% reduction in
the sulfur content of diesel fuel. As a result, diesel vehicles would
achieve gasoline-like exhaust emission levels, in addition to their
inherent advantages over gasoline vehicles with respect to fuel
economy, lower greenhouse gas emissions, and lower evaporative
hydrocarbon emissions. We are also proposing more stringent standards
for heavy-duty gasoline vehicles.
The clean air impact of this program would be dramatic when fully
implemented. By 2030, this program would reduce annual emissions of
nitrogen oxides, nonmethane hydrocarbons, and particulate matter by a
projected 2.8 million, 305,000 and 110,000 tons, respectively. We
project that these reductions and the resulting significant
environmental benefits of this program would come at an average cost
increase of about $1,700 to $2,800 per new vehicle in the near term and
about $1000 to $1600 per new vehicle in the long term, depending on the
vehicle size. In comparison, new vehicle prices today can range up to
$250,000 for larger heavy-duty vehicles. The cost of reducing the
sulfur content of diesel fuel would result in an estimated increase of
approximately four cents per gallon.
DATES: Comments: We must receive your comments by August 14, 2000.
Hearings: We will hold public hearings on June 19, 20, 22, 27, and
29, 2000. See ADDRESSES below for the locations of the hearings.
ADDRESSES: Comments: You may send written comments in paper form and/or
by e-mail. We must receive them by the date indicated under ``DATES''
above. Send paper copies of written comments (in duplicate if possible)
to the contact person listed below. Send e-mail comments to
[email protected].
EPA's Air Docket makes materials related to this rulemaking
available for review in Docket No. A-99-06 located at U.S.
Environmental Protection Agency (EPA), Air Docket (6102), Room M-1500,
401 M Street, SW, Washington, DC 20460 (on the ground floor in
Waterside Mall) from 8 a.m. to 5:30 p.m., Monday through Friday, except
on government holidays. You can reach the Air Docket by telephone at
(202) 260-7548 and by facsimile at (202) 260-4400. We may charge a
reasonable fee for copying docket materials, as provided in 40 CFR part
2.
Hearings: We will hold five public hearings at the following
locations:
June 19, 2000, Crowne Plaza Hotel, 1605 Broadway, New York, NY,
10019
June 20, 2000, Rosemont Convention Center, 5555 N. River Rd.,
Rosemont, IL 60018
June 22, 2000, Renaissance Atlanta Hotel, 590 W. Peachtree St, NW,
Atlanta, GA, 30308
June 27, 2000, Hyatt Regency, 711 S. Hope Street, Los Angeles, CA,
90017
June 29, 2000, Doubletree Hotel, 3203 Quebec St., Denver, CO, 80207
We request that parties who want to testify at a hearing notify the
contact person listed below ten days before the date of the hearing.
Please see section X, ``Public Participation'' below for more
information on the comment procedure and public hearings.
FOR FURTHER INFORMATION CONTACT: Margaret Borushko, U.S. EPA, National
Vehicle and Fuel Emissions Laboratory, 2000 Traverwood, Ann Arbor MI
48105; Telephone (734) 214-4334, FAX (734) 214-4816, E-mail
[email protected].
SUPPLEMENTARY INFORMATION:
Regulated Entities
This proposed action would affect you if you produce or import new
[[Page 35431]]
heavy-duty engines which are intended for use in highway vehicles such
as trucks and buses or heavy-duty highway vehicles, or convert heavy-
duty vehicles or heavy-duty engines used in highway vehicles to use
alternative fuels. It would also affect you if you produce, distribute,
or sell highway diesel fuel.
The table below gives some examples of entities that may have to
follow the proposed regulations. But because these are only examples,
you should carefully examine the proposed and existing regulations in
40 CFR parts 69, 80, and 86. If you have questions, call the person
listed in the FOR FURTHER INFORMATION CONTACT section above.
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Examples of potentially regulated
Category NAICS Codes a SIC Codes b entities
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Industry................................... 336112 3711 Engine and truck manufacturers.
336120
Industry................................... 811112 7533 Commercial importers of vehicles
and vehicle components.
811198 7549
Industry................................... 324110 2911 Petroleum refiners.
Industry................................... 422710 5171 Diesel fuel marketers and
distributors.
422720 5172
Industry................................... 484220 4212 Diesel fuel carriers.
484230 4213
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a North American Industry Classification System (NAICS).
b Standard Industrial Classification (SIC) system code.
Access to Rulemaking Documents Through the Internet
Today's proposal is available electronically on the day of
publication from the Environmental Protection Agency Internet Web site
listed below. Electronic copies of the preamble, regulatory language,
Draft Regulatory Impact Analysis, and other documents associated with
today's proposal are available from the EPA Office of Transportation
and Air Quality (formerly the Office of Mobile Sources) Web site listed
below shortly after the rule is signed by the Administrator. This
service is free of charge, except any cost that you incur for
connecting to the Internet.
Environmental Protection Agency Web Site:
http://www.epa.gov/fedrgstr/
(Either select a desired date or use the Search feature.)
Office of Transportation and Air Quality (OTAQ) Web Site:
http://www.epa.gov/otaq/
(Look in ``What's New'' or under the ``Heavy Trucks/Busses'' topic.)
Please note that due to differences between the software used to
develop the document and the software into which document may be
downloaded, changes in format, page length, etc. may occur.
Table of Contents
I. A Brief Overview
A. What Is Being Proposed?
1. Heavy-Duty Emission Standards
2. Fuel Quality Standards
B. Why Is EPA Making This Proposal?
1. Heavy-Duty Vehicles Contribute to Serious Air Pollution
Problems
2. Technology-Based Solutions
3. Basis for Action Under the Clean Air Act
C. Putting This Proposal In Perspective
1. Diesel Popularity
2. Past Progress and New Developments
3. Tier 2 Emissions Standards
4. Mobile Source Air Toxics Rulemaking
5. Nonroad Engine Standards and Fuel
6. Actions in California
7. Retrofit Programs
8. Actions in Other Countries
II. The Air Quality Need and Projected Benefits
A. Overview
B. Public Health and Welfare Concerns
1. Ozone and Its Precursors
a. Health and Welfare Effects From Short-Term Exposures to Ozone
b. Current and Future Nonattainment Status With the 1-Hour Ozone
NAAQS
i. Ozone Predictions Made in the Tier 2 Rulemaking and Other
Information on Ozone Attainment Prospects
ii. Areas At Risk of Exceeding the 1-Hour Ozone Standard
iii. Conclusion
c. Public Health and Welfare Concerns from Prolonged and
Repeated Exposures to Ozone
2. Particulate Matter
a. Health and Welfare Effects
i. Particulate Matter Generally
ii. Special Considerations for Diesel PM
b. Potential Cancer Effects of Diesel Exhaust
c. Noncancer Effects of Diesel Exhaust
d. Attainment and Maintenance of the PM10 NAAQS
i. Current PM10 Nonattainment
ii. Risk of Future Exceedances of the PM10 Standard
e. Public Health and Welfare Concerns from Exposure to Fine PM
f. Visibility and Regional Haze Effects of Ambient PM
g. Other Welfare Effects Associated with PM
h. Conclusions Regarding PM
3. Other Criteria Pollutants
4. Other Air Toxics
a. Benzene
b. 1,3-Butadiene
c. Formaldehyde
d. Acetaldehyde
e. Acrolein
f. Dioxins
5. Other Environmental Effects
a. Acid Deposition
b. Eutrophication and Nitrification
c. POM Deposition
C. Contribution From Heavy-Duty Vehicles
1. NOX Emissions
2. PM Emissions
3. Environmental Justice
D. Anticipated Emissions Benefits
1. NOX Reductions
2. PM Reductions
3. NMHC Reductions
4. Additional Emissions Benefits
a. CO Reductions
b. SOX Reductions
c. Air Toxics Reductions
E. Clean Heavy-Duty Vehicles and Low-Sulfur Diesel Fuel Are
Critically Important for Improving Human Health and Welfare
III. Heavy-Duty Engine and Vehicle Standards
A. Why Are We Setting New Heavy-Duty Standards?
B. Technology Opportunity for Heavy-Duty Vehicles and Engines
C. What Engine and Vehicle Standards Are We Proposing?
1. Heavy-Duty Engine Standards
a. Federal Test Procedure
b. Not-to-Exceed and Supplemental Steady-State Test
c. Crankcase Emissions Control
2. Heavy-Duty Vehicle Standards
a. Federal Test Procedure
b. Supplemental Federal Test Procedure
3. Heavy-Duty Evaporative Emission Standards
D. Standards Implementation Issues
1. Alternative Approach To Phase-In
2. Implementation Schedule for Gasoline Engine and Vehicle
Standards
E. Feasibility of the Proposed New Standards
1. Feasibility of Stringent Standards for Heavy-Duty Diesel
a. Meeting the Proposed PM Standard
b. Meeting the Proposed NOX Standard
c. Meeting the Proposed NMHC Standard
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d. Meeting the Crankcase Emissions Requirements
e. The Complete System
2. Feasibility of Stringent Standards for Heavy-Duty Gasoline
3. Feasibility of the Proposed Evaporative Emission Standards
F. Need for Low-Sulfur Diesel Fuel
1. Diesel Particulate Filters and the Need for Low-Sulfur Fuel
a. Inhibition of Trap Regeneration Due to Sulfur
b. Loss of PM Control Effectiveness
c. Increased Maintenance Cost for Diesel Particulate Filters Due
to Sulfur
2. Diesel NOX Catalysts and the Need for Low-Sulfur
Fuel
a. Sulfate Particulate Production for NOX Control
Technologies
b. Sulfur Poisoning (Sulfate Storage) on NOX
Adsorbers
c. Sulfur Impacts on Catalytic Efficiency
3. What About Sulfur in Engine Lubricating Oils?
G. Fuel Economy Impact of Advanced Emission Control Technologies
1. Diesel Particulate Filters and Fuel Economy
2. NOX Control Technologies and Fuel Economy
3. Emission Control Systems for 2007 and Net Fuel Economy
Impacts
H. Future Reassessment of Diesel NOX Control
Technology
I. Encouraging Innovative Technologies
IV. Diesel Fuel Requirements
A. Why Do We Believe New Diesel Fuel Sulfur Controls Are
Necessary?
B. What New Sulfur Standard Are We Proposing for Diesel Fuel?
1. Why Is EPA Proposing a 15 ppm Cap and Not a Higher or Lower
Level?
2. Why Propose a Cap and Not an Average?
3. Should the Proposed 15 ppm Cap Standard Also Have an Average
Standard?
4. Why We Believe Our Diesel Fuel Sulfur Program Should Be Year-
round and Nationwide
C. When Would the New Diesel Sulfur Standard Go Into Effect?
D. Why We Believe the Proposed Diesel Sulfur Standard is
Technologically Feasible
1. What Technology Would Refiners Use?
2. Are These Technologies Commercially Demonstrated?
3. Are There Unique Concerns for Small Refiners?
4. Can Refiners Comply with an April 1, 2006 Start Date?
5. Can a 15 ppm Cap on Sulfur be Maintained by the Distribution
System?
6. What are the Potential Impacts of the Proposed Sulfur Change
on Lubricity, Other Fuel Properties, and Specialty Fuels?
a. What Is Lubricity and Why Might It be a Concern?
b. Voluntary Approach for the Maintenance of Fuel Lubricity
c. What Are the Possible Impacts of Potential Changes in Fuel
Properties Other Than Sulfur on the Materials Used in Engines and
Fuel Supply Systems?
d. What Impact Would the 15 ppm Cap Have on Diesel Performance
Additives?
e. What Are the Concerns Regarding the Potential Impact on the
Availability and Quality of Specialty Fuels?
E. Who Would Be Required to Meet This Proposed New Diesel Sulfur
Standard?
F. What Might Be Done To Encourage the Early Introduction of
Low-Sulfur Diesel Fuel?
V. Economic Impact
A. Cost for Diesel Vehicles to Meet Proposed Emissions Standards
1. Summary of New System and Operating Costs
2. New System Costs for NOX and PM Emission Control
3. Operating Costs Associated With NOX and PM Control
B. Cost for Gasoline Vehicles to Meet Proposed Emissions
Standards
1. Summary of New System Costs
2. Operating Costs Associated with Meeting the Heavy-Duty
Gasoline Standard
C. Benefits of Low-Sulfur Diesel Fuel for the Existing Diesel
Fleet
D. Cost of Proposed Fuel Change
1. Refinery Costs
2. Cost of Possibly Needed Lubricity Additives
3. Distribution Costs
E. Aggregate Costs
F. Cost Effectiveness
1. What Is the Cost Effectiveness of This Proposed Program?
2. Comparison With Other Means of Reducing Emissions
G. Does the Value of the Benefits Outweigh the Cost of the
Proposed Standards?
1. What Is the Purpose of This Benefit-Cost Comparison?
2. What Is Our Overall Approach to the Benefit-Cost Analysis?
3. What Are the Significant Limitations of the Benefit-Cost
Analysis?
4. How Will the Benefit-Cost Analysis Change From the Tier 2
Benefit-Cost Analysis?
5. How Will We Perform the Benefit-Cost Analysis?
6. What Types of Results Will Be Presented in the Benefit-Cost
Analysis?
VI. Alternative Program Options
A. What Other Fuel Implementation Options Have We Considered?
1. What Are the Advantages and Disadvantages of a Phase-in
Approach to Implementing the Low Sulfur Fuel Program?
a. Availability of Low Sulfur Diesel Fuel
b. Misfueling
c. Distribution System Impacts
d. Uncertainty in the Transition to Low Sulfur
e. Cost Considerations Under a Phase-in Approach
2. What Phase-in Options Is EPA Seeking Comment on in Today's
Proposal?
a. Refiner Compliance Flexibility
i. Overview of Compliance Flexibility
ii. What Are the Key Considerations in Designing the Compliance
Flexibility?
iii. How Does This Compliance Flexibility Relate to the Options
for Small Refiner Flexibility?
iv. How Would the Averaging, Banking and Trading Program Work?
v. Compliance, Recordkeeping, and Reporting Requirements
b. Refiner-Ensured Availability
c. Retailer Availability Requirement
2. Why Is a Regulation Necessary to Implement the Fuel Program?
3. Why Not Just Require Low-Sulfur Diesel Fuel for Light-Duty
Vehicles and Light-Duty Trucks?
4. Why Not Phase-Down the Concentration of Sulfur in Diesel Fuel
Over Time as Was Done With Gasoline in the Tier 2 Program?
B. What Other Fuel Standards Have We Considered In Developing
This Proposal?
1. What About Setting the 15 ppm Sulfur Level as an Average?
a. Emission Control Technology Enablement Under a 15 ppm Average
Standard
b. Vehicle and Operating Costs for Diesel Vehicles to Meet the
Proposed Emissions Standards with a 15 ppm Average Standard
c. Diesel Fuel Costs Under a 15 ppm Average Standard
d. Emission Reductions Under a 15 ppm Average Standard
e. Cost Effectiveness of a 15 ppm Average Standard
2. What About a 5 ppm Sulfur Level?
3. What About a 50 ppm Sulfur Level?
4. What Other Fuel Properties Were Considered for Highway Diesel
Fuel?
C. Should Any States or Territories Be Excluded from this Rule?
1. What Are the Anticipated Impacts of Using High-Sulfur Fuel in
New and Emerging Diesel Engine Technologies if Areas Are Excluded
From This Rule?
2. Alaska
a. Why is Alaska Unique?
b. What Flexibilities Are We Proposing for Alaska?
c. How Do We Propose to Address Alaska's Petition Regarding the
500 ppm Standard?
3. American Samoa, Guam, and the Commonwealth of Northern
Mariana Islands
a. Why are We Considering Excluding American Samoa, Guam, and
the Commonwealth of Northern Mariana Islands?
b. What Are the Relevant Factors?
c. What Are the Options and Proposed Provisions for the
Territories?
D. What About the Use of JP-8 Fuel in Diesel Equipped Military
Vehicles?
VII. Requirements for Engine and Vehicle Manufacturers
A. Compliance With Standards and Enforcement
B. Certification Fuel
C. Averaging, Banking, and Trading
D. Chassis Certification
E. FTP Changes to Accommodate Regeneration of Aftertreatment
Devices
F. On-Board Diagnostics
G. Supplemental Test Procedures
H. Misfueling Concerns
I. Light-Duty Provisions
J. Correction of NOX Emissions for Humidity Effects
VIII. Requirements For Refiners, Importers, and Fuel Distributors
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A. Compliance and Enforcement
1. Overview
2. What Are the Requirements for Refiners and Importers?
a. General Requirements
b. Dyes and Markers
3. What Requirements Apply Downstream?
a. General Requirements
b. Use of Used Motor Oil in Diesel-Fueled New Technology
Vehicles
c. Use of Kerosene and Other Additives in Diesel Fuel
4. What Are the Proposed Testing and Sampling Methods and
Requirements?
a. Testing Requirements and Test Methods
b. Sampling Methods
5. What Are the Proposed Recordkeeping Requirements?
6. Are There Any Proposed Exemptions Under This Subpart?
7. Would California Be Exempt From the Rule?
8. What Are the Proposed Liability and Penalty Provisions for
Noncompliance?
a. Presumptive Liability Scheme of Current EPA Fuels Programs
b. Affirmative Defenses for Liable Parties
c. Penalties for Violations
9. How Would Compliance With the Diesel Sulfur Standards Be
Determined?
B. Lubricity
C. Would States Be Preempted From Adopting Their Own Sulfur
Control Programs for Highway Diesel Fuel?
D. Refinery Air Permitting
E. Provisions for Qualifying Refiners
1. Allow Small Refiners to Continue Selling 500 ppm Highway
Diesel
2. Temporary Waivers Based on Extreme Hardship Circumstances
3. 50 ppm Sulfur Cap for Small Refiners
IX. Standards and Fuel for Nonroad Diesel Engines
X. Public Participation
A. Submitting Written and E-mail Comments
B. Public Hearings
XI. Administrative Requirements
A. Administrative Designation and Regulatory Analysis
B. Regulatory Flexibility Act
1. Potentially Affected Small Businesses
2. Small Business Advocacy Review Panel and the Evaluation of
Regulatory Alternatives
C. Paperwork Reduction Act
D. Intergovernmental Relations
1. Unfunded Mandates Reform Act
2. Executive Order 13084: Consultation and Coordination With
Indian Tribal Governments
E. National Technology Transfer and Advancement Act
F. Executive Order 13045: Children's Health Protection
G. Executive 13132: Federalism
XII. Statutory Provisions and Legal Authority
I. A Brief Overview
This proposal covers the second of two phases in a comprehensive
nationwide program for controlling emissions from heavy-duty engines
(HDEs) and vehicles. It builds upon the phase 1 program we proposed
last October (64 FR 58472, October 29, 1999). That action reviewed and
proposed to confirm the 2004 model year emission standards set in 1997
(62 FR 54693, October 21, 1997), proposed stringent new emission
standards for gasoline-fueled heavy-duty vehicles (HDVs), and proposed
other changes to the heavy-duty program, including provisions to ensure
in-use emissions control. Today's proposal takes the provisions of the
October 1999 proposal as a point of departure.
This second phase of the program looks beyond 2004, based on the
use of high-efficiency exhaust emission control devices and the
consideration of the vehicle and its fuel as a single system. In
developing this proposal, we took into consideration comments received
in response to an advance notice of proposed rulemaking (ANPRM)
published in May of last year (64 FR 26142, May 13, 1999), and comments
we received in response to our discussion of future standards in the
heavy-duty 2004 standards proposal last October. We welcome comment on
all facets of this proposal and its supporting analyses, including the
levels and timing of the proposed emissions standards and diesel fuel
quality requirements. We ask that commenters provide any technical
information that supports the points made in their comments.
This proposed program would result in particulate matter (PM) and
oxides of nitrogen (NOX) emission levels that are 90% and
95% below current standards levels, respectively. In order to meet
these more stringent standards for diesel engines, the proposal calls
for a 97% reduction in the sulfur content of diesel fuel. This proposal
would make clean diesel fuel available in time for implementation of
the light-duty Tier 2 standards. The heavy-duty engine standards would
be effective starting in the 2007 model year and the low sulfur diesel
fuel needed to facilitate the standards would be widely available by
the middle of 2006. As a result, diesel vehicles would achieve
gasoline-like exhaust emission levels, in addition to their inherent
advantages over gasoline vehicles with respect to fuel economy, lower
greenhouse gas emissions, and lower evaporative hydrocarbon emissions.
We are also proposing more stringent standards for heavy-duty gasoline
vehicles.
The standards proposed would result in substantial benefits to
public health and welfare and the environment through significant
reductions in emissions of NOX, PM, nonmethane hydrocarbons
(NMHC), carbon monoxide (CO), sulfur oxides (SOX), and air
toxics. We project that by 2030, this proposed phase 2 program would
reduce annual emissions of NOX, NMHC, and PM by 2.8 million,
305,000 and 110,000 tons, respectively. Especially in the early years
of this program, large reductions in the amount of direct and secondary
PM caused by the existing fleet of heavy-duty vehicles would occur
because of the improvement in diesel fuel quality.
A. What Is Being Proposed?
There are two basic parts to this proposal: (1) New exhaust
emission standards for heavy-duty highway engines and vehicles, and (2)
new quality standards for highway diesel fuel. The systems approach of
combining the engine and fuel standards into a single program is
critical to the success of our overall efforts to reduce emissions,
because the emission standards would not be feasible without the fuel
change. This is because the emission standards, if promulgated, are
expected to result in the use of high-efficiency exhaust emission
control devices that would be damaged by sulfur in the fuel. This
proposal, by providing extremely low sulfur diesel fuel, would also
enable cleaner diesel passenger vehicles and light-duty trucks. This is
because the same pool of highway diesel fuel also services these light-
duty diesel vehicles, and these vehicles can employ technologies
similar to the high-efficiency heavy-duty exhaust emission control
technologies that would be enabled by the fuel change. We believe these
technologies are needed for diesel vehicles to comply with our recently
adopted Tier 2 emissions standards for light-duty highway vehicles (65
FR 6698, February 10, 2000).
We believe that this systems approach is a comprehensive way to
enable promising new technologies for clean diesel affecting all sizes
of highway diesel engines and, eventually, diesel engines used in
nonroad applications too. The fuel change, in addition to enabling new
technologies, would also produce emissions and maintenance benefits in
the existing fleet of highway diesel vehicles. These benefits would
include reduced sulfate and sulfur oxides emissions, reduced engine
wear and less frequent oil changes, and longer-lasting exhaust gas
recirculation (EGR) components on engines equipped with EGR. Heavy-duty
gasoline vehicles would also be expected to reach cleaner levels due to
the transfer of recent technology developments for light-duty
applications, and the recent action taken to reduce sulfur in gasoline
as part of the Tier 2 rule.
[[Page 35434]]
The basic elements of the proposal are outlined below. Detailed
provisions and justifications for our proposal are discussed in
subsequent sections.
1. Heavy-Duty Emission Standards
We are proposing a PM emissions standard for new heavy-duty engines
of 0.01 grams per brake-horsepower-hour (g/bhp-hr), to take full effect
in the 2007 HDE model year. We are also proposing standards for
NOX and NMHC of 0.20 g/bhp-hr and 0.14 g/bhp-hr,
respectively. These NOX and NMHC standards would be phased
in together between 2007 and 2010, for diesel engines. The phase-in
would be on a percent-of-sales basis: 25 percent in 2007, 50 percent in
2008, 75 percent in 2009, and 100 percent in 2010. Because of the more
advanced state of gasoline engine emissions control technology,
gasoline engines would be fully subject to these standards in the 2007
model year, although we request comment on phasing these standards in
as well. A potential delay in the implementation date of the gasoline
engine and vehicle standards to the 2008 model year arising from issues
connected with the 2004 model year standards is discussed in section
III.D.2. In addition, we are proposing a formaldehyde (HCHO) emissions
standard of 0.016 g/bhp-hr for all heavy-duty engines, to be phased in
with the NOX and NMHC standards, and the inclusion of
turbocharged diesels in the existing crankcase emissions prohibition,
effective in 2007.
Proposed standards for complete HDVs would be implemented on the
same schedule as for engine standards. For certification of complete
vehicles between 8500 and 10,000 pounds gross vehicle weight rating
(GVWR), the proposed standards are 0.2 grams per mile (g/mi) for
NOX, 0.02 g/mi for PM, 0.195 g/mi for NMHC, and 0.016 g/mi
for formaldehyde.\1\ For vehicles between 10,000 and 14,000 pounds, the
proposed standards are 0.4 g/mi for NOX, 0.02 g/mi for
PM, 0.230 g/mi for NMHC, and 0.021 g/mi for formaldehyde. These
standards levels are roughly comparable to the proposed engine-based
standards in these size ranges. Note that these standards would not
apply to vehicles above 8500 pounds that we classify as medium-duty
passenger vehicles as part of our Tier 2 program.
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\1\ Vehicle weight ratings in this proposal refer to GVWR (the
curb weight of the vehicle plus its maximum recommended load of
passengers and cargo) unless noted otherwise.
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Finally, we are proposing to revise the evaporative emissions
standards for heavy-duty engines and vehicles, effective on the same
schedule as the gasoline engine and vehicle exhaust emission standards.
The proposed standards for 8500 to 14,000 pound vehicles are 1.4 and
1.75 grams per test for the 3-day diurnal and supplemental 2-day
diurnal tests, respectively. Slightly higher standards levels of 1.9
and 2.3 grams per test would apply for vehicles over 14,000 pounds.
These proposed standards represent more than a 50 percent reduction in
the numerical standards as they exist today.
2. Fuel Quality Standards
We are proposing that diesel fuel sold to consumers for use in
highway vehicles be limited in sulfur content to a level of 15 parts
per million (ppm), beginning June 1, 2006. This proposed sulfur
standard is based on our assessment of how sulfur-intolerant advanced
exhaust emission control technologies will be, and a corresponding
assessment of the feasibility of low-sulfur fuel production and
distribution. We are seeking comment on voluntary options for providing
refiners with flexibility in complying with the low sulfur highway
diesel fuel program. In addition, we request comment on some potential
flexibility provisions to assist small refiners in complying with the
program.
With minor exceptions, existing compliance provisions for ensuring
diesel fuel quality that have been in effect since 1993 would remain
unchanged (55 FR 34120, August 21, 1990).
B. Why Is EPA Making This Proposal?
1. Heavy-Duty Vehicles Contribute to Serious Air Pollution Problems
As will be discussed in detail in section II, emissions from heavy-
duty vehicles contribute greatly to a number of serious air pollution
problems, and will continue to do so into the future absent further
controls to reduce these emissions. First, heavy-duty vehicles
contribute to the health and welfare effects of ozone, PM,
NOX, SOX, and volatile organic compounds (VOCs),
including toxic compounds such as formaldehyde. These adverse effects
include premature mortality, aggravation of respiratory and
cardiovascular disease (as indicated by increased hospital admissions
and emergency room visits, school absences, work loss days, and
restricted activity days), changes in lung function and increased
respiratory symptoms, changes to lung tissues and structures, altered
respiratory defense mechanisms, chronic bronchitis, and decreased lung
function. Ozone also causes crop and forestry losses, while PM also
causes damage to materials, and soiling. Second, both NOX
and PM contribute to substantial visibility impairment in many parts of
the U.S. Third, NOX emissions from heavy-duty trucks
contribute to the acidification, nitrification and eutrophication of
water bodies.
Millions of Americans live in areas with unhealthful air quality
that currently endangers public health and welfare. Without emission
reductions from the proposed standards for heavy-duty vehicles, there
is a significant risk that an appreciable number of areas across the
country will violate the 1-hour ozone national ambient air quality
standard (NAAQS) during the period when these standards will take
effect. Furthermore, our analysis shows that PM10
concentrations in 10 areas with a combined population of 27 million
people face a significant risk of exceeding the PM10 NAAQS
without significant additional controls in 2007 or thereafter. Under
the mandates and authorities in the Clean Air Act, federal, State, and
local governments are working to bring ozone and particulate levels
into compliance with the 1-hour ozone and PM10 NAAQS through
State Implementation Plan (SIP) attainment and maintenance plans, and
to ensure that future air quality reaches and continues to achieve
these health-based standards. The reductions proposed in this
rulemaking would play a critical part in these important efforts.
Emissions from heavy-duty vehicles account for substantial portions
of the country's ambient PM and NOX levels. (NOX
is a key precursor to ozone formation). By 2007, we estimate that
heavy-duty vehicles will account for 29 percent of mobile source
NOX emissions and 14 percent of mobile source PM emissions.
These proportions are even higher in some urban areas, such as in
Albuquerque, where HDVs contribute 37 percent of the mobile source
NOX emissions and 20 percent of the mobile source PM
emissions. The PM and NOX standards for heavy-duty vehicles
proposed in this rule would have a substantial impact on these
emissions. By 2030, NOX emissions from heavy-duty vehicles
under today's proposed standards would be reduced by 2.8 million tons,
and PM emissions would decline by about 110,000 tons, dramatically
reducing this source of NOX and PM emissions. Urban areas,
which include many poorer neighborhoods, can be disproportionately
impacted by HDV emissions, and these neighborhoods would thus receive a
relatively larger portion of the benefits expected from new HDV
emissions controls. Over time,
[[Page 35435]]
the relative contribution of diesel engines to air quality problems
will go even higher if diesel-equipped light-duty vehicles become more
popular, as is expected by some automobile manufacturers.
In addition to its contribution to PM inventories, diesel exhaust
PM is of special concern because it has been implicated in an increased
risk of lung cancer and respiratory disease in human studies. The EPA
draft Health Assessment Document for Diesel Emissions is currently
being revised based on comments received from the Clean Air Scientific
Advisory Committee (CASAC) of EPA's Science Advisory Board. The current
EPA position is that diesel exhaust is a likely human carcinogen and
that this cancer hazard applies to environmental levels of exposure.\2\
In the draft Health Assessment Document for Diesel Emissions, EPA
provided a qualitative perspective that the upper bounds on
environmental cancer risks may exceed 10-6 and could be as
high as 10-3. Several other agencies and governing bodies
have designated diesel exhaust or diesel PM as a ``potential'' or
``probable'' human carcinogen. In addition, diesel PM poses
nonmalignant respiratory hazards to humans, not unlike, in some
respects, hazards from exposure to ambient PM2.5, to which
diesel PM contributes. State and local governments, in their efforts to
protect the health of their citizens and comply with requirements of
the Clean Air Act (CAA or ``the Act''), have recognized the need to
achieve major reductions in diesel PM emissions, and have been seeking
Agency action in setting stringent new standards to bring this
about.\3\
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\2\ Environmental Protection Agency (1999) Health Assessment
Document for Diesel Emissions: SAB Review Draft. EPA/600/8-90/057D
Office of Research and Development, Washington, D.C. The document is
available electronically at www.epa.gov/ncea/diesel.htm
\3\ For example, see letter dated July 13, 1999 from John Elston
and Richard Baldwin on behalf of the State and Territorial Air
Pollution Program Administrators and the Association of Local Air
Pollution Control Officials (docket A-99-06, item II-D-78).
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2. Technology-Based Solutions
Although the air quality problems caused by diesel exhaust are
formidable, we believe they can be resolved through the application of
high-efficiency emissions control technologies. As discussed in detail
in section III, the development of diesel emissions control technology
has advanced in recent years so that very large emission reductions (in
excess of 90 percent) are possible, especially through the use of
catalytic emission control devices installed in the vehicle's exhaust
system (and integrated with the engine controls). These devices are
often referred to as ``exhaust emission control'' or ``aftertreatment''
devices. Exhaust emission control devices, in the form of the well-
known catalytic converter, have been used in gasoline-fueled
automobiles for 25 years, but have had only limited application in
diesel vehicles.
Because the Clean Air Act requires us to set heavy-duty engine
standards that reflect the greatest degree of emission reduction
achievable through the application of available technology (subject to
a number of criteria as discussed in section I.B.3), this notice
proposes these standards, and proposes a justification for their
adoption based on the air quality need, their technological
feasibility, costs, and other criteria listed in the Act (see section
III of this document). As part of this proposal, we are also proposing
changes to diesel fuel quality in order to enable these advanced
technologies (section IV). Heavy-duty gasoline engines would also be
able to reach the significantly cleaner levels envisioned in this
proposal by relying on the transfer of recent technology developments
for light-duty applications, given the recent action taken to reduce
sulfur in gasoline (65 FR 6698, February 10, 2000).
We believe the proposed standards would require the application of
high-efficiency PM and NOX exhaust emission controls to
heavy-duty diesel vehicles. High-efficiency PM exhaust emission control
technology has been available for several years, although engine
manufacturers have generally not needed this technology in order to
meet our PM emission standards. This technology has continued to
improve over the years, especially with respect to durability and
robust operation in use. It has also proven extremely effective in
reducing exhaust hydrocarbon emissions. Thousands of such advanced-
technology systems are now in use in fleet programs, especially in
Europe. However, as discussed in detail in section III, these advanced-
technology systems are very sensitive to sulfur in the fuel. For the
technology to be viable and capable of meeting the proposed standards,
we believe, based on information currently available, that it will
require diesel fuel with sulfur content at the 15 ppm level.
Similarly, high-efficiency NOX exhaust emission control
technology will be needed if heavy-duty vehicles are to attain the
proposed standards. We believe this technology, like the PM technology,
is dependent on 15 ppm diesel fuel sulfur levels to be feasible,
marketable, and capable of achieving the proposed standards. High-
efficiency NOX exhaust emission control technology has been
quite successful in gasoline direct injection engines that operate with
an exhaust composition fairly similar to diesel exhaust. However, as
discussed in section III, application of this technology to diesels has
some additional challenges and so has not yet gotten to the field trial
stage. We are confident that the certainty of low-sulfur diesel fuel
that would be provided by promulgation of the proposed fuel standard
would allow the application of this technology to diesels to progress
rapidly, and would result in systems capable of achieving the proposed
standards. However, we acknowledge that our proposed NOX
standard represents an ambitious target for this technology, and so we
are asking for comment on the appropriateness of a technology review of
diesel NOX exhaust emission controls.
The need to reduce the sulfur in diesel fuel is driven by the
requirements of the exhaust emission control technology that we project
would be needed to meet the proposed standards. The challenge in
accomplishing the sulfur reduction is driven by the feasibility of
needed refinery modifications, and by the costs of making the
modifications and running the equipment. In consideration of the
impacts that sulfur has on the efficiency, reliability, and fuel
economy impact of diesel engine exhaust emission control devices, we
believe that controlling the sulfur content of highway diesel fuel to
the 15 ppm level will be necessary. Furthermore, although the refinery
modifications and process changes needed to meet a 15 ppm restriction
are expected to be substantial, we propose that this level is both
feasible and cost effective. However, we are asking for comment on
various concepts to provide implementation flexibility for refiners.
3. Basis for Action Under the Clean Air Act
Section 202(a)(1) of the Act directs us to establish standards
regulating the emission of any air pollutant from any class or classes
of new motor vehicles or engines that, in the Administrator's judgment,
cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare. Section 202(a)(3)
requires that EPA set standards for heavy-duty trucks that reflect the
greatest degree of emission reduction achievable through the
application of technology which we determine will be available for the
[[Page 35436]]
model year to which the standards apply. We are to give appropriate
consideration to cost, energy, and safety factors associated with the
application of such technology. We may revise such technology-based
standards, taking costs into account, on the basis of information
concerning the effects of air pollution from heavy-duty vehicles or
engines and other sources of mobile source related pollutants on the
public health and welfare. Section 202(a)(3)(C) requires that
promulgated standards apply for no less than three years and go into
effect no less than 4 years after promulgation. This proposal has been
developed in conformance with these statutory requirements.
We believe the evidence provided in section III and the draft
Regulatory Impact Analysis (RIA) indicates that the stringent
technology-forcing standards proposed today are feasible and reflect
the greatest degree of emission reduction achievable in the model years
to which they apply. We have given appropriate consideration to costs
in choosing these standards. Our review of the costs and cost-
effectiveness of these proposed standards indicate that they would be
reasonable and comparable to the cost-effectiveness of other emission
reduction strategies that have been required or could be required in
the future. We have also reviewed and given appropriate consideration
to the energy factors of this rule in terms of fuel efficiency and
effects on diesel production and distribution, as discussed below, as
well as any safety factors associated with these proposed standards.
The information regarding air quality and the contribution of
heavy-duty engines to air pollution in section II and the Draft RIA
provides strong evidence that emissions from such engines significantly
and adversely impact public health or welfare. First, there is a
significant risk that several areas will fail to attain or maintain
compliance with the NAAQS for 1-hour ozone concentrations or
PM10 concentrations during the period that these proposed
new vehicle and engine standards would be phased into the vehicle
population, and that heavy-duty engines contribute to such
concentrations, as well as to concentrations of other NAAQS-related
pollutants. Second, EPA currently believes that diesel exhaust is a
likely human carcinogen. The risk associated with exposure to diesel
exhaust includes the particulate and gaseous components. Some of the
toxic air pollutants associated with emissions from heavy-duty vehicles
and engines include benzene, formaldehyde, acetaldehyde, dioxin,
acrolein, and 1,3-butadiene. Third, emissions from heavy-duty engines
contribute to regional haze and impaired visibility across the nation,
as well as acid deposition, POM deposition, eutrophication and
nitrification, all of which are serious environmental welfare problems.
Based on this evidence, EPA believes that, for purposes of section
202(a)(1), emissions of NOX, VOCs, SOX and PM
from heavy-duty trucks can reasonably be anticipated to endanger the
public health or welfare. In addition, this evidence indicates that it
would not be appropriate to modify the technology based standards
pursuant to section 202(a)(3)(B). EPA believes that it is required
under section 202(a)(3)(A) to set technology based standards that meet
the criteria of that provision, and is not required to make an
affirmative determination under section 202(a)(1). Instead EPA is
authorized to take air quality into consideration under section
202(a)(3)(B) in deciding whether to modify or not set standard under
section 202(a)(3)(A). In this case, however, EPA believes the evidence
would fully support a determination under section 202(a)(1) to set
standards, and a determination not to modify such standards under
section 202(a)(3)(B).
In addition, there is significant evidence that emissions from
heavy-duty trucks contribute to levels of ozone such that large
segments of the national population are expected to experience
prolonged exposure over several hours at levels that present serious
concern for the public health and welfare. The same is true for
exposure to fine PM. These public health and welfare problems are
expected to occur in many parts of the country, including areas that
are in compliance with the 1-hour ozone and PM10 NAAQS
(PM10 is particulate matter that is 10 microns or smaller).
This evidence is an additional reason why the controls proposed today
are justified and appropriate under the Act. While EPA sees this as
additional support for this action, EPA also believes that the evidence
of air pollution problems summarized above and described in greater
detail elsewhere is an adequate justification for this rule independent
of concern over prolonged exposure to ozone levels.
Section 211(c) of the CAA allows us to regulate fuels where
emission products of the fuel either: (1) Cause or contribute to air
pollution that reasonably may be anticipated to endanger public health
or welfare, or (2) will impair to a significant degree the performance
of any emission control device or system which is in general use, or
which the Administrator finds has been developed to a point where in a
reasonable time it would be in general use were such a regulation to be
promulgated. This proposal meets each of these criteria. The discussion
of the first test is substantially the same as the above discussion for
the heavy-duty engine standards, because SOx emissions from heavy-duty
diesel vehicles are due to sulfur in diesel fuel. The substantial
adverse effect of high diesel sulfur levels on diesel control devices
or systems expected to be used to meet the heavy-duty standards is
discussed in depth in section III.F and in the Draft RIA. In addition,
our authority under section 211(c) is discussed in more detail in
appendix A to the draft RIA.
C. Putting This Proposal in Perspective
There are several helpful perspectives to establish in
understanding the context for this proposal: the growing popularity of
diesel engines, past progress and new developments in diesel emissions
control, Tier 2 light-duty emission standards and other related EPA
initiatives (besides the above-discussed rulemaking for highway heavy-
duty engine emission standards in 2004), and recent actions and plans
to control diesel emissions by the States and in other countries.
1. Diesel Popularity
The diesel engine is increasingly becoming a vital workhorse in the
United States, moving much of the nation's freight, and carrying out
much of its farm, construction, and other labor. Diesel engine sales
have grown impressively over the last decade, so that now about a
million new diesel engines are put to work in the U.S. every year.
Unfortunately, these diesel engines emit large quantities of harmful
pollutants annually.
Furthermore, although diesel emissions in this country come mostly
from heavy-duty trucks and nonroad equipment, an additional source may
grow out of auto manufacturers' plans to greatly increase the sales of
diesel-powered light-duty vehicles (LDVs) and especially of light-duty
trucks (LDTs), a category that includes the fast-selling sport-utility
vehicles, minivans, and pickup trucks. These plans reflect the
continuation of an ongoing dieselization trend, a trend recently most
evident in the growing popularity of diesel-powered light heavy-duty
trucks (8500 to 19,500 pounds). Diesel market penetration is working
its way from larger to smaller highway applications and to a broader
array of nonroad equipment applications. Finally, especially in Europe
where diesels have
[[Page 35437]]
already gained a broad consumer acceptance, the diesel engine is
increasingly viewed as an attractive technology option for reducing
emissions of gases that contribute to global warming, because it has
greater operating efficiency than a gasoline engine.
2. Past Progress and New Developments
Since the 1970's, highway diesel engine designers have employed
numerous strategies to meet our emissions standards, beginning with
smoke controls, and focusing in the 1990's on increasingly stringent
NOX, hydrocarbon, and PM standards. These strategies have
generally focused on reducing engine-out emissions and not on exhaust
emission controls, although low-efficiency oxidation catalysts have
been applied in some designs to reduce PM (and even their effectiveness
has been limited by sulfur in the fuel). On the fuel side, we set
quality standards that provided emissions benefits by limiting the
amount of sulfur and aromatics in highway diesel fuel beginning in 1993
(55 FR 34120, August 21, 1990). Our most recent round of standard
setting for heavy-duty highway diesels occurred in 1997 (62 FR 54693,
October 21, 1997), effective with the 2004 model year. These standards
were recently reviewed in a proposed rulemaking (64 FR 58472, October
29, 1999), which proposed to confirm them. These actions will result in
engines that emit only a fraction of the NOX, hydrocarbons,
and PM produced by engines manufactured just a decade ago. We consider
this an important first phase of our current initiative to reconcile
the diesel engine with the environment.
Nevertheless, certain characteristics inherent in the way diesel
fuel combustion occurs have prevented achievement of emission levels
comparable to those of today's gasoline-fueled vehicles. Although
diesel engines provide advantages in terms of fuel economy, durability,
and evaporative emissions, and have inherently low exhaust emissions of
hydrocarbons and carbon monoxide, controlling NOX emissions
is a greater challenge for diesel engines than for gasoline engines,
primarily because of the ineffectiveness of three-way catalysis in the
oxygen-rich and relatively cool diesel exhaust environment. Similarly,
PM emissions, which are inherently low for properly operating gasoline
engines, are more difficult to control in diesel engines, because the
diesel combustion process tends to form soot particles. The challenge
is somewhat complicated by the fact that historical diesel
NOX control approaches tend to increase PM, and vice versa,
but both are harmful pollutants that need to be controlled.
Considering the air quality impacts of diesel engines and the
potential for growth of diesels in the lighter-duty portion of the
market, it is imperative that progress in diesel emissions control
continue. Fortunately, encouraging progress is now being made in the
design of exhaust emission control devices for diesel applications,
driven in part by the challenge presented by the stringent Tier 2
standards for light-duty vehicles. As discussed in detail in section
III, promising new exhaust emission control technologies for
NOX, PM, and hydrocarbon reduction show potential for a
major advancement in diesel emissions control of a magnitude comparable
to that ushered in by the automotive catalytic converter in the 1970's.
However, changes in diesel fuel quality will be needed to enable these
high-efficiency exhaust emission control devices. With these promising
technologies, diesel vehicles have potential to achieve gasoline-like
exhaust emission levels, in addition to their inherent advantages over
gasoline vehicles with respect to fuel economy, lower greenhouse gas
emissions, and lower evaporative hydrocarbon emissions.
3. Tier 2 Emissions Standards
Auto manufacturers' design plans for new light-duty diesel vehicle
models will be greatly affected by our recent adoption of stringent new
emission standards for light-duty highway vehicles (referred to as
``Tier 2'' standards) that will phase in between 2004 and 2009. These
Tier 2 standards will require significant improvements in electronic
engine controls and catalysts on gasoline vehicles. (We anticipate that
these advances will be transferred over to heavy-duty gasoline vehicles
in meeting the standards proposed in this document). The Tier 2
NOX and PM standards (that apply equally to gasoline and
diesel vehicles) are far more challenging for diesel engine designers
than the most stringent light- or heavy-duty vehicle standards
promulgated to date, and so will require the use of advanced emission
control technologies. However, the low sulfur highway diesel fuel
proposed in this notice would make it possible for designers to employ
advanced exhaust emission control technologies in these light-duty
applications, and the timing of the proposed fuel change provides for
the use of these devices in time to satisfy Tier 2 phase-in
requirements.
The Tier 2 program phases in interim and final standards over a
number of years, providing manufacturers the option of delaying some of
their production of final Tier 2 designs until later in the phase-in.
For vehicles up to 6000 lbs GVWR (LDVs) and light light-duty trucks
(LLDTs)), the interim standards begin in 2004 and phase out by 2007, as
they are replaced by the final Tier 2 standards. For vehicles between
6000 and 8500 lbs ( heavy light-duty trucks (HLDTs)), the interim
standards begin in 2004 and phase out by 2009 as they are replaced by
the final Tier 2 standards. A new category of vehicles between 8,500
and 10,000 lbs, medium-duty passenger vehicles (MDPVs), will follow the
same phase-in schedule as HLDTs.
Our assessment in the Tier 2 final rule is that the interim
standards are feasible for diesel vehicles without a need for fuel
quality changes. Manufacturers can take advantage of the flexibilities
provided in the Tier 2 program to delay the need for light-duty diesels
to meet the final Tier 2 levels until late in the phase-in period (as
late as 2007 for LDVs and LLDTs, and 2009 for HLDTs and MDPVs).
However, low sulfur fuel is expected to be needed for diesel vehicles
designed to meet the final NOX and PM standards, because
these vehicles are likely to employ light-duty versions of the sulfur-
sensitive exhaust emission control technologies discussed in Section
III. The gasoline quality changes and light-duty gasoline engine
developments that will result from the Tier 2 rule would also help make
it feasible for heavy-duty gasoline engines to meet the standards
proposed in this document.
4. Mobile Source Air Toxics Rulemaking
Passenger cars, on-highway trucks, and nonroad equipment emit
hundreds of different compounds and elements. Several of these are
considered to be known, likely, or possible human carcinogens. These
include diesel exhaust, plus several VOCs such as acetaldehyde,
benzene, 1,3-butadiene, formaldehyde, and acrolein. Trace metals may
also be present in heavy-duty diesel engine emissions, resulting from
metals in fuels and lubricating oil, and from engine wear. Several of
these metals have carcinogenic and mutagenic effects.
These and other mobile source air toxics are already controlled
under existing programs established under Clean Air Act sections 202(a)
(on-highway engine requirements), 211 (the fuel requirements), and 213
(nonroad engine requirements). Although these programs are primarily
designed for control of criteria pollutants, especially ozone and
PM10, they also achieve
[[Page 35438]]
important reductions in air toxics through VOC and hydrocarbon
controls.
In addition to these programs, section 202(l)(2) of the Act directs
us to consider additional controls to reduce emissions of hazardous air
pollutants from motor vehicles, their fuels, or both. Those standards
are to reflect the greatest degree of emission reduction achievable
through the application of technology which will be available, taking
into account existing standards, costs, noise, energy, and safety
factors. We anticipate that this section 202(l)(2) rulemaking, which we
expect to propose in July 2000 and finalize in December 2000, will
consist of three parts. First, we will identify a list of hazardous air
pollutants emitted from motor vehicles and determine which of these
endanger human health and welfare. Diesel particulate matter will be
considered as part of this determination because, as discussed in
section II, human epidemiological studies have suggested that diesel
exhaust is associated with increased risk of adverse respiratory
effects and lung cancer. Second, we will consider more comprehensively
the contribution of mobile sources to the nation's air toxics inventory
and evaluate the toxics benefits of existing and proposed emission
control programs. The benefits of the program proposed in today's
action will be included in this analysis. Finally, we will consider
whether additional controls are appropriate at this time, given
technological feasibility, cost, and the other criteria specified in
the Act.
5. Nonroad Engine Standards and Fuel
Although this proposal covers only highway diesel engines and fuel,
it is clear that potential requirements for nonroad diesel engines and
fuel are related. It is expected that nonroad diesel fuel quality,
currently unregulated, may need to be controlled in the future in order
to reduce the large contribution of nonroad engines to NOX
and PM inventories. Refiners, fuel distributors, states, environmental
organizations, and others have asked that we provide as much
information as possible about the future specifications for both types
of fuel as early as possible.
We do plan to give further consideration to further control of
nonroad engine emissions. As discussed below in section IX, an
effective control program for these engines requires the resolution of
several major issues relating to engine emission control technologies
and how they are affected by fuel sulfur content. The many issues
connected with any rulemaking for nonroad engines and fuel warrant
serious attention, and we believe it would be premature today for us to
attempt to propose resolutions to them. We plan to initiate action in
the future to formulate thoughtful proposals covering both nonroad
diesel fuel and engines.
6. Actions in California
The California Air Resources Board (ARB) and local air quality
management districts within California are also pursuing measures to
better control diesel emissions. Key among these efforts is work
resulting from the Board's designation of particulate emissions from
diesel-fueled engines as a toxic air contaminant (TAC) on August 27,
1998. TACs are air pollutants that may cause or contribute to an
increase in death or serious illness or may pose a present or future
hazard to human health. The TAC designation was based on research
studies showing that emissions from diesel-fueled engines may cause
cancer in animals and humans, and that workers exposed to higher levels
of emissions from diesel-fueled engines are more likely to develop lung
cancer.
The ARB has now begun a public process to evaluate the need to
further reduce the public's exposure to organic gases and PM emissions
from diesel-fueled engines, and the feasibility and cost of doing
so.\4\ This evaluation is being done in consultation with the local air
districts, affected industries, and the public, and will result in a
report on the appropriate degree of control. Based on this report, if
cost effective measures are identified that will reduce public
exposure, then specific control measures applicable in California will
be developed in a public process.
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\4\ Regularly updated information on this effort can be obtained
at a website maintained by the ARB staff: www.arb.ca.gov/toxics/diesel/diesel.htm
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The ARB also recently adopted stringent new emission requirements
for urban transit buses and is considering similar requirements for
school buses.\5\ This program is aimed at encouraging the use of clean
alternative fuels and high-efficiency diesel emission control
technologies. Their program includes requirements for zero-emissions
buses, fleet average NOX levels, and retrofits for PM
control, as well as model year 2007 NOX and PM standards
levels of 0.2 and 0.01 g/bhp-hr, respectively (equal to the levels
proposed in this document). It also requires that all diesel fuel used
by transit agencies after July 1, 2002 must meet a cap of 15 ppm
sulfur. This is the same as the sulfur level proposed in this document,
but in batch amounts and on a much earlier schedule to support the
ARB's proposed PM retrofit schedule.
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\5\ ``Notice of Public Hearing To Consider the Adoption of a
Public Transit Bus Fleet Rule and Emission Standards For New Urban
Buses'', California ARB, November 30, 1999, and ARB Resolution 00-2,
dated February 24, 2000.
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California's urban bus program is focused on only a portion of the
highway diesel fleet and fuel, characterized by short-range trips and
captive fuel supplies. The large amount of interstate truck traffic in
California and the fact that these trucks can travel many miles between
refuelings would dramatically reduce the effectiveness of a more
comprehensive State program, and would also subject California
businesses to competitive disadvantages. As a result, the ARB has
stressed the need for action at a Federal level, and is depending on
our efforts to control HDV NOX and PM emissions and to
regulate diesel fuel. We agree that a national program is appropriate
to ensure the effectiveness of such a program.
7. Retrofit Programs
Many States facing air quality improvement challenges have
expressed strong interest in programs that would reduce emissions from
existing highway and nonroad diesel engines through the retrofitting of
these engines with improved emission control devices. The urban bus
program proposed by the California ARB includes such a retrofit
requirement as one of its major components (see section I.C.6). These
retrofit programs are appealing because the slow turnover of the diesel
fleet to the new low-emitting engines makes it difficult to achieve
near-term air quality goals through new engine programs alone. Some of
the exhaust emission control technologies discussed in this proposal
are especially appealing for use in retrofits because they can be
fitted to an existing vehicle as add-on devices without major engine
modifications, although some of the more sophisticated systems that
require careful control of engine parameters may be more challenging.
Because of the uncertainty at this time in how and when such
programs may be implemented, this proposal does not calculate any
benefits from them. Nevertheless, we believe that this proposed program
can enable the viability of these retrofit technologies. We expect that
large emission benefits from the existing fleet could be realized as a
result of the fuel changes we are proposing here, combined with
retrofit versions of the technologies that would be developed in
response to the proposed engine standards. These
[[Page 35439]]
benefits would be especially important in the early years of the
program when new vehicles standards are just beginning to have an
impact, and when States and local areas need to gain large reductions
to attain air quality goals.
8. Actions in Other Countries
There is substantial activity taking place in many countries of the
world related to the regulation of diesel fuel and engines. The large
light-duty vehicle market share enjoyed by diesels in many European
countries has helped to stir innovation in dealing with diesel
emissions problems. Advanced emissions control technologies are being
evaluated there in the in-use fleet and experience gained from these
trials is helping to inform the diesel emissions control discussion in
the U.S. In addition, several European countries have low sulfur diesel
fuel, with maximum sulfur levels varying from 10 to 50 ppm, and so
experience gained from the use of these fuels, though not completely
transferable to the U.S. situation, also helps to inform the
discussion. European Union countries will limit sulfur in diesel fuel
to 50 ppm by 2005, and even more aggressive plans are being discussed
or implemented. The United Kingdom made a rapid conversion to 50 ppm
maximum sulfur diesel fuel last year by offering tax incentives. This
change occurred with much smaller refinery investments than had been
predicted, and some refinery production there is actually at levels
well below the 50 ppm cap. Germany is moving forward with plans to
introduce a 10 ppm sulfur cap for diesel fuel by 2003, also via tax
incentives, and is attempting to get the 50 ppm specification that was
adopted by the European Commission revised downward to the 10 ppm cap
level.
One European country has had extensive experience with the
transition to low sulfur diesel fuel. In the early 1990's, Sweden
decided to take advantage of the environmental benefits of 10 ppm
sulfur/low aromatics fuel by introducing it with a reduction in the
diesel fuel tax. The program has been quite successful, and in excess
of 90 percent of the road fuel used there is of this 10 ppm maximum
sulfur class.\6\ The ability of the Swedish fuel distributors to
maintain these low sulfur levels at the fuel stations has also been
quite good.
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\6\ Memo from Thomas M. Baines to Docket A-99-06, October 29,
1999, Docket #A-99-06, Item II-G-12.
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Section VII.H discusses how differences between the future fuel
specifications in the U.S. and those in Canada and Mexico may affect
the emissions control program proposed in this document.
II. The Air Quality Need and Projected Benefits
A. Overview
Heavy-duty vehicle emissions contribute to air pollution with a
wide range of adverse health and welfare impacts. Emissions of VOC, CO,
NOX, SOX, and PM from HD vehicles contribute a
substantial percentage to ambient concentrations of ozone, PM, sulfur
and nitrogen compounds, aldehydes, and substances known or considered
likely to be carcinogens. VOC and diesel PM emissions include some
specific substances known or suspected to cause cancer, and diesel
exhaust emissions are associated with non-cancer health effects. These
ambient concentrations in turn cause human health effects and many
welfare effects including visibility reductions, acid rain,
nitrification and eutrophication of water bodies.
Emissions from heavy-duty vehicles, which are predominantly diesel-
powered, account for substantial portions of the country's ambient PM
and ground-level ozone levels. (NOX is a key precursor to
ozone formation). By 2007, we estimate that heavy-duty vehicles would
account for 29 percent of mobile source NOX emissions, and
14 percent of mobile source PM emissions. These proportions are even
higher in some urban areas, such as New York and Los Angeles. Urban
areas, which include many poorer neighborhoods, can be
disproportionately impacted by HDV emissions because of heavy traffic
in and out of densely populated urban areas. Of particular concern is
human epidemiological evidence linking diesel exhaust to an increased
risk of lung cancer. Based on information provided in the draft Health
Assessment Document for Diesel Emissions \7\ and other sources of
information, we believe that emissions from heavy-duty diesel vehicles
contribute to air pollution that warrants regulatory attention under
section 202(a)(3) of the Act.
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\7\ EPA is revising this draft document in response to comments
by the CASAC.
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Thirty-six metropolitan areas with a total population of 111
million people have recently violated or are currently violating the 1-
hour ozone NAAQS, and have ozone modeling or other factors which
indicate a risk of NAAQS violations in 2007 or beyond. Another six
areas with 11 million people have recently experienced ozone
concentrations within 10 percent of exceeding the NAAQS between 1996
and 1998 and have some evidence of a risk of future violations. Ten
PM10 nonattainment areas with 27 million people face a
significant risk of experiencing particulate matter levels that violate
the PM10 standard during the time period when this proposal
would take effect. Without reductions from these proposed standards,
there is a significant risk that an appreciable number of these areas
would violate the 1-hour ozone and PM10 standards during the
time period when these proposed standards would apply to heavy-duty
vehicles. Under the mandates and authorities in the Clean Air Act,
federal, State, and local governments are working to bring ozone and
particulate levels into compliance with the 1-hour ozone and
PM10 NAAQS through SIP attainment and maintenance plans, and
to ensure that future air quality continues to achieve these health-
based standards. The reductions proposed in this rulemaking would
assist these efforts.
The proposed heavy-duty vehicle and engine emission standards,
along with the diesel fuel sulfur standard proposed today, would have a
dramatic impact in reducing the large contribution of HDVs to air
pollution. The proposed standards would result in substantial benefits
to public health and welfare through significant annual reductions in
emissions of NOX, PM, NMHC, carbon monoxide, sulfur dioxide,
and air toxics. For example, we project a 2 million ton reduction in
NOX emissions from HD vehicles in 2020, which would increase
to 2.8 million tons in 2030 when the current HD vehicle fleet is
completely replaced with newer HD vehicles that comply with these
proposed emission standards. When coupled with the emission reductions
projected to result from the Phase 1 (model year 2004) HDV standards,
the emission reductions from heavy-duty vehicles are projected to be as
large as the substantial reductions the Agency expects from light-duty
vehicles as a result of its recently promulgated Tier 2 rulemaking.
B. Public Health and Welfare Concerns
The following subsections present the available information on the
air pollution situation that is likely to exist without this rule for
each ambient pollutant. We also present information on the improvement
that would result from this rule. The Agency's analysis and this
proposal are supported by the numerous letters received from States and
environmental organizations calling for significant emission reductions
from heavy-duty vehicles in order to enable
[[Page 35440]]
these areas to achieve and sustain clean, healthful air.\8\
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\8\ Letters from States and environmental organizations are
located in the docket for this proposal.
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1. Ozone and Its Precursors
a. Health and Welfare Effects From Short-Term Exposures to Ozone
NOX and VOC are precursors in the photochemical reaction
which forms tropospheric ozone. A large body of evidence shows that
ozone can cause harmful respiratory effects including chest pain,
coughing, and shortness of breath, which affect people with compromised
respiratory systems most severely. When inhaled, ozone can cause acute
respiratory problems; aggravate asthma; cause significant temporary
decreases in lung function of 15 to over 20 percent in some healthy
adults; cause inflammation of lung tissue; may increase hospital
admissions and emergency room visits; and impair the body's immune
system defenses, making people more susceptible to respiratory
illnesses. Children and outdoor workers are likely to be exposed to
elevated ambient levels of ozone during exercise and, therefore, are at
greater risk of experiencing adverse health effects. Beyond its human
health effects, ozone has been shown to injure plants, reducing crop
yields.
b. Current and Future Nonattainment Status With the 1-Hour Ozone NAAQS
Exposure to levels of ozone that are not in compliance with the 1-
hour ozone NAAQS are a serious public health and welfare concern. The
following sections discuss the present situation and outlook regarding
attainment in areas of the country where ozone levels presently fail to
comply with this NAAQS, or where they have come close to failing to
comply in recent years.
Over the last decade, emissions have declined and national air
quality has improved for all six criteria pollutants, including
ozone.\9\ Some of the greatest emissions reductions have taken place in
densely-populated urban areas, where emissions are heavily influenced
by mobile sources such as cars and trucks. For example, VOC and
NOX emissions in several urban areas in the Northeast
declined by 15 percent and 14 percent from 1990 to 1996.\10\ However,
when ozone trends are normalized for annual weather variations between
1989 and 1998, they reveal a downward trend in the early 1990's
followed by a leveling off, or an upturn in ozone levels, over the past
several years in many urban areas.\11\
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\9\ National Air Quality and Emissions Trends Report, 1997, US
EPA, December 1998.
\10\ National Emissions Trends database.
\11\ Trends in Daily Maximum 1-hour Ozone in Selected Urban
Areas, 1989-1998.
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Despite impressive improvements in air quality over the last
decade, present concentrations of ground-level ozone continue to
endanger public health and welfare in many areas. As of December, 1999,
92 million people (1990 census) lived in 32 metropolitan areas
designated nonattainment under the 1-hour ozone NAAQS.\12\ In addition,
there are 14 areas with a 1996 population of 17 million people not
currently listed as non-attainment areas because the 1-hour ozone
standard was revoked for these areas (we have proposed to re-instate
the standard).\13\ These 14 areas are relevant to this proposal because
ozone concentrations above the health-based ozone standard, should they
occur, endanger public health and welfare independent of the
applicability of the 1-hour standard or an area's official attainment
or nonattainment status. Ozone also has negative environmental impacts.
For example, exposure of vegetation to ozone can inhibit
photosynthesis, and alter carbohydrate allocation, which in turn can
suppress the growth of crops, trees, shrubs and other plants.
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\12\ Memorandum to Air Docket, January 12, 2000. Information on
ozone nonattainment areas and population as of December 13, 1999
from US EPA website www.epa.gov/airs/nonattn.html, USA Air Quality
Nonattainment Areas, Office of Air Quality Planning and Standards.
The reader should note that the 32 areas mentioned here are
designated nonattainment areas, while the 36 areas noted in the
overview section have recent (1995-1998) or current violations, and
predicted exceedances in 2007 or 2030 based on air quality modeling
or other evidence discussed in more detail later in this preamble,
and in the draft RIA.
\13\ 64 FR 57424 (October 25, 1999)
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The next two sections present lists of metropolitan areas, in two
tables, with potential for violating the ozone standard in the future.
The first section presents a table with 33 metropolitan areas that were
predicted by Tier 2 modeling to have exceedances in either 2007 or
2030, and accompanying text identifies an additional nine areas for
which we have other evidence of a risk of future exceedances. The
second section discusses the air quality prospects for these 42 areas,
which are divided into several groups. These groups are presented in
Table II.B-2.
i. Ozone Predictions Made in the Tier 2 Rulemaking and Other
Information on Ozone Attainment Prospects
In conjunction with its Tier 2 rulemaking efforts, the Agency
performed ozone air quality modeling for nearly the entire Eastern U.S.
covering metropolitan areas from Texas to the Northeast, and for a
western U.S. modeling domain. The ozone modeling we did as part of the
Tier 2 rulemaking predicted that without further emission reductions, a
significant number of areas recently experiencing ozone exceedances
across the nation are at risk of failing to meet the 1-hour ozone NAAQS
in 2007 and beyond, even with Tier 2 and other controls currently in
place.
The general pattern observed from the Tier 2 ozone modeling is a
broad reduction between 1996 and 2007 in the geographic extent of ozone
concentrations above the 1-hour NAAQS, and in the frequency and
severity of exceedances. Despite this improvement from 1996 to 2007,
many ozone exceedances were predicted to occur in 2007 even with
reductions from Tier 2 standards and other controls currently in place,
affecting 33 metropolitan areas across the nation. Assuming no
additional emission reductions beyond those that will be achieved by
current control programs,\14\ a slight decrease below 2007 levels in
modeled concentrations and frequencies of exceedances was predicted for
2030 for most areas. Exceedances were still predicted in 2030 in most
of the areas where they were predicted in 2007.\15\
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\14\ Current control programs assumed for the predictions
summarized here included the Tier 2/Gasoline Sulfur program and some
specific programs that are legally required but not yet fully
adopted, such as the regional Ozone Transport Rule and not-yet-
adopted MACT standards that will affect VOC emissions.
\15\ Achieving attainment with the ozone standard is only one
measure of air quality improvement. EPA found that the Tier 2
program significantly lowers the model-predicted number of
exceedances of the ozone standard by one tenth in 2007, and by
almost one-third in 2030 across the nation (Tier 2 RIA).
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Although we did not model ozone concentrations for years between
2007 and 2030, we may expect that they would broadly track the national
emissions trends. Based on these emission trends alone, national ozone
concentrations, on average, would be projected to decline after 2007
largely due to penetration of Tier-2 compliant vehicles into the light
duty vehicle fleet, but begin to increase around 2015 or 2020 due to
economic growth until they reach the 2030 levels just described.
However, the change in ozone levels from the expected NOX
reduction is relatively small compared to the effects of variations in
ozone due to meteorology. Furthermore, in some areas, where growth
exceeds national averages, emissions levels would begin increasing
sooner and reach higher levels in 2030.
[[Page 35441]]
Table II.B-1 lists the 33 areas with predicted 1-hour ozone
exceedances in 2007 and/or 2030 based on the Tier 2 modeling, after
accounting for the emission reductions from the Tier 2 program and
other controls. \16\ There are areas that are not included in this
table that will be discussed shortly. A factor to consider with respect
to the ozone predictions in Table II.B-1 is that recent improvements to
our estimates of the current and future mobile source NOX
inventory have resulted in an increase in our estimate of aggregate
NOX emissions from all sources by more than eight percent
since the air quality modeling performed for the Tier 2 rule. The
adjusted NOX inventory level in 2015 is greater than the
NOX inventory used in the Tier 2 air quality analysis for
2030. If we were to repeat the ozone modeling now for the 2015 time
frame, using the new emissions estimates, it would most likely predict
exceedances in 2015 for all the areas that had 2030 exceedances
predicted in the modeling done for the Tier 2 rulemaking. As summarized
in Table II.B-1, the Tier 2 modeling predicted that there will be 33
areas in 2007 or 2030 with about 89 million people predicted to exceed
the 1-hour ozone standard, even after Tier 2 and other controls
currently in place. Additional information on ozone modeling is found
in the draft RIA and the technical support document for the Tier 2
rule, which is in the docket for this rulemaking. We request comment on
the inventory estimates and ozone air quality modeling analysis
described in this proposal.
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\16\ Table II.B-1 excludes areas for which the Tier 2 modeling
predicted exceedances in 1996 but for which the actual ozone design
values in 1995-1997 and 1996-1998 were both less than 90 percent of
the NAAQS. For these areas, we considered the ozone model's
predictions of 2007 or 2030 exceedances to be too uncertain to play
a supportive role in our rulemaking determinations. Also, 2007 ozone
was not modeled for western areas. For 2030, all areas were modeled
for fewer episode days which, along with a general model under-
prediction bias, may result in an underestimation of 2030
exceedances. Without these factors, there could have been more
western areas listed in Table II.B-1, and more areas with predicted
exceedances in 2030.
Table II.B-1.--Metropolitan Areas With Predicted Exceedances in 2007 or 2030 From Tier 2 Air Quality Modeling
Including Emission Reductions From Tier 2 and Other Current/Committed Controls
----------------------------------------------------------------------------------------------------------------
1996 Population
CMSA/MSAs 2007 Control case 2030 Control case (millions)
----------------------------------------------------------------------------------------------------------------
Boston, MA CMSA........................ X X 5.6
Chicago, IL CMSA....................... X X 8.6
Cincinnati, OH CMSA**.................. X ......................... 1.9
Cleveland, OH CMSA*.................... X X 2.9
Detroit, MI CMSA*...................... X X 5.3
Houston, TX CMSA....................... X X 4.3
Milwaukee, WI CMSA..................... X X 1.6
New York City, NY CMSA................. X X 19.9
Philadelphia, PA CMSA.................. X X 6.0
Washington,-Baltimore, DC-VA-WV-MD CMSA X X 7.2
Atlanta, GA MSA........................ X X 3.5
Barnstable, MA MSA..................... X X 0.2
Baton Rouge, LA MSA.................... X X 0.6
Benton Harbor, MI MSA.................. X X 0.2
Biloxi, MS MSA*........................ X X 0.3
Birmingham, AL MSA..................... X X 0.9
Charlotte, NC MSA...................... X X 1.3
Grand Rapids, MI MSA................... X X 1.0
Hartford, CT MSA....................... X X 1.1
Houma, LA MSA.......................... X X 0.2
Huntington, WV MSA..................... X ......................... 0.3
Indianapolis, IN MSA................... X ......................... 1.5
Louisville, KY MSA..................... X X 1.0
Memphis, TN MSA........................ X X 1.1
Nashville, TN MSA...................... X X 1.1
New London, CT MSA..................... X X 1.3
New Orleans, LA MSA*................... X X 0.3
Pensacola, FL MSA*..................... X ......................... 0.4
Pittsburgh, PA MSA..................... X ......................... 2.4
Providence, RI MSA..................... X X 1.1
Richmond, VA MSA....................... X ......................... 0.9
St. Louis, MO MSA...................... X X 2.5
Tampa, FL MSA*......................... X X 2.2
33 areas / 88.7 million people......... 32 areas/86.3 million 28 areas/83.7 million .................
people people
----------------------------------------------------------------------------------------------------------------
* These areas have registered recent (1995-1998) ozone levels within 10% of the 1-hour ozone standard.
** Based on more recent air quality monitoring data not considered in the Tier 2 analysis, and on 10-year
emissions projections, we expect to redesignate Cincinnati-Hamilton to attainment soon.
Ozone modeling for the Tier 2 rulemaking did not look at the effect
on ozone attainment and maintenance beyond current/committed controls
and the Tier 2/Gasoline Sulfur Program itself. Therefore, Table II.B-1
should be interpreted as indicating what areas are at risk of ozone
violations in 2007 or 2030 without federal or state measures that may
be adopted and implemented after this rulemaking is proposed. We expect
many of the areas listed in Table
[[Page 35442]]
II.B-1 to adopt additional emission reduction programs, but the Agency
is unable to quantify the future reductions from additional State
programs since they have not yet been adopted.
In addition, Table II.B-1 reflects only the ozone predictions made
in the modeling for the Tier 2 rulemaking. The Tier 2 modeling did not
predict (or did not provide information regarding) 2007 or 2030
violations for a number of areas for which other available ozone
modeling has shown 2007 violations, or for which the history and
current degree of nonattainment indicates some risk of ozone violations
in 2007 or beyond. These nine areas had a 1996 population of 30 million
people. They include seven ozone nonattainment areas in California (Los
Angeles, San Diego, Southeast Desert, Sacramento, Ventura County, San
Joaquin Valley, and San Francisco), and two Texas areas (Beaumont-Port
Arthur and Dallas). A more detailed discussion is presented in the
Draft RIA. The following section will discuss the air quality prospects
of these 42 areas (i.e., the 33 shown in Table II.B-1, plus the nine
additional areas identified in this paragraph).
For the final rule, the Agency plans to use the same modeling
system as was used in its Tier 2 air quality analysis with updated
inventory estimates for 2030 and a further characterization of the
inventory estimates for the interim period between 2007 and 2030 We
plan to release the products of these revised analyses into the public
record on a continuous basis as they are developed. Interested parties
should check docket number A-99-06 periodically for updates.
ii. Areas At Risk of Exceeding the 1-Hour Ozone Standard
This section presents the Agency's conclusions about the risk of
future nonattainment for the 42 areas identified above. These areas are
listed in Table II.B-2, and are subdivided into three groups. The
following discussion follows the groupings from top to bottom. A more
detailed discussion is found in the Draft RIA.
In general, EPA believes that the proposed new standards for heavy-
duty vehicles are warranted by a sufficient risk that without these
standards, some areas would experience violations of the 1-hour NAAQS
at some time during the period when this rulemaking would achieve its
emission reductions, despite efforts that EPA, States and localities
are now making through SIPs to reach attainment and to preserve
attainment by developing and implementing maintenance plans. Because
ozone concentrations causing violations of the 1-hour ozone standard
are well established to endanger public health and welfare, this
indicates that it is appropriate for the Agency to propose setting new
standards for heavy-duty vehicles.
Our belief regarding the risk of future violations of the 1-hour
NAAQS is based upon our consideration of predictive ozone air quality
modeling and analysis we performed for U.S. metropolitan areas for the
recent Tier 2 rulemaking, and the predictive ozone modeling and other
information that has come to us through the SIP process, and other
local air quality modeling for certain areas. We have assessed this
information in light of our understanding of the factors that influence
ozone concentrations, taking due consideration of current and future
federal, state and local efforts to achieve and maintain the ozone
standard through air quality planning and implementation.
Ten metropolitan areas that fall within ozone nonattainment areas
have statutorily-defined attainment dates of 2007 or 2010, or have
requested attainment date extensions to 2007 (including two requests on
which we have not yet proposed any action). These 10 areas are listed
at the top of Table II.B-2, and are New York City, Houston, Hartford,
New London, Chicago, Milwaukee, Dallas, Beaumont-Port Arthur, Los
Angeles, and Southeast Desert. The Los Angeles (South Coast Air Basin)
ozone attainment demonstration is fully approved, but it is based in
part on reductions from new technology measures and actions that have
yet to be identified. Accordingly, the State will be able to benefit
from, and will need, the reductions from this proposed rule in order to
meet the NOX and VOC shortfalls identified in the South
Coast Air Basin's SIP. The 2007 attainment demonstration for the
Southeast Desert area is also approved. However, because ozone travels
from the South Coast to the Southeast Desert, attainment in the
Southeast Desert may depend on progress in reducing ozone levels in the
South Coast Air Basin.
The process of developing adequate attainment plans has been
difficult. While the efforts by EPA and the States have been more
prolonged than expected, they are nearing completion. Of the remaining
eight areas discussed above, two--Chicago and Milwaukee--do not have
EPA-identified shortfalls in their 1998 attainment demonstrations.
However, these two areas are revising their local ozone air quality
modeling, which will be taken into account in the final rule. We have
recently proposed to approve attainment plans for New York, Houston,
Hartford and New London, and we hope to receive attainment plans and
propose such approval soon for Dallas and Beaumont-Port Arthur. EPA has
proposed, or expects to propose, that attainment in 2007 in each of
these six areas depends upon either achieving specified additional
emission reductions in the area itself, or achieving ozone reductions
in an upwind nonattainment area that has such a shortfall. Those areas
with shortfalls will be able to take credit for the expected reductions
from the proposed rule in their attainment demonstrations, once the
rule is promulgated. We expect to rely in part on these reductions in
reaching our final conclusion as to whether each of the eight areas for
which we have reviewed an attainment demonstration, or expect to review
an attainment demonstration soon, is more likely than not to attain on
its respective date, whether or not the State formally relies on these
reductions as part of its strategy to fill the identified shortfall in
its attainment demonstration, if any.
The proposed new standards for heavy-duty vehicles would help
address some of the uncertainties and risks that are inherent in
predicting future air quality over a long period. Actual ozone levels
may be affected by increased economic growth, unusually severe weather
conditions, and unexpectedly large changes in vehicle miles traveled.
For example, the emissions and air quality modeling that forms the
basis for the 2007-to-2030 emissions and ozone trend described earlier
used a 1.7 percent national VMT growth rate. Historical growth in
national VMT for LDVs over the last 30 years has averaged 2.7 percent
per year, but over the past 10 years, annual VMT growth has fluctuated
from 1.2 percent to 3.5 percent. The growth rates can also vary from
locality to locality. The reported annual VMT growth rate experienced
in Atlanta, a fast-growing metropolitan area, was six percent from
1986-1997, or more than twice the 30-year national average, and year-
to-year variations in Atlanta's reported annual VMT ranged from a 12%
increase to no increase over the same period. While some factors
influencing previous VMT growth rates, such as increased participation
of women in the workforce, may be declining, other factors, such as
widening suburbanization, more suburb-to-suburb commuting and the rise
of healthier and wealthier older age drivers, may result in increased
VMT growth rates.\17\ Activity by other source
[[Page 35443]]
types also varies due to economic factors. Actual future VMT and other
economic growth in specific areas may vary from the best predictions
that have been used in each attainment demonstration. Over a number of
years, differences in annual growth can cause substantial differences
in total emissions. These uncertainties, and others, dictate that a
prudent course for the Agency is to protect public health by increasing
our confidence that the necessary reductions will be in place. This
proposed rulemaking would provide significant and needed reductions to
those areas at risk of violating the 1-hour ozone standard during the
time period when this rule would take effect.
---------------------------------------------------------------------------
\17\ See Tier 2 Response to Comments document for a longer
decision.
---------------------------------------------------------------------------
The reductions from this proposal would begin in 2007 and would
continue to grow over time as the existing heavy-duty fleet is replaced
by newer vehicles meeting the proposed emission standards. Even
assuming attainment is achieved, areas that wish a redesignation to
attainment may rely on further reductions generated by this rulemaking
to support their 10-year maintenance plan. Even if an area does not
choose to seek redesignation, the continuing reductions from this
proposed rulemaking would help ensure maintenance with the 1-hour
standard after attainment is reached.
Thus, a total of six metropolitan areas need additional measures to
meet the shortfalls in the applicable attainment demonstrations, or are
subject to ozone transport from an upwind area that has an identified
shortfall. In addition, two areas are expected to need additional
emission reductions to demonstrate attainment in future SIPs. EPA
believes that the States responsible may need, among other reductions,
the level of reductions provided by this rule in order to fill the
shortfalls. We expect to rely in part on these reductions in reaching
our final conclusion as to whether each of the eight areas for which we
have reviewed an attainment demonstration is more likely than not to
attain on its respective date, whether or not the State formally relies
on these reductions as part of its strategy to fill the identified
shortfall in its attainment demonstration. As to all ten areas, even if
all shortfalls were filled by the States, there is some risk that at
least some of the areas will not attain the standards by their
attainment dates of 2007, or 2010 for Los Angeles. In that event, the
reductions associated with this proposed program, which increase
substantially after 2007, would help assure that any residual failures
to attain are remedied. Finally, there is also some risk that the areas
will be unable to maintain attainment after 2007. Considered
collectively, there is a significant risk that some areas would not be
in attainment throughout the period when the proposed rule would reduce
heavy-duty vehicle emissions.
The next group of 26 areas have required attainment dates prior to
2007, or have no attainment date but are subject to a general
obligation to have a SIP that provides for attainment and maintenance.
EPA and the States are pursuing the established statutory processes for
attaining and maintaining the ozone standard where it presently
applies. EPA has also proposed to re-apply the ozone standard to the
remaining areas. The Agency believes that there is a significant risk
that future air quality in a number of these areas would exceed the
ozone standard at some time in the 2007 and later period. This belief
is based on three factors: (1) Recent exceedances in 1995-1997 or 1996-
1998, (2) predicted exceedances in 2007 or 2030 after accounting for
reductions from Tier 2 and other local or regional controls currently
in place or required, and (3) our assessment of the magnitude of recent
violations, the variability of meteorological conditions, transport
from areas with later attainment dates, and other variables inherent in
predicting future attainment such as the potential for some areas to
experience unexpectedly high economic growth rates, growth in vehicle
miles traveled, varying population growth from area to area, and
differences in vehicle choice.
Only a subset of these areas have yet adopted specific control
measures that have allowed the Agency to fully approve an attainment
plan. For some of these areas, we have proposed a finding, based on all
the available evidence, that the area will attain on its attainment
date. In one case, we have proposed that an area will maintain over the
required 10-year time period. However, in many cases, these proposals
depend on the State adopting additional emission reduction measures.
The draft RIA provides more information on our recent proposals on
attainment demonstrations and maintenance plans.\18\ Until the SIPs for
these areas are actually submitted, reviewed and approved, there is
some risk that these areas will not adopt fully approvable SIPs.
Furthermore, some of these areas are not under a current requirement to
obtain EPA approval for an attainment plan. The mechanisms to get to
attainment in areas without a requirement to submit an attainment
demonstration are less automatic, and more uncertain. Even with
suitable plans, implementation success is uncertain, and therefore
there is some risk that 2007 attainment, or maintenance thereafter,
would not happen.
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\18\ We have recently proposed favorable action, in some cases
with a condition that more emission reductions be obtained, on
attainment demonstrations in these areas with attainment dates prior
to 2007: Philadelphia, Washington-Baltimore, Atlanta, and St. Louis.
We expect to give final approval soon to a maintenance plan and
redesignation to attainment for Cincinnati.
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Finally, there are six additional metropolitan areas, with another
11.4 million people in 1996, for which the available ozone modeling and
other evidence is less clear regarding the need for additional
reductions. These areas include Biloxi-Gulfport-Pascagoula, MS,
Cleveland-Akron, OH, Detroit-Ann Arbor-Flint, MI, New Orleans, LA,
Pensacola, FL, and Tampa, FL. Our own ozone modeling predicted these
six areas to need further reductions to avoid exceedances in 2007 or
2030. The recent air quality monitoring data for these six areas shows
ozone levels with less than a 10 percent margin below the NAAQS. This
suggests that ozone concentrations in these areas may remain below the
NAAQS for some time, but we believe there is still a risk of that
future ozone levels will be above the NAAQS because meteorological
conditions may be more severe in the future.
In sum, without these reductions, there is a significant risk that
an appreciable number of the 42 areas, with a population of 123 million
people in 1996, will violate the 1-hour ozone standard during the time
period when these proposed standards will apply to heavy-duty vehicles.
The 42 areas consist of the 27 areas with predicted exceedances in 2007
or 2030 under Tier 2 air quality modeling and recent violations of the
1-hour ozone standard, plus seven California areas (South Coast Air
Basin, San Diego, Ventura County, Southeast Desert, San Francisco, San
Joaquin Valley, Sacramento), two Texas areas (Dallas and Beaumont-Port
Arthur), and six areas that have recent ozone concentrations within 10%
of exceeding the standard and predicted exceedances. Additional
information about these areas is provided in the draft RIA.
iii. Conclusion
We have reviewed the air quality situation of three broad groups of
areas: (1) Those areas with recent violations of the ozone standard and
attainment dates in 2007 or 2010, (2) those areas with recent
violations and attainment dates (if any) prior to 2007, and (3) those
areas with recent ozone concentrations within 10% of a violation of the
1-hour ozone
[[Page 35444]]
standard, with predicted exceedances, and without proposed or approved
SIP attainment demonstrations. In general, the evidence summarized in
this section, and presented in more detail in the draft RIA, supports
the Agency's belief that emissions of NOX and VOC from
heavy-duty vehicles in 2007 and later will contribute to a national
ozone air pollution problem that warrants regulatory attention under
section 202(a)(3) of the Act.
Table II.B-2
------------------------------------------------------------------------
Proposed
Metropolitan area/State reinstatement of 1996 population
ozone standard (in millions)
------------------------------------------------------------------------
Areas with 2007/2010 Attainment
Dates (Established or
Requested):
New York City, NY-NJ-CT..... 19.9
Houston, TX................. 4.3
Hartford, CT................ 1.1
New London, CT.............. 1.3
Chicago, IL-IN.............. 8.6
Milwaukee, WI............... 1.6
Dallas, TX.................. 4.6
Beaumont-Port Arthur, TX.... 0.4
Los Angeles, CA............. 15.5
Southeast Desert, CA........ 0.4
Subtotal of 10 areas...... 57.7
Areas with Pre-2007 Attainment
Dates or No Specific Attainment
Date, with a Recent History of
Nonattainment:**
Atlanta, GA................. 3.5
Philadelphia-Wilmington- 6.0
Atlantic City, PA-NJ-DE-MD.
Sacramento, CA.............. 1.5
San Joaquin Valley, CA 2.7
*possible future
reclassification and change
of attainment date to 2005.
Ventura County, CA.......... 0.7
Washington-Baltimore, DC-MD- 7.2
VA-WV......................
Charlotte-Gastonia, NC...... X 1.3
Grand Rapids, MI............ X 1.0
Huntington-Ashland, WV-KY... X 0.3
Indianapolis, IN............ X 1.5
Memphis, TN................. X 1.1
Nashville, TN............... X 1.1
Barnstable-Yarmouth, MA..... X 0.2
Boston-Worcester-Lawrence, X 5.6
MA.........................
Houma, LA................... X 0.2
Providence-Fall River- X 1.1
Warwick, RI-MA.............
Richmond-Petersburg, VA..... X 1.0
Benton Harbor, MI........... X 0.2
Baton Rouge, LA............. 0.6
Birmingham, AL.............. 0.9
Cincinnati-Hamilton, OH-KY- 1.9
IN*........................
Louisville, KY-IN........... 0.3
Pittsburgh, PA MSA.......... 2.4
San Diego, CA............... 2.8
San Francisco Bay Area, CA.. 6.2
St. Louis, MO-IL............ 2.5
Subtotal of 26 areas...... 53.8
Areas with Pre-2007 Attainment
Dates and Recent Concentrations
within 10% of an Exceedance,
But With No Recent History of
Nonattainment:
Biloxi-Gulfport-Pascagoula, X 0.3
MS MSA.....................
Cleveland-Akron, OH CMSA.... X 2.9
Detroit-Ann Arbor-Flint, MI X 5.3
CMSA.......................
New Orleans, LA MSA......... X 0.3
Pensacola, FL MSA........... X 0.4
Tampa, FL MSA............... X 2.2
Subtotal of 6 areas....... 11.4
Total 1996 Population of All
Areas at Risk of Exceeding the
Ozone Standard in 2007 or
Thereafter:
42 Areas--total population.. 122.9
------------------------------------------------------------------------
*Based on more recent air quality monitoring data not considered in the
Tier 2 analysis, and on 10-year emissions projections, we expect to
redesignate Cincinnati-Hamilton to attainment soon.
**The list includes certain areas that are currently not violating the 1-
hour NAAQS.
c. Public Health and Welfare Concerns From Prolonged and Repeated
Exposures to Ozone
A large body of scientific literature regarding health and welfare
effects of ozone has associated health effects with certain patterns of
ozone exposures that do not include any hourly ozone concentration
above the 0.12 parts per million (ppm) level of the 1-hour NAAQS. The
science indicates that there are health effects attributable to
prolonged and repeated exposures to lower ozone concentrations. Studies
of 6 to 8 hour exposures showed health effects from prolonged and
repeated exposures at moderate levels of exertion to ozone
concentrations as low as 0.08
[[Page 35445]]
ppm. Prolonged and repeated ozone concentrations at these levels are
common in areas throughout the country, and are found in areas that are
exceeding, and areas that are not exceeding, the 1-hour ozone standard.
For example, in 1998, almost 62 million people lived in areas with 2 or
more days with concentrations of 0.09 ppm or higher, excluding areas
currently violating the 1-hour NAAQS. Since prolonged exposures at
moderate levels of ozone are more widespread than exceedances of the 1-
hour ozone standard, and given the continuing nature of the 1-hour
ozone problem described above, adverse health effects from this type of
ozone exposure can reasonably be anticipated to occur in the future in
the absence of this rule. Adverse welfare effects can also be
anticipated, primarily from damage to vegetation. See the draft RIA for
further details.
Studies of acute health effects have shown transient pulmonary
function responses, transient respiratory symptoms, effects on exercise
performance, increased airway responsiveness, increased susceptibility
to respiratory infection, increased hospital and emergency room visits,
and transient pulmonary respiratory inflammation. Such acute health
effects have been observed following prolonged exposures at moderate
levels of exertion at concentrations of ozone well below the current
standard of 0.12 ppm. The effects are more pronounced at concentrations
above 0.09 ppm, affecting more subjects or having a greater effect on a
given subject in terms of functional changes or symptoms. A more
detailed discussion may be found in the Draft RIA.
With regard to chronic health effects, the collective data have
many ambiguities, but provide suggestive evidence of chronic effects in
humans. There is a biologically plausible basis for considering the
possibility that repeated inflammation associated with exposure to
ozone over a lifetime, as can occur with prolonged exposure to moderate
ozone levels below peak levels, may result in sufficient damage to
respiratory tissue that individuals later in life may experience a
reduced quality of life, although such relationships remain highly
uncertain.
We believe that the evidence in the Draft RIA regarding the
occurrence of adverse health effects due to prolonged and repeated
exposure to ozone concentrations in the range discussed above, and
regarding the populations that are expected to receive exposures at
these levels, supports a conclusion that emissions of NOX,
and VOC from heavy-duty vehicles in 2007 and later will be contributing
to a national air pollution problem that warrants regulatory attention
under section 202(a)(3) of the Act.
Ozone has many welfare effects, with damage to plants being of most
concern. Plant damage affects crop yields, forestry production, and
ornamentals. The adverse effect of ozone on forests and other natural
vegetation can in turn cause damage to associated ecosystems, with
additional resulting economic losses. Ozone concentrations of 0.10 ppm
can be phytotoxic to a large number of plant species, and can produce
acute injury and reduced crop yield and biomass production. Ozone
concentrations at or below 0.10 ppm have the potential over a longer
duration of creating chronic stress on vegetation that can result in
reduced plant growth and yield, shifts in competitive advantages in
mixed populations, decreased vigor, and injury from other environmental
stresses. The forestry, crop and other environmental damage from ozone
in times and places where the 1-hour NAAQS is attained adds support to
the Agency's belief that there will be air pollution in 2007 and
thereafter that warrants regulatory attention under section 202(a)(3)
of the Act.
2. Particulate Matter
a. Health and Welfare Effects
i. Particulate Matter Generally
Particulate matter (PM) represents a broad class of chemically and
physically diverse substances. It can be principally characterized as
discrete particles that exist in the condensed (liquid or solid) phase
spanning several orders of magnitude in size. All particles equal to
and less than 10 microns are called PM10. Fine particles can
be generally defined as those particles with an aerodynamic diameter of
2.5 microns or less (also known as PM2.5), and coarse
fraction particles are those particles with an aerodynamic diameter
greater than 2.5 microns, but equal to or less than a nominal 10
microns. The health and environmental effects of PM are strongly
related to the size of the particles.
The emission sources, formation processes, chemical composition,
atmospheric residence times, transport distances and other parameters
of fine and coarse particles are distinct. Fine particles are directly
emitted from combustion sources and are formed secondarily from gaseous
precursors such as sulfur dioxide, nitrogen oxides, or organic
compounds. Fine particles are generally composed of sulfate, nitrate,
chloride and ammonium compounds; organic and elemental carbon; and
metals. Combustion of coal, oil, diesel, gasoline, and wood, as well as
high temperature process sources such as smelters and steel mills,
produce emissions that contribute to fine particle formation. In
contrast, coarse particles are typically mechanically generated by
crushing or grinding and are often dominated by resuspended dusts and
crustal material from paved or unpaved roads or from construction,
farming, and mining activities. Fine particles can remain in the
atmosphere for days to weeks and travel through the atmosphere hundreds
to thousands of kilometers, while coarse particles deposit to the earth
within minutes to hours and within tens of kilometers from the emission
source.
Particulate matter, like ozone, has been linked to a range of
serious respiratory health problems. Scientific studies suggest a
likely causal role of ambient particulate matter (which is attributable
to a number of sources including diesel) in contributing to a series of
health effects. The key health effects categories associated with
ambient particulate matter include premature mortality, aggravation of
respiratory and cardiovascular disease (as indicated by increased
hospital admissions and emergency room visits, school absences, work
loss days, and restricted activity days), aggravated asthma, acute
respiratory symptoms, including aggravated coughing and difficult or
painful breathing, chronic bronchitis, and decreased lung function that
can be experienced as shortness of breath. For additional information
on health effects, see the draft RIA. Both fine and coarse particles
can accumulate in the respiratory system. Exposure to fine particles is
most closely associated with such health effects as premature mortality
or hospital admissions for cardiopulmonary disease. PM also causes
damage to materials and soiling. It is a major cause of substantial
visibility impairment in many parts of the U.S.
Diesel particles are a component of both coarse and fine PM, but
fall mostly in the fine range. Noncancer health effects associated with
exposure to diesel PM overlap with some health effects reported for
ambient PM including respiratory symptoms (cough, labored breathing,
chest tightness, wheezing), and chronic respiratory disease (cough,
phlegm, chronic bronchitis and some evidence for decreases in pulmonary
function).
[[Page 35446]]
ii. Special Considerations for Diesel PM
Primary diesel particles mainly consist of carbonaceous material,
ash (trace metals), and sulfuric acid. Many of these particles exist in
the atmosphere as a carbon core with a coating of organic carbon
compounds, sulfuric acid and ash, sulfuric acid aerosols, or sulfate
particles associated with organic carbon.
Most diesel particles are in the fine and ultrafine size range.
Diesel PM contains small quantities of numerous mutagenic and
carcinogenic compounds. While representing a very small portion (less
than one percent) of the national emissions of metals, and a small
portion of diesel particulate matter (one to five percent), we note
that several trace metals of toxicological significance are also
emitted by diesel engines in small amounts including chromium,
manganese, mercury and nickel. In addition, small amounts of dioxins
have been measured in diesel exhaust, some of which may partition into
the particle phase, though the impact of these emissions on human
health is not clear.
Because the chemical composition of diesel PM includes these
hazardous air pollutants, or air toxics, diesel PM emissions are of
concern to the agency beyond their contribution to general ambient PM.
Moreover, as discussed in detail in the draft RIA, there have been
health studies specific to diesel PM emissions which indicate potential
hazards to human health that appear to be specific to this emissions
source. For chronic exposure, these hazards included respiratory system
toxicity and carcinogenicity. Acute exposure also causes transient
effects (a wide range of physiological symptoms stemming from
irritation and inflammation mostly in the respiratory system) in humans
though they are highly variable depending on individual human
susceptibility.
b. Potential Cancer Effects of Diesel Exhaust
The EPA draft Health Assessment Document for Diesel Emissions
(draft Assessment) is currently being revised based on comments
received from the Clean Air Scientific Advisory Committee (CASAC) of
EPA's Science Advisory Board.\19\ The current EPA position is that
diesel exhaust is a likely human lung carcinogen and that this cancer
hazard exists for occupational and environmental levels of
exposure.\20\
---------------------------------------------------------------------------
\19\ U.S. EPA (1999) Health Assessment Document for Diesel
Emissions: SAB Review Draft. EPA/600/8-90/057D Office of Research
and Development, Washington, DC. The document is available
electronically at www.epa.gov/ncea/diesel.htm.
\20\ The EPA designation of diesel exhaust as a likely human
carcinogen is subject to further comment by CASAC in 2000. The
designation of diesel exhaust as a likely human carcinogen under the
1996 Proposed Guidelines for Carcinogen Risk Assessment is very
similar to the current 1986 Guidelines for Carcinogen Risk
Assessment that designate diesel exhaust as a probable carcinogen
(B-1 carcinogen). The new guidelines, once finalized, will
incorporate a narrative approach to assist the risk manager in the
interpretation of the carcinogen's mode of action, the weight of
evidence, and any risk related exposure-response or protective
exposure recommendations.
---------------------------------------------------------------------------
In evaluating the available research for the draft Assessment, EPA
found that individual epidemiological studies numbering about 30 show
increased lung cancer risks associated with diesel emissions within the
study populations of 20 to 89 percent depending on the study.
Analytical results of pooling the positive study results show that on
average the risks were increased by 33 to 47 percent. Questions remain
about the influence of other factors (e.g., effect of smoking), the
quality of the individual epidemiology studies, exposure levels, and
consequently the precise magnitude of the increased risk of lung
cancer. From a weight of the evidence perspective, EPA believes that
the epidemiology evidence, as well as supporting data from certain
animal and mode of action studies, support the Agency's proposed
conclusion that exposure to diesel exhaust is likely to pose a human
health hazard at occupational exposure levels, as well as to the
general public exposed to typically lower environmental levels of
diesel exhaust.
Risk assessments on epidemiological studies in the peer-reviewed
literature which have attempted to assess the lifetime risk of lung
cancer in workers occupationally exposed to diesel exhaust suggests
that lung cancer risk may range from 10-4 to
10-.\21\ \22\ \23\ The Agency recognizes the significant
uncertainties in these studies, and has not used these estimates to
assess the possible cancer unit risk associated with ambient exposure
to diesel exhaust.
---------------------------------------------------------------------------
\21\ California Environmental Protection Agency, Office of
Health Hazard Assessment (CAL-EPA, OEHHA) (1998) Proposed
Identification of Diesel Exhaust as a Toxic Air Contaminant.
Appendix III Part B Health Risk Assessment for Diesel Exhaust. April
22, 1998.
\22\ Steenland, K., Deddens, J., Stayner, L. (1998) Diesel
Exhaust and Lung Cancer in the Trucking Industry: Exposure-Response
Analyses and Risk Assessment. Am. J Indus. Medicine 34:220-228.
\23\ Harris, J.E. (1983) Diesel emissions and Lung Cancer. Risk
Anal. 3:83-100.
---------------------------------------------------------------------------
While available evidence supports EPA's conclusion that diesel
exhaust is a likely human lung carcinogen, and thus is likely to pose a
cancer hazard to humans, the absence of quantitative estimates of the
lung cancer unit risk for diesel exhaust limits our ability to quantify
with confidence the actual magnitude of the cancer risk. In the draft
1999 Assessment, EPA acknowledged these limitations and provided a
discussion of the possible cancer risk consistent with general
occupational epidemiological findings of increased lung cancer risk and
relative exposure ranges in the occupational and environmental
settings. \24\ The Agency believes that the techniques that were used
in the draft Assessment to qualitatively gauge the potential for and
possible magnitude of risk are reasonable. The details of this approach
are provided in the draft RIA.
---------------------------------------------------------------------------
\24\ See Chapter 8.3 and 9.6 of the draft Health Assessment for
Diesel Exhaust. U.S. EPA (1999) Health Assessment Document for
Diesel Emissions: SAB Review Draft. EPA/600/8-90/057D Office of
Research and Development, Washington, D.C. The document is available
electronically at www.epa.gov/ncea/diesel.htm.
---------------------------------------------------------------------------
In the absence of a quantitative unit cancer risk to assess
environmental risk, EPA has considered the relevant epidemiological
studies and principles for their assessment, the risk from occupational
exposure as assessed by others, and relative exposure margins between
occupational and ambient environmental levels of diesel exhaust
exposure. Based on this epidemiological and other information, there is
the potential that upper bounds on environmental cancer risks from
diesel exhaust may exceed 10-6 and could be as high as
10-3. \25\ While uncertainty exists in estimating risk, the
likely hazard to humans together with the potential for significant
environmental risks leads the Agency to believe that diesel exhaust
emissions should be reduced in order to protect the public's health. We
believe that this is a prudent measure in light of the designation of
diesel exhaust as a likely human carcinogen, the exposure of almost the
entire population to diesel exhaust, the significant and consistent
finding of an increase in lung cancer risk in workers exposed to diesel
exhaust, and the potential overlap and/or small difference between some
occupational and environmental exposures.
---------------------------------------------------------------------------
\25\ As used in this proposal, environmental risk is defined as
the risk (i.e. a mathematical probability) that lung cancer would be
observed in the population after a lifetime exposure to diesel
exhaust. Exposure levels may be occupational lifetime or
environmental lifetime exposures. A population risk in the magnitude
of 10-6 translates as the probability of lung cancer
being evidenced in one person in one million over a lifetime
exposure.
---------------------------------------------------------------------------
As discussed in section I.C.6, ``Actions in California'', the
Office of Environmental Health Hazard
[[Page 35447]]
Assessment (OEHHA, California EPA) has identified diesel PM as a toxic
air contaminant. \26\ California is in the process of determining the
need for, and appropriate degree of control measures for diesel PM.
Apart from the EPA draft Assessment and California EPA's actions,
several other agencies and governing bodies have designated diesel
exhaust or diesel PM as a ``potential'' or ``probable'' human
carcinogen. \27\ \28\ \29\ The International Agency for Research on
Cancer (IARC) considers diesel exhaust a ``probable'' human carcinogen
and the National Institutes for Occupational Safety and Health have
classified diesel exhaust a ``potential occupational carcinogen.''
Thus, the concern for the health hazard resulting from diesel exhaust
exposures is widespread.
---------------------------------------------------------------------------
\26\ Office of Environmental Health Hazard Assessment (1998)
Health risk assessment for diesel exhaust, April 1998. California
Environmental Protection Agency, Sacramento, CA.
\27\ National Institute for Occupational Safety and Health
(NIOSH) (1988) Carcinogenic effects of exposure to diesel exhaust.
NIOSH Current Intelligence Bulletin 50. DHHS, Publication No. 88-
116. Centers for Disease Control, Atlanta, GA.
\28\ International Agency for Research on Cancer (1989) Diesel
and gasoline engine exhausts and some nitroarenes, Vol. 46.
Monographs on the evaluation of carcinogenic risks to humans. World
Heath Organization, International Agency for Research on Cancer,
Lyon, France.
\29\ World Health Organization (1996) Diesel fuel and exhaust
emissions: International program on chemical safety. World Health
Organization, Geneva, Switzerland.
---------------------------------------------------------------------------
c. Noncancer Effects of Diesel Exhaust
The noncancer effects of diesel exhaust emissions are also of
concern to the Agency. EPA believes that chronic diesel exhaust
exposure, at sufficient exposure levels, increases the hazard and risk
of an adverse consequence (including respiratory tract irritation/
inflammation and changes in lung function). The draft 1999 Assessment
discussed an existing inhalation reference concentration (RfC) for
chronic effects that EPA intends to revise in the next draft Assessment
in response to CASAC comments. The revised RfC will be reviewed by
CASAC at a future meeting. An RfC provides an estimate of the
continuous human inhalation exposure (including sensitive subgroups)
that is likely to be without an appreciable risk of deleterious
noncancer effects during a lifetime.
d. Attainment and Maintenance of the PM10 NAAQS
Under the CAA, we are to regulate HD emissions if they contribute
to air pollution that can reasonably be anticipated to endanger public
health and welfare. We have already addressed the question of what
concentration patterns of PM endanger public health, in setting the
NAAQS for PM10 in 1987. The PM NAAQS were revised in 1997,
largely by adding new standards for fine particles (PM2.5)
and modifying the form of the daily PM10 standard. On
judicial review, the revised standards were remanded for further
proceedings, and the revised PM10 standards were vacated.
EPA has sought Supreme Court review of that decision; pending final
resolution of the litigation, the 1987 PM10 standards
continue to apply.
i. Current PM10 Nonattainment
The most recent PM10 monitoring data indicates that 12
designated PM10 nonattainment areas, with a population of 19
million in 1990, violated the PM10 NAAQS in the period 1996-
1998. Table II.B-3 lists the 12 areas. The table also indicates the
classification and 1990 population for each area.
Table II.B-3.--PM10 Nonattainment Areas Violating the PM10 NAAQS in 1996-
1998 a
------------------------------------------------------------------------
1990 population
Area Classification (millions)
------------------------------------------------------------------------
Clark Co., NV................... Serious............ 0.741
El Paso, TX b................... Moderate........... 0.515
Hayden/Miami, AZ................ Moderate........... 0.003
Imperial Valley, CA b........... Moderate........... 0.092
Owens Valley, CA................ Serious............ 0.018
San Joaquin Valley, CA.......... Serious............ 2.564
Mono Basin, CA.................. Moderate........... 0.000
Phoenix, AZ..................... Serious............ 2.238
Fort Hall Reservation, ID....... Moderate........... 0.001
Los Angeles South Coast Air Serious............ 13.00
Basin, CA.
Nogales, AZ..................... Moderate........... 0.019
Wallula, WA c................... Moderate........... 0.048
------------------
Total population.......... 19.24
------------------------------------------------------------------------
\a\ In addition to these designated nonattainment areas, there are 15
unclassified counties, with a 1996 population of 4.2 million, for
which States have reported PM10 monitoring data for this period
indicating a PM10 NAAQS violation. Although we do not believe that we
are limited to considering only designated nonattainment areas as part
of this rulemaking, we have focused on the designated areas in the
case of PM10. An official designation of PM10 nonattainment indicates
the existence of a confirmed PM10 problem that is more than a result
of a one-time monitoring upset or a result of PM10 exceedances
attributable to natural events. We have not yet excluded the
possibility that one or the other of these is responsible for the
monitored violations in 1996-1998 in the 15 unclassified areas. We
adopted a policy in 1996 that allows areas whose PM10 exceedances are
attributable to natural events to remain unclassified if the State is
taking all reasonable measures to safeguard public health regardless
of the source of PM10 emissions. Areas that remain unclassified areas
are not required to submit attainment plans, but we work with each of
these areas to understand the nature of the PM10 problem and to
determine what best can be done to reduce it.
\b\ EPA has determined that PM10 nonattainment in these areas is
attributable to international transport. While reductions in heavy-
duty vehicle emissions cannot be expected to result in attainment,
they will reduce the degree of PM10 nonattainment to some degree.
\c\ The violation in this area has been determined to be attributable to
natural events.
ii. Risk of Future Exceedances of the PM10 Standard
The proposed new standards for heavy-duty vehicles will benefit
public health and welfare through reductions in direct diesel particles
and NOX, VOCs, and SOX which contribute to
secondary formation of particulate matter. Because ambient particle
concentrations causing violations of the PM10 standard are
well established to endanger public health and welfare, this
information supports the proposed new standards for heavy-duty
vehicles. The Agency's recent PM modeling analysis
[[Page 35448]]
performed for the Tier 2 rulemaking predicts that a significant number
of areas across the nation are at risk of failing to meet the
PM10 NAAQS even with Tier 2 and other controls currently in
place. These reductions will assist states as they work with the Agency
through SIP development and implementation of local controls to move
their areas into attainment by the applicable deadline, and maintain
the standards thereafter.
The Agency believes that the PM10 concentrations in 10
areas shown in Table II.B-4 have a significant risk of exceeding the
PM10 standard without further emission reductions during the
time period when this rulemaking would take effect. This belief is
based on the PM10 modeling conducted for the Tier 2
rulemaking. Table II.B-4 presents information about these 10 areas and
subdivides them into two groups. The first group of six areas are
designated PM10 nonattainment areas which had recent
monitored violations of the PM10 NAAQS in 1996-1998 and were
predicted to be in nonattainment in 2030 in our PM10 air
quality modeling. These areas have a population of over 19 million.
Included in the group are the nonattainment areas that are part of the
Los Angeles, Phoenix, and Las Vegas metropolitan areas, where traffic
from heavy-duty vehicles is substantial. These six areas would clearly
benefit from the reductions in emissions that would occur from the
proposed new standards for heavy-duty vehicles.
The second group of four counties listed in Table II.B-4 with a
total of 8 million people in 1996 also had predicted exceedances of the
PM10 standard. However, while these four areas registered,
in either 1997 or 1998, single-year annual average monitored
PM10 levels of at least 90 percent of the PM10
NAAQS, these areas did not exceed the formal definition of the
PM10 NAAQS over the three-year period ending in 1998.\30\
Unlike the situation for ozone, for which precursor emissions are
generally declining over the next 10 years or so before beginning to
increase, we estimate that emissions of PM10 will rise
steadily unless new controls are implemented. The small margin of
attainment which the four areas currently enjoy will likely erode; the
PM air quality modeling suggests that it will be reversed. We therefore
consider these four areas to each individually have a significant risk
of exceeding the PM10 standard without further emission
reductions. The emission reductions from the proposed new standards for
heavy-duty vehicles would help these areas with attainment and maintain
in conjunction with other processes that are currently moving these
areas towards attainment.
---------------------------------------------------------------------------
\30\ In fact, in two of these areas, New York Co., NY and Harris
Co., TX, the average PM10 level in 1998 was above the 50
micrograms per cubic meter value of the NAAQS. These two areas are
not characterized in Table II.B-4 as areas with a high risk of
failing to attain and maintain because lower PM10 levels
in 1996 and 1997 caused their three-year average PM10
level to be lower than the NAAQS. Official nonattainment
determinations for the annual PM10 NAAQS are made based
on the average of 12 quarterly PM10 averages.
Table II.B-4.--Areas With Significant Risk of Exceeding the PM10 NAAQS
Without Further Emission Reductions
------------------------------------------------------------------------
1990 population
Area (millions)
------------------------------------------------------------------------
Areas Currently Exceeding the PM10 Standard:
Clark Co., NV.............................. 0.741
El Paso, TX a.............................. 0.515
Imperial Valley, CA a...................... 0.092
San Joaquin Valley, CA..................... 2.564
Phoenix, AZ................................ 2.238
Los Angeles South Coast Air Basin, CA...... 13.00
------------------------
Subtotal for 6 Areas..................... 19.15
========================
Areas within 10% of Exceeding the PM10
Standard:
New York Co., NY........................... 1.49
Cuyahoga Co., OH........................... 1.41
Harris, Co., TX............................ 2.83
San Diego Co., CA.......................... 2.51
------------------------
Subtotal for 4 Areas..................... 8.24
========================
Total 1996 Population of All 10 Areas at 27.39
Risk of Exceeding the PM10 Standard: 10
Areas, Total 1990 Population............
------------------------------------------------------------------------
\a\ EPA has determined that PM10 nonattainment in these areas is
attributable to international transport. While reductions in heavy-
duty vehicle emissions cannot be expected to result in attainment,
they will reduce the degree of PM10 nonattainment to some degree.
Future concentrations of ambient particulate matter may be
influenced by the potentially significant influx of diesel-powered cars
and light trucks into the light duty vehicle fleet. At the present
time, virtually all cars and light trucks being sold are gasoline
fueled. However, the possibility exists that diesels will become more
prevalent in the car and light-duty truck fleet, since automotive
companies have announced their desire to increase their sales of diesel
cars and light trucks. For the Tier 2 rulemaking, the Agency performed
a sensitivity analysis using A.D.Little's ``most likely'' increased
growth scenario of diesel penetration into the light duty vehicle fleet
which culminated in a 9 percent and 24 percent penetration of diesel
vehicles in the LDV and LDT markets, respectively, in 2015 (see Tier 2
RIA, Table III.A.-13). This scenario is relevant for the purpose of
this rulemaking because, according to the analysis performed in Tier 2,
an increased number of diesel-powered light duty vehicles will increase
LDV PM emissions by about 13 percent in 2010 rising to 19 percent in
2030, even with the stringent new PM standards established under the
Tier 2 rule. If manufacturers elect to certify a portion of their
diesel-powered LDVs to the least-stringent PM standard available under
the Tier 2 bin structure, the increase in LDV PM emissions could be
[[Page 35449]]
even greater, thus potentially exacerbating PM10
nonattainment problems.
EPA recognizes that the SIP process is ongoing and that many of the
six current nonattainment areas in Table II.B-4 are in the process of,
or will be adopting additional control measures to achieve the
PM10 NAAQS in accordance with their attainment dates under
the Clean Air Act. EPA believes, however, that as in the case of ozone,
there are uncertainties inherent in any demonstration of attainment
that is premised on forecasts of emission levels and meteorology in
future years. Therefore, even if these areas adopt and submit SIPs that
EPA is able to approve as demonstrating attainment of the
PM10 standard, the modeling conducted for Tier 2 and the
history of PM10 levels in these areas indicates that there
is still a significant risk that these areas would need the reductions
from the proposed heavy-duty vehicle standards to maintain the
PM10 standards in the long term. The other four areas in
Table II.B-4 also have a significant risk of experiencing violations of
the PM10 standard.
In sum, the Agency believes that all 10 areas have a significant
risk of experiencing particulate matter levels that violate the
PM10 standard during the time period when this proposed rule
would take effect. These 10 areas have a combined population of 27
million, and are located throughout the nation. In addition, this list
does not fully consider the possibility that there are other areas
which are now meeting the PM10 NAAQS that have at least a
significant probability of requiring further reductions to continue to
maintain it.
e. Public Health and Welfare Concerns From Exposure to Fine PM
Many epidemiologic studies have shown statistically significant
associations of ambient PM levels with a variety of human health
endpoints in sensitive populations, including mortality, hospital
admissions and emergency room visits, respiratory illness and symptoms
measured in community surveys, and physiologic changes in mechanical
pulmonary function. These effects have been observed in many areas with
ambient PM levels at or below the current PM10 NAAQS. The
epidemiologic science points to fine PM as being more strongly
associated with some health effects, such as premature mortality, than
coarse fraction PM.
Associations of both short-term and long-term PM exposure with most
of the above health endpoints have been consistently observed. (A more
detailed discussion may be found in the RIA.) The general internal
consistency of the epidemiologic data base and available findings have
led to increasing public health concern, due to the severity of several
studied endpoints and the frequent demonstration of associations of
health and physiologic effects with ambient PM levels at or below the
current PM10 NAAQS. The weight of epidemiologic evidence
suggests that ambient PM exposure has affected the public health of
U.S. populations. Specifically, increased mortality associated with
fine PM was observed in cities with longer-term average fine PM
concentrations in the range of 16 to 21 ug/m3. For example, over 113
million people (46 percent of continental US population, 1990) lived in
areas in 1996 where long term ambient fine particulate matter levels
were at or above 16 g/m3, which is the long term
average PM2.5 concentration that prevailed in Boston during
the study which found that acute mortality was statistically
significantly associated with daily fine PM concentrations.\31\ It is
reasonable to anticipate that sensitive populations exposed to similar
or higher levels, now and in the 2007 and later time frame, will also
be at increased risk of premature mortality associated with exposures
to fine PM. In addition, statistically significant relationships have
also been observed in U.S. cities between PM levels and increased
respiratory symptoms and decreased lung functions in children.
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\31\ In the absence of quality-assured PM2.5
monitoring data, we have used an air quality model called Regional
Modeling System for Aerosols and Deposition (REMSAD) to estimate
recent PM2.5 concentrations across the U.S. for 1996.
Essentially, REMSAD is a three-dimensional grid-based Eulerian air
quality model designed to simulate long-term (e.g., annual)
concentrations and deposition of atmospheric pollutants (e.g.,
particulates and toxics) over large spatial scales (e.g., over the
contiguous United States). A more detailed explanation of the
methodology is found in the draft RIA.
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While uncertainty remains in the published data base regarding
specific aspects about the nature and magnitude of the overall public
health risk imposed by ambient PM exposure, we believe that the body of
health evidence is supportive of our view that PM exposures that can
reasonably be anticipated to occur in the future are a serious public
health concern warranting a requirement to reduce emissions from heavy-
duty vehicles, even at levels below the PM10 NAAQS. EPA
believes the risk is significant from an overall public health
perspective because of the large number of individuals in sensitive
populations that we expect to be exposed to ambient fine PM in the 2007
and later time frame, as well as the importance of the negative health
affects.
We believe the evidence regarding the occurrence of adverse health
effects due to exposure to fine PM concentrations, and regarding the
populations that are expected to receive exposures at these levels,
supports a proposed conclusion that emissions from heavy-duty vehicles
that lead to the formation of fine PM in 2007 and later will be
contributing to a national air pollution problem that warrants action
under section 202(a)(3).
f. Visibility and Regional Haze Effects of Ambient PM
Visibility impairment, also called regional haze, is a complex
problem caused by a variety of sources, both natural and anthropogenic
(e.g., motor vehicles). Regional haze masks objects on the horizon and
reduces the contrast of nearby objects. The formation, extent, and
intensity of regional haze are functions of meteorological and chemical
processes, which sometimes cause fine particle loadings to remain
suspended in the atmosphere for several days and to be transported
hundreds of kilometers from their sources (NRC, 1993).
Visibility has been defined as the degree to which the atmosphere
is transparent to visible light (NRC, 1993). Visibility impairment is
caused by the scattering and absorption of light by particles and gases
in the atmosphere. Fine particles (0.1 to 1.0 microns in diameter) are
more effective per unit mass concentration at impairing visibility than
either larger or smaller particles (NAPAP, 1991). Most of the diesel
particle mass emitted by diesel engines falls within this fine particle
size range. Light absorption is often caused by elemental carbon, a
product of incomplete combustion from activities such as burning diesel
fuel or wood. These particles cause light to be scattered or absorbed,
thereby reducing visibility.
Heavy-duty vehicles contribute a significant portion of the
emissions of direct PM, NOX, and SOX that result
in ambient PM that contributes to regional haze and impaired
visibility. The Grand Canyon Visibility Transport Commission's report
found that reducing total mobile source emissions is an essential part
of any program to protect visibility in the Western U.S. The Commission
identified mobile source pollutants of concern as VOC, NOX,
and elemental and organic carbon. The Western Governors Association, in
later commenting on the Regional Haze Rule and on protecting the 16
Class I
[[Page 35450]]
areas on the Colorado Plateau, stated that the federal government, and
particularly EPA, must do its part in regulating emissions from mobile
sources that contribute to regional haze in these areas. As described
more fully later in this section, today's proposal would result in
large reductions in these pollutants. These reductions are expected to
provide an important step towards improving visibility across the
nation. Emissions reductions being achieved to attain the 1-hour ozone
and PM10 NAAQS will assist in visibility improvements, but
not substantially. Moreover, the timing of the reductions from the
proposed standards fits very well with the goals of the regional haze
program. We will work with the regional planning bodies to make sure
they have the information to take account of the reductions from any
final rule resulting from this proposal in their planning efforts.
The Clean Air Act contains provisions designed to protect national
parks and wilderness areas from visibility impairment. In 1999, EPA
promulgated a rule that will require States to develop plans to
dramatically improve visibility in national parks. Although it is
difficult to determine natural visibility levels, we believe that
average visual range in many Class I areas in the United States is
significantly less (about 50-66% of natural visual range in the West,
about 20% of natural visual range in the East) than the visual range
that would exist without anthropogenic air pollution. The final
Regional Haze Rule establishes a 60-year time period for planning
purposes, with several near term regulatory requirements, and is
applicable to all 50 states. One of the obligations is for States to
conduct visibility monitoring in mandatory Class I Federal areas and
determine baseline conditions using data for year 2000 to 2004.
Reductions of particles, NOX, sulfur, and VOCs from this
rulemaking would have a significant impact on moving all states towards
achieving long-term visibility goals, as outlined in the 1999 Regional
Haze Rule.
g. Other Welfare Effects Associated With PM
The deposition of airborne particles reduces the aesthetic appeal
of buildings, and promotes and accelerates the corrosion of metals,
degrades paints, and deteriorates building materials such as concrete
and limestone. This materials damage and soiling are related to the
ambient levels of airborne particulates, which are emitted by heavy-
duty vehicles. Although there was insufficient data to relate materials
damage and soiling to specific concentrations, and thereby to allow the
Agency to establish a secondary PM standard for these impacts, we
believe that the welfare effects are real and that heavy-duty vehicle
PM, NOX, SOX, and VOC contribute to materials
damage and soiling.
h. Conclusions Regarding PM
There is a significant risk that, despite statutory requirements
and EPA and state efforts towards attainment and maintenance, some
areas of the U.S. will violate the PM10 NAAQS in 2007 and
thereafter. We believe that the information provided in this section
shows that there will be air pollution that warrants regulatory
attention under section 202(a)(3) of the Act. Heavy-duty vehicles
contribute substantially to PM10 levels, as shown in section
II.C below.
It is also reasonable to anticipate that concentrations of fine PM,
as represented for example by PM2.5 concentrations, will
endanger public health and welfare also even if all areas attain and
maintain the PM10 NAAQS. Heavy-duty vehicles will also
contribute to this air pollution problem.
There are also important environmental impacts of PM10,
such as regional haze which impairs visibility. Furthermore, while the
evidence on soiling and materials damage is limited and the magnitude
of the impact of heavy-duty vehicles on these welfare effects is
difficult to quantify, these welfare effects support our belief
information that this proposal is necessary and appropriate.
3. Other Criteria Pollutants
The standards being proposed today would help reduce levels of
three other pollutants for which NAAQS have been established: carbon
monoxide (CO), nitrogen dioxide (NO2), and sulfur dioxide
(SO2). The extent of nonattainment for these three
pollutants is small, so the primary effect of today's proposal would be
to provide areas concerned with maintaining their attainment status a
greater margin of safety. As of 1998, every area in the United States
has been designated to be in attainment with the NO2 NAAQS.
As of 1997, only one area (Buchanan County, Missouri) did not meet the
primary SO2 short-term standard, due to emissions from the
local power plant. In 1997, only 6 of 537 monitoring sites reported
ambient CO levels in excess of the CO NAAQS. There are currently 20
designated CO nonattainment areas, with a combined population of 34
million. There are also 23 designated maintenance areas with an
additional combined population of 34 million. The broad trends indicate
that ambient levels of CO are declining.
4. Other Air Toxics
In addition to NOx and particulates, heavy-duty vehicle
emissions contain several other substances that are known or suspected
human or animal carcinogens, or have serious noncancer health effects.
These include benzene,1,3-butadiene, formaldehyde, acetaldehyde,
acrolein, and dioxin. For some of these pollutants, heavy-duty engine
emissions are believed to account for a significant proportion of total
nation-wide emissions. Although these emissions will decrease in the
short term, they are expected to increase in 2007-2020 without the
proposed emission limits, as the number of miles traveled by heavy-duty
trucks increases. In the Draft RIA, we present current and projected
exposures to benzene, 1,3-butadiene, formaldehyde, and acetaldehyde
from all on-highway motor vehicles.
By reducing hydrocarbon and other organic emissions, both in gas
phase and bound to particles, the emission control program proposed in
today's action would have a significant impact on direct emissions of
air toxics from HDVs. We are also proposing a new formaldehyde standard
for heavy-duty vehicles. Today's action would reduce exposure to these
substances and therefore help reduce the impact of HDV emissions on
cancer and non-cancer health effects. We are currently conducting a
risk assessment to assess the risk of cancer in the population that can
be attributed to motor vehicle emissions of benzene, 1,3-butadiene,
formaldehyde, and acetaldehyde.
a. Benzene
Highway mobile sources account for 52 percent of nationwide
emissions of benzene and HDVs account for 7 percent of all highway
vehicle benzene emissions.\32\ The EPA has recently reconfirmed that
benzene is a known human carcinogen by all routes of exposure
(including leukemia at high, prolonged air exposures), and is
associated with additional health effects including genetic changes in
humans and animals and increased proliferation
[[Page 35451]]
of bone marrow cells in mice.\33\ \34\ \35\ EPA believes that the data
indicate a causal relationship between benzene exposure and acute
lymphocytic leukemia and suggest a relationship between benzene
exposure and chronic non-lymphocytic leukemia and chronic lymphocytic
leukemia. Respiration is the major source of human exposure and at
least half of this exposure is attributable to gasoline vapors and
automotive emissions. A number of adverse noncancer health effects
including blood disorders, such as preleukemia and aplastic anemia,
have also been associated with low-dose, long-term exposure to benzene.
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\32\ 1990 Emissions Inventory of Forty Potential Section 112(k)
Pollutants: Supporting Data for EPA's Section 112(k) Regulatory
Strategy--Final Report. Emission Factors and Inventory Group, Office
of Air Quality Planning and Standards, May, 1999.
\33\ International Agency for Research on Cancer, IARC
monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 29, Some industrial chemicals and dyestuffs,
International Agency for Research on Cancer, World Health
Organization, Lyon, France, p. 345-389, 1982.
\34\ Irons, R.D., W.S. Stillman, D.B. Calogiovanni, and V.A.
Henry, Synergistic action of the benzene metabolite hydroquinone on
myelopoietic stimulating activity of granulocyte/macrophage colony-
stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-3695,
1992.
\35\ Environmental Protection Agency, Carcinogenic Effects of
Benzene: An Update, National Center for Environmental Assessment,
Washington, DC. 1998.
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b. 1,3-Butadiene
Highway mobile sources account for 51 percent of the annual
emissions of 1,3-butadiene and HDVs account for 15 percent of the
highway vehicle portion. Today's program would play an important role
in reducing in the mobile contribution of 1,3-butadiene. This compound
causes a variety of reproductive and developmental effects in mice and
rats exposed to long-term, low doses. There is, however, no human data
on 1,3-butadiene. EPA's recently prepared draft health assessment
document presents evidence that suggests this substance is a known
human carcinogen.\36\ The Environmental Health Committee of EPA's
Science Advisory Board, in reviewing EPA's draft Health Assessment for
1,3-butadiene, recommended that 1,3-butadiene should be classified as a
probable human carcinogen.\37\
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\36\ Environmental Protection Agency, Health Risk Assessment of
1,3-Butadiene. EPA/600/P-98/001A, February 1998.
\37\ An SAB Report: Review of the Health Risk Assessment of 1,3-
Butadiene. EPA-SAB-EHC-98, August, 1998.
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c. Formaldehyde
Highway mobile sources contribute 27 percent of the national
emissions of formaldehyde, and HDVs account for 35 percent of the
highway portion. EPA has classified formaldehyde as a probable human
carcinogen based on evidence in humans and in rats, mice, hamsters, and
monkeys.\38\ Epidemiological studies in occupationally exposed workers
suggest that long-term inhalation of formaldehyde may be associated
with tumors of the nasopharyngeal cavity (generally the area at the
back of the mouth near the nose), nasal cavity, and sinus. Formaldehyde
exposure also causes a range of noncancer health effects, including
irritation of the eyes (tearing of the eyes and increased blinking) and
mucous membranes. Sensitive individuals may experience these adverse
effects at lower concentrations than the general population and in
persons with bronchial asthma, the upper respiratory irritation caused
by formaldehyde can precipitate an acute asthmatic attack.
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\38\ Environmental Protection Agency, Assessment of health risks
to garment workers and certain home residents from exposure to
formaldehyde, Office of Pesticides and Toxic Substances, April 1987.
---------------------------------------------------------------------------
d. Acetaldehyde
Highway mobile sources contribute 20 percent of the national
acetaldehyde emissions and HDVs are responsible for approximately 33
percent of these highway mobile source emissions. Acetaldehyde is
classified as a probable human carcinogen and is considered moderately
toxic by the inhalation, oral, and intravenous routes. The primary
acute effect of exposure to acetaldehyde vapors is irritation of the
eyes, skin, and respiratory tract. At high concentrations, irritation
and pulmonary effects can occur, which could facilitate the uptake of
other contaminants.
e. Acrolein
HDVs are responsible for approximately 53 percent of the mobile
source highway emissions and about 8% of the total inventory (1996
NTI). Acrolein is extremely toxic to humans when inhaled, with acute
exposure resulting in upper respiratory tract irritation and
congestion. The Agency has developed a reference concentration for
inhalation (RfC) of acrolein of 0.02 micrograms/m3.\39\
Although no information is available on its carcinogenic effects in
humans, based on laboratory animal data, EPA considers acrolein a
possible human carcinogen.
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\39\ U.S. EPA (1993) Environmental Protection Agency, Integrated
Risk Information System (IRIS), Office of Health and Environmental
Assessment, Environmental Criteria and Assessment Office,
Cincinnati, OH.
---------------------------------------------------------------------------
f. Dioxins
Recent studies have confirmed that dioxins are formed by and
emitted from heavy-duty diesel trucks. These trucks are estimated to
account for 1.2 percent of total dioxin emissions. In general, dioxin
exposures of concern have primarily been noninhalation exposures
associated with human ingestion of certain foods (e.g., beef,
vegetables, and dairy products contaminated by dioxin). EPA has
classified dioxin as a probable human carcinogen. Acute and chronic
effects have also been reported for dioxin from oral and inhalation
routes of exposure.\40\
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\40\ U.S. EPA (1994) Health Assessment Document for 2,3,7,8-
Tetrachlorodibenzo-p-dioxin (TCDD) and Related Compounds: Volume III
Summary Draft Document. EPA/600/BP-92/001c.
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5. Other Environmental Effects
a. Acid Deposition
Acid deposition, or acid rain as it is commonly known, occurs when
SO2 and NOX react in the atmosphere with water,
oxygen, and oxidants to form various acidic compounds that later fall
to earth in the form of precipitation or dry deposition of acidic
particles.\41\ It contributes to damage of trees at high elevations and
in extreme cases may cause lakes and streams to become so acidic that
they cannot support aquatic life. In addition, acid deposition
accelerates the decay of building materials and paints, including
irreplaceable buildings, statues, and sculptures that are part of our
nation's cultural heritage. To reduce damage to automotive paint caused
by acid rain and acidic dry deposition, some manufacturers use acid-
resistant paints, at an average cost of $5 per vehicle--a total of $61
million per year if applied to all new cars and trucks sold in the U.S.
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\41\ Much of the information in this subsection was excerpted
from the EPA document, Human Health Benefits from Sulfate Reduction,
written under Title IV of the 1990 Clean Air Act Amendments, U.S.
EPA, Office of Air and Radiation, Acid Rain Division, Washington, DC
20460, November 1995.
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Acid deposition primarily affects bodies of water that rest atop
soil with a limited ability to neutralize acidic compounds. The
National Surface Water Survey (NSWS) investigated the effects of acidic
deposition in over 1,000 lakes larger than 10 acres and in thousands of
miles of streams. It found that acid deposition was the primary cause
of acidity in 75 percent of the acidic lakes and about 50 percent of
the acidic streams, and that the areas most sensitive to acid rain were
the Adirondacks, the mid-Appalachian highlands, the upper Midwest and
the high elevation West. The NSWS found that approximately 580 streams
in the Mid-Atlantic Coastal Plain are acidic primarily due to acidic
deposition. Hundreds of the lakes in the Adirondacks surveyed in the
NSWS
[[Page 35452]]
have acidity levels incompatible with the survival of sensitive fish
species. Many of the over 1,350 acidic streams in the Mid-Atlantic
Highlands (mid-Appalachia) region have already experienced trout losses
due to increased stream acidity. Emissions from U.S. sources contribute
to acidic deposition in eastern Canada, where the Canadian government
has estimated that 14,000 lakes are acidic. Acid deposition also has
been implicated in contributing to degradation of high-elevation spruce
forests that populate the ridges of the Appalachian Mountains from
Maine to Georgia. This area includes national parks such as the
Shenandoah and Great Smoky Mountain National Parks.
The SOX and NOX reductions from today's
proposal would help reduce acid rain and acid deposition, thereby
helping to reduce acidity levels in lakes and streams throughout the
country and help accelerate the recovery of acidified lakes and streams
and the revival of ecosystems adversely affected by acid deposition.
Reduced acid deposition levels would also help reduce stress on
forests, thereby accelerating reforestation efforts and improving
timber production. Deterioration of our historic buildings and
monuments, and of buildings, vehicles, and other structures exposed to
acid rain and dry acid deposition also would be reduced, and the costs
borne to prevent acid-related damage may also decline. While the
reduction in sulfur and nitrogen acid deposition would be roughly
proportional to the reduction in SOX and NOX
emissions, respectively, the precise impact of today's proposal would
differ across different areas.
b. Eutrophication and Nitrification
Nitrogen deposition into bodies of water can cause problems beyond
those associated with acid rain. The Ecological Society of America has
included discussion of the contribution of air emissions to increasing
nitrogen levels in surface waters in a recent major review of causes
and consequences of human alteration of the global nitrogen cycle in
its Issues in Ecology series.\42\ Long-term monitoring in the United
States, Europe, and other developed regions of the world shows a
substantial rise of nitrogen levels in surface waters, which are highly
correlated with human-generated inputs of nitrogen to their watersheds.
These nitrogen inputs are dominated by fertilizers and atmospheric
deposition.
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\42\ Vitousek, Peter M., John Aber, Robert W. Howarth, Gene E.
Likens, et al. 1997. Human Alteration of the Global Nitrogen Cycle:
Causes and Consequences. Issues in Ecology. Published by Ecological
Society of America, Number 1, Spring 1997.
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Human activity can increase the flow of nutrients into those waters
and result in excess algae and plant growth. This increased growth can
cause numerous adverse ecological effects and economic impacts,
including nuisance algal blooms, dieback of underwater plants due to
reduced light penetration, and toxic plankton blooms. Algal and
plankton blooms can also reduce the level of dissolved oxygen, which
can also adversely affect fish and shellfish populations. This problem
is of particular concern in coastal areas with poor or stratified
circulation patterns, such as the Chesapeake Bay, Long Island Sound, or
the Gulf of Mexico. In such areas, the ``overproduced'' algae tends to
sink to the bottom and decay, using all or most of the available oxygen
and thereby reducing or eliminating populations of bottom-feeder fish
and shellfish, distorting the normal population balance between
different aquatic organisms, and in extreme cases causing dramatic fish
kills.
Collectively, these effects are referred to as eutrophication,
which the National Research Council recently identified as the most
serious pollution problem facing the estuarine waters of the United
States (NRC, 1993). Nitrogen is the primary cause of eutrophication in
most coastal waters and estuaries.\43\ On the New England coast, for
example, the number of red and brown tides and shellfish problems from
nuisance and toxic plankton blooms have increased over the past two
decades, a development thought to be linked to increased nitrogen
loadings in coastal waters. Airborne NOX contributes from 12
to 44 percent of the total nitrogen loadings to United States coastal
water bodies. For example, approximately one-quarter of the nitrogen in
the Chesapeake Bay comes from atmospheric deposition.
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\43\ Much of this information was taken from the following EPA
document: Deposition of Air Pollutants to the Great Waters-Second
Report to Congress, Office of Air Quality Planning and Standards,
June 1997, EPA-453/R-97-011. A Third Report to Congress on
Deposition of Air Pollutants to the Great Waters will be forthcoming
the the next month. We will update this section with information
from the Third Report in the final rule.
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Excessive fertilization with nitrogen-containing compounds can also
affect terrestrial ecosystems.\44\ Research suggests that nitrogen
fertilization can alter growth patterns and change the balance of
species in an ecosystem. In extreme cases, this process can result in
nitrogen saturation when additions of nitrogen to soil over time exceed
the capacity of the plants and microorganisms to utilize and retain the
nitrogen. This phenomenon has already occurred in some areas of the
U.S.
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\44\ Terrestrial nitrogen deposition can act as a fertilizer. In
some agricultural areas, this effect can be beneficial.
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Deposition of nitrogen from heavy-duty vehicles contributes to
these problems. In the Chesapeake Bay region, modeling shows that
mobile source deposition occurs in relatively close proximity to
highways, such as the I-95 corridor which covers part of the Bay
surface. The proposed new standards for heavy-duty vehicles would
reduce total NOX emissions by 2.8 million tons in 2030. The
NOX reductions should reduce the eutrophication problems
associated with atmospheric deposition of nitrogen into watersheds and
onto bodies of water, particularly in aquatic systems where atmospheric
deposition of nitrogen represents a significant portion of total
nitrogen loadings.
c. POM Deposition
EPA's Great Waters Program has identified 15 pollutants whose
deposition to water bodies has contributed to the overall contamination
loadings to the these Great Waters.\45\ One of these 15 pollutants, a
group known as polycyclic organic matter (POM), are compounds that are
mainly adhered to the particles emitted by mobile sources and later
fall to earth in the form of precipitation or dry deposition of
particles. The mobile source contribution of the 7 most toxic POM is at
least 62 tons/year and represents only those POM that adhere to mobile
source particulate emissions.\46\ The majority of these emissions are
produced by diesel engines.
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\45\ Much of this information was taken from the following EPA
document: Deposition of Air Pollutants to the Great Waters-Second
Report to Congress, Office of Air Quality Planning and Standards,
June 1997, EPA-453/R-97-011. You are referred to that document for a
more detailed discussion. A Third Report to Congress on Deposition
of Air Pollutants to the Great Waters will be forthcoming the the
next month. We will update this section with information from the
Third Report in the final rule.
\46\ The 1996 National Toxics Inventory, Office of Air Quality
Planning and Standards, October 1999.
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POM is generally defined as a large class of chemicals consisting
of organic compounds having multiple benzene rings and a boiling point
greater than 100 deg.C. Polycyclic aromatic hydrocarbons are a chemical
class that is a subset of POM. POM are naturally occurring substances
that are byproducts of the incomplete combustion of fossil fuels and
plant and animal biomass (e.g., forest fires). Also, they occur as
byproducts from steel and
[[Page 35453]]
coke productions and waste incineration.
Evidence for potential human health effects associated with POM
comes from studies in animals (fish, amphibians, rats) and in human
cells culture assays. Reproductive, developmental, immunological, and
endocrine (hormone) effects have been documented in these systems. Many
of the compounds included in the class of compounds known as POM are
classified by EPA as probable human carcinogens based on animal data.
The particulate reductions from today's proposal would help reduce
not only the particulate emissions from highway diesel engines but also
the deposition of the POM adhering to the particles, thereby helping to
reduce health effects of POM in lakes and streams, accelerate the
recovery of affected lakes and streams, and revive the ecosystems
adversely affected.
C. Contribution from Heavy-Duty Vehicles
Nationwide, heavy-duty vehicles contribute about 15 percent of the
total NOX inventory, and 29 percent of the mobile source
inventory. Heavy-duty NOX emissions also contribute to fine
particulate concentrations in ambient air due to the transformation in
the atmosphere to nitrates. The NOX reductions resulting
from today's proposed standards would therefore have a considerable
impact on the national NOX inventory. Light and heavy-duty
mobile sources account for 24 percent of the PM10 (excluding
the contribution of miscellaneous and natural sources), and heavy-duty
vehicles account for 14 percent of the mobile source portion of
national PM10 emissions. The heavy-duty portion of the
inventory is often greater in the cities, and the reductions proposed
in this rulemaking would have a relatively greater benefit in those
areas.
1. NOX Emissions
Heavy-duty vehicles are important contributors to the national
inventories of NOX emissions, and they contribute moderately
to national VOC pollution. The Draft RIA for this proposal describes in
detail recent emission inventory modeling completed by EPA. HDVs are
expected to contribute approximately 15 percent of annual
NOX emissions in 2007 (Table II.C-1).
Table II.C-1.--2007 Heavy-Duty Vehicle Contribution to Urban NOX
Inventories
[Amounts in percent]
------------------------------------------------------------------------
Portion
Portion of
Metropolitan statistical area of mobile
total source
NOX NOX
------------------------------------------------------------------------
National.............................................. 15% 29%
Albuquerque........................................... 25% 38%
Atlanta............................................... 23% 36%
San Francisco......................................... 23% 29%
Spokane............................................... 23% 29%
Seattle............................................... 22% 26%
Dallas................................................ 22% 28%
Charlotte............................................. 21% 34%
Washington............................................ 20% 37%
Los Angeles........................................... 20% 26%
San Antonio........................................... 20% 31%
New York.............................................. 19% 30%
Miami................................................. 18% 23%
Phoenix............................................... 18% 28%
Philadelphia.......................................... 18% 30%
Cleveland............................................. 17% 30%
St. Louis............................................. 16% 34%
------------------------------------------------------------------------
The contribution of heavy-duty vehicles to NOX
inventories in many MSAs is significantly greater than that reflected
in the national average. For example, HDV contributions to
NOX in Albuquerque, Atlanta, San Francisco, Spokane,
Seattle, and Dallas are projected to be 22 to 25 percent of the MSA-
specific inventories in 2007, which is significantly higher than the
national average. These data are based largely on our Tier 2
inventories and have been adjusted to reflect new information regarding
the VMT split between light-duty and heavy-duty vehicles as discussed
in the draft RIA. These data will be further updated for the final rule
to reflect more recent modeling.
2. PM Emissions
Nationally, we estimate that primary emissions of PM10
to be about 33.2 million tons/year in 2007. Fugitive dust, other
miscellaneous sources and crustal material (wind erosion) comprise
approximately 90 percent of the 2007 PM10 inventory.
However, there is evidence from ambient studies that emissions of these
materials may be overestimated and/or that once emitted they have less
of an influence on monitored PM concentration than this inventory share
would suggest. Mobile sources account for 24 percent of the
PM10 inventory (excluding the contribution of miscellaneous
and natural sources) and highway heavy-duty engines, the subject of
today's action, account for 14 percent of the mobile source portion of
national PM10 emissions.
The contribution of heavy-duty vehicle emissions to total PM
emissions in some metropolitan areas is substantially higher than the
national average. This is not surprising, given the high density of
these engines operating in these areas. For example, in Albuquerque,
Pittsburgh, St. Louis, and Atlanta, the estimated 2007 highway heavy-
duty vehicle contribution to mobile source PM10 ranges from
16 to 21 percent, and the national percent contribution to mobile
sources for 2007 is projected to be about 14 percent. As illustrated in
Table II.C-2 , heavy-duty vehicles operated Washington, Fairbanks,
Billings, and Detroit also account for a slightly higher portion of the
mobile source PM inventory than the national average. These data are
based largely on our Tier 2 inventories and have been adjusted to
reflect new information regarding the VMT split between light-duty and
heavy-duty vehicles as discussed in the draft RIA. These data will be
further updated for the final rule to reflect more recent modeling.
Importantly, these estimates do not include the contribution from
secondary PM which is an important component of diesel PM.
Table II.C-2.--2007 Heavy-Duty Vehicle Contribution to Urban Mobile
Source PM Inventories
------------------------------------------------------------------------
PM10
contribution
Metropolitan statistical area from HDVs
(in percent)
------------------------------------------------------------------------
National.................................................. 14
Albuquerque............................................... 21
Pittsburgh................................................ 18
St. Louis................................................. 17
Atlanta................................................... 16
Washington................................................ 15
Fairbanks................................................. 15
Billings.................................................. 15
Detroit................................................... 15
------------------------------------------------------------------------
In addition to the national inventories, investigations have been
conducted in certain urban areas which provide information about the
contribution of HD diesel vehicles and engines to ambient
PM2.5 concentrations. This is particularly relevant as
diesel PM, for the most part, is composed of fine particles under 2.5
microns. Information about ambient concentrations of diesel PM and the
relative contribution of diesel engines to ambient PM levels is
available from source-receptor models, dispersion models, and elemental
carbon measurements. The most commonly used receptor model for
quantifying concentrations of diesel PM at a
[[Page 35454]]
receptor site is the chemical mass balance model (CMB). Input to the
CMB model includes PM measurements made at the receptor site as well as
measurements made of each of the source types suspected to impact the
site. Because of problems involving the elemental similarity between
diesel and gasoline emission profiles and their co-emission in time and
space, it is necessary to carefully quantify chemical molecular species
that provide markers for separation of these sources. Recent advances
in chemical analytical techniques have facilitated the development of
sophisticated molecular source profiles, including detailed speciation
of organic compounds, which allow the apportionment of PM to gasoline
and diesel sources with increased certainty. Older studies that made
use of only elemental source profiles have been published and are
summarized here, but are subject to more uncertainty. It should be
noted that since receptor modeling is based on the application of
source profiles to ambient measurements, this estimate of diesel PM
concentrations does not distinguish between on-road and non-road
sources for diesel PM. In addition, this model accounts for primary
emissions of diesel PM only; the contribution of secondary aerosols is
not included.
Dispersion models estimate ambient levels of PM at a receptor site
on the basis of emission factors for the relevant sources and the
investigator's ability to model the advection, mixing, deposition, and
chemical transformation of compounds from the source to the receptor
site. Dispersion models can provide the ability to distinguish on-
highway from off-highway diesel source contributions and can be used to
estimate the concentrations of secondary aerosols from diesel exhaust.
Dispersion modeling is being conducted by EPA to estimate county-
specific concentrations of, and exposures to, several toxic species,
including diesel PM. Results from this model are expected in 2000.
Elemental carbon is a major component of diesel exhaust,
contributing approximately 60-80 percent of diesel particulate mass,
depending on engine technology, fuel type, duty cycle, lube oil
consumption, and state of engine maintenance.\47\ \48\ \49\ \50\ In
most ambient environments, diesel PM is one of the major contributors
to elemental carbon, with other potential sources including gasoline
exhaust; combustion of coal, oil, or wood; charbroiling; cigarette
smoke; and road dust. Because of the large portion of elemental carbon
in diesel PM, and the fact that diesel exhaust is one of the major
contributors to elemental carbon in most ambient environments, diesel
PM concentrations can be bounded using elemental carbon measurements.
One approach for calculating diesel PM concentrations from elemental
carbon measurements is presented in the draft Health Assessment
Document for Diesel Emissions. The surrogate diesel PM calculation is a
useful approach for estimating diesel PM in the absence of a more
sophisticated modeling analysis for locations where elemental carbon
concentrations are available.
---------------------------------------------------------------------------
\47\ Zaebst, D.D., Clapp D.E., Blake L.M., Marlow D.A.,
Steenland K., Hornung R.W., Scheutzle D. and J. Butler (1991)
Quantitative Determination of Trucking Industry Workers Exposures to
Diesel Exhaust Particles. Am. Ind. Hyg. Assoc. J., 52:529-541.
\48\ Graboski, M. S., McCormick, R.L., Yanowitz, J., and L.B.A.
Ryan (1998) Heavy-Duty Diesel Testing for the Northern Front Range
Air Quality Study. Colorado Institute for Fuels and Engine Research.
\49\ Warner-Selph, M. A., Dietzmann, H.E. (1984)
Characterization of Heavy-Duty Motor Vehicle Emissions Under
Transient Driving Conditions. Southwest Research Institute. EPA-600/
3-84-104.
\50\ Pierson, W.R., Brachazek, W. W. (1983) Particulate Matter
Associated with Vehicles on the Road. Aerosol Sci. & Tech. 2:1-40.
---------------------------------------------------------------------------
Ambient concentrations of diesel PM reported for the period before
1990 when no nationwide PM controls were in place for HDVs suggest that
annually averaged diesel PM levels in urban and suburban environments
ranged from approximately 1.9 to 11.6 micrograms/m3 (Table
II.C-3a and Table II.C-3b). On individual days, diesel PM
concentrations as high as 22 micrograms/m3 were reported.
Studies reporting annual average diesel PM concentrations in urban and
suburban areas after 1990 indicate that diesel PM concentrations range
from approximately 0.5 to 3.6 micrograms/m3, with studies
over short periods amidst dense bus traffic averaging 29.2 micrograms/
m3 and ranging up to 46.7 micrograms/m3 (Table
II.C-3a and Table II.C-3b). Dispersion modeling conducted in Southern
California reported that the highway contribution to the reported
diesel PM levels ranged from 63-89 percent of the total diesel PM
(Table II.C-3b). In the two dispersion model studies reporting diesel
PM in Southern California in August 1987 and September 1996, secondary
formation of diesel PM accounted for 27 percent to 67 percent of the
total diesel PM (Table II.C-3b). Using elemental carbon as a surrogate
for diesel PM suggests that diesel PM concentrations measured in some
urban and rural areas in the 1990s range from approximately 0.4 to 4.5
micrograms/m3 in urban environments and 0.2 to 1.3
micrograms/m3 in rural environments (Table II.C-3c).
Table II.C-3a.--Ambient Diesel PM Concentrations and Contribution to Total Ambient PM10 and PM2.5 From Chemical
Mass Balance Studies
----------------------------------------------------------------------------------------------------------------
Diesel PM2.5 Diesel PM % of
Location Year of sampling g/m3 total PM
----------------------------------------------------------------------------------------------------------------
West LA, CA................................ 1982, annual....................... 4.4 13
Pasadena, CA............................... 1982, annual....................... 5.3 19
Rubidoux, CA............................... 1982, annual....................... 5.4 13
Downtown LA, CA a.......................... 1982, annual....................... 11.6 36
Phoenix area, AZ b......................... 1989-90, Winter.................... * 4-22 50
Phoenix, AZ c.............................. 1994-95, Winter.................... 0-5.3 0-27
California, 15 Air Basins d................ 1988-92, annual.................... * 0.2-3.6
Manhattan, NY e............................ 1993, Spring, 3 d.................. * 13.2-46.7 31-68
Welby and Brighton, CO f................... 1996-97, Winter, 60 d.............. 0-7.3 0-26
----------------------------------------------------------------------------------------------------------------
* PM10. The reader should note that 80-95% of diesel PM is PM2.5.
Not Available.
a Schauer, J.J., Rogge, W.F., Hildemann, L.M., Mazureik, M.A., Cass, G.R., and B.R.T. Simoneit (1996) Source
Apportionment of Airborne particulate Matter Using Organic Compounds as Tracers. Atmos. Environ. 30(22):3837-
3855.
[[Page 35455]]
b Chow, J.C., Watson, J.G., Richards, L.W., Haase, D.L., McDade, C., Dietrich, D.L., Moon, D., and C. Sloane
(1991) The 1989-1990 Phoenix PM10 Study. Volume II: Source Apportionment. Final Report. DRI Document No.
8931.6F1, prepared for Arizona Department of Environmental Air Quality, Phoenix, AZ, by Desert Research
Institute, Reno, NV.
c Maricopa Association of Governments. The 1999 Brown Cloud Project for the Maricopa Association of Governments
Area, Revised Draft Report, November 1999.
d California Environmental Protection Agency (1998) Report to the Air Resources Board on the Proposed
Identification of Diesel Exhaust as a Toxic Air Contaminant. Appendix III, Part A: Exposure Assessment, April
1998.
e Wittorff, D.N., Gertler, A.W., Chow, J.C., Barnard, W.R. Jongedyk, H.A. The Impact of Diesel Particulate
Emissions on Ambient Particulate Loadings. Air & Waste Management Association 87th Annual Meeting, Cincinnati,
OH, June 19-24, 1994.
f Fujita, E., Watson, J.G., Chow, J.C., Robinson, N.F., Richards, L.W., Kumar, N. (1998) The Northern Front Rage
Air Quality Study Final Report Volume C: Source Apportionment and Simulation Methods and Evaluation. http://nfraqs.cira.colostate.edu/
Table II.C-3b.--Ambient Diesel PM Concentrations and Contribution to Total Ambient PM2.5 From Dispersion
Modeling Studies
----------------------------------------------------------------------------------------------------------------
Diesel PM2.5 Diesel PM % of
Location Year of sampling /m3 total PM
----------------------------------------------------------------------------------------------------------------
Azusa, CA.................................. 1982, annual....................... ** 1.4 5
Pasadena, CA............................... 1982, annual....................... ** 2.0 7
Anaheim, CA................................ 1982, annual....................... ** 2.7 12
Long Beach, CA............................. 1982, annual....................... ** 3.5 13
Downtown LA, CA............................ 1982, annual....................... ** 3.5 11
Lennox, CA................................. 1982, annual....................... ** 3.8 13
West LA, CA a.............................. 1982, annual....................... ** 3.8 16
Claremont, CA b............................ 18-19 Aug 1987..................... 2.4 8
Long Beach, CA............................. 24 Sept 1996....................... +1.9(2.6) 8
Fullerton, CA.............................. 24 Sept 1996....................... + 2.4(3.9) 9
Riverside, CA c............................ 25 Sept 1996....................... + 4.4(13.3) 12
----------------------------------------------------------------------------------------------------------------
+ Value in parenthesis includes secondary diesel PM (nitrate, ammonium, sulfate and hydrocarbons) due to
atmospheric reactions of primary diesel emissions of NOX, SO2 and hydrocarbons.
** On-road diesel vehicles only; All other values are for on-road plus nonroad diesel emissions.
a Cass, G.R. and H.A. Gray (1995) Regional Emissions and Atmospheric Concentrations of Diesel Engine Particulate
Matter: Los Angeles as a Case Study. In: Diesel Exhaust: A Critical Analysis of Emissions, Exposure, and
Health Effects. A Special Report of the Institute's Diesel Working Group. Health Effects Institute, Cambridge,
MA, pp. 125-137.
b Kleeman, M.J., Cass, G.R. (1999a) Identifying the Effect of Individual Emissions Sources on Particulate Air
Quality Within a Photochemical Aerosol Processes Trajectory Model. Atmos. Eviron. 33:4597-4613.
c Kleeman, M.J., Hughes, L.S., Allen, J.O., Cass, G.R. (1999b) Source Contributions to the Size and Composition
Distribution of Atmospheric Particles: Southern California in September 1996. Environ. Sci. Technol. 33:4331-
4351.
Table II.C-3c.--Ambient Diesel PM Concentrations and Contribution to Total Ambient PM2.5 From Elemental Carbon
Measurements
----------------------------------------------------------------------------------------------------------------
Diesel PM2.5
Location Year of sampling g/ Diesel PM % of
m\3\ total PM
----------------------------------------------------------------------------------------------------------------
Boston, MA................................. 1995, annual....................... 0.7-1.7 3-15
Rochester, NY.............................. 1995, annual....................... 0.4-0.8 2-9
Quabbin, MA................................ 1995, annual....................... 0.2-0.6 1-6
Reading, MA................................ 1995, annual....................... 0.4-1.3 2-7
Brockport, NY a............................ 1995, annual....................... 0.2-0.5 1-5
Washington, DC b........................... 1992-1995, annual.................. 1.3-1.8 6-10
South Coast Air Basin c.................... 1995-1996, annual.................. 2.4-4.5
----------------------------------------------------------------------------------------------------------------
The Multiple Air Toxics Exposure Study in the South Coast Air Basin reported average annual values for 8 sites
in the South Coast Basin.
Not Available.
a Salmon, L.G., Cass, G.R., Pedersen, D.U., Durant, J.L., Gibb, R., Lunts, A., and M. Utell (1997) Determination
of fine particle concentration and chemical composition in the northeastern United States, 1995. Progress
Report to Northeast States for Coordinated Air Use Management (NESCAUM), September 1999.
b Sisler, J.F. (1996) Spatial and Seasonal Patterns and Long Term Variability of the Composition of the Haze in
the United States: An Analysis of Data from the IMPROVE Network. Cooperative Institute for Research in the
Atmosphere. Colorado State University. ISSN: 0737-5352-32.
c South Coast Air Quality Management District (2000) Multiple Air Toxics Exposure Study in the South Coast Air
Basin (MATES-II), Final Report and Appendices, March 2000.
The city-specific emission inventory analysis and independent
investigations of ambient PM2.5 summarized here indicate
that the contribution of diesel engines to PM inventories in several
urban areas around the U.S. is much higher than indicated by the
national PM emission inventories only. One possible explanation for
this is the concentrated use of diesel engines in certain local or
regional areas which is not well represented by the national, yearly
average presented in national PM emission inventories. Another reason
may be underestimation of the in-use diesel PM emission rates. Our
current modeling incorporates deterioration only as would be
experienced in properly maintained, untampered vehicles. We are
currently in the process of reassessing the rate of in-use
deterioration of diesel engines and vehicles which could greatly
increase the contribution of HDVs to diesel PM.
Moreover, heavy-duty vehicles will have a more important
contributing role in ambient PM2.5 concentrations than in
ambient PM10 concentrations. In addition, the absolute
contribution from heavy-duty vehicles is larger in relationship to the
numerically lower PM2.5 standard, making them more
[[Page 35456]]
important to attainment and maintenance.
3. Environmental Justice
Environmental justice is a priority for EPA. The Federal government
documented its concern over this issue through issuing Executive Order
12898, Federal Actions To Address Environmental Justice in Minority
Populations and Low-Income Populations (February 11, 1994). This Order
requires that federal agencies make achieving environmental justice
part of their mission. Similarly, the EPA created an Office of
Environmental Justice (originally the Office of Environmental Equity)
in 1992, commissioned a task force to address environmental justice
issues, oversees a Federal Advisory Committee addressing environmental
justice issues (the National Environmental Justice Advisory Council),
and has developed an implementation strategy as required under
Executive Order 12898.
Environmental justice is a movement promoting the fair treatment of
people of all races, income, and culture with respect to the
development, implementation, and enforcement of environmental laws,
regulations, and policies. Fair treatment implies that no person or
group of people should shoulder a disproportionate share of any
negative environmental impacts resulting from the execution of this
country's domestic and foreign policy programs.
For the last several years, environmental organizations and
community-based citizens groups have been working together to phase out
diesel buses in urban areas. For example, the Natural Resources Defense
Council initiated a ``Dump Dirty Diesel'' campaign in the mid-1990s to
press for the phase out of diesel buses in New York City. Other
environmental organizations operating in major cities such as Boston,
Newark, and Los Angeles have joined this campaign. The Coalition for
Clean Air worked with NRDC and other experts to perform exposure
monitoring in communities located near distribution centers where
diesel truck traffic is heavy. These two organizations concluded that
facilities with heavy truck traffic are exposing local communities to
diesel exhaust concentrations far above the average levels in outdoor
air. The report states: ``These affected communities, and the workers
at these distribution facilities with heavy diesel truck traffic, are
bearing a disproportionate burden of the health \51\-\62\
risks.'' \63\ Other diesel ``hot spots'' identified by the groups are
bus terminals, truck and bus maintenance facilities, retail
distribution centers, and busy streets and highways.
---------------------------------------------------------------------------
\51\-\62\ [Reserved]
\63\ Exhausted by Diesel: How America's Dependence on Diesel
Engines Threatens Our Health, Natural Resources Defense Council,
Coalition for Clean Air, May 1998.
---------------------------------------------------------------------------
Although the new standards proposed in this rulemaking would not
reroute heavy-duty truck traffic or relocate bus terminals, they would
be expected to improve air quality across the country and would provide
increased protection to the public against a wide range of health
effects, including chronic bronchitis, respiratory illnesses, and
aggravation of asthma symptoms. These air quality and public health
benefits could be expected to mitigate some of the environmental
justice concerns related to heavy-duty vehicles since the proposal
would provide relatively larger benefits to heavily impacted areas.
D. Anticipated Emissions Benefits
This subsection presents the emission benefits we anticipate from
heavy-duty vehicles as a result of our proposed NOX, PM, and
NMHC emission standards for heavy-duty engines. The graphs and tables
that follow illustrate the Agency's projection of future emissions from
heavy-duty vehicles for each pollutant. The baseline case represents
future emissions from heavy-duty vehicles at present standards
(including the MY2004 standards). The controlled case quantifies the
future emissions of heavy-duty vehicles if the new standards proposed
in this rulemaking are finalized and implemented.
1. NOX Reductions
The Agency expects substantial NOX reductions on both a
percentage and a tonnage basis from this proposal. As illustrated in
the following graph, the air quality benefit expected from this
proposal is a reduction in NOX emissions from HDVs of 2.0
million tons in 2020.\64\ The Draft RIA provides additional projections
between 2007 and 2030. As stated previously, HDVs contribute about 15
percent to the national NOX inventory for all sources. The
NOX standards proposed in this rule would have a substantial
impact on the total NOX inventory so that in 2030, HDVs
under today's proposed standards would account for only 3 percent of
the national NOX inventory. Figure II.D-1 shows our national
projections of total NOX emissions with and without the
proposed engine controls. This includes both exhaust and crankcase
emissions. The proposed standards should result in about a 90 percent
reduction in NOX from new engines.\65\
---------------------------------------------------------------------------
\64\ The baseline used for this calculation is the 2004 HDV
standards (64 FR 58472). These reductions are in addition to the
NOX emissions reductions projected to result from the
2004 HDV standards.
\65\ We include in the NOX projections excess
emissions, developed by the EPA's Office of Enforcement and
Compliance, that were emitted from many model year 1988-98 diesel
engines. This is described in more detail in Chapter 2 of the draft
RIA.
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[[Page 35457]]
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2. PM Reductions
As stated previously, HDVs contribute about 14 percent to the
national PM10 inventory for mobile sources. The 90 percent
reduction in the PM standard for HDVs proposed in this rule would have
a substantial impact on the mobile source PM inventory, so that in 2030
HDVs under today's proposed standards would account for only 3 percent
of the national mobile source PM inventory.
The majority of the projected PM reductions are directly a result
of the proposed exhaust PM standard. However, a modest amount of PM
reductions would come from reducing sulfur in the fuel. For the
existing fleet of heavy-duty vehicles, a small fraction of the sulfur
in diesel fuel is emitted directly into the atmosphere as direct
sulfate, and a portion of the remaining fuel sulfur is transformed in
the atmosphere into sulfate particles, referred to as indirect sulfate.
Reducing sulfur in the fuel decreases the amount of direct sulfate PM
emitted from heavy-duty diesel engines and the amount of heavy-duty
diesel engine SOX emissions that are transformed into
indirect sulfate PM in the atmosphere.\66\ For engines meeting the
proposed standards, we consider low sulfur fuel to be necessary to
enable the PM control technology. In other words, we do not claim an
additional benefit beyond the proposed standard for reductions in
direct sulfate PM. However, once the proposed low sulfur fuel
requirements go into effect, pre-2007 model year engines would also be
using low sulfur fuel. Because these engines would be certified with
high sulfur fuel, they would achieve reductions in PM beyond their
certification levels.
---------------------------------------------------------------------------
\66\ Sulfate forms a significant portion of total fine
particulate matter in the Northeast. Chemical speciation data in the
Northeast collected in 1995 shows that the sulfate fraction of fine
particulate matter ranges from 20 and 27 percent of the total fine
particle mass. Determination of Fine Particle and Coarse Particle
Concentrations and Chemical Composition in the Northeastern United
States, 1995, NESCAUM, prepared by Cass, et al., September 1999.
---------------------------------------------------------------------------
Figure II.D-2 shows our national projections of total HDV PM
emissions with and without the proposed engine controls. This figure
includes crankcase emissions and the direct sulfate PM benefits due to
the use of low sulfur fuel by the existing fleet. These direct sulfate
PM benefits from the existing fleet are also graphed separately. The
proposed standards should result in about a 90 percent reduction in
total PM from new engines. The proposed low sulfur fuel should result
in about a 95 percent reduction in direct sulfate PM from pre-2007
engines. Due to complexities of the conversion and removal processes of
sulfur dioxide, we do not attempt to quantify the indirect sulfate
reductions that would be derived from this rulemaking. Nevertheless,
the Agency believes that these indirect sulfate PM reductions are
likely to contribute significant additional benefits to public health
and welfare. The air quality benefit of the new PM standards and low
sulfur diesel fuel are presented in Figure II.D-2, indicating a 83,000
ton direct PM reduction in 2020.
[[Page 35458]]
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3. NMHC Reductions
The standards described in section III are designed to be feasible
for both gasoline and diesel heavy-duty vehicles. The NMHC standards
are expected to be more of a challenge for the gasoline vehicles than
for the diesel vehicles, however. (The converse is true for the PM
standards.) Based on our analysis of the aftertreatment technology
described in section III, diesel engines meeting the proposed PM
standard are expected to have NMHC emissions levels well below the
standard in use. Furthermore, although the proposed standards give
manufacturers the same phase-in for NMHC as for NOX, we
model the NMHC reductions for diesel vehicles to be fully in place in
2007. We believe the use of aftertreatment for PM control would cause
the NMHC levels to be below the proposed standards as soon as the PM
standard goes into effect in 2007. We request comment on this
assumption.
HDVs account for about 3 percent of national VOC and 8 percent from
mobile sources in 2007. Figure II.D-3 shows our national projections of
total NMHC emissions with and without the proposed engine controls.
This includes both exhaust emissions and evaporative emissions. As
presented in Figure II.D-3, the Agency projects a reduction of 230,000
tons of NMHC in 2020 due to the proposed standards.
[[Page 35459]]
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4. Additional Emissions Benefits
This subsection looks at tons/year emission inventories of CO,
SOX, and air toxics from HDEs. Although we are not including
stringent standards for these pollutants in our proposed standards, we
believe the proposed standards would result in reductions in CO,
SOX, and air toxics. Here, we present our anticipated
benefits.
a. CO Reductions
In 2007, HDVs are projected to contribute to approximately 5
percent of national CO and 9 percent of CO from mobile sources.
Although it does not propose new CO emission standards, today's
proposal would nevertheless be expected to result in a considerable
reduction in CO emissions from heavy-duty vehicles. CO emissions from
heavy-duty diesel vehicles, although already very low, would likely be
reduced by an additional 90 percent due to the presence of
aftertreatment devices. CO emissions from heavy-duty gasoline vehicles
would also likely decline as the NMHC emissions are decreased. Table
II.D-1 presents the projected reductions in CO emissions from HDVs.
Table II.D-1.--Estimated Reductions in CO
------------------------------------------------------------------------
CO benefit (thousand short
Calendar year tons)
------------------------------------------------------------------------
2007...................................... 71
2010...................................... 405
2015...................................... 911
2020...................................... 1,250
2030...................................... 1,640
------------------------------------------------------------------------
b. SOX Reductions
HDVs are projected to emit approximately 0.5 percent of national
SOX and 7 percent of mobile source SOX in 2007.
We are proposing significant reductions in diesel fuel sulfur to enable
certain emission control devices to function properly. We expect
SOX emissions to decline as a direct benefit of low sulfur
diesel fuel. The majority of these benefits would be from heavy-duty
highway diesel vehicles; however, some benefits would also come from
highway fuel burned in other applications. As discussed in greater
detail in the section on PM reductions, the amount of sulfate particles
(direct and indirect) formed as a result of diesel exhaust emissions
would decline for all HD diesel engines operated on low sulfur diesel
fuel, including the current on-highway HD diesel fleet, and those non-
road HD diesel engines that may operate on low sulfur diesel fuel in
the future. Table II.D-2 presents our estimates of SOX
reductions resulting from the proposed low sulfur fuel.
Table II.D-2.--Estimated Reductions in SOX Due to Low Sulfur Fuel
------------------------------------------------------------------------
SOX
benefit
Calendar year (thousand
short
tons)
------------------------------------------------------------------------
2007........................................................ 101
2010........................................................ 106
2015........................................................ 115
2020........................................................ 124
2030........................................................ 139
------------------------------------------------------------------------
c. Air Toxics Reductions
This proposal establishes new hydrocarbon and formaldehyde
standards for heavy-duty vehicles. Hydrocarbons are a broad class of
chemical compounds containing carbon and hydrogen. Many forms of
hydrocarbons, such as formaldehyde, are directly hazardous and
contribute to what are collectively called ``air toxics.'' Air toxics
are pollutants known to cause or suspected of causing cancer or other
serious human health effects or ecosystem damage. The Agency has
identified as least 20 compounds emitted from on-road gasoline vehicles
that have toxicological potential, 19 of which are emitted by diesel
vehicles as well as an additional 20 compounds which have been listed
as toxic air
[[Page 35460]]
contaminants by California ARB.\67\ \68\ This proposal also seeks to
reduce emissions of diesel exhaust and diesel particulate matter (see
section II.B for a discussion of health effects).
---------------------------------------------------------------------------
\67\ National Air Quality and Emissions Trends Report, 1997,
(EPA 1998), p. 74.
\68\ California Environmental Protection Agency (1998) Report to
the Air Resources Board on the Proposed Identification of Diesel
Exhaust as a Toxic Air Contaminant, Appendix III, Part A: Exposure
Assessment, April 1998.
---------------------------------------------------------------------------
Our assessment of heavy-duty vehicle (gasoline and diesel) air
toxics focuses on the following compounds with cancer potency estimates
that have significant emissions from heavy-duty vehicles: benzene,
formaldehyde, acetaldehyde, and 1,3-butadiene. These compounds are an
important, but limited, subset of the total number of air toxics that
exist in exhaust and evaporative emissions from heavy-duty vehicles.
The reductions in air toxics quantified in this section represent only
a fraction of the total number and amount of air toxics reductions
expected from the proposed new hydrocarbon standards.
For this analysis, we estimate that air toxic emissions are a
constant fraction of hydrocarbon exhaust emissions. Because air toxics
are a subset of hydrocarbons, and new emission controls are not
expected to preferentially control one type of air toxic over another,
the selected air toxics chosen for this analysis are expected to
decline by the same percentage amount as hydrocarbon exhaust emissions.
We have not performed a separate analysis for the new formaldehyde
standard since compliance with the hydrocarbon standard should result
in compliance with the formaldehyde standard for all petroleum-fueled
engines. The Draft RIA provides more detail on this analysis. Table
II.D-3 shows the estimated air toxics reductions associated with the
anticipated reductions in hydrocarbons.
Table II.D-3.--Estimated Reductions in Air Toxics
[Short tons]
----------------------------------------------------------------------------------------------------------------
1,3-
Calendar year Benzene Formaldehyde Acetaldehyde Butadiene
----------------------------------------------------------------------------------------------------------------
2007...................................................... 153 831 318 65
2010...................................................... 932 4,750 1,870 382
2015...................................................... 2,080 11,400 4,460 909
2020...................................................... 2,780 15,800 6,120 1,250
2030...................................................... 3,510 20,500 7,850 1,600
----------------------------------------------------------------------------------------------------------------
E. Clean Heavy-Duty Vehicles and Low-Sulfur Diesel Fuel Are Critically
Important for Improving Human Health and Welfare
Despite continuing progress in reducing emissions from heavy-duty
engines, emissions from these engines continue to be a concern for
human health and welfare. Ozone continues to be a significant public
health problem, and affects not only people with impaired respiratory
systems, such as asthmatics, but healthy children and adults as well.
Ozone also causes damage to plants and has an adverse impact on
agricultural yields. Diesel exhaust also continues to be a significant
public health concern.
Today's proposal would reduce NOX, VOC, CO, PM, and
SOX emissions from these heavy-duty vehicles substantially.
These reductions would help reduce ozone levels nationwide and reduce
the frequency and magnitude of predicted exceedances of the ozone
standard. These reductions would also help reduce PM levels, both by
reducing direct PM emissions and by reducing emissions that give rise
to secondary PM. The NOX and SOX reductions would
help reduce acidification problems, and the NOX reductions
would help reduce eutrophication problems. The PM and NOX
standard proposed today would help improve visibility. All of these
reductions could be expected to have a beneficial impact on human
health and welfare by reducing exposure to ozone, PM, and other air
toxics and thus reducing the cancer and noncancer effects associated
with exposure to these substances.
III. Heavy-Duty Engine and Vehicle Standards
In this section, we describe the vehicle and engine standards we
are proposing today to respond to the serious air quality needs
discussed in section II. Specifically, we discuss:
The CAA and why we are proposing new heavy-duty standards.
The technology opportunity for heavy-duty vehicles and
engines.
Our proposed HDV and HDE standards, and our proposed
phase-in of those standards.
Why we believe the stringent standards being proposed
today are feasible in conjunction with the low-sulfur gasoline required
under the recent Tier 2 rule and the low-sulfur diesel fuel being
proposed today.
The effects of diesel fuel sulfur on the ability to meet
the proposed standards, and what happens if high sulfur diesel fuel is
used.
A possible reassessment of the technology and diesel fuel
sulfur level needed for diesels to comply with today's proposed
NOX standard.
We welcome comment on the levels and timing of the proposed
emissions standards, and on the technological feasibility discussion
and supporting analyses. We also request comment on the timing of the
proposed diesel fuel standard in conjunction with these proposed
emission standards. We ask that commenters provide any technical
information that supports the points made in their comments.
A. Why Are We Setting New Heavy-Duty Standards?
We are proposing heavy-duty vehicle and engine standards and
related provisions under section 202(a)(3) of the CAA which authorizes
EPA to establish emission standards for new heavy-duty motor vehicles
(see 42 U.S.C. 7521(a)(3)). Section 202(a)(3)(A) requires that such
standards ``reflect the greatest degree of emission reduction
achievable through the application of technology which the
Administrator determines will be available for the model year to which
such standards apply, giving appropriate consideration to cost, energy,
and safety factors associated with the application of such
technology.'' Section 202(a)(3)(B) allows EPA to take into account air
quality information in revising such standards. Because heavy-duty
engines contribute greatly to a number of serious air pollution
problems, especially the health and welfare effects of ozone, PM, and
air toxics, and because millions of Americans live in areas that exceed
the
[[Page 35461]]
national air quality standards for ozone or PM, we believe the air
quality need for tighter heavy-duty standards is well founded. This,
and our belief that a significant degree of emission reduction from
heavy-duty vehicles and engines is achievable through the application
of new diesel emission control technology, further refinement of well
established gasoline emission controls, and reductions of diesel fuel
sulfur levels, leads us to believe that new emission standards are
warranted.
B. Technology Opportunity for Heavy-Duty Vehicles and Engines
For the past 30 or more years, emission control development for
gasoline vehicles and engines has concentrated most aggressively on
exhaust emission control devices. These devices currently provide as
much as or more than 95 percent of the emission control on a gasoline
vehicle. In contrast, the emission control development work for diesels
has concentrated on improvements to the engine itself to limit the
emissions leaving the combustion chamber.
However, during the past 15 years, more development effort has been
put into diesel exhaust emission control devices, particularly in the
area of PM control. Those developments, and recent developments in
diesel NOX control devices, make the advent of diesel
exhaust emission controls feasible. Through use of these devices, we
believe emission control similar to that attained by gasoline
applications will be possible with diesel applications. However,
without low-sulfur diesel fuel, these technologies cannot be
implemented on heavy-duty or light-duty diesel applications.
Several exhaust emission control devices have been developed to
control harmful diesel PM constituents--the diesel oxidation catalyst
(DOC), and the many forms of particulate filters, or traps. DOCs have
been shown to be durable in use, but they control only a relatively
small fraction of the total PM and, consequently, do not address our PM
concerns sufficiently. Uncatalyzed diesel particulate traps
demonstrated high efficiencies many years ago, but the level of the PM
standard was such that it could be met through less costly ``in-
cylinder'' control techniques. Catalyzed diesel particulate traps have
the potential to provide major reductions in diesel PM emissions and
provide the durability and dependability required for diesel
applications. Therefore, as discussed in the feasibility portion of
this section, at this time we believe the catalyzed PM trap will be the
control technology of choice for future control of diesel PM emissions.
However, as discussed in detail in the draft RIA, we believe that
catalyzed PM traps cannot be brought to market on diesel applications
unless low-sulfur diesel fuel is available.
Diesel NOX control is arguably at an earlier stage of
development than is diesel PM control. Even so, several exhaust
emission control technologies are being developed to control
NOX emissions, and the industry seems focused on a couple of
these as the most promising technologies for enabling lower
NOX emission standards. Diesel selective catalytic
reduction, or SCR, has been developed to the point of nearing market
introduction in Europe. SCR has significant NOX control
potential, but it also has many roadblocks to marketability in this
country. These roadblocks, discussed in more detail in the draft RIA,
include infrastructure issues that we believe would prove exceedingly
difficult and potentially costly to overcome. Because of that, we
believe that the NOX adsorber is the best technology for
delivering significant diesel NOX reductions while also
providing market and operating characteristics necessary for the U.S.
market.\69\ However, as is discussed in detail in the draft RIA, the
NOX adsorber, like the catalyzed PM trap, cannot be brought
to market on diesel applications unless low-sulfur diesel fuel is
available.
---------------------------------------------------------------------------
\69\ The NOX adsorber was originally developed for
stationary source emission control and was subsequently developed
for use in the lean operating environment of gasoline direct
injection engines.
---------------------------------------------------------------------------
Improvements have also been made to gasoline emission control
technology during the past few years, even the past 12 months. Such
improvements include those to catalyst designs in the form of improved
washcoats and improved precious metal dispersion. Much effort has also
been put into improved cold start strategies that allow for more rapid
catalyst light-off. This can be done by retarding the spark timing to
increase the temperature of the exhaust gases, and by using air-gap
manifolds, exhaust pipes, and catalytic converter shells to decrease
heat loss from the system.
These improvements to gasoline emission control have been made in
response to the California LEV-II standards and the federal Tier 2
standards. Some of this development work was contributed by EPA in a
very short timeframe and with very limited resources in support of our
Tier 2 program.\70\ These improvements should transfer well to the
heavy-duty gasoline segment of the fleet. With such migration of light-
duty technology to heavy-duty vehicles and engines, we believe that
considerable improvements to heavy-duty emissions can be realized, thus
enabling much more stringent standards.
---------------------------------------------------------------------------
\70\ See Chapter IV.A of the final Tier 2 Regulatory Impact
Analysis, contained in Air Docket A-97-10.
---------------------------------------------------------------------------
The following discussion provides more detail on the technologies
we believe are most capable of enabling very stringent heavy-duty
emission standards. The goal of this discussion is to highlight the
emission reduction capability of these emission control technologies
and to highlight their critical need for diesel sulfur levels as low as
those being proposed today. But first, we present the details of the
emission standards being proposed today.
C. What Engine and Vehicle Standards Are We Proposing?
1. Heavy-Duty Engine Standards
a. Federal Test Procedure
The emission standards being proposed today for heavy-duty engines
are summarized in Table III.C-1.
Table III.C-1.--Proposed Full Useful Life Heavy-Duty Engine Emission Standards and Phase-Ins
----------------------------------------------------------------------------------------------------------------
Phase-in by model year (In percent)
Standard (g/ -----------------------------------------------
bhp-hr) 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
Diesel........................ NOX 0.20
NMHC 0.14 25 50 75 100
HCHO 0.016
Gasoline...................... NOX 0.20
NMHC 0.14 100
[[Page 35462]]
HCHO 0.016
Diesel & Gasoline............. PM 0.01 100
----------------------------------------------------------------------------------------------------------------
With respect to PM, this proposed new standard would represent a 90
percent reduction for most heavy-duty diesel engines from the current
PM standard, which was not proposed to change in model year 2004.\71\
The current PM standard for most heavy-duty engines, 0.1 g/bhp-hr, was
implemented in the 1994 model year; the PM standard for urban buses
implemented in that same year was 0.05 g/bhp-hr. The proposed PM
standard of 0.01 g/bhp-hr is projected to require the addition of a
highly efficient PM trap to diesel engines, including urban buses; it
is not expected to require the addition of any new hardware for
gasoline engines. We request comment on the feasibility and
appropriateness of this proposed PM standard.
---------------------------------------------------------------------------
\71\ From 64 FR 58472, October 29, 1999, ``* * * diesel fuel
quality, and in particular, diesel fuel sulfur level, can play an
important role in enabling certain PM and NOX control
technologies. Some DOCs and continuously regenerable PM traps, as
well as current generation lean NOX adsorber catalysts
can be poisoned by high sulfur levels. Given this information, EPA
has not included more stringent PM standards for the 2004 model year
or later in today's proposal.''
---------------------------------------------------------------------------
With respect to NMHC and NOX, these new standards would
represent roughly a 90 percent reduction in diesel NOX and
roughly a 70 percent reduction in diesel NMHC levels compared to the
2004 heavy-duty diesel engine standard. The 2004 heavy-duty diesel
engine standard is 2.5 g/bhp-hr NMHC+NOX, with a cap on NMHC
of 0.5 g/bhp-hr. Like the PM standard, the proposed NOX
standard is projected to require the addition of highly efficient
NOX aftertreatment to diesel engines. For gasoline engines,
the standard proposed in the 2004 heavy-duty rule is 1.0 g/bhp-hr
NMHC+NOX. Therefore, for gasoline engines, the standards
proposed today would represent roughly a 70 percent reduction. We
request comment on the feasibility and appropriateness of these
proposed NOX and NMHC standards.
With respect to formaldehyde, a hazardous air pollutant that is
emitted by heavy-duty engines and other mobile sources, we are
proposing standards to prevent excessive emissions. The standards are
comparable in stringency to the formaldehyde standards recently
finalized in the Tier 2 rule for passenger vehicles; they are also
consistent with the CARB LEV II formaldehyde standards. These standards
would be especially important for methanol-fueled engines because
formaldehyde is chemically similar to methanol and is one of the
primary byproducts of incomplete combustion of methanol. Formaldehyde
is also emitted by engines using petroleum fuels (i.e., gasoline or
diesel fuel), but to a lesser degree than is typically emitted by
methanol-fueled engines. We recognize that petroleum-fueled engines
able to meet the proposed NMHC standards should comply with the
formaldehyde standards with large compliance margins. Based upon the
analysis of similar standards recently finalized for passenger
vehicles, we believe that formaldehyde emissions from petroleum-fueled
engines when complying with the PM, NMHC, and NOX standards
should be as much as 90 percent below the standards.\72\ Thus, to
reduce testing costs, we are proposing a provision that would permit
manufacturers of petroleum-fueled engines to demonstrate compliance
with the formaldehyde standards based on engineering analysis. This
provision would require manufacturers to make a demonstration in their
certification application that engines having similar size and emission
control technology have been shown to exhibit compliance with the
applicable formaldehyde standard for their full useful life. This
demonstration would be similar to that recently finalized for light-
duty vehicles to demonstrate compliance with the Tier 2 formaldehyde
standards.
---------------------------------------------------------------------------
\72\ See the Tier 2 Response to Comments document contained in
Air Docket A-97-10.
---------------------------------------------------------------------------
Because the NOX exhaust emission control technology we
expect would be required to meet the proposed NOX standard
is at an early stage of development, we believe a phase-in of the
NOX standard is appropriate. With a phase-in, manufacturers
are able to introduce the new technology on a limited number of
engines, thereby gaining valuable experience with the technology prior
to implementing it on their entire fleet. Also, we are proposing that
the NOX, HCHO, and NMHC standards be phased-in together for
diesel engines. That is, engines would be expected to meet each of
these proposed new standards, not just one or the other. We propose
this because the standard as proposed in the 2004 heavy-duty rule would
be a combined NMHC+NOX standard. Separating the phase-ins
for NMHC and NOX would create a problem because it would not
be clear to what NMHC standard an engine would certify were it to
certify to the proposed NOX standard independent of
certifying to the proposed NMHC standard (and vice versa for engines
certifying to the proposed NMHC standard independent of the proposed
NOX standard).\73\ We request comment on the phase-in for
diesel engines of these proposed NOX, HCHO, and NMHC
standards and the requirement that they be phased-in together. We also
request comment on alternative phase-in schedules and percentages, such
as a phase-in over three years (2007-2009), a phase-in over two years
(2007-2008), and no phase-in (100% in 2007). We are not proposing a
phase-in for gasoline engines because we want to maintain consistency
with the proposed heavy-duty gasoline vehicle standards which are not
phased-in; those standards are discussed below.\74\ Nonetheless, we
request comment on possible alternative phase-ins for the proposed
gasoline engine standards, such as a phase-in consistent with the
proposed phase-in for diesel engine standards shown in Table III.C-
[[Page 35463]]
1, or a phase-in consistent with that used for heavy light-duty trucks
and medium-duty passenger vehicles under the light-duty highway Tier 2
program.
---------------------------------------------------------------------------
\73\ Note that, despite the concurrent phase-in of
NOX and NMHC standards for diesel engines, the NMHC
standards should be easily met through use of a PM trap as is fully
discussed in section III.E. Since the PM standards would be
implemented on 100 percent of new engines in the 2007 model year,
all new engines would have a PM trap and would, therefore, control
NMHC emissions to levels below the proposed standards. Therefore,
while the NMHC standard is phased-in with NOX due to the
2004 combining of the NOX and NMHC standards, the
proposed NMHC standards would be met by all new engines in the 2007
model year. This is reflected in our emission inventory analysis as
was discussed in section II.
\74\ Please refer to section III.D.2 below for a discussion of
implementing these proposed standards in the 2007 or 2008 model
years, and the relationship between today's proposed implementation
and the implementation of the proposed 2004 emission standards.
---------------------------------------------------------------------------
The specifics of the Averaging, Banking, and Trading program
associated with today's proposed standards are discussed in section VII
of this preamble. The reader should refer to that section for more
details.
b. Not-to-Exceed and Supplemental Steady-State Test
To help ensure that heavy-duty engine emissions are controlled over
the full range of speed and load combinations commonly experienced in
use, we have previously proposed to apply Not-To-Exceed (NTE) limits to
heavy-duty diesel engines (64 FR 58472, October 29, 1999). As proposed,
the NTE approach establishes an area (the ``NTE zone'') under the
torque curve of an engine where emissions must not exceed a specified
value for any of the regulated pollutants.\75\ As proposed, the
specified value under which emissions must remain is 1.25 times the FTP
standards. The NTE standard would apply under any conditions that could
reasonably be expected to be seen by that engine in normal vehicle
operation and use. In addition, we have proposed that the whole range
of real ambient conditions be included in NTE testing.
---------------------------------------------------------------------------
\75\ Torque is a measure of rotational force. The torque curve
for an engine is determined by an engine ``mapping'' procedure
specified in the Code of Federal Regulations. The intent of the
mapping procedure is to determine the maximum available torque at
all engine speeds. The torque curve is merely a graphical
representation of the maximum torque across all engine speeds.
---------------------------------------------------------------------------
Similarly, to help ensure that heavy-duty engine emissions are
controlled during steady-state type driving (such as a line-haul truck
operating on a freeway), we have previously proposed a new supplemental
steady-state test (64 FR 58472, October 29, 1999). The supplemental
steady-state test consists of 13 steady-state modes, each weighted
according to the amount of time that might be expected at each mode
during typical real world conditions. As proposed, the supplemental
steady-state test has emission limits of 1.0 times the FTP standards.
Today's document proposes to apply the heavy-duty diesel NTE and
supplemental steady-state test provisions intended to be finalized as
part of the 2004 standards rulemaking. The October 29, 1999, proposal
for that rule contained the description of these provisions. We expect
that a number of modifications will be made to those provisions in the
FRM for that rule based on feedback received during the comment period.
While the details of the final provisions are not yet available, we
will provide the necessary information in the docket for this rule as
soon as it becomes available in order to allow for comment.
We have not proposed that the NTE requirements, or the supplemental
steady-state test, apply to heavy-duty gasoline engines. However, we
are working with several industry members to pursue a proposal in a
separate action with the intention of having NTE requirements in place
for heavy-duty gasoline engines beginning in the 2004 model year.\76\
Today's proposal intends that those provisions, when developed, would
apply to the gasoline engines subject to today's proposed standards as
well. We currently have no intention of pursuing supplemental steady-
state test requirements for heavy-duty gasoline engines.
---------------------------------------------------------------------------
\76\ Letters from Margo Oge, EPA, to Kelly Brown, Ford Motor
Company, and Samuel. Leonard, General Motors Corp., both dated
September 17, 1999; and letter from Samuel. Leonard, GM, and Kelly
Brown, Ford, to Margo Oge, EPA, dated August 10,1999; all of these
letters are available in EPA Air Docket #A-98-32.
---------------------------------------------------------------------------
We request comment and data on the feasibility of technology
meeting the proposed emission standards in the context of the NTE and
supplemental steady-state tests as proposed in the 2004 heavy-duty
rule, and the potential changes to the supplemental tests should
changes be made from what was proposed. As stated above, should such
changes be made, we will provide the necessary information in the
docket for this rule as soon as it becomes available in order to allow
for comment.
c. Crankcase Emissions Control
Crankcase emissions are the pollutants that are emitted in the
gases that are vented from an engine's crankcase. These gases are also
referred to as ``blowby gases'' because they result from engine exhaust
from the combustion chamber ``blowing by'' the piston rings into the
crankcase. These gases are vented to prevent high pressures from
occurring in the crankcase. Our existing emission standards prohibit
crankcase emissions from all highway engines except turbocharged heavy-
duty diesel engines. The most common way to eliminate crankcase
emissions has been to vent the blowby gases into the engine air intake
system, so that the gases can be recombusted. We made the exception for
turbocharged heavy-duty diesel engines because of concerns in the past
about fouling that could occur by routing the diesel particulates
(including engine oil) into the turbocharger and aftercooler. Our
concerns are now alleviated by newly developed closed crankcase
filtration systems, specifically designed for turbocharged heavy-duty
diesel engines. These new systems (discussed more fully in section
III.E and in Chapter III of the draft RIA) are already required for new
on-highway diesel engines under the EURO III emission standards.
We are proposing to eliminate the exception for turbocharged heavy-
duty diesel engines starting in the 2007 model year. This is an
environmentally significant proposal since most heavy-duty diesel
trucks use turbocharged engines, and a single engine can emit over 100
pounds of NOx, NMHC, and PM from the crankcase over the
lifetime of the engine. We request comment on this proposal.
2. Heavy-Duty Vehicle Standards
a. Federal Test Procedure
The emission standards being proposed today for heavy-duty vehicles
are summarized in Table III.C-2. We have already proposed that all
complete heavy-duty gasoline vehicles, whether for transporting
passengers or for work, be chassis certified (64 FR 58472, October 29,
1999). Current federal regulations do not require that complete diesel
vehicles over 8,500 pounds be chassis certified, instead requiring
certification of their engines. Today's proposal does not make changes
to those requirements.
The Tier 2 final rule created a new vehicle category called
``medium-duty passenger vehicles''.\77\ These vehicles, both gasoline
and diesel, are required to meet requirements of the Tier 2 program,
which carries with it a chassis certification requirement. As a result,
applicable complete diesel vehicles must certify using the chassis
certification test procedure. Today's proposed chassis standards for
2007 and later model year heavy-duty gasoline vehicles would apply to
the remaining (work-oriented) complete gasoline vehicles under 14,000
pounds.
---------------------------------------------------------------------------
\77\ Medium-duty passenger vehicles are defined as any complete
vehicle between 8,500 and 10,000 pounds GVWR designed primarily for
the transportation of persons. The definition specifically excludes
any vehicle that (1) has a capacity of more than 12 persons total
or, (2) is designed to accommodate more than 9 persons in seating
rearward of the driver's seat or, (3) has a cargo box (e.g., pick-up
box or bed) of six feet or more in interior length. (See the Tier 2
final rulemaking, 65 FR 6698, February 10, 2000)
[[Page 35464]]
Table III.C-2.--Proposed 2007+ Full Useful Life Heavy-Duty Vehicle Exhaust Emission Standards for Complete
Gasoline Vehicles*
[grams/mile]
----------------------------------------------------------------------------------------------------------------
Weight range (GVWR) NOX NMHC HCHO PM
----------------------------------------------------------------------------------------------------------------
8500 to 10,000 lbs.......................................... 0.2 0.195 0.016 0.02
10,000 to 14,000 lbs........................................ 0.4 0.230 0.021 0.02
----------------------------------------------------------------------------------------------------------------
* Does not include medium-duty passenger vehicles.
These NOX standards represent a 78 percent reduction and
a 60 percent reduction from the standards for 8,500-10,000 pound and
10,000-14,000 pound vehicles, respectively, proposed in the 2004 heavy-
duty rule. The 2004 heavy-duty rule would require such vehicles to meet
the California LEV-I NOX standards of 0.9 g/mi and 1.0 g/mi,
respectively. The proposed NOX standards shown in Table
III.C-2 are consistent with the CARB LEV-II NOX standard for
low emission vehicles (LEVs). We have proposed, and CARB has put into
place in their LEV-II program, a slightly higher NOX
standard for 10,000 to 14,000 pound vehicles because these vehicles are
tested at a heavier payload. The increased weight results in using more
fuel per mile than vehicles tested at lighter payloads; therefore, they
tend to emit slightly more grams per mile than lighter vehicles.\78\
---------------------------------------------------------------------------
\78\ Engine standards, in contrast, are stated in terms of grams
per unit power rather than grams per mile. Therefore, engine
emission standards need not increase with weight because heavier
engines do not necessarily emit more per horsepower even though they
tend to emit more per mile.
---------------------------------------------------------------------------
The NMHC standards represent a 30 percent reduction from the
proposed 2004 standards for 8500-10,000 and 10,000-14,000 pound
vehicles. The 2004 heavy-duty rule would require such vehicles to meet
NMHC standard levels of 0.28 g/mi and 0.33 g/mi, respectively (equal to
the California LEV-I nonmethane organic gases (NMOG) standard levels).
The proposed NMHC standards are consistent with the CARB LEV-II NMOG
standards for LEVs in each respective weight class. The NMHC standard
for 10,000-14,000 pound vehicles is higher than for 8,500-10,000 pound
vehicles for the same reason as stated above for the higher
NOX standard for such vehicles.
The formaldehyde standards are comparable in stringency to the
formaldehyde standards recently finalized in the Tier 2 rule for
passenger vehicles; they are also consistent with today's proposed
engine standards and the CARB LEV II formaldehyde standards.
Formaldehyde is a hazardous air pollutant that is emitted by heavy-duty
vehicles and other mobile sources, and we are proposing these
formaldehyde standards to prevent excessive formaldehyde emissions.
These standards would be especially important for methanol-fueled
vehicles because formaldehyde is chemically similar to methanol and is
one of the primary byproducts of incomplete combustion of methanol.
Formaldehyde is also emitted by vehicles using petroleum fuels (i.e.,
gasoline or diesel fuel), but to a lesser degree than is typically
emitted by methanol-fueled vehicles. We recognize that petroleum-fueled
vehicles able to meet the proposed NMHC standards should comply with
the formaldehyde standards with large compliance margins. Based upon
the analysis of similar standards recently finalized for passenger
vehicles, we believe that formaldehyde emissions from petroleum-fueled
vehicles when complying with the PM, NMHC and NOX standards
should be as much as 90 percent below the standards.\79\ Thus, to
reduce testing costs, we are proposing a provision that would permit
manufacturers of petroleum-fueled vehicles to demonstrate compliance
with the formaldehyde standards based on engineering analysis. This
provision would require manufacturers to make a demonstration in their
certification application that vehicles having similar size and
emission control technology have been shown to exhibit compliance with
the applicable formaldehyde standard for their full useful life. This
demonstration would be similar to that recently finalized for light-
duty vehicles to demonstrate compliance with the Tier 2 formaldehyde
standards.
---------------------------------------------------------------------------
\79\ See the Tier 2 Response to Comments document contained in
Air Docket A-97-10.
---------------------------------------------------------------------------
The PM standard represents over an 80 percent reduction from the
CARB LEV-II LEV category PM standard of 0.12 g/mi. Note that the PM
standard shown in Table III.C-2 represents not only a stringent PM
level, but a new standard for federal HDVs where none existed before.
The California LEV-II program for heavy-duty vehicles, and the federal
Tier 2 standards for over 8,500 pound vehicles designed for
transporting passengers, both contain PM standards. The PM standard
proposed today is consistent with the Tier 2 bin 8 level of 0.02 g/mi.
The standards shown in Table III.C-2 are, we believe, comparable in
stringency to the proposed diesel and gasoline engine standards shown
in Table III.C-1. We request comment on this issue, including any
supporting data. We also request comment on other possible vehicle
exhaust emission standards. For example, the CARB LEV-II ULEV standards
are identical in NOX levels, but have NMOG levels of 0.143
and 0.167 g/mi for 8,500 to 10,000 pound and 10,000 to 14,000 pound
vehicles, respectively. We request comment on whether these standards
(0.143 and 0.167 g/mi NMHC for 8,500 to 10,000 pound and 10,000 to
14,000 pound vehicles, respectively), or lower standards, may be more
appropriate emission standards. We also request comment on whether we
should instead include a 40 percent/60 percent split of standards at
the LEV-II LEV and ULEV levels, respectively. To clarify, the CARB LEV-
II program requires a compliance split of vehicles certified to the LEV
versus the ULEV levels; that split is 40 percent LEV and 60 percent
ULEV. We request comment on whether we should employ such a split.
We are not proposing a phase-in for the HDV standards. As proposed,
the HDV standards would apply only to complete gasoline vehicles,
consistent with our current regulations. We believe that emission
control technology for gasoline engines is in an advanced enough state
to justify a simple implementation requirement in the 2007 model year.
However, please refer to section III.D.2, below, for a discussion of
the appropriate implementation schedule associated with these proposed
standards, and the relationship between today's proposed implementation
and the implementation of the proposed 2004 emission standards. We
believe that our proposed implementation schedule provides consistency
with our Tier 2 standards and our expectation of probable certification
levels for similarly sized light-duty trucks and medium-duty
[[Page 35465]]
passenger vehicles. Although these vehicles are allowed to certify at
fairly high emission levels under the Tier 2 bin structure, we believe
that Tier 2 gasoline applications will be designed to certify to
standards of 0.20 g/mi NOX and 0.09 g/mi NMHC by the 2007
model year, and possibly lower to allow for diesels certifying in
higher emission bins within the NOX averaging scheme. This
makes the proposed HDV standards and associated phase-in consistent
with Tier 2. We request comment on the appropriateness of not having a
phase-in associated with the vehicle standards. We also request comment
on possible alternative phase-ins for the proposed gasoline vehicle
standards, such as a phase-in consistent with the proposed phase-in for
diesel engine standards shown in Table III.C-1, or a phase-in
consistent with that used for heavy light-duty trucks and medium-duty
passenger vehicles under the light-duty highway Tier 2 program.
Consistent with current regulations, we are not proposing to allow
complete heavy-duty diesel vehicles to certify to the heavy-duty
vehicle standards. Instead, manufacturers would be required to certify
the engines intended for such vehicles to the engine standards shown in
Table III.C-1. However, we request comment on whether complete heavy-
duty diesel vehicles should be allowed, or perhaps should be required,
to certify to the vehicle standards. Any comments on this topic should
also address whether a phase-in, consistent with the phase-in of engine
standards, would be appropriate.
The specifics of the Averaging, Banking, and Trading program
associated with today's proposed standards are discussed in section VII
of this document. The reader should refer to that section for more
details.
We request comment on the feasibility and appropriateness of the
proposed standards for heavy-duty complete vehicles shown in Table
III.C-2.
b. Supplemental Federal Test Procedure
We are not proposing new supplemental FTP (SFTP) standards for
heavy-duty vehicles. The SFTP standards control off-cycle emissions in
a manner analogous to the NTE requirements for engines. We believe that
the SFTP standards are an important part of our light-duty program just
as we believe the NTE requirements will be an important part of our
heavy-duty diesel engine program. Although we are not proposing SFTP
standards for heavy-duty vehicles, we intend to do so via a separate
rulemaking. We request comment on such an approach, and on appropriate
SFTP levels for heavy-duty vehicles along with supporting data.
3. Heavy-Duty Evaporative Emission Standards
We are proposing new evaporative emission standards for heavy-duty
vehicles and engines. The proposed standards are shown in Table III.C-
3. These standards would apply to heavy-duty gasoline-fueled vehicles
and engines, and methanol-fueled heavy-duty vehicles and engines.
Consistent with existing standards, only the standard for the three day
diurnal test sequence would apply to liquid petroleum gas (LPG) fueled
and natural gas fueled HDVs.
Table III.C-3.--Proposed Heavy-Duty Evaporative Emission Standards*
[Grams per test]
------------------------------------------------------------------------
Supplemental
3 day 2 day
Category diurnal + diurnal +
hot soak hot soak**
------------------------------------------------------------------------
8,500-14,000 lbs............................... 1.4 1.75
>14,000 lbs.................................... 1.9 2.3
------------------------------------------------------------------------
* Proposed to be implemented on the same schedule as the proposed
gasoline engine and vehicle exhaust emission standards shown in Tables
III.C-1 and III.C-2. These proposed standards would not apply to
medium-duty passenger vehicles, and would not apply to diesel fueled
vehicles.
** Does not apply to LPG or natural gas fueled HDVs.
These proposed standards represent more than a 50 percent reduction
in the numerical standards as they exist today. The 2004 heavy-duty
rule (64 FR 58472, October 29, 1999) proposed no changes to the
numerical value of the standard, but it did propose new evaporative
emission test procedures for heavy-duty complete gasoline vehicles.\80\
Those test procedures would effectively increase the stringency of the
standards, even though the numerical value was not proposed to change.
For establishing evaporative emission levels from complete heavy-duty
vehicles, the standards shown in Table III.C-3 presume the test
procedures proposed in the 2004 heavy-duty rule.
---------------------------------------------------------------------------
\80\ The proposed test procedure changes sought to codify a
commonly approved waiver allowing heavy-duty gasoline vehicles to
use the light-duty driving cycle for demonstrating evaporative
emission compliance. The urban dynamometer driving schedule (UDDS)
used for heavy-duty vehicles is somewhat shorter than that used for
light-duty vehicles, both in terms of mileage covered and minutes
driven. This results in considerably less time for canister purge
under the heavy-duty procedure than under the light-duty procedure.
We recognize this discrepancy and have routinely provided waivers
under the enhanced evaporative program that allow the use of the
light-duty procedures for heavy-duty certification testing. We do
not believe that this approach impacts the stringency of the
standards. Further, it is consistent with CARB's treatment of
equivalent vehicles.
---------------------------------------------------------------------------
The proposed standards for 8,500 to 14,000 pound vehicles are
consistent with the Tier 2 standards for medium-duty passenger vehicles
(MDPV). MDPVs are of consistent size and have essentially identical
evaporative emission control systems as the remaining work-oriented
HDVs in the 8,500 to 10,000 pound weight range. Therefore, the
evaporative emission standards should be equivalent. We are proposing
those same standards for the 10,000 to 14,000 pound HDVs because,
historically, the evaporative emission standards have been consistent
throughout the 8,500 to 14,000 pound weight range. We believe that the
HDVs in the 10,000 to 14,000 pound range are essentially equivalent in
evaporative emission control system design as the lighter HDVs;
therefore, continuing this historical approach is appropriate.
We are proposing slightly higher evaporative emission standards for
the over 14,000 pound HDVs because of their slightly larger fuel tanks
and vehicle sizes. This is consistent with past evaporative emission
standards. The levels chosen for the over 14,000 pound HDVs maintains
the same ratio relative to the 8,500 to 14,000 pound HDVs as exists
with current evaporative standards. To clarify, the current standards
for the 3 day diurnal test are 3 and 4 grams/test for the 8,500 to
14,000 and the over 14,000 pound categories, respectively. The ratio of
3:4 is maintained for the proposed 2007 standards, 1.4:1.9.
The proposed standards levels are slightly higher than the
California LEV-II standards levels. The California standards levels are
1.0 and 1.25 for the 3-day and the 2-day tests, respectively. We
believe that our standards are appropriate for federal vehicles
certified on the higher-volatility federal test fuel.
We are proposing that the proposed evaporative emission standards
be implemented on the same schedule as the proposed gasoline engine and
vehicle exhaust standards shown in Tables III.C-1 and III.C-2. We
request comment on this proposal. Also, we are proposing the revised
durability provisions finalized in the Tier 2 rulemaking, which require
durability demonstration using fuel containing at least 10 percent
alcohol. Alcohol can break down the materials used in evaporative
emission control systems. Therefore, a worst case durability
demonstration would include a worst case alcohol level in the fuel (10
percent) as some areas of the country
[[Page 35466]]
use alcohol fuels to improve their air quality. We request comment on
extending this durability provision to HDVs.
We request comment on the feasibility and appropriateness of the
proposed evaporative emission standards shown in Table III.C-3.
D. Standards Implementation Issues
1. Alternative Approach to Phase-In
Although we are proposing the standards and diesel phase-ins shown
in Section III.C, we request comment on the possibility of structuring
the proposed diesel engine standards as a ``declining'' standard rather
than the standard level ``phase-in'' being proposed. Under such an
approach, the final NOX and NMHC standards of 0.20 and 0.14
g/bhp-hr would be achieved via a ramping down of the standards from the
NOX and NMHC levels assumed under the 2004
NMHC+NOX standard (i.e., 2.0 g NOX and 0.5 g
NHMC) to the final levels provided it did not compromise the air
quality benefits in any given year. Such a declining standard would
result in 2007 standards for all engines lower than the 2004 standards,
but not as low as today's proposed standards. The 2008 standards for
all engines would then be lower than the 2007 standards, and the 2009
standards for all engines would be lower than the 2008 standards. In
2010, the standards would become 0.20 g/bhr-hr NOX and 0.14
g/bhp-hr NMHC.
Under such a declining standard approach, an engine manufacturer
would probably have to redesign most, if not all, of its engines to
reduce their emissions from the 2004 standard levels to the 2007 model
year declining standard levels. In contrast, under the proposed
approach, 25 percent of an engine manufacturer's engines would have to
certify to the 0.20/0.14 g/bhp-hr standards. Although the phase-in
levels would be more stringent, the manufacturer would have to redesign
only that 25 percent of its engines during the 2007 model year. The
same would be true for the ensuing years. Under the declining standard
approach, some level of redesign would probably have to be done on
every engine in every year to meet the declining standard unless a
manufacturer had extensive ABT credits at its disposal to apply against
the standard. Under the phase-in, each new model year would entail a
redesign of only 25 percent of a manufacturer's engines. In the end,
both approaches result in the entire fleet meeting the proposed
standard levels in 2010, but both achieve that in different ways.
We request comment on this declining standard approach for the
diesel engine standards. We also request suggestions on appropriate
declining standards for each model year that would result in stringency
levels and emission reductions consistent with those of the proposed
phase-in approach.
We also request comment on the possibility of structuring the
phase-in of the proposed diesel engine standards as a ``cumulative''
phase-in rather than the 25-50-75-100 percent phase-in being proposed.
Under such an approach, a manufacturer could phase-in compliance with
the proposed standards in whatever percentages were most beneficial to
that manufacturer, provided the cumulative total in each year met or
exceeded the cumulative total of the proposed phase-in. Whatever the
phase-in schedule chosen by the manufacturer, all of its engines sold
in model year 2010 would be required to demonstrate compliance with the
proposed standards. For example, a manufacturer could phase-in its
engines according to a schedule of 50-50-50-100 percent, or 35-50-65-
100 percent, or 30-60-60-100, etc. Note that the cumulative percentages
would have to be based on cumulative engine sales to avoid the
possibility that variations in market conditions would not compromise
air quality benefits. We believe that such a phase-in could provide
manufacturers with more flexibility in product planning while possibly
enhancing the air quality benefits of the proposed standards because
some manufacturers may accelerate their phase-in. Manufacturers should
indicate their interest in such an approach in their comments and
should indicate how they might utilize it.
2. Implementation Schedule for Gasoline Engine and Vehicle Standards
The October 1999 proposal of new heavy-duty engine and vehicle
standards included revised standards for gasoline heavy-duty engines
and vehicles (64 FR 58472, October 29, 1999). These standards were
proposed to take effect in the 2004 model year. Commenters on that
proposal raised concerns that these standards could not take effect
until model year 2005 or later because of the applicability of Clean
Air Act section 202(a)(3)(C) to these engines and vehicles. Those
commenters argued that this provision requires 4 years of
implementation leadtime following the promulgation of new or revised
standards, and that these standards had not been promulgated in a final
rule in time to satisfy this leadtime provision. We are still in the
process of finalizing this rule and so at this time we are not able to
announce the outcome of the leadtime issue. However, we do expect that,
should the gasoline engine and vehicle standards be delayed to model
year 2005, the standards being proposed today for gasoline engines and
vehicles would first apply in model year 2008, rather than 2007, due to
another part of the Clean Air Act section 202(a)(3)(C) provision that
requires 3 model years of stability between changed standards. We
invite comment on the appropriateness of this expectation and on any
issues that might arise in connection with the model year 2008
implementation schedule.
E. Feasibility of the Proposed New Standards
For more detail on the arguments supporting our assessment of the
technological feasibility of today's proposed standards, please refer
to the Draft RIA in the docket for this rule. The following discussion
summarizes the more detailed discussion found in the Draft RIA.
1. Feasibility of Stringent Standards for Heavy-Duty Diesel
Diesel engines have made great progress in lowering engine-out
emissions from 6.0 g/bhp-hr NOX and 0.6 g/bhp-hr PM in 1990
to 4.0 g/bhp-hr NOX and 0.1 g/bhp-hr PM in 1999. These
reductions came initially with improvements to combustion and fuel
systems. Introduction of electronic fuel systems in the early 1990s
allowed lower NOX and PM levels without sacrificing fuel
economy. This, combined with increasing fuel injection pressures, has
been the primary technology that has allowed emission levels to be
reduced to current 1999 levels. Further engine-out NOX
reductions to the levels necessary to comply with the 2004 standard of
2.5 g/bhp-hr NOX+NMHC will come primarily from the
addition of cooled EGR.
Engine out emission reductions beyond the 2.5 g/bhp-hr level are
expected with low sulfur fuel and more experience with cooled EGR
systems. Low sulfur fuel will allow more EGR to be used at lower
temperatures because of the reduced threat of sulfuric acid formation.
In addition, recirculating the exhaust gases from downstream of a PM
trap may allow different EGR pumping configurations to be feasible.
Such pumping configurations could provide a better NOX/fuel
consumption tradeoff.
These potential engine-out emission reductions are expected to be
modest and are not expected to be sufficient to meet the emission
standards proposed
[[Page 35467]]
today. However, they would allow greater flexibility in choosing the
combination of technologies used to meet the proposed emission
standards. With lower engine-out emissions, it might be most cost
effective to use smaller and less expensive exhaust emission control
devices, for instance. Also, the combination of engine-out and exhaust
emission control could be chosen for the best fuel economy. The fuel
economy trade-offs between lower engine-out emissions and more
effective exhaust emission control might be such that a combination of
the two methods provide fuel economy that is better than either method
on its own. As a result, additional engine-out emission reductions are
expected to add additional flexibility in combination with exhaust
emission control in jointly optimizing costs, fuel economy, and
emissions.
a. Meeting the Proposed PM Standard
Diesel PM consists of three primary constituents: unburned carbon
particles, which make up the largest portion of the total PM; the
soluble organic fraction (SOF), which consists of unburned hydrocarbons
that have condensed into liquid droplets or have condensed onto
unburned carbon particles; and sulfates, which result from oxidation of
fuel borne sulfur in the engine's exhaust.
Several exhaust emission control devices have been developed to
control harmful diesel PM constituents--the diesel oxidation catalyst
(DOC), and the many forms of particulate filters, or traps. DOCs have
been shown to be durable in use, but they effectively control only the
SOF portion of the total PM which, especially on today's engines,
constitutes only around 10 to 30 percent of the total PM. Therefore,
the DOC does not address our PM concerns sufficiently.
At this time, only the PM trap is capable of providing the level of
control sought by today's proposed PM standards. In the past, the PM
trap has demonstrated highly efficient trapping efficiency, but
regeneration of the collected PM has been a serious challenge. The PM
trap works by passing the exhaust through a ceramic or metallic filter
to collect the PM. The collected PM, mostly carbon particles but also
the SOF portion, must then be burned off the filter before the filter
becomes plugged. This burning off of collected PM is referred to as
``regeneration,'' and can occur either:
on a periodic basis by using base metal catalysts or an
active regeneration system such as an electrical heater, a fuel burner,
or a microwave heater; or,
on a continuous basis by using precious metal catalysts.
Uncatalyzed diesel particulate traps demonstrated high PM trapping
efficiencies many years ago, but the level of the PM standard was such
that it could be met through less costly ``in-cylinder'' control
techniques. Also, the regeneration characteristics were not dependable.
As a result, some systems employed electrical heaters or fuel burners
to improve upon regeneration, but these complicated the system design
and still could not provide the durability and dependability required
for HD diesel applications.
We believe the most desirable PM trap, and the type of trap that
will prove to be the industry's technology of choice, is one capable of
regenerating on an essentially continuous basis. We also believe that
such traps are the most promising for enabling very low PM emissions
because:
They are highly efficient at trapping all forms of diesel
PM;
They employ precious metals to reduce the temperature at
which regeneration occurs, thereby allowing for passive regeneration
under normal operating conditions typical of a diesel engine;\81\
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\81\ For PM trap regeneration without precious metals,
temperatures in excess of 650 deg.C must be obtained. At such high
temperatures, carbon will burn provided sufficient oxygen is
present. However, although the largest heavy-duty diesels may
achieve temperatures of 650 deg.C under some operating conditions,
smaller diesel engines, particularly light-duty and light heavy-duty
diesel engines, will rarely achieve such high temperatures. For
example, exhaust temperatures on the HDE Federal Test Procedure
cycle typically range from 100 deg.C to 450 deg.C. Precious metal
catalyzed traps use platinum to oxidize NO in the exhaust to
NO2, which is capable of oxidizing carbon at temperatures
as low as 250 deg.C to 300 deg.C.
---------------------------------------------------------------------------
Because they regenerate continuously, they have lower
average backpressure thereby reducing potential fuel economy impacts;
and,
Because of their passive regeneration characteristics,
they need no extra burners or heaters like would be required by an
active regeneration system thereby reducing potential fuel economy
impacts.
These catalyzed PM traps are able to provide in excess of 90
percent control of diesel PM. However, as discussed in detail in the
Draft RIA, the catalyzed PM trap cannot regenerate properly with
current fuel sulfur levels as such sulfur levels inhibit the NO to
NO2 reaction to the point of stopping trap regeneration.\82\
Also, because SO2 is so readily oxidized to SO3,
very low PM standards cannot be achieved with current sulfur levels
because of the resultant increase in sulfate PM emissions.\83\
---------------------------------------------------------------------------
\82\ Cooper and Thoss, Johnson Matthey, SAE 890404.
\83\ See the Draft RIA for more detail on the relationship of
fuel sulfur to sulfate make.
---------------------------------------------------------------------------
More than one exhaust emission control manufacturer is known to be
developing these precious metal catalyzed, passively regenerating PM
traps and to have them in broad field test programs in areas where low
sulfur diesel fuel is currently available. In field trials, they have
demonstrated highly efficient PM control and promising durability with
some units accumulating in excess of 360,000 miles of field use.\84\
The experience gained in these field tests also helps to clarify the
need for very low sulfur diesel fuel. In Sweden and some European city
centers where below 10 ppm diesel fuel sulfur is readily available,
more than 3,000 catalyzed diesel particulate filters have been
introduced into retrofit applications without a single failure. The
field experience in areas where sulfur is capped at 50 ppm has been
less definitive. In regions without extended periods of cold ambient
conditions, such as the United Kingdom, field tests on 50 ppm cap low
sulfur fuel have been extremely positive, matching the success at, 10
ppm. However, field tests in Finland where colder winter conditions are
sometimes encountered (similar to northern parts of the United States)
have revealed a failure rate of 10 percent. This 10 percent failure
rate has been attributed to insufficient trap regeneration due to fuel
sulfur in combination with low ambient temperatures.\85\ As the ambient
conditions in Sweden are expected to be no less harsh than Finland, we
are left to conclude that the increased failure rates noted here are
due to the higher fuel sulfur level in a 50 ppm cap fuel versus a 10
ppm cap fuel. From these results, we can also theorize that lighter
applications (such as large pick-up trucks and other light heavy-duty
applications), having lower exhaust temperatures than heavier
applications, may experience similar results and would, therefore, need
very low sulfur fuel. These results are understood to be due to the
effect of sulfur on the trap's ability to create sufficient
NO2 to carry out proper trap regeneration. Without the
NO2, the trap continues to trap at high efficiency, but it
is unable to oxidize, or regenerate, the trapped PM. The possible
result is a plugged trap.
---------------------------------------------------------------------------
\84\ Allansson, et at., SAE 2000-01-0480.
\85\ Letter from Dr. Barry Cooper to Don Lopinski US EPA, EPA
Docket A-99-06.
---------------------------------------------------------------------------
Diesel particulate traps reduce particulate matter (PM) by
capturing and burning particles. Ninety percent of
[[Page 35468]]
the PM mass resides in particle sizes that are less than 1000
nanometers (nm) in diameter, and half of these particles are less than
200 nm. Fortunately, PM traps have very high particle capture
efficiencies. PM less than 200 nm is captured efficiently by diffusion
onto surfaces within the trap walls. Larger particles are captured
primarily by inertial impaction onto surfaces due to the tortuous path
that exhaust gas must take to pass through the porous trap walls.
Capture efficiency for elemental carbon (soot) and metallic ash is
nearly 100 percent; therefore, significant PM can only form downstream
of the trap. Volatile PM forms from sulfate or organic vapors via
nucleation, condensation, and/or adsorption during initial dilution of
raw exhaust into the atmosphere. Kleeman,\86\ et. al., and
Kittelson,\87\ et. al., independently demonstrated that these volatile
particles reside in the ultra-fine PM range (i.e. 100 nm range).
---------------------------------------------------------------------------
\86\ Kleeman, M.J., Schauer, J.J., Cass, G.R., 2000, Size and
Composition Distribution of Fine Particulate Matter Emitted From
Motor Vehicles, Environmental Science and Technology, Vol. 34, No.
7.
\87\ Kittelson, D.B., 2000, Presentation on Fuel and Lube Oil
Sulfer and Oxidizing Aftertreatment System Effects on Nano-particle
Emissions from Diesel Engines. Presented in United Kingdom April 12,
2000.
---------------------------------------------------------------------------
Modern catalyzed PM traps have been shown to be very effective at
reducing PM mass. In addition, they can significantly reduce the
overall number of emitted particles when operated on low sulfur fuel.
Hawker, et al., found that a modern catalyzed PM trap reduced particle
count by over 95 percent, including ultrafine particles ( 50 nm) at
most of the tested conditions. The lowest observed efficiency in
reducing particle number was 86 percent. No generation of particles by
the PM trap was observed under any tested conditions.\88\ Kittelson, et
al., confirmed that ultrafine particles can be reduced by a factor of
ten by oxidizing volatile organics, and by an additional factor of ten
by reducing sulfur in the fuel. Catalyzed PM traps efficiently oxidize
nearly all of the volatile organic PM precursors, and elimination of as
much fuel sulfur as possible will dramatically reduce the number of
ultrafine PM emitted from diesel engines. Therefore, the combination of
PM traps with low sulfur fuel is expected to result in a very large
reduction in PM mass, and ultrafine particles will be almost completely
eliminated.
---------------------------------------------------------------------------
\88\ Hawker, P., et al., Effect of a Continuously Regenerating
Diesel Particulate Filter on Non-Regulated Emissions and Particle
Size Distribution, SAE 980189.
---------------------------------------------------------------------------
Now that greater than 90 percent effective PM emission control has
been demonstrated, focus has turned to bringing PM exhaust emission
control to market. One of the drivers is the Euro IV PM standard set to
become effective in 2005.\89\ This standard sets a PM trap forcing
emission target. In anticipation of the 2005 introduction date, field
tests are already underway in several countries with catalyzed
particulate filters. We believe the experience gained in Europe with
these technologies will coincide well with the emission standards in
this proposal. The timing of today's proposal harmonizes the heavy-duty
highway PM technologies with those expected to be used to meet the
light-duty highway Tier 2 standards. Our own testing with fuel sulfur
levels below 10 ppm shows that these systems are viable.\90\ With this
level of effort already under way, we believe that the proposed PM
standards which would require a 90 percent reduction in the mass of
particulate emissions could be met provided low sulfur fuel is made
available.
---------------------------------------------------------------------------
\89\ The Euro IV standards are 2.6 g/hp-hr NOX and
0.015 g/hp-hr PM.
\90\ Memorandum from Charles Schenk, EPA, to Air Docket A-99-06,
``Summary of EPA PM Efficiency Data,'' May 8, 2000.
---------------------------------------------------------------------------
The data currently available show that catalyzed particulate
filters can provide significant reductions in PM. Catalyzed particulate
filters, in conjunction with low sulfur fuel, have been shown to be
more than 90 percent efficient over the FTP and at most supplemental
steady-state modes.\91\ However, with the application of exhaust
emission control technology and depending on the sulfur level of the
fuel, there is the potential for sulfate production during some
operating modes covered by the NTE and the supplemental steady-state
test. We believe that, with the 15 ppm diesel sulfur level proposed
today, the NTE and the supplemental steady-state test, as proposed in
the 2004 heavy-duty rule, would be feasible. This belief, as discussed
in greater detail in the draft RIA, is supported by data generated as
part of the Diesel Emission Control Sulfur Effects (DECSE) test
program.\92\ We request comment and relevant data on this issue.
---------------------------------------------------------------------------
\91\ Demonstration of Advanced Emission Control Technologies
Enabling Diesel-Powered Heavy-Duty Engines to Achieve Low Emission
Levels, Manufacturers of Emissions Controls Association, June 1999.
\92\ Diesel Emission Control Sulfur Effects (DECSE) Program--
Phase II Interim Data Report No. 4, Diesel Particulate Filters--
Final Report, January 2000, Table C1, www.ott.doe.gov/decse.
---------------------------------------------------------------------------
We request comment on the potential need to remove, clean, and
reverse these traps at regular intervals to remove ash build-up
resulting from engine oil. Small amounts of oil can enter the exhaust
via the combustion chamber (past the pistons, rings and valve seals),
and via the crankcase ventilation system. This can lead to ash build-
up, primarily as a result of the metallic oil additives used to provide
pH control. Such pH control is necessary, in part, to neutralize
sulfuric acid produced as a byproduct of burning fuel containing
sulfur. However, with reduced fuel sulfur, these oil additives could be
reduced, thereby reducing the rate of ash build-up and lengthening any
potential cleaning intervals. It may also be possible to use oil
additives that are less prone to ash formation to reduce the need for
periodic maintenance. We believe that catalyzed PM traps should be able
to meet the required emissions reduction goals over their useful life
with minimal maintenance. Nonetheless, we request comment on the
appropriate minimum allowable maintenance interval for PM traps.
Commenters should consider whether the maintenance interval should
include design provisions to ensure quick and easy maintenance and
should make suggestions for how performance of the maintenance by the
owner would be ensured.
b. Meeting the Proposed NOX Standard
The NOX standard proposed today requires approximately a
90 percent reduction in NOX emissions beyond the levels
expected from the 2004 emission standards. Historically, catalytic
reduction of NOX emissions in the oxygen-rich environment
typical of diesel exhaust has been difficult because known
NOX reduction mechanisms tend to be highly selective for
oxygen rather than NOX. Nonetheless, there are exhaust
emission control devices that reduce the NOX to form
harmless oxygen and nitrogen. These devices are the lean NOX
catalyst, the NOX adsorber, selective catalytic reduction
(SCR), and non-thermal plasma.
The lean NOX catalyst has been shown to provide up to a
30 percent NOX reduction under limited steady-state
conditions. Despite a large amount of development effort,
NOX reductions over the heavy-duty transient federal test
procedure (FTP) have been demonstrated only on the order of 12
percent.\93\ Consequently, the lean NOX
[[Page 35469]]
catalyst does not appear to be capable of enabling the significantly
lower NOX emissions required by the proposed NOX
standard.
---------------------------------------------------------------------------
\93\ Kawanami, M., et al., Advanced Catalyst Studies of Diesel
NOX Reduction for On-Highway Trucks, SAE 950154.
---------------------------------------------------------------------------
NOX adsorbers were first introduced in the power
generation market less than five years ago. Since then, NOX
adsorber systems in stationary source applications have enjoyed
considerable success. In 1997, the South Coast Air Quality Management
District of California determined that a NOX adsorber system
provided the ``Best Available Control Technology'' NOX limit
for gas turbine power systems.\94\ Average NOX control for
these power generation facilities is in excess of 92 percent.\95\
---------------------------------------------------------------------------
\94\ Letter from Barry Wallerstein, Acting Executive Officer,
SCAQMD, to Rober Danziger, Goal Line Environmental Technologies,
dated December 8, 1997, www.glet.com.
\95\ Reyes and Cutshaw, SCONOX Catalytic Absorption
System, December 8, 1998. www.glet.com.
---------------------------------------------------------------------------
Recently, the NOX adsorber's stationary source success
has caused some to turn their attention to applying NOX
adsorber technology to lean burn engines in mobile source applications.
With only a few years of development effort, NOX adsorber
catalysts have been developed and are now in production for gasoline
direct injection vehicles in Japan. The 2000 model year will see the
first U.S. application of this technology with the introduction of the
Honda Insight, which will be certified to the California LEV-I ULEV
category standard.
Although diesel vehicle manufacturers have not yet announced
production plans for NOX adsorber-based systems, they are
known to have development efforts underway to demonstrate their
potential. In Europe, both Daimler-Chrysler and Volkswagen, driven by a
need to meet stringent Euro IV emission standards, have published
results showing how they would apply the NOX adsorber
technology to their diesel powered passenger cars. Volkswagen reports
that it has already demonstrated NOX emissions of 0.137
g/km (0.22 g/mi) on a diesel powered Passat passenger car equipped with
a NOX adsorber catalyst.\96\
---------------------------------------------------------------------------
\96\ Pott, E., et al., Potential of NOX-Trap Catalyst
Application for DI-Diesel Engines.
---------------------------------------------------------------------------
Likewise, in the United States, heavy-duty engine manufacturers
have begun investigating the use of NOX adsorber
technologies as a more cost effective means to control NOX
emissions when compared to more traditional in-cylinder approaches.
Cummins Engine Company reported, at DOE's 1999 Diesel Engine Emissions
Reduction workshop, that they had demonstrated an 80 percent reduction
in NOX emissions over the Supplemental Steady State test and
58 percent over the heavy-duty FTP cycle using a NOX
adsorber catalyst.
In spite of these promising developments, work in the United States
on NOX adsorbers has been limited in comparison to the rest
of the world for at least a couple of reasons: (1) prior to today's
proposal, emission standards have not necessitated the use of
NOX exhaust emission controls on heavy-duty diesel engines;
and, (2) there has not been a commitment in the U.S. to guarantee the
availability of low sulfur diesel fuel. This is in stark contrast to
Europe where the Euro IV and Euro V emission standards, along with the
commitment to low sulfur diesel fuel, have led to rapid advancements of
NOX exhaust emission control technology. We believe, based
on input from industry members that develop and manufacture emission
control devices such as NOX adsorbers, that the prospect of
low sulfur diesel fuel in the U.S. market will drive rapid advancement
of this promising NOX control technology.\97\
---------------------------------------------------------------------------
\97\ Letter from Bruce Bertelsen, Executive Director,
Manufacturers of Emission Controls Association, to Margo Oge, EPA,
dated April 5, 2000.
---------------------------------------------------------------------------
NOX adsorbers work by providing a NOX storage
feature, a NOX adsorber, during periods of fuel lean
operation. This is then combined with the typical three-way catalyst,
like those used for years in stoichiometric gasoline applications. The
combination of adsorber plus three-way catalyst allows storage of
NOX on the adsorber during fuel lean-oxygen rich operation,
then removal of NOX from the adsorber and reduction of
NOX over the three-way catalyst during fuel rich-oxygen lean
operation. This removal of NOX from the adsorber is termed
``NOX regeneration'' and generally requires purposeful
controlled addition of small amounts of fuel into the exhaust stream at
regular intervals.
Improving NOX reduction efficiencies over the diesel
exhaust temperature range is key to meeting the proposed standards.
Current NOX adsorbers, for instance, have a high reduction
efficiency (over 90 percent NOX reduction) over a fairly
broad temperature range (exhaust temperatures from 250 deg.C to
450 deg.C) allowing today's proposed standard to be met over this
range.\98\ Extending the range of high NOX reduction
efficiency at both high temperatures and low temperatures will allow
higher average reduction efficiencies over the FTP and in use. The
performance of the NOX adsorber may vary somewhat with
exhaust temperature across the NTE. For that reason, engine-out
NOX emissions will have to be flattened over the NTE to
accommodate these variations in NOX reduction performance.
We believe that such an approach would allow the NOX NTE and
supplemental steady-state composite to be met. We seek comment and data
on the relationship between NOX adsorber performance and
engine operating mode.
---------------------------------------------------------------------------
\98\ Dou, D., Bailey, O., Investigation of NOX
Adsorber Catalyst Deactivation, SAE 982594.
---------------------------------------------------------------------------
The greatest hurdle to the application of the NOX
adsorber technology has been its sensitivity to sulfur in diesel fuel.
The NOX adsorber stores sulfur emissions in a manner
directly analogous to its storage of NOX under lean
conditions. Unfortunately, the stored sulfur is not readily removed
from the adsorber during the type of operating conditions under which
NOX is readily removed. This leads to an eventual loss of
NOX adsorber function and, thus, a loss of NOX
emission control. This potential loss of NOX adsorber
function can most effectively be addressed through the reduction of
sulfur in diesel fuel. For a more complete description of the
sensitivity of this technology to sulfur in diesel fuel, and for an
explanation of the need for low sulfur diesel fuel, please refer to
section III.F.
The preceding discussion of NOX adsorbers assumes that
SOX (SO2 and SO3) emissions will be
``trapped'' on the surface of the catalyst effectively poisoning the
device and requiring a ``desulfation'' (sulfur removal event) to
recover catalyst efficiency. We believe that, at the proposed 15 ppm
cap fuel sulfur level, this strategy will allow effective
NOX control with moderately frequent desulfation and with a
modest fuel consumption of one percent, which we anticipate will be
more that offset by reduced reliance on current more expensive (from a
fuel economy standpoint) NOX control strategies (see
discussion in section III.F for estimates of overall fuel economy
impacts). In order to reduce the fuel economy impact and to simplify
engine control, some manufacturers are investigating the use of
SOX ``traps'' (sometimes called SOX
``adsorbers'') to remove sulfur from the exhaust stream prior to it
flowing through the NOX adsorber catalyst.
The SOX trap is, in essence, a modified NOX
adsorber designed to preferentially store (trap) sulfur on its surface
rather than NOX. It differs from a NOX adsorber
in that it is not effective at storing NOX and it more
easily releases stored sulfur. A SOX trap placed upstream of
a NOX adsorber could effectively remove very modest
[[Page 35470]]
amounts of sulfur from the exhaust, thereby limiting sulfur's effect on
the NOX adsorber. Unfortunately, the SOX trap
like the NOX adsorber, will eventually fill every available
storage site with sulfate and will cease to function unless the sulfur
is removed. Desulfating the SOX adsorber on the vehicle is
problematic since it would be upstream of the NOX adsorber
which could then be poisoned quite rapidly by the SOX
released from the SOX trap. This problem could presumably be
solved through some form of NOX adsorber by-pass during
SOX trap desulfation (although control of NOX
during this event may be problematic). Alternatively, removal and
replacement of the SOX adsorber on a fixed service interval
would solve this problem, albeit at some cost. In an oral presentation
made to EPA, an engine manufacturer estimated the storage capacity of a
SOX trap at approximately one pound of SO2 per
cubic foot of catalyst.\99\ For fuel with a seven ppm average sulfur
level, this would mean replacement of a 48 liter SOX trap
approximately every 100,000 miles.\100\ This more than doubles the
catalyst size we have projected for a typical heavy heavy-duty vehicle
in this proposal, while only providing protection for a small fraction
of its useful life. Because of practical limitations on SOX
trap size, we do not believe that the use of SOX traps can
avoid the need for very low-sulfur diesel fuel, and we have received no
information from manufacturers that contradicts this belief. We invite
comment on the use of a SOX trap to protect NOX
adsorbers and on the appropriateness of SOX traps being
replaced on a fixed interval as described here. Further, we request
comment and supporting data to indicate the interval at which
SOX traps would require replacement.
---------------------------------------------------------------------------
\99\ Memorandum from Byron Bunker, US EPA to Air Docket A-99-06,
``Meeting between EPA, OMB, representatives of major oil companies,
and representatives of major diesel engine manufacturers,'' Item II-
E-17.
\100\ This estimate assumes that a heavy-duty vehicle averages
six miles per gallon of fuel, that diesel fuel weighs seven pounds
per gallon, that diesel fuel has seven ppm sulfur, and that a sulfur
trap could store one pound of SO2 in a cubic foot of
catalyst.
---------------------------------------------------------------------------
Selective Catalytic Reduction (SCR), like NOX adsorber
technology, was first developed for stationary applications and is
currently being refined for the transient operation found in mobile
applications.\101\ With the SCR system, a urea solution is injected
upstream of the catalyst which breaks down the urea into ammonia and
carbon dioxide. Catalysts containing precious metals (platinum) can be
used at the inlet and outlet of SCR systems designed for mobile
applications to improve low temperature NOX reduction
performance and to oxidize any ammonia that may pass through the SCR,
respectively. Such SCR systems are referred to as ``Compact SCR.'' The
use of these platinum catalysts enable Compact SCR systems to achieve
large NOX reductions, but introduce sensitivity to sulfur in
much the same way as for diesel particulate filter technologies. Sulfur
in diesel fuel inhibits low temperature performance and results in high
sulfate make leading directly to higher particulate emissions. For a
further discussion of Compact SCR system sensitivity to sulfur in
diesel fuel, and of its need for low sulfur diesel fuel, refer to
section III.F.
---------------------------------------------------------------------------
\101\ SRC systems being developed for mobile applications are
more appropriately called ``compact SCR'' systems, which incorporate
on oxidation catalyst. Generally, reference to SCR throughout this
preamble should be taken to mean compact SCR.
---------------------------------------------------------------------------
The reduction efficiency window for Compact SCR is similar to the
NOX adsorber, with greater than 80 percent efficiency at
exhaust temperatures as low as 250 deg.C.\102\ Peak efficiency values
of over 90 percent are possible under certain conditions, but the cool
exhaust temperature characteristics of diesel engines make excursions
outside the optimum efficiency window of current Compact SCR systems
quite frequent. As a result, the cycle average NOX reduction
efficiency is on the order of 77 percent over the heavy-duty FTP.\103\
Over the Supplemental Steady State test modes, the SCR has been shown
to have 65-99 percent efficiency.\104\ The high efficiency over a broad
temperature range should also allow the NTE to be met. With additional
development effort, we believe the NOX reduction efficiency
of SCR can be further improved to meet NOX levels as low as
those proposed today.
---------------------------------------------------------------------------
\102\ Klein, H., et al., NOX Reduction for Diesel
Vehicles, Degussa-Huls AG, Corning Clean Diesel Workshop, Sept. 27-
29, 1999.
\103\ ``Demonstration of Advanced Emission Control Technologies
Enabling Diesel-Powered Heavy-Duty Engines to Achieve Low Emission
Levels,'' Manufacturers of Emission Controls Association, June 1999.
\104\ ``Demonstration of Advanced Emission Control Technologies
Enabling Diesel-Powered Heavy-Duty Engines to Achieve Low Emission
Levels,'' Manufacturers of Emission Controls Association, June 1999.
---------------------------------------------------------------------------
However, significant challenges remain for Compact SCR systems to
be applied to mobile source applications. In addition to the need for
very low sulfur diesel fuel to achieve high NOX conversion
efficiencies and to control sulfate PM emissions, Compact SCR systems
require vehicles to be refueled with urea. The infrastructure for
delivering urea at the pump needs to be in place for these devices to
be feasible in the marketplace; and before development of the
infrastructure can begin, the industry must decide upon a standardized
method of delivery for the urea supply. In addition to this, there
would need to be adequate safeguards in place to ensure the urea is
used throughout the life of the vehicle, since, given the added cost of
urea, there would be incentive not to refill the urea tank. Because
urea is required for the SCR system to function, urea replenishment
would need to be assured.
Another, very recent approach to NOX reduction is the
non-thermal plasma assisted catalyst. This system works by applying a
high voltage across two metal plates in the exhaust stream to form ions
that serve as oxidizers. Essentially, the plasma would displace a
conventional platinum based oxidation catalyst in function. Once
oxidized to NO2, NOX can be more readily reduced
over a precious metal catalyst. While the concept is promising, this
technology is so new that essentially no data exists showing its
effectiveness at controlling NOX. We expect that, if and
when the non-thermal plasma approach to NOX control becomes
viable, it will also require the use of low sulfur diesel fuel due to
its reliance on a precious metal catalyst to reduce the
NO2.\105\
---------------------------------------------------------------------------
\105\ ``The Impact of Sulfur in Diesel Fuel on Catalyst Emission
Control Technology,'' report by the Manufacturers of Emission
Controls Association, March 15, 1999.
---------------------------------------------------------------------------
Based on the discussion above, we believe that NOX
aftertreatment technology, in combination with low sulfur diesel fuel,
is capable of meeting the very stringent NOX standards we
have proposed. The clear intent that this proposal provides to make
very low sulfur diesel fuel available in the future and to establish
emission standards which necessitate advanced NOX controls
should enable rapid development of these technologies. The
NOX adsorber technology has shown incredible advancement in
the last five years, moving from stationary source applications to
lean-burn gasoline, and now to heavy-duty diesel engines. Given this
rapid progress, the availability of very low sulfur diesel fuel, and
the lead time provided by today's proposal, we believe that applying
NOX adsorbers to heavy-duty diesel engines would enable
manufacturers to comply with our proposed standards. Compact SCR has
been slower in developing than NOX adsorbers but could be
applied to mobile source applications if the
[[Page 35471]]
difficult urea infrastructure issues can be addressed.
c. Meeting the Proposed NMHC Standard
Meeting the NMHC standards proposed today should not present any
special challenges to diesel manufacturers. Since all of the devices
discussed above--catalyzed particulate filters, NOX
adsorbers, and SCR--contain platinum and other precious metals to
oxidize NO to NO2, they are also very efficient oxidizers of
hydrocarbons. Reductions of greater than 95 percent have been shown
over transient FTP and supplemental steady-state modes.\106\ Given that
typical engine-out NMHC is expected to be in the 0.2 g/bhp-hr range for
engines meeting the 2004 standards, this level of NMHC reduction will
easily allow the 0.14 g/bhp-hr NMHC standard to be met over the
transient FTP, the supplemental steady-state test, and the NTE zone.
---------------------------------------------------------------------------
\106\ ``The Impact of Sulfur in Diesel Fuel on Catalyst Emission
Control Technology,'' report by the Manufacturers of Emission
Controls Association, March 15, 1999, pp. 9 & 11.
---------------------------------------------------------------------------
d. Meeting the Crankcase Emissions Requirements
The most common way to eliminate crankcase emissions has been to
vent the blow-by gases into the engine air intake system, so that the
gases can be recombusted. Until today's proposal, we have required that
crankcase emissions be controlled only on naturally aspirated diesel
engines. We have made an exception for turbocharged heavy-duty diesel
engines because of concerns in the past about fouling that could occur
by routing the diesel particulates (including engine oil) into the
turbocharger and aftercooler. However, this is an environmentally
significant exception since most heavy-duty diesel trucks use
turbocharged engines, and a single engine can emit over 100 pounds of
NOX, NMHC, and PM from the crankcase over the lifetime of
the engine.
Therefore, we have proposed to eliminate this exception. We
anticipate that the heavy-duty diesel engine manufacturers will be able
to control crankcase emissions through the use of closed crankcase
filtration systems or by routing unfiltered blow-by gases directly into
the exhaust system upstream of the emission control equipment. The
closed crankcase filtration systems work by separating oil and
particulate matter from the blow-by gases through single or dual stage
filtration approaches, routing the blow-by gases into the engine's
intake manifold and returning the filtered oil to the oil sump. These
systems are required for new heavy-duty diesel vehicles in Europe
starting this year. Oil separation efficiencies in excess of 90 percent
have been demonstrated with production ready prototypes of two stage
filtration systems.\107\ By eliminating 90 percent of the oil that
would normally be vented to the atmosphere, the system works to reduce
oil consumption and to eliminate concerns over fouling of the intake
system when the gases are routed through the turbocharger. An
alternative approach would be to route the blow-by gases into the
exhaust system upstream of the catalyzed diesel particulate filter
which would be expected to effectively trap and oxidize the engine oil
and diesel PM. This approach may require the use of low sulfur engine
oil to ensure that oil carried in the blow-by gases does not compromise
the performance of the sulfur sensitive emission control equipment. We
request comment on the use of either approach to crankcase emissions
control.
---------------------------------------------------------------------------
\107\ Letter from Marty Barris Donaldson Corporation to Byron
Bunker US EPA, March 2000. EPA Air Docket A-99-06.
---------------------------------------------------------------------------
e. The Complete System
We expect that the technologies described above would be integrated
into a complete emission control system. The engine-out emissions will
be traded off against the exhaust emission control package in such a
way that the result is the most beneficial from a cost, fuel economy
and emissions standpoint. The engine-out characteristics will also have
to be tailored to the needs of the exhaust emission control devices
used. The NOX adsorber, for instance, will require periods
of oxygen depleted exhaust flow in order to regenerate. This may be
most efficiently done by reducing the air-fuel ratio that the engine is
operating under during the regeneration to reduce the oxygen content of
the exhaust. Further, it is envisioned that the PM device will be
integrated into the exhaust system upstream of the NOX
reduction device. This placement would allow the PM trap to take
advantage of the engine-out NOX as an oxidant for the
particulate, while removing the particulate so that the NOX
exhaust emission control device will not have to deal with large PM
deposits which may cause a deterioration in performance. Of course,
there is also the possibility of integrating the PM and NOX
exhaust emission control devices into a single unit to replace a
muffler and save space. Particulate free exhaust may also allow for new
options in EGR system design to optimize its efficiency.
We expect that the exhaust emission control emission reduction
efficiency will vary with temperature and space velocity \108\ across
the NTE zone. Consequently, to maintain the NTE emission cap, the
engine-out emissions would have to be calibrated with exhaust emission
control performance characteristics in mind. This would be accomplished
by lowering engine-out emissions where the exhaust emission control was
less efficient. Conversely, where the exhaust emission control is very
efficient at reducing emissions, the engine-out emissions could be
tuned for higher emissions and better fuel economy. These trade-offs
between engine-out emissions and exhaust emission control performance
characteristics are similar to those of gasoline engines with three-way
catalysts in today's light-duty vehicles. Managing and optimizing these
trade-offs will be crucial to effective implementation of exhaust
emission control devices on diesel applications.
---------------------------------------------------------------------------
\108\ The term, ``space velocity,'' is a measure of the volume
of exhaust gas that flows through a device.
---------------------------------------------------------------------------
2. Feasibility of Stringent Standards for Heavy-Duty Gasoline
Gasoline emission control technology has evolved rapidly in recent
years. Emission standards applicable to 1990 model year vehicles
required roughly 90 percent reductions in exhaust NMHC and CO emissions
and a 75 percent reduction in NOX emissions compared to
uncontrolled emissions. Today, some vehicles' emissions are well below
those necessary to meet the current federal heavy-duty gasoline
standards, the proposed 2004 heavy-duty gasoline standards, and the
California Low-Emission Vehicle standards for medium-duty vehicles. The
continuing emissions reductions have been brought about by ongoing
improvements in engine air-fuel management hardware and software plus
improvements in exhaust system and catalyst designs.
We believe that the types of changes being seen on current vehicles
have not yet reached their technological limits and continuing
improvement will allow them to meet today's proposed standards. The
Draft RIA describes a range of specific emission control techniques
that we believe could be used. There is no need to invent new
technologies, although there will be a need to apply existing
technology more effectively and more broadly. The focus of the effort
will be in the application and optimization of these existing
technologies.
[[Page 35472]]
In our light-duty Tier 2 rule, we have required that gasoline
sulfur levels be reduced to a 30 ppm average, with an 80 ppm maximum.
This sulfur level reduction is the primary enabler for the Tier 2
standards. Similarly, we believe that the gasoline sulfur reduction,
along with refinements in existing gasoline emission control
technology, will be sufficient to allow heavy-duty gasoline vehicles
and engines to meet the emission standards sought by today's proposal.
However, we recognize that the emission standards are stringent,
and considerable effort would have to be undertaken. For example, we
expect that every engine would have to be recalibrated to improve upon
its cold start emission performance. Manufacturers would have to
migrate their light-duty calibration approaches to their heavy-duty
offerings to provide cold start performance in line with what they will
have to achieve to meet the Tier 2 standards.
We also project that the proposed 2007 heavy-duty standards would
require the application of advanced engine and catalyst systems similar
to those projected for their light-duty counterparts. Historically,
manufacturers have introduced technology on light-duty gasoline
applications and then applied those technologies to their heavy-duty
gasoline applications. The proposal would allow manufacturers to take
this same approach for 2007. In other words, we expect that
manufacturers would meet the proposed 2007 standards through the
application of technology developed to meet light-duty Tier 2 standards
for 2004.
Improved calibration and systems management would be critical in
optimizing the performance of the engine with the advanced catalyst
system. Precise air/fuel control must be tailored for emissions
performance and must be optimized for both FTP and SFTP type driving.
Calibration refinements may also be needed for EGR system optimization
and to reduce cold start emissions through methods such as spark timing
retard. We also project that electronic control modules with expanded
capabilities would be needed on some vehicles and engines.
We also expect increased use of other technologies in conjunction
with those described above. We expect some increased use of air
injection to improve upon cold start emissions. We may also see air-gap
manifolds, exhaust pipes, and catalytic converter shells as a means of
improving upon catalyst light-off times thereby reducing cold start
emissions. Other, non-catalyst related improvements to gasoline
emission control technology include, as already stated, higher speed
computer processors which enable more sophisticated engine control
algorithms and improved fuel injectors providing better fuel
atomization thereby improving fuel combustion.
Catalyst system durability is, and will always be, a serious
concern. Historically, catalysts have deteriorated when exposed to very
high temperatures. This has long been a concern especially for heavy-
duty work vehicles. However, catalyst manufacturers continue to make
strides in the area of thermal stability and we expect that
improvements in thermal stability will continue for the next generation
of catalysts.
We believe that, by optimizing all of these technologies,
manufacturers will be able to achieve the proposed emission levels.
Advanced catalyst systems have already shown potential to reduce
emissions to close to the proposed levels. Some current California
vehicles are certified to levels below 0.2 g/mi NOX.
California tested an advanced catalyst system on a vehicle loaded to a
test weight comparable to a heavy-duty vehicle test weight and achieved
NOX and NMOG levels of 0.1 g/mi and 0.16 g/mi, respectively.
The California vehicle with the advanced catalyst had not been
optimized as a system to take full advantage of the catalyst's
capabilities.
The ABT program can also be an important tool for manufacturers in
implementing a new standard. The program allows manufacturers to
transition to the more stringent standards by introducing emissions
controls over a longer period of time, as opposed to a single model
year. Manufacturers plan their product introductions well in advance.
With ABT, manufacturers can better manage their product lines so that
the new standards don't interrupt their product introduction plans.
Also, the program allows manufacturers to focus on higher sales volume
vehicles first and use credits for low sales volume vehicles.
We request comment on the feasibility of the proposed standards and
request data that would help us evaluate advanced system durability.
3. Feasibility of the Proposed Evaporative Emission Standards
The proposed evaporative emission standards appear to be feasible
now. Many designs have been certified that already meet these
standards. A review of 1998 model year certification data indicates
that five of eight evaporative system families in the 8,500 to 14,000
pound range comply with the proposed 1.4 g/test standard, while all
evaporative system families in the over 14,000 pound range comply with
the proposed 1.9 g/test standard.
The proposed evaporative emission standards would not require the
development of new materials or, in many cases, even the new
application of existing materials. Low permeability materials and low
loss connections and seals are already used to varying degrees on
current vehicles. Today's proposed standards would likely ensure their
consistent use and discourage manufacturers from switching to cheaper
materials or designs to take advantage of the large safety margins they
have under current standards.
There are two approaches to reducing evaporative emissions for a
given fuel. One is to minimize the potential for permeation and leakage
by reducing the number of hoses, fittings and connections. The second
is to use less permeable hoses and lower loss fittings and connections.
Manufacturers are already employing both approaches.
Most manufacturers are moving to ``returnless'' fuel injection
systems. Through more precise fuel pumping and metering, these systems
eliminate the return line in the fuel injection system. The return line
carries unneeded fuel from the fuel injectors back to the fuel tank.
Because the fuel injectors are in such close contact with the hot
engine, the fuel returned from the injectors to the fuel tank has been
heated. This returned fuel is a significant source of fuel tank heat
and vapor generation. The elimination of the return line also reduces
the total length of hose on the vehicle through which vapors can
permeate, and it reduces the number of fittings and connections through
which fuel can leak.
Low permeability hoses and seals, and low loss fittings are
available and are already used on many vehicles. Fluoropolymer
materials can be added as liners to hose and component materials to
yield large reductions in permeability over such conventional materials
as monowall nylon. In addition, fluoropolymer materials can greatly
reduce the adverse impact of alcohols in gasoline on permeability of
evaporative components, hoses and seals.
F. Need for Low-Sulfur Diesel Fuel
The following discussion will build upon the brief sulfur
sensitivity points made earlier in this section by providing a more in
depth discussion of sulfur's effect on the most promising diesel
exhaust emission control technologies. In order to evaluate the effect
of sulfur
[[Page 35473]]
on diesel exhaust control technologies, we used three key factors to
categorize the impact of sulfur in fuel on emission control function.
These factors were efficiency, reliability, and fuel economy. Taken
together these three factors lead us to believe that diesel fuel sulfur
levels of 15 ppm will be required in order to make feasible the
proposed heavy-duty vehicle emission standards (a discussion of higher
sulfur fuel standards, and what they might mean is included in Section
VI.B). Brief summaries of these factors are provided below. A more in-
depth review is given in the following subsections and the RIA
associated with this proposal.
The efficiency of emission control technologies to reduce harmful
pollutants is directly affected by sulfur in diesel fuel. Initial and
long term conversion efficiencies for NOX, NMHC, CO and
diesel PM emissions are significantly reduced by catalyst poisoning and
catalyst inhibition due to sulfur. NOX conversion
efficiencies with the NOX adsorber technology in particular
are dramatically reduced in a very short time due to sulfur poisoning
of the NOX storage bed. In addition, total PM control
efficiency is negatively impacted by the formation of sulfate PM. As
explained in detail in the following sections, all of the advanced
NOX and PM technologies described here have the potential to
make significant amounts of sulfate PM under operating conditions
typical of heavy-duty vehicles. The formation of sulfate PM is likely
to be in excess of the total PM standard proposed today, unless diesel
fuel sulfur levels are at or below 15 ppm. Based on the strong negative
impact of sulfur on emission control efficiencies for all of the
technologies evaluated, we believe that 15 ppm represents an upper
threshold of acceptable diesel fuel sulfur levels.
Reliability refers to the expectation that emission control
technologies must continue to function as required under all operating
conditions for the life of the vehicle. As discussed in the following
sections, sulfur in diesel fuel can prevent proper operation of both
NOX and PM control technologies. This can lead to permanent
loss in emission control effectiveness and even catastrophic failure of
the systems. Sulfur in diesel fuel impacts reliability by decreasing
catalyst efficiency (poisoning of the catalyst), increasing diesel
particulate filter loading, and negatively impacting system
regeneration functions. Among the most serious reliability concerns
with sulfur levels greater than 15 ppm are those associated with
failure to properly regenerate. In the case of the NOX
adsorber, failure to regenerate will lead to rapid loss of
NOX emission control as a result of sulfur poisoning of the
NOX adsorber bed. In the case of the diesel particulate
filter, sulfur in the fuel reduces the reliability of the regeneration
function. If regeneration does not occur, catastrophic failure of the
filter could occur. It is only by the availability of very low-sulfur
diesel fuels that these technologies become feasible. The analysis
given in the following section makes clear that diesel fuel sulfur
levels will need to be consistent with today's proposed standard in
order to ensure robust operation of the technologies under the variety
of operating conditions anticipated to be experienced in the field.
Fuel economy impacts due to sulfur in diesel fuel affect both
NOX and PM control technologies. The NOX adsorber
sulfur regeneration cycle (desulfation cycle) can consume significant
amounts of fuel unless fuel sulfur levels are very low. The larger the
amount of sulfur in diesel fuel, the greater the adverse effect on fuel
economy. As sulfur levels increase above 15 ppm, the adverse effect on
fuel economy becomes more significant, increasing above one percent and
doubling with each doubling of fuel sulfur level. Likewise, PM trap
regeneration is inhibited by sulfur in diesel fuel. This leads to
increased PM loading in the diesel particulate filter and increased
work to pump exhaust across this restriction. With very low sulfur
diesel fuel, diesel particulate filter regeneration can be optimized to
give a lower (on average) exhaust backpressure and thus better fuel
economy. Thus for both NOX and PM technologies the lower the
fuel sulfur level the better.
1. Diesel Particulate Filters and the Need for Low-Sulfur Fuel
As discussed earlier in this section, un-catalyzed diesel
particulate filters require exhaust temperatures in excess of 650 deg.C
in order for the collected PM to be oxidized by the oxygen available in
diesel exhaust. That temperature threshold for oxidation of PM by
exhaust oxygen can be decreased to 450 deg.C through the use of base
metal catalytic technologies. Unfortunately, for a broad range of
operating conditions diesel exhaust is significantly cooler than
400 deg.C. If oxidation of the trapped PM could be assured to occur at
exhaust temperatures lower than 300 deg.C, then diesel particulate
filters would be expected to be robust for most applications and
operating regimes. The only means that we are aware of to ensure
oxidation of PM (regeneration of the trap) at such low exhaust
temperatures is by using oxidants which are more readily reduced than
oxygen. One such oxidant is NO2.
NO2 can be produced in diesel exhaust through the
oxidation of the nitrogen monoxide (NO), created in the engine
combustion process, across a catalyst. The resulting NO2-
rich exhaust is highly oxidizing in nature and can oxidize trapped
diesel PM at temperatures as cool as 250 deg.C.\109\ Some platinum
group metals are known to be good catalysts to promote the oxidation of
NO to NO2. Therefore in order to ensure passive regeneration
of the diesel particulate filters, significant amounts of platinum
group metals (primarily platinum) are being used in the wash-coat
formulations of advanced diesel particulate filters. The use of
platinum to promote the oxidation of NO to NO2 introduces
several system vulnerabilities affecting both the durability and the
effectiveness of the catalyzed diesel particulate filter when sulfur is
present in diesel exhaust. The two primary mechanisms by which sulfur
in diesel fuel limits the robustness and effectiveness of diesel
particulate filters are inhibition of trap regeneration (i.e.,
inhibition of the oxidation of NO to NO2) and a dramatic
loss in total PM control effectiveness due to the formation of sulfate
PM. Unfortunately, these two mechanisms trade-off against one another
in the design of diesel particulate filters. Changes to improve the
reliability of regeneration by increasing catalyst loadings lead to
increased sulfate emissions and thus loss of PM control effectiveness.
Conversely, changes to improve PM control by reducing the use of
platinum group metals and, therefore, limiting ``sulfate make'' leads
to less reliable regeneration. We believe the only means of achieving
good PM emission control and reliable operation is to reduce sulfur in
diesel fuel to the level proposed today, as shown in the following
subsections.
---------------------------------------------------------------------------
\109\ Hawker, P. et al, Experience with a New Particulate Trap
Technology in Europe, SAE 970182.
---------------------------------------------------------------------------
a. Inhibition of Trap Regeneration Due to Sulfur
The passively regenerating diesel particulate filter technologies
rely on the generation of a very strong oxidant, NO2, to
ensure that the carbon captured by the PM trap's filtering media is
oxidized under normal operating conditions. NO2 is produced
through the oxidation of NO in the exhaust across a platinum catalyst.
This oxidation is inhibited by the presence of
[[Page 35474]]
SO2 in the exhaust stream because the preferential reaction
across the platinum is oxidation of SO2 to SO3,
rather than oxidation of NO to NO2.\110\ This inhibition
limits the total amount of NO2 available for oxidation of
the trapped diesel PM, thereby raising the minimum exhaust temperature
required to ensure trap regeneration. Without sufficient
NO2, the amount of PM trapped in the diesel particulate
filter will continue to increase and can lead to excessive exhaust back
pressure, low engine power, and even catastrophic failure of the diesel
particulate filter itself.
---------------------------------------------------------------------------
\110\ Hawker, P. et al, Experience with a New Particulate Trap
Technology in Europe, SAE 970182.
---------------------------------------------------------------------------
Full field test evaluations and retrofit applications of these
catalytic trap technologies are occurring in parts of Europe where low-
sulfur diesel fuel is already available.\111\ The experience gained in
these field tests helps to clarify the need for very low-sulfur diesel
fuel. In Sweden and some European city centers where below 10 ppm
diesel fuel sulfur is readily available, more than 3,000 catalyzed
diesel particulate filters have been introduced into retrofit
applications without a single failure. Given the large number of
vehicles participating in these test programs and the extended time
periods of operation (some vehicles have been operating with traps for
more than 4 years and in excess of 300,000 miles \112\), this is a
strong indication of the robustness of this technology on 10 ppm low-
sulfur diesel fuel. The field experience in areas where sulfur is
capped at 50 ppm has been less definitive. In regions without extended
periods of cold ambient conditions, such as the United Kingdom, field
tests on 50 ppm cap low-sulfur fuel have also been positive, matching
the success at 10 ppm. However, field tests in Finland where colder
winter conditions are sometimes encountered (similar to many parts of
the United States) have revealed a failure rate of 10 percent. This 10
percent failure rate has been attributed to insufficient trap
regeneration due to fuel sulfur in combination with low ambient
temperatures.\113\ As the ambient conditions in Sweden are expected to
be no less harsh than Finland, we are left to conclude that the
increased failure rates noted here are due to the higher fuel sulfur
level in a 50 ppm cap fuel versus a 10 ppm cap fuel. The failure of
some fraction of the traps to regenerate on 50 ppm cap fuel is believed
to be primarily due to inhibition of the NO to NO2
conversion as described here.
---------------------------------------------------------------------------
\111\ Through tax incentives 50 ppm cap sulfur fuel is widely
available in the United Kingdom and 10 ppm sulfur fuel is available
in Sweden and in certain European city centers.
\112\ Allansson, et al. SAE 2000-01-0480.
\113\ Letter from Dr. Barry Cooper, Johnson Matthey, to Don
Kopinski, US EPA, Air Docket A-99-06.
---------------------------------------------------------------------------
The failure mechanisms experienced by diesel particulate filters
due to low NO2 availability vary significantly in severity
and long term consequences. In the most fundamental sense, the failure
is defined as an inability to oxidize the stored particulate at a rate
fast enough to prevent net particulate accumulation over time. The
excessive accumulation of PM over time blocks the passages through the
filtering media, making it more restrictive to exhaust flow. In order
to continue to force the exhaust through the now more restrictive
filter the exhaust pressure upstream of the filter must increase. This
increase in exhaust pressure is commonly referred to as increasing
``exhaust backpressure'' on the engine.
The increased exhaust backpressure represents increased work being
done by the engine to force the exhaust gas through the increasingly
restrictive particulate filter. Unless the filter is frequently
cleansed of the trapped PM, this increased work can lead to reductions
in engine performance and increases in fuel consumption. This loss in
performance may be noted by the vehicle operator in terms of poor
acceleration and generally poor driveability of the vehicle. In some
cases, engine performance can be so restricted that the engine stalls,
stranding the vehicle. This progressive deterioration of engine
performance as more and more PM is accumulated in the filter media is
often referred to as ``trap plugging.'' Trap plugging also has the
potential to cause engine damage. If the exhaust backpressure gets high
enough to open the exhaust valves prematurely, the exhaust valves can
then strike the piston causing catastrophic engine failure. Whether
trap plugging occurs, and the speed at which it occurs, will be a
function of many variables in addition to the fuel sulfur level; these
variables include the vehicle application, its duty cycle, and ambient
conditions. However, if the fuel sulfur level is sufficient to prevent
trap regeneration in any real world conditions experienced, trap
plugging can occur. This is not to imply that any time a vehicle is
refueled once with high sulfur fuel trap plugging will occur. Rather,
it is important to know that the use of fuel with sulfur levels higher
than 15 ppm significantly increases the chances of particulate filter
failure.
Catastrophic failure of the filter can occur when excessive amounts
of PM are trapped in the filter due to a lack of NO2 for
oxidation. This failure occurs when excessive amounts of trapped PM
begin to oxidize at high temperatures (combustion-like temperatures of
over 1000 deg.C) leading to a ``run-away'' combustion of the PM. This
can cause temperatures in the filter media to increase in excess of
that which can be tolerated by the particulate filter itself. For the
cordierite material commonly used as the trapping media for diesel
particulate filters, the high thermal stresses caused by the high
temperatures can cause the material to crack or melt. This can allow
significant amounts of the diesel particulate to pass through the
filter without being captured during the remainder of the vehicle's
life. That is, the trap is destroyed and PM emission control is lost.
As shown above, sulfur in diesel fuel inhibits NO oxidation leading
to increased exhaust backpressure, reduced fuel economy, compromised
reliability, and potentially engine damage. Therefore, we believe that,
in order to ensure reliable and economical operation over a wide range
of expected operating conditions, diesel fuel sulfur levels should be
at or below 15 ppm. With these very low sulfur levels we believe, as
demonstrated by experience in Europe, that catalyzed diesel particulate
filters will prove to be both durable and effective at controlling
diesel particulate emissions to the very low levels that would be
required by today's proposed standard. We request comment on the
inhibition of trap regeneration due to fuel sulfur, along with
supporting data.
b. Loss of PM Control Effectiveness
In addition to inhibiting the oxidation of NO to NO2,
the sulfur dioxide (SO2) in the exhaust stream is itself
oxidized to sulfur trioxide (SO3) at very high conversion
efficiencies by the precious metals in the catalyzed particulate
filters. The SO3 serves as a precursor to the formation of
hydrated sulfuric acid (H2SO4+H2O), or
sulfate PM, as the exhaust leaves the vehicle tailpipe. Virtually all
of the SO3 is converted to sulfate under dilute exhaust
conditions in the atmosphere as well in the dilution tunnel used in
heavy-duty engine testing. Since virtually all sulfur present in diesel
fuel is converted to SO2, the precursor to SO3,
as part of the combustion process, the total sulfate PM is directly
proportional to the amount of sulfur present in diesel fuel. Therefore,
even though diesel particulate filters are very effective at trapping
the carbon and the SOF portions of the total PM, the
[[Page 35475]]
overall PM reduction efficiency of catalyzed diesel particulate filters
drops off rapidly with increasing sulfur levels due to the production
of sulfate PM.
SO2 oxidation is promoted across a catalyst in a manner
very similar to the oxidation of NO, except it is converted at higher
rates, with peak conversion rates in excess of 50 percent. The
SO2 oxidation rate for a platinum based oxidation catalyst
typical of the type which might be used in conjunction with, or as a
washcoat on, a catalyzed diesel particulate filter can vary
significantly with exhaust temperature. At the low temperatures typical
of some urban driving and the heavy-duty federal test procedure (HD-
FTP), the oxidation rate is relatively low, perhaps no higher than ten
percent. However at the higher temperatures that might be more typical
of non-urban highway driving conditions and the Supplemental Steady
State Test (also called the EURO III or 13 mode test), the oxidation
rate may increase to 50 percent or more. These high levels of sulfate
make across the catalyst are in contrast to the very low SO2
oxidation rate typical of diesel engines (less than 2 percent). This
variation in expected diesel exhaust temperatures means that there will
be a corresponding range of sulfate production expected across a
catalyzed diesel particulate filter.
The U.S. Department of Energy in cooperation with industry
conducted a study entitled Diesel Emission Control Sulfur Effects
(DECSE) to provide insight into the relationship between advanced
emission control technologies and diesel fuel sulfur levels. Interim
report number four of this program gives the total particulate matter
emissions from a heavy-duty diesel engine operated with a diesel
particulate filter on several different fuel sulfur levels. A straight
line fit through this data is presented in Table III.F-1 below showing
the expected total direct PM emissions from a heavy-duty diesel engine
on the supplemental steady state test cycle.\114\
---------------------------------------------------------------------------
\114\ Note that direct emissions are those pollutants emitted
directly from the engine or from the tailpipe depending on the
context in which the term is used, and indirect emissions are those
pollutants formed in the atmosphere through the combination of
direct emissions and atmospheric constituents.
Table III.F-1.--Estimated PM Emissions From a Heavy-Duty Diesel Engine
at the Indicated Average Fuel Sulfur Levels
------------------------------------------------------------------------
Supplemental steady state
-----------------------------
Avg. Fuel Sulfur [ppm] Relative
Tailpipe PM [g/ to 3 ppm
bhp-hr] sulfur
------------------------------------------------------------------------
3......................................... 0.003 ..........
7 *....................................... 0.006 100%
15 *...................................... 0.009 200%
30........................................ 0.017 470%
150....................................... 0.071 2,300%
------------------------------------------------------------------------
* The PM emissions at these sulfur levels are based on a straight-line
fit to the DECSE data; PM emissions at other sulfur levels are actual
DECSE data. (Diesel Emission Control Sulfur Effects (DECSE) Program--
Phase II Interim Data Report No. 4, Diesel Particulate Filters-Final
Report, January 2000, Table C1.) Although DECSE tested diesel
particulate filters at these fuel sulfur levels, they do not conclude
that the technology is feasible at all levels, but they do note that
testing at 150 ppm is a moot point as the emission levels exceed the
engine's baseline emission level.
Table III.F-1 makes it clear that there are significant PM emission
reductions possible with the application of catalyzed diesel
particulate filters and low-sulfur diesel fuel. At the observed sulfate
PM conversion rates, the DECSE program results show that the proposed
total PM standard is feasible for diesel particulate filter equipped
engines operated on fuel with a sulfur level at or below 15 ppm. The
results also show that diesel particulate filter control effectiveness
is rapidly degraded at higher diesel fuel sulfur levels due to the high
sulfate PM make observed with this technology.
It is clear that PM reduction efficiencies are limited by sulfur in
diesel fuel and that, in order to realize the PM emissions benefits
sought in this rule, diesel fuel sulfur levels must be as low as
possible. As discussed in Section IV, we believe that a 15 ppm sulfur
cap for highway diesel fuel is the correct level given consideration to
all factors. We request comment on the loss of PM control effectiveness
due to fuel sulfur along with supportive data.
c. Increased Maintenance Cost for Diesel Particulate Filters Due to
Sulfur
In addition to the direct performance and durability concerns
caused by sulfur in diesel fuel, it is also known that sulfur can lead
to increased maintenance costs, shortened maintenance intervals, and
poorer fuel economy for particulate filters. Diesel particulate filters
are highly effective at capturing the inorganic ash produced from
metallic additives in engine oil. This ash is accumulated in the filter
and is not removed through oxidation, unlike the trapped carbonaceous
PM. Periodically the ash must be removed by mechanical cleaning of the
filter with compressed air or water. This maintenance step is
anticipated to occur on intervals of well over one hundred thousand
miles. However, sulfur in diesel fuel increases this ash accumulation
rate through the formation of metallic sulfates in the filter, which
increases both the size and mass of the trapped ash. By increasing the
ash accumulation rate, the sulfur shortens the time interval between
the required maintenance of the filter and negatively impacts fuel
economy. We request comment on the issue of PM filter maintenance costs
and maintenance intervals along with supportive data.
2. Diesel NOX Catalysts and the Need for Low-Sulfur Fuel
All of the NOX exhaust emission control technologies
discussed previously in Section III are expected to utilize platinum to
oxidize NO to NO2 to improve the NOX reduction
efficiency of the catalysts at low temperatures or as in the case of
the NOX adsorber, as an essential part of the process of
NOX storage. This reliance on NO2 as an integral
part of the reduction process means that the NOX exhaust
emission control technologies, like the PM exhaust emission control
technologies, will have problems with sulfur in diesel fuel. In
addition NOX adsorbers have the added constraint that the
adsorption function itself is blocked by the presence of sulfur. These
limitations due to sulfur in the fuel affect both overall performance
of the technologies and, in fact, the very feasibility of the
NOX adsorber technology.
a. Sulfate Particulate Production for NOX Control
Technologies
Two advanced NOX control technologies that are likely to
be able to meet the NOX emission standard being proposed
today are advanced NOX adsorber catalyst systems and
advanced Compact-SCR systems. The NOX adsorber technology
relies on an oxidation function to convert NO to NO2 over
the catalyst bed. For the NOX adsorber this is a fundamental
step prior to the storage of NO2 in the catalyst bed as a
nitrate. Without this oxidation function the catalyst will only trap
that small portion of NOX emissions from a diesel engine
which is NO2. This would reduce the NOX adsorber
effectiveness for NOX reduction from in excess of 90 percent
to something well below 20 percent. The NOX adsorber relies
on platinum to provide this oxidation function due to the need for high
NO
[[Page 35476]]
oxidation rates under the relatively cool exhaust temperatures typical
of diesel engines.
The Compact-SCR technology, like the NOX adsorber
technology, uses an oxidation catalyst to promote the oxidation of NO
to NO2 at the low temperatures typical of much of diesel
engine operation. By converting a portion of the NOX
emissions to NO2 upstream of the ammonia SCR reduction
catalyst, the overall NOX reductions are improved
significantly at low temperatures. As discussed previously in section
III, platinum group metals, primarily platinum, are known to be good
catalysts to promote NO oxidation, even at low temperatures. Therefore,
future Compact-SCR systems are expected to rely on a platinum oxidation
catalyst in order to provide the required NOX emission
control.
The NOX adsorber technology may be able to limit its
impact on sulfate PM emissions by releasing stored sulfur as
SO2 under rich operating conditions. The Compact-SCR
technology, on the other hand, has no means to limit sulfate emissions
other than through lower catalytic function or lowering sulfur in
diesel fuel. The degree to which the NOX control
aftertreatment technologies increase the production of sulfate PM
through oxidation of SO2 to SO3 varies somewhat
from technology to technology, but it is expected to be similar in
magnitude and environmental impact to that for the PM control
technologies discussed previously. Thus, we believe that diesel fuel
sulfur levels will likely need to be below 15 ppm in order to apply
these advanced NOX control technologies (see discussion in
section III.F.1). Without this low-sulfur fuel, the advanced
NOX control technologies are expected to create PM emissions
in excess of the PM standard regardless of the engine-out PM levels. We
invite comment on sulfate PM production by NOX control
technologies due to fuel sulfur along with supportive data.
b. Sulfur Poisoning (Sulfate Storage) on NOX Adsorbers
The NOX adsorber technology relies on the ability of the
catalyst to store NOX as a nitrate on the surface of the
catalyst, or adsorber (storage) bed, during lean operation. Because of
the similarities in chemical properties of SOX and
NOX, the SO2 present in the exhaust is also
stored by the catalyst surface as a sulfate. The sulfate compound that
is formed is significantly more stable than the nitrate compound and is
not released and reduced during the NOX release and
reduction step. Since the NOX adsorber is essentially 100
percent effective at capturing SO2 in the adsorber bed, the
poisoning of the catalyst occurs rapidly. As a result, sulfate
compounds quickly occupy all of the NOX storage sites on the
catalyst thereby rendering the catalyst ineffective for NOX
reduction (poisoning the catalyst).
The stored sulfur compounds can be removed by exposing the catalyst
to hot (over 650 deg.C) and rich (air-fuel ratio below the
stoichiometric ratio of 14.5 to 1) conditions for a brief period.\115\
\116\ Under these conditions, the stored sulfate is released and
reduced in the catalyst.\117\ Because the exhaust must be taken to a
hot and rich condition, there is a fuel consumption impact associated
with the desulfation cycle. We have developed a spreadsheet model that
estimates the frequency of desulfation cycles from published data and
then estimates the fuel economy impact from this event.\118\ Table III-
F.2 shows the estimated fuel economy impact for desulfation of a
NOX adsorber at different fuel sulfur levels assuming a
desired 90 percent NOX conversion efficiency. The estimates
in the table are based on assumed average fuel sulfur levels associated
with different sulfur level caps.
---------------------------------------------------------------------------
\115\ [Reserved]
\116\ Dou, Danan and Bailey, Owen, ``Investigation of
NOX Adsorber Catalyst Deactivation,'' SAE 982594.
\117\ Guyon, M. et al., ``Impact of Sulfur on NOX
Trap Catalyst Activity--Study of the Regeneration Conditions,'' SAE
982607.
\118\ Memo from Byron Bunker, to docket A-99-06, ``Estimating
Fuel Economy Impacts of NOX Adsorber De-Sulfurization.''
Table III.F-2.--Estimated Fuel Economy Impact From Desulfation of a 90%
Efficient NOX Adsorber
------------------------------------------------------------------------
Fuel
Fuel sulfur cap [ppm] Average fuel economy
sulfur [ppm] penalty
------------------------------------------------------------------------
500.......................................... 350 27%
50........................................... 30 2%
25........................................... 15 1%
15........................................... 7 1%
5............................................ 2 1%
------------------------------------------------------------------------
The table highlights that the fuel economy penalty associated with
sulfur in diesel fuel is noticeable even at average sulfur levels as
low as 15 ppm and increases rapidly with higher sulfur levels. It also
shows that the use of a NOX adsorber at the proposed 15 ppm
sulfur cap would be expected to result in a fuel economy impact of less
than 1 percent absent other changes in engine design. However, as
discussed in Section G below, we anticipate that other engine
modifications could be made to offset this fuel economy impact. For
example, a NOX control device in the exhaust system could
allow use of fuel saving engine strategies, such as advanced fuel
injection timing, that could be used to offset the increased fuel
consumption associated with the NOX adsorber. The result is
that low-sulfur fuel enables the NOX adsorber, which in turn
enables fuel saving engine modifications. Such a system level fuel
economy impact, which we estimate to be zero under a 15 ppm cap
program, is discussed below in section III.G.
Future improvements in the NOX adsorber technology are
expected and needed if the technology is to provide the environmental
benefits we have projected today. Some of these improvements are likely
to include improvements in the means and ease of removing stored sulfur
from the catalyst bed. However because the stored sulfate species are
inherently more stable than the stored nitrate compounds (from stored
NOX emissions), we expect that a separate release and
reduction cycle (desulfation cycle) will always be needed in order to
remove the stored sulfur. Therefore, we believe that fuel with a sulfur
level at or below 15 ppm sulfur will be necessary in order to avoid an
unacceptable fuel economy impact. We request comment on sulfur
poisoning of NOX adsorbers by fuel sulfur along with
supportive data.
c. Sulfur Impacts on Catalytic Efficiency
The technologies discussed in today's proposal generally rely on
some form of catalytic function in order to promote favorable chemical
reactions needed in order to accomplish the desired NOX
emission reductions. In each case platinum and/or other precious group
metal catalysts are anticipated to be used to accomplish these
functions. From our experience with gasoline three-way catalysts and
from the extensive body of work in the literature we know that these
catalytic functions are inhibited by sulfur. Sulfur deposits on the
precious metal sites in the catalyst and causes a decrease in the
catalytic function of the device. This causes an increase in the light-
off temperature for the catalyst along with a significant reduction in
the oxidation and reduction efficiencies of all of the devices.\119\ As
discussed at length in the Tier 2 rulemaking, sulfur reductions in the
fuel are a very effective way to reduce catalyst poisoning of this type
in
[[Page 35477]]
order to maintain high catalyst efficiency and to ensure reliable
operation. We invite comment on fuel sulfur impact on catalyst
efficiency along with supportive data.
---------------------------------------------------------------------------
\119\ The Impact of Sulfur in Diesel Fuel on Catalyst Emissions
Control Technology--Manufacturers of Emission Controls Association
(MECA), March 15, 1999, www.meca.org.
---------------------------------------------------------------------------
3. What About Sulfur in Engine Lubricating Oils?
Current engine lubricating oils have sulfur contents which can
range from 2,500 ppm to as high as 8,000 ppm by weight. Since engine
oil is consumed by heavy-duty diesel engines in normal operation, it is
important that we account for the contribution of oil derived sulfur in
our analysis of the need for low-sulfur diesel fuel. One way to give a
straightforward comparison of this effect is to express the sulfur
consumed by the engine as an equivalent fuel sulfur level. This
approach requires that we assume specific fuel and oil consumption
rates for the engine. Using this approach, estimates ranging from two
to seven ppm diesel fuel sulfur equivalence have been made for the
sulfur contribution from engine oil.\120,\ \121\ If values at the upper
end of this range accurately reflect the contribution of sulfur from
engine oil to the exhaust this would be a concern as it would represent
50 percent of the total sulfur in the exhaust under a 15 ppm diesel
fuel sulfur cap (with an average sulfur level assumed to be
approximately seven ppm). However, we believe that this simplified
analysis, while valuable in demonstrating the need to investigate this
issue further, overstates the likely sulfur contribution from engine
oil by a significant amount.
---------------------------------------------------------------------------
\120\ Whitacre, Shawn. ``Catalyst Compatible'' Diesel Engine
Oils, DECSE Phase II, Presentation at DOE/NREL Workshop ``Exploring
Low Emission Diesel Engine Oils.'' January 31, 2000.
\121\ This estimate assumes that a heavy-duty diesel engine
consumes 1 quart of engine oil in 2,000 miles of operation, consumes
fuel at a rate of 1 gallon per 6 miles of operation and that engine
oil sulfur levels range from 2,000 to 8,000 ppm.
---------------------------------------------------------------------------
Current heavy-duty diesel engines operate with open crankcase
ventilation systems which ``consume'' oil by carrying oil from the
engine crankcase into the environment. This consumed oil is correctly
included in the total oil consumption estimates, but should not be
included in estimates of oil entering the exhaust system for this
analysis, since as currently applied this oil is not introduced into
the exhaust. At present we estimate that the majority of lube oil
consumed by an engine meeting the 0.1 g/bhp-hr PM standard is lost
through crankcase ventilation, rather than through the exhaust. Based
on assumed engine oil to PM conversion rates and historic soluble
organic fraction breakdowns we have estimated the contribution of
sulfur from engine oil to be less than two ppm fuel equivalency. With
the proposal today to close the crankcase, coupled with the use of
closed crankcase ventilation systems that separate in excess of 90
percent of the oil from the blow-by gases, we believe that this very
low contribution of lube oil to sulfur in the exhaust can be
maintained. For a further discussion of our estimates of the sulfur
contribution from engine oil refer to the draft RIA associated with
this proposal.
Although there are good indications to date that oil borne sulfur
is not a significant contributor to exhaust sulfur, EPA remains
concerned about this issue. We invite comment on the potential for
engine lubricating oils to introduce significant amounts of sulfur into
the exhaust. Of particular value to EPA is data indicating the expected
oil consumption rates of future engines and estimates of future engine
oil characteristics specifically with regard to sulfur content. We also
invite comment on the potential for new ``low-sulfur'' engine oils to
be developed for these vehicles equipped with sulfur sensitive emission
control technologies.
G. Fuel Economy Impact of Advanced Emission Control Technologies
The advanced emission control technologies expected to be applied
in order to meet the proposed NOX and PM standards involve
wholly new system components integrated into engine designs and
calibrations, and as such may be expected to change the fuel
consumption characteristics of the overall engine design. After
reviewing the likely technology options available to the engine
manufacturers, we believe that the integration of the engine and
exhaust emission control systems into a single synergistic emission
control system will lead to heavy-duty vehicles which can meet
demanding emission control targets without increasing fuel consumption
beyond today's levels.
1. Diesel Particulate Filters and Fuel Economy
Diesel particulate filters are anticipated to provide a step-wise
decrease in diesel particulate (PM) emissions by trapping and oxidizing
the diesel PM. The trapping of the very fine diesel PM is accomplished
by forcing the exhaust through a porous filtering media with extremely
small openings and long path lengths.\122\ This approach results in
filtering efficiencies for diesel PM greater than 90 percent but
requires additional pumping work to force the exhaust through these
small openings. The additional pumping work is anticipated to increase
fuel consumption by approximately one percent.\123\ However, we believe
this fuel economy impact can be regained through optimization of the
engine-PM trap-NOX adsorber system, as discussed below. We
request comment and data on the magnitude of the fuel economy impact of
diesel particulate filters.
---------------------------------------------------------------------------
\122\ Typically the filtering media is a porous ceramic monolith
or a metallic fiber mesh.
\123\ Engine, Fuel, and Emissions Engineering, Incorporated,
``Economic Analysis of Diesel Aftertreatment System Changes Made
Possible by Reduction of Diesel Fuel Sulfur Content,'' December 14,
1999, Air Docket A-99-06.
---------------------------------------------------------------------------
2. NOX Control Technologies and Fuel Economy
NOX adsorbers are expected to be the primary
NOX control technology introduced in order to provide the
reduction in NOX emissions envisioned in this proposal.
NOX adsorbers work by storing NOX emissions under
fuel lean operating conditions (normal diesel engine operating
conditions) and then by releasing and reducing the stored
NOX emissions over a brief period of fuel rich engine
operation. This brief periodic NOX release and reduction
step is directly analogous to the catalytic reduction of NOX
over a gasoline three-way-catalyst. In order for this catalyst function
to occur the engine exhaust constituents and conditions must be similar
to normal gasoline exhaust constituents. That is, the exhaust must be
fuel rich (devoid of excess oxygen) and hot (over 250C). Although it is
anticipated that diesel engines can be made to operate in this way, it
is assumed that fuel economy while operating under these conditions
will be worse than normal. We have estimated that the fuel economy
impact of the NOX release and reduction cycle would, all
other things being equal, increase fuel consumption by approximately
one percent. Again, we believe this fuel economy impact can be regained
through optimization of the engine-PM trap-NOX adsorber
system, as discussed below.
In addition to the NOX release and regeneration event,
another step in NOX adsorber operation may affect fuel
economy. As discussed earlier, NOX adsorbers are poisoned by
sulfur in the fuel even at the low sulfur levels we are proposing. As
discussed in the draft RIA, we anticipate that the sulfur poisoning of
the NOX adsorber can be reversed through a periodic
``desulfation'' event. The desulfation of the NOX adsorber
is accomplished in a similar manner to the NOX release and
regeneration cycle described above. However it is anticipated that the
[[Page 35478]]
desulfation event will require extended operation of the diesel engine
at rich conditions.\124\ This rich operation will, like the
NOX regeneration event, require an increase in the fuel
consumption rate and will cause an associated decrease in fuel economy.
With a 15 ppm fuel sulfur cap, we are projecting that fuel consumption
for desulfation would increase by one percent or less, which we believe
can be regained through optimization of the engine-PM trap-
NOX adsorber system as discussed below.
---------------------------------------------------------------------------
\124\ Dou, D. and Bailey, O., ``Investigation of NOX
Adsorber Catalyst Deactivation'' SAE982594.
---------------------------------------------------------------------------
While NOX adsorbers require non-power producing
consumption of diesel fuel in order to function properly and,
therefore, have an impact on fuel economy, they are not unique among
NOX control technologies in this way. In fact NOX
adsorbers are likely to have a very favorable NOX to fuel
economy trade-off when compared to other NOX control
technologies like cooled EGR and injection timing retard that have
historically been used to control NOX emissions. EGR
requires the delivery of exhaust gas from the exhaust manifold to the
intake manifold of the engine and causes a decrease in fuel economy for
two reasons. The first of these reasons is that a certain amount of
work is required to pump the EGR from the exhaust manifold to the
intake manifold; this necessitates the use of intake throttling or some
other means to accomplish this pumping. The second of these reasons is
that heat in the exhaust, which is normally partially recovered as work
across the turbine of the turbocharger, is instead lost to the engine
coolant through the cooled EGR heat exchanger. In the end, cooled EGR
is only some 50 percent effective at reducing NOX.
Nonetheless, cooled EGR, which we anticipate to be the technology of
choice for meeting the proposed 2004 heavy-duty standards, still has a
considerable advantage over the previous solutions such as injection
timing retard. Injection timing retard is the strategy that has
historically been employed to control NOX emissions. By
retarding the introduction of fuel into the engine, and thus delaying
the start of combustion, both the peak temperature and pressure of the
combustion event are decreased; this lowers NOX formation
rates and, ultimately, NOX emissions. Unfortunately, this
also significantly decreases the thermal efficiency of the engine
(decreases fuel economy) while also increasing PM emissions. As an
example, retarding injection timing eight degrees can decrease
NOX emissions by 45 percent, but this occurs at a fuel
economy penalty of more than seven percent.\125\
---------------------------------------------------------------------------
\125\ Herzog, P. et al., NOX Reduction Strategies for
DI Diesel Engines, SAE 920470, Society of Automotive Engineers 1992
(from Figure 1).
---------------------------------------------------------------------------
Today, most diesel engines rely on injection timing control
(retarding injection timing) in order to meet the 4.0 g/bhp-hr
NOX emission standard. For 2002/2004 model year compliance,
we expect that engine manufacturers will use a combination of cooled
EGR and injection timing control to meet the 2.0 g/bhp-hr
NOX standard. Because of the more favorable fuel economy
trade-off for NOX control with EGR when compared to timing
control, we have forecast that less reliance on timing control will be
needed in 2002/2004. Therefore, fuel economy will not be changed even
at this lower NOX level.
NOX adsorbers have a significantly more favorable
NOX to fuel economy trade-off when compared to cooled EGR or
timing retard alone, or even when compared to cooled EGR and timing
retard together.\126\ We expect NOX adsorbers to be able to
accomplish greater than 90 percent reduction in NOX
emissions, while only increasing fuel consumption by a very reasonable
two percent or less. Therefore, we expect manufacturers to take full
advantage of the NOX control capabilities of the
NOX adsorber and project that they will decrease reliance on
the more expensive (from a fuel economy standpoint) technologies,
especially injection timing retard. We would therefore predict, that
the fuel economy impact currently associated with NOX
control from timing retard would be decreased by at least three
percent. In other words, through the application of advanced
NOX exhaust emission control technologies, which are enabled
by the use of low-sulfur diesel fuel, we expect the NOX
trade-off with fuel economy to continue to improve significantly when
compared to today's technologies. This will result in both much lower
NOX emissions, and potentially overall improvements in fuel
economy. Improvements could easily offset the fuel consumption of the
NOX adsorber itself and, in addition, the one percent fuel
economy loss projected to result from the application of PM filters.
Consequently, we are projecting no fuel economy penalty to result from
this rule. We invite comment and data concerning the relationships
between the various types of NOX control technologies and
fuel economy as described here and in the cited references. In
particular we ask for comments and data on NOX adsorber fuel
economy and methods of recovering that fuel economy through injection
timing changes.
---------------------------------------------------------------------------
\126\ Zelenka, P. et al., Cooled EGR--A Key Technology for
Future Efficient HD Diesels, SAE 980190, Society of Automotive
Engineers 1998. Figure 2 from this paper gives a graphical
representation of how new technologies (including aftertreatment
technologies) can shift the trade-off between NOX
emissions and fuel economy.
---------------------------------------------------------------------------
3. Emission Control Systems for 2007 and Net Fuel Economy Impacts
We anticipate that, in order to meet the stringent NOX
and PM emission standards proposed today, the manufacturers would
integrate engine-based emission control technologies and post-
combustion emission control technologies into a single systems-based
approach that would fundamentally shift historic trade-offs between
emissions control and fuel economy. As outlined in the preceding two
sections, individual components in this system would introduce new
constraints and opportunities for improvements in fuel efficient
control of emissions. Having considered the many opportunities to
fundamentally improve these relationships, we believe that it is
unlikely that fuel economy will be lower than today's levels and, in
fact, may improve through the application of these new technologies and
this new systems approach. Therefore, for our analysis of economic
impacts in section V, no penalty or benefit for changes to fuel economy
are considered. We request comment on our analysis of the likely fuel
economy offsets of the NOX and PM emission control
technologies that would be needed in order to meet today's proposed
standards.
H. Future Reassessment of Diesel NOX Control Technology
We are considering conducting a future reassessment of diesel
NOX control technologies and associated fuel sulfur
requirements, and we request comment on the need for such a
reassessment. Given the relative state of development of NOX
emission control technology versus PM and NMHC control technologies, we
would expect to focus the control technology reassessment solely on
NOX control technologies. We believe that the clear intent
of this proposal to provide low-sulfur diesel fuel will allow the
development of this technology to progress rapidly, and will result in
systems capable of achieving the proposed standards. However, we
acknowledge that our proposed NOX standard represents an
ambitious target for this technology, and that the degree of
uncertainty surrounding the feasibility of high-efficiency
NOX control technology would be higher if
[[Page 35479]]
fuel sulfur levels higher than the proposed level were adopted. We also
recognize that technology evolution may affect the sulfur level at
which these technologies are enabled.
Therefore, we are evaluating whether or not the proposed program
could benefit from a future reassessment of the control effectiveness
of diesel NOX exhaust emission control technologies and
associated fuel sulfur requirements. We would expect to conduct such a
reassessment in the 2003 timeframe, though we welcome comment on
whether such a reassessment will be needed and on the appropriate
timing for it. We also welcome comment on the extent to which a review
of NOX control technology should also include a review of
the appropriate diesel fuel sulfur level for enabling the
NOX control technology, including consideration of impacts
that a revised fuel requirement would have on PM control technology.
Another possible area for consideration during the reassessment could
be non-conformance penalties (NCPs) and the role they might play in
this program. NCPs would allow engine manufacturers to produce and sell
noncomplying engines under limited circumstances in exchange for paying
a penalty to the government. We welcome comment on the role NCPs may
play.
In conducting the review, we would expect to determine whether or
not there was a need to formally consider a change in the final
regulations adopted for this program. If such a change were determined
to be necessary, we would conduct a formal rulemaking, including
conducting public hearings.
I. Encouraging Innovative Technologies
We encourage comments on approaches that could provide increased
incentives for the development and introduction of clean advanced
engine technologies. Some such approaches have been suggested by
stakeholders or have been a part of other EPA rules. One of these would
be to develop a program for providing a special designation for engines
or vehicles that are significantly below the standards or use specific
innovative propulsion technologies. EPA finalized such a designation,
the ``Blue Sky Series Engine'' program, as a part of the 1998 nonroad
diesel standards final rule. Incorporating such a designation could be
very valuable for use in programs developed by states, municipalities,
or corporations to highlight or reward the purchase and use of
especially clean or innovative vehicles and engines. We request comment
on how we might structure a program like the ``Blue Sky Series''
program in the context of today's proposal, including what criteria we
should use to qualify an engine or vehicles for such a designation.
It has also been suggested that we might adapt the proposed ABT
program described in section VII.C. below to provide extra incentives
for manufacturers that encourage innovative technologies. For example,
manufacturers might get additional credits under the ABT program if
they introduce extra clean models or if they meet future standards
early. We believe our current ABT program, with the proposed revisions
discussed below, should encourage manufacturers to seriously consider
any technologies that can economically reach the very low emission
levels proposed today. Nevertheless, we request comment on the need for
and appropriateness of such additional provisions under the ABT
program.
IV. Diesel Fuel Requirements
As discussed in section III above, we believe that advanced exhaust
emission control technology exists and is being developed that can
reduce emissions of NOX and PM to very low levels. However,
those exhaust emission control technologies will require changes to
diesel fuel in order to operate efficiently and reach the new engine
emissions standards we are proposing in today's NPRM. This section will
present our proposed changes to diesel fuel that are intended to enable
heavy-duty engines to meet our proposed new emission standards. We will
also describe the extent and applicability of the proposed diesel fuel
program, the means through which we expect refiners to meet the new
diesel fuel standards, and incentives we are providing refiners for
early introduction. The economic and environmental impacts of the
proposed diesel fuel program will be covered in subsequent sections in
combination with the implications of the proposed engine standards.
A. Why Do We Believe New Diesel Fuel Sulfur Controls Are Necessary?
In section III, we discussed our proposed finding that new
standards for heavy-duty engines can be established on the basis of
exhaust emission controls which we believe will be fully viable and
widely available for the 2007 model year. However, we also discussed
our understanding that those exhaust emission control technologies have
a significant and irreversible sensitivity to the sulfur content of the
fuel. Deep sulfur reductions are necessary to enable both the
NOX and PM emission control technology that we believe
vehicles would need to use to achieve the emission standards we are
proposing today. Since we believe that new standards for heavy-duty
engines are an appropriate next step for reducing ambient pollution,
and it is these very exhaust emission control technologies which
manufacturers are likely to use in order to reach these low emission
levels, we are proposing to reduce the sulfur content of highway diesel
fuel.
Engine manufacturers and representatives of States, and
environmental and public health organizations have expressed general
support for a highway diesel fuel sulfur reduction strategy similar to
the gasoline sulfur reduction program. However, some stakeholders, in
particular refiners, have expressed concern that the sulfur sensitivity
of heavy-duty diesel exhaust emission controls has not been quantified
with a sufficient degree of certainty to provide a basis for setting a
specific low sulfur standard. Although it is likely that the efficiency
of exhaust emission control technology improves with decreasing fuel
sulfur levels all the way down to nominally zero levels, we believe
that it is possible to set a non-zero sulfur standard that sufficiently
enables high-efficiency control technology. The sulfur standard we are
proposing and the associated justification is described in more detail
in section IV.B below.
Sulfur appears to be the only diesel fuel property that must be
changed in order for the prospective exhaust emission control
technologies to operate effectively. Changes in other fuel properties,
such as cetane, aromatics, density, and high-end distillation, might
all provide small emission benefits for engines meeting our proposed
standards, but those benefits would be very small in comparison to the
sulfur standard. They would also not enable new advances in emission
control technology, and so would not likely produce significant step
changes in heavy-duty engine emissions. See section VI.B for a more
complete discussion of non-sulfur property changes for diesel fuel.
Finally, there is also an expectation on the part of some
automobile manufacturers that diesel engines will be used more
frequently in light-duty vehicles in the coming decade. However, any
light-duty diesel vehicles will be required to meet our final Tier 2
standards, which we believe will require the use of the same high
efficiency exhaust emission control technologies envisioned for heavy-
duty applications. Although we are not proposing a change to diesel
fuel specifically for light-duty diesel
[[Page 35480]]
vehicles, it is our expectation that the availability of a low-sulfur
fuel intended primarily to enable heavy-duty engines to meet our
proposed new standards would enable automobile manufacturers to produce
light-duty diesel vehicles that could meet the Tier 2 standards. We
would like comment on whether any other changes to diesel fuel
specifically for light-duty diesel vehicles are necessary, and on the
appropriateness, benefits, and costs of doing so.
B. What New Sulfur Standard Are We Proposing for Diesel Fuel?
We are proposing to require substantial reductions in diesel fuel
sulfur levels nationwide. Our proposal would require that all highway
diesel fuel produced or imported by refiners and importers be subject
to a maximum sulfur level of 15 ppm by weight. The technological need
for low-sulfur diesel fuel and the reasons for our proposed sulfur
standard are discussed in section III above. However, we are also
seeking comment on whether the sulfur standard should be set as high as
50 ppm or as low as 5 ppm, as well as what the associated costs and
benefits would be of a higher or lower level. (See section VI.B. for
further discussion of various sulfur standards.)
We believe our proposed diesel fuel sulfur program balances the
goal of achieving dramatic reductions in emissions from heavy-duty
vehicles with the goal of providing sufficient lead-time for the engine
emission control technology to develop and for the refining industry to
transition to a lower sulfur diesel fuel. Nevertheless, as noted
elsewhere, we are seeking comments on all these issues. We are aware of
diesel fuel industry concerns about their ability to consistently
deliver fuel meeting this low cap requirement. We are also aware that
some engine manufacturers are concerned that even fuel meeting the 15
ppm cap requirement may not adequately enable the exhaust emission
control technologies. In determining the appropriate sulfur level and
scope for our proposed program, we considered the implications of
diesel fuel sulfur on the emission control hardware of both heavy-duty
and light-duty vehicles (that is, light-duty diesel vehicles that are
required to meet our Tier 2 emission standards). Specifically, we
analyzed the degree to which the emission control devices described in
section III, above, may tolerate diesel fuel sulfur. We also evaluated
the environmental implications of sulfur control beyond the expected
NOX and PM benefits (see section II) and the costs of
controlling fuel sulfur content, and we considered the ability of all
refiners and importers to meet the proposed diesel fuel sulfur standard
at essentially the same time (see section IV.D). We hope to benefit
from further discussion of all of these issues during the public
comment period.
The following sections describe in more detail the standard we are
proposing and the reasons why we are proposing a program that applies
year-round and nationwide.
1. Why Is EPA Proposing a 15 ppm Cap and Not a Higher or Lower Level?
There are five key factors which, when taken together, lead us to
propose that a diesel fuel sulfur cap of 15 ppm is both necessary to
enable the NOX and PM exhaust emission control technology
(and thereby allow the proposed emission standards to be met), and
appropriate, taking into consideration the challenges involved in
providing low-sulfur fuel. These factors, as discussed in more detail
in sections III and IV.D, are the implications that sulfur levels in
excess of 15 ppm would have for the efficiency, reliability, and fuel
economy impacts of the exhaust emission control systems, and the
feasibility and costs of producing low-sulfur diesel fuel.
The efficiency of emission control technologies at reducing harmful
pollutants is directly impacted by sulfur in diesel fuel. Initial and
long term conversion efficiencies for NOX, NMHC, CO and
diesel PM emissions are significantly reduced by catalyst poisoning and
catalyst inhibition due to sulfur. NOX conversion
efficiencies with the NOX adsorber technology in particular
are dramatically reduced in a very short time due to sulfur poisoning
of the NOX storage bed. In addition total PM control
efficiency is negatively impacted by the formation of sulfate PM. The
formation of sulfate PM is likely to be in excess of the total PM
standard proposed today, unless diesel fuel sulfur levels are below 15
ppm.
The reliability of the emission control technologies to continue to
function as required under all operating conditions for the life of the
vehicle is also directly impacted by sulfur in diesel fuel. As
discussed in section III, sulfur in diesel fuel can prevent proper
operation and regeneration of both NOX and PM control
technologies leading to permanent loss in emission control
effectiveness and even catastrophic failure of the systems. We believe
that diesel fuel with sulfur levels less than 15 ppm will be required
to provide a level of reliability for these technologies to allow their
introduction into the marketplace.
The sulfur content of diesel fuel will also affect the fuel economy
of vehicles equipped with NOX and PM exhaust emission
control technologies. As discussed in detail in section III,
NOX adsorbers are expected to consume diesel fuel in order
to cleanse themselves of stored sulfates and maintain efficiency. The
larger the amount of sulfur in diesel fuel, the greater this impact on
fuel economy. As sulfur levels increase above 15 ppm the fuel economy
impact transitions from merely noticeable to levels most diesel vehicle
operators would consider unacceptable (see discussion in section III).
Likewise PM trap regeneration is inhibited by sulfur in diesel fuel.
This leads to increased PM loading in the diesel particulate filter,
increased exhaust backpressure, and poorer fuel economy. Thus for both
NOX and PM technologies the lower the fuel sulfur level the
better the fuel economy of the vehicle.
As a result of these factors, we believe that 15 ppm represents an
upper threshold of diesel fuel sulfur levels that would make these
technologies viable, and are therefore proposing to cap in-use sulfur
levels there. In comments received on the ANPRM, as well as in
subsequent meetings and discussions, however, we have often heard
different points of view on this issue expressed by the vehicle and
engine manufacturers, and by oil refiners.
Some vehicle and engine manufacturers have argued for a maximum cap
on the sulfur content of diesel fuel of 5 ppm, believing that this
level is necessary. As we discuss in section III, however, we believe
that a cap of 15 ppm (likely resulting in an in-use sulfur level 7 to
10 ppm) would be sufficient to ensure the reliability of PM exhaust
emission control technology (avoid potential for irreversible failure)
and enable it to reach the very high efficiencies needed over the wide
range of vehicle operation and conditions that would be needed for the
engines to comply with our proposed standards. Although at the current
stage of development, high efficiency NOX technology is
extremely sulfur intolerant, work is already underway to develop
capability in the technology to tolerate at least some sulfur in the
fuel. As discussed in section III, however, it is likely that to
maintain the very high operational efficiencies of the emission control
equipment that we believe would be needed to meet the proposed emission
standards, and to avoid a significant fuel economy penalty, the sulfur
level in the fuel would still have to be very low.
[[Page 35481]]
We believe that requiring a cap lower than 15 ppm would not be
necessary to enable the exhaust emission control technology to meet the
very low NOX and PM emission standards proposed. A cap lower
than 15 ppm would provide little additional emission reduction but
would increase the cost. Consequently, requiring a sulfur cap lower
than that necessary to enable the exhaust emission control technology
to meet the emission standards would be inappropriate. Further
discussion and analysis of alternative sulfur standards is contained in
section VI.
Conversely, many oil refiners have argued for a higher maximum cap
(if any) on the content of sulfur in diesel fuel, typically on the
order of 50 ppm. They argue that the cost of reducing the sulfur level
below a cap of 50 ppm (and average of 30 ppm) becomes prohibitively
high. They further argue that diesel engine exhaust emission control
technology is still in its infancy and will likely develop rapidly over
the next several years to the point where it is much less sulfur
sensitive than the technology of today. As discussed in section III, we
also believe that the diesel engine exhaust emission control technology
will develop rapidly over the coming years, and in particular are
projecting that the sensitivity of NOX adsorber technology
to fuel sulfur will improve considerably through the development of
techniques to effectively regenerate themselves of stored sulfur
compounds. The Manufacturers of Emission Controls Association (MECA)
recently sent a letter strongly supporting this position, stating ``we
strongly believe that NOX adsorber technology will be
commercially available in 2007 to help heavy-duty diesel engines meet
the stringent NOX standards being considered by EPA and that
any current engineering challenges involved with this technology will
be addressed provided that very low sulfur fuel is available.'' \127\
Based on available information and our projections from that
information, we believe that a cap higher than 15 ppm sulfur, and in
particular a cap as high as 50 ppm would not enable the exhaust
emission control technology needed to achieve the proposed emission
standards and furthermore may severely compromise the reliability of
the systems and result in unacceptable fuel economy impacts. In
addition, as discussed in section IV.D below, although we acknowledge
that the cost to desulfurize diesel fuel does increase with more
stringent sulfur levels, we believe that these costs would not be
prohibitively high, and maintain that the environmental benefits of the
program are sufficient to justify the costs of the program at a sulfur
cap level of 15 ppm.
---------------------------------------------------------------------------
\127\ Letter to Carol Browner, Administrator of EPA from Bruce
Bertelsen, Executive Director of Manufacturers of Emission Controls
Association, May 3, 2000.
---------------------------------------------------------------------------
Based on our assessment of the efficiency, reliability, and fuel
economy impacts of sulfur on diesel engine exhaust emission control
technology, and the cost and feasibility factors associated with
reducing the sulfur content of diesel fuel, we propose to adopt 15 ppm
as the appropriate sulfur cap. However, we have analyzed the impacts on
technology enablement, costs, and benefits from controlling fuel sulfur
to a 15 ppm average level with a 25 ppm cap, as well as from capping
fuel sulfur at 5 ppm and 50 ppm. These levels have been put forward by
various stakeholders as either necessary (in the case of a 5 ppm cap)
or adequate (in the case of a 50 ppm cap) for enabling high-efficiency
diesel exhaust emission controls, and so we believe that assessments of
these levels is appropriate. These assessments are discussed in section
VI.B. We request comment on the appropriate level of the highway diesel
fuel sulfur standard, and on our assessment of alternative standards.
2. Why Propose a Cap and Not an Average?
We are proposing a cap on the sulfur content of diesel fuel in
order to protect the vehicle aftertreatment technologies that we expect
would be used to meet the proposed standards for heavy-duty engines and
vehicles. An average standard by itself would not be sufficient to
ensure that sulfur levels higher than those that could be tolerated by
the exhaust emission control technology would not be used in vehicles
for extended periods of time. Consequently, we do not believe that an
average standard can stand by itself and would at minimum have to be
coupled with a cap.
3. Should the Proposed 15 ppm Cap Standard Also Have an Average
Standard?
Although our current 500 ppm sulfur limit for diesel fuel provides
no averaging flexibility, in the years since that limit was set our
motor vehicle fuel regulations have frequently incorporated provisions
allowing regulated industries to average regulated parameters around a
standard, often with a capped upper limit. In fact this approach was
taken in the recently promulgated control of gasoline sulfur levels, in
which we adopted a 30 ppm average level with an 80 ppm cap.
Despite the ability of averaging provisions in some programs to
increase compliance flexibility and in some cases reduce overall costs
while still achieving the environmental objectives, we are not
proposing such provisions for the diesel fuel sulfur standard we are
proposing today. Basing the fuel program around an average sulfur level
could risk failure in meeting the whole objective of sulfur control
(the enablement of sulfur-sensitive technologies) and thereby the
environmental objectives of the program, or else could require the
adoption of a cap so low as to make the average level largely
irrelevant. The exhaust emission control technologies enabled by diesel
sulfur control appear to be far more sensitive to and far less
forgiving of variations in fuel sulfur level than advanced Tier 2
gasoline technologies. Enough is known about the exhaust emission
control technologies to convince us that the proposed sulfur level will
likely represent an enablement threshold level, above which increases
in emissions and potentially system failures could be expected.
Consumption of diesel fuel with sulfur levels above this threshold
could be very problematic.
Some commenters who responded to our diesel fuel ANPRM did express
interest in an averaged fuel sulfur standard, but only from the
viewpoint that the flexibility provided by averaging is generally
desirable, and not with specific solutions to the above-discussed
problems created by this approach. Other commenters opposed an
averaging requirement due to the test burden associated with
demonstrating compliance under such a program. We request specific
suggestions on how to structure a viable averaging requirement in
conjunction with a 15 ppm cap, and whether it would be desirable to do
so. One benefit of having only a cap instead of an average is that it
allows for a simplified enforcement scheme. Imposing an average
standard in addition to the cap would require additional product
sampling, recordkeeping, and reporting requirements to demonstrate
compliance with the standard. Thus, depending on how the program is
structured, the flexibility of an average standard may not be worth the
additional cost and complexity that would result, particularly with a
cap set at 15 ppm.
Some have suggested that it may be possible to set an average
standard of 10 ppm coupled with a higher cap. They
[[Page 35482]]
suggest that a 10 ppm average would achieve essentially the same
average in-use sulfur level as the proposed 15 ppm cap, and that as
long as the cap is sufficiently protective of the exhaust
aftertreatment technology, then the refining and distribution systems
may have greater flexibility in complying with the standard, allowing
for lower costs and less potential for disruptions of fuel supply. We
request comment on whether it would be possible to have a higher cap as
long as the average remained essentially unchanged and if so, what cap
would be appropriate. If such an approach could enable the technology,
we seek comment on the extent to which it would help address the
concerns refiners have raised with very low sulfur levels with respect
to the potential for fuel shortages and price increases.
If an averaged fuel sulfur standard were to be adopted (at any
sulfur level), one added flexibility option that has been suggested to
facilitate it is an averaging, banking and trading program. Because we
believe that the exhaust emission control devices would require ultra-
low sulfur diesel fuel, this flexibility would be focused on the
average component of the standard, rather than on the cap component.
Refineries would have the option to average across batches, to bank
credits for use in the future, and to purchase credits from other
refineries. In addition, under this concept the Agency could offer
additional ``average credits'' at a predetermined price to refineries.
This could provide more certainty about the cost of complying with the
average component of the standard by establishing a ceiling price on
these tradable and bankable credits. These credits could be used for a
refinery to comply with the average requirement; however, refineries'
use of these credits would still be subject to the cap standard. We
request comment on the concept of an averaging, banking, and trading
program in the context of an average standard, including: (1) whether
the additional flexibility of offering additional ``average credits''
at a predetermined price would benefit refineries; and, (2) what the
appropriate predetermined price for EPA-offered ``average credits''
should be.
4. Why We Believe Our Diesel Fuel Sulfur Program Should Be Year-round
and Nationwide
We believe it is necessary for all highway diesel fuel to meet the
proposed 15 ppm sulfur limit at all times. To relax this requirement
would jeopardize many of the environmental benefits of the proposed
program. Although NOX benefits are only realized in the
summer, PM and air toxics benefits are realized year-round. Moreover,
the exhaust emission control devices require low-sulfur diesel fuel
year-round. The use of highway fuel with a sulfur content greater than
our proposed sulfur standard could damage the emission control
technology of 2007 and later model year vehicles and engines. Once
vehicles are equipped with the new exhaust emission control devices,
they can only be fueled with the low-sulfur fuel. This precludes any
consideration of a seasonal program. In addition, because diesel
vehicles travel across the country transporting goods from region to
region and state to state, low-sulfur diesel fuel will have to be
available nationwide (see discussion in section VI.C. for possible
exceptions. The health effects associated with diesel PM emissions are
not area-specific, nor are the adverse effects of high sulfur diesel on
engines with exhaust emission control. For these reasons, we do not
believe that any regional or seasonal exemptions from the proposed
sulfur requirements would be practical.
C. When Would the New Diesel Sulfur Standard Go Into Effect?
Since the need for low-sulfur diesel is dictated by the
implementation of new engine standards, the proposed sulfur standard
would become effective commensurate with the introduction of the first
heavy-duty engines meeting our proposed standards. As described in
section III.H, the phase-in of the engine standards is proposed to
begin with the 2007 model year. Since light-heavy-duty trucks might be
introduced as early as January 2 of the previous calendar year but are
often introduced beginning about July 1, we are proposing that all
highway diesel fuel sold at retail stations and wholesale purchaser-
consumers meet the proposed sulfur standard by June 1, 2006. We believe
that this one month lead time will be sufficient to provide confidence
that the fuel available for purchase on July 1 will comply with the
proposed sulfur cap. We are also proposing that highway diesel fuel at
the terminal level be required to meet the proposed sulfur standard as
of May 1, 2006, and that highway diesel fuel produced by refiners (and
imported) meet the proposed sulfur standard by April 1, 2006. We
believe these earlier compliance requirements at terminals and
refineries would be necessary to provide an orderly transition to low-
sulfur fuel and to avoid the market disruptions that occurred when the
sulfur level of diesel fuel was lowered to 500 ppm in 1993 with only a
retail compliance date. The three months between April and July should
allow sufficient time for fuel to move through the distribution system,
for existing tankage to transition down to the lower sulfur level that
would be required. It would also ensure that all fuel is complying with
the proposed sulfur standard and is available for use in heavy-duty
engines when 2007 model year engines are introduced to the market. We
request comment on this proposed approach.
We believe that the lead-time issue is particularly important,
because not only would failure to meet the standards at the retail
level cause emission increases from new technology vehicles, but
violations of the standard due to insufficient turnover in the
distribution system could potentially permanently disable the emission
control systems of new technology vehicles and could cause driveability
problems for the operators of such vehicles. We would like to take
comment on these dates for the start of our low-sulfur diesel program,
and in particular on whether the three-month lead time is more than
adequate, adequate, or less than adequate for an orderly transition.
Some parties have suggested that low-sulfur diesel should be
required at the same time as low-sulfur gasoline, in 2004. They point
out that refinery synergies are optimized when refiners are forced to
address both requirements at the same time instead of sequentially. The
earlier introduction of low-sulfur diesel would also provide both
reductions in sulfur dioxide and sulfate PM emissions for the in-use
fleet prior to 2007, and would give engine manufacturers greater
flexibility to make use of sulfur-sensitive technologies such as cooled
EGR.
We do not believe that it is appropriate to require all on-highway
diesel fuel to meet our proposed sulfur standard prior to the
introduction of heavy-duty engines meeting our proposed standards. By
proposing a 2006 start year for the low-sulfur diesel program, we are
giving refiners a long lead-time to begin the planning process for
meeting our proposed requirements. They always have the flexibility to
make a single set of refinery changes prior to 2004 that will allow
them to meet both the low-sulfur gasoline and our proposed low-sulfur
diesel requirements by 2004. Although we are not requiring it, we would
encourage the introduction of highway diesel fuel that meets the
proposed sulfur standard prior to 2006, as discussed in section IV.F.
Finally, some parties have suggested that low-sulfur diesel is
necessary by 2004 to ensure that light-duty vehicles
[[Page 35483]]
can meet our Tier 2 standards using diesel fuel. Although some analysts
have predicted a greater proportion of diesel-powered light-duty
vehicles in the coming decade, we do not believe that they can justify
the introduction of low-sulfur diesel prior to 2006. As discussed in
more detail in section VI.A.2, we believe diesel-powered light-duty
vehicles will not actually need low-sulfur diesel fuel prior to 2006,
given the flexibility offered by the Tier 2 program's bin structure. It
would also appear that light-duty vehicles would not produce lower
emissions using lower-sulfur diesel fuel than they would using
gasoline, since all light-duty must meet the same Tier 2 standards.
There would be no emission benefits associated with introducing low-
sulfur diesel fuel prior to 2006, for use in light-duty vehicles, and
thus it would be difficult to justify the costs. We welcome comments on
requiring low-sulfur diesel fuel prior to 2006 for use in light-duty
vehicles. We also welcome comments on the appropriateness of a 2006
start date for the diesel fuel sulfur standard.
D. Why We Believe the Proposed Diesel Sulfur Standard Is
Technologically Feasible
In addition to evaluating the merits of diesel powered highway
vehicles operating on low-sulfur diesel fuel, we also considered the
ability of refiners to reduce diesel fuel sulfur in essentially every
gallon of highway diesel fuel by mid-2006. Based on this evaluation, we
believe it is technically feasible for refiners to meet the proposed
standards and that it is possible for them to do so in the proposed
time frame. We are summarizing our analysis here and we refer the
reader to the Draft RIA for more details. We welcome comments on all
aspects of this analysis.
1. What Technology Would Refiners Use?
Conventional diesel desulfurization technologies have been
available and in use for many years. Conventional hydrotreating
technology involves combining hydrogen with the distillate (material
falling into the boiling range of diesel fuel) at moderate pressures
and temperatures and flowing the mixture through a fixed bed of
catalyst. EPA required refiners and diesel fuel distributors and
marketers to provide diesel fuel for highway vehicles which does not
exceed 500 ppm by weight in sulfur starting in October 1993. As a
result, most U.S. refiners installed diesel desulfurization units to
reduce their onroad diesel fuel from the pre-control average of about
3000 ppm, to the current average of about 350 ppm.
Based on our review of the literature and discussions with vendors
of catalyst technology and desulfurization technology, the most
difficult challenge to reducing sulfur to extremely low levels via
conventional hydrotreating is the presence of certain aromatic
compounds. These aromatic compounds are referred to as sterically
hindered, because the physical arrangement of the atoms of these
compounds hinders interaction between the sulfur atom and the
catalyst.\128\ One method to desulfurize these compounds is to design
the shape of catalyst surfaces so that these sterically hindered
compounds can more easily approach the catalytic material. Another
approach is to saturate one or more of the aromatic rings present,
which makes the sulfur atom more accessible to the catalytic surface.
---------------------------------------------------------------------------
\128\ Typical compounds which are difficult to desulfurize are
4-methyl, dibenzothiophene and 4,6-dimethyl, dibenzothiophene. The
methyl group(s) attached to the aromatic rings make it very
difficult for the sulfur atom to physically approach the catalyst,
which is essential for the desulfurization process to proceed.
---------------------------------------------------------------------------
Refiners produce diesel fuel from a variety of distillate blending
streams in the refinery. The largest component is straight run
distillate, which comes straight from crude oil, hence the name
straight run. The second largest component is light cycle oil (LCO)
which comes from the fluidized catalytic cracker, or FCC unit. This
unit primarily produces gasoline from material having a higher
molecular weight than either gasoline or diesel fuel, but also produces
a significant amount of distillate. About 62 percent of today's highway
diesel fuel contains some LCO. The third largest component is light
coker gas oil, which comes from the coker, which also produces lighter
molecular weight material from heavier material. Both straight run
distillate and light coker gas oil contain relatively low levels of
sterically hindered compounds. LCO contains a much higher concentration
of sterically hindered compounds. Thus, the difficulty of achieving the
15 ppm sulfur cap being proposed today is primarily a function of the
amount of light cycle oil (LCO) that a refiner processes into its
highway diesel pool.\129\
---------------------------------------------------------------------------
\129\ LCOs are not homogeneous and can vary dramatically in
chemical composition from refiner to refiner. The discussion here
applies to a typical LCO composition.
---------------------------------------------------------------------------
We project that all refiners would be technically capable of
meeting the proposed sulfur cap with extensions of the same
conventional hydrotreating which they are using to meet the current
highway diesel fuel standard. This extension would likely mean adding a
second stage of conventional hydrotreating. In a two-stage process,
hydrogen sulfide is removed from the treated distillate after the first
reactor and fresh hydrogen added prior to the second reactor. This
stripping of the hydrogen sulfide serves two purposes. First and
foremost, it reduces the concentration of hydrogen sulfide throughout
the second reactor. This speeds up the desufurization reactions
substantially. Second, it reduces the concentration of hydrogen sulfide
at the end of the second reactor. This is the point where hydrogen
sulfide can react with the treated distillate, forming new sulfur
compounds (essentially adding sulfur back into the fuel). This process
is termed recombination and low hydrogen sulfide concentrations
decrease it dramatically. Finally, reducing the concentration of
hydrogen sulfide increases the concentration of hydrogen, again
speeding up the desulfurization reactions.
Converting an existing one-stage hydrotreater into a two-stage
hydrotreater would involve adding an additional reactor, a hot hydrogen
sulfide stripper, modifications to the compressor to increase pressure
to the new reactor and possibly a pressure-swing adsorption (PSA) unit
to increase hydrogen purity. Essentially all of the units comprising
the existing hydrotreater would still be used.
We project that all refiners could utilize recently developed, high
activity catalysts, which increase the amount of sulfur which can be
removed relative to the catalysts which were available when the current
desulfurization units were designed and built. The cost of these
advanced catalysts is very modest relative to less active catalysts,
but they would significantly reduce the size of the new reactors
described above. We also project that refiners and technology vendors
could achieve the 15 ppm cap without significant saturation of aromatic
compounds. This will be achieved through the selection of catalysts and
through the control of operating conditions, particularly temperature.
The above projections are based primarily on information received
from a number of refining technology vendors, supported by published
literature, as no operating experience at sulfur levels below 10 ppm
currently exists with this technology on diesel fuel feedstocks typical
of U.S. refiners. All the vendors supplying information to EPA and
others studying diesel fuel desulfurization projected that the 15 ppm
cap can be met using diesel fuel
[[Page 35484]]
hydrotreaters which operate at hydrogen pressures ranging from 600-900
pounds per square inch (psi) and with total reactor volumes of roughly
2-3 times those of current diesel fuel hydrotreaters. A number of oil
refiners informed us that they believe that much larger reactors would
be required. API believes that both higher pressures and larger
reactors will be needed. Either change would increase our projected
costs (described in section V.D.1 below).
Based on our review of the literature, we do not believe that these
extremely large reactors would be required to meet the proposed sulfur
cap. However, 15 ppm sulfur diesel fuel is not yet being produced
commercially from feedstocks typical of the U.S. Thus, we request
comments on the sufficiency of 600-900 psi operating pressures for
diesel fuel hydrotreaters to meet the proposed sulfur cap. We also
request comment on the sufficiency of total reactor volumes which are
2-3 times greater than those currently being utilized under the 500 ppm
sulfur cap in order to meet a 15 ppm cap.
Other options are available to refiners. Some refiners could choose
to add an FCC feed hydrotreater. This improves the yield of high value
products from the FCC unit and reduces the sulfur content of both FCC
naphtha and LCO. FCC naphtha is the primary source of sulfur in
gasoline, for which EPA recently set stringent standards. However,
while hydrotreating the FCC feed reduces the sulfur content of the LCO
produced by the FCC unit, it can increase the concentration of
sterically hindered compounds. Also, FCC feed hydrotreating is much
more costly than distillate hydrotreating or ring opening technology.
Thus, we are not projecting that any refiners would utilize this
technology to meet the proposed diesel fuel sulfur cap.
Refiners could also add a hydrocracker to process their LCO if they
have not already done so. This would increase the production of high
value gasoline with a very low sulfur content. However, hydrocrackers
are very costly to build and operate, so a refiner choosing to do so
would likely do so for reasons beyond removing sulfur from diesel fuel.
In addition to these major technological options, most refiners
would also have to add other more minor units to support the new
desulfurization unit. These units could include hydrogen plants, sulfur
recovery plants, amine plants and sour water scrubbing facilities. All
of these units are already operating in refineries but may have to be
expanded or enlarged.
2. Are These Technologies Commercially Demonstrated?
As mentioned above, conventional diesel desulfurization
technologies have been available and in use for many years. U.S.
refiners have roughly seven years of experience with this technology in
producing highway diesel fuel with less than 500 ppm sulfur. Refiners
in California also have the same length of experience with meeting the
California 500 ppm cap on sulfur and an additional aromatics
standard.\130\ In order to meet both sulfur and aromatics standards,
refineries in California are producing highway and nonroad diesel fuel
with an average sulfur level of 150 ppm.
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\130\ California allows refiners to use an engine test to
certify an alternative fuel mixture which meets or exceeds the NOx
reducing performance of a 10 volume percent maximum aromatics and a
500 ppm maximum sulfur diesel fuel.
---------------------------------------------------------------------------
Some refiners in Europe are producing a very low-sulfur, low
aromatics diesel fuel for use in the cities in Sweden (Class I Swedish
Diesel) using two-stage hydrotreating. This ``Swedish city diesel'' is
averaging under 10 ppm sulfur and under 10 volume percent aromatics.
While clearly demonstrating the feasibility of consistently producing
diesel fuel with less than 10 ppm sulfur from selected feedstocks,
there are a few differences between the Swedish fuel and typical U.S.
diesel fuel. First, the tight aromatics specification applicable to
Swedish City diesel fuel usually requires the use of ring-opening or
dearomatization catalysts in the second stage of the two-stage
hydrotreating unit. This eases the task of desulfurizing any sterically
hindered compounds present. Second, Swedish Class I diesel fuel also
must meet a tight density specification. This, coupled with the fact
that European diesel fuel contains less LCO than U.S. diesel fuel,
significantly reduces the amount of sterically hindered compounds
present in the feed to the desulfurization unit. Third, it is not clear
whether any refiner is producing a large fraction of their distillate
production to this specification. Thus, the European experience
demonstrates the efficacy of the two-stage process and its ability to
produce very low sulfur diesel fuel. However, doing so without
saturating most of the aromatics present and with heavier feedstock has
only been demonstrated in pilot plants and not commercially.
Europe has adopted a 50 ppm cap sulfur standard for all diesel fuel
which takes effect in 2005. Some countries, including England, have
implemented tax incentives for refiners to produce this fuel sooner.
The great majority of diesel fuel in England already meets the 50 ppm
specification. Refiners have reported no troubles with this technology.
This diesel fuel is being produced in one-stage hydrotreaters. However,
as mentioned above, European diesel fuel contains less LCO than diesel
fuel in the U.S., so the use of one-stage conventional hydrotreating to
meet very low sulfur levels is applicable, but not sufficient to
demonstrate feasibility in the U.S. Germany has also established a tax
incentive, but for diesel fuel containing 10 ppm or less sulfur. One
European technology vendor indicated that they have already licensed
two desulfurization units to German refiners planning to produce diesel
fuel to obtain this tax credit.
Overall, conventional diesel desulfurization ring-opening and
dearomatization technologies have all been installed and are operating
in one or more refineries. Thus, there should not be much concern among
refiners whether these technologies will work reliably in general.
Refiners' primary concern would be focused on the treatment of any LCO
currently being blended into highway diesel fuel. They would be
particularly concerned with the ability to desulfurize this material to
very low sulfur levels using conventional technology and, absent that,
ways to shift this material to other valuable fuel pools or treat it
more severely in available hydrotreaters or hydrocrackers. Of course,
refiners would also be concerned with the reliability of the technology
in complying with a 15 ppm cap day in and day out.
In addition to these more traditional technologies, Energy
Biosystems recently announced the availability of their
biodesulfurization technology for desulfurizing diesel fuel.
Biodesulfurization is a process which uses bacteria which has been
genetically enhanced to biologically remove the sulfur atoms from
petroleum compounds. This process is still being developed and is
expected to begin commercial demonstration in the next couple of years.
At the present time, the goal of the developers is to produce diesel
fuel with less than 50 ppm sulfur. It is not known whether this
technology would be capable of meeting the proposed cap of 15 ppm. This
process has the advantage of operating at ambient temperature and
pressures, and requires no hydrogen. The economics of the process,
however, rely on a market for its by-products, which may limit its
widespread application. Because of
[[Page 35485]]
uncertainties in this technology's ability to achieve the proposed 15
ppm cap, we did not factor it into our cost projections. We request
comment on the availability of this technology in the relevant time
frame for this proposed rulemaking.
3. Are There Unique Concerns for Small Refiners?
We have heard concerns that small refiners would bear
proportionately higher economic burdens if they were required to
produce diesel fuel meeting the same sulfur levels as larger
refineries. The most significant concern expressed to us has been their
more limited ability to obtain the capital necessary to make the
refinery modifications necessary to produce low sulfur diesel fuel
compared to the larger refiner. To address these and other concerns
related to small refiners, we have participated in a review and
evaluation process specific to small businesses under the Small
Business Regulatory Enforcement Flexibility Act (SBREFA). More
information can be found in our response to the Regulatory Flexibility
Act (see section XI.B). In short, we are seeking comment on provisions
that would assist small refiners in addressing unique challenges, as
discussed in section VIII.E.
4. Can Refiners Comply with an April 1, 2006 Start Date?
We believe that our proposal that the program begin on April 1,
2006 would provide more than an adequate amount of time for refiners to
plan their investment, complete the design package and complete the
construction and startup of the new or modified desulfurization unit
and other associated units in their refineries. In response to our
proposed Tier 2 gasoline desulfurization rulemaking, the American
Petroleum Institute (API) commented that 4 years is needed for refiners
to complete this cycle of planning, design, construction and startup.
While we believe 4 years to be more than sufficient, we have initiated
this rulemaking sufficiently early to provide over 5 years of lead
time. We recognize that most refiners will have to make investments in
their refineries to desulfurize their gasoline during this time, so the
additional time from final rule to implementation is expected to be
valuable for refiners. Similarly, by informing refiners now (i.e.,
before they make their gasoline desulfurization investments) of our
proposed highway diesel fuel desulfurization program we hope to allow
refiners to coordinate their investments and produce both low-sulfur
gasoline and low-sulfur onroad diesel at a lower cost. The additional
time between promulgation and implementation is important because of
the number of refiners which are expected to have to make these
investments. Unlike the gasoline sulfur program which really only
affected refineries outside of California, this program would affect
the California refiners as well, in addition to a number of refineries
which produce onroad diesel fuel but no gasoline.\131\ However, the
total capital cost of the investments projected to be required to meet
the proposed diesel fuel sulfur cap is less than that for the Tier 2
gasoline sulfur standards.
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\131\ By far most of California gasoline meets a 30 ppm
averaging standard, except for a small volume which is exported out
of the state. However, since the California refiners already have
the desulfurization units in place to desulfurize the majority of
their gasoline, they are expected to use those same units to
desulfurize the exported gasoline as well.
---------------------------------------------------------------------------
A particular concern has been raised to the Agency regarding the
capability of the engineering and construction (E&C) industries to be
able to design and build diesel fuel hydrotreaters while at the same
time doing the same for gasoline, as well as accomplishing their other
objectives. We believe that the E&C industry is capable of supplying
the oil refining industry with the equipment necessary to comply with
the proposed diesel fuel sulfur cap on time.\132\ We believe that this
is facilitated by the extended phase-in we allowed regarding compliance
with the Tier 2 gasoline sulfur standards. For example, we project that
only roughly a third of all gasoline-producing refineries outside of
California will be building gasoline desulfurization equipment for
start-up in early 2006 and 2007. Thus, most of the construction related
to gasoline desulfurization will be completed prior to the proposed
implementation of the diesel fuel sulfur cap. Also, low sulfur gasoline
and diesel fuel standards scheduled for Europe and Canada become
effective in 2005. We believe that this precedes the proposed highway
diesel fuel sulfur cap sufficiently to enable the availability of
European equipment fabrication capacity to be available to meet the
needs of the proposed sulfur cap in the U.S. Thus, we do not foresee
any shortage in either E&C industry personnel or equipment fabrication
capacity. We request comment on these findings.
---------------------------------------------------------------------------
\132\ Rykowski, Richard A., ``Implementation of Ultra Low Sulfur
Diesel Fuel: Construction Capacity and Aggregate Capital
Investment,'' EPA Memorandum to the Record, Docket A-99-06.
---------------------------------------------------------------------------
We are aware that the National Petroleum Council (NPC) is
conducting a Refining Study which also addresses this issue. It appears
from a publically available draft final report that the NPC may
conclude otherwise. We plan to consider the findings of this study once
it becomes final.
Another issue related to the feasibility of the April 1, 2006 start
date relates to refiners' ability to hook up their new equipment to
their existing diesel fuel hydrotreaters while still providing the
nation with diesel fuel during the transition. This issue is relevant
since: (1) we expect most refiners to revamp their current equipment,
as opposed to building entirely new equipment and (2) all refiners face
the same April 1, 2006 deadline. We expect that any new equipment
required as part of the revamp would be able to be constructed on-site
while the current equipment is operating. Inter-connecting the new and
old equipment would occur prior to April 2006 when the current
hydrotreater is scheduled to be down for maintenance. Existing
equipment which would require modification, such as compressors and
heat exchangers, would be modified during this time, as well. Diesel
fuel hydrotreaters currently operate roughly two years in between
scheduled maintenance. Thus, there should be at least one and possibly
two scheduled maintenance periods between the time when refiners could
have project designs completed, permits issued, as appropriate, and
April 2006. Under this schedule of refinery maintenance, modifying
current diesel fuel hydrotreaters to meet the proposed sulfur cap
should not impact diesel fuel production. If refiners had to schedule
additional down time in order to complete the revamp, then diesel fuel
production could be affected. We expect that any such shortfall would
be made up by other refiners or the previous build-up of inventory. We
request comment on the ability of the industry to continue to supply
highway diesel fuel while it is modifying equipment in order to comply
with the proposed sulfur cap.
Concerns have also been raised with respect to the refining
industry's ability to raise the capital necessary to make the refinery
modifications necessary to meet a 15 ppm sulfur cap on diesel fuel,
while at the same time expending capital to reduce the sulfur level in
gasoline as a result of the recently promulgated Tier 2 standards. This
has led to concerns that some refiners may refrain from investing to
continue to produce highway diesel fuel, which could cause a shortage
when the program is implemented. As discussed in section IV.B. of the
draft RIA, we have designed these programs in a
[[Page 35486]]
manner which will serve to maximize refiner flexibility and minimize
costs. Furthermore, as discussed in section V.D.1., we believe that
despite the capital cost of desulfurizing their highway diesel fuel,
other options for marketing the distillate streams from their
refineries will be limited. Finally, as discussed in section VI.A., we
are also considering various phase-in approaches for implementing the
low sulfur diesel standard. A phase-in could help spread out the
design, construction, and capital expenditure of refinery modifications
necessary to comply with the proposed diesel fuel sulfur standard. We
request comment on the necessity and ability of a phase-in to address
these concerns.
In summary, we believe that meeting a 15 ppm cap is achievable with
the diesel desulfurization technologies available now. We are confident
that we are providing more than a sufficient amount of time between
when this rule is expected to be finalized and the proposed startup
date of the program. This timing should allow for a smooth transition
of low-sulfur fuel into the marketplace. We request comments on all of
these issues. In particular, we request comment and supporting
information on the challenges refiners would face in competing for
engineering and construction resources and obtaining capital for diesel
fuel sulfur control. We also seek comment with supporting information
on the potential for diesel fuel shortages at the beginning of the
program that some believe might result from individual refinery
decisions to shift all or a portion of their production to other
distillate products or export, and on the ability of the market to self
correct if a shortage does occur.
5. Can a 15 ppm Cap on Sulfur Be Maintained by the Distribution System?
The proposed cap on sulfur content would apply to on-highway diesel
fuel at the refinery gate, and at every point along the distribution
system through to the end-user. The current distribution system for
petroleum distillates currently carries products with sulfur contents
that range from 30 ppm to over 10,000 ppm. The system includes
pipelines, tankers, tanks, and delivery trucks. To date, this system
has not been required to deliver a product with the purity which would
be required under this proposal. Consequently, to ensure the sulfur
standard is not exceeded during the fuel's journey to the end-user, the
refiner would actually produce diesel fuel sufficiently below the cap
to account for its own compliance margin (estimated to be 7 ppm on
average), as well as for test variability and potential downstream
contamination. Under the current sulfur cap of 500 ppm, refiners
typically provide ample margin, producing fuel with roughly 350 ppm
sulfur. With a sulfur cap of 15 ppm, the absolute magnitude of the
margin refiners could provide would obviously be much smaller. In
addition, the impact of contamination in the distribution system would
be potentially much more severe. If the proposed 15 ppm cap on the
sulfur content of on highway diesel fuel were adopted, other products
in the distribution system such as nonroad diesel fuel would have
sulfur concentrations over 200 times that of highway diesel fuel
instead of the 10-fold factor at present. Additives to diesel fuel
added in small amounts downstream which sometimes contain high sulfur
concentrations levels may also become much more of a concern (see
section IV.D.6.c). If as expected, refiners would produce highway
diesel fuel with an average sulfur content of approximately 7 ppm to
comply with the proposed sulfur standard, and variability in measuring
diesel sulfur content is limited to less than +/-4 ppm, downstream
sulfur contamination would need to be limited to less than 3 ppm to
maintain compliance with the proposed 15 ppm cap. Petroleum marketers
and distributors have cautioned that the distribution system is
unfamiliar with limiting sulfur contamination to such a low level.
Current industry practices may need to be modified to control and
limit sulfur contamination in the distribution system. Current
practices which are critical to minimizing contamination and which may
need to be more carefully performed include:
--Properly leveling tank trucks to ensure that they can drain
completely of high-sulfur product prior to being filled with the
proposed diesel fuel.
--Allowing sufficient time for transport tanks to drain of high-sulfur
product prior to being filled with the proposed diesel fuel.
--Purging delivery hoses of higher sulfur product prior to their use to
deliver the proposed diesel fuel.
To adequately limit sulfur contamination, we believe that such
practices would need to be followed each and every time with adequate
care taken to ensure their successful and full completion. Some
distributors may find it necessary to conduct an employee education
program to emphasize their importance. We request comment on our
assessment for each segment in the distribution chain, including tank
trucks, tank wagons, rail tankers, barges, and marine tankers.
As discussed in section V.D.3 of today's document, there may be an
increase in distribution costs associated with an increase in pipeline
interface volumes and the need to sample and test each batch of on
highway diesel fuel at the terminal level for its sulfur content. There
could also be an increase in the occurrence of noncomplying fuel
showing up in the distribution system. As is the case today, this could
cause temporary, local market shortages of fuel meeting the proposed
sulfur cap. This off-specification fuel would also either have to be
downgraded to off-highway, or re-refined, though we have assumed that
the frequency of such occurrence would be low enough as to not impact
the costs of the program noticeably. The potential sources of sulfur
contamination in the distribution system, what controls we believe
would be necessary to ensure downstream compliance with the proposed
sulfur standard, and the costs associated with such controls are
discussed in more detail in the Draft RIA. We request comment on the
challenges that each segment of the distribution chain would face in
controlling sulfur contamination, on the extent that each segment might
reasonably be expected to limit sulfur contamination, and on the
associated costs.
6. What Are the Potential Impacts of the Proposed Sulfur Change on
Lubricity, Other Fuel Properties, and Specialty Fuels?
a. What Is Lubricity and Why Might It be a Concern?
Diesel fuel lubricity properties are depended on by the engine
manufacturers to lubricate and protect moving parts within fuel pumps
and injection systems for reliable performance. Unit injector systems
and in-line pumps, commonly used in heavy-duty engines, are actuated by
cams lubricated with crankcase oil, and have minimal sensitivity to
fuel lubricity. However, rotary and distributor type pumps, commonly
used in light and medium-duty diesel engines, are completely fuel
lubricated, resulting in high sensitivity to fuel lubricity.
Experience has shown that it is very rare for a naturally high-
sulfur fuel to have poor lubricity, although, most studies show
relatively poor overall correlation between sulfur content and
lubricity. Considerable research remains to be performed for a better
understanding of the fuel components most responsible for lubricity.
[[Page 35487]]
Consequently, we are uncertain about the impact of today's proposal on
fuel lubricity. Nevertheless, there is evidence that the typical
process used to remove sulfur from diesel fuel (hydrotreating) can
impact lubricity depending on the severity of the treatment process and
characteristics of the crude. If refiners use hydrotreating to achieve
the proposed sulfur limit, there may be reductions in the concentration
of those components of diesel fuel which contribute to adequate
lubricity. As a result, the lubricity of some batches of fuel may be
reduced compared to today's levels, resulting in an increased need for
the use of lubricity additives in highway diesel fuel.
Blending small amounts of lubricity-enhancing additives increases
the lubricity of poor-lubricity fuels to acceptable levels. At the
present time, it is believed that oil companies are treating diesel
fuel in this way on a batch to batch basis, when poor lubricity fuel is
expected. This practice of treating fuel on an as-needed and voluntary
basis has been effective in ensuring good diesel fuel lubricity for the
diesel heavy-duty vehicle fleet. Our review of the technical literature
\133\ indicates that the U.S. military also uses lubricity-enhancing
additives in its diesel fuel. The U.S. military has found that the
traditional corrosion inhibitor additives that it uses have been highly
effective in reducing fuel system component wear. Consequently, the
U.S. Army now blends MIL-I-25017E corrosion inhibitor additive to all
fuels when poor lubricity is expected, and regularly for Jet A-1, JP-5
and JP-8 fuels. We believe that this practice would continue, with some
portion of the fuel refined to the proposed standard being treated with
lubricity-enhancing additives. For a more detailed discussion of diesel
fuel lubricity and current industry practices, please refer to the
Draft RIA for this proposal. We have included a 0.2 cents per gallon
cost in our calculations to account for the potential increased use of
lubricity additives (see section V.D.2).
---------------------------------------------------------------------------
\133\ See the draft RIA for a more detailed discussion.
---------------------------------------------------------------------------
b. Voluntary Approach for the Maintenance of Fuel Lubricity
If action on fuel lubricity does prove necessary, we believe a
voluntary approach would provide customer protection from engine
failures due to low lubricity, while providing the maximum flexibility
for industry. In a voluntary approach we would encourage, but not
require, fuel producers and distributors to monitor and provide fuel
with adequate lubricity to protect diesel engine fuel systems. This
approach recognizes the uncertainties of measuring fuel lubricity, and
allows flexibility as research produces better information and improved
test methods. The voluntary approach discussed here would be a
continuation of current industry practices for diesel fuel produced to
meet the current Federal and California 500 ppm sulfur diesel fuel
specifications, and benefits from the considerable experience gained
since 1993. The advantage of this approach is avoidance of an
additional regulatory scheme and associated burdens. On the down side,
voluntary measures do not guarantee results. We believe the risk in
this case is small. Refiners and distributors have an incentive to
supply fuel products that will not damage consumer equipment. Even if
occasional batches of poor lubricity fuel are distributed, they would
likely be ``treated'' with residual quantities of good lubricity fuel
in storage tanks, tanker trucks, retail tanks, and vehicle fuel tanks
(even at very low treatment levels lubricity enhancing additives
provide significant protection; see the discussion in the Draft RIA for
this proposal). Further, we expect that the American Society for
Testing and Materials intends to address lubricity in its ASTM D-975
specifications for diesel fuel quality after its concerns about test
issues have been resolved.
We are asking for comments on the alternative of specifying minimum
fuel lubricity, and suggestions for the appropriate lubricity standard
and test method. Under this approach, we would require fuel producers
to monitor and provide minimum lubricity. This would be similar to the
approach of Canada and our understanding of the usage requirements of
the U.S. military. The advantage of this approach is to guarantee the
minimum quality of fuel in the market. On the down side, such a new
specification would need to be tied specifically to emissions or
emission control hardware, and we question whether such a requirement
is appropriate considering the uncertainty about the adequacy of the
existing test methods. The American Society for Testing and Materials
has declined to specify a lubricity standard in its ASTM D-975
specifications for diesel fuel quality until its concerns about test
issues have been resolved. Also, this approach would require an
enforcement scheme and associated compliance burden. Further, we
believe that this approach would probably not be significantly more
effective than the voluntary approach. Refiners and distributors have
an incentive to supply fuel products that will not damage consumer
equipment, and the U.S. commercial market has adequately addressed
similar concerns in the past.
The U.S. Department of Defense (DOD) expressed strong reservations
about the ability of the proposed voluntary approach to ensure adequate
fuel lubricity and requested that EPA establish a uniform requirement
to ensure that diesel fuel introduced into commerce has adequate
lubricity. Absent such a requirement, DOD related that the military
would face a considerable burden to ensure that highway diesel fuel
used in military vehicles provides sufficient lubricity. DOD stated
that since they rely on the commercial market to supply highway diesel
to military users and are currently experiencing lubricity problems in
certain parts of the country during the winter months, a reduction in
diesel sulfur would increase the risk and scope of lubricity problems.
DOD also stated that due to harsher operating conditions, engines used
in their vehicles (especially tactical vehicles) are more vulnerable to
lubricity problems than the same engines operated in commercial
vehicles. In addition, at some U.S. military installations DOD uses
highway diesel fuel in their off highway vehicles as well as their
highway vehicles. We request comment on the unique challenges that our
proposed voluntary approach would place on the military and on the
appropriate means to address DOD's concerns.
c. What Are the Possible Impacts of Potential Changes in Fuel
Properties Other Than Sulfur on the Materials Used in Engines and Fuel
Supply Systems?
With the introduction of low-sulfur diesel fuel in the United
States in 1993, some diesel engine fuel pumps with a Nitrile material
for O-ring seals began to leak. Fuel pumps using a Viton material for
the seals did not experience leakage. The leakage from the Nitrile
seals was determined to be due to low aromatics levels in some low-
sulfur fuel, not the low sulfur levels. In the process of lowering the
sulfur content of some fuel, some of the aromatics had been removed.
Normally, the aromatics in the fuel penetrate the Nitrile material and
cause it to swell, thereby providing a seal with the throttle shaft.
When low-aromatics fuel is used after conventional fuel has been used,
the aromatics already in the swelled O-ring will leach out into the
low-aromatics fuel.
[[Page 35488]]
Subsequently, the Nitrile O-ring will shrink and pull away, thus
causing leaks, or the stress on the O-ring during the leaching process
will cause it to crack and leak. Not all low-sulfur fuels caused this
problem, because the amount and type of aromatics varied. Although
manufacturers have apparently resolved this issue, and we have no
evidence that further desulfurization will cause further changes in O-
ring shape or other concerns, we request comments on this or other
potential impacts of fuel properties on the materials used in engines
and fuel supply systems.
d. What Impact Would the 15 ppm Cap Have on Diesel Performance
Additives?
Our proposal to limit the sulfur content of performance additives
used in diesel fuel to less than 15 ppm (see section VIII) would
require that the use of certain high-sulfur diesel fuel additives be
discontinued. Our review of EPA's Fuel and Fuel Additives database
indicates that alternative additives that perform the same function and
which do not contain sulfur are readily available. Our evaluation
suggests that discontinuing the use of the limited number of diesel
additives with a high sulfur content would not result in significant
increased costs or an undue hardship to additive and fuel manufacturers
(see the draft RIA). We request comment on the difference in price
between high- and low-sulfur performance additives and whether there
are differences in their efficiency. As an alternative to the proposed
15 ppm cap on the sulfur content of performance additives, we are
requesting comment on whether additives not meeting the 15 ppm sulfur
cap should be allowed to be added to diesel fuel downstream in de
minimis amounts, as long as the final blend still meets the 15 ppm cap.
e. What Are the Concerns Regarding the Potential Impact on the
Availability and Quality of Specialty Fuels?
The Department of Defense (DOD) has expressed concerns regarding
the potential impact of today's proposed rule on the availability and
quality of military fuels, especially the aviation fuels JP-5 and JP-8.
DOD is concerned that today's rule might reduce the number of
refineries that produce military fuels by limiting the slate of fuels
that refiners can economically produce or the number of refiners that
continue to produce military fuels. DOD notes that the special flash
point requirement for military JP-5 fuel already limits DOD's supply
base and that the proposed rule may make some refiners opt out of
manufacturing this speciality fuel, which would reduce supply
availability and increase costs. DOD also states that the increased
hydroprocessing severity and other refinery process modifications
necessary to meet the proposed sulfur standard could impact certain
chemical/physical characteristics that are part of their fuel
specifications. DOD relates that previous environmentally-driven
changes to gasoline and diesel specifications have caused a degradation
in the quality of the jet fuel. For example, DOD states that they have
noticed a reduction and continued decline in jet fuel stability.
DOD is also concerned that refiners that currently blend more than
10 percent light cycle oil (LCO) into their highway diesel fuel might
shift some LCO into off-highway distillate fuels. DOD relates that this
would adversely affect the quality of off highway fuels used by the
military such as their naval distillate fuel F-76. DOD states that they
have experienced quality problems with LCO component streams that were
not adequately hydrotreated causing a highly unstable finished product.
Storage stability is an important issue for DOD since military naval
fuel F-76 is often stored for extended periods (longer than six months)
and unstable LCO used to manufacture F-76 could compromise mission
readiness. The potential changes that refiners might make in the way
they process LCO streams and incorporate such streams into their slate
of distillate fuels is discussed in section V.D.1 and in the Draft RIA.
We believe that concerns related to the quality of specialty fuels
can continue to be addressed by actions taken by the manufacturers and
purchasers of such fuels without the need for intervention by EPA. We
also anticipate that demand for such fuels will be sufficient to
encourage their continued availability. We request comment on the
potential impact of today's proposed rule on the quality and
availability of specialty fuels such as those used by the U.S.
military, on what actions might be necessary to mitigate such impacts,
and on the associated costs. Comment is specifically requested on the
need for the military to modify its specifications and/or enhance
enforcement of these specifications to achieve their fuel quality goals
if the proposed sulfur standards are adopted, and on the costs
associated with such changes.
E. Who Would Be Required to Meet This Proposed New Diesel Sulfur
Standard?
As discussed earlier, the highway diesel fuel sulfur content
standard being proposed today is a per-gallon cap of 15 ppm. We believe
that heavy-duty diesel trucks subject to the standards we are proposing
today would require the consistent use of diesel fuel with a sulfur cap
of 15 ppm to avoid the potentially severe emission, performance, and
durability problems that arise from operation on higher-sulfur fuel. On
this basis we believe that the proposed sulfur standard should apply to
the diesel fuel at the point of sale to the ultimate consumer. In other
words, the proposed cap on sulfur content should apply at all points in
the diesel fuel production and distribution system, including the
retail level.
We understand that there are production and distribution practices,
such as blending of additives and winter viscosity improvers such as
kerosene or No. 1 diesel fuel, that could cause the sulfur level of
diesel fuel to vary as it travels from refinery to end-point consumers.
Along with concerns about contamination and test method
reproducibility, these issues suggest that we should include some sort
of tolerance along with our proposed sulfur cap. However, we are
concerned that such tolerances on top of the 15 ppm cap may not be
appropriate given the sensitivity of diesel exhaust emission control
technology to fuel sulfur above the proposed sulfur cap. In practice,
therefore, refiners will likely be required by the downstream
distribution system to produce diesel fuel having a sulfur content
significantly below the proposed sulfur cap to ensure that downstream
practices do not end up producing a retail-level fuel with sulfur
levels higher than the proposed maximum. Thus, all parties in the
distribution system, including refiners and importers, would be
prohibited from selling, storing, transporting, dispensing,
introducing, or causing or allowing the introduction of highway diesel
fuel whose sulfur content exceeds the proposed sulfur cap. The
advantage of such an approach is that, as downstream distribution
practices and sulfur measurement accuracy improves, refiners will be
able to reduce production costs by producing fuel closer to the
proposed sulfur cap. Alternatively, we could enforce the proposed 15
ppm sulfur cap at retail and enforce a lower cap at the refinery level.
This cap would likely have to be less than 10 ppm to allow for
downstream contamination, additive blending, and test method
variability.
[[Page 35489]]
However, we believe it is more appropriate to leave this tolerance to
the market.
F. What Might Be Done To Encourage the Early Introduction of Low-Sulfur
Diesel Fuel?
As discussed in section IV.C, we are proposing that the entire
highway diesel pool be required to meet a lower standard on sulfur
content beginning June 1, 2006.\134\ This should provide certainty that
low-sulfur diesel fuel will be available for model year (MY) 2007
heavy-duty diesel engines by July 1, 2006. If low-sulfur diesel fuel
was available prior to July 1, 2006, engine manufacturers have
indicated that fleet trials might be conducted of the sulfur-sensitive
exhaust emission control equipment intended for use in heavy-duty
vehicles to meet the proposed MY 2007 emissions standards. The
information gained from these trials could be used to improve the
efficiency and durability of such exhaust emission control equipment.
This could lower the cost of the exhaust emission control equipment and
help ensure the smooth implementation of the proposed MY 2007, heavy-
duty standards. If low-sulfur diesel fuel was available earlier than
July 1, 2006, it might also facilitate the early introduction of
sulfur-sensitive exhaust emission control equipment in light-duty
diesel vehicles. Automobile manufacturers expressed interest in using
sulfur-sensitive exhaust emission control equipment in some of their
light-duty vehicles beginning in MY 2004, so that they might benefit
from in-use experience prior to the anticipated use of such equipment
in all MY 2007, light-duty diesel vehicles. In addition, early
availability of some low sulfur diesel fuel would have the added
advantage of allowing the distribution system a chance to develop
experience handling diesel fuel with such a low sulfur level before the
standards would take effect.
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\134\ This is the proposed retail-level compliance date. The
proposed compliance date at the refinery level is April 1, 2006.
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We believe that some low-sulfur diesel fuel meeting the proposed 15
ppm sulfur cap would be available in advance of when we are proposing
that it must be produced by refiners. Most refiners will need to
install new equipment to meet the proposed sulfur standard. Since the
technical and construction resources needed for such refinery upgrades
is limited, a number of refiners are likely to have the new
desulfurization equipment installed well in advance of the proposed
compliance date. Refiners who produce low-sulfur diesel early would
want to market it as a premium fuel rather than losing the added value
by selling it as current highway diesel fuel. Some refiners have
already begun programs to market low-sulfur diesel as a premium fuel.
For example, ARCO Products Company recently announced a fleet program
to demonstrate the emissions benefits of its EC--D (emission control)
diesel which has a lower sulfur and aromatics content, and a higher
cetane rating than current highway diesel fuel.\135\ Engine and vehicle
manufacturers are assisting in the overall program design and
implementation of the program. Emission control equipment manufacturers
are supplying exhaust emission control equipment which works more
effectively with low-sulfur fuel. ARCO has also begun marketing diesel
fuel in California with a maximum sulfur content of 15 ppm. This fuel
is being made available, upon request, to operators of urban municipal
fleets retrofitted with catalytic exhaust emission controls in
connection with the California ARB's proposed urban bus program (see
section I.C.6). \136\ Mobil Corporation, Ford Motor Company, Navistar,
and Volkswagen also have a cooperative program underway to evaluate the
emissions benefits of new engine/aftertreatment technologies using a
lower-sulfur diesel fuel (also with reduced polynuclear aromatic
content). We are interested in encouraging additional programs between
refiners and vehicle manufacturers to introduce vehicles equipped with
exhaust emission control technologies which benefit from the use of
low-sulfur diesel fuel prior to the date when we are proposing that
such fuel must be made available.
---------------------------------------------------------------------------
\135\ ARCO Products Company news release dated October 7, 1999,
Docket A-99-06 Item II-G-13.
\136\ ARCO Products Company news release dated December 15,
1999.
---------------------------------------------------------------------------
There are numerous strategies involving voluntary market incentives
that could help promote the early introduction of low-sulfur diesel
fuel. Under existing voluntary emission credits programs, a system
might be created whereby refiners that produce low-sulfur fuel early
could generate emission reduction credits that could then be sold
through a market mechanism to other entities that could use such
credits to meet their emission compliance goals. We welcome comments on
whether additional incentives are needed and feasible to encourage the
early introduction of low-sulfur diesel fuel for use in vehicles
equipped to provide lower emissions with the use of such a fuel. We
also request comments on how such incentives might be structured under
a phase in of low sulfur highway diesel fuel (see section VI.A).
V. Economic Impact
This section discusses the projected economic impact and cost
effectiveness of the proposed emission standards and low-sulfur fuel
requirement. We welcome comment on the estimated cost for research and
development and the necessary lead time to develop these technologies
for heavy-duty vehicles. Additionally we invite the reader to review
all of the underlying cost assumptions made in the accompanying draft
RIA and ask for comment on the validity of these assumptions. Full
details of our cost and cost effectiveness analyses can be found in the
Draft RIA.
A. Cost for Diesel Vehicles To Meet Proposed Emissions Standards
1. Summary of New System and Operating Costs
The technologies described in section III show a good deal of
promise for controlling emissions, but also make clear that much effort
remains to develop and optimize these new technologies for maximum
emission-control effectiveness with minimum negative impacts on engine
performance, durability, and fuel consumption. On the other hand, it
has become clear that manufacturers have a great potential to advance
beyond the current state of understanding by identifying aspects of the
key technologies that contribute most to hardware or operational costs
or other drawbacks and pursuing improvements, simplifications, or
alternatives to limit those burdens. To reflect this investment in
long-term cost savings potential, the cost analysis includes an
estimated $385 million in R&D outlays for heavy-duty engine designs and
$220 million in R&D for catalysts systems giving a total R&D outlay for
improved emission control of more than $600 million. The cost and
technical feasibility analyses accordingly reflect substantial
improvements on the current state of technology due to these future
developments.
Estimated costs are broken into additional hardware costs and life-
cycle operating costs. The incremental hardware costs for new engines
are comprised of variable costs (for hardware and assembly time) and
fixed costs (for R&D, retooling, and certification). Total operating
costs include the estimated incremental cost for low-sulfur diesel
fuel, any expected
[[Page 35490]]
increases in maintenance cost, or fuel consumption costs along with any
decreases in operating cost expected due to low-sulfur fuel. Cost
estimates based on these projected technology packages represent an
expected incremental cost of engines in the 2007 model year. Costs in
subsequent years would be reduced by several factors, as described
below. Separate projected costs were derived for engines used in three
service classes of heavy-duty diesel engines. All costs are presented
in 1999 dollars.
The costs of these new technologies for meeting the proposed 2007
model year standards are itemized in the Draft RIA and summarized in
Table V.A-1. For light heavy-duty vehicles, the cost of a new 2007
model year engine is estimated to increase by $1,688 and operating
costs over a full life-cycle to increase by about $431. For medium
heavy-duty vehicles the cost of a new engine is estimated to increase
by $2,213, with life-cycle operating costs increasing to $826.
Similarly, for heavy heavy-duty engines, the vehicle cost is expected
to increase by $2,768, and estimated additional life-cycle operating
costs are $3,362. The higher incremental increase in operating costs
for the heavy heavy-duty vehicles is due to the larger number of miles
driven over their lifetime (714,000 miles on average) and their
correspondingly high lifetime fuel usage. Emission reductions are also
proportional to VMT and so are significantly higher for heavy heavy-
duty vehicles.
We also believe there are factors that would cause cost impacts to
decrease over time, making it appropriate to distinguish between near-
term and long term costs. Research in the costs of manufacturing has
consistently shown that as manufacturers gain experience in production,
they are able to apply innovations to simplify machining and assembly
operations, use lower cost materials, and reduce the number or
complexity of component parts.\137\ Our analysis, as described in more
detail in the draft RIA, incorporates the effects of this learning
curve by projecting that the variable costs of producing the low-
emitting engines decreases by 20 percent starting with the third year
of production (2009 model year) and by reducing variable costs again by
20 percent starting with the fifth year of production. We invite
comment on this methodology to account for the learning curve phenomena
and also request comment on whether learning is likely to reduce costs
in this industry. Additionally, since fixed costs are assumed to be
recovered over a five-year period, these costs are not included in the
analysis after the first five model years. Finally, manufacturers are
expected to apply ongoing research to make emission controls more
effective and to have lower operating cost over time. However, because
of the uncertainty involved in forecasting the results of this
research, we have conservatively not accounted for it in this analysis.
Table V.A-1 lists the projected costs for each category of vehicle in
the near- and long-term. For the purposes of this analysis, ``near-
term'' costs are those calculated for the 2007 model year and ``long
term'' costs are those calculated for 2012 and later model years.
---------------------------------------------------------------------------
\137\ ``Learning Curves in Manufacturing,'' Linda Argote and
Dennis Epple, Science, February 23, 1990, Vol. 247, pp. 920-924.
---------------------------------------------------------------------------
We welcome comment on the degree to which this program may
influence sales of new heavy-duty vehicles in the early years of the
program, and the resulting impact this would have on our projected
program benefits and costs. Costlier model year 2007 vehicles may
induce some potential purchasers of these vehicles to instead buy 2006
models to save money, or to defer a purchase longer than they otherwise
might have. On the other hand, we would anticipate that the very low
emissions characteristics of these new vehicles would cause many buyers
for whom cleaner diesels would be good for business (for example, urban
transit authorities and touring or shuttle services) to retire older
higher-emitting vehicles early.
Table V.A-1.--Projected Incremental System Cost and Life Cycle Operating Cost for Heavy-Duty Diesel Vehicles
[Net present values in the year of sale, 1999 dollars]
----------------------------------------------------------------------------------------------------------------
Life-cycle
Vehicle class Model year Hardware cost operating
cost*
----------------------------------------------------------------------------------------------------------------
Light heavy-duty.............................. Near term....................... $1,688 $431
Long term....................... 982 413
Medium heavy-duty............................. Near term....................... 2,213 826
Long term....................... 1,188 800
Heavy heavy-duty.............................. Near term....................... 2,768 3,362
Long term....................... 1,572 3,265
Urban Bus..................................... Near term....................... 2,268 3,942
Long term....................... 1,252 3,874
----------------------------------------------------------------------------------------------------------------
* Incremental life-cycle operating costs include the incremental costs to refine and distribute low sulfur
diesel fuel, the service cost of closed crankcase filtration systems, and the lower maintenance costs realized
through the use of low sulfur diesel fuel (see discussion in section V.3).
2. New System Costs for NOX and PM Emission Control
Several new technologies are projected for complying with the
proposed 2007 model year emission standards. We are projecting that
NOX adsorbers and catalyzed diesel particulate filters would
be the most likely technologies applied by the industry in order to
meet our proposed emissions standards. The fact that manufacturers
would have several years before implementation of the proposed new
standards ensures that the technologies used to comply with the
standards would develop significantly before reaching production. This
ongoing development could lead to reduced costs in three ways. First,
we expect research will lead to enhanced effectiveness for individual
technologies, allowing manufacturers to use simpler packages of
emission control technologies than we would predict given the current
state of development. Similarly, we anticipate that the continuing
effort to improve the emission control technologies will include
innovations that allow lower-
[[Page 35491]]
cost production. Finally, we believe that manufacturers would focus
research efforts on any drawbacks, such as fuel economy impacts or
maintenance costs, in an effort to minimize or overcome any potential
negative effects.
We anticipate that in order to meet the proposed standards,
industry would introduce a combination of primary technology upgrades
for the 2007 model year. Achieving very low NOX emissions
will require basic research on NOX emission control
technologies and improvements in engine management to take advantage of
the exhaust emission control system capabilities. The manufacturers are
expected to take a systems approach to the problem optimizing the
engine and exhaust emission control system to realize the best overall
performance possible. Since most research to date with exhaust emission
control technologies has focused on retrofit programs there remains
room for significant improvements by taking such a systems approach.
The NOX adsorber technology in particular is expected to
benefit from re-optimization of the engine management system to better
match the NOX adsorbers performance characteristics. The
majority of the $600 million dollars we have estimated for research is
expected to be spent on developing this synergy between the engine and
NOX exhaust emission control systems. PM control
technologies are expected to be less sensitive to engine operating
conditions as they have already shown good robustness in retrofit
applications with low-sulfur diesel fuel.
The NOX adsorber system that we are anticipating would
be applied in 2007 consists of a catalyst which combines traditional
gasoline three-way conversion technology with a newly developed
NOX storage function, a reductant metering system and a
means to control engine air fuel (A/F) ratio. The NOX
adsorber catalyst itself is a relatively new device, but is benefitting
in its development from over 20 years of gasoline three-way catalyst
development. In order for it to function properly, a systems approach
that includes a reductant metering system and control of engine A/F
ratio is also necessary. Many of the new air handling and electronic
system technologies developed in order to meet the 2004 heavy-duty
engine standards can be applied to accomplish the NOX
adsorber control functions as well. Some additional hardware for
exhaust NOX or O2 sensing and for fuel metering
will likely be required. We have estimated that this additional
hardware will increase new engine costs by approximately $350 for a
heavy heavy-duty diesel engine. The Draft RIA also calculates an
increase in warranty costs for this additional hardware. In total the
new NOX control technologies required in order to meet the
proposed 2007 emission standards are estimated to increase light heavy-
duty engine costs by $890, medium heavy-duty engine costs by $1,047 and
heavy heavy-duty engine costs by $1,410 in the year 2007. In the year
2012 and beyond the incremental costs are expected to decrease to $570
for a light heavy-duty engine, $670 for a medium heavy-duty engine and
to $902 for a heavy heavy-duty engine.
Catalyzed diesel particulate filters are experiencing widespread
retrofit use in much of Europe as low-sulfur diesel fuel becomes
readily available. These technologies are proving to be robust in their
non-optimized retrofit applications requiring no modification to engine
or vehicle control functions. We therefore anticipate that catalyzed
diesel particulate filters can be integrated with new diesel engines
with only a minimal amount of engine development. We do not anticipate
that additional hardware beyond the diesel particulate filter itself
and an exhaust pressure sensor for OBD will be required in order to
meet the proposed PM standard. We estimate in 2007 that diesel
particulate filter systems will add $633 to the cost of a light heavy-
duty vehicle, $796 to the cost of a medium heavy-duty vehicle and
$1,028 to the cost of a heavy heavy-duty vehicle. By 2012 these costs
are expected to decrease to $389, $491, and $638 respectively. These
cost estimates are comparable to estimates made by the Manufacturers of
Emission Controls Association for these technologies.\138\
---------------------------------------------------------------------------
\138\ Letter from Bruce Bertelsen, Manufacturers of Emission
Controls Association (MECA) to William Charmley, US EPA, December
17, 1998. The letter documents a MECA member survey of expected
diesel particulate filter costs. EPA Air Docket A-99-06.
---------------------------------------------------------------------------
We have proposed to eliminate the exemption that allows turbo-
charged heavy-duty diesel engines to vent crankcase gases directly to
the environment, so called open crankcase systems, and have projected
that manufacturers will rely on engineered closed crankcase ventilation
systems which filter oil from the blow-by gases. We have estimated the
initial cost of these systems in 2007 to be $37, $42, and $49 for
light, medium and heavy heavy-duty diesel engines respectively.
Additionally we expect a portion of the oil filtration system to be a
service replacement oil filter which will be replaced on a 30,000 mile
service interval with a service cost of $10, $12, and $15 for light,
medium, and heavy heavy-duty diesel engines respectively. These cost
are summarized with the other cost for emission controls in Table V.A-1
and are included in the aggregate cost reported in section V.E.
3. Operating Costs Associated With NOX and PM Control
The Draft RIA assumes that a variety of new technologies will be
introduced to enable heavy-duty vehicles to meet the new emissions
standards we are proposing. Primary among these are advanced emission
control technologies and low-sulfur diesel fuel. The many benefits of
low-sulfur diesel fuel are described in section III, and the
incremental cost for low-sulfur fuel is described in section V.D. The
new emission control technologies are themselves not expected to
introduce additional operating costs in the form of increased fuel
consumption. Operating costs are estimated in the Draft RIA over the
life of the vehicle and are expressed as a net present value (NPV) in
1999 dollars for comparison purposes.
Total operating cost estimates include both the expected increases
in maintenance and fuel costs (both the incremental cost for low-sulfur
fuel and any fuel consumption penalty) due to the emission control
systems application and the predicted decreases in maintenance cost due
to the use of low-sulfur fuel. Today's proposal estimates some increase
in operating costs due to the incremental cost of low-sulfur diesel
fuel but no net increase in fuel consumption with the application of
the new emission control technologies (see discussion in section
III.G). The net increase in operating costs are summarized in Table
V.A-1. While we are using these incremental operating cost estimates
for our cost effectiveness calculations, it is almost certain that the
manufacturers will improve existing technologies or introduce new
technologies in order to offset at least some of the increased
operating costs. We request comment on these operating cost estimates
and on ways in which industry may be able to offset these operating
costs.
We estimate that the low-sulfur diesel fuel we are proposing to
require in order to enable these technologies would have an incremental
cost of approximately $0.044/gallon as discussed in section V.D. The
proposed low-sulfur diesel fuel may also provide additional benefits by
reducing the engine maintenance costs associated with corrosion due to
sulfur in the current diesel fuel. These benefits, which are discussed
further in section V.C and in the draft RIA, include extended oil
[[Page 35492]]
change intervals due to the slower acidification rate of the engine oil
with low-sulfur diesel fuel. Service intervals for the EGR system are
also expected to increase due to lower-sulfur induced corrosion than
will occur with today's higher-sulfur fuel. This lengthening of service
intervals provides a significant savings to the end user. As described
in more detail in the Draft RIA we anticipate that low-sulfur diesel
fuel would provide additional cost savings to the consumer of $153 for
light heavy-duty vehicles, $249 for medium heavy-duty vehicles and $610
for heavy heavy-duty vehicles. The operating costs for replacement
filters in the closed crankcase filtration systems are estimated to be
$48 for light heavy-duty vehicles, $72 for medium heavy-duty vehicles
and $268 for heavy heavy-duty vehicles in 2007 and in the long term are
expected to decrease to $31 for a light heavy-duty vehicle, $46 for a
medium heavy-duty vehicle and $172 for a heavy heavy-duty vehicle.
Factoring the cost savings due to low sulfur diesel fuel into the
additional cost for low-sulfur diesel fuel and the service cost of the
closed crankcase ventilation system yields a net increase in vehicle
operating costs of $431 for a light heavy-duty vehicle, $826 for a
medium heavy-duty vehicle and $3,362 for a heavy heavy-duty vehicle.
These life cycle operating costs are also summarized in Table V.A-1.
The net increase in operating cost can also be expressed as an average
annual operating cost for each class of heavy-duty vehicle. Expressed
as an approximate annual per vehicle cost, the additional operating
cost is estimated as $50 for a light heavy-duty vehicle, $100 for a
medium heavy-duty vehicle, and $400 for a heavy heavy-duty vehicle.
B. Cost for Gasoline Vehicles to Meet Proposed Emissions Standards
1. Summary of New System Costs
To perform a cost analysis for the proposed standards, we first
determined a package of likely technologies that manufacturers could
use to meet the proposed standards and then determined the costs of
those technologies. In making our estimates we have relied on our own
technology assessment which included publicly available information,
such as that developed by California, as well as confidential
information supplied by individual manufacturers, and the results of
our own in-house testing.
In general, we expect that heavy-duty gasoline vehicles would (like
Tier 2 light duty vehicles) be able to meet these standards through
refinements of current emissions control components and systems rather
than through the widespread use of new technology. More specifically,
we anticipate a combination of technology upgrades such as the
following:
Improvements to the catalyst system design, structure, and
formulation, plus an increase in average catalyst size and loading.
Air and fuel system modifications including changes such
as improved oxygen sensors, and calibration changes including improved
precision fuel control and individual cylinder fuel control.
Exhaust system modifications, possibly including air
gapped components, insulation, leak free exhaust systems, and thin wall
exhaust pipes.
Increased use of fully electronic exhaust gas
recirculation (EGR).
Increased use of secondary air injection.
Use of ignition spark retard on engine start-up to improve
upon cold start emission control.
Use of low permeability materials and minor improvements
to designs, such as the use of low-loss connectors, in evaporative
emission control systems.
We expect that the technologies needed to meet these proposed
heavy-duty gasoline standards would be very similar to those required
to meet the Tier 2 standards for vehicles over 8,500 pounds GVWR. Few
heavy-duty gasoline vehicles currently rely on technologies such as
close coupled catalysts and secondary air injection, but we expect they
would do so to in order to meet the proposed 2007 standards.
For each group we developed estimates of both variable costs (for
hardware and assembly time) and fixed costs (for R&D, retooling, and
certification). Cost estimates based on the current projected costs for
our estimated technology packages represent an expected incremental
cost of vehicles in the near-term. For the longer term, we have
identified factors that would cause cost impacts to decrease over time.
First, since fixed costs are assumed to be recovered over a five-year
period, these costs disappear from the analysis after the fifth model
year of production. Second, the analysis incorporates the expectation
that manufacturers and suppliers would apply ongoing research and
manufacturing innovation to making emission controls more effective and
less costly over time. Research in the costs of manufacturing has
consistently shown that as manufacturers gain experience in production
and use, they are able to apply innovations to simplify machining and
assembly operations, use lower cost materials, and reduce the number or
complexity of component parts.\139\ These reductions in production
costs are typically associated with every doubling of production
volume. Our analysis incorporates the effects of this ``learning
curve'' by projecting that a portion of the variable costs of producing
the new vehicles decreases by 20 percent starting with the third year
of production. We applied the learning curve reduction only once since,
with existing technologies, there would be less opportunity for
lowering production costs than would be the case with the adoption of
new technology. We did not apply the learning curve reduction to
precious metal costs, nor did we apply it for the evaporative
standards. We invite comment on this methodology to account for the
learning curve phenomena and also request comment on whether learning
is likely to reduce costs in this industry.
---------------------------------------------------------------------------
\139\ See Chapter V of the final Tier 2 Regulatory Impact
Analysis, contained in Air Docket A-97-10.
---------------------------------------------------------------------------
We have prepared our cost estimates for meeting the new heavy-duty
gasoline standards using a baseline of current technologies for heavy-
duty gasoline vehicles and engines. Finally, we have incorporated what
we believe to be a conservatively high level of R&D spending at
$2,500,000 per engine where no California counterpart exists. We have
included this large R&D effort because calibration and system
optimization is likely to be a critical part of the effort to meet the
standards. However, we believe that the R&D costs may be generous
because the projection probably underestimates the carryover of
knowledge from the development required to meet the light-duty Tier 2
and CARB LEV-II standards.
Table V.B-1 provides our estimates of the per vehicle increase in
purchase price for heavy-duty gasoline vehicles and engines. The near-
term cost estimates in Table V.B-1 are for the first years that
vehicles meeting the standards are sold, prior to cost reductions due
to lower productions costs and the retirement of fixed costs. The long-
term projections take these cost reductions into account. We request
comment on the costs shown in Table V.B-1 and the analysis behind them.
[[Page 35493]]
Table V.B-1.--Projected Incremental System Cost and Life Cycle Operating Cost for Heavy-Duty Gasoline Vehicles
[Net present values in the year of sale, 1999 dollars]
----------------------------------------------------------------------------------------------------------------
Incremental Life-cycle
Vehicle class Model year system cost operating cost
----------------------------------------------------------------------------------------------------------------
Heavy-Duty Gasoline........................... Near term....................... $182 $0
Long term....................... 152 0
----------------------------------------------------------------------------------------------------------------
2. Operating Costs Associated With Meeting the Heavy-Duty Gasoline
Standard
Low sulfur gasoline is a fundamental enabling technology which will
allows heavy-duty gasoline vehicles to meet the very low emission
standards being proposed today. The low sulfur gasoline required under
the Tier 2 proposal will enable advanced exhaust emission control for
heavy-duty vehicles as well. Today's proposal puts no additional
requirements on gasoline sulfur levels and as such should not directly
increase gasoline fuel costs. Additionally, the new technologies being
employed in order to meet the new standards are not expected to
increase fuel consumption for heavy-duty gasoline vehicles. In fact,
there may be some small improvement in fuel economy from the
application of improved fuel and air control systems on these engines.
Therefore, in the absence of changes to gasoline specifications and
with no decrease in fuel economy, we do not expect any increase in
vehicle operating costs.
C. Benefits of Low-Sulfur Diesel Fuel for the Existing Diesel Fleet
We estimate that the proposed low-sulfur diesel fuel would provide
additional benefits to the existing heavy-duty vehicle fleet as soon as
the fuel is introduced. We believe these benefits could offer
significant cost savings to the vehicle owner without the need for
purchasing any new technologies. The Draft RIA has catalogued a variety
of benefits from the proposed low-sulfur diesel fuel. These benefits
are summarized in Table V.C-1.
Table V.C-1.--Components Potentially Affected by Lower Sulfur Levels in
Diesel Fuel
------------------------------------------------------------------------
Effect of lower Potential impact
Affected components sulfur on engine system
------------------------------------------------------------------------
Piston Rings.................... Reduce corrosion Extended engine
wear. life and less
frequent
rebuilds.
Cylinder Liners................. Reduce corrosion Extended engine
wear. life and less
frequent
rebuilds.
Oil Quality..................... Reduce deposits Reduce wear on
and less need for piston ring and
alkaline cylinder liner
additives. and less frequent
oil changes.
Exhaust System (tailpipe)....... Reduces corrosion Less frequent part
wear. replacement.
EGR............................. Reduces corrosion Less frequent part
wear. replacement.
------------------------------------------------------------------------
The actual value of these benefits over the life of the vehicle
would depend upon the length of time that the vehicle operates on low-
sulfur diesel fuel and the degree to which vehicle operators change
engine rebuild patterns to take advantage of these benefits. For a
vehicle near the end of its life in 2007 the benefits would be quite
small. However for vehicles produced in the years immediately preceding
the introduction of low-sulfur fuel the savings would be substantial.
The Draft RIA estimates that a heavy heavy-duty vehicle introduced into
the fleet in 2006 would realize savings of $610 over its life. This
savings could alternatively be expressed in terms of fuel costs as
approximately 1 cent per gallon as discussed in the draft RIA. These
savings would occur without additional new cost to the vehicle owner
beyond the incremental cost of the low-sulfur diesel fuel, although
these savings would require changes to existing maintenance schedules.
Such changes seem likely given the magnitude of the savings and the
nature of the regulated industry.
The maintenance benefits we project come primarily from extended
oil change intervals. We have no quantitative data on how much longer
these intervals might be. Based on discussions with some engine
manufacturers, we believe it is reasonable to assume that engine oil
change intervals will increase by 10 percent for each class of engine
(in both new and existing fleets). We seek comment on this key
assumption and on these projected savings and all of the assumptions
behind them; details of the analysis behind these savings can be found
in the draft RIA contained in the docket for this rule.
D. Cost of Proposed Fuel Change
We estimate that the overall cost associated with lowering the
sulfur cap from the current level of 500 ppm to the 15 ppm level
proposed today will be approximately 4.4 cents per gallon. As discussed
in sections V.A. and V.C., this cost would be offset by a one cent per
gallon savings (or more) from the reduction in vehicle maintenance
savings that result from the use of the cleaner fuel. The fuel cost is
comprised of a number of components associated with refining and
distributing the fuel. The majority of the fuel cost is expected to be
the refining cost which is estimated to be approximately 4.0 cents per
gallon, which includes the cost of producing more volume of diesel fuel
because desulfurization decreases the energy density of the fuel. The
remaining 0.4 cents per gallon in fuel costs is associated with an
anticipated increase in the use of additives to maintain fuel lubricity
at a cost of 0.2 cents per gallon, and an increase in distribution
costs of 0.2 cents per gallon. The increase in distribution costs
comprises 0.1 cents per gallon to distribute the additional volume of
diesel fuel needed to compensate for the decrease in fuel energy
density, and 0.1 cents per gallon to maintain product integrity in the
distribution system. These cost estimates are discussed in more detail
below and in the Draft RIA.
[[Page 35494]]
When the 4.4 cent per gallon cost is applied to the expected low sulfur
diesel fuel sales volume of approximately 40 billion gallons at the
start of the program, it equates to an annual cost of roughly $1.8
billion per year. This fuel cost would be offset by a reduction in
maintenance costs of roughly $0.4 billion per year.
1. Refinery Costs
As explained in Section IV, refiners would have to install capital
equipment to meet the proposed diesel fuel sulfur standard. Presuming
that refiners will want to minimize the cost involved and use
conventional technology, refiners are expected to build onto their
existing desulfurization unit by adding another hydrotreating reactor
and other related equipment.
In our analysis, we estimated the cost of lowering onroad diesel
fuel sulfur levels for a national average refinery starting from the
current national average sulfur level of about 350 ppm down to 7 ppm.
We believe that a refinery's average diesel fuel sulfur level would be
roughly 7 ppm under a 15 ppm cap standard. We then calculated a
national aggregate cost and cents-per-gallon cost. Based on this
analysis we estimate that, on average, individual refiners in the years
2004-05 would be expected to invest about $30 million for capital
equipment and spend about $8 million per year for each refinery to
cover the operating costs associated with these desulfurization units.
Since this average represents a diverse size range of refineries, some
refineries would pay more and others less than this average cost. When
the average per-refinery cost is aggregated for all the onroad diesel
fuel expected to be produced in this country in 2007, we estimate that
the total investment for desulfurizing diesel fuel would be about $1.9,
$2.0, and $0.2 billion in 2004, 2005, and 2006, respectively, as
discussed in section IV.B. Operating costs for these units are expected
to be about $1.1 billion per year.
Using our estimated capital and operating costs we calculated the
average per-gallon cost of reducing diesel fuel sulfur down to meet the
proposed 15 ppm cap standard. Using a capital cost amortization factor
based on a seven percent rate of return on investment before taxes, we
estimated the average national cost for desulfurizing onroad diesel
sulfur to be about 4.0 cents per gallon. This cost is our estimated
cost to society of producing onroad diesel to meet a 15 ppm cap
standard that we used for estimating cost effectiveness.
There is currently no commercial experience in the U.S. and only a
limited amount of information in the public literature on the costs
associated with reducing the sulfur level in diesel fuel to very low
levels on an ongoing operational basis. Experience in Sweden involves
other changes to the fuel as well that would tend to drive up the costs
considerably. The EMA recently commissioned a study by Mathpro of the
economics of controlling the sulfur content of highway and nonroad
diesel fuel to various sulfur levels as low as 2 ppm. Unfortunately,
none of the scenarios modeled in the EMA study are consistent with our
proposal today. Furthermore, some of the assumptions made in the
analysis are inconsistent with our standard assumptions for economic
analysis. For example, Mathpro used a higher rate of return on new
capital than the rate we use. Nevertheless, some insight can be gained
from a broad comparison of Mathpro's and our cost projections. The
proposed sulfur cap for highway diesel fuel is very roughly bracketed
by two Mathpro sulfur control scenarios: (1) a highway diesel fuel
standard of 20 ppm on average with a nonroad diesel fuel standard of
350 ppm on average, and (2) an highway diesel fuel standard of 2 ppm on
average with a nonroad diesel fuel standard of 20 ppm on average.
Mathpro's projected refining costs for these two scenarios range from 4
to just under 6 cents per gallon (citing their costs for revamping
current diesel fuel hydrotreaters with reactors in series, which is
equivalent to our technology projections). Considering that Mathpro
uses a higher rate of return on capital and that both of their
scenarios included controlling nonroad diesel fuel, the two sets of
cost projections appear to be roughly consistent. This serves to give
us some confidence that our cost estimate for a sulfur cap of 15 ppm on
highway diesel fuel is reasonable. This is discussed in further detail
in the Draft RIA.
Although API assisted in the study, API has expressed some concern
about the accuracy of the EMA cost estimates. API highlighted their
concerns on the EMA study in a memo to the Director the Office of
Transportation Air Quality, which is included in the docket.\140\ While
API expressed their belief that the cost outcomes of the EMA study are,
in general, reasonable, they expressed serious concerns about the cost
of producing diesel with sulfur levels below 20 ppm (roughly equivalent
to a 30 ppm cap). API believes that, particularly at extremely low
sulfur levels, the measures needed to be taken would result in
significantly higher costs than estimated by EMA. We request comment on
this assessment.
---------------------------------------------------------------------------
\140\ Edward H. Murphy, API to Margo Oge, US EPA, October
26,1999.
---------------------------------------------------------------------------
We acknowledge that some refiners likely face higher
desulfurization costs than others. This is generally the case with any
fuel quality regulation, since the crude oils processed by, as well as
the configurations and product slates of individual refineries vary
dramatically. As mentioned in section IV, API believes that those
refiners facing higher than average costs may decide to leave the
highway diesel fuel market. They argue this is especially a possibility
if they are faced with a sulfur standard below a 30 ppm average (or 50
ppm cap), which they believe will require very large investments for
high pressure hydrotreating to maintain current highway diesel
production volumes. API also believes that many refiners may reduce
their production of highway diesel fuel, by switching the feedstocks
(i.e., LCO) which are most difficult to desulfurize to other markets,
thus avoiding the higher investments associated with high pressure
hydrotreating. If some refiners reduce highway diesel fuel production,
that could present an opportunity for other refiners, who choose to
make the investment, of higher prices for the new 15 ppm sulfur
product. Whether the potential for higher prices would be sufficient
and be apparent with sufficient leadtime to allow refiners to make an
added investment by the time the proposed rule is effective is
currently unclear.
For example, the refining industry actually overbuilt
desulfurization capacity for the current 500 ppm standard, as evidenced
by the significant use in the off-highway market of diesel fuel
produced to the current highway diesel sulfur standard of 500 ppm. Some
of this overproduction may have been due to limitations in the
distribution system to distribute both highway and off-highway grades
of diesel fuel. Despite the overall market overproduction, a number of
small refiners did decide to switch from the highway diesel fuel market
to the off-highway diesel fuel market, presumably for economic reasons.
Another incentive for refiners to invest in highway diesel fuel
desulfurization equipment is the potential for a growing light-duty
diesel market. Many vehicle manufacturers have announced plans to equip
their light-duty vehicles and, particularly, light-duty trucks with
diesel engines. Refiners may want to ensure their
[[Page 35495]]
presence in this growing and potentially profitable market.
Alternative markets for distillate products are limited in the U.S.
The domestic off-highway diesel fuel and heating oil markets are much
smaller than the highway diesel fuel market. The domestic off-highway
diesel fuel and heating oil markets are currently in balance,
considering the fact that some highway diesel fuel is currently being
sold into these markets. Assuming that the distribution system can be
changed to segregate highway and other distillate fuels more
economically, some amount of current highway diesel fuel production
could switch to these other markets with no loss of highway diesel fuel
supply. In addition, although the off-highway diesel fuel market is
growing, this growth will occur gradually over the next 6 years and not
occur on April 1, 2006. The heating oil market is very seasonal (strong
in the winter and weak in the summer), regional (strong in the
Northeast) and not growing. Thus, overall, we do not see much
opportunity for large domestic producers of highway diesel fuel to be
able to shift their production to these other domestic markets.
Export opportunities for diesel fuel are also limited to some
degree. Japan and Europe will have stringent sulfur caps in place by
2005 and have cetane requirements well beyond the cetane levels of
current U.S. diesel fuel. Asia, while growing in demand for diesel
fuel, has also been the focus of new grassroots refinery production and
again has high cetane requirements. Thus, the primary areas for export
of diesel fuel of average U.S. quality would appear to be Africa and
Latin America.
Refiners have also raised the possibility of exporting some of
their more difficult to desulfurize diesel feedstocks such as LCO to
other distillate markets. While this may be a possibility to some
degree as discussed in Section IV and the draft RIA, the opportunities
to do so appear to be limited. We have not conducted a detailed
analysis of the potential for this exportation. Refiners would have to
hydrotreat this material to lower its sulfur content in order to meet
the European Union 50 ppm sulfur cap (and increase its cetane) in order
for it to be used as a diesel fuel blendstock. Otherwise, its only use
without additional treating would be in heating fuel. With Europe and
developing countries expected to experience increasing demand for non-
diesel, distillate fuel, there may be economic opportunities for
exporting such fuel.
We request comments on the possibility that the proposed sulfur cap
would cause some refiners to abandon the U.S. highway diesel fuel
market or to reduce highway diesel fuel production, as well as on the
impact that this would have on diesel fuel supply and price in the U.S.
We also request comment on whether refiners would likely desire to
shift all their LCO to non-highway diesel fuel markets or just the
heavier portion which contains the most sterically hindered compounds.
We also request comment on the economic viability of alternative
markets for current highway diesel fuel or its more difficult to
desulfurize components. We also request comments on the ability of
overseas refiners providing highway diesel fuel under the proposed
sulfur cap should domestic refiners reduce production. Finally, as
discussed in section VI.A., we are also considering various phase-in
approaches for implementing the low sulfur diesel standard. A phase-in
could help spread out the design, construction, and capital expenditure
of refinery modifications necessary to comply with the proposed diesel
fuel sulfur standard, and in so doing could further minimize any risk
of supply shortages. We request comment on the appropriateness and
ability of a phase-in to address these concerns.
2. Cost of Possibly Needed Lubricity Additives
As discussed in section IV, the refinery processes needed to
achieve the sulfur standard have some potential to degrade the natural
lubricity characteristics of the fuel. Consequently an increase in the
use of lubricity additives for diesel fuel may be anticipated over the
amounts used today. We contacted various producers of lubricity
additives to get their estimates of what costs might be incurred for
this increase in the use of lubricity additives. The cost estimates
varied from 0.1 to 0.5 cents per gallon. This range is to be expected
since the cost will be a strong function of not only the additive type,
but also the assumed treatment rate and the volume of fuel that needs
to be treated, both of which will be, to some extent, a function of the
sulfur cap. As described in more detail in the Draft RIA, we have
included in the fuel cost estimate an average cost of 0.2 cents per
gallon for lubricity additives over the entire pool of low-sulfur
highway diesel fuel. This estimate is comparable to an estimate made by
Mathpro in a study sponsored by the EMA. We request comment on our cost
estimate. In particular, we request comment on whether there may be
unique costs for the military to maintain the lubricity of their
distillate fuels. We request that such comments addressing this issue
include a detailed discussion of the volumes of fuel effected, current
lubricity additive use, and the additional measures that might be
needed (and associated costs) to maintain the appropriate level of fuel
lubricity.
3. Distribution Costs
Under the proposed 15 ppm sulfur cap, we project that distribution
costs would increase by a total of 0.2 cents per gallon as discussed
below.
If the proposed sulfur standard is adopted, there would be a
greater difference between the sulfur content of highway diesel fuel
and other distillate products than presently exists.\141\ For example,
off-highway diesel fuel currently has a sulfur content that is
approximately ten times that of highway diesel. Under the proposed
sulfur standard, off-highway diesel fuel would have a sulfur content
over two hundred times that of highway diesel fuel. This could
potentially make it more difficult to limit the sulfur contamination of
highway diesel fuel with other distillate products as the fuel travels
through the distribution system. As discussed in section IV, standard
industry practices, if followed carefully, should be able to virtually
eliminate the potential contamination. To do so, however, is expected
to result in slightly increased costs in a few different parts of the
distribution system.
---------------------------------------------------------------------------
\141\ Highway diesel fuel currently must have a sulfur content
of no more than 500 ppm and typically has an average sulfur content
of 350 ppm. Off-highway diesel fuel sulfur content is currently
unregulated and is approximately 3,500 ppm on average. The maximum
allowed sulfur content of heating oil is 5,000 ppm. The maximum
allowed sulfur content of kerosene (and jet fuel) is 3,000 ppm.
---------------------------------------------------------------------------
We identified three segments in the distribution system (pipeline
operators, terminal operators, and tank-truck operators) that might
experience increased costs due to increased difficulty in limiting
sulfur contamination under the proposed sulfur standard. As discussed
in the Draft RIA, we estimate that the total increase in diesel
distribution costs associated with adequately limiting sulfur
contamination under today's proposal would be no more than 0.1 cents
per gallon for the distribution system as a whole. The majority of this
increased cost is attributed to the unavoidable mixing of highway
diesel with other products that occurs in pipeline shipments. The
amount of interface (e.g., mixture of a highway diesel batch and a
nonroad diesel batch) that must be downgraded to a lower
[[Page 35496]]
price product is expected to grow with a lower sulfur cap for highway
diesel, resulting in a slightly increased cost for pipeline shipments.
A slight increase in distribution costs is also expected to result at
terminals due to the anticipated need for additional quality assurance
testing at very low sulfur levels. We believe that, although tank-truck
operators may need to more carefully observe current industry practices
used to limit product contamination, this will not result in a
significant increase in costs.
We invite comment on the amount of sulfur contamination which might
be expected from each segment of the distribution system, the measures
that might be taken to limit contamination, and the costs associated
with these measures. We also request comment on the level of sulfur
contamination in the distribution system that might be considered
unavoidable without the imposition of an undue burden on diesel
distributors and how this bears on the question of what sulfur level
the refiner would need to meet at the refinery gate (the compliance
margin) to ensure that highway diesel fuel does not exceed the proposed
cap on sulfur content. Please refer to section IV.E for discussion of
the compliance margin that we anticipate refiners will need to provide.
The energy density of diesel fuel would be decreased as a side
effect of reducing sulfur content to the proposed 15 ppm cap.
Consequently, to meet the same level of consumer demand an increased
volume of diesel fuel would need to move through the distribution
system. The cost of distributing this increased volume of diesel fuel
was calculated within the model that used to evaluate refining costs
(see the Draft RIA). Spread over the total volume of diesel fuel
distributed, the additional cost is estimated at 0.1 cents per gallon.
We request comment on this cost estimate.
E. Aggregate Costs
Using current data for the size and characteristics of the heavy-
duty vehicle fleet and making projections for the future, the diesel
per-engine, gasoline per-vehicle, and per-gallon fuel costs described
above can be used to estimate the total cost to the nation for the
emission standards in any year. Figure V.E-1 portrays the results of
these projections.\142\ All capital costs have been amortized.
---------------------------------------------------------------------------
\142\ Figure V.E-1 is based on the amortized engine, vehicle and
fuel costs as described in the Draft RIA. Actual capital
investments, particularly important for fuels, would occur prior to
and during the initial years of the program.
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP02JN00.003
BILLING CODE 6560-50-C
As can be seen from the figure, the annual costs start out at less
than a billion dollars in year 2006 and increase over the phase-in
period to about $2.8 billion in 2015. Thereafter, total annualized
costs are projected to continue increasing due to the effects of
projected growth in engine sales and fuel consumption. The Draft RIA
provides further detail regarding these cost projections.
Future consumption of today's proposed low sulfur diesel fuel may
be influenced by a potential influx of diesel-powered cars and light
trucks into the light-duty fleet. At the present time, virtually all
cars and light trucks being sold are gasoline fueled. However, the
possibility exists that diesels will become more prevalent in the car
and light-duty truck fleet, since automotive companies have announced
their desire to increase their sales of diesel cars and light trucks.
For the Tier 2 rulemaking, the Agency performed a sensitivity analysis
using A.D.Little's ``most likely'' increased growth scenario of diesel
penetration into the light-duty vehicle fleet which culminated in a 9
percent and 24 percent penetration of diesel vehicles in the LDV and
LDT markets,
[[Page 35497]]
respectively, in 2015 (see Tier 2 RIA, Table III.A. 13). Were this
scenario to play out, the increased number of diesel-powered cars and
light-duty trucks would increase the societal costs (those costs, in
total, paid by consumers) for the proposed higher priced diesel fuel
because more diesel fuel would be consumed. However, were more diesel
vehicles to penetrate the light-duty fleet, less gasoline would be
consumed than was estimated in our Tier 2 cost analysis. Also, diesel
vehicles tend to get higher fuel economy. In the end, the effect of
increased dieselization of the light-duty fleet may have little or no
impact on the aggregate costs estimated for today's proposal. While we
have not fully analyzed this light-duty diesel penetration scenario, we
request comment on it and relevant data which would allow us to perform
a sensitivity analysis.
F. Cost Effectiveness
One tool that can be used to assess the value of new standards for
heavy-duty vehicles and engines is cost effectiveness, in which the
costs incurred to reach the standards are compared to the mass of
emission reductions. This analysis results in the calculation of a $/
ton value, the purpose of which is to show that the reductions from the
engine and fuel controls being proposed today are cost effective, in
comparison to alternative means of control. This analysis involves a
comparison of our program not only to past measures, but also to other
potential future measures that could be implemented. Both EPA and
states have already adopted numerous control measures, and remaining
measures tend to be more expensive than those previously employed. As
we and States tend to employ the most cost effective available measures
first, more expensive ones must be adopted to achieve further emission
reductions.
1. What Is the Cost Effectiveness of This Proposed Program?
We have calculated the cost-effectiveness of our proposed diesel
engine/gasoline vehicle/diesel sulfur standards based on two different
approaches. The first considers the net present value of all costs
incurred and emission reductions generated over the life of a single
vehicle meeting our proposed standards. This per-vehicle approach
focuses on the cost-effectiveness of the program from the point of view
of the vehicles and engines which will be used to meet the new
requirements. However, the per-vehicle approach does not capture all of
the costs or emission reductions from our proposed diesel engine/
gasoline vehicle/diesel sulfur program since it does not account for
the use of low sulfur diesel fuel in current diesel engines. Therefore,
we have also calculated an 30-year net present value cost-effectiveness
using the net present value of costs and emission reductions for all
in-use vehicles over a 30-year time frame. The baseline or point of
comparison for this evaluation is the previous set of engine, vehicle,
and diesel sulfur standards (in other words, the applicable 2004 model
year standards).
As described earlier in the discussion of the cost of this program,
the cost of complying with the new standards will decline over time as
manufacturing costs are reduced and amortized capital investments are
recovered. To show the effect of declining cost in the per-vehicle
cost-effectiveness analysis, we have developed both near term and long
term cost-effectiveness values. More specifically, these correspond to
vehicles sold in years one and six of the vehicle and fuel programs.
Chapter VI of the RIA contains a full description of this analysis, and
you should look in that document for more details of the results
summarized here.
The 30-year net present value approach to calculating the cost-
effectiveness of our program involves the net present value of all
nationwide emission reductions and costs for a 30 year period beginning
with the start of the diesel fuel sulfur program and introduction of
model year 2007 vehicles and engines in year 2006. This 30-year
timeframe captures both the early period of the program when very few
vehicles that meet our proposed standards will be in the fleet, and the
later period when essentially all vehicles in the fleet will meet our
proposed standards. We have calculated the 30-year net present value
cost-effectiveness using the net present value of the nationwide
emission reductions and costs for each calender year. These emission
reductions and costs are given for every calendar year in the RIA, in
addition to details of the methodology we used to calculate the 30-year
net present value cost-effectiveness.
Our per-vehicle and 30-year net present value cost-effectiveness
values are given in Tables V.F-1 and V.F-2. Table V.F-1 summarizes the
per-vehicle, net present value lifetime costs, NMHC + NOX
and PM emission reductions, and resulting cost-effectiveness results
for our proposed diesel engine/gasoline vehicle/diesel sulfur standards
using sales weighted averages of the costs (both near term and long
term) and emission reductions of the various vehicle and engine classes
affected. Table V.F-2 provides the same information from the program
30-year net present value perspective. It includes the net present
value of the 30 year stream of vehicle and fuel costs, NMHC +
NOX and PM emission reductions, and the resulting 30-year
net present value cost-effectiveness. Diesel fuel costs applicable to
diesel engines have been divided equally between the adsorber and trap,
since low sulfur diesel is intended to enable all technologies to meet
our proposed standards. In addition, since the trap produces reductions
in both PM and hydrocarbons, we have divided the total trap costs
equally between compliance with the proposed PM standard and compliance
with the proposed NMHC standard.
Tables V.F-1 and V.F-2 also display cost-effectiveness values based
on two approaches to account for the reductions in SO2
emissions associated with the reduction in diesel fuel sulfur. While
these reductions are not central to the program and are therefore not
displayed with their own cost-effectiveness, they do represent real
emission reductions due to our program. The first set of cost-
effectiveness numbers in the tables simply ignores these reductions and
bases the cost-effectiveness on only the emission reductions from our
proposed program. The second set accounts for these ancillary
reductions by crediting some of the cost of the program to
SO2. The amount of cost allocated to SO2 is based
on the cost-effectiveness of SO2 emission reductions that
could be obtained from alternative, potential future EPA programs. The
SO2 credit was applied only to the PM calculation, since
SO2 reductions are primarily a means to reduce ambient PM
concentrations.
[[Page 35498]]
Table V.F-1.--Per-Engine Cost Effectiveness of the Proposed Standards for 2007 and Later MY Vehicles
----------------------------------------------------------------------------------------------------------------
Discounted Discounted
Discounted lifetime Discounted lifetime cost
Pollutants lifetime emission lifetime cost effectiveness
vehicle & reductions effectiveness per ton with
fuel costs (tons) per ton SO2 credit a
----------------------------------------------------------------------------------------------------------------
Near-term costs b:
NOX+NMHC............................................ $1535 0.8838 $1,736 $1,736
PM.................................................. 872 0.0672 12,977 6,338
Long-term costs:
NOX+NMHC............................................ 1121 0.8838 1,268 1,268
PM.................................................. 652 0.0672 9,704 3,065
----------------------------------------------------------------------------------------------------------------
\a\ $446 credited to SO2 (at $4800/ton) for PM cost effectiveness.
\b\ As described above, per-engine cost effectiveness does not include any costs or benefits from the existing,
pre-control, fleet of vehicles that would use the low sulfur diesel fuel proposed in this document.
Table V.F-2.--30-year Net Present Value a Cost Effectiveness of the Standards
----------------------------------------------------------------------------------------------------------------
30-year
n.p.v. 30-year 30-year
engine, n.p.v. 30-year n.p.v. cost
vehicle, & reduction n.p.v. cost effectiveness
fuel costs (tons) (in effectiveness per ton with
(in millions) per ton SO2 credit b
billions)
----------------------------------------------------------------------------------------------------------------
NOX + NMHC.............................................. $28.9 18.9 $1,531 $1,531
PM...................................................... 8.8 0.79 11,248 1,850
----------------------------------------------------------------------------------------------------------------
a This cost effectiveness methodology reflects the total fuel costs incurred in the early years of the program
when the fleet is transitioning from pre-control to post-control diesel vehicles. In 2007 10% of highway
diesel fuel is anticipated to be consumed by 2007 MY vehicles. By 2012 this increases to >50% for 2007 and
later MY vehicles.
b $7.4 billion credited to SO2 (at $4800/ton).
2. Comparison With Other Means of Reducing Emissions
In comparison with other mobile source control programs, we believe
that our program represents a cost effective strategy for generating
substantial NOX, NMHC, and PM reductions. This can be seen
by comparing the cost effectiveness of today's program with a number of
mobile source standards that EPA has adopted in the past. Table V.F-3
summarizes the cost effectiveness of several past EPA actions for
NOX+ NMHC. Table V.F-4 summarizes the cost effectiveness of
several past EPA actions for PM.
Table V.F-3.--Cost Effectiveness of Previous Mobile Source Programs for
NOX+NMHC
------------------------------------------------------------------------
Program $/ton
------------------------------------------------------------------------
Tier 2 vehicle/gasoline sulfur........................ 1,311-2,211
2004 Highway HD diesel................................ 207-405
Nonroad diesel engine................................. 416-660
Tier 1 vehicle........................................ 2,010-2,732
NLEV.................................................. 1,888
Marine SI engines..................................... 1,146-1,806
On-board diagnostics.................................. 2,263
Marine CI engines..................................... 23-172
------------------------------------------------------------------------
Note.--costs adjusted to 1998 dollars.
Table V.F-4.--Cost Effectiveness of Previous Mobile Source Programs for
PM
------------------------------------------------------------------------
Program $/ton
------------------------------------------------------------------------
Marine CI engines..................................... 511-3,797
1996 urban bus........................................ 12,000-19,200
Urban bus retrofit/rebuild............................ 29,600
1994 highway HD diesel................................ 20,450-23,940
------------------------------------------------------------------------
Note.--costs adjusted to 1998 dollars.
We can see from these tables that the cost effectiveness of our
proposed diesel engine/gasoline vehicle/diesel sulfur standards falls
within the range of these other programs for both NOX+NMHC
and PM. Our proposed program overlaps the range of the recently
promulgated standards for Tier 2 light-duty vehicles and gasoline
sulfur shown in Table V.F-3. Our proposed program also overlaps the
cost-effectiveness of past programs for PM. It is true that some
previous programs have been more cost efficient than the program we are
proposing today. However, it should be expected that the next
generation of standards will be more expensive than the last, since the
least costly means for reducing emissions is generally pursued first.
In evaluating the cost effectiveness of our proposed diesel engine/
gasoline vehicle/diesel sulfur program, we also considered whether our
proposal is cost effective in comparison with possible stationary
source controls. In the context of the Agency's rulemaking which would
have revised the ozone and PM NAAQS,\143\ the Agency compiled a list of
additional known technologies that could be considered in devising new
emission reductions strategies.\144\ Through this broad review, over 50
technologies were identified that could reduce NOx, VOC, or PM. The
cost effectiveness of these technologies averaged approximately $5,000/
ton for VOC, $13,000/ton for NOX, and $40,000/ton for PM.
Although a $10,000/ton limit was actually used in the air quality
analysis presented in the NAAQS revisions rule, these values clearly
indicate that, not only are future emission control strategies likely
to be more expensive (less cost effective) than past strategies, but
the cost effectiveness of our proposed program falls well
[[Page 35499]]
below the average of those choices, and is near the lower end of the
range of potential future strategies.
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\143\ This rulemaking was remanded by the DC Circuit Court on
May 14, 1999. However, the analyses completed in support of that
rulemaking are still relevant, since they were designed to
investigate the cost effectiveness of a wide variety of potential
future emission control strategies.
\144\ ``Regulatory Impact Analyses for the Particulate Matter
and Ozone National Ambient Air Quality Standards and Proposed
Regional Haze Rule,'' Appendix B, ``Summary of control measures in
the PM, regional haze, and ozone partial attainment analyses,''
Innovative Strategies and Economics Group, Office of Air Quality
Planning and Standards, U.S. Environmental Protection Agency,
Research Triangle Park, NC, July 17, 1997.
---------------------------------------------------------------------------
In summary, we believe that the weight of the evidence from
alternative means of providing substantial NOX+NMHC and PM
emission reductions indicates that our proposed diesel engine/gasoline
vehicle/diesel sulfur program is cost effective. We believe this is
true from the perspective of other mobile source control programs and
from the perspective of other stationary source technologies that might
be considered. We request comment on the cost-effectiveness of this
program.
G. Does the Value of the Benefits Outweigh the Cost of the Proposed
Standards?
In addition to cost-effectiveness, further insight regarding the
merits of the standards can be provided by benefit-cost analysis. The
purpose of this section is to propose the methods to be used in
conducting an analysis of the economic benefits of the final rule for
heavy-duty vehicles and diesel fuel, and to discuss the potential for
economic benefits associated with the rule. While the quantification of
the benefits will not be available until the final rule, it is our
belief that, based on the similarity between today's proposed rule and
Tier 2/gasoline sulfur rule in terms of the costs per ton of emissions
reduced and types of health and welfare benefits expected, the health
and welfare benefits would substantially outweigh the costs.
1. What Is the Purpose of This Benefit-Cost Comparison?
Benefit-cost analysis (BCA) is a useful tool for evaluating the
economic merits of proposed changes in environmental programs and
policies. In its traditional application, BCA estimates the economic
``efficiency'' of proposed changes in public policy by organizing the
various expected consequences and representing those changes in terms
of dollars. Expressing the effects of these policy changes in dollar
terms provides a common basis for measuring and comparing these various
effects. Because improvement in economic efficiency is typically
defined to mean maximization of total wealth spread among all members
of society, traditional BCA must be supplemented with other analyses in
order to gain a full appreciation of the potential merits of new
policies and programs. These other analyses may include such things as
examinations of legal and institutional constraints and effects;
engineering analyses of technology feasibility, performance and cost;
or assessment of the air quality need.
In addition to the economic efficiency focus of most BCAs, the
technique is also limited in its ability to project future economic
consequences of alternative policies in a definitive way. Critical
limitations on the availability, validity, or reliability of data;
limitations in the scope and capabilities of environmental and economic
effect models; and controversies and uncertainties surrounding key
underlying scientific and economic literature all contribute to an
inability to estimate the economic effects of environmental policy
changes in exact and unambiguous terms. Under these circumstances, we
consider it most appropriate to view BCA as a tool to inform, but not
dictate, regulatory decisions such as the ones reflected in today's
proposed rule.
Despite the limitations inherent in BCA of environmental programs,
we consider it useful to analyze the potential benefits of today's
proposed action both in terms of physical changes in human health and
welfare and environmental change, and in terms of the estimated
economic value of those physical changes.
2. What Is Our Overall Approach to the Benefit-Cost Analysis?
The basic question we will seek to answer in the BCA is: ``What are
the net yearly economic benefits to society of the reduction in air
pollutant emissions likely to be achieved by the proposed rule for
heavy-duty vehicles and diesel fuel?'' In designing an analysis to
answer this question, we will model the benefits in a future year
(2030) that is representative of full-implementation of the program. We
will also adopt an analytical structure and sequence similar to that of
the benefit analysis for the Tier 2/gasoline sulfur rulemaking and used
for the ``section 812 studies'' \145\ to estimate the total benefits
and costs of the entire Clean Air Act. Moreover, we will use many of
the same models and assumptions actually used in the section 812
studies, and other Regulatory Impact Analyses (RIA's) prepared by the
Office of Air and Radiation. By adopting the major design elements,
models, and assumptions developed for the section 812 studies and other
RIA's, we will largely rely on methods which have already received
extensive review by the independent Science Advisory Board (SAB), by
the public, and by other federal agencies. In addition to the 2030
analysis, we plan to provide further characterization of the benefits
for the interim period between 2007 and 2030.
---------------------------------------------------------------------------
\145\ The ``section 812 studies'' refers to (1) US EPA, Report
to Congress: The Benefits and Costs of the Clean Air Act, 1970 to
1990, October 1997 (also known as the ``section 812 Retrospective);
and (2) the first in the ongoing series of prospective studies
estimating the total costs and benefits of the Clean Air Act (see
EPA report number: EPA-410-R-99-001, November 1999).
---------------------------------------------------------------------------
3. What Are the Significant Limitations of the Benefit-Cost Analysis?
Every BCA examining the potential effects of a change in
environmental protection requirements is limited to some extent by data
gaps, limitations in model capabilities (such as geographic coverage),
and uncertainties in the underlying scientific and economic studies
used to configure the benefit and cost models. Deficiencies in the
scientific literature often result in the inability to estimate changes
in health and environmental effects, such as potential increases in
premature mortality associated with increased exposure to carbon
monoxide. Deficiencies in the economics literature often result in the
inability to assign economic values even to those health and
environmental outcomes which can be quantified, such as changes in
visibility in residential areas. While these general uncertainties in
the underlying scientific and economics literatures will be discussed
in detail in the RIA for the final action, the key uncertainties are:
The exclusion of potentially significant benefit
categories (e.g., health and ecological benefits of incidentally
controlled hazardous air pollutants),
Errors in measurement and projection for variables such as
population growth,
Variability in the estimated relationships of health and
welfare effects to changes in pollutant concentrations.
In addition to these uncertainties and shortcomings which pervade
all analyses of criteria air pollutant control programs, a number of
limitations apply specifically to a BCA. Though we will use the best
data and models available, we will likely be required to adopt a number
of simplifying assumptions and to use data sets which, while reasonably
close, will not match precisely the conditions and effects expected to
result from implementation of the standards. For example, to estimate
the effects of the program at full implementation we will need to
project vehicle miles traveled and populations in the year 2030. These
assumptions may play a significant role in determining the magnitude of
the benefits estimate. In addition, the emissions data sets which
[[Page 35500]]
will be used for the analysis may not anticipate the emissions
reductions realized by other future actions and by expected near-future
control programs. For example, it is possible that the proposed heavy-
duty vehicle and diesel fuel sulfur standards will not be the governing
vehicle emissions standards in 2030. In the years before 2030, the
benefits from the proposed rule for heavy-duty vehicles and diesel fuel
will be less than in 2030 because the heavy-duty fleet will not be
fully phased in.
The key limitations and uncertainties unique to the BCA of the
final rule, therefore, will include:
Uncertainties in the estimation of future year emissions
inventories and air quality,
Uncertainties associated with the extrapolation of air
quality monitoring data to some unmonitored areas required to better
capture the effects of the standards on affected populations, and
Uncertainties associated with the effect of potential
future actions to limit emissions.
Despite these uncertainties, we believe the BCA will provide a
reasonable indication of the expected economic benefits of the proposed
rule for heavy-duty vehicles and diesel fuel in 2030 under one set of
assumptions. This is because the analysis will focus on estimating the
economic effects of the changes in air quality conditions expected to
result from today's proposed action, rather than focusing on developing
a precise prediction of the absolute levels of air quality likely to
prevail in 2030. An analysis focusing on the changes in air quality can
give useful insights into the likely economic effects of emission
reductions of the magnitude expected to result from today's proposed
rule.
4. How Will the Benefit-Cost Analysis Change From the Tier 2 Benefit-
Cost Analysis?
We will evaluate the economics and scientific literature prior to
conducting the benefit-cost analysis for the final rule. Our final
benefit-cost methodology will reflect the most up to date set of health
and welfare effects and the most current economic valuation methods. In
addition, we will use updated emission inventories. We will also be
evaluating the air quality models used to predict changes in future air
quality for use in the benefits analysis.
5. How Will We Perform the Benefit-Cost Analysis?
The analytical sequence begins with a projection of the mix of
technologies likely to be deployed to comply with the new standards,
and the costs incurred and emissions reductions achieved by these
changes in technology. The proposed rule for heavy-duty vehicles and
diesel fuel has various cost and emission related components. These
components would begin at various times and in some cases would phase
in over time. This means that during the early years of the program
there would not be a consistent match between cost and benefits. This
is especially true for the vehicle control portions of the program,
where the full vehicle cost would be incurred at the time of vehicle
purchase, while the cost for low sulfur diesel fuel along with the
emission reductions and benefits would occur throughout the lifetime of
the vehicle.
To develop a benefit-cost number that is representative of a fleet
of heavy-duty vehicles, we need to have a stable set of cost and
emission reductions to use. This means using a future year where the
fleet is fully turned over and there is a consistent annual cost and
annual emission reduction. For the proposed rule for heavy-duty
vehicles and diesel fuel, this stability would not occur until well
into the future. For this analysis, we selected the year 2030. The
resulting analysis will represent a snapshot of benefits and costs in a
future year in which the heavy-duty fleet consists almost entirely of
heavy-duty vehicles meeting the proposed standards. As such, it depicts
the maximum emission reductions (and resultant benefits) and among the
lowest costs that would be achieved in any one year by the program on a
``per mile'' basis. (Note, however, that net benefits would continue to
grow over time beyond those resulting from this analysis, because of
growth in population and vehicle miles traveled.) Thus, based on the
long-term costs for a fully turned over fleet, the resulting benefit-
cost ratio will be close to its maximum point (for those benefits which
we have been able to value).
To present a BCA, we are designing the cost estimate to reflect
conditions in the same year as the benefit valuation. Costs, therefore,
will be developed for the year 2030 fleet. For this purpose we will use
the long term cost once the capital costs have been recovered and the
manufacturing learning curve reductions have been realized, since this
will be the case in 2030.
We will also make adjustments in the costs to account for the fact
that there is a time difference between when some of the costs are
expended and when the benefits are realized. The vehicle costs are
expended when the vehicle is sold, while the fuel related costs and the
benefits are distributed over the life of the vehicle. We will resolve
this difference by using costs distributed over time such that there is
a constant cost per ton of emissions reduction and such that the net
present value of these distributed costs corresponds to the net present
value of the actual costs.
The resulting adjusted costs will be somewhat greater than the
expected actual annual cost of the program, reflecting the time value
adjustment. Thus, the costs will not represent expected actual annual
costs for 2030. Rather, they will represent an approximation of the
steady-state cost per ton that would likely prevail in that time
period. The benefit cost ratio for the earlier years of the program
would be expected to be lower than that based on these costs, since the
per-vehicle costs are larger in the early years of the program while
the benefits are smaller.
In order to estimate the changes in air quality conditions which
would result from these emissions reductions, we will develop two
separate, year 2030 emissions inventories to be used as inputs to the
air quality models. The first, baseline inventory, will reflect the
best available approximation of the county-by-county emissions for
NOX, VOC, and SO2 expected to prevail in the year
2030 in the absence of the standards. To generate the second, control
case inventory, we will first estimate the change in vehicle emissions,
by pollutant and by county, expected to be achieved by the 2030 control
scenario described above. We will then take the baseline emissions
inventory and subtract the estimated reduction for each county-
pollutant combination to generate the second, control case emissions
inventory. Taken together, the two resulting emissions inventories will
reflect two alternative states of the world and the differences between
them will represent our best estimate of the reductions in emissions
which would result from our control scenario.
With these two emissions inventories in hand, the next step will be
to ``map'' the county-by-county and pollutant-by-pollutant emission
estimates to the input grid cells of appropriately selected air quality
and deposition models. One such model, called the Urban Airshed Model
(UAM), is designed to estimate the tropospheric ozone concentrations
resulting from a specific inventory of emissions of ozone precursor
pollutants, particularly NOX and NMHC. Another model, called
the Climatological Regional Dispersion Model Source-Receptor Matrix
model (S-R Matrix), is designed to estimate the changes in ambient
particulate matter and visibility which would result from a specific
set of changes in emissions of primary
[[Page 35501]]
particulate matter and secondary particulate matter precursors, such as
SO2, NOX, and NMHC. Also, nitrogen loadings to
watersheds can be estimated using factors derived from previous
modeling from the Regional Acid Deposition Model (RADM). By running
both the baseline and control case emissions inventories through models
such as these, we will be able to estimate the expected 2030 air
quality conditions and the changes in air quality conditions which
would result from the emissions reductions expected to be achieved by
the proposed rule for heavy-duty vehicles and diesel fuel.
After developing these two sets of year 2030 air quality profiles,
we will use the same health and environmental effect models used in the
section 812 studies to calculate the differences in human health and
environmental outcomes projected to occur with and without the proposed
standards. Specifically, we will use the Criteria Air Pollutant
Modeling System (CAPMS) to estimate changes in human health outcomes,
and the Agricultural Simulation Model (AGSIM) to estimate changes in
yields of a selected few agricultural crops. In addition, the impacts
of reduced visibility impairment and estimates of the effect of changes
in nitrogen deposition to a selection of sensitive estuaries will be
estimated using slightly modified versions of the methods used in the
section 812 studies. At proposal, we expect that several air quality-
related health and environmental benefits, however, will not be able to
be calculated for the BCA of today's proposed standards. Changes in
human health and environmental effects due to changes in ambient
concentrations of carbon monoxide (CO), gaseous sulfur dioxide
(SO2), gaseous nitrogen dioxide (NO2), and
hazardous air pollutants will likely not be included. In addition, some
health and environmental benefits from changes in ozone and PM may not
be included in our analysis (i.e., commercial forestry benefits).
However, if our review of the economics and scientific literature
reveals new information that will allow us to quantify these effects,
they will be considered for inclusion in the estimate of total benefits
for the final rule. Table IV-X lists the set of effects that we expect
to be able to quantify for the BCA of the final rule, along with those
effects which are known to exist, but that are currently
unquantifiable.
To characterize the total economic value of the reductions in
adverse effects achieved across the lower 48 states, we plan to use the
same set of economic valuation coefficients and models used in the
section 812 studies and the Tier 2 benefits analysis, as approved by
the SAB. The set of coefficients and their sources are listed in the
final Tier 2 RIA. However, any new methods uncovered in our evaluation
of the economic and scientific literature may be incorporated into our
final analysis. The net monetary benefits of the proposed rule for
heavy-duty vehicles and diesel fuel will then be calculated by
subtracting the estimated costs of compliance from the estimated
monetary benefits of the reductions in adverse health and environmental
effects.
The last step of the analysis will be to characterize the
uncertainty surrounding our estimate of benefits. Again, we will follow
the recommendations of the SAB for the presentation of uncertainty.
They recommend that a primary estimate should be presented along with a
description of the uncertainty associated with each endpoint.
Therefore, for the final rule for heavy-duty vehicles and diesel
fuel, the benefit analysis will adopt an approach similar to the
section 812 study and the final Tier 2/gasoline sulfur benefit-cost
analysis. Our analysis will first present our estimate for a primary
set of benefit endpoints followed by a presentation of ``alternative
calculations'' of key health and welfare endpoints to characterize the
uncertainty in this primary set. However, the adoption of a value for
the projected reduction in the risk of premature mortality is the
subject of continuing discussion within the economic and public policy
analysis community within and outside the Administration. In response
to the sensitivity on this issue, we will provide estimates reflecting
two alternative approaches. The first approach--supported by some in
the above community and preferred by EPA--uses a Value of a Statistical
Life (VSL) approach developed for the Clean Air Act section 812
benefit-cost studies. This VSL estimate of $5.9 million (1997$) was
derived from a set of 26 studies identified by EPA using criteria
established in Viscusi (1992), as those most appropriate for
environmental policy analysis applications.
Table V.G-1.--Human Health and Welfare Effects of Pollutants Affected by the Proposed Heavy-duty Vehicle Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative quantified and/or
Pollutant Quantified and monetized effects monetized effects Unquantified effects
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ozone Health..................... Minor restricted activity days/acute ...................................... Premature mortality; a Increased
respiratory symptoms; Hospital airway responsiveness to stimuli;
admissions--respiratory and Inflammation in the lung; Chronic
cardiovascular; Emergency room visits respiratory damage; Premature aging
for asthma. of the lungs; Acute inflammation and
respiratory cell damage; Increased
susceptibility to respiratory
infection; Non-asthma respiratory
emergency room visits.
Ozone Welfare.................... Decreased worker productivity; ...................................... Decreased yields for commercial
Decreased yields for commercial forests; Decreased yields for fruits
crops. and vegetables.
PM Health........................ Premature mortality; Bronchitis-- ...................................... Infant mortality; Low birth weight;
chronic and acute; Hospital Changes in pulmonary function;
admissions--respiratory and Chronic respiratory diseases other
cardiovascular; Emergency room visits than chronic bronchitis;
for asthma; Lower and upper Morphological changes; Altered host
respiratory illness; Shortness of defense mechanisms; Cancer; Non-
breath; Minor restricted activity asthma respiratory emergency room
days/acute respiratory symptoms; Work visits.
loss days.
[[Page 35502]]
PM Welfare....................... Visibility in California, Visibility in Northeastern, .....................................
Southwestern, and Southeastern Class Northwestern, and Midwestern Class I
I areas. areas; Household soiling.
Nitrogen and Sulfate Deposition ...................................... Costs of nitrogen controls to reduce Impacts of acidic sulfate and nitrate
Welfare. eutrophication in selected eastern deposition on commercial forests;
estuaries. Impacts of acidic deposition to
commercial freshwater fishing;
Impacts of acidic deposition in
terrestrial ecosystems; Impacts of
nitrogen deposition on commercial
fishing, agriculture, and forests;
Impacts of nitrogen deposition on
recreation in estuarine ecosystems;
Reduced existence values for
currently healthy ecosystems.
CO Health........................ ...................................... ...................................... Premature mortality; a Behavioral
effects; Hospital admissions--
respiratory, cardiovascular, and
other; Other cardiovascular effects;
Developmental effects; Decreased
time to onset of angina.
HAPS Health...................... ...................................... ...................................... Cancer (benzene, 1,3-butadiene,
formaldehyde, acetaldehyde); Anemia
(benzene); Disruption of production
of blood components (benzene);
Reduction in the number of blood
platelets (benzene); Excessive bone
marrow formation (benzene);
Depression of lymphocyte counts
(benzene); Reproductive and
developmental effects (1,3-
butadiene); Irritation of eyes and
mucus membranes (formaldehyde);
Respiratory irritation
(formaldehyde); Asthma attacks in
asthmatics (formaldehyde).
HAPS Welfare..................... ...................................... ...................................... Direct toxic effects to animals;
Bioaccumlation in the food chain.
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Premature mortality associated with ozone is not separately included in this analysis. It is assumed that the Pope, et al. C-R function for premature
mortality captures both PM mortality benefits and any mortality benefits associated with other air pollutants.
An alternative, age-adjusted approach is preferred by some others
in the above community both within and outside the Administration. This
approach was also developed for the Section 812 studies and addresses
concerns with applying the VSL estimate--reflecting a valuation derived
mostly from labor market studies involving healthy working-age manual
laborers--to PM-related mortality risks that are primarily associated
with older populations and those with impaired health status. This
alternative approach leads to an estimate of the value of a statistical
life year (VSLY), which is derived directly from the VSL estimate. It
differs only in incorporating an explicit assumption about the number
of life years saved and an implicit assumption that the valuation of
each life year is not affected by age.\146\ The mean VSLY is $360,000
(1997$); combining this number with a mean life expectancy of 14 years
yields an age-adjusted VSL of $3.6 million (1997$).
---------------------------------------------------------------------------
\146\ Specifically, the VSLY estimate is calculated by
amortizing the $5.9 million mean VSL estimate over the 35 years of
life expectancy asssociated with subjects in the labor market
studies. The resulting estimate, using a 5 percent discount rate, is
$360,000 per life-year saved in 1997 dollars. This annual average
value of a life-year is then multiplied times the number of years of
remaining life expectancy for the affected population (in the case
of PM-related premature mortality, the average number of $ life-
years saved is 14).
---------------------------------------------------------------------------
Both approaches are imperfect, and raise difficult methodological
issues which are discussed in depth in the recently published Section
812 Prospective Study, the draft EPA Economic Guidelines, and the peer-
review commentaries prepared in support of each of these documents. For
example, both methodologies embed assumptions (explicit or implicit)
about which there is little or no definitive scientific guidance. In
particular, both methods adopt the assumption that the risk versus
dollars trade-offs revealed by available labor market studies are
applicable to the risk versus dollar trade-offs in an air pollution
context.
EPA currently prefers the VSL approach because, essentially, the
method reflects the direct application of what EPA considers to be the
most reliable estimates for valuation of premature mortality available
in the current economic literature. While there are several differences
between the labor market studies EPA uses to derive a VSL estimate and
the particulate matter air pollution context addressed here, those
differences in the affected populations and the nature of the risks
imply both upward and downward adjustments. For example, adjusting for
age differences may imply the need to adjust the $5.9 million VSL
downward as would adjusting for health differences, but the involuntary
nature of air pollution-related risks and the lower level of risk-
aversion of the
[[Page 35503]]
manual laborers in the labor market studies may imply the need for
upward adjustments. In the absence of a comprehensive and balanced set
of adjustment factors, EPA believes it is reasonable to continue to use
the $5.9 million value while acknowledging the significant limitations
and uncertainties in the available literature. Furthermore, EPA prefers
not to draw distinctions in the monetary value assigned to the lives
saved even if they differ in age, health status, socioeconomic status,
gender or other characteristic of the adult population.
Those who favor the alternative, age-adjusted approach (i.e. the
VSLY approach) emphasize that the value of a statistical life is not a
single number relevant for all situations. Indeed, the VSL estimate of
$5.9 million (1997 dollars) is itself the central tendency of a number
of estimates of the VSL for some rather narrowly defined populations.
When there are significant differences between the population affected
by a particular health risk and the populations used in the labor
market studies--as is the case here--they prefer to adjust the VSL
estimate to reflect those differences. While acknowledging that the
VSLY approach provides an admittedly crude adjustment (for age though
not for other possible differences between the populations), they point
out that it has the advantage of yielding an estimate that is not
presumptively biased. Proponents of adjusting for age differences using
the VSLY approach fully concur that enormous uncertainty remains on
both sides of this estimate--upwards as well as downwards--and that the
populations differ in ways other than age (and therefore life
expectancy). But rather than waiting for all relevant questions to be
answered, they prefer a process of refining estimates by incorporating
new information and evidence as it becomes available.
The presentation of the alternative calculations for certain
endpoints will demonstrate how much the overall benefit estimate might
vary based on the value EPA gives to a parameter (which has some
uncertainty associated with it) underlying the estimates for human
health and environmental effect incidence and the economic valuation of
those effects. These alternative calculations will represent conditions
that are possible to occur, however, EPA has selected the best
supported values based on current scientific literature for use in the
primary estimate. The alternate calculations will include:
Presentation of an estimated confidence interval around
the Primary estimate of benefits to characterize the standard error in
the C-R and valuation studies used in developing benefit estimates for
each endpoint;
Valuing PM-related premature mortality based on a
different C-R study;
Value of avoided premature mortality incidences based on
statistical life years;
Consideration of reversals in chronic bronchitis treated
as lowest severity cases;
Value of visibility changes in all Class I areas;
Value of visibility changes in Eastern U.S. residential
areas;
Value of visibility changes in Western U.S. residential
areas;
Value of reduced household soiling damage; and
Avoided costs of reducing nitrogen loadings in east coast
estuaries.
For instance, the estimate of the relationship between PM exposure
and premature mortality from the study by Dockery, et al. is a
plausible alternative to the Pope, et al. study used for the Primary
estimate of benefits. The SAB has noted that ``the study had better
monitoring with less measurement error than did most other studies''
(EPA-SAB-COUNCIL-ADV-99-012, 1999). The Dockery study had a more
limited geographic scope (and a smaller study population) than the
Pope, et al. study and the Pope study appears more likely to mitigate a
key source of potential confounding. The Dockery study also covered a
broader age category (25 and older compared to 30 and older in the Pope
study) and followed the cohort for a longer period (15 years compared
to 8 years in the Pope study). For these reasons, the Dockery study is
considered to be a plausible alternative estimate of the avoided
premature mortality incidences that are expected to be associated with
the final heavy-duty rule rule. The alternative estimate for mortality
can be substituted for the valuation component in our primary estimate
of mortality benefits to observe how the net benefits of the program
may be influenced by this assumption. Unfortunately, it is not possible
to combine all of the assumptions used in the alternate calculations to
arrive at different total benefit estimates because it is highly
unlikely that the selected combination of alternative values would all
occur simultaneously. Therefore, it will be more appropriate to
consider each alternative calculation individually to assess the
uncertainty in the estimate.
In addition to the estimate for the primary set of endpoints and
alternative calculations of benefits, our RIA for the final rule will
also present an appendix with supplemental benefit estimates and
sensitivity analyses of other key parameters in the benefit analysis
that have greater uncertainty surrounding them due to limitations in
the scientific literature. Supplemental estimates will be presented for
premature mortality associated with short-term exposures to PM and
ozone, asthma attacks, occurrences of moderate or worse asthma
symptoms, and the avoided incidences of premature mortality in infants.
Even with our efforts to fully disclose the uncertainty in our
estimate, this uncertainty presentation method does not provide a
definitive or complete picture of the true range of monetized benefits
estimates. This proposed approach, to be implemented in the BCA for the
final rule, will not reflect important uncertainties in earlier steps
of the analysis, including estimation of compliance technologies and
strategies, emissions reductions and costs associated with those
technologies and strategies, and air quality and deposition changes
achieved by those emissions reductions. Nor does this approach provide
a full accounting of all potential benefits associated with the
proposed rule for heavy-duty vehicles and diesel fuel, due to data or
methodological limitations. Therefore, the uncertainty range will only
be representative of those benefits that we will be able to quantify
and monetize.
6. What Types of Results Will Be Presented in the Benefit-Cost
Analysis?
The BCA for the final rule for heavy-duty vehicles and diesel fuel
will reflect a single year ``snapshot'' of the yearly benefits and
costs expected to be realized once the standards have been fully
implemented and non-compliant vehicles have all been retired. Near-term
costs will be higher than long-run costs as vehicle manufacturers and
oil companies invest in new capital equipment and develop and implement
new technologies. In addition, near-term benefits will be lower than
long-run benefits because it will take a number of years for compliant
heavy-duty vehicles to fully displace older, more polluting vehicles.
However, we will adjust the cost estimates upward to compensate for
some of this discrepancy in the timing of benefits and costs and to
ensure that the long-term benefits and costs are calculated on a
consistent basis. Because of the adjustment process, the cost estimates
should not be interpreted as reflecting the actual costs expected to be
incurred in the year 2030. Actual program costs can be found earlier in
this preamble.
With respect to the benefits, the BCA for the final rule for heavy-
duty vehicles and diesel fuel will follow the
[[Page 35504]]
presentation format used in the Tier 2 BCA, presenting several
different measures of benefits which will be useful to compare and
contrast to the estimated compliance costs. These benefit measures
include (a) the tons of emissions reductions achieved, (b) the
reductions in incidences of adverse health and environmental effects,
and (c) the estimated economic value of those reduced adverse effects.
Calculating the cost per ton of pollutant reduced is particularly
useful for comparing the cost-effectiveness of the new standards or
programs against existing programs or alternative new programs
achieving reductions in the same pollutant or combination of
pollutants. Considering the absolute numbers of avoided adverse health
and environmental effects can also provide valuable insights into the
nature of the health and environmental problem being addressed by the
proposed rule as well as the magnitude of the total public health and
environmental gains potentially achieved. Finally, when considered
along with other important economic dimensions--including environmental
justice, small business financial effects, and other outcomes related
to the distribution of benefits and costs among particular groups--the
direct comparison of quantified economic benefits and economic costs
can provide useful insights into the potential magnitude of the
estimated net economic effect of the rule, keeping in mind the limited
set of effects we expect to be able to monetize.
VI. Alternative Program Options
In the course of developing the proposal, we considered a broad
range of options, many of which were raised by commenters on the ANPRM.
Various options were considered for the best manner to implement a
change to diesel fuel, on how to structure a sulfur standard, on fuel
changes other than sulfur, and on the geographic scope of the program.
This section helps to explain many alternative program options that we
considered in designing today's proposal. In this section, we also are
seeking comment on voluntary phase-in options for implementing the fuel
program (see section VI.A.2), and on issues connected with the use of
JP-8 fuel in highway-going military vehicles (see section VI.D).
A. What Other Fuel Implementation Options Have We Considered?
A broad spectrum of approaches for implementing the fuel program
were either raised by the Agency in the ANPRM, received as public
comments on the ANPRM, or raised by various parties during the
development of this proposal. Below, we discuss some of the options we
have considered, including alternatives on which we are seeking
comment.
1. What Are the Advantages and Disadvantages of a Phase-in Approach to
Implementing the Low Sulfur Fuel Program?
EPA is proposing, as discussed in section IV.C., that the entire
pool of highway diesel fuel be converted to low sulfur diesel fuel all
at once in 2006. In the early years of the program, the use of low
sulfur diesel fuel will result in reductions in the amount of direct
and secondary particulate matter from the existing fleet of heavy-duty
vehicles. Nevertheless, the primary benefit of the fuel change is the
emission reductions that would occur over time from the new vehicle
fleet as a result of the enablement of advanced aftertreatment exhaust
emission control technologies. Consequently, we believe there may be
some advantages, particularly in the early years, to allowing some
flexibility in the program so that not all of the highway diesel fuel
pool must be converted to low sulfur all at once. First, owners of old
vehicles could continue to refuel on higher-sulfur (500 ppm) diesel
fuel, potentially saving money for consumers. Second, we believe a
phase-in approach, if designed properly, has the potential to be
beneficial for refiners, by reducing the fuel production costs in the
early years of the program. This flexibility could reduce operating
costs, if the entire volume of highway fuel does not have to meet the
low sulfur standard. If coupled with averaging, banking and trading
provisions, some refineries may be able to delay desulfurization
investments for several years. Even for refiners planning to
desulfurize their entire highway fuel pool to low sulfur levels at the
beginning of the program, there may be circumstances where the actual
fuel produced is slightly off-spec (i.e., above the low sulfur
standard). A phase-in approach could allow refiners to continue selling
that fuel to the highway market (as 500 ppm fuel), rather than to other
distillate markets. Refiners could also have more flexibility to
continue producing highway diesel (as 500 ppm fuel) during unit
downtime (e.g., turnarounds and upsets).
While a phase-in approach could provide flexibility for refiners
and potentially lower costs for consumers, a number of concerns would
need to be addressed before such an approach could be implemented.
These include: ensuring sufficient availability of the low sulfur fuel
when and where it is needed, minimizing the potential for misfueling,
minimizing the risk of spot outages, and minimizing impacts on the fuel
distribution and retail industries. These issues are discussed further
below. It is not obvious at what level the fuel production and
distribution systems can provide two grades of highway diesel fuel
while minimizing the potential for localized supply shortages and price
spikes, and misfueling problems. For example, we expect that in the
first year of the program only about 10 percent of highway diesel fuel
would be consumed by 2007 model year vehicles requiring the use of low
sulfur fuel. In a perfect world where the distribution system could,
without additional cost, make low sulfur diesel fuel widely available
(in addition to the current 500 ppm fuel), only about 10 percent of the
highway diesel fuel produced by refiners in the first year would then
have to be low sulfur. Unfortunately, since this perfect world does not
exist, the question remains whether, and to what extent, the system can
distribute two grades of highway diesel fuel in a way that takes
advantage of any flexibilities offered, and ensures sufficient supply
of fuel for the new vehicles that need it.
During the process of developing this proposal (including comments
received on the ANPRM), many industry stakeholders (many diesel
distributors, marketers, larger refiners, and end-users such as
truckers and centrally-fueled fleets) have commented on ways to
implement the fuel program. While each stakeholder may have had
different assumptions behind their position (including assumptions
about the structure of a phase-in, and expectations about the resulting
costs and fuel prices), many stakeholders have encouraged EPA to
implement any fuel change all at once, rather than incur the added
distribution costs and marketplace complication of phasing in a new
grade of highway diesel fuel. The following sections discuss some of
the challenges in implementing a phase-in approach.
a. Availability of Low Sulfur Diesel Fuel
Because new vehicles would need to be fueled exclusively with low
sulfur diesel, for a phase-in approach to be workable, low sulfur
diesel fuel would have to be available in all parts of the country. It
is not clear what minimum level of availability would be necessary to
meet the needs of diesel vehicles. The trucking industry has indicated
that a limited number of phased-in fueling locations would not meet the
needs of the trucking industry.
[[Page 35505]]
We seek comment on what level of availability would be appropriate
under a phase-in approach, to ensure that the low sulfur diesel fuel is
available, within a reasonable distance, to all consumers in all parts
of the country. For example, would sufficient availability be achieved
if all major truck stops across the country offered low sulfur fuel, or
if some minimum percentage of diesel retailers in different geographic
areas offered low sulfur fuel? Are there studies on fuel availability
that would serve to inform efforts to assure adequate availability? We
request that commenters consider what fraction of truck stops and other
retail outlets would need to make low sulfur fuel available within any
given area in order to ensure reasonable availability from the public's
perspective.
b. Misfueling
Any phase-in approach would introduce an additional grade of
highway diesel fuel into the market, by allowing both high and low-
sulfur grades to coexist, with a potential for a price differential
between the grades. Many industry stakeholders, including diesel
marketers, truck stop operators, and engine manufacturers, have
commented that misfueling would be significant under a phase-in
approach.\147\ That is, customers with new vehicles that need low-
sulfur fuel might use the higher-sulfur fuel, mistakenly or
deliberately, which could increase emissions and damage the emissions
control technology on the vehicle. Diesel marketers have also raised
the issue that a phase-in system could create incentives for consumers
to tamper with the emission control equipment of new vehicles, if they
believe that will enable them to use a lower priced fuel. Therefore, we
are concerned about the potential for misfueling, as it could reduce
the emission benefits of the program. However, if a phase-in approach
were to work well and misfueling were not an issue, we would expect to
achieve the same environmental benefits as the proposed single fuel
approach.
---------------------------------------------------------------------------
\147\ Comment letters from the Engine Manufacturers Association
(Item II-D-35), National Association of Truck Stop Operators
(Included in Report of the Small Business Advocacy Review (SBAR)
Panel, Appendix B, Page 30), and Petroleum Marketers Association of
America (Included in SBAR Panel Report, Appendix B, Page 38).
---------------------------------------------------------------------------
Some degree of misfueling occurs even today with a single grade of
highway diesel fuel, due to the availability of tax exempt off-highway
diesel fuel. The opportunity for misfueling with off-highway diesel
fuel, however, is somewhat limited by the limited number of highway
diesel refueling locations that market both grades of diesel fuel.
Nevertheless, since off-highway diesel fuel will still be available
even under a complete switch of highway diesel fuel to low sulfur, the
problem of misfueling is not entirely unique to the phase-in approach.
It is, however, true that the greater availability of 500 ppm diesel
fuel alongside the low sulfur fuel will make misfueling easier. Thus,
the appropriate question to ask when considering a phase-in approach is
not ``will people misfuel?'' but ``to what extent?'' and ``how can the
design of the program minimize the potential for misfueling?''
One factor that might encourage misfueling would be the existence
of a price differential between low sulfur diesel fuel and 500 ppm
fuel. For many diesel vehicles, particularly line-haul tractor
trailers, the fuel cost can be as much as 20 percent of annual
operating costs, so drivers have a strong incentive to save on fuel
costs. On the other hand, there are also several factors that might
serve as a deterrent to misfueling. First, the potential risk
associated with voiding a manufacturer emission warranty or damaging
the engine and exhaust system on an expensive vehicle might cause
owners and operators of heavy-duty trucks to be more circumspect in
ensuring that their vehicles are fueled properly. Second, misfueled
vehicles could experience a loss in performance, such as poor
acceleration or even engine stalling (as discussed in section
III.F.1.a). Third, under the proposed regulations it would be unlawful
for any person to misfuel.
Depending on the potential for misfueling, EPA may need to require
that new vehicles be fitted with a unique nozzle interface, with a
corresponding size nozzle for the low-sulfur diesel. This would be
analogous to the nozzle interface approach used to discourage
misfueling in the unleaded gasoline program. However, diesel marketers
have indicated that they do not support the use of unique nozzle
interfaces for the low sulfur fuel, particularly if it would affect
volume delivery. They have expressed the concern that a smaller nozzle
size would reduce the volume of fuel delivered, result in slower
refuelings, and increase wait times at retail stations. Further, based
on our experience with unleaded gasoline,\148\ it is likely that people
intent on misfueling would quickly find ways around a unique nozzle/
nozzle interface. We request comment on ways to structure a unique
nozzle/nozzle interface approach that would discourage misfueling while
avoiding these problems. We also request comment on any alternative
methods that could be used to discourage misfueling.
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\148\ ``An Analysis of the Factors Leading to the Use of Leading
to the Use of Leaded Gasoline in Automobiles Requiring Unleaded
Gasoline,'' September 29, 1978, Sobotka & Company, Inc. See also
``Motor Vehicle Tampering Survey--1983,'' July 1984, U.S. EPA,
Office of Air and Radiation, Docket A-99-06. See also ``Anti-
Tampering and Anti-Misfueling Programs to Reduce In-Use Emissions
From Motor Vehicles,'' May 25, 1983 (EPA/AA/83-3). Contained in
Docket A-99-06.
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We invite comment on the potential for misfueling under phase-in
approaches, what factors would influence misfueling, and how the
potential for misfueling might vary under the different phase-in
approaches described in subsection 2 below. We further seek comment on
how these phase-in approaches could be designed to minimize the
potential for misfueling.
c. Distribution System Impacts
While providing flexibility for refiners and potentially lower
costs to consumers, a phase-in approach would rely on the fuel
distribution infrastructure being able to accommodate the second grade
of highway diesel fuel. The economics of modifying the distribution
infrastructure to handle two grades of highway diesel fuel would affect
the extent to which refiners can take advantage of the flexibility, and
consumers enjoy the cost-savings, of a phase-in. There are a vast array
of businesses in the diesel fuel distribution system, encompassing
thousands of companies, including pipelines, bulk terminals, bulk
plants, petroleum marketers (who carry the fuel from bulk terminals and
bulk plants via transport trucks and fuel tank wagons to retail outlets
and fleet customers), fuel oil dealers, service stations, truck stops,
and centrally-fueled fleets (commercial fleets, federal/state/local
government fleets, and farms). Based on available data, the vast
majority of these are small businesses according to the Small Business
Administration's definitions.\149\ These businesses may make
investments and change their practices to accommodate two grades of
highway diesel fuel. The economics of a phase-in could be viewed as
follows: Through intermediate price mark-ups on the product, the system
would distribute some of the cost savings experienced by the refiners
and consumers to those making capital investments. If the potential
cost savings
[[Page 35506]]
were not sufficient to justify such investments, then those investments
would not occur and the entire system would convert to low sulfur
diesel. We seek comment on how the economics of a phase-in would
actually play out.
---------------------------------------------------------------------------
\149\ For more information, see the Report of the Small Business
Advocacy Review Panel, contained in the docket.
---------------------------------------------------------------------------
If the cost savings of a phase-in are substantial, many bulk
terminals and bulk plants may find it economical to add new tank
capacity to accommodate a second grade of highway diesel fuel. However,
if the cost savings of a phase-in are modest, fewer terminal operators
would profit from such investments, since some have commented on the
costs, space constraints, and permitting difficulties associated with
new tankage.\150\ The magnitude of the cost savings also affects the
role of diesel marketers in this market. Some marketers have commented
that if some terminals offer two grades while others offer only one
grade, the costs of transporting fuel would increase since some trucks
would have to travel greater distances to alternate terminals or bulk
plants.\151\ The share of the cost savings that marketers could enjoy
from the mark-up on diesel products would have to at least equal the
higher transport costs for them to offer to handle two grades of fuel.
---------------------------------------------------------------------------
\150\ Letter from Independent Terminal Operators Association,
July 13, 1999 (Item # II-D-80).
\151\ Letter from Petroleum Marketers Association of America,
November 8, 1999, Docket A-99-06.
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Similarly, many service stations, truck stops, and centrally-fueled
fleets would be faced with a decision of whether to add additional
underground storage tanks to carry the extra grade of diesel fuel.
Retailers with more than one diesel tank, such as many truck stops and
some fleets, could choose to demanifold existing tanks (involving
breaking concrete) in order to dedicate one or more tanks to the new
fuel. Those that find it economical to do so will undertake the
investment and offer two grades, while those that would not find the
investment profitable would forego this option.
Generally we would expect that where businesses could profit from
managing two grades they would do so and provide some 500 ppm diesel to
the market. Thus, the impact to the distribution system of a phase-in
would include costs from new investments, but these could be
compensated by higher profits. Where the costs of handling two fuels in
the distribution system are larger than the cost savings enjoyed by
refineries (and passed down to consumers in lower fuel prices), then
only low sulfur diesel would be offered. Some refiners and distributors
have expressed the concern, however, that these additional investments
would be ``stranded'' after the phase-in period ends. A key question
will be whether each party in the refining/distribution system can
accurately anticipate what the others will do, so as to avoid
unnecessary investments (e.g., if the system should switch over the low
sulfur more quickly than expected). Since the diesel fleet transitions
over relatively quickly (greater than 50 percent of VMT is typically
driven by new diesel vehicles after just 5 years), there may be limited
time to recoup any investment made to handle an additional grade of
highway diesel fuel. We request comment overall on the economics of a
phase-in approach.
In addition to overall impacts on the distribution system, an
additional grade of highway diesel fuel could reduce the flexibility of
the distribution system to carry all grades of fuels that it does
today. This may particularly be a concern with specialty fuels or
segregated shipments of fuel through pipelines that require separate
tankage such as those utilized by the Department of Defense (DOD). DOD
stated that since its specialty fuels (F-76, JP-5, and JP-8) are not
fungible fuels, if today's rule places additional stress on an already
capacity-strained pipeline system, it may limit DOD's ability to
transport adequate volumes of their specialty fuels to meet operational
readiness requirements. Consequently we request comment on this
particular impact on the distribution system in regard to accommodating
a second grade of highway diesel fuel.
d. Uncertainty in the Transition to Low Sulfur
We believe the proposed single fuel approach provides more
certainty to the market for making the large investments needed to
introduce low-sulfur fuel. Yet even under a single fuel approach,
refiners have indicated that there is uncertainty in refiner decisions
to invest or not (or to underinvest) in desulfurization, which could
lead to a risk of supply shortfalls and high prices. Refiners may make
this choice to exit the highway diesel market, or to reduce production
volume of highway diesel fuel, especially if faced with uncertainty
about the ability to recover their investments (see further discussion
in section V.D.1). A phase-in approach could minimize any potential for
such a shortfall in the overall highway diesel fuel supply. Under a
phase-in, the level of uncertainty is different, however, in that since
the highway diesel pool would be split into two grades, refiners would
need to predict in advance the relative demand for each grade.
Under the phase-in flexibility approaches (described in the
following section), the presumption is that the fuel production and
distribution system will react to both the market demand and the
incentive of the various programs to produce and distribute the low
sulfur fuel at reasonable prices to all parts of the country. Turning
any of these approaches into a reality requires embracing the
possibility that the market reacts differently than anticipated. For
example, diesel retailers have indicated that it would be extremely
difficult to predict how retailers would respond to making low sulfur
fuel available, given the many factors that influence retail decisions.
Consequently, refiners might have little certainty about continued
markets for 500 ppm fuel when making their investment decisions and all
of them might choose to convert to low sulfur. Given the lead time
needed for additional desulfurization capacity at refineries to come on
line, it is important for a smooth transition to low sulfur diesel fuel
that predictions of demand be similar to the actual demand. Each of the
phase-in approaches described in the following section is intended to
be designed to allow the market the flexibility to find a lower cost
option than full initial conversion to low sulfur fuel if such a
solution exists, and to default to a full low sulfur program if such a
solution does not exist. Each approach is, however, subject to
different sources of uncertainty. We request comment on the ability of
refiners to accurately predict demand for desulfurization capacity
under a phase-in approach. Commenters should discuss this issue in the
context of the phase-in approaches described below and in the context
of the proposed single fuel approach.
e. Cost Considerations Under a Phase-in Approach
Because it avoids the need to produce all of the fuel to the low
sulfur standard in the first year, a phase-in approach could provide an
opportunity for cost savings to refiners and could significantly lower
overall diesel fuel production costs. Consumers of pre-2007 diesel
vehicles could also realize a savings if the current 500 ppm fuel were
still available and priced lower than the new low sulfur fuel. In a
perfect world with a distribution system capable of distributing a
second grade of highway diesel fuel at no cost, if low sulfur
production could be matched with the demand from new vehicles, the
fraction of highway diesel fuel that would have to be low sulfur would
increase from approximately 9% in
[[Page 35507]]
2007 to approximately 60% in 2012 based on typical fleet turnover
rates. Thus, the amount of low sulfur fuel refiners would have to
produce in the early years of the program could be reduced
significantly, with a corresponding reduction in production costs
theoretically as high as $4 billion, using our estimated per gallon
fuel costs discussed in section IV. This theoretical distribution
system does not exist and there would be a number of important and
potentially significant costs incurred in the distribution system that
could impact these savings. As discussed above, a wide array of
entities in the distribution system, including refiners, bulk
terminals, pipelines, bulk plants, petroleum marketers, fuel oil
dealers service stations, truck stops, and centrally fuelled fleets
would have to make investment decisions in order to distribute a second
grade of highway diesel fuel. We seek comment on the potential cost
savings associated with a phase-in approach, including the potential
costs of managing two grades of highway diesel fuel in the distribution
system, how these costs would vary depending on the relative volumes of
the two grades of highway diesel fuel, the necessary margin for
businesses in the distribution system to find it economic to manage two
grades of highway fuel, and how these cost savings and margins could
vary depending on the range of ways the distribution system might
respond.
2. What Phase-in Options Is EPA Seeking Comment on in Today's Proposal?
In this section, we are requesting comment on three different
phase-in approaches for implementing a program for low sulfur highway
diesel fuel.
a. Refiner Compliance Flexibility
Despite the concerns described above with a phase-in approach for
implementing the diesel fuel sulfur control program, EPA nevertheless
believes that a program, if voluntary, can be devised which can address
these concerns and take advantage of at least some of the benefits a
phase-in approach has to offer. Consequently, as part of our proposed
program for implementing low sulfur highway diesel, as described in
section IV.C, we also are seeking comment on a voluntary option that
would provide compliance flexibilities for refiners, while still
achieving the environmental benefits of the program. In this section,
we describe this refiner compliance flexibility concept and seek
comment on all aspects of its design. We also discuss how this
compliance flexibility relates to the options for small refiner
flexibility (which we're seeking comment on in section VIII.E).
i. Overview of Compliance Flexibility
We are seeking comment on a voluntary compliance flexibility that
would allow refiners to continue producing fuel at the 500 ppm level
for a fraction of their total highway diesel fuel volume in the first
few years of the program. The fraction of 500 ppm fuel allowed to be
produced by refiners would phase-down over a period of several years.
Specifically, we request comment on the appropriate fraction of highway
diesel fuel allowed to be produced as 500 ppm fuel beginning in 2006.
Three possible scenarios are shown in Table VI.A-1 below. The level at
which this flexibility begins would significantly affect its design. We
are seeking comment on a range of production percentages for the 500
ppm fuel. We are particularly interested in the degree to which
percentages of 500 ppm at the higher end of this range could pose
challenges for ensuring sufficient availability of the low sulfur fuel
and minimizing the potential for misfueling. In addition, we request
comment on the extent to which different proportions of 500 ppm fuel
will pose different challenges for the distribution system. Several
issues and implications of setting the 500 ppm production limits at
higher or lower levels are discussed below. We seek comment on our
assumptions and the implications of these issues for the design of such
a compliance flexibility program. Further, we request comment on the
number of years this flexibility should be provided.
Table VI.A-1.--Two Possible Scenarios for Implementing the Compliance Flexibility
----------------------------------------------------------------------------------------------------------------
Percent of highway diesel fuel permitted to be 500 ppm
--------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Scenario A....................................... 20 20 10 10 0 0 0
Scenario B....................................... 50 50 30 15 0 0 0
Scenario C....................................... 75 75 60 45 30 15 0
----------------------------------------------------------------------------------------------------------------
We believe this compliance flexibility would be potentially
beneficial for refiners. This flexibility could reduce operating costs,
by not requiring the entire volume of highway fuel to meet the low
sulfur standard. With averaging, banking and trading provisions as a
component of this compliance flexibility (as discussed below), some
refineries may be able to delay desulfurization investments for several
years. Even for refiners planning to desulfurize their entire highway
fuel pool to low sulfur levels at the beginning of the program, there
may be circumstances where the actual fuel produced is slightly off-
spec (i.e., above the low sulfur standard). This flexibility would
allow refiners to continue selling that fuel to the highway market (as
500 ppm fuel), rather than to other distillate markets. Refiners would
also have more flexibility to continue producing highway diesel (as 500
ppm fuel) during unit downtime (e.g., turnarounds and upsets).
This approach would need appropriate safeguards to minimize
contamination of the low sulfur fuel and misfueling. Thus, low sulfur
highway diesel would have to remain a segregated product throughout its
distribution (see further discussion of segregation requirements in
section VI.A.2.a.v). Further, any retail pumps carrying 500 ppm fuel
would have to be prominently labeled to prevent misfueling of 2007 and
later model year vehicles. We seek comment on whether other measures to
discourage misfueling might also be necessary. For example, the use of
a unique refueling nozzle/vehicle nozzle interface could further
discourage misfueling, although we question the need to pursue this
approach if the 500 ppm fuel were in the market in relatively low
volumes and only during the initial years when new vehicles still
comprise a relatively small percent of the fleet. Other issues
regarding the potential for misfueling are discussed in subsection 1
above.
We also propose an averaging, banking and trading (ABT) program as
part of this compliance flexibility. Refiners owning more than one
refinery would be allowed to average their
[[Page 35508]]
production volumes across refineries in determining compliance. This
could provide flexibility for some refining companies to delay making
desulfurization investments at some smaller refineries for several
years. Refiners also could generate credits based on the volume of low
sulfur fuel produced above the required percentage. For example, if a
refinery were required to produce a minimum of 80 percent of its
highway diesel pool as low sulfur in the first year, and that refinery
actually produced 100 percent of its highway diesel as low sulfur that
year, it could generate credits based on the volume of the ``extra'' 20
percent of low sulfur fuel it produced. Those credits could be sold or
traded with another refinery, which could in turn use the credits to
produce a greater percentage of 500 ppm sulfur highway diesel fuel.
More details on how these ABT provisions could be structured are
discussed in section VI.A.2.a.iv below.
We believe a credit trading program may be particularly beneficial
for refiners whose volumes of highway diesel are relatively small. It
is possible that the credits generated by a refiner producing a large
volume of low sulfur diesel could potentially be sufficient to offset a
smaller refiner's entire highway diesel production, thereby enabling a
smaller refiner to comply solely by the use of credits--and avoid
desulfurization investments--for several years.
While we believe that a credit trading program could add meaningful
flexibility under this approach, we are concerned about the potential
for shortfalls in supply of low sulfur highway diesel in those areas
supplied exclusively or primarily by refiners complying by the use of
credits (i.e., producing only 500 ppm fuel). This situation could
potentially occur, for example, in the Rocky Mountain area, or other
areas served primarily by smaller refineries, or areas with relatively
isolated fuel distribution systems. This concern becomes more salient
as the percentage of 500 ppm fuel allowed to be produced increases. If
the flexibility were to begin with 20 percent (of 500 ppm fuel) in the
first year, the likelihood of a supply shortfall would be less likely
than if the program begins with 50 percent (of 500 ppm fuel).
Therefore, we seek comment on the extent to which this situation could
occur and ways to structure the credit trading system to prevent low
sulfur fuel supply shortfalls in any area, perhaps through regional
restrictions in credit trading, or providing incentives for refiners to
supply sufficient volumes of low sulfur fuel. We have been, and will
continue, working with the Western states (for example, through the
Western Governors Association) to discuss the best ways of implementing
the program in that area.
Alternatively, we request comment on a regional approach to
designing a compliance flexibility (for example, different refiner
production levels and/or availability provisions for different areas of
the country). We seek comment on whether and how this compliance
flexibility could be enhanced by such a regional approach, including
information and data that would help us to better understand regional
differences in highway diesel fuel supply, demand and distribution.
Refiners have expressed concern that under some phase-in approaches
it might be difficult for them to recover their capital investments. We
request comment this issue, including how the potential for cost
recovery under a phase-in approach compares with that under the single-
fuel approach, and what the implications are for the optimal production
level of low sulfur diesel under the compliance flexibility approach.
We also invite comment on an alternative in which we simply
establish a minimum production percentage for low sulfur fuel in the
beginning of the program, and allow the market to take over in
determining the appropriate supply and distribution from that point on.
One concern with this approach is that it would perpetuate the
potential for misfueling for as long as two grades of highway fuel
remained in the market. We request comment on how long two grades of
highway diesel would likely coexist in the market under this approach.
Further, the level of this minimum low sulfur production percentage
would have to be carefully designed to assure sufficient availability
throughout the country. If you believe this or other alternative
approaches would make the program more useful, please share your
specific suggestions with us.
ii. What Are the Key Considerations in Designing the Compliance
Flexibility?
A key consideration in designing this compliance flexibility is
whether or not it should be accompanied by a retailer availability
requirement. Under an availability requirement, diesel retailers would
have to offer low sulfur fuel, but would have the flexibility to offer
the 500 ppm fuel as well. We believe the need for an availability
requirement is linked to the refiners' 500 ppm fuel production limits.
At a 500 ppm fuel production limit beginning at 20 percent, our
concerns for lack of availability and misfueling would likely be low
enough not to warrant a retailer availability requirement or additional
misfueling controls such as special nozzles. Our presumption is that if
at least 80 percent of the highway fuel volume is low sulfur (i.e., a
maximum 20 percent is 500 ppm), the low sulfur fuel should be
sufficiently available across the country. Alternatively, if refiners
were allowed to produce some greater proportion of their highway diesel
fuel as 500 ppm fuel in the first few years, there would be a greater
likelihood of low sulfur fuel supply shortfalls, lack of availability,
and misfueling , and there would be a more compelling need to ensure
that some minimum fraction of diesel retailers offered the low sulfur
fuel. We request comment on the level of the 500 ppm fuel production
limit at which concerns about low sulfur shortfalls, lack of
availability, and misfueling would be great enough to warrant imposing
a retailer availability requirement. We ask that commenters also
consider whether they would prefer a ``blended'' program (i.e., a
program with both a production limit on 500 ppm fuel and some form of a
retailer availability requirement) to a program that permits a slightly
lower level of 500 ppm fuel, but with no availability requirement.
In considering this issue, note that the percentage of low sulfur
diesel fuel produced would not necessarily match the availability
level. For example, if 80 percent of the highway fuel pool were low
sulfur, this would not necessarily translate into the low sulfur fuel
being available at 80 percent of retail stations currently selling
diesel fuel. Since large retail stations (e.g., large truck stops) and
centrally-fueled fleets represent a disproportionate share of the
diesel sales volume, it is possible that the percentage of retail
stations offering low sulfur fuel could be much lower than 80 percent
of the diesel retail stations. If this were the case, would there still
be concerns with lack of availability of the low sulfur fuel (e.g.,
even with 20 percent of highway fuel as low sulfur)?
We believe there are merits to designing this compliance
flexibility in a way that avoids the need for a retailer availability
requirement. With no availability requirement, retailers would be free
to choose to sell 500 ppm fuel only, low sulfur fuel only, or both. We
have heard from refiners and diesel marketers that they believe that
retailers, if faced with an availability requirement, would likely
decide not to carry both grades of fuel but, rather, would switch over
to the low sulfur fuel to avoid the expense of installing new tanks and
pumps. If this were true, an
[[Page 35509]]
availability requirement could have the effect of significantly
limiting a refiner's markets for its 500 ppm fuel, thus, limiting the
benefits of the compliance flexibility approach. Nevertheless, we seek
comment on whether an availability requirement for low sulfur diesel
fuel should be a condition for retailers marketing 500 ppm fuel.
We seek comment on whether a retailer availability requirement
would diminish the utility of the compliance flexibility approach, and
at what point in designing this option (e.g., at what 500 ppm fuel
production limit) a retailer availability requirement would become
necessary to encourage sufficient availability of low sulfur fuel.
Since this compliance flexibility is voluntary, we anticipate that
refiners would only produce and market 500 ppm fuel under the allowed
percentages to the extent that the costs of distributing it are offset
by savings elsewhere. The distribution system has only a limited
ability to accommodate a second grade of highway diesel without
incurring significant costs (e.g., installing new tankage). Therefore,
while refiners may be able to reduce the costs of diesel fuel
production if higher percentages of high sulfur diesel fuel are
permitted, they may find it difficult to market 500 ppm fuel in volumes
much above even the 20 percent level, due to distribution system costs.
We request comment on the degree to which the distribution and retail
costs associated with accommodating two grades of highway diesel fuel
depend on the relative volumes of those fuels. For example, how would
the costs incurred in the distribution system vary as the amount of 500
ppm fuel produced by refiners increases from zero to 50 percent, or
even beyond?
iii. How Does This Compliance Flexibility Relate to the Options for
Small Refiner Flexibility?
In section VIII.E., we seek comment on three approaches for small
refiner flexibility. One of these approaches would allow small refiners
to continue selling 500 ppm fuel for an unspecified period of time
(although we seek comment on an appropriate duration for this
flexibility). If the compliance flexibility approach described here
were implemented for the refining industry as a whole, we seek comment
on the best ways to meld this flexibility with approaches for
minimizing the burden on small refiners. For example, we seek comment
on whether it would be appropriate to either relax or remove any 500
ppm production limits for small refiners. In other words, we may
consider allowing small refiners to continue selling their full
production volume of highway diesel as 500 ppm fuel for some period of
time (likely at least as long as the compliance flexibility provided to
the refining industry as a whole, if not for some or an unlimited
number of years beyond that). We request comment on the appropriate
duration of this flexibility for small refiners. Further, we seek
comment on whether small refiners should be allowed to generate and
sell credits under the compliance flexibility's ABT program, even if
small refiners are not required to produce any portion of their highway
fuel as low sulfur diesel. The ABT approach could minimize the burden
on small refiners by allowing them to make some additional profit to
offset their desulfurization investments, thus giving them an incentive
to produce low sulfur highway diesel fuel earlier than they otherwise
would. We seek comment on other ways this compliance flexibility could
be crafted to minimize burden on small refiners and to better meld with
the approaches for small refiner flexibility described in section
VIII.E.
It should be noted that our approach to allow small refiners to
continue selling 500 ppm highway diesel (on which we're seeking public
comment in section VIII.E.1.) does not include a retailer availability
requirement. During the SBREFA process, small refiners expressed
concern that an availability requirement would significantly limit
their potential markets for 500 ppm fuel, since they believe that few
retail outlets would be willing to offer both grades of highway diesel
due to the significant costs of installing new tanks and pumps.
Therefore, if this option for small refiner flexibility is promulgated
in the final rule, we would reconsider its design in light of any
decisions made for compliance flexibilities for the whole refining
industry (e.g., the issue of whether an availability requirement would
be necessary).
iv. How Would the Averaging, Banking and Trading Program Work?
This section discusses in more detail how we envision an averaging,
banking and trading (ABT) program working in conjunction with the
compliance flexibility approach. The goal of the ABT provisions is to
maximize the flexibility provided by the program without diminishing
its environmental benefits. We envision that this ABT program could
apply to the program regardless of the actual level of the minimum
refiner production requirement for low sulfur highway diesel. We
request comment on all aspects of these ABT provisions. If you have
ideas on how these provisions could be structured differently to
enhance the program, please share your specific suggestions with us.
Averaging
Refiners and importers could be allowed to meet the required
minimum percentage of low sulfur fuel production averaged over their
entire corporate highway diesel pool. The minimum required percentage
of low sulfur fuel production under the compliance flexibility would be
determined on an annual average basis, across all refineries owned by
that refiner (or all highway diesel fuel imported by the importer in
the calendar year). Thus, within a given refining company, the volume
of low sulfur fuel produced at one refinery could be below the minimum
required percentage, so long as the volume produced at another refinery
exceeded the minimum percentage by a sufficient amount such that the
minimum required percent of low sulfur volume was met at the corporate
level.
Generating Credits
Beginning in 2006, refineries and importers could generate credits
based on the volume of low sulfur fuel produced above the required
percentage. For example, a refinery produced 10 million gallons of
highway diesel fuel in 2006 and was required to produce a minimum of 80
percent of its highway diesel volume (8 million gallons) as low sulfur
that year. That refinery actually produced 100 percent of its highway
diesel as low sulfur that year. Thus, it could generate credits based
on the volume of the ``extra'' 20 percent of low sulfur fuel it
produced above the required minimal percentage `` that is, 2 million
gallons of credits. Under this program, we do not envision a need to
establish a baseline volume of diesel fuel, since credits would be
generated based on the volume of low sulfur diesel fuel actually
produced above the required percentage.
Credits could be generated in each year that the compliance
flexibility provisions are in place. In other words, if the duration of
the compliance flexibility were for four years (i.e., refiners were
allowed to continue producing some specified percentage of 500 ppm fuel
for four years after the start of the low sulfur program), from 2006
through 2009, credits could be generated in each of those years.
We seek comment on whether there could be circumstances where the
use of low sulfur highway diesel could be shown to demonstrate
environmental benefits significant enough to warrant
[[Page 35510]]
the generation of early credits. To the extent there may be
circumstances that warrant early credit generation, we seek comment on
whether there should be an appropriate discount factor applied to such
credits, to ensure they would be comparable with the environmental
benefits achieved by the use of low sulfur fuel in vehicles meeting
today's proposed standards. See section IV.F.
As an additional aspect to implementing the compliance flexibility
program, we seek comment on whether it would be advantageous for EPA to
offer to sell additional ABT credits to refineries at a predetermined
price. This would provide more certainty about the cost of supplying
low sulfur diesel fuel by establishing a ceiling price on the ABT
credits. We request comment on (1) what should be the appropriate
predetermined price for these ABT credits; (2) whether there should be
a cap on the total number of credits available from EPA to assure
availability of low sulfur diesel; and (3) if there is a cap, whether
credits should be sold on a first-come, first-serve basis.
Using Credits
Refiners and importers would be able to use credits to demonstrate
compliance with the minimum required percentage of low sulfur highway
diesel fuel, if they are unable to meet this requirement with actual
highway diesel fuel production. Although credits would not officially
exist until the end of the calendar year (based on the generating
refinery's actual low sulfur fuel production) there is nothing to
prevent companies from contracting with each other for credit sales
prior to the end of the year, based on anticipated production. The
actual credit transfer would not take place until the end of the year.
All credit transfer transactions would have to be concluded by the last
day of February after the close of the annual compliance period (e.g.,
February 28, 2007 for the 2006 compliance period).
For example, refiners who wish to purchase credits to comply with
the 2006 required percentage of low sulfur fuel could do so based on
the generating refinery's projections of low sulfur fuel production. By
the end of February the following year, both the purchaser and the
seller would need to reconcile the validity of the credits, as well as
their compliance with the required percentages of low sulfur fuel
produced.
We seek comment on allowing an individual refinery that does not
meet the required percentage of low sulfur fuel production in a given
year to carry forward a credit deficit for one year. Under this
provision, the refinery would have to make up the credit deficit and
come into compliance with the required low sulfur production percentage
in the next calendar year, or face penalties. This provision would give
some relief to refiners faced with an unexpected shutdown or that
otherwise were unable to obtain sufficient credits to meet the required
percentage of low sulfur fuel production.
We recognize that there is potential for credits to be generated by
one party and subsequently purchased and used in good faith by another
party, yet later found to have been calculated or created improperly,
or otherwise determined to be invalid. Our preference would be to hold
the credit seller, as opposed to the credit purchaser, liable for the
violation. Generally, we would anticipate enforcing a compliance
shortfall (caused by the good faith purchase of invalid credits)
against a good faith purchaser only in cases where the seller is unable
to recover valid credits to cover the compliance shortfall. Moreover,
in settlement of such cases, we would strongly encourage the seller to
purchase credits to cover the good faith purchaser's credit shortfall.
We believe that any person could act as a broker in facilitating
credit transactions, whether or not such person is a refiner or
importer, so long as the title to the credits are transferred directly
from the generator to the purchaser. Whether credits are transferred
directly from the generator to the purchaser, or through a broker, the
purchaser needs to have sufficient information to fully assess the
likelihood that credits would be valid. Any party that can generate and
hold credits could also resell them, but the credits should not be
resold more than twice. Repeated sales of credits could significantly
reduce the ability to verify the validity of those credits.
How Long Would Credits Last?
The goal of these ABT provisions is to provide refiners additional
flexibility in the early years of the low sulfur fuel program. After
the first few years of the program, there would be a significantly
greater proportion of aftertreatment-equipped vehicles in the fleet. It
would be important to ensure a full transition to the new low sulfur
fuel to prevent misfueling of those vehicles and preserve the
environmental benefits of the program. Therefore, we do not currently
envision allowing credits to be used more than a few years beyond the
compliance flexibility period. We seek comment on whether credit
lifetime should be limited, and if so on the appropriate length of time
credits should be allowed to be used (in other words, the ``lifetime''
of credits).
v. Compliance, Recordkeeping, and Reporting Requirements
This section describes the types of provisions we believe the
regulations would need to include if a compliance flexibility approach
were adopted, to ensure that diesel fuel subject to the 500 ppm sulfur
standard would not be introduced into model year 2007 and later diesel
vehicles.
Refiners and importers of 500 ppm highway diesel fuel would be
required to designate all highway diesel fuel produced as meeting the
500 ppm sulfur standard or meeting the proposed 15 ppm standard. Such
refiners and importers would be required to maintain records regarding
each batch of motor vehicle diesel fuel produced or imported, including
the volume of each batch, and would be required to maintain records,
and to report regarding credits earned and credit transactions.
Reporting would also be required regarding volumes of highway diesel
fuel produced or imported.
All parties in the distribution system that chose to carry 500 ppm
fuel would be required to segregate that fuel from 15 ppm sulfur fuel,
and would be responsible for ensuring that fuel designated as 15 ppm or
500 ppm meets the respective sulfur standards, throughout the
distribution system. Such segregation requirements would likely be
modeled after those of the reformulated gasoline (RFG) program (e.g.,
the RFG program's requirements for product transfer documents,
refiners' designations of the standards to which each batch of fuel
applies, and registration requirements for refiners producing both
highway diesel fuels). However, the RFG program's segregation
provisions are somewhat different, in that they were designed to
segregate RFG from conventional gasoline by geographic area. In the
highway diesel program, the segregation provisions would be much more
widespread, because both grades of highway fuel could be distributed
throughout the country, depending on how refiners choose to take
advantage of the compliance flexibility. We seek comment on the need to
require refiners producing 500 ppm fuel to conduct some form of
downstream quality assurance sampling, similar to the surveys required
under the RFG program.
Further, all parties in the distribution system would be subject to
prohibitions against selling, transporting, storing, or introducing or
causing or allowing the introduction of diesel fuel having a
[[Page 35511]]
sulfur content greater than: (1) the proposed 15 ppm standard into
highway diesel vehicles manufactured in the 2007 model year and beyond;
and (2) 500 ppm into any highway vehicle. Under the proposed
presumptive liability scheme (as discussed in section VIII.A.8), if a
violation is found at any point in the distribution system, all parties
in the distribution system for the fuel in violation are responsible
unless they can establish a defense. Because of our concerns for
contamination and misfueling with having two grades of highway diesel
in the market, we seek comment on whether a refiner should lose its
flexibility to continue producing 500 ppm fuel if it is found liable
for a violation.
All parties handling 500 ppm fuel also would be required to
maintain product transfer documents for five years that indicate to
which highway diesel fuel standard the fuel is subject. Pump labels
would be required at retail outlets and wholesale purchaser-consumer
facilities providing notice regarding the different highway fuel types
and the vehicles they may/may not be used in. As mentioned above,
nozzle requirements might also be considered if the minimum volume
requirement for low sulfur diesel is low enough to warrant it.
The rule would prohibit any refiner from producing more 500 ppm
highway diesel fuel than allotted, and would prohibit any party from
distributing or selling diesel fuel not meeting the proposed 15 ppm
standard unless it is properly designated and accompanied by
appropriate product transfer documents. The rule would also prohibit
any person from introducing or causing or allowing the introduction of
highway diesel fuel not meeting the 15 ppm sulfur standard into any
model year 2007 or later vehicle.
As with any ABT program, we would need refiners to keep appropriate
records, and to file necessary reports, to ensure compliance as well as
the integrity of any credit generation, trading, and use. If this
program is promulgated in the final rule, we would envision that
refiners would likely be required to keep records of key information
pertaining to the ABT program. Beginning the first year that credits
are generated, any refiner for each of its refineries, and any importer
for the highway diesel fuel it imports, would keep information
regarding credits generated, separately kept according to the year of
generation. We envision that refiners would keep records of the
following information, at a minimum, and report such information to EPA
on an annual basis, for any year in which credits are generated,
transferred, or used:
The total volume of highway diesel fuel produced
The total volume of highway diesel fuel produced meeting
the 500 ppm sulfur standard
The total volume of highway diesel fuel produced meeting
the low sulfur standard
The total volume of highway diesel fuel produced
(delineating both 500 ppm fuel and low sulfur fuel) after inclusion of
any credits
The number of credits in the refiner's or importer's
possession at the beginning of the averaging period
The number of credits used
If any credits were obtained from or transferred to other
parties, for each other party, its name, its EPA refiner or importer
registration number, and the number of credits obtained from or
transferred to the other party;
The number of credits in the refiner's or importer's
possession that will carry over into the next averaging period
Contracts or other commercial documents that establish
each transfer of credits from the transferor to the transferee
The calculations used to determine compliance with the
minimum required percentage of low sulfur highway diesel fuel
The calculations used to determine the number of credits
generated
b. Refiner-Ensured Availability
An alternative concept suggested to the Agency to accomplish the
objective of ensuring widespread availability of low sulfur diesel fuel
while still allowing flexibility for producing less than all of the
diesel fuel pool as low sulfur is to have the refiners ensure that it
is widely available. The base program would still be a requirement that
refiners produce only highway diesel fuel which meets the sulfur
standard proposed today. However, refiners could voluntarily choose to
participate in a program where they would be allowed to sell a larger
fraction of their highway diesel fuel as 500 ppm fuel, in exchange for
ensuring that low sulfur diesel fuel is made widely available at the
retail level.
This concept may entail a refinery contracting with, or purchasing
credits from, retailers, who in exchange for incentives from the
refiner, agree to make low sulfur diesel fuel available. This could
mean that the retailer decides to switch over entirely to selling low
sulfur diesel fuel, or that they offer both low sulfur and high sulfur
diesel fuel simultaneously. The retailer would have to make a showing
that: (1) the low sulfur diesel was ``meaningfully'' available; (2)
there was an assured supply chain for obtaining low sulfur diesel fuel;
and (3) the diesel fuels were segregated and properly labeled at the
pumps. ``Meaningfully'' available might mean having dedicated pumps and
tankage for low sulfur diesel with a capacity in the thousands of
gallons range, and operating all year long. To be clear, the contract/
credits would be for making low sulfur diesel available for sale, not
necessarily selling a given volume of low sulfur diesel.
The relief that refiners receive in exchange for providing for low
sulfur availability could be calculated on the basis of the retailer's
total diesel sales volume. For example, the refiner would be permitted
to produce a certain volume of highway diesel fuel at the current 500
ppm cap in proportion to the total diesel sales volume of the retailers
that the refiner contracts with (or purchases credits from). A ratio
could be applied to the retailer's sales volume to ensure sufficient
retail availability.
An example of how this concept might work is as follows: A refinery
producing highway diesel fuel contracts with several truck stops and
service stations to make low sulfur fuel available at their stations.
The refiner would then be permitted to produce 500 ppm grade diesel
fuel in an amount up to the combined diesel sales volume (or some
multiple thereof) for these retailers. The retailers may receive their
low sulfur diesel fuel from this refiner or from other refiners to
comply with the contract.
Under this approach, refiners would likely make arrangements with,
or purchase credits from, the largest retailers (since they have the
largest fuel volumes), in order to minimize transaction costs. Because
the largest 5 percent of diesel retail stations represent 60 percent of
the sales volume, \152\ to achieve any meaningful availability of low
sulfur fuel at retail stations, the program may require a considerably
larger percentage of the sales volume to be targeted by weighting more
heavily credits generated by smaller retail outlets.
---------------------------------------------------------------------------
\152\ Memorandum to Docket A-99-06 from Jeffrey Herzog, EPA,
entitled: ``Diesel Throughput Volume by Percentage of Diesel Fuel
Retailers,'' May 5, 2000.
---------------------------------------------------------------------------
We ask for comment on this concept, on its advantages and
disadvantages compared to other implementation options, on the
percentage of retail outlets that may be sufficient under this concept
to achieve satisfactory low
[[Page 35512]]
sulfur diesel fuel availability, on means of ensuring adequate
geographic distribution of low sulfur diesel fuel throughout the year,
and on the appropriate means of calculating the volumes that refiners
should be permitted to produce as high sulfur in exchange for making
low sulfur available. We also request comment on how such a program
could be implemented and enforced. In particular, we request comment on
the type of recordkeeping and reporting EPA should require in ensuring
a refiner actually has legitimate credits, contracts or other binding
arrangements with retailers to make low sulfur diesel fuel
``meaningfully'' available. We further request comment on whether and
what type of recordkeeping and reporting may be necessary for retailers
and distributors, particularly if the program were structured to allow
retailers to generate and sell credits.
c. Retailer Availability Requirement
One way of ensuring widespread availability of the low sulfur fuel
under a phase-in approach would be to require retailers selling highway
diesel to make available the low-sulfur diesel (i.e., a retailer
availability requirement). Retailers would be free to sell the current
500 ppm sulfur fuel as well, but at a minimum would have to offer the
low sulfur fuel. This approach could either be a stand-alone program
design (i.e., with no refiner production requirement for a minimum
amount of low sulfur diesel), or could be coupled with a refiner
production requirement. Retailers would be responsible for getting low-
sulfur diesel from the distribution system. The premise of this
approach is that the fuel distribution system would react to the market
demands, and supply and distribute the second grade of fuel in all
parts of the country.
In order to turn this premise into a reality, the fundamental
issues associated with a phase-in approach, as discussed in subsection
1 above, would have to be addressed. Consequently, in the context of an
availability requirement, we seek comment on how to resolve the
concerns raised in subsection 1. With regard to the structure of such
an availability requirement, we seek comment on when it should begin,
whether it could be limited to just a fraction of the diesel fuel
retail outlets, and what fraction would constitute acceptable
availability in the marketplace. We specifically request comment on the
merits of limiting an availability requirement to the larger diesel
retailers. Under such an approach, the larger diesel retailers would
have to carry low sulfur diesel, but could also choose to carry the 500
ppm grade as well. Smaller retailers not subject to the availability
requirement would have the flexibility to choose to carry only the low
sulfur grade, only the 500 ppm grade, or both. For example, we seek
comment on the merits of limiting the requirement to only truck stops
selling more than 200,000 gallons of diesel fuel per month, and other
retail outlets selling more than 20,000 gallons of diesel per month, as
suggested by some Panel members during the Small Business Advocacy
Review process. We encourage commenters to consider other appropriate
throughput thresholds, for both truck stops and service stations that
could limit an availability requirement to the larger retailers, while
still ensuring sufficient availability.
While desirable to limit the fraction of retailers subject to an
availability requirement, ensuring sufficient availability is
complicated by the fact that diesel fuel is sold at a portion of all
retail outlets today. \153\ If less than 100 percent of diesel retail
outlets are required to make the new fuel available, how would we
ensure availability in all parts of the country? Commenters should
consider the distribution of diesel fuel outlets around the country,
and the distances between outlets in addressing this issue. How would
the rest of the distribution system respond to supply the low sulfur
fuel to the retail outlets needing to make it available? To help
protect against fuel shortages either nationally or regionally, would
an availability requirement need to be coupled with a production
requirement on refiners to ensure supply of a minimum amount of low-
sulfur diesel fuel? If so, how should such a production requirement be
structured? Conversely, could an availability requirement be coupled
with a production requirement in a way that would allow a larger
percentage of 500 ppm fuel production in the early years? (See the
discussion above in subsection 2.a.ii)
---------------------------------------------------------------------------
\153\ ``Summary Data on Diesel Fuel Retailers,'' Memo to the
docket from Jeffrey Herzog, EPA, March 23, 2000 (Docket item # II-B-
07).
---------------------------------------------------------------------------
With regard to the impacts on the diesel fuel retail and
distribution system, numerous parties in the industry have commented
that managing two grades of highway diesel in the distribution system
would raise their costs. We seek comment on what actions retailers,
centrally fueled fleets, wholesalers, terminals, pipelines, and
refiners would take to manage two grades of highway diesel, and in
particular on the cost impacts resulting from those actions. We
especially seek comment on what cost savings refiners might realize
under such an approach, and whether these savings would be greater than
the costs incurred by the distribution system to distribute a second
grade of highway diesel fuel. In this context, we also seek comment on
how refiners would plan their refinery changes given the uncertainty of
low sulfur diesel demand from retailers under such a phase-in approach.
When would they make their capital investments, and for what volume of
fuel would they plan to build desulfurization capacity? How would they
predict demand in the time frame when they would need to make their
capital investments? How would they adjust to different volumes from
predicted demand levels, and what would be the implications?
Commenters should address this approach from the perspective of the
issues discussed above in subsection A.1 (including misfueling,
distribution system impacts, potential costs, etc). We are also
interested in the implications of such an approach on prices in the
wholesale and retail markets, and on the ability of retailers and
distributors to recover costs under such an approach.
We also invite comment on the merits of applying an averaging,
banking and trading program within the context of a retailer
availability requirement. Such a credit trading program could entail
elements similar to the program described in subsection 2.a.v. for
refiners under the compliance flexibility approach, but would be
tailored specifically to retailers subject to an availability
requirement. Commenters should address how such a credit trading
program might be structured, if they believe it should differ
significantly from the refiner-based approach discussed above.
Finally, the trucking industry and diesel marketers have also
commented that an availability requirement would be administratively
intensive for the Agency to implement and enforce, especially in
verifying actual fuel availability. Therefore, we ask comment on ways
to streamline the enforcement of such a program to avoid unnecessary
burden on both industry and the Agency.
2. Why Is a Regulation Necessary to Implement the Fuel Program?
Some commenters on the ANPRM suggested simply leaving it up to the
market to introduce low-sulfur highway diesel fuel--that is, establish
no regulatory requirements for refiners to produce the fuel and no
requirements for retailers to sell the fuel. The
[[Page 35513]]
commenters' line of reasoning for this suggestion is as follows. The
vehicle and engine manufacturers would be forced by emission standards
to introduce vehicles meeting stringent emission standards. Since the
engines and vehicles would need low-sulfur diesel fuel to meet the
emission standards, then the vehicle purchasers would have to refuel
only with low-sulfur diesel fuel. The fuel production and distribution
system would then respond to the demand and provide the fuel if, when,
and where necessary.
Such an approach raises many of the same issues discussed above
with respect to phase-in approaches (e.g., fuel availability,
misfueling, and uncertainties in the transition to low sulfur). These
concerns, however, would be heightened by the fact that no regulatory
measures would be in place to mitigate them. We seek comment on whether
a market-based approach could adequately ensure availability of the low
sulfur fuel for the vehicles that need it.
3. Why Not Just Require Low-Sulfur Diesel Fuel for Light-Duty Vehicles
and Light-Duty Trucks?
In the ANPRM, we requested and received considerable comment on
focusing the rulemaking effort on providing low-sulfur diesel fuel for
light-duty vehicles and trucks only. By providing a clean grade of
diesel fuel, exhaust emission control technology would be enabled. This
in turn would give light-duty diesel vehicles a much better chance of
meeting the final Tier 2 emission standards. The appeal of a light-duty
only approach is that the program would be relatively small and could
set the stage for future expansion of low-sulfur diesel fuel into the
heavy-duty market if the demand developed.
Based on the comments received on the ANPRM and our own analysis,
however, there appears to be little justification for such a regulatory
approach. First, and most importantly, such an approach would provide
no environmental benefit to justify the costs of the program. Under the
Tier 2 program, all LDVs and LDTs must meet on average a certain
NOX emission standard. There are a number of emission
standards or ``bins'' that individual vehicles can be certified to, but
an overall fleet average emission standard must still be met.
Consequently, regardless of whether or not the Tier 2 fleet is
comprised of a large number of diesel vehicles, the same overall fleet
average NOX emission rate will be achieved. The only
anticipated difference would be in particulate emissions where, even
though the emission standards are the same, in-use emissions are
assumed to be somewhat lower for gasoline vehicles than for diesel
vehicles. In contrast, today's proposed program for setting new
emission standards for heavy-duty engines and vehicles in conjunction
with lower sulfur highway diesel fuel would achieve significant
reductions in NOX and particulate matter, as discussed
further in section II.
Secondly, the comments received on the ANPRM from the fuel
production and distribution system indicated that such an approach
would be very costly. The Engine Manufacturers Association conducted a
study of the cost increase associated with distributing a unique grade
of diesel fuel for just light-duty vehicles and trucks.\154\ The
results of this study indicated that the distribution costs alone
(i.e., not including refiner production costs) for such a fuel could be
3 to 4 cents per gallon. Moreover, this study made some simplifying
assumptions that served to underestimate actual volume of highway
diesel fuel that would have to be produced and the costs. The study
assumed a production volume of 5 percent low sulfur diesel, which is
not realistic because many retailers might choose to switch over
entirely to the low sulfur fuel. Thus, refiners would have to make the
investments to produce a considerably larger volume of low sulfur
diesel fuel than might be required for new light-duty vehicles and
trucks only.
---------------------------------------------------------------------------
\154\ ``Very-Low-Sulfur Diesel Distribution Cost,'' Baker &
O'Brien Inc., for the Engine Manufacturers Association, August 1999.
---------------------------------------------------------------------------
Third, commenters indicated that such an approach may be
impractical. In areas where there are few fuel distribution options
(e.g., areas not served by pipelines, areas with few diesel retail
outlets), the low-sulfur diesel fuel may not be made available or, if
it is, it could only be sold at retail prices considerably higher than
the refiners' cost to produce the fuel. Consumer demand for light-duty
diesel vehicles could be reduced by both unavailability of the low
sulfur fuel and uncertainty about it being available at reasonable
prices.
Finally, a light-duty only approach would appear to be
inappropriate in light of our demonstrated air quality need for
additional emission reductions and the opportunity available with
recent advancements in diesel engine exhaust emission control
technology to obtain these emission reductions from heavy-duty engines.
If the technology necessary to meet very low emission standards for
light-duty diesel vehicles is feasible with the control of diesel fuel
sulfur, and if that same technology is applicable to heavy-duty diesel
vehicles, then we have an obligation under the Clean Air Act to
consider emission standards for heavy-duty vehicles that would be
enabled by that technology as well. Given the air quality need, we
would be remiss in our obligations under section 202(a)(3)(A) of the
Act which requires us to set the most stringent standards feasible for
heavy-duty vehicles, taking into consideration cost and other factors.
EPA can revise such standards, however, based on available information
regarding the effects of air pollutants from heavy-duty engines on
public health or welfare.
4. Why Not Phase-Down the Concentration of Sulfur in Diesel Fuel Over
Time as Was Done With Gasoline in the Tier 2 Program?
There are a number of ways a fuel change can be introduced over
time. The most recent example is in the Tier 2 rulemaking where the
concentration of sulfur in gasoline was phased-down over time. Such an
approach is not workable for diesel fuel, however, due to the demands
of the exhaust emission control technology. As discussed in section
III, the efficiency of both the NOX and PM exhaust emission
control drops off quickly if the vehicle is operated on sulfur levels
higher than the standard proposed. Thus, the vehicles would be unable
to meet the emission standards, and there would be very little if any
emission benefit to be gained until the end of any such phase-down.
Furthermore, as discussed in section III, in some applications it is
possible that operation on higher sulfur levels may not only cause
permanent damage to the PM trap, but also could result in vehicle
driveability and safety concerns. Consequently, it is imperative that
aftertreatment-equipped vehicles are fueled exclusively with fuel
meeting the proposed low sulfur levels, and that the low sulfur fuel
remain segregated in the distribution system.
This contrasts with the gasoline sulfur control program, where the
impact of sulfur on the exhaust emission control technology was thought
to be less severe and emission benefits accrued even at the phased-down
sulfur levels. Furthermore, if gasoline vehicles are operated on higher
sulfur fuel, no driveability concerns are anticipated; higher sulfur
diesel would have detrimental effects on the driveability of diesel
engines. Thus, in the gasoline sulfur program there was not a need to
require that low sulfur gasoline remain segregated from the remaining
gasoline pool while sulfur levels are being phased-down. Here there is
a need to
[[Page 35514]]
segregate low sulfur highway diesel fuel to ensure the new technology
vehicles are not damaged by higher sulfur levels.
B. What Other Fuel Standards Have We Considered in Developing This
Proposal?
1. What About Setting the 15 ppm Sulfur Level as an Average?
We have considered several potential diesel fuel sulfur
alternatives in developing today's proposed rulemaking, including two
alternatives centered around a 15 ppm sulfur level: a cap at this level
as proposed, and an average at this level with a 25 ppm cap to ensure
that sulfur levels would not exceed a 15 ppm average level by too much.
The analyses of technology enablement, costs, emission reductions, and
cost effectiveness discussed in the preceding sections are based on a
15 ppm cap. In this section we provide the results of these analyses
for the 15 ppm average sulfur level case.
a. Emission Control Technology Enablement Under a 15 ppm Average
Standard
Having a 15 ppm average standard with a 25 ppm cap would increase
uncertainty around the advanced technologies required here and would
therefore be less attractive to diesel engine and vehicle
manufacturers. As discussed at length in Section III, fuel sulfur
adversely impacts the effectiveness of all known and projected exhaust
emission control devices. Despite these adverse effects, it may be
possible that the design, precious metal loading, and application of
exhaust emission control devices could be fundamentally similar under
both a 15 ppm cap and a 15 ppm average. However, we would expect that
the exhaust emission control devices would not operate at the same
level of efficiency as expected under the 15 ppm cap program and there
would be some sacrifice in the durability and reliability of these
devices due to the higher sulfur level.
PM trap regeneration would be compromised due to sulfur's adverse
impacts on the NO to NO2 conversion necessary for completely
passive PM trap regeneration.\155\ Because of this effect, concerns
have been raised that a 15 average/25 cap program would require that
some vehicle applications, particularly lighter applications having
lower operating temperatures, incorporate some form of active PM trap
regeneration strategy. Such an active regeneration strategy could take
the form of a fueling strategy capable of increasing exhaust
temperature as opposed to an electrical heater or some other ``added''
hardware. The active regeneration scheme would likely be incorporated
into the design as a backup, or protective measure, and would not
function at all times. Instead, the active regeneration would kick in
under conditions such as very cold ambient temperature conditions or
extended idles where exhaust temperatures might be too low for too long
to enable passive regeneration. There are also concerns that fuel
economy would be reduced both due to the use of active regeneration and
due to the higher, on average, PM trap backpressure. This would likely
occur due to the slightly higher soot loading, on average, resulting
from less efficient passive trap regeneration. This higher backpressure
would probably occur on all applications, not just the lighter
applications. Nonetheless, we believe that the fuel economy effect
would probably not be greater than one percent.
---------------------------------------------------------------------------
\155\ Cooper and Thoss, Johnson Matthey, SAE 890404.
---------------------------------------------------------------------------
Under a 15 ppm average standard, we would expect the in-use average
sulfur level to be roughly double the in-use average under a 15 ppm cap
program. The higher in-use sulfur level would roughly double in-use PM
emissions. Since an average limit would be in place and be enforced,
and since in-use emissions would be expected to approximate the
average, we might consider allowing engine manufacturers to certify
their engines on diesel fuel meeting the average sulfur level rather
than the cap. If this approach were taken, setting the sulfur standard
at a 15 ppm average instead of a 15 ppm cap would not necessitate an
increase in the PM standard. However, in-use PM emissions would nearly
double due to the increased average fuel sulfur level (when compared to
the 15 ppm cap base case).
Regarding the NOX adsorber, we believe that a 15
average/25 cap program may have the potential to enable NOX
adsorber technology, though with increased uncertainty. However, while
the NOX adsorber would continue to adsorb and subsequently
reduce NOX despite the higher sulfur fuel, the frequency of
sulfur regeneration events, referred to as desulfation in section III,
would roughly double relative to the rate with a 15 ppm cap. The
increased frequency of desulfation would increase fuel consumption
probably on the order of one percent and would be realized on all
diesel applications equipped with NOX adsorber
technology.\156\ Additionally, the increased frequency of desulfation
may adversely impact NOX adsorber durability because the
thermal strain placed on the adsorber during any desulfation event
would increase in frequency. Also, because of the increased frequency
of desulfation events, there would be a corresponding decrease in the
likelihood of being able to perform the desulfation during ideal
operating conditions. This may cause more thermal strain on the
NOX adsorber and/or less efficient desulfation with a
corresponding increase in fuel usage. The result would be a decrease in
our level of confidence that the NOX adsorber would be
capable of fulfilling the demands of heavy-duty diesel engines in terms
of fuel consumption and durability.
---------------------------------------------------------------------------
\156\ See section III and Table III.F-2 for more detail on
desulfation and the associated fuel economy impacts.
---------------------------------------------------------------------------
Note that, although the analysis finds that a 15 ppm average/25 ppm
cap standard has potential to be adequate for enabling high-efficiency
exhaust emissions controls, this finding involves a significantly
higher level of uncertainty than the proposed 15 ppm sulfur cap,
because it is based on the assumption that exhaust emission control
designs could be focused on the average fuel sulfur levels.
Manufacturers have commented that the possibility of some in-use fuel
at near-cap levels would necessitate designing to accommodate this
level, and they contend that this would not allow the high-efficiency
technology to be enabled. If so, the technology enablement for this
case would likely be similar to that for the 50 ppm cap case.
b. Vehicle and Operating Costs for Diesel Vehicles To Meet the Proposed
Emissions Standards With a 15 ppm Average Standard
As pointed out above, we believe it may be possible that the
design, precious metal loading, and application of exhaust emission
control devices could be fundamentally similar under both a 15 ppm cap
and a 15 ppm average. Therefore, we believe that having a 15 ppm
average sulfur standard would have no quantifiable impact on the cost
of emission control hardware relative to the costs associated with a 15
ppm cap standard. However, as mentioned, we would expect a one percent
fuel economy decrease (i.e., a one percent increase in fuel
consumption) due to the increased frequency of desulfation of the
NOX adsorber. This reduction in fuel economy would result in
consumption
[[Page 35515]]
of more fuel and, therefore, higher costs. We have estimated the
discounted lifetime cost of this one percent fuel economy impact at
$108, $207, $755, and $893 for a light, medium, and heavy heavy-duty
diesel, and urban buses, respectively. See the draft RIA for details on
how this cost was calculated.
c. Diesel Fuel Costs Under a 15 ppm Average Standard
Having a 15 ppm average with a 25 ppm cap sulfur standard would be
directionally more attractive to the petroleum industry because of the
slightly higher sulfur levels. Overall, we would expect this approach
to provide more flexibility to refiners and distributors, and
directionally help in addressing concerns that have been expressed
about the difficulties of distributing diesel fuel with very low sulfur
specifications. The cost of meeting a 15 ppm sulfur average at the
refinery (with a 25 ppm cap) would be significantly less than meeting
the proposed cap of 15 ppm. We project that roughly half of all
refiners would be able to meet a 15 ppm average by modifying their
existing one-stage hydrotreating unit by adding a hydrogen sulfide
scrubbing unit, a PSA unit to increase hydrogen purity and a second
reactor. A new, high activity catalyst would also replace today's
catalyst. Refiners who would be capable of meeting a 15 ppm average
with a one-stage unit would likely be those blending low amounts of
light cycle oil (LCO) into their diesel fuel or those having
substantial excess hydrotreating capacity in their current unit. The
remaining refiners would require essentially the same two-stage
hydrotreating unit that would be required to meet the proposed 15 ppm
cap. In all cases, hydrogen consumption would be somewhat less than
that required to meet the proposed 15 ppm cap standard.
As for fuel distribution, under the proposed 15 ppm cap on diesel
sulfur content, we estimate that sulfur contamination in the
distribution system can be adequately controlled at modest additional
cost through the consistent and careful observation of current industry
practices. A 0.2 cent per gallon increase in distribution cost is
anticipated due to the need for an increase in pipeline shipment
interface volumes, increased quality testing at product terminals, and
the need to distribute an increased volume of fuel to meet the same
level of consumer demand due to a reduction in energy density. Having a
15 ppm average standard would mean that the increase in pipeline
interface volumes would likely be somewhat smaller than under the
proposed 15 ppm cap. However, we do not expect that the savings in
interface volumes would be proportional to the difference between the
standards. This is due to the similarity of the alternative standards
with the proposed 15 ppm sulfur cap relative to their comparison with
the sulfur level of other products in the distribution system such as
nonroad diesel fuel (3,400 ppm average sulfur content). Consequently,
we estimate that distribution costs under a 15 ppm average standard
would only be marginally lower (approximately 0.003 cents per gallon
less) than under the proposed 15 ppm cap.
Overall, we project that the average cost of meeting the 15 ppm
average at the refinery would be about 3.0 cents per gallon, about 1.0
cents per gallon less than the corresponding cost for fuel meeting a 15
ppm sulfur cap. Adding the cost of lubricity additives and increase in
distribution costs, the final cost for the 15 ppm average/25 ppm cap
fuel would be 3.4 cents/gallon, as compared to 4.4 cents per gallon
under the proposed 15 ppm cap standard.
d. Emission Reductions Under a 15 ppm Average Standard
As discussed above, we believe that the same basic exhaust emission
control technology could be used to reduce exhaust emissions from HDDEs
even if we required a 15 ppm average rather than a 15 ppm cap. However,
as pointed out above, there would likely be penalties in durability,
fuel consumption, and emissions.
At this higher fuel sulfur level, we believe that the particulate
trap will still result in large reductions of HC, CO, and carbon soot.
We also believe that the 0.2 g/bhp-hr NOX standard may be
achieved using a NOX adsorber. Nonetheless, the total PM
reductions would be lower under a 15 ppm average standard. Sulfur in
the fuel impacts the amount of direct sulfate PM in the exhaust gas. We
estimate that a 15 ppm average standard would result in almost double
the total PM emissions as compared to a 15 ppm cap standard because the
15 ppm cap is assumed to result in a 7 ppm in-use average. Table VI.B-1
presents projected nationwide HDDE PM emissions for the baseline and
control case for a 15 ppm average/25 ppm sulfur cap standard along with
the corresponding reductions. For comparison, the same information is
shown for the proposed 15 ppm cap. Refer to the draft RIA for details
of this analysis.
Table VI.B-1.--HDDE PM Emissions With a 15 ppm Average/25 ppm Sulfur Cap
[Thousand short tons]
----------------------------------------------------------------------------------------------------------------
15 ppm average 15 ppm cap (for
------------------ comparison)
Calendar year Baseline -----------------
Controlled Controlled
----------------------------------------------------------------------------------------------------------------
2007...................................................... 100 89 88
2010...................................................... 94 60 59
2015...................................................... 93 33 30
2020...................................................... 98 19 15
2030...................................................... 119 13 8
----------------------------------------------------------------------------------------------------------------
A higher average sulfur level also results in lower SOX
emission reductions. We assume that the sulfur in the fuel that is not
converted to sulfate PM is converted to SO2. Because we base
SOX emissions on the amount of sulfur flowing through the
engine, the increase in fuel consumption also negatively impacts
SOX emissions. Table VI.B-2 presents projected nationwide
HDDE SOX reductions for a 15 ppm average/25 ppm sulfur cap
standard and for the proposed 15 ppm cap.
[[Page 35516]]
Table VI.B-2.--HDDE SOX Emission Reductions With a 15 ppm Average/25 ppm
Sulfur Cap
[Thousand short tons]
------------------------------------------------------------------------
15 ppm
Calendar year average 15 ppm cap
------------------------------------------------------------------------
2007.......................................... 86 88
2010.......................................... 91 93
2015.......................................... 99 102
2020.......................................... 107 109
2030.......................................... 120 123
------------------------------------------------------------------------
e. Cost Effectiveness of a 15 ppm Average Standard
The methodology used to determine the cost-effectiveness of a 15
ppm average sulfur standard follows that described in Section V for our
proposed 15 ppm cap standard. The alternative standard of 15 ppm on
average does have impacts on specific values in the calculations,
including lower desulfurization and distribution, lower in-use PM
benefits, and lower SO2 benefits all of which were pointed
out above. Engine costs are assumed not to change under either a 15 ppm
cap or 15 ppm average standard. We have calculated cost-effectiveness
using both the per-vehicle and aggregate approaches, consistent with
our cost-effectiveness presentation in Section V for our proposed
program. The results are shown in Tables VI.B-3 and VI.B-4 which can be
directly compared to Tables V.F-1 and V.F-2, respectively, showing
values for the proposed 15 ppm cap standard. Details of the
calculations are presented in the draft RIA which can be found in the
docket for this rulemaking.
Table VI.B-3.--Per-Vehicle Cost-Effectiveness of a 15 ppm Average/25 ppm Cap Sulfur Standard
----------------------------------------------------------------------------------------------------------------
Discounted
Discounted Discounted Discounted lifetime cost
Pollutants lifetime vehicle lifetime emission lifetime cost effectiveness per
& fuel costs reductions (tons) effectiveness per ton with SO2
ton credit a
----------------------------------------------------------------------------------------------------------------
Near-term costs:b
NOX + NMHC...................... $1,565 0.88 $1,800 $1,800
PM.............................. 774 0.064 12,100 5,200
Long-term costs:
NOX + NMHC...................... $1,151 0.88 $1,300 $1,300
PM.............................. 554 0.064 8,700 1,800
----------------------------------------------------------------------------------------------------------------
a $440 credited to SO2 (at $4800/ton) for PM cost effectiveness.
b As described above, per-engine cost effectiveness does not include any costs or benefits from the existing,
pre-control, fleet of vehicles that would use the low sulfur diesel fuel proposed in this document.
Table VI.B-4.-- 30-Year Net Present Value Cost-Effectiveness of a 15 ppm Average/25 ppm Cap Sulfur Standard
----------------------------------------------------------------------------------------------------------------
30-year NPV
30-year NPV 30-year NPV 30-year NPV cost
costs reduction cost effectiveness
(billion) (million tons) effectiveness per ton with
per ton SO2 credit a
----------------------------------------------------------------------------------------------------------------
NOX + NMHC...................................... $26.4 18.9 $1,400 $1,400
PM.............................................. $8.0 0.75 $10,700 $1,100
----------------------------------------------------------------------------------------------------------------
a $7.2 billion credited to SO2 (at $4800/ton).
2. What About a 5 ppm Sulfur Level?
Some diesel engine and automobile manufacturers have expressed
support for a sulfur cap of 5 ppm (sometimes termed ``near-zero'') for
some or all of the highway diesel fuel pool.\157\ They view the
technology solutions envisioned in this rulemaking to be infeasible at
higher fuel sulfur levels. Although the feasibility analysis results of
this proposal lead us to disagree with this conclusion, we have
evaluated the impact that a 5 ppm sulfur cap would have on technology
enablement, vehicle and fuel costs, and emissions reductions. The
results of this analysis are provided below. Analysis details are
provided in the Draft RIA. We encourage comment on our assessment,
preferably accompanied by data and analysis supporting the commenter's
views.
---------------------------------------------------------------------------
\157\ See for example letter from Patrick Charbonneau of
Navistar to Robert Perciasepe of EPA dated July 21, 1999, EPA,
docket A-99-06.
---------------------------------------------------------------------------
Capping diesel fuel sulfur at 5 ppm would clearly strengthen the
viability of new emissions control technologies enabled at 15 ppm,
although we are aware of no additional technologies that this lower
sulfur level would enable. PM traps would emit somewhat less sulfate
PM, but non-sulfate PM emissions and certification test measurement
tolerances would effectively limit the extent to which the standard
could be lowered from the proposed 0.01 g/bhp-hr level at this time.
Given the level of precision implicit in the 0.01 numerical standard,
we would not expect a 5 ppm sulfur cap to result in a lower PM
standard. Nevertheless, there would be an in-use benefit compared to a
15 ppm cap, because the average fuel sulfur would be lower (perhaps 2-3
ppm compared to about 7 ppm) and so new vehicles
[[Page 35517]]
would emit less sulfate PM, providing a projected 86,000 ton per year
PM benefit in these vehicles in 2020, compared to 83,000 tons per year
achieved under a 15 ppm cap. We have assumed that the small margins
involved and the extremely high trapping efficiencies of filters that
are already readily available would give manufacturers no incentive to
take advantage of the lower sulfate emissions to design for higher non-
sulfate emissions under the standard.
Lower sulfate PM emissions in the existing fleet would provide a
105 tons per year additional PM benefit (in 2007 when this benefit
peaks) from adoption of a 5 ppm sulfur cap compared to a 15 ppm cap.
However this is quite small compared to the corresponding 7100 ton per
year existing fleet PM benefit of reducing fuel sulfur from typical
current average levels of around 340 ppm to levels near 15 ppm, which
in turn is a small fraction of the total direct PM emissions benefit of
the 15 ppm cap, most of which comes from enabling PM traps on new
engines (see Figure II.D-2). SOX and SOX-derived
secondary PM would also be reduced in about the same small proportion.
The robustness of the PM trap regeneration process would also be
directionally aided by the near zero sulfur fuel, because less of the
catalyst sites that promote regeneration would be blocked by sulfur
poisoning. (This phenomenon is described in section III.F.1.a). In
fact, designers could further increase regeneration robustness by
increasing precious metal loading without fear of inordinate sulfate
production because of the lower fuel sulfur level (though at added
cost). However, we have not quantified this directional benefit or cost
difference because we deem the 15 ppm level adequate for robust
regeneration already.
Five ppm sulfur fuel would also benefit NOX adsorber
technology. Adsorber desulfation would be needed about four times less
often than that required under a 15 ppm sulfur cap, providing a
projected 1 percent improvement in fuel economy. There may also be a
small gain in NOX adsorber durability due to the less
frequent thermal cycling built into the desulfation process. However,
available evidence suggests that at any fuel sulfur level under 15 ppm,
these cycles are not likely to be so numerous or severe over the
vehicle life as to seriously constrain durability. NOX
emissions would not be much affected because the basic NOX
storage and removal processes would occur in much the same way, and
desulfation events would be programmed to occur frequently enough to
maintain NOX reduction efficiencies high enough to meet the
standard with a minimum of fuel consumption.
We have not performed an extensive analysis of the refining cost of
meeting a 5 ppm sulfur cap. However, Mathpro, under contract to EMA,
did estimate the refining cost of producing diesel fuel with an average
sulfur level of 2 ppm, a reasonable average under a 5 ppm cap. Mathpro
examined two sets of cases where average on-highway diesel fuel sulfur
levels were reduced from 20 ppm to 2 ppm, one with nonroad diesel fuel
sulfur at 350 ppm (Cases 1 and MP1) and the other with nonroad diesel
fuel sulfur at 20 ppm (Cases 4 and 8). From these cases, Mathpro's
estimated cost of reducing highway diesel fuel sulfur from 20 ppm to 2
ppm ranges from 1.7 to 2.1 cents per gallon. Assuming a linear
relationship between sulfur and cost per gallon in this range, the cost
of reducing average sulfur levels from 7 ppm (that projected under the
proposed 15 ppm cap) to 2 ppm would be 0.7-0.8 cents per gallon.
Although it is possible that the cost per ppm of sulfur reduced would
actually increase as sulfur was reduced, the extent of this increase is
difficult to estimate. Thus, the best cost that we can project at this
time is 0.7-0.8 cents per gallon, incremental to the cost of the 15 ppm
sulfur cap program.
Although we have not attempted to analyze in detail the cost
impacts of distributing a fuel with a cap on sulfur content as low as 5
ppm, the American Petroleum Institute recently had a contractor do
so.\158\ That study estimated that, compared to current costs,
distribution costs would increase by 0.9 to 2.1 cents per gallon if a 5
ppm standard were adopted for the entire highway diesel pool.\159\ The
following reasons were cited for why, as the sulfur specification is
decreased, it becomes more difficult to maintain product purity and
supply:
---------------------------------------------------------------------------
\158\ ``Costs/Impacts of Distributing Potential Ultra Low Sulfur
Diesel, Turner, Mason, & Company Consulting Engineers,'' February
2000. EPA Docket A-99-06, item II-G-49.
\159\ ``Costs/Impacts of Distributing Potential Ultra Low Sulfur
Diesel, Turner, Mason, & Company Consulting Engineers,'' February
2000. EPA Docket A-99-06, item II-G-49.
---------------------------------------------------------------------------
--There is increased difficulty and cost associated with correcting
off-specification batches in the distribution system.
--Measurement accuracy becomes more limiting.
--The pipeline compliance margin becomes more limiting at refineries.
--Supply outages due to off-specification product will become more
common.
--The difference between the sulfur content of highway diesel fuel and
that of abutting higher sulfur products in the pipeline system becomes
larger.
Even with the estimated increase in distribution costs, the report
still concluded that it was probably impractical to attain continuous
supply availability of diesel fuel in all areas and outlets within the
current distribution system at a 5 ppm cap on fuel sulfur content. If
such problems are to be avoided, additional, more costly measures may
be necessary. Should a segregated distribution system be needed to
control contamination, including dedicated pipelines and tank trucks,
the costs would be considerably higher than the 0.9 to 2.1 cents per
gallon estimated in the report.
We too are concerned that the measures which form the basis for the
0.9 to 2.1 cents per gallon cost estimate in the API-sponsored study
may not ensure widespread compliance. Under a 5 ppm standard, sulfur
measurement variability would need to be reduced appreciably from
current tolerances, perhaps to a level of 1 ppm or less, and the test
equipment purchases and quality control steps needed to attain this
could prove costly. Yet the bulk of the impact would come from the
major shift likely to be needed in the practices used to avoid
contamination in the distribution system. Assuming an extremely
demanding maximum sulfur specification of 3 ppm at the refinery gate
and a test variability of 1 ppm, only 1 ppm contamination through the
distribution system could be tolerated, and this would need to be
maintained nationwide and year round in a distribution system that
routinely handles products with sulfur levels of up to several thousand
ppm. Refiners would also need to take additional measures to meet the 3
ppm refinery gate standard that would likely be set by pipeline
operators. Similar to the distribution system, the measures that
refiners would need to take to further reduce sulfur content and limit
process variability are unclear, and might prove quite costly.
The overall cost of a program with a 5 ppm sulfur cap is comprised
of the program's cost in producing and distributing the fuel, offset by
the cost of the projected 1 percent fuel economy gain. As the sulfur
level reaches this very low level, the types of process changes in the
refinery and fuel distribution systems necessary to eliminate
contamination and maintain sufficient process flexibility in the system
become much more uncertain. Consequently, serious concerns have
[[Page 35518]]
been raised concerning the ability to achieve a 5 ppm sulfur cap
without drastic and costly changes to how diesel fuel is produced and
distributed today. Nevertheless, assuming the average of the per gallon
production and distribution cost ranges discussed above, this
corresponds to a net $47.1 billion 30-year NPV cost, compared to $37.7
billion for the 15 ppm sulfur cap proposal. Considering the
NOX emissions benefits (unchanged from the 15 ppm sulfur cap
case) and the PM emissions benefits (slightly improved), the resulting
aggregate cost effectiveness is projected to be $1900 per ton of
NOX+NMHC and $4500 per ton of PM (including the
SO2 credit). These compare to $1500 per ton of
NOX+NMHC and $1900 per ton of PM for the 15 ppm sulfur cap
proposal.
3. What About a 50 ppm Sulfur Level?
The American Petroleum Institute has proposed that we set a sulfur
cap for highway diesel fuel of 50 ppm with a required refinery output
average of 30 ppm, along with other proposal elements.\160\ API's
proposal is based on their assessment of technological need and
viability. Key to API's position is the view that, ``while EPA may set
standards to encourage advanced technology, EPA must not base a sulfur
level on a particular technology the Agency predicts might prove
viable.'' However, we believe that we must set standards in the context
of real technologies that can be expected to be feasible, rather than
as a means of generally encouraging advanced technology. With this in
mind, we have analyzed the impact that a 50 ppm sulfur cap would have
on technology enablement, vehicle and fuel costs, and emissions
reductions. The results of this analysis are provided below. Analysis
details are provided in the Draft RIA. We encourage comment on this
assessment, preferably accompanied by data and analysis supporting the
commenter's views.
---------------------------------------------------------------------------
\160\ Letter from Red Cavaney of API to EPA Administrator Carol
Browner, dated February 7, 2000, EPA docket A-99-06.
---------------------------------------------------------------------------
As discussed in detail in section III.F, we believe that diesel
fuel needs to be desulfurized to the 15 ppm level to enable emission
control technologies capable of meeting the proposed standards. Setting
a fuel sulfur cap of 50 ppm would require that the PM standard be set
at a less stringent level to accommodate the approximate tripling of
sulfate PM production in the trap compared to a 15 ppm cap. However, we
believe increased fuel sulfur would have an even larger effect on
robust trap regeneration than on sulfate production, bringing into
question the very viability of PM traps at the higher sulfur levels. As
discussed in section III.F.1, field experience in Sweden, where below
10 ppm diesel fuel sulfur is readily available, has been good.
Experience has also been good in regions without extended periods of
cold ambient conditions (such as the United Kingdom) using 50 ppm cap
low sulfur fuel. However, field tests in Finland, where colder winter
conditions are sometimes encountered (similar to many parts of the
United States), have revealed a failure rate of 10 percent, due to
insufficient trap regeneration. We believe that failures of the
severity experienced with 50 ppm fuel in Finland would be unacceptable.
These problems could become even more pronounced in light-duty
applications, which tend to involve cooler exhaust streams, making
regeneration more difficult. Field data with such applications is still
sparse.
One means of attempting to resolve these problems is through use of
an active regeneration mechanism, such as electric heaters or fuel
burners. These could potentially introduce additional hardware and fuel
consumption costs. They would also raise reliability concerns, based on
past experience with such approaches. Active regeneration failures in
PM traps would be of more concern than in NOX exhaust
emission control devices because they involve the potential for
complete exhaust stream plugging, runaway regeneration at very high
temperatures, trap melting, engine stalling, and stranding of motorists
in severe weather. As a result, we do not consider dependence on active
PM trap regeneration to be a sufficient basis for establishing PM trap
feasibility.
NOX adsorber technology would likely be infeasible with
50 ppm sulfur fuel as well, due to the rapid poisoning of
NOX storage sites. Desulfation would be needed much more
frequently and with a much higher resulting fuel consumption. Even if
the fuel economy penalty could somehow be justified, we expect that
overly frequent desulfation could cause unacceptable adsorber
durability or driveability problems (because of the difficulty in
timing the desulfation to avoid driving modes in which it might be
noticed by the driver). A less stringent NOX standard could
help to mitigate these concerns by allowing the NOX storage
bed to sulfate up to a greater degree before desulfating. However, this
might then cause deeper sulfate penetration into the storage bed and
thus possible long-term degradation because of the difficulty of
removing this deeper sulfate.
Instead, we expect that diesel fuel with an average fuel sulfur
level of 30 ppm and a cap of 50 ppm could enable lean NOX
catalyst technology (described in section III.E). These devices can
provide modest NOX reductions and, because of their reliance
on precious metal catalyst, also serve the function of a diesel
oxidation catalyst, removing some of the gaseous hydrocarbons and the
soluble organic fraction of PM. Unfortunately, lean NOX
catalysts also share the oxidation catalyst's tendency to convert fuel
sulfur into sulfate PM, and do so even more aggressively because they
require higher precious metal loadings to reduce NOX. They
also require a fairly large addition of diesel fuel to accomplish
NOX reduction, typically about 4 percent or more of total
fuel consumption. The injected fuel also makes it difficult to achieve
an overall hydrocarbon reduction, despite the potential to convert much
of the engine-out hydrocarbons over the catalyst. Typically, current
lean NOX catalyst designs actually show a net hydrocarbon
increase.
We have assumed that lean NOX catalysts could be
developed over time to deliver 20 percent reductions in NOX
(well beyond their current proven performance over the Federal Test
Procedure) with a net PM reduction of 20 percent and no net increase in
gaseous hydrocarbons with a 4 percent fuel economy penalty. Although
this PM reduction level is below that achieved by current diesel
oxidation catalysts, it represents an ambitious target to designers
attempting to balance NOX reduction with sulfate production
from the still substantial sulfur in the fuel. We have estimated that
lean NOX catalysts (including their diesel oxidation
catalyst function) would add an average long term cost of $603 to a
heavy-duty vehicle, inclusive of maintenance savings realized through
the use of low sulfur fuel. This is lower than the cost increase for
technologies enabled by 15 ppm sulfur fuel.
Based on the 20% expected emission reductions, we believe the
appropriate emissions standards at a 30 ppm average / 50 ppm cap diesel
sulfur level would be 1.8 g/bhp-hr NOX and 0.08 g/hp-hr PM.
Because the enabled technologies do not allow very large emission
reductions and stringent emission standards, it is conceivable that
continued progress in engine design may eventually allow these
standards to be met through improvements in EGR and combustion
optimization, although we cannot outline such a technology path at this
time. It is likely that such a path would still involve a substantial
fuel economy penalty.
[[Page 35519]]
The 50 ppm sulfur cap would therefore result in projected
NOX and PM emission reductions in 2020 of 540,000 and 17,000
tons per year, respectively, compared to 2.0 million and 83,000 tons
per year for a 15 ppm cap. It should be noted that virtually none of
the PM reduction comes from a reduction in the soot component of PM.
The cost of meeting a 50 ppm sulfur cap at the refinery would be
substantially less costly than meeting the proposed cap of 15 ppm. In
some cases, refiners may be able to meet a 50 ppm cap with only
relatively minor capital investment of a few million dollars for a new
hydrogen sulfide scrubbing unit and a PSA unit to increase hydrogen
purity. New, high activity catalyst would also replace today's
catalyst. In other cases, refiners would also have to add a second
reactor. Finally, some refiners would require essentially the same two-
stage hydrotreating unit that would be required to meet the proposed 15
ppm standard. In all cases, hydrogen consumption would be somewhat less
than that required to meet the proposed 15 ppm standard.
Refiners who would be capable of meeting a 50 ppm cap with only
minor capital investment would likely be those not blending any LCO
into their diesel fuel, or those having substantial excess
hydrotreating capacity in their current unit. We estimate that about 15
percent of on-highway diesel fuel production would fall into this
category. Refiners blending some LCO into their diesel fuel (e.g., 15
percent or less), or with somewhat greater levels of LCO but also
having significant excess current hydrotreating capacity, would likely
be capable of meeting a 50 ppm cap with an additional reactor. We
estimate that about 35 percent of on-highway diesel fuel production
would fall into this category. Finally, about 50 percent of on-highway
diesel fuel production would likely require a two-stage hydrotreating
unit due to their higher LCO fraction or lack of excess current
hydrotreating capacity. Overall, we project that the average cost of
meeting the 50 ppm standard at the refinery would be about 2.3 cents
per gallon, about 1.7 cents per gallon less than the corresponding cost
for fuel meeting a 15 ppm sulfur cap.
It would be slightly less expensive to distribute the 50 ppm sulfur
fuel than the15 ppm sulfur fuel. The pipeline interface between highway
diesel fuel and higher sulfur products that must be sold with the
higher sulfur product to ensure quality of the highway diesel fuel
could be reduced. We estimate the cost savings per gallon of diesel
fuel to be about 0.01 cents.
The overall cost of a program with a 50 ppm sulfur cap with a 30
ppm average is comprised of the hardware cost of lean NOX
catalyst technology, the cost increase in producing and distributing
the fuel, and the cost of the projected 4% fuel economy loss. This
corresponds to a net $35.4 billion 30-year NPV cost, compared to $37.7
billion for the 15 ppm sulfur cap proposal. Considering the PM and
NOX emissions benefits, the resulting aggregate cost
effectiveness is projected to be $3600 per ton of NOX+NMHC
and $56,700 per ton of PM (including the SO2 credit). These
compare to $1500 per ton of NOX+NMHC and $1900 per ton of PM
for the 15 ppm sulfur cap proposal. The large difference in PM cost
effectiveness is primarily due to the fuel economy penalty and the fact
that none of the fuel cost could be allocated to hydrocarbon control,
because of the lack of a hydrocarbon benefit.
Table VI.B-5 summarizes key emissions and cost impacts of a program
adopting the sulfur levels analyzed. Note that, although the analysis
finds that a 15 ppm average/25 ppm cap standard has potential to be
adequate for enabling high-efficiency exhaust emissions controls, this
finding involves a significantly higher level of uncertainty than the
proposed 15 ppm sulfur cap, because it is based on the assumption that
exhaust emission control designs could be focused on the average fuel
sulfur levels. We believe that the possibility of some in-use fuel at
near-cap levels would necessitate designing to accommodate this level,
and they contend that this would not allow the high-efficiency
technology to be enabled. If so, the technology enablement for this
case would likely be similar to that for the 50 ppm cap case. The
analysis results show that the 50 ppm cap case does not enable high-
efficiency exhaust control technology at all.
Table VI.B-5.--Summary of Emissions and Cost Impacts at Different Fuel Sulfur Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020 emission reductions Cost impacts
(thousand tons/year) ---------------------------------------------------------------
Sulfur level -------------------------------- Fuel Aggregate 30-
Vehicle c consumption Fuel ( cents/ yr NPV ($
NOX PM (percent) gal) billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 ppm cap............................................... 2,020 86 $1,133 -1 d 6.0-7.3 d 47.1
15 ppm cap.............................................. 2,020 83 1,133 0 4.4 37.7
25 ppm cap w/15 ppm average a........................... 2,020 79 1,133 1 3.4 34.5
50 ppm cap w/30 ppm averageb ........................... 538 17 603 4 2.7 35.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Note that this sulfur level involves significant increased uncertainty with respect to technology enablement. Manufacturers have commented that the
possibility of some in-use fuel at or near the 25 ppm cap level would necessitate designing to accommodate this level, thus precluding high-efficiency
technology enablement, and making technology for this case similar to that for the 50 ppm cap case.
\b\ This sulfur level is not expected to enable high-efficiency exhaust control technology.
\c\ Costs of added hardware combined with lifetime maintenance cost impacts; figures shown for comparison purposes are long-term costs for heavy heavy-
duty vehicles.
\d\ Fuel cost based on industry analyses of refinery and distribution costs; costs could range much higher depending on fuel segregation measures
required.
We welcome comments on all aspects of these analyses for
alternative fuel sulfur standards, including the technology enablement
assessments, vehicle and fuel costs, emissions reductions, and cost
effectiveness.
4. What Other Fuel Properties Were Considered for Highway Diesel Fuel?
In addition to changes in highway diesel fuel sulfur content, we
also considered changes to other fuel properties such as cetane number,
aromatics, density, or distillation. Each of these fuel properties has
the potential to affect the combustion chemistry within the engine, and
so aid in reducing emissions of regulated pollutants. Indeed, some
manufacturers have made public statements to the effect that an
idealized highway diesel fuel is necessary in order to optimize
[[Page 35520]]
the efficiency of the next generation of heavy-duty diesel vehicles.
The focus of the fuel changes we are proposing today is to enable
diesel engines to meet much more stringent emission standards. As
described earlier in this section, we believe that diesel engines can
meet much more stringent emission standards using advanced exhaust
emission control systems, but the performance of these systems is
dramatically reduced by sulfur. Thus, we have determined that sulfur in
diesel fuel would need to be lowered. It does not appear that other
fuel properties have the same sort of effect on advanced exhaust
emission controls, and as a result we do not believe that changes in
fuel properties other than sulfur are necessary in order for heavy-duty
engines to reach the low emission levels offered by the advanced
exhaust emission controls discussed above. In fact, after conducting a
research study on this topic, industry members concluded that, ``If in
the future, fuel sulfur levels are significantly reduced in order to
enable efficient exhaust emission controls, then it should be
recognized that the exhaust emission control device becomes the primary
driver on tailpipe emissions and that all other fuel properties will
have only minor or secondary effects on the tailpipe emissions.'' \161\
---------------------------------------------------------------------------
\161\ Lee, et al., SAE 982649.
---------------------------------------------------------------------------
Emission reductions can also be achieved through changes in diesel
fuel properties as a direct means for reducing engine-out emissions. In
this approach, it is not the exhaust emission control which is being
``enabled,'' but rather the combustion process itself which is being
optimized. This approach has the advantage that the effects are fleet-
wide and immediate upon introduction of the new fuel, whereas new
engine standards do not produce significant emission reductions until
the fleet turns over. However, regulated changes in diesel fuel
properties may produce emission reductions that disappear over time, if
compliance test fuel is changed concurrently with the changes to in-use
fuel (to assure that such fuel remains representative of in-use fuels).
Manufacturers will redesign their new engines to take advantage of any
benefit a cleaner fuel provides, resulting in engines still meeting the
same emission standards in-use. Consequently, it would only be those
engines sold before the compliance test fuel changes that would be
likely to produce emission benefits, and as these engines drop out of
the fleet, so also would the benefit of changes to diesel fuel.
Even so, it is useful to consider what emission reductions are
achievable through changes to non-sulfur diesel fuel properties. The
non-sulfur fuel properties most often touted as good candidates for
producing emission reductions from heavy-duty engines are cetane number
and aromatics content. According to correlations between these fuel
properties and emissions that have been presented in various published
documents, the effects are rather small. We have estimated that an
increase in cetane number from 44 to 50 would reduce both
NOX and PM emissions by about 1 percent for the in-use fleet
in calender year 2004.\162\ Likewise a reduction in total aromatics
content from 34 volume percent to 20 volume percent would reduce both
NOX and PM emissions by about 3 percent. We expect changes
in other fuel properties to produce emission reductions that are no
greater than these effects. These reductions are insignificant in
comparison to the emission benefits projected to result from today's
proposal, and would come at a considerable refining cost. As a result,
at this time we do not believe that it is appropriate to require
changes to non-sulfur diesel fuel properties as a means for producing
reductions in engine-out emissions. There may, however, be performance
or engine design optimization benefits associated with non-sulfur
changes to diesel fuel that could justify their cost. Therefore we
welcome cross-industry collaboration on voluntary diesel fuel
improvements beyond the sulfur reduction proposed in this notice, and
we continue to solicit information on the impact of non-sulfur fuel
changes on exhaust emission control, engine-out emissions, and engine
design and performance.
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\162\ ``Exhaust emissions as a function of fuel properties for
diesel-powered heavy-duty engines,'' memorandum from David Korotney
to EPA Air Docket A-99-06, September 13, 1999.
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C. Should Any States or Territories Be Excluded From This Rule?
1. What Are the Anticipated Impacts of Using High-Sulfur Fuel in New
and Emerging Diesel Engine Technologies if Areas Are Excluded From This
Rule?
Section III discusses the technological feasibility of the emission
standards being proposed today and the critical need to have sulfur
levels reduced to 15 ppm for the technology to achieve these emission
standards. The implications to be drawn from section III with regard to
exemptions from the sulfur standards for States and Territories is
fairly straightforward. If vehicles and engines employing these
technologies to achieve the proposed emission standards will be
operated in these states or territories, then low-sulfur diesel fuel
must be available for their use.
Some have suggested allowing persons in Alaska to remove emission
control equipment to enhance the viability of using high-sulfur fuel.
In addressing this issue, we note that, under the Clean Air Act, it is
prohibited in all 50 states to remove emission control equipment from
an engine, unless that equipment is damaged or not properly
functioning, and then is replaced with equivalent properly functioning
equipment.
2. Alaska
a. Why is Alaska Unique?
There are important nationwide environmental and public health
benefits that can be achieved with cleaner diesel engines and fuel,
particularly from reduced particulate emissions, nitrogen oxides, and
air toxics (as further discussed in section II). Therefore, it is also
important to implement this program in Alaska. Any 2007 and later model
year diesel vehicles in Alaska would have to be fueled with low sulfur
highway diesel, or risk potential damage to the aftertreatment
technologies or even the engines themselves. Although the engine
standards proposed today do not have different technology and cost
implications for Alaska as compared to the rest of the country, the low
sulfur fuel program would have different implications (described
below). Therefore, in evaluating the best approach for implementing the
low sulfur fuel program, it is important to consider the extremely
unique factors in Alaska.
Section 211(i)(4) provides that the states of Alaska and Hawaii may
seek an exemption from the 500 ppm sulfur standard in the same manner
as provided in section 325 of the Clean Air Act. Section 325 provides
that upon request of Guam, American Samoa, the Virgin Islands, or the
Commonwealth of the Northern Mariana Islands, EPA may exempt any person
or source, or class of persons or sources, in that territory from any
requirement of the CAA, with some specific exceptions. The requested
exemption could be granted if EPA determines that compliance with such
requirement is not feasible or is unreasonable due to unique
geographical, meteorological, or economic factors of the territory, or
other local factors as EPA considers significant.
Unlike the rest of the nation, Alaska is currently exempt from the
500 ppm
[[Page 35521]]
sulfur standard for highway diesel fuel (as discussed in section c
below). Since the beginning of the 500 ppm highway diesel fuel program,
we have granted Alaska exemptions from meeting the sulfur standard and
dye requirements, because of its unique geographical, meteorological,
air quality, and economic factors. These unique factors are described
in more detail in the Draft Regulatory Impact Analysis contained in the
docket.
Second, in Alaska, unlike in the rest of the country, diesel fuel
consumption for highway use represents only five percent of the State's
total distillate fuel consumption, because of the relatively small
numbers of vehicles in the State. Most of this fuel is produced by
refineries located in Alaska, primarily because of the more severe
cloud point specification needed for the extremely low temperatures
experienced in much of Alaska during the winter. There are four
commercial refineries in Alaska. Only one of these refineries currently
has any desulfurization capacity, which is relatively small.
Consequently, because these refineries would have to reduce sulfur from
uncontrolled levels to meet the proposed 15 ppm standard, these
refineries could incur substantially higher costs than those in the
rest of the nation. Given the very small highway diesel demand,
however, it is doubtful that more than one or two Alaska refineries
would choose to produce low sulfur highway fuel, and these refiners
could even decide to import it from refineries outside of Alaska.
Third, Alaska's highway diesel vehicle fleet is relatively small,
particularly outside the Federal Aid Highway System. The State
estimates that there are less than 9000 diesel vehicles in the entire
State, with less than 600 of these vehicles in all of rural Alaska. The
State also indicates that these vehicles are predominantly older than
the average elsewhere.\163\
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\163\ See further discussion in the Draft RIA (Chapter VIII).
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Finally, Alaska's fuel distribution system faces many unique
challenges. Unlike the rest of the country, because of its current
exemption from the 500 ppm sulfur standard, Alaska does not currently
segregate highway diesel fuel from that used for off-road, marine,
heating oil, and other distillate uses. Therefore, the distribution
system costs for segregating a low sulfur grade of diesel for highway
uses will be significant. The existing fuel storage facilities limit
the number of fuel types that can be stored. In addition to significant
obstacles to expanding tankage in Alaska, the cost of constructing
separate storage facilities, and providing separate tanks for
transporting low-sulfur diesel fuel (e.g., by barge or truck), could be
significant. Most of Alaska's communities rely on barge deliveries, and
ice formation on the navigable waters during the winter months
restricts fuel delivery to these areas. Construction costs are 30
percent higher in Alaska than in the lower-48 states, due to higher
costs for freight deliveries, materials, electrical, mechanical, and
labor. There is also a shorter period of time during which construction
can occur, because of seasonal extremes in temperature and the amount
of daily sunlight.
b. What Flexibilities Are We Proposing for Alaska?
Because of the unique circumstances in Alaska, we are proposing an
alternative option for implementing the low sulfur fuel program in
Alaska. We are proposing to provide the State an opportunity to develop
an alternative low sulfur transition plan for Alaska. We would intend
to facilitate the development of this plan by working in close
cooperation with the State and key stakeholders. This plan would need
to ensure that sufficient supplies of low sulfur diesel fuel are
available in Alaska to meet the demand of any new 2007 and later model
year diesel vehicles. Given that Alaska's demand for highway diesel
fuel is very low and only a small number of new diesel vehicles are
introduced each year, it may be possible to develop an alternative
implementation plan for Alaska in the early years of the program that
provides low sulfur diesel only in sufficient quantities to meet the
demand from the small number of new diesel vehicles. This would give
Alaska refiners more flexibility during the transition period because
they would not have to desulfurize the entire highway diesel volume.
Our goal in offering this additional flexibility would be to transition
Alaska into the low sulfur fuel program in a manner that minimizes
costs, while still ensuring that the new vehicles receive the low
sulfur fuel they need. We expect that the transition plan would begin
to be implemented at the same time as the national program, but the
State would have an opportunity to determine what volumes of low sulfur
fuel would need to supplied, and in what timeframes, in different areas
of the State.
At a minimum, such a transition plan would need to: (1) Ensure an
adequate supply (either through production or imports), (2) ensure
sufficient retail availability of low sulfur fuel for new vehicles in
Alaska, (3) address the growth of supply and availability over time as
more new vehicles enter the fleet, (4) include measures to prevent
misfueling, and (5) ensure enforceability. We would anticipate that, to
develop a workable transition plan, the State would likely work in
close cooperation with refiners and other key stakeholders, including
retailers, distributors, truckers, engine manufacturers, environmental
groups, and other interested groups. For example, the State would
likely rely on input from the trucking industry in determining the
expected low sulfur fuel volume needed in Alaska, based on the
anticipated number of new vehicles, and how this volume is expected to
grow during the first few years of the program. Similarly, the State
would likely rely on the Alaska refiners' input regarding plans for
supplying (either through production or imports) low sulfur fuel to
meet the expected demand. Further, the State would likely rely on input
and cooperation from retailers and distributors to determine at which
locations the low sulfur fuel should be made available. Retailers
offering low sulfur fuel would have to take measures to prevent
misfueling, such as pump labeling. All parties in the distribution
system would need to ensure the low sulfur fuel remains segregated and
take measures to prevent sulfur contamination, in the same manner as
described for the national program in section VIII.
If the State anticipates that the primary demand for low sulfur
fuel will be along the highway system (e.g., to address truck traffic
from the lower 48 states) in the early years of the program, then the
initial stages of the transition plan could be focused in these areas.
We believe it would be appropriate for the State to consider an
extended transition schedule for implementing the low sulfur program in
rural Alaska, as part of the state's overall plan, based on when they
anticipate the introduction of a significant number of 2007 and later
model year vehicles in the remote areas.
Under such an approach, the State would be given the opportunity to
develop such a transition plan, as an alternative to the national
program, and submit it to EPA. Our goal would be to help facilitate the
development of the plan, by working closely with the State and the
stakeholder group so they would have an opportunity to address EPA's
concerns in their submittal. We envision that the State would develop
and submit this plan to EPA within about one year of the final diesel
rule. Our goal would be to conduct a rulemaking and publish a final
rule
[[Page 35522]]
promulgating a new regulatory scheme for Alaska, if appropriate. The
goal would be to issue a final rule within one year of Alaska's
submittal of the plan, so that refiners and other affected parties
would have certainty as to their regulatory requirements. We request
comment on the timing for the State to submit such an alternative plan,
and for EPA to conduct the rulemaking action. If the State chose not to
submit an alternative plan, or if the plan did not provide a reasonable
alternative for Alaska as described above, then Alaska would be subject
to the national program.
We seek comment on all aspects of this approach, and on other
approaches that may have merit, to provide additional flexibility in
transitioning the low sulfur fuel program for Alaska.
c. How Do We Propose to Address Alaska's Petition Regarding the 500 ppm
Standard?
Background
On February 12, 1993, Alaska submitted a petition under section 325
of the Act to exempt highway vehicle diesel fuel in Alaska from
paragraphs (1) and (2) of section 211(i) of the Act, except for the
minimum cetane index requirement.\164\ The petition requested that we
temporarily exempt highway vehicle diesel fuel in communities served by
the Federal Aid Highway System from meeting the sulfur content
specified in section 211(i) of the Act and the dye requirement for non-
highway diesel fuel of 40 CFR 80.29, until October 1, 1996. The
petition also requested a permanent exemption from those requirements
for areas of Alaska not reachable by the Federal Aid Highway System--
the remote areas. On March 22, 1994, (59 FR 13610), we granted the
petition based on geographical, meteorological, air quality, and
economic factors unique to Alaska.
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\164\ Copies of information regarding Alaska's petition for
exemption and subsequent requests by Alaska and actions by EPA are
available in public docket A-96-26.
---------------------------------------------------------------------------
On December 12, 1995, Alaska submitted a petition for a permanent
exemption for all areas of the State served by the Federal Aid Highway
System, that is, those areas covered only by the temporary exemption.
On August 19, 1996, we extended the temporary exemption until October
1, 1998 (61 FR 42812), to give us time to consider comments to that
petition that were subsequently submitted by stakeholders. On April 28,
1998 (63 FR 23241) we proposed to grant the petition for permanent
exemption. Substantial public comments and substantive new information
were submitted in response to the proposal. To give us time to consider
those comments and new information, we extended the temporary exemption
for another nine months until July 1, 1999 (September 16, 1998, 63 FR
49459). During this time period, we started work on a nationwide rule
to consider more stringent diesel fuel requirements, particularly for
the sulfur content (i.e., today's proposed rule). To coordinate the
decision on Alaska's request for a permanent exemption with this
nationwide rule on diesel fuel quality, we extended the temporary
exemption until January 1, 2004 (June 25, 1999 64 FR 34126).
Today's Proposed Action
As mentioned above, Alaska has submitted a petition for a permanent
exemption from the 500 ppm standard for areas not served by the Federal
Aid Highway System. Our goal is to take action on this petition in a
way that minimizes costs through Alaska's transition to the low sulfur
program. The cost of compliance could be reduced if Alaska refiners
were given the flexibility to meet the low sulfur standard in one step,
rather than two steps (i.e., once for the current 500 ppm sulfur
standard in 2004 when the temporary exemption expires, and again for
the proposed 15 ppm standard in 2006). Therefore, we propose to extend
the temporary exemption for the areas of Alaska served by the Federal
Aid Highway System from January 1, 2004 (the current expiration date)
to the proposed effective date for the proposed 15 ppm sulfur standard
(i.e., April 1, 2006 at the refinery level; May 1, 2006 at the terminal
level; and June 1, 2006 at all downstream locations).
As discussed in section b above, we are proposing to allow Alaska
to develop a transition plan for implementing the 15 ppm sulfur
program. During this transition period, it is possible that both 15 ppm
(for proposed 2007 and later model year vehicles) and higher sulfur
(for older vehicles) highway fuels might be available in Alaska. To
avoid the two-step sulfur program described above, we seek comment on
whether we should consider additional extensions to the temporary
exemption of the 500 ppm standard beyond 2006 (e.g., for that portion
of the highway pool that is available for the older technology vehicles
during Alaska's transition period). We would expect that any additional
temporary extensions, if appropriate, would be made in the context of
the separate rulemaking taking action on Alaska's transition plan (as
described in the previous section).
As in previous actions to grant Alaska sulfur exemptions, we would
not base any vehicle or engine recall on emissions exceedences caused
by the use of high-sulfur (>500 ppm) fuel in Alaska during the period
of the temporary sulfur exemption. In addition, manufacturers may have
a reasonable basis for denying emission related warranties where damage
or failures are caused by the use of high-sulfur (>500 ppm) fuel in
Alaska.
Finally, the costs of complying could be reduced significantly if
Alaska were not required to dye the non-highway fuel. Dye contamination
of other fuels, particularly jet fuel, is a serious potential problem.
This is a serious issue in Alaska since the same transport and storage
tanks used for jet fuel are generally also used for other diesel
products, including off-highway diesel products which are required to
be dyed under the current national program. This issue is discussed
further in the Draft RIA (Chapter VIII). Therefore, we also propose to
grant Alaska's request for a permanent exemption from the dye
requirement of 40 CFR 80.29 and 40 CFR 80.446 for the entire State.
We are interested in comments on all aspects of this proposal.
3. American Samoa, Guam, and the Commonwealth of Northern Mariana
Islands
a. Why Are We Considering Excluding American Samoa, Guam, and the
Commonwealth of Northern Mariana Islands?
Prior to the effective date of the current highway diesel sulfur
standard of 500 ppm, the territories of American Samoa, Guam and the
Commonwealth of Northern Mariana Islands (CNMI) petitioned EPA for an
exemption under section 325 of the Act from the sulfur requirement
under section 211(i) of the Act and associated regulations at 40 CFR
80.29. The petitions were based on geographical, meteorological, air
quality, and economic factors unique to those territories. We
subsequently granted the petitions.\165\ With today's proposal we need
to evaluate whether to include or exclude the territories in areas for
which the fuel sulfur standard would apply.
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\165\ See 57 FR 32010, July 20, 1992 for American Samoa; 57 FR
32010, July 30, 1992 for Guam; and 59 FR 26129, May 19, 1994 for
CNMI.
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b. What are the Relevant Factors?
The key relevant factors unique to these territories, briefly
discussed below, are discussed in detail in the
[[Page 35523]]
Draft RIA. These U.S. Territories are islands with limited
transportation networks. Consequently among these three territories
there are currently only approximately 1300 registered diesel vehicles.
Diesel fuel consumption in these vehicles represents just a tiny
fraction of the total diesel fuel volume consumed in these places; the
bulk of diesel fuel is burned in marine, nonroad, and stationary
applications. Consequently highway diesel vehicles are believed to have
a negligible impact on the air quality in these territories, which,
with minor exceptions, is very good.
All three of these territories lack internal petroleum supplies and
refining capabilities and rely on long distance imports. Given their
remote location from the U.S. mainland, petroleum products are imported
from east rim nations, particularly Singapore. Although Australia, the
Philippines, and certain other Asian countries have or will soon
require low-sulfur diesel fuel, this requirement is a 500 ppm sulfur
limit, not the proposed 15 ppm sulfur limit. Compliance with low-sulfur
requirements for highway fuel would require construction of separate
storage and handling facilities for a unique grade of diesel fuel for
highway purposes, or importation of low-sulfur diesel fuel for all
purposes, either of which would significantly add to the already high
cost of diesel fuel in territories which rely heavily on United States
support for their economies.
c. What Are the Options and Proposed Provisions for the Territories?
We could include or exclude the territories in the areas for which
the proposed diesel fuel sulfur standard would apply. As in the early
1990's when the 500 ppm sulfur standard was implemented, we believe
that compliance with the proposed 15 ppm sulfur standard would result
in relatively small environmental benefit, but major economic burden.
We are also concerned about the impact to vehicle owners and operators
of running the new and upcoming engine and emission control
technologies using high-sulfur fuel. We believe that for the sulfur
exemption to be viable for vehicle owners and operators, they would
need access to either low-sulfur fuel or vehicles meeting the pre-2007
HDV emission standards that could be run on high-sulfur fuel without
significant engine damage or performance degradation.
We are proposing to exclude American Samoa, Guam and CNMI from the
proposed diesel fuel sulfur requirement of 15 ppm because of the high
economic cost of compliance and minimal air quality benefits. We are
also proposing to exclude, but not prohibit, the territories from the
2007 heavy-duty diesel vehicle and engine emissions standards, and
other requirements associated with those emission standards based on
the increased costs associated with implementing the vehicle and fuel
standards together in these territories. Thus, the territories would
continue to have access to 2006 diesel vehicle and engine technologies.
This exclusion from standards would not apply to gasoline engines and
vehicles because gasoline that complies with our regulations will be
available, and so concerns about damage to engines and emissions
control systems will not exist. As proposed this exclusion from
standards does not apply to light-duty diesel vehicles and trucks
because gasoline vehicles meeting the emission standards and capable of
fulfilling the same function would be available.
We are proposing to continue requiring all diesel motor vehicles
and engines to be certified and labeled to the applicable requirements
(either to the 2006 model year standards and associated requirements,
or to the standards and associated requirements applicable for the
model year of production) and warranted, as otherwise required under
the Clean Air Act and EPA regulations. Special recall and warranty
considerations due to the use of exempted high-sulfur fuel are proposed
to be the same as those proposed for Alaska during its proposed
transition period. To protect against this exclusion being used to
circumvent the emission requirements applicable to the rest of the
United States (i.e., continental United States, Alaska, Hawaii, Puerto
Rico and the U.S. Virgin Islands) after 2006 by routing pre-2007
technology vehicles and engines through one of these territories, we
propose to restrict the importation of vehicles and engines from these
territories into the rest of the United States. After the 2006 model
year, diesel vehicles and engines certified under this exclusion to
meet the 2006 model year emission standards for sale in American Samoa,
Guam and CNMI would not be permitted entry into the rest of the United
States.
We request comment on these exclusions and particularly on whether
it should be extended to light-duty diesel vehicle and truck standards
as well.
D. What About the Use of JP-8 Fuel in Diesel-Equipped Military
Vehicles?
In 1995, EPA issued a letter to the Deputy Under Secretary of
Defense for Environmental Security which concluded that the military
specification fuel known as JP-8 did not meet the definition of diesel
fuel under EPA's regulations and was, therefore, not subject to the
0.05 percent by weight sulfur standard. EPA also determined that
despite the slightly higher sulfur levels, the use of JP-8 in motor
vehicles by the military would not be a violation of EPA regulations as
a matter of policy. This decision was made after careful consideration
of the impact on operational readiness, logistical considerations and
cost for the military. EPA also evaluated data presented by the
military which compared the emissions of vehicles operated on typical
highway diesel and JP-8. These data supported the conclusion that there
would not be a significant adverse environmental consequence from the
limited use of JP-8 fuel. EPA's evaluation of the emissions impact was,
of course, based on the results of tests conducted using vehicles
representative of diesel emission control technology and diesel fuel in
use at that time.
The technical basis for EPA's decision on this matter may be
affected by the prospect of military vehicles equipped with the highly
sulfur sensitive technology that is expected to be used on vehicles and
engines designed to meet the standards for 2007 and beyond. We request
comment from interested parties on how to best deal with this
situation, including comment on the extent to which national security
exemptions pursued under 40 CFR 85.1708 may affect resolution of the
issue.
VII. Requirements for Engine and Vehicle Manufacturers
A. Compliance With Standards and Enforcement
We are not proposing any changes to the enforcement scheme
currently applicable to vehicles and engines under Title II of the CAA.
Thus, they would continue to apply to the vehicles and engines subject
to today's proposed standards. This includes the enforcement provisions
relating to the manufacture, importation and in-use compliance of these
vehicles and engines (see sections 202-208 of the CAA). Manufacturers
are required to obtain a certificate of conformity for their engine
designs prior to introducing them into commerce, and are subject to
Selective Enforcement Audits during production. Although there are
[[Page 35524]]
currently no regulatory requirements for manufacturers to test in-use
engines, they are responsible for the emission performance of their
engines in use. If we determine that a substantial number of properly
maintained and used engines in any engine family is not complying with
the standards in use, then we may require the manufacturer to recall
the engines and remedy the noncompliance. Failure by a manufacturer to
comply with the certification, warranty, reporting, and other
requirements of Title II can result in sanctions including civil
penalties and injunctive relief (see sections 202-208 of the CAA).
Other enforcement provisions regulating persons in addition to
manufacturers would also be applicable to the affected diesel vehicles,
including provisions such as the tampering and defeat device
prohibitions. It is also important to note that, because the CAA
defines manufacturer to include importers, all of these requirements
and prohibitions apply equally to importers.
Consideration has been given to in-use issues that may arise from
use of the new exhaust emission control technology. While it is
believed that the technology is sufficient to ensure that emission
control devices and elements of design will be effective throughout the
useful life of the vehicle, some concern has been expressed regarding
the possibility that instances of driveability or other operational
problems could occur in-use. One example brought up, is the possibility
that a vehicle could experience severe driveability problems if the PM
trap becomes plugged. At this time, however, we are confident that the
technologies will be developed to prevent these types of problems from
occurring provided the vehicle is operated on the appropriate fuel.
Nevertheless, comments are requested on any in-use problems that may
arise as a result of inclusion of exhaust emission control technology.
Your comments should address the nature of the problem, likelihood of
its occurrence and options for ensuring it does not occur.
Another issue related to certification is what (if any) maintenance
we should allow for adsorbers and traps. Our existing regulations
define these to be critical emission-related components, which means
that the amount of maintenance of them that the manufacturer is allowed
to conduct during durability testing (or specify in the maintenance
instructions that it gives to operators) is limited. We believe that
this is appropriate because, as we already noted, we expect that these
technologies will be very durable in use and will last the full useful
life with little or no scheduled maintenance. However, our existing
regulations (40 CFR 86.004-25) would allow a manufacturer to specify
something as drastic as replacement of the adsorber catalyst bed or the
trap filter after as little as 100,000-150,000 miles if there was a
``reasonable likelihood'' that the maintenance would get done. We are
concerned that some manufacturers may underdesign the adsorbers and
traps compared to the level of durability that is achievable. If this
occurred, even if most users replaced their adsorber or trap according
to the manufacturer's schedule, there would certainly be some users
that did not. Therefore, we are proposing to require that these
technologies be designed to last for the full useful life of the
engine. More specifically, the proposed regulations state that
scheduled replacement of the PM filter element or catalyst bed is not
allowed during the useful life. Only cleaning and adjustment will be
allowed as scheduled maintenance.
It may be appropriate to establish non-conformance penalties (NCPs)
for the standards being proposed today. NCPs are monetary penalties
that manufacturers can pay instead of complying with an emission
standard. In order for us to establish NCPs for a specific standard, we
would have to find that: (1) Substantial work will be required to meet
the standard for which the NCP is offered; and (2) there is likely to
be a ``technological laggard'' (i.e., a manufacturer that cannot meet
the standard because of technological (not economic) difficulties and,
without NCPs, might be forced from the marketplace). According to the
CAA (section 206(g)), such NCPs ``shall remove any competitive
disadvantage to manufacturers whose engines or vehicles achieve the
required degree of emission reduction.'' We also must determine
compliance costs so that appropriate penalties can be established. We
have established NCPs in past rulemakings. However, since the
implementation of our averaging, banking and trading program, their use
has been rare. We believe manufacturers have taken advantage of the
averaging, banking and trading program as a preferred alternative to
incurring monetary losses. At this time, we have insufficient
information to evaluate these criteria for heavy-duty engines. While we
believe that substantial work will be required to meet the 2007
standards, we currently have no information indicating that a
technological laggard is likely to exist. Recognizing that it may be
premature for manufacturers to comment on these criteria, since
implementation of these standards is still more than six years away, we
expect to consider NCPs in a future action. We welcome comment on this
approach.
Today's proposal includes PM standards for heavy-duty gasoline
engines. Because gasoline engines have inherently low PM emissions, it
may be appropriate in some cases to waive the requirement to measure PM
emissions. Therefore, we are proposing to maintain the flexibility to
allow manufacturers to certify gasoline engines without measuring PM
emissions, provided they have previous data, analyses, or other
information demonstrating that they comply with the standards. The
flexibility is the same as that allowed for PM emissions from light-
duty gasoline vehicles and for CO emissions from heavy-duty diesel
engines.
B. Certification Fuel
It is well established that measured emissions are affected by the
properties of the fuel used during the test. For this reason, we have
historically specified allowable ranges for test fuel properties such
as cetane and sulfur content. These specifications are intended to
represent most typical fuels that are commercially available in use.
Because today's action is proposing to lower the upper limit for sulfur
content in the field, we are also proposing a new range of allowable
sulfur content for testing that would be 7 to 15 ppm (by weight).
Beginning in the 2007 model year, these specifications would apply to
all emission testing conducted for Certification and Selective
Enforcement Audits, as well as any other laboratory engine testing for
compliance purposes. Because the same in use fuel is used for light-and
heavy-duty highway diesel vehicles, we are also proposing to change the
sulfur specification for light-duty diesel vehicle testing to the same
7 to 15 ppm range, beginning in the 2007 model year. We request comment
on these test fuel specifications. We also request comment regarding
whether the range of allowable test fuel properties should include the
full range of in-use properties or include the most typical range
around the average properties (e.g., 7 to 10 ppm sulfur).
C. Averaging, Banking, and Trading
We are proposing to continue the basic structure of the existing
ABT program for heavy-duty diesel engines. (Note that this includes the
Otto-cycle engine and vehicle ABT programs that were proposed on
October 29, 1999, 64 FR 58472.) This program allows manufacturers to
certify that their
[[Page 35525]]
engine families comply with the applicable standards on average. More
specifically, manufacturers are allowed to certify their engine
families with various family emission limits (FELs), provided the
average of the FELs does not exceed the standard when weighted by the
numbers of engines produced in each family for that model year. To do
this, they generate certification emission credits by producing engine
families that are below the applicable standard. These credits can then
be used to offset the production of engines in engine families that are
certified to have emissions in excess of the applicable standards.
Manufacturers are also allowed to bank these credits for later use or
trade them to other manufacturers. We are proposing some restrictions
to prevent manufacturers from producing very high-emitting engines and
unnecessarily delaying the transition to the new exhaust emission
control technology. These restrictions are described below. We are
continuing this ABT program because we believe that it would provide
the manufacturers significant compliance flexibility. This compliance
flexibility would be a significant factor in the manufacturers' ability
to certify a full line of engines in 2007 and would help to allow
implementation of the new, more stringent standard as soon as
permissible under the CAA. This is especially true given the very low
levels of the proposed standards. In some ways the ABT program is
intended to serve the same purpose as the phase-in for diesel engines.
As is described below, we have proposed some restrictions to make this
program compatible with the phase-in. Thus your comments on this ABT
program should address how it fits with the phase-in, and vice versa.
The existing ABT program includes limits on how high the emissions
from credit-using engines can be. These limits are referred to as FEL
caps. No engine family may be certified above these caps using credits.
These limits provide the manufacturers compliance flexibility while
protecting against the introduction of unnecessarily high-emitting
engines. In today's action, we are proposing to establish lower caps
for those engines that are required to comply with the proposed
standards. Specifically, we are proposing that the engines subject to
the new standards have NOX emissions no higher than 0.50 g/
bhp-hr, and PM emissions no higher than 0.02 g/bhp-hr. Without this
cap, we are concerned that one or more manufacturer(s) could use the
ABT program to unnecessarily delay the introduction of exhaust emission
control technologies. Allowing this would be contrary to one of the
goals of the phase-in program, which is to allow manufacturers to gain
experience with these technologies on a limited scale before they are
applied to their full production. Similarly, we are proposing FEL caps
of 1.0 g/mi NOX and 0.03 g/mi PM for chassis-certified
heavy-duty vehicles. We request comment on the need for and the levels
of these FEL caps.
We are proposing separate averaging sets during the phase-in
period. In one set, engines would be certified to the 2.4 g/bhp-hr
NOX+NMHC standard (which applies for model years 2004-2006),
and would be subject to the restrictions and allowances established for
those model years. In the other set, engines would be certified to the
proposed 0.20 g/bhp-hr NOX standard, and would be subject to
the restrictions and allowances proposed today. Averaging would not be
allowed between these two sets within the same model year. The reason
for this is similar to that for the low FEL caps. Allowing averaging
between the sets would be contrary to one of the goals of the phase-in
program, which is to allow manufacturers to introduce engines with
ultra-low emission technologies on a limited scale before they are
applied to their full production. We are concerned that manufacturers
could delay the introduction of NOX aftertreatment
technology, diminishing the projected benefits of the proposed program
during the phase-in. We request comment on the need for this
restriction. As a part of this restriction of cross-set averaging, we
are also proposing that banked NOX+NMHC and PM credits
generated from 2006 and earlier engines may not be used to comply with
the stricter standards that apply to 2007 and later engines (unless
such credits are generated from engines that meet all of the stricter
standards early). We are also requesting comments on alternatives to
these restrictions, such as only allowing banked credits generated from
engines below some threshold (e.g., 1.5 g/bhp-hr NOX+NMHC or
0.05 g/bhp-hr PM) to be used for compliance with the 2007 standards.
Under the threshold approach, the credits would be calculated in
reference to the threshold rather than the applicable standard. Your
alternatives should address our two primary concerns: (1) Ensuring that
manufacturers produce engines during the phase-in period that are
equipped with the advanced NOX aftertreatment controls; and
(2) ensuring that the program produces equivalent or greater emission
reductions during the phase-in period.
We propose to apply these same restrictions to the 2007 chassis-
based standards. This would affect the averaging program that was
proposed previously for model year 2004 (October 29, 1999, 64 FR
58472). We believe that these restrictions are equally necessary for
the chassis-based program, but are also open to alternatives. We are
particularly interested in the possibility of using the Tier 2 pull-
ahead approach that would allow manufacturers to phase in the new
standards on a per-vehicle basis rather than on a total gram basis.
Under this approach, for each ``2007-technology'' vehicle that a
manufacturer introduced before 2007, it could produce one ``2006-
technology'' vehicle in 2007 or later. We recognize that this approach
would be complicated for heavy-duty vehicles because of the different
weight classes, but believe that this problem could be addressed with
appropriate weighting factors (e.g, setting one 14,000 lb vehicle as
equivalent to two 8,500 lb vehicles). While it is less clear that such
an approach would work for the engine programs, we would welcome such
comments.
The Agency continues to be interested in the potential of early
benefits to be gained from retrofitting highway engines. Thus, we are
also asking for comment on various concepts by which manufacturers
could earn credits potentially to be used in a variety of programs. An
example of such credits in the 2007 MY program might include
consideration by EPA of the retiring of retrofit credits in deciding
whether to make a discretionary determination under section 207(c) of
substantial non-conformity. For discussion of related issues, see the
final rule for spark-ignition marine engines (61 FR 52088, 52095,
October 4, 1996), and the final rule for locomotive engines (63 FR
18978, 18988, April 16, 1998). We ask for comment as to what emission
benefits could be achieved by this concept and by what legal authority
such credits could be applied. Such systems would bring existing
highway engines into compliance with the standards being proposed for
new engines, or alternately with some less stringent standards levels
that still achieve large emission reductions. We ask comment on how
such an emissions reduction calculation should be formulated and how
such benefits and resulting credits should be applied. Certification
requirements for such retrofit systems could be developed along the
lines of those adopted in EPA's urban bus retrofit program (58 FR
21359, April 21, 1993). Credits would be
[[Page 35526]]
calculated based on the expected lifetime emissions benefits of the
retrofit systems. Because this benefit depends on the remaining life of
the retrofitted vehicle, and this could vary considerably, any emission
reduction formula would require the certainty to account for this in
the calculation, such as by estimating an average remaining life for
retrofits in each engine family, or by using a vehicle age-dependent
proration factor for each retrofitted system, similar to the approach
taken in the locomotive emissions rule (see Appendix K of the
Regulatory Support Document for the locomotives final rule. 63 FR
18977, April 16, 1998).
D. Chassis Certification
Heavy-duty vehicles under 14,000 pounds can generally be split into
two groupings, complete and incomplete vehicles. Complete vehicles are
those that are manufactured with their cargo carrying container
attached. These vehicles consist almost entirely of pick-up trucks,
vans, and sport utility vehicles. Incomplete vehicles are those chassis
that are manufactured by the primary vehicle manufacturer without their
cargo carrying container attached. These chassis may or may not have a
cab attached. The incomplete chassis are then manufactured into a
variety of vehicles such as recreational vehicles, tow trucks, dump
trucks, and delivery vehicles.
Recently, we proposed to require all complete Otto-cycle vehicles
between 8,500 and 14,000 pounds to be certified to vehicle-based
standards rather than engine-based standards beginning in model year
2004 (October 29, 1999, 64 FR 58472). Under this proposal manufacturers
would test the vehicles in essentially the same manner light-duty
trucks are tested. We continue to believe this approach is reasonable
and are thus proposing to continue it with the more stringent
standards. We request comment regarding the possible mandatory or
voluntary application of this program to complete diesel vehicles under
14,000 pounds.
E. FTP Changes to Accommodate Regeneration of Aftertreatment Devices
It is possible that some of the exhaust emission control devices
used to meet the proposed standard will have discrete regeneration
events that could effect emission characteristics. For example,
NOX adsorbers and actively regenerated PM traps each
incorporate discrete regenerations. The NOX adsorber stores
NOX under normal conditions until the NOX storage
capacity is nearly full, at which point, the regeneration event is
triggered to purge the stored NOX and reduce it across a
catalyst. Actively regenerated PM traps incorporate heating devices to
periodically initiate regeneration. In both cases, we would expect that
these regeneration events would be controlled by the engine computer,
and would thus be generally predictable. Even passively regenerating
catalytic PM trap designs can have discrete regeneration events.
Discrete regeneration events can be important because it is
possible for exhaust emissions to increase during the regeneration
process. The regeneration of a NOX adsorber for instance,
could result in increased particulates, NMHC and NOX due to
the rich exhaust gas required to purge and reduce the NOX.
We expect that in most cases, the regeneration events would be
sufficiently frequent to be included in the measured emissions. Our
feasibility analysis projects very frequent regeneration of the
NOX adsorbers, and continuously regenerating PM traps.
Nevertheless, this issue becomes a regulatory concern because it is
also conceivable that these emission storage devices could be designed
in such a way that a regeneration event would not necessarily occur
over the course of a single heavy-duty FTP cycle, and thus be
unmeasured by the current test procedure. Since these regeneration
events could produce increased emissions during the regeneration
process, it will be important to make sure that regeneration is
captured as part of the certification testing. We seek comment on the
need to measure regeneration emissions as part of each emission test,
and the best method of making such measurements.
In order to verify the emission levels during regeneration, we
propose that the transient FTP applicable for certification be repeated
until a regeneration occurs. The transient FTP will be repeated until a
regeneration event is confirmed. The emissions measured during the
cycle in which the regeneration occurs must be below the applicable
transient cycle standard. For example, if an actively regenerated
heavy-duty PM trap does not regenerate over the cold-soak-hot cycle,
the hot portion of the cycle will be repeated until a regeneration is
observed. The specific hot cycle with the highest emissions would be
used as the representative hot cycle, and its emissions would be
weighted with the cold cycle emissions (as is currently required) to
determine compliance with the composite emission standard for the cold-
soak-hot cycle. We seek comment on the proposed method of capturing
regeneration emissions and whether we should allow the manufacturers to
use the average hot-start emissions rather than the worst case.
This proposal is based on the assumption that the systems would
include a fairly high frequency of regeneration events (e.g., one
regeneration event per hour). We seek comment on the need to capture
regeneration emissions as part of the certification testing if the
regeneration events occur much less frequently. Similarly, we request
comment on the need to measure emissions during desulfurization of the
NOX adsorber. Would it be appropriate to allow manufacturers
to use a mathematical adjustment of measured emissions to account for
increased emissions during infrequent regeneration or desulfurization
events? For example, if a system required a desulfurization after every
20 transient cycles, and PM emissions increased by 20 percent during
desulfurization, would it be appropriate to adjust measured emissions
upward by one percent (20 percent divided by 20 cycles)?
F. On-Board Diagnostics
OBD systems help ensure continued compliance with emission
standards during in-use operation, and they help mechanics to properly
diagnose and repair malfunctioning vehicles while minimizing the
associated time and effort. We implemented OBD requirements on light-
duty applications in the 1994 model year (58 FR 9468, February 19,
1993). We recently proposed OBD requirements for 8500 to 14,000 pound
heavy-duty gasoline and diesel applications (October 29, 1999, 64 FR
58472). The 8500 to 14,000 pound requirements are scheduled for
implementation in the 2004 model year with a phase-in running through
the 2006 model year; the 2007 model year would be the first year of 100
percent OBD compliance on 8500 to 14,000 pound applications. We are
currently working with industry to develop OBD requirements for the
over 14,000 pound heavy-duty gasoline and diesel engines. Those
requirements will be proposed in a separate rulemaking and are
anticipated to be effective on or before the 2007 model year;
consequently, we are not proposing them here.
As discussed in the October 29, 1999, proposed rule, OBD system
requirements would allow for potential inclusion of heavy-duty vehicles
and engines in inspection/maintenance programs via a simple check of
the OBD system. The OBD system must monitor emission control components
for any malfunction or deterioration that could cause exceedance of
certain emission thresholds. The OBD system also
[[Page 35527]]
notifies the driver when repairs are needed via a dashboard light, or
malfunction indicator light (MIL), when the diagnostic system detects a
problem.
An OBD system is important on heavy-duty vehicles and engines for
many reasons. In the past, heavy-duty diesel engines have relied
primarily on in-cylinder modifications to meet emission standards. For
example, emission standards have been met through changes in injection
timing, piston design, combustion chamber design, use of four valves
per cylinder rather than two valves, and piston ring pack design and
location improvements. In contrast, the proposed 2004 and 2007
standards represent a significant technological challenge that would
require use of EGR and exhaust emission control devices whose
deterioration or malfunction can easily go unnoticed by the driver. The
same argument is true for heavy-duty gasoline vehicles and engines;
while emission control is managed both with engine design elements and
exhaust emission control devices, the latter are the primary emission
control features. Because deterioration and malfunction of these
devices can go unnoticed by the driver, and because their sole purpose
is emissions control, some form of detection is crucial. An OBD system
is well suited to detect such deterioration or malfunction.
Today's proposal does not contain any new OBD requirements. The
vehicles and engines designed to comply with today's proposed emission
standards would be required to comply with the OBD requirements already
in place or proposed for implementation in the 2004 model year (i.e.,
light-duty and heavy-duty through 14,000 pounds). However, because some
of the existing OBD requirements are based on multipliers of the
applicable emission standards, we request comment regarding the effect
of the low levels of the proposed standards on these OBD requirements.
We believe that these requirements will be feasible for these engines.
If you believe that the OBD requirements will not be feasible, you
should include in your comments suggestions for how they should be
revised to make them feasible.
We are also requesting comment regarding whether there are new OBD
requirements that should be adopted for these exhaust emission control
technologies. Comments supporting new requirements should indicate
whether they would be intended only to prevent emission problems, or
would also be intended to prevent performance problems, such as exhaust
emission control plugging.
G. Supplemental Test Procedures
To ensure better control of in-use emissions, we recently proposed
(October 29, 1999, 64 FR 58472) \166\ to add two supplemental sets of
requirements for heavy-duty diesel engines: (1) A supplemental steady-
state test and accompanying limits; and (2) NTE Limits. Both types of
these proposed supplemental emission requirements are expressed as
multiples of the normal duty cycle-weighted emission standards, or FEL
if the engine is certified under the ABT program, whichever is
applicable. For example, the diesel engine NTE limit for NOX
+ NMHC emissions from 2004 engines would be 1.25 times the 2.4 g/bhp-hr
emission standard, or 1.25 times the applicable FEL. Although we are
not proposing any changes to these requirements, we are requesting
comment on the feasibility of technologies needed to meet the standards
being proposed in this notice, in the context of applying these
multipliers to these new standards.
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\166\ Today's notice proposes to apply the heavy-duty diesel NTE
and supplemental steady-state test provisions intended to be
finalized as part of the 2004 standards rulemaking. The October 29,
1999 proposal for that rule contained the description of these
provisions. We expect that a number of modifications will be made to
those provisions in the FRM for that rule based on feedback received
during the comment period. While the details of the final provisions
are not yet available, we will provide the necessary information in
the docket for this rule as soon as it becomes available in order to
allow for comment.
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Like current requirements, these new requirements would apply to
certification, production line testing, and vehicles in actual use. All
existing provisions regarding standards (e.g., warranty, certification,
recall) would be applicable to these new requirements as well. The
steady-state test was proposed because it represents a significant
portion of in-use operation of heavy-duty diesel engines that is not
adequately represented by the FTP. The combination of these
supplemental requirements is intended to provide assurance that engine
emissions achieve the expected level of in-use emissions control over
expected operating regimes in-use. We stated in the previous NPRM that
we believed that compliance with these requirements would not require
manufacturers to add additional emission control technologies, but
would require manufacturers to put forth some effort to better optimize
their engines with respect to emissions over a broader range of
operating conditions. You should read the previous NPRM for more
detail. You should also read the comments that we received in response
to this proposal. In those comments, some engine manufacturers raised
concerns regarding the feasibility of implementing these requirements
in the 2004 model year, in the context of the technologies expected to
be seen in the 2004 time frame (principally cooled EGR, advanced fuel
injection systems, advanced turbo-charging systems).\167\ Many of these
comments question the feasibility of meeting the proposed NTE emission
limits under the high-load regions of the proposed NTE zone,
particularly under conditions of high temperature and/or altitude.
These comments are highlighted here because the resolution of these
issues for the 2004 diesel engine standards, may also be relevant to
today's rulemaking.
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\167\ See, for example, comments from Engine Manufacturers
Association, Detroit Diesel Corporation, Navistar International
Transportation Corp., Mack Trucks Inc., in EPA Air Docket No. A-98-
32.
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We plan to apply these requirements with the proposed 2007
standards in the same manner as they would be applied with the 2004
standards, if adopted. There is some concern that certain exhaust
emission control devices, though capable of providing large emission
reductions and performing robustly over a wide range of expected
operating conditions, may have degraded performance in some conditions
included in the NTE or supplemental steady-state testing requirements.
We are thus asking for comments and supporting data related to this
concern. Your comments should address the following questions:
--What is the relative ability of the emission control technologies
being considered in today's action to control emissions over the full
range of speeds and loads typically encountered in actual use? Are
there areas of the map in which the emission controls are significantly
less effective?
--What is the relative need for emission reduction for different areas
of the speed-load map?
--How do the emission control technologies being considered in today's
action perform at different ambient conditions?
--Are the multipliers proposed previously the most appropriate
multipliers for ensuring in-use emissions control on exhaust emission
control-equipped engines?
--Are there other cost effective approaches to controlling in-use
emissions for engines equipped with exhaust emission controls?
--Are the technological issues raised in the 2004 rulemaking equally
applicable to diesel engines featuring
[[Page 35528]]
advanced exhaust emission controls and designed to meet the proposed
2007 standards?
H. Misfueling Concerns
As explained in Section III, the emissions standards contained in
this proposal will likely make it necessary for manufacturers to employ
exhaust emission control devices that require low-sulfur fuel to ensure
proper operation. This proposal therefore restricts the sulfur content
of highway diesel fuel sold in the U.S. There are, however, some
situations in which vehicles requiring low-sulfur fuel may be
accidentally or purposely misfueled with higher-sulfur fuel. Vehicles
operated within the continental U.S. may cross into Canada and Mexico,
countries which have not confirmed that they plan to adopt the same low
sulfur requirements we are proposing here. In addition, high-sulfur
nonroad fuel may illegally be used by some operators to fuel highway
vehicles. Any of these misfueling events could seriously degrade the
emission performance of sulfur-sensitive exhaust emission control
devices, or perhaps destroy their functionality altogether.
There are, however, some factors that help to mitigate concerns
about misfueling. Most operators are very conscious of the need to
ensure proper fueling and maintenance of their vehicles. The fear of
large repair and downtime costs may often outweigh the temptation to
save money through misfueling.
The likelihood of misfueling in Canada and Mexico is lessened by
current cross-border shipment practices and prospects for eventual
harmonization of standards. Canada has historically placed a priority
on harmonization with U.S. vehicle emission standards. They have also
placed a priority on harmonization with U.S. fuels standards, as they
import a significant amount of fuel from the U.S. and do not want to
become a ``dumping ground'' for fuel that does not comply with U.S.
fuel standards. We think it likely therefore that Canada will harmonize
with the U.S. revised engine standards and the fuel sulfur levels
required to support those standards. This will offer vehicle owners the
option of refueling with low-sulfur fuel there. Even if Canada were to
lag the U.S. in mandating low-sulfur fuels, these fuels would likely
become available along major through routes to serve the needs of U.S.
commercial traffic that have the need to purchase it. In addition,
there is less potential for U.S. commercial vehicles needing low-sulfur
fuel to refuel in Canada because Canadian fuel is currently more costly
than U.S. fuel. As a result, most vehicles owners will prefer to
purchase fuel in the U.S., prior to entering Canada, whenever possible.
This is facilitated by large tractor-trailer trucks that can have long
driving ranges--up to 2,000 miles or so--and the fact that most of the
Canadian population lives within 100 miles of the United States/Canada
border.
In Mexico, the entrance of trucks beyond the border commercial zone
has been prohibited since before the conclusion of the North American
Free Trade Agreement in 1994. This prohibition applies in the U.S. as
well, as entrance of trucks into the U.S. beyond the border commerce
zone is also not allowed. Since these prohibitions are contrary to the
intent of the Free Trade Agreement, a timetable was established to
eliminate them.\168\ However, these prohibitions are a point of
contention between the U.S. and Mexico and remain in force at this
time.
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\168\ See NAFTA, Volume II, Annex I, Reservations for Existing
Measures and Liberalization Commitments, Pages I-M-69 and 70, and
Pages I-U-19 and 20.
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The NAFTA negotiations included creation of a ``corridor'' where
commercial truck travel occurs, and where Mexico is obligated to
provide ``low-sulfur'' fuel. At the time of the NAFTA negotiations,
``low-sulfur'' fuel was considered 500 ppm, which was the level needed
to address the needs of engines meeting the 1994 emission standards.
The travel prohibition currently in place may be lifted at some point.
At that time, the issue of assuring, for U.S. vehicles, fuel with a
sulfur level needed by the technology that results from this regulation
may need to be addressed.
Even considering these mitigating factors, we believe it is
reasonable to propose two additional measures with very minor costs to
manufacturers and consumers. First, we are proposing a requirement that
heavy-duty vehicle manufacturers notify each purchaser of a model year
2007 or later diesel-fueled vehicle that the vehicle must be fueled
only with the low-sulfur diesel fuel meeting our regulations. We
believe this requirement is necessary to alert vehicle owners to the
need to seek out low-sulfur fuel when operating in areas such as Canada
and Mexico where it may not be widely available. We are also proposing
that model year 2007 and later heavy-duty diesel vehicles must be
equipped by the manufacturer with labels on the dashboard and near the
refueling inlet that say: ``Ultra-Low Sulfur Diesel Fuel Only.'' We
request comment on the need for these measures, alternative suggestions
for wording, whether or not these requirements should exist for only a
limited number of years, and whether any vehicles certified to the new
standards without the need for low-sulfur fuel should be exempted. We
also request comment on whether additional measures are needed to
preclude misfueling, such as requiring that the new technology vehicles
be equipped with refueling inlet restrictors that can only accept
refueling nozzles from pumps that dispense low-sulfur fuel. We would
also need to require that these pumps (or the high-sulfur fuel pumps)
be correspondingly equipped with specialized nozzles or other devices
to complement the vehicle refueling inlet restrictor.
I. Light-Duty Provisions
We are proposing that the heavy-duty vehicle labeling and purchaser
notification requirements discussed in section VII.H be applied to the
light-duty diesel vehicles certified to the final Tier 2 standards as
well, because these vehicles are expected to require the low-sulfur
fuel and so would be equally susceptible to misfueling damage.
J. Correction of NOX Emissions for Humidity Effects
Engine-out emissions of NOX are known to be affected
significantly by the amount of moisture in the intake air. The water
absorbs heat which lowers combustion temperatures, and thus lowers
NOX emissions. Our existing regulations include equations
that give correction factors to eliminate this effect. For example, if
the equation indicated that NOX emissions measured on a
relatively high humidity day would be about three percent lower than
would be expected with standard humidity, they would be multiplied by
1.03 to correct them to standard conditions. However, these equations
were developed many years ago, based on data from older technology
engines. We are concerned that these equations may not be valid for
engines equipped with catalytic emission controls. It is possible that
with catalytic systems, the effect may be very different. Perhaps with
these newer technologies, the effect will not be significant and
correction factors will not be needed. Therefore, we are requesting
comment regarding the accuracy of the existing equations for engines
equipped with NOX adsorbers, and the need for such
correction factors for the 2007 standards. To the extent possible, your
comments should address the broader issue of the need for correction
factors for NOX and other
[[Page 35529]]
pollutants based on changing ambient conditions. This issue was also
discussed in the October 29, 1999 proposal (64 FR 58472). You should
read that discussion and the comments that we received in response to
that proposal.
VIII. Requirements for Refiners, Importers, and Fuel Distributors
A. Compliance and Enforcement
1. Overview
The proposed rule would create a national, industry-wide sulfur cap
standard for highway diesel fuel of 15 ppm. This standard could be
enforced through sampling and testing at all points in the distribution
system, combined with inspection of fuel delivery records and other
commercial documents. The compliance requirements of this proposed rule
would thus be very similar to the current diesel sulfur rule, except
that the sulfur standard would be substantially more stringent.\169\
Since the 15 ppm cap would be the maximum acceptable sulfur level at
the retail level, pipelines might set more stringent refiner
specifications to account for test variability and contamination. See
section VIII.A.2 for a discussion of the refinery level standard and
enforcement testing.
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\169\ 40 CFR 80.29-80.30.
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Under the proposed rule, all parties in the distribution system
would continue to be subject to the current diesel fuel requirements
and prohibitions concerning aromatics and cetane (40 CFR 80.29(a)).
Furthermore, until the proposed implementation dates, all of the
requirements and prohibitions of the presently effective diesel fuel
control rule will remain in effect with the limited modification
concerning sulfur test methods as discussed in section VIII.A.4.
Diesel fuel not covered by today's proposed rule includes that used
for off-highway mobile source purposes such as aircraft, off-road
machinery and equipment, locomotives, boats and marine vessels, and for
stationary source purposes such as utilities (electrical power
generation), portable generators, air compressors, steam boilers, etc.
Also excluded is highway diesel fuel exported for sale outside the
United States and its territories, and that specified for research and
development subject to certain restrictions. Today's proposal would
allow the use of used motor oil in pre-2007 model year and specially
certified 2007 and later model year highway engines subject to certain
restrictions (see section VIII.A.3.b).
It should be noted that, while this preamble uses the common
vernacular ``highway diesel fuel,'' the terminology used in the
proposed regulations refers to ``motor vehicle diesel fuel'' in order
to be consistent with the definitions and authorities under the Clean
Air Act (see sections 202(a), 211(c), and 216(2)). The definition of
``motor vehicle diesel fuel'' clarifies that nonroad engines and
nonroad vehicles are not motor vehicles or motor vehicle engines. This
is intended to clarify the definition. Diesel fuel that is available
for use by both motor vehicles and engines and nonroad vehicles and
engines would be treated as motor vehicle diesel fuel and still subject
to the low sulfur diesel standard. For example, a diesel fuel pump used
by nonroad equipment and motor vehicles must carry diesel fuel meeting
the low sulfur diesel fuel requirements for motor vehicles.
2. What Are the Requirements for Refiners and Importers?
a. General Requirements
The sulfur sensitivity of emission controls on model year 2007 and
later vehicles requires that the sulfur content of diesel fuel at the
retail pump must not exceed 15 ppm (see section III). Thus, the
proposed rule would require refiners and importers, and all other
parties in the distribution system, to comply with the industry-wide
sulfur cap standard of 15 ppm for all highway diesel fuel, unless
specifically exempted (see sections VIII.A.6 and 7).
Under the proposed approach, there would be no published
enforcement test tolerance. If an enforcement test tolerance were
allowed, a more stringent refinery level sulfur standard would be
required to ensure the proposed 15 ppm retail level cap is attained. We
expect that the diesel fuel refining and distribution industry would
establish appropriate upstream commercial specifications to ensure the
15 ppm standard is met downstream. These parties are in the best
position to determine what the refinery level commercial specifications
need to be, and they are in control of the means to achieve those
specifications. Further, they may take advantage of improvements over
time in testing precision and contamination prevention measures to
adjust their operations to minimize costs. However, we recognize that
because of concerns about test variability and contamination in the
fuel distribution system, pipelines may set sulfur specifications that
would be more stringent than the regulatory standard.\170\
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\170\ See section IV.D. regarding the anticipated sulfur level
at the refinery gate necessary to accommodate variability in
production, variability in the proposed sulfur measurement procedure
(discussed in detail in section VII.A.), and contamination in the
distribution system.
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As discussed below, we are not proposing that refiners or importers
engage in mandatory sampling and testing of every batch of diesel fuel
they produce or import under the proposed industry-wide sulfur cap
program. However, if some approach is finalized other than what has
been proposed, then every-batch testing by refiners and importers, and
associated recordkeeping and reporting requirements, may be necessary.
b. Dyes and Markers
Under the federal tax code requirements and the current EPA diesel
fuel rule, diesel fuel intended for highway use can generally be
distinguished by its color from fuel intended for off-highway use.\171\
The current EPA diesel fuel regulations, at 40 CFR 80.29(b), provides
that any diesel fuel that does not show visible evidence of dye solvent
red 164 (which has a characteristic red color in fuel) is considered to
be available for use as diesel highway fuel and is subject to the
requirements and prohibitions associated with diesel highway fuel.
However, under the tax code, highway diesel fuel sold for certain tax
exempt uses may also be dyed red. Therefore, some red-dyed diesel fuel
is legal highway fuel under the EPA diesel fuel rule.
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\171\ See section 4082 of the Internal Revenue Code.
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Diesel fuel for off-highway use would continue to be dyed red under
today's proposal, except in Alaska (see section VI.C). We do not
believe that any additional dye requirement is needed to enhance
compliance or enforcement effectiveness of the proposed rule.
3. What Requirements Apply Downstream?
a. General Requirements
Due to the adverse effects of diesel fuel containing more than 15
ppm sulfur on model year 2007 and later vehicles, as discussed in
section III, diesel fuel at all levels of the distribution system would
be required to meet the 15 ppm standard. The proposed rule would
stagger the implementation dates for compliance with the standard,
based on a facility's position in the distribution system as a refiner,
distributor, or retailer. As with other fuels programs, EPA enforcement
personnel would sample and test for compliance with
[[Page 35530]]
this downstream standard at all points in the distribution system.
Under the proposed presumptive liability scheme, if a violation is
found at any point in the distribution system, all parties in the
distribution system for the fuel in violation are responsible unless
they can establish a defense. See section VIII.A.8 regarding liability,
penalty and defense provisions.
Under the proposed diesel sulfur program, it is imperative that
distribution systems segregate highway diesel fuel from high sulfur
distillate products such as home heating oil and nonroad diesel fuel.
The sulfur content of those products is frequently as high as 3,000
ppm. Our concern extends to potential misfueling at retail outlets and
wholesale purchaser-consumer facilities, even if segregation of the
different grades of diesel fuel has been maintained in the distribution
system.
Misfueling model year 2007 and later diesel vehicles with higher
sulfur fuel could severely damage their emission controls and cause
driveability problems. In order to discourage accidental misfueling of
highway vehicles with higher sulfur distillates such as nonroad diesel
fuel we are proposing that these fuel pumps be labeled. The proposed
rule would require that retailers and wholesale purchaser-consumers
selling or dispensing nonroad diesel fuel or other high sulfur
distillates in addition to highway diesel fuel must label any
dispensers of this higher sulfur fuel. The label would have to indicate
that the fuel is high sulfur and state that the fuel is illegal for use
in motor vehicles.
All parties in the distribution system would be subject to
prohibitions against selling, transporting, storing, or introducing or
causing or allowing the introduction of diesel fuel having a sulfur
content exceeding 15 ppm into highway diesel vehicles. Certain product
transfer document (PTD) information requirements would apply to all
parties in the distribution system. See section VIII.A.5.
b. Use of Used Motor Oil in Diesel-Fueled New Technology Vehicles
We are aware of the practice of disposing of used motor oil by
blending it with diesel fuel for use as fuel in diesel vehicles. Such
practices range from dumping used motor oil directly into the vehicle
fuel tank, to dumping it into the fuel storage tanks, to blending small
amounts of motor oil from the vehicle crank case into the fuel system
as the vehicle is being operated. To the extent such practices could
cause vehicles to exceed their emissions standards, the person blending
the oil, or causing or permitting such blending, could be considered to
be rendering emission controls inoperative in violation of section 203
of the CAA and potentially liable for a civil penalty.\172\
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\172\ Section 203(a)(3) of the Act, 42 U.S.C. 7522(a)(3).
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With today's proposal our concerns with this practice are increased
considerably. Today's formulations of motor oil contain very high
levels of sulfur. Depending on how the oil is blended, it could
increase the sulfur content of the fuel burned in the vehicle by as
much as 200 ppm. As discussed elsewhere in this notice, we believe this
practice would render inoperative not only the emission control
technology on the vehicle, but potentially render the vehicle
undriveable as well. Therefore, in today's notice we are proposing to
prohibit any person from introducing or causing or allowing the
introduction of used motor oil, or diesel fuel containing used motor
oil, into the fuel delivery systems of vehicles manufactured in model
year 2007 and later. The only exception to this would be where the
engine is explicitly certified to the emission standard with oil added,
the oil is added in a manner consistent with the certification, and the
sulfur level of the oil is representative of commercially available
oils. Today's proposal would not change existing requirements regarding
the use of used motor oil in pre-2007 model year engines. However, the
proposal would prevent the addition of used oil to diesel fuel prior to
its introduction into the vehicle fuel tank. We request comment on this
proposal, and in particular on whether an additional constraint can or
should be placed on the sulfur content of motor oil to preclude the
possibility that vehicle exhaust emission control technology would not
be adversely impacted should used motor oil be added to a vehicle's
fuel tank.
c. Use of Kerosene and Other Additives in Diesel Fuel
We are aware that kerosene is commonly added to diesel fuel to
reduce fuel viscosity in cold weather. Other additives are added to
diesel fuel for various purposes, including viscosity, lubricity, and
pour point. We are not proposing to limit this practice. However under
today's proposal, additives used in highway diesel fuel would be
required to meet the same 15 ppm standard proposed for highway diesel
fuel. To help ensure this, we are proposing that kerosene or other
additives meeting the 15 ppm standard, and distributed for use in motor
vehicles would be required to be accompanied by PTDs accurately stating
that the additive meets the 15 ppm standard. As an alternative for such
additives sold in cans or other containers, the required sulfur content
identification could be posted on the container itself. This
identification would be necessary to allow downstream parties to be
able to determine if additives such as kerosene meet the required 15
ppm sulfur limit. Any party who blends high sulfur additives into
highway diesel fuel, uses such additives as highway diesel fuel, or who
causes highway diesel fuel to exceed the standard due to the addition
of kerosene or other additives, would be subject to liability for
violating the rule. We are requesting comment on this proposal and any
alternative that would inform transferees of diesel fuel additives of
the appropriateness of their use in highway diesel fuel.
We are not proposing that refiners or importers of kerosene or
other additives which could be used in highway diesel fuel, would have
an affirmative duty to produce additives that meet the proposed 15 ppm
sulfur standard. This is because we believe that refiners will produce
low sulfur kerosene, for example, in the same refinery processes that
produce low sulfur diesel fuel, and that the market will drive supply
of low sulfur kerosene for those areas and seasons where the product is
needed for blending with highway diesel fuel. We request comment on
whether there should be an affirmative requirement for refiners or
terminals to supply low sulfur kerosene or whether all number one
kerosene should be required to meet the 15 ppm sulfur standard.
We also request comment on whether additives not meeting the 15 ppm
sulfur cap should be allowed to be added to diesel fuel downstream in
de minimis amounts, and if so, how such a program could be structured
to ensure that the additives would not cause the 15 ppm sulfur cap to
be exceeded. In addition we request comment on whether any regulatory
constraint at all need be placed on the sulfur level of diesel
additives, and whether instead the liability mechanisms contained in
this proposal are sufficient to protect against downstream parties
adding additives to diesel fuel that would cause the fuel delivered to
consumers to exceed the cap.
4. What Are the Proposed Testing and Sampling Methods and Requirements?
a. Testing Requirements and Test Methods
We do not believe an every-batch testing requirement for refiners
and
[[Page 35531]]
importers is necessary under the proposed rule. This is primarily
because refiners will likely voluntarily test every batch of fuel
produced to ensure it meets the 15 ppm sulfur standard, and because
pipeline operators will require test results before agreeing to ship
low sulfur highway diesel fuel. However, we are proposing to designate
a test method that would be used as the benchmark for all compliance
testing. We are requesting comment on whether every-batch testing
should be required in light of the requirement (discussed in section
VIII.A.5) for refiners to issue PTDs stating that the product meets the
applicable sulfur standard.
We propose to designate ASTM D 2622-98 with the minor modification
discussed below as the benchmark test method for quantifying the sulfur
content of diesel fuel for compliance determination. We are also
proposing that this test method would be the benchmark method to
determine compliance under the current sulfur control regulations. This
method is an updated version of the designated method under the current
highway diesel fuel rule. This test method is currently in wide use by
refiners and laboratories both for gasoline and diesel testing. This
method does not currently include test repeatability or reproducibility
information for diesel fuel having a sulfur content below 60 ppm.\173\
Nevertheless, in EPA's review of the test method, we believe that when
applied to low sulfur diesel fuel with the proposed modification, the
method has acceptable precision at sulfur levels below 15 ppm.
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\173\ Repeatability is defined by ASTM as the difference between
two test results, obtained by the same operator with the same
apparatus under constant operating conditions on identical test
material, that would, in the long run, in the normal and correct
operation of the test method, be exceeded only in one case in
twenty. Reproducibility is defined by ASTM as the difference between
two single and independent results obtained by different operators
working in different laboratories on identical test materials that
would, in the long run, in the normal and correct operation of the
test method, be exceeded only in one case in twenty.
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We have had success in improving the precision of the ASTM D 2622-
98 procedure in measuring low levels of diesel fuel sulfur through a
simple modification of the calibration method. This modification
includes two small changes. The first is the substitution of a
measurement blank that more closely resembles the boiling point range
and density of diesel fuel. The second is a change to the calibration
line to ensure that it goes through zero. This modification is detailed
in the proposed regulatory text. Using this modification, we have had
success in the correlation of test results with industry laboratories
on samples with sulfur content in the range of 1 to 20 ppm. We will
continue to investigate the proposed modification to the ASTM D 2622-98
procedure. Based on current information, we believe that lab-to-lab
reproducibility can be limited to a maximum of +/-4 ppm at sulfur
levels in the 1-20 ppm range. We do not anticipate that this
modification will add appreciably to the cost of sulfur testing.
We are requesting comments on performance data for diesel fuel
analysis using ASTM D 2622 at sulfur levels below 60 ppm, on additional
modifications to the procedure which might be needed to limit
variability, and on the cost of such modifications. Specifically,
comment is requested on whether only end-window type scanning
instruments should be used because additional variability is introduced
through the use side-window type instruments. \174\ If the use of side-
window type scanning instruments must be disallowed, comment is
requested on the extent such instruments are used and on the cost of
changing them to an end-window configuration.
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\174\ Side-window vs end-window refers to the location of the
sample cup.
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While we are proposing to designate the modified ASTM D 2622-98
procedure as the designated test method, we do not believe that such
designation should preclude regulated parties from using alternative
methods that afford them sufficient confidence that they are
demonstrably in compliance. Therefore, we are proposing that
alternative methods may be used for quality assurance purposes provided
that the proper correlation is established between the alternative
method and the benchmark method.\175\ Since EPA enforcement testing
would be conducted using the modified ASTM D 2622 procedure, parties
would need to have considerable confidence in any alternative methods
they may use. We believe that for quality assurance testing, an
approach that could provide more flexibility and potentially save costs
for industry would be to allow other appropriate ASTM test methods, so
long as they are conducted properly and the results correlate to the
designated method. Although these test results could be used by the
government to demonstrate noncompliance, this should not be a
substantial concern since any test result that demonstrates
noncompliance should lead to appropriate action on the part of the
regulated party, as would a test result from the use of the designated
method. We seek comment on this approach.
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\175\ EPA is preparing to propose, in another action, a set of
criteria by which alternative methods for measuring fuel parameters
may be evaluated and controlled in practice. We are not proposing to
prescribe these criteria and statistical quality control methods in
this rulemaking, but suggest that their use will enhance the
credibility of measurements made with alternative methods and
offered in situations where testing is necessary to establish a
defense.
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EPA's proposed designation of the modified ASTM D 2622-98 procedure
is based on a review of currently available methods. Should superior
methods be developed in the future, EPA will certainly consider an
orderly process of redesignation to take advantage of newer
technologies.
One commenter to the ANPRM stated that ASTM D 2622 may not be
suitable for determining the sulfur content of biodiesel. We request
comment on whether ASTM D 2622-98 is appropriate for determining the
sulfur content of biodiesel, or mixtures of biodiesel and conventional
diesel fuel, and if not, what test methods are appropriate, and any
data supporting these conclusions.
We are also proposing a test method for the determination of sulfur
in motor oil, since that may be relevant if any engine manufacturers
choose to certify engines with the addition of motor oil to the fuel.
The test method we are proposing is ASTM D 4927-96, Standard Test
Methods for Elemental Analysis of Lubricant and Additive Components--
Barium, Calcium, Phosphorus, Sulfur, and Zinc by Wavelength-Dispersive
Fluorescence Spectroscopy. This method uses the same apparatus as D
2622-998, but includes specific methodology to compensate for
interferences caused by the additives present in motor oil. We request
comment on this test method.
b. Sampling Methods
We are proposing the use of sampling methods that were proposed for
use in the Tier 2/gasoline sulfur rule. \176\ These proposed sampling
methods are ASTM D 4057-95 (manual sampling) and D 4177-95 (automatic
sampling from pipelines/in-line blending). We are proposing to require
the use of these ASTM methods instead of the methods currently provided
in 40 CFR part 80, appendix G, for determining compliance under both
the newly proposed 15 ppm sulfur standard, and the 500 ppm standard
currently in place. That is because the proposed methods have been
updated by ASTM, and the
[[Page 35532]]
updates have provided clarification and have eliminated certain
requirements that are not necessary for sampling petroleum products
such as diesel fuel.
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\176\ 64 FR 26004, at 26098 (May 13, 1999). These methods are
also proposed for use under the RFG and CG rules. See 62 FR 37337
(July 11, 1997).
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5. What Are the Proposed Recordkeeping Requirements?
We are proposing that refiners and importers provide information on
commercial PTDs that identify diesel fuel for highway use and that it
complies with the 15 ppm sulfur standard (unless exempted). We believe
this additional information on commercial PTDs is necessary because of
the importance of avoiding commingling of high sulfur distillate
products with highway diesel fuel. It is proposed that all parties in
the distribution chain, from the refiner or importer to the retailer or
wholesale purchaser-consumer would be required to retain copies of
these PTDs for a period of 5 years. This is the same period of time
required in other fuels rules, and it coincides with the applicable
statute of limitations. We believe that for other reasons, most parties
in the distribution system would maintain such records for this length
of time even without the requirement.
We are proposing that the current diesel rule's PTD requirement
regarding the identification of dyed, tax-exempt highway diesel fuel
would be retained. This provision is useful for wholesale purchaser-
consumers who need to know that the tax exempt highway diesel fuel is
appropriate for highway use despite the presence of red dye. We are
also proposing that product codes may be used to convey the information
required to be included in PTD's, for all parties except for transfers
to truck carriers, retailers or wholesale purchaser-consumers. This
provision is consistent with other fuel programs. However, we are
seeking comment on also allowing product codes to be used for transfers
to truck carriers, retailers or wholesale purchaser-consumers.
We are proposing that records of any test results performed by any
regulated party for quality assurance purposes or otherwise, must be
maintained for 5 years, along with supporting documentation such as
date of sampling and testing, batch number, tank number, and volume of
product. Also, business records regarding actions taken in response to
any violations discovered would be required to be maintained.
As noted above, we are also proposing that commercial PTDs for
kerosene or other products sold for blending into highway diesel fuel
must indicate that the product meets the 15 ppm federal sulfur standard
for use in diesel motor vehicles. We believe that such PTDs are already
a part of normal business practices and therefore such a requirement
would add little if any burden. We invite comment on this proposal.
Given the importance of avoiding highway diesel fuel sulfur
contamination under today's proposed rule, we are also concerned that
additional measures may be needed to assure off-highway distillates are
not commingled with, or used as, highway diesel fuel. Such high sulfur
products could easily raise the sulfur level of low sulfur highway
diesel fuel, and damage emission controls on new vehicles and cause
driveability problems. Therefore, we request comment on whether
shipment of distillate products such as nonroad diesel fuel and home
heating oil should be required to be accompanied by PTDs stating that
the products do not meet highway diesel standards and are illegal for
use in highway vehicles.
6. Are There Any Proposed Exemptions Under This Subpart?
We are proposing to exempt from the sulfur requirements diesel fuel
used for research, development, and testing purposes. We recognize that
there may be legitimate research programs that require the use of
diesel fuel with higher sulfur levels than allowed under today's
proposed rule. As a result, today's proposal contains provisions for
obtaining an exemption from the prohibitions for persons distributing,
transporting, storing, selling, or dispensing diesel fuel that exceeds
the standards, where such diesel fuel is necessary to conduct a
research, development, or testing program.
Under the proposal, parties would be required to submit to EPA an
application for exemption that would describe the purpose and scope of
the program and the reasons why the use of the higher-sulfur diesel
fuel is necessary. Upon presentation of the required information, the
exemption would be granted at the discretion of the Administrator, with
the condition that EPA could withdraw the exemption ab initio in the
event the Agency determines the exemption is not justified. Fuel
subject to this exemption would be exempt from the other provisions of
this subpart, provided certain requirements are met. These requirements
include such conditions as the segregation of the exempt fuel from non-
exempt highway diesel fuel, identification of the exempt fuel on
product transfer documents, and the replacement, repair, or removal
from service of emission systems damaged by the use of the high sulfur
fuel.
We believe that the proposal includes the least onerous
requirements for industry that also would ensure that higher-sulfur
diesel fuel would be used only for legitimate research purposes. We
request comment on these proposed provisions.
We are requesting comment on the need to provide an exemption from
the sulfur content and other requirements of this proposal for diesel
fuel used in racing vehicles. We see no advantage to racing vehicles
for having fuel with higher sulfur levels (or lower cetane or higher
aromatic levels) than would be required by today's proposal.
Conversely, we are concerned about the potential for misfueling that
could result from having a racing fuel with higher sulfur in the
marketplace that would be intended for use only in racing or
competition versions of highway vehicles. Consequently, we are not
proposing that diesel fuel used in racing vehicles be exempted from the
diesel fuel requirements proposed today. We request comment on this
decision and whether an exemption should be allowed for racing diesel
fuel.
7. Would California Be Exempt From the Rule?
Although California is currently considering diesel fuel
regulations, we do not propose to exempt California from the federal
rule at this time.\177\ California has received an exemption from
certain compliance related provisions under the Federal reformulated
gasoline (RFG) program, on the grounds that California has implemented
a program in covered areas that meets or exceeds Federal RFG standards
and because the California ARB has sufficient resources and authority
to enforce the program to ensure equivalent environmental benefits are
realized. These exemptions cover such enforcement provisions as
recordkeeping, reporting, and test methods. California gasoline is not
exempted from the standards for Federal RFG or conventional gasoline.
See 40 CFR 80.81. We have also proposed full exemption for California
from the proposed gasoline sulfur standards and other provisions of
that rule because California has an effective gasoline sulfur program
that is different from the
[[Page 35533]]
proposed federal rule. Although it would be premature to grant similar
exemptions to the California low-sulfur diesel program at this time,
EPA may revisit the issue of enforcement exemptions when such action is
timely, and we invite public comment on this approach. Exemptions for
other states and territories are discussed in section VI.C.
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\177\ On November 10, 1998, The California ARB held a workshop
to comply with the Governor's Executive Order W-144-97. At that
workshop the ARB discussed the possibility of amending Title 13 of
the California Code of Regulations, Section 2281, ``Sulfur Content
of Diesel Fuel.'' Under that section, California currently enforces
a 500 ppm sulfur standard for highway diesel fuel. The ARB is
considering a diesel fuel standard that may be as stringent as, or
more stringent than, the standard we are proposing today.
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8. What Are the Proposed Liability and Penalty Provisions for
Noncompliance?
Today's proposed rule contains provisions for liability and
penalties that are similar to the liability and penalty provisions of
the other EPA fuels regulations. Under the proposed rule, regulated
parties would be liable for committing certain prohibited acts, such as
selling or distributing diesel fuel that does not meet the sulfur
standards, or causing others to commit prohibited acts. In addition,
parties would be liable for a failure to meet certain affirmative
requirements, or causing others to fail to meet affirmative
requirements. All parties in the diesel fuel distribution system,
including refiners, importers, distributors, carriers, retailers, and
wholesale purchaser-consumers, would be liable for a failure to fulfill
the recordkeeping requirements and the PTD requirements.
a. Presumptive Liability Scheme of Current EPA Fuels Programs
All EPA fuels programs include a presumptive liability scheme for
violations of prohibited acts. Under this approach, liability is
imposed on two types of parties: (1) The party in the fuel distribution
system that controls the facility where the violation was found or had
occurred; and (2) those parties, typically upstream in the fuel
distribution system from the initially listed party, (such as the
refiner, reseller, and any distributor of the fuel), whose prohibited
activities could have caused the program non-conformity to exist.\178\
This presumptive liability scheme has worked well in enabling us to
enforce our fuels programs, since it creates comprehensive liability
for substantially all the potentially responsible parties. The
presumptions of liability may be rebutted by establishing an
affirmative defense.
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\178\ An additional type of liability, vicarious liability, is
also imposed on branded refiners under these fuels programs.
---------------------------------------------------------------------------
To clarify the inclusive nature of these presumptive liability
schemes, today's proposed rule would explicitly include causing another
person to commit a prohibited act and causing the presence of non-
conforming diesel fuel (or kerosene or other additives for motor
vehicle use) to be in the distribution system as prohibitions. This is
consistent with the provisions and implementation of other fuels
programs.
Today's proposed rule, therefore, provides that most parties
involved in the chain of distribution would be subject to a presumption
of liability for actions prohibited, including causing non-conforming
diesel fuel to be in the distribution system and causing violations by
other parties. Like the other fuels regulations, a refiner also would
be subject to a presumption of vicarious liability for violations by
any downstream facility that displays the refiner's brand name, based
on the refiner's ability to exercise control at these facilities.
Carriers, however, would be liable only for violations arising from
product under their control or custody, and not for causing non-
conforming diesel fuel to be in the distribution system, except where
specific evidence of causation exists.
b. Affirmative Defenses for Liable Parties
The proposal includes affirmative defenses for each party that is
deemed liable for a violation, and all presumptions of liability are
refutable. The proposed defenses are similar to the defenses available
to parties for violations of the RFG regulations. We believe that these
defense elements set forth reasonably attainable criteria to rebut a
presumption of liability. The defenses include a demonstration that:
(1) The party did not cause the violation; (2) the party has PTDs
indicating that the fuel was in compliance at its facility; and (3)
except for retailers and wholesale purchaser-consumers, the party
conducted a quality assurance program. For parties other than tank
truck carriers, the quality assurance program would be required to
include periodic sampling and testing of the diesel fuel. For tank
truck carriers, the quality assurance program would not need to include
periodic sampling and testing, but in lieu of sampling and testing, the
carrier would be required to demonstrate evidence of an oversight
program for monitoring compliance, such as appropriate guidance to
drivers on compliance with applicable requirements and the periodic
review of records concerning diesel fuel quality and delivery.
As in the other fuels regulations, branded refiners would be
subject to more stringent standards for establishing a defense because
of the control such refiners have over branded downstream parties.
Under today's rule, in addition to the other presumptive liability
defense elements, branded refiners would be required to show that the
violation was caused by an action by another person in violation of
law, an action by another person in violation of a contractual
agreement with the refiner, or the action of a distributor not subject
to a contract with the refiner but engaged by the refiner for the
transportation of the diesel fuel.
Based on experience with other fuels programs, we believe that a
presumptive liability approach would increase the likelihood of
identifying persons who cause violations of the sulfur standards. We
normally do not have the information necessary to establish the cause
of a violation found at a facility downstream of the refiner or
importer. We believe that those persons who actually handle the fuel
are in the best position to identify the cause of the violation, and
that a refutable presumption of liability would provide an incentive
for parties to be forthcoming with information regarding the cause of
the violation. In addition to identifying the party that caused the
violation, providing evidence to rebut a presumption of liability would
serve to establish a defense for the parties who are not responsible.
Presumptive liability is familiar to both industry and to EPA, and we
believe that this approach would make the most efficient use of EPA's
enforcement resources. For these reasons, we are proposing a liability
scheme for the diesel fuel sulfur program based on a presumption of
liability. We request comment on the proposed liability provisions.
c. Penalties for Violations
Section 211(d)(1) of the CAA provides for penalties for violations
of the fuels regulations.\179\ Today's rule proposes penalty provisions
that would apply this CAA penalty provision to the diesel fuel sulfur
rule. The proposal would subject any person who violates any
requirement or prohibition of the diesel fuel sulfur rule to a civil
penalty of up
[[Page 35534]]
to $27,500 for every day of each such violation and the amount of
economic benefit or savings resulting from the violation. A violation
of a sulfur cap standard would constitute a separate day of violation
for each day the diesel fuel giving rise to the violation remains in
the diesel fuel distribution system. The length of time the diesel fuel
in question remains in the distribution system would be deemed to be
twenty-five days unless there is evidence that the diesel fuel remained
in the diesel fuel distribution system for fewer than or more than
twenty-five days. The penalty provisions proposed in today's rule are
similar to the penalty provisions for violations of the RFG regulations
and the Tier 2 gasoline sulfur rule. EPA requests comment on these
provisions.
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\179\ Section 211(d)(1) reads, in pertinent part: ``(d)(1) Civil
Penalties.--Any person who violates . . the regulations prescribed
under subsection (c) . . of this section . . shall be liable to the
United States for a civil penalty of not more than the sum of
$25,000 for every day of such violation and the amount of economic
benefit or saving resulting from the violation. . . . Any violation
with respect to a regulation prescribed under subsection (c). . . of
this section which establishes a regulatory standard based upon a
multi-day averaging period shall constitute a separate day of
violation for each and every day in the averaging period. . . . ''
Pursuant to the Debt Collection Improvement Act of 1996 (31 U.S.C.
3701 note), the maximum penalty amount prescribed in section
211(d)(1) of the CAA was increased to $27,500. (See 40 CFR part 19.)
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9. How Would Compliance with the Diesel Sulfur Standards Be Determined?
We have often used a variety of evidence to establish non-
compliance with the requirements imposed under our current fuels
regulations. Test results of the content of diesel fuel or gasoline
have been used to establish violations, both in situations where the
sample has been taken from the facility at which the violation
occurred, and where the sample has been obtained from other parties'
facilities when such test results have had probative value of the
fuel's characteristics at points upstream or downstream. The Agency has
also commonly used documentary evidence to establish non-compliance or
a party's liability for non-compliance. Typical documentary evidence
has included PTDs identifying the fuel as inappropriate for the
facility it is being delivered to, or identifying parties having
connection with the non-complying fuel.
We propose that compliance with the sulfur standards would be
determined based on the sulfur level of the diesel fuel, as measured
using the regulatory testing method. We further propose that any
evidence from any source or location could be used to establish the
diesel fuel sulfur level, provided that such evidence is relevant to
whether the sulfur level would have been in compliance if the
regulatory sampling and testing methodology had been correctly
performed.
Compliance with the standard would be determined using the
specified sampling and test methodologies. While other information
could be used, including test results using different test methods,
such other information may only be used if it is relevant to
determining whether the sulfur level would meet the standard had
compliance been properly measured using the specified test method. The
proposal would establish the regulatory test method as the benchmark
against which other evidence is measured. EPA intends to use the
regulatory test method for enforcement testing purposes.
Today's proposal is consistent with the approach adopted in the
Tier 2 gasoline sulfur rule (65 FR 6698, February 10, 2000). EPA
intends to undertake rulemaking in the near future to revise the
current fuels regulations to include the same language for the use of
other evidence as is proposed today. We seek comment on this approach.
The proposed rule would also clarify that any probative evidence
obtained from any source or location may be used to establish non-
compliance with requirements other than the sulfur standard, such as
recordkeeping requirements, as well as to establish which parties have
facility control or some other basis for liability for sulfur rule
noncompliance. Since proof of these elements is not predicated on
establishing sulfur levels, whether or not regulatory test methods are
used is not significant. EPA is seeking comment on this approach for
monitoring and determining compliance with the applicable requirements.
To ensure the effectiveness and the ability to adequately enforce
the sulfur standards, it is reasonable for EPA to consider evidence
other than actual test results using the regulatory test method, where
such evidence can be related to the test results. As described above,
test results using the regulatory test method are often not available.
In such circumstances, it is reasonable to consider other evidence of
compliance, such as test results using other methods or commercial
documents, if such evidence can be shown to be relevant to determining
whether the diesel fuel would meet the standard if tested using the
regulatory methods. The proposal would only permit the use of other
evidence that is relevant to such a determination, and is therefore
reasonably limited to allow for effective enforcement, without creating
uncertainty about compliance.
B. Lubricity
We strongly encourage, but do not believe it necessary to require,
fuel producers and distributors to voluntarily monitor and provide
diesel fuel with lubricity characteristics at least as good as those of
current fuel. We believe this voluntary action is reasonable and has a
high likelihood of success, because the issues surrounding the impact
of sulfur reduction on lubricity are well established. Refiners and
distributors have an incentive to supply fuel products that will not
damage or create problems with consumer equipment. For a further
discussion of diesel fuel lubricity, and why we believe a voluntary
approach will be effective, please refer to the earlier discussion in
section IV.D.6. We request comment on this approach, on whether or not
a regulatory requirement is needed, and on whether there are concerns
unique to the military.
C. Would States Be Preempted from Adopting Their Own Sulfur Control
Programs for Highway Diesel Fuel?
When we adopt federal fuel standards, states are preempted from
adopting state-level controls with respect to the same fuel
characteristics or components. Section 211(c)(4)(A) of the CAA
prohibits states from prescribing or attempting to enforce controls or
prohibitions respecting any fuel characteristic or component if EPA has
prescribed a control or prohibition applicable to such fuel
characteristic or component under section 211(c)(1) of the Act. This
preemption applies to all states except California, as explained in
section 211(c)(4)(B) of the Act. For states other than California, the
Act provides two mechanisms for avoiding preemption. First, section
211(c)(4)(A)(ii) creates an exception to preemption for a state
prohibition or control that is identical to a prohibition or control
adopted by EPA. Second, a state may seek EPA approval of a SIP revision
containing a fuel control measure, as described in section 211(c)(4)(C)
of the Act. EPA may approve such a SIP revision, and thereby ``waive''
preemption, only if it finds the state control or prohibition ``is
necessary to achieve the national primary or secondary ambient air
quality standard which the plan implements.''
When we adopted the current diesel fuel sulfur standards pursuant
to our authority under section 211(c)(1) of the Act in 1990, States
were preempted from also doing so under the provisions of section
211(c)(4)(A). The diesel sulfur standards proposed today merely modify
the existing standards and as a result do not initiate any new
preemption of State authority. The provisions of this proposal would
merely continue the already existing State preemption provisions with
respect to highway diesel fuel sulfur.
D. Refinery Air Permitting
Prior to making diesel desulfurization changes, some refineries
could be required to obtain a preconstruction
[[Page 35535]]
permit, under the New Source Review (NSR) program, from the applicable
state/local air pollution control agency.\180\ We believe that today's
proposal provides sufficient lead time for refiners to obtain any
necessary NSR permits well in advance of the proposed compliance date.
For the recently promulgated gasoline sulfur control program, refiners
had expressed concerns that permit delays might impede their ability to
meet compliance dates. EPA committed to undertake several actions to
minimize the possibility of any delays for refineries obtaining major
NSR permits for gasoline desulfurization projects. These actions
include providing federal guidance on emission control technologies and
the appropriate use of motor vehicle emission reductions (resulting
from the use of low sulfur fuel), where available, as emission offsets,
as well as forming EPA permit teams to assist states in quickly
resolving issues, where needed. These three items are discussed in more
detail in the Tier 2 final rule and interested parties should refer to
that discussion for additional details regarding permitting
considerations in the gasoline sulfur program (see 65 FR 6773, Feb. 10,
2000).
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\180\ Hydrotreating diesel fuel involves the use of process
heaters, which have the potential to emit pollutants associated with
combustion, such as NOX, PM, CO and SO2. In addition,
reconfiguring refinery processes to add desulfurization equipment
could increase fugitive VOC emissions. The emissions increases
associated with diesel desulfurization will vary widely from
refinery to refinery, depending on many source-specific factors,
such as crude oil supply, refinery configuration, type of
desulfurization technology, amount of diesel fuel produced, and type
of fuel used to fire the process heaters.
---------------------------------------------------------------------------
However, given that the proposed diesel sulfur program would
provide several more years of lead time than was provided under the
gasoline sulfur program, refiners should have ample time to obtain any
necessary preconstruction permits. As we learned in finalizing the
gasoline sulfur program, state/local permitting agencies are prepared
to process refinery permits within the needed time frames, so long as
refiners begin discussing potential permit issues with them early in
the process and submit their permit applications in a timely manner.
EPA believes that this will be the case for diesel fuel. We request
comment on the interaction of this proposed rule and the permitting
process and whether the permitting approaches discussed in the Tier 2
final rule should be continued, and if necessary updated, to assist
refineries in obtaining any necessary permits for refinery diesel
desulfurization changes.
E. Provisions for Qualifying Refiners
As explained in the Regulatory Flexibility Analysis discussion in
section XI.B of this document, we have considered the impacts of these
proposed regulations on small businesses. As part of this process, we
convened a Small Business Advocacy Review Panel (Panel) for this
proposed rulemaking, as required under the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA). The Panel was charged with
reporting on the comments of small business representatives regarding
the likely implications of possible control programs, and to make
findings on a number of issues, including:
A description and estimate of the number of small entities
to which the proposed rule would apply;
A description of the projected reporting, recordkeeping,
and other compliance requirements of the proposed rule;
An identification of other relevant federal rules that may
duplicate, overlap, or conflict with the proposed rule; and
A description of any significant alternatives to the
proposed rule that accomplish the objectives of the proposal and that
may minimize any significant economic impact of the proposed rule on
small entities.
The Panel's final report is available in the docket. In summary,
the Panel concluded that small refiners would likely be directly
affected by the proposed program.
In addition, the Panel concluded that small diesel distributors and
retailers also would likely be directly affected by the fuel program's
compliance requirements, but that under the approach we are proposing
today these requirements would pose minimal burden. Therefore, the
Panel did not recommend any regulatory relief for this group of small
businesses under the program proposed today.
We understand that the proposed low sulfur standards will require
significant economic investment by the refining industry. We also
recognize that refineries owned by small businesses could experience
more difficulty in complying with the proposed standards on time
because, as a group, they have less ability to raise capital necessary
for desulfurization investments, face proportionately higher costs due
to economies of scale, and may be less successful in competing for
limited construction and engineering resources. Some of the small
refiners with whom we and the Panel met indicated their belief that,
because of the extreme level of economic hardship their businesses
would face in meeting the new standards, their businesses might close
without additional time to comply or certain flexibility alternatives.
The Panel recommended that EPA seek comment on various flexibilities
that potentially could alleviate the burden on small refiners.
Upon evaluating the potential impacts of our proposed diesel sulfur
requirements on small refiners and careful review of the Panel's
recommendations, we are seeking comment on three approaches that could
provide flexibility for small refiners. We believe that these
approaches could provide meaningful flexibility for small refiners in
meeting the proposed standards, although we do have concerns that
certain approaches, to varying extents, may compromise the
environmental benefits of the program (as discussed below), while still
ensuring that the vast majority of the program is implemented as
expeditiously as practical in order to achieve the air quality benefits
sooner. Therefore, we invite comment on the appropriateness of any or
all of these approaches in light of the environmental goals, the
relative usefulness in allowing additional time and flexibility for
small refiners to comply with the proposed low sulfur targets, and
information and ideas on appropriate implementation mechanisms. These
approaches are summarized in subsection 1 below.
Elsewhere, in section VI, we seek comment on various alternatives
for phasing in the fuel program. Some small refiners have commented
that some form of a phase-in approach could potentially mitigate the
hardship they would experience under the proposed fuel standards. (See
the discussion in section VI for a discussion of the potential impacts
of a phase-in approach on entities in the distribution system).
In addition to considering the following flexibility approaches for
small refiners, we are interested in exploring appropriate flexibility
options for farmer cooperatives. There are currently four refiner co-
ops, yet only one meets SBA's definition of a small business. The
farmer cooperatives have expressed concern that they have the same
difficulty as small refiners in obtaining access to capital for
desulfurization investments. Farmers are both the customer and the
member owner of their cooperatives. Because cooperatives do not have an
investor/stockholder form of ownership, they are
[[Page 35536]]
not able to access equity markets that provide capital to larger
refiners. The added costs of financing projects through traditional
loans is eventually borne by farmers. The refiner co-ops have also
expressed concern that the highway diesel sulfur program could result
in higher fuel prices for farmers, and could potentially reduce
refining capacity and diesel fuel supply in rural America. To help
address these concerns, we are requesting comment on the following
flexibility approaches for farmer cooperatives as well. We also seek
comment on other appropriate flexibility approaches for farmer
cooperatives that may have merit.
1. Allow Small Refiners to Continue Selling 500 ppm Highway Diesel
First, we are seeking comment on an option for small refiner
flexibility that would allow small refiners to continue selling their
current 500 ppm highway diesel, provided there are adequate safeguards
to prevent contamination and misfueling. This option would effectively
delay the ultra-low sulfur compliance date for small refiners, and
allow them to continue selling their current fuel to the highway diesel
market. Under this approach, retailers would not have an availability
requirement; rather, retailers would be free to choose to sell only 500
ppm fuel (from small refiners), only ultra-low sulfur fuel, or both.
During the Panel process, small refiners expressed varying views on
this flexibility approach. At least one small refiner supported this
option, while others expressed the concern that they would not be able
to find markets for the 500 ppm fuel once large refiners begin
producing exclusively ultra-low sulfur highway diesel (i.e., as soon as
the rule were implemented). Those small refiners doubtful of continued
500 ppm markets think it is unlikely that retailers would either
continue to sell only 500 ppm diesel instead of ultra-low sulfur, or
that retailers would make the investments to market both grades. Their
key assumption is that there would be no price differential between the
ultra-low sulfur fuel and the 500 ppm fuel and, thus, no incentive for
marketers to want the ``old'' fuel. Small refiners noted that, although
ultra-low sulfur fuel would be more costly to produce than the current
grade, vertically integrated refiners with control over the marketing
of their refinery products would have incentives to price below cost in
order to eliminate the potential for niche markets that would be of
value to any small refiners seeking to avail themselves of this
flexibility option. Small diesel distributors and retailers commented
that marketers also don't anticipate a price differential, but
acknowledged that a market for small refiner's 500 ppm likely would
last as long as there were a price differential. Nevertheless, most
small refiners with whom we and the Panel met strongly supported this
option, largely because it potentially could benefit at least a few
small refiners. At the same time, they believed it should not be the
only flexibility option provided for small refiners. We believe that
seeking public comment on this option will give all small refiners an
opportunity to continue exploring the extent of potential markets for
the 500 ppm fuel, and thus, the potential viability of this flexibility
option.
We also request comment on an appropriate duration for this option.
We seek comment on the need for, and appropriateness of, an unlimited
exemption, as well as whether such an exemption should be limited to a
specific timeframe (e.g., two years, ten years, etc.). We note that by
limiting this flexibility to two years, for example, during which time
the new vehicle fleet would still be relatively small, the potential
for misfueling would be minimized. We also question how long this
flexibility option may remain viable, since many small refiners
commented during the Panel process that they do not expect markets for
the 500 ppm fuel to remain after larger refiners begin producing
exclusively ultra-low sulfur fuel. Nevertheless, we request comment on
the need for, and potential impacts of, a longer exemption. A longer
duration for this flexibility option would give participating refiners
more time to stagger their diesel desulfurization investments. The
number of vehicles potentially affected by misfueling or contamination
would still be fairly limited under this approach, since small refiners
produce only approximately four percent of all the highway diesel fuel
produced in the U.S. Moreover, the potential for misfueling would be
further limited because most small refiners distribute highway diesel
in a fairly local area. (Some small refiners, however, distribute a
portion of their diesel fuel outside their local area via pipeline or
barge. See further discussion below about the potential need to
prohibit pipeline/barge shipments of 500 ppm highway diesel under this
option). An unlimited exemption would allow the market to determine the
duration of flexibility provided to small refiners. There would be
diminishing returns to small refiners from such an option over time, as
a growing portion of the vehicle miles traveled would be from vehicles
with emission control devices requiring ultra-low sulfur, and so small
refiners would eventually switch over to producing low sulfur highway
diesel fuel.
To ensure that this flexibility option would not compromise the
expected environmental benefits of today's proposal, there would have
to be certain safeguards with refiners as well as downstream parties to
prevent contamination of the ultra-low sulfur fuel, and to prevent
misfueling of new vehicles. We seek comment on how best to prevent
misfueling and contamination of the ultra-low sulfur fuel under this
approach for small refiner flexibility. Specifically, we request
comment on the following measures to prevent misfueling and
contamination:
Small refiners could make an initial demonstration to EPA
of how they would ensure the fuel remains segregated through the
distribution system to its end use.
Small refiners could be prohibited from distributing 500
ppm highway diesel via pipeline or barge. As the fuel is piped or
barged to locations further from the refinery, it would likely become
more difficult to ensure proper segregation and labeling. We have
learned through the Panel process that most small refiners distribute
highway diesel in a fairly local area; it appears that only a few small
refiners distribute highway diesel via pipeline or barge. All small
refiners (even those that distribute highway diesel via pipeline or
barge) also distribute fuel to the local area, which should provide
adequate potential markets for the 500 ppm fuel. This provision may be
less necessary in the context of a broader program, such as the
approaches discussed in section VI.A.
There could be some general requirements on any entities
carrying the fuel downstream of the refiner, such as a condition to
keep the fuel segregated and maintain records (e.g., product transfer
documents).
Retailers who choose to sell the 500 ppm fuel could be
required to label pumps, clearly indicating that the fuel is higher
sulfur and should not be used in new (e.g., 2007 model year or later)
diesel vehicles.
We also seek comment on how to best prevent small refiners from
increasing the refinery's production capacity (selling 500 ppm highway
diesel under such a program) without also increasing the refinery's
desulfurization capacity. Specifically, we request comment on whether
it would be appropriate and necessary to limit the volume of 500
[[Page 35537]]
ppm highway fuel produced by a refinery owned by a small refiner to the
lesser of: (1) 105 percent of the highway volume it produced on average
in 1998 and 1999; or (2) the volume of highway diesel fuel produced
from crude oil on average in the calendar year. Such limits to a small
refiner's 500 ppm production expansion could also serve to limit the
potential for fuel shortages of the ``new'' fuel in local areas where
small refiners have or will gain significant market share as a result
being allowed to continue producing and selling 500 ppm highway diesel
fuel. This issue is discussed further below.
We believe that safeguards such as these would add minimal burden
on small refiners or any party choosing to distribute or sell small
refiner highway diesel, but would be critical to preventing misfueling
and potential damage to new vehicles--and thus critical to preserving
the environmental benefits of the program. These types of safeguards
are typical of EPA fuel programs where more than one fuel is introduced
into commerce.
We also would need to ensure that this type of flexibility would
not result in lack of availability of low sulfur highway diesel in
markets served primarily by small refiners. We seek comment on whether
there is a potential for lack of availability of the low sulfur fuel
under this approach and, if so, how to prevent this.
Finally, we seek comment on the appropriate definition of a small
refiner under such a program. If such a flexibility option is
promulgated under the final rule, EPA would envision considering a
refiner as a small refiner if both of the following criteria are met:
No more than 1500 employees corporate-wide, based on the
average number of employees for all pay periods from January 1, 1999 to
January 1, 2000.
A corporate crude capacity less than or equal to 155,000
barrels per calendar day (bpcd) for 1999.
In determining the total number of employees and crude capacity, a
refiner would include the employees and crude capacity of any
subsidiary companies, any parent company and subsidiaries of the parent
company, and any joint venture partners. This definition of small
refiner mirrors the one recently promulgated under the Tier 2/gasoline
sulfur program, except that the time period used to determine the
employee number and crude capacity criteria has been updated to reflect
the most recent calendar year. This is consistent with the Small
Business Administration's regulations, which specify that, where the
number of employees is used as a size standard, the size determination
is based on the average number of employees for all pay periods during
the preceding 12 months (13 CFR 121.106). However, because the gasoline
sulfur standards and the proposed diesel sulfur standards would impact
small refiners in relatively the same timeframes, we believe it is
reasonable to consider any small refiner approved by EPA as meeting the
small refiner definition under the gasoline sulfur program (40 CFR
80.235) as a small refiner under the highway diesel sulfur rule as
well. We request comment on this provision.
2. Temporary Waivers Based on Extreme Hardship Circumstances
We are also seeking comment on a case-by-case approach to
flexibility that would provide a process for all domestic and foreign
refiners, including small refiners, to seek case-by-case approval of
applications for temporary waivers to the diesel sulfur standards,
based on a demonstration of extreme hardship circumstances. Small
refiners have expressed their belief that there may be no ``one size
fits all'' approach to flexibility--given the wide variety of refinery
circumstances and configurations. Although this option was first raised
in the context of small refiner flexibility during the Panel process,
we believe that it could be extended to any qualifying refiner meeting
the criteria described below. We recognize that there may be case-by-
case flexibilities that are feasible, environmentally neutral, and
warranted to meet the unique needs of an individual refiner, but that,
if applied across the board, might jeopardize the environmental
benefits of the program. This provision would further our overall
environmental goals of achieving low sulfur highway diesel fuel as soon
as possible. By providing short-term relief to those refiners that need
additional time because they face hardship circumstances, we can adopt
a program that reduces diesel sulfur beginning in 2006 for the majority
of the industry that can comply by then. We envision that this option
would be modeled after a similar provision in the recently-promulgated
gasoline sulfur program. This case-by-case provision could be in
addition to or in place of the small refiner option discussed above.
We understand that the ultra-low sulfur standards for highway
diesel fuel will require significant economic investments by the
refining industry. We recognize that refineries owned by small
businesses could experience more difficulty in complying with the
standards on time because, as a group, they have less ability to raise
capital necessary for desulfurization investments, face proportionately
higher costs due to economies of scale, and may be less successful in
competing for limited construction and engineering resources. However,
because the refining industry encompasses a wide variety of individual
circumstances, it is possible that other refiners also may face
particular difficulty in complying with the proposed sulfur standards
on time. For example, as discussed above the farmer cooperatives have
expressed concern that they would face considerable difficulty in
obtaining access to capital for desulfurization investments. Because
farmer cooperatives do not have an investor/stockholder form of
ownership, they are not able to access equity markets that provide
capital to larger refiners; thus, the added costs of financing projects
through traditional loans is eventually borne by farmers.This option
would allow any refiner to request additional flexibility based on a
showing of unusual circumstances that result in extreme hardship and
significantly affect the refiner's ability to comply by the applicable
date, despite its best efforts. However, we would not intend for this
waiver provision to encourage refiners to delay planning and
investments they would otherwise make in anticipation of receiving
relief from the applicable requirements.
An example of case-by-case flexibility under this approach might be
to allow a refiner to continue selling 500 ppm highway diesel fuel for
an extended time period, so long as that fuel were properly segregated
and labeled at pump stands (see the discussion of possible compliance
measures in section E.1. above).
To further preserve the environmental benefits of the program,
recognizing the constraints it places on any flexibility, we currently
believe that it would be necessary to segregate the fuel pool for any
highway diesel fuel sold under an approved hardship waiver.
Consequently, any additional compliance flexibilities would carry with
them certain safeguards for preventing contamination and misfueling. We
welcome comment on these compliance measures and any other
alternatives. These provisions would be analogous to those discussed
above under section E.1. Further, as part of such a flexibility, we
would need to ensure that there was not a significant potential for
lack of availability of the low sulfur fuel for those refiners that are
the primary supplier of highway diesel fuel in a given area (as
discussed in section E.1 above). We seek comment on whether there is a
significant potential
[[Page 35538]]
for lack of availability of the low sulfur fuel under this approach
and, if so, how to prevent this situation.
During the Panel process, several small refiners that produce both
gasoline and highway diesel expressed concern about the difficulty in
obtaining financing for the significant capital costs of desulfurizing
both these fuels in relatively the same timeframes. Similar concerns
have been expressed by farmer cooperatives and other refiners. Small
refiners suggested that they might be able to desulfurize highway
diesel fuel under the schedule proposed today, if additional
flexibility could be provided in meeting the gasoline sulfur standards,
which would allow them to stagger their investments. We estimate that
approximately nine small refiners (owning 11 refineries) would be
subject to both the gasoline and highway diesel sulfur standards. As
another example of case-by-case flexibility under the hardship
approach, we request comment on whether and to what extent we should
consider additional flexibilities in meeting the gasoline sulfur
standards, for those refiners that produce both gasoline and highway
diesel fuel, and meet the highway diesel fuel standards on time. For
example, we invite comment on whether it would be necessary and
appropriate to take into consideration compliance with the diesel
sulfur rule as part of a small refiner's application demonstrating
significant economic hardship under the gasoline sulfur program's small
refiner hardship extension provision (40 CFR 80.260). In evaluating
applications for any case-by-case consideration of additional
flexibility under the gasoline sulfur program, we would fully consider
the environmental consequences of such an approach. For example, we
would consider such factors as the relative volumes of gasoline and
highway diesel fuel produced by the refiner, where these fuels are
sold, and the projected emission impacts of vehicles using the
refiner's gasoline and diesel fuels. If we were to consider such a
case-by-case approach to compliance under the gasoline and diesel
sulfur programs, we believe the gasoline sulfur program requirements
may have to be changed to allow for the consideration of appropriate
criteria related to compliance with the highway diesel sulfur rule. We
seek comment on how such an approach could be accommodated under the
gasoline sulfur program and the environmental implications of this
approach. We also seek comment on the criteria that should be
considered in granting gasoline hardship relief based on early diesel
compliance.
Small refiners have recommended that the Agency could provide some
flexibility by granting the hardship extension on an automatic, rather
than case by case basis, if they agree to meet the highway diesel
sulfur standards at the same time as the national program. They
commented that this approach would provide more certainty for their
planning purposes in determining how to comply with the requirements of
both programs. The gasoline sulfur program provides that small refiners
can apply for and receive an extension of their interim standards, if
we determine that the small refiner has made the best efforts possible
to achieve compliance with the national standards by January 1, 2008,
but has been unsuccessful for unanticipated reasons beyond its control.
We would consider granting the hardship extension for a time period not
to extend beyond calendar year 2009, based on several factors,
including the small refiner's compliance plan and demonstration of
progress toward producing gasoline meeting the national sulfur
standards by the end of 2009. (See 40 CFR 80.255 and 80.260). We have
concerns about making the small refiner gasoline hardship extension
``automatic'', as this approach could undermine some of the
environmental benefits of the Tier 2/gasoline sulfur program, and is
not consistent with the purpose of the hardship extension. We would
need to consider the environmental impacts of such an extension, by
evaluating, for example, the small refiners' relative production of
highway diesel fuel as compared to gasoline and the air quality
concerns in the locations where both products are sold. We believe it
would be more environmentally protective to make this determination on
a case-by-case basis. Nevertheless, we seek comment on the approach of
granting a small refiner an automatic hardship extension under the
gasoline sulfur program if they demonstrate that they will comply on
time with the national program for highway diesel fuel. We also seek
comment on whether this approach should be applied on a case-by-case,
rather than automatic, basis.
As another example of case-by-case flexibility under this approach,
we request comment on whether it would be appropriate, as part of a
review of a refiner's application for hardship relief under the diesel
sulfur program, to consider granting a delay of diesel sulfur standards
for those refiners that agree to meet the gasoline sulfur standards
under a schedule more accelerated than that required under the gasoline
sulfur program. Any consideration of such delays would require full
consideration of the environmental implications of such a delay, as
well as of other relevant factors.
There are several factors we would consider in evaluating an
application for a hardship waiver. These factors could include refinery
configuration, severe economic limitations, and other factors that
prevent compliance in the lead time provided. Applications for a waiver
would need to include information that would allow us to evaluate all
appropriate factors. We would consider the total crude capacity of the
refinery and its parent corporation, whether the refinery configuration
or operation is unique or atypical, how much of a refinery's diesel is
produced using an FCC unit, its hydrotreating capacity relative to its
total crude capacity, highway diesel production relative to other
refinery products, and other relevant factors. A refiner also may face
severe economic limitations that result in a demonstrated inability to
raise the capital necessary to make desulfurization investments by the
compliance date, which could be shown by an unfavorable bond rating,
inadequate resources of the refiner and its parent and/or subsidiaries,
or other relevant factors. Finally, we would consider where the highway
diesel would be sold in evaluating the environmental impacts of
granting a waiver. We seek comment on these criteria for evaluating a
refiner's hardship application, and on whether there are other criteria
that should also be considered.
This hardship provision would be intended to address unusual
circumstances, such as unique and atypical refinery operations or a
demonstrated inability to raise capital. These kinds of circumstances
should be apparent soon after the final rule is promulgated, so
refiners seeking additional time under this provision should be able to
apply for relief within a relatively short timeframe (e.g., nine months
to one year) after promulgation of the final rule. We request comment
on an appropriate timeframe for refiners to submit hardship
applications to EPA. A refiner seeking a waiver would need to show that
unusual circumstances exist that impose extreme hardship and
significantly affect its ability to meet the standards on time, and
that it has made best efforts to comply with the standards. Applicants
for a hardship waiver also would need to submit a plan demonstrating
how the standards would be achieved as expeditiously as possible. The
plan would need to
[[Page 35539]]
include a timetable for obtaining the necessary capital, contracting
for engineering and construction resources, and obtaining permits. We
request comment on the information that should be contained in a
hardship application, as well as the demonstrations that refiners
should be required to make in such applications. Once all applications
are received, we would consider the appropriate process to follow in
reviewing and acting on applications, including whether to conduct a
notice and comment decision-making process. We would review and act on
applications, and, if a waiver were granted, would specify a time
period for the waiver.
During the SBREFA Panel process, small refiners commented that they
need certainty as to their regulatory requirements, and any
flexibilities, well in advance of compliance dates so that they can
seek financing. Therefore, we also seek comment on how such a hardship
provision could be administered in a manner that provides the most
certainty to small refiners as to any potential hardship relief, well
in advance of the compliance deadline. Specifically, we request comment
on an appropriate timeframe within which the Agency should respond to
hardship applications (for example, one year from the date of receipt).
Because of the significant environmental benefits of lowering
sulfur in highway diesel fuel, we would administer any hardship
provision in a manner that continues to ensure the environmental
benefits of the regulation. To limit the potential environmental impact
of this hardship provision, we would reserve the discretion to deny
applications where we find that granting a waiver would result in an
unacceptable environmental impact. While any hardship determination
would be made on a case-by-case basis, we would not anticipate granting
waivers that apply to more than a minimal amount of the total national
pool of highway diesel fuel, or to more than a minimal percentage of
the highway diesel supply in an area with significant air quality
problems. The level of this minimal amount of fuel would be considered
in light of any additional flexibility options provided for refiners
and would be established in a way that maintains the environmental
goals of the program.
As a condition of any waiver granted, we would likely impose other
reasonable requirements, such as anti-backsliding requirements to
ensure no deterioration in the sulfur level of highway diesel fuel
produced, or limitations on the volume of highway diesel fuel produced
under the waiver (e.g., at or near current production levels). This
latter measure would prevent refiners from increasing the refinery's
production capacity without also increasing the desulfurization
capacity. Specifically, we would limit the volume of highway diesel
produced by a refinery covered by a hardship waiver to the lesser of:
(1) 105 percent of the highway volume it produced on average in 1998
and 1999; or (2) the volume of highway diesel fuel produced from crude
oil on average in the calendar year. We request comment on the need for
such a hardship provision and how it should be structured.
3. 50 ppm Sulfur Cap for Small Refiners
In section IV.B, we fully discuss the basis for the 15 ppm sulfur
standard proposed, based on the needs of diesel engine technology and
on the criteria mandated by the Clean Air Act, and we seek comment on
this level. In section III.F, we also discuss the level of sensitivity
these new emission control technologies have to sulfur in the fuel, and
potential consequences of the vehicles using fuel with a sulfur content
higher than that proposed.
During the Panel process, small refiners expressed strong concern
about their ability to meet a sulfur standard in the 5 to 40 ppm range
discussed. Several small refiners have commented that capital,
operating, and maintenance costs of meeting a 50 ppm cap are
significantly less than the costs of meeting more stringent standards.
Because small refiners produce relatively smaller volumes, their
capital (and other fixed) costs per barrel produced are significantly
higher than their larger competitors. They also cannot take advantage
of the significant economies of scale that exist in the refining
industry and may be less successful in competing for limited
construction and engineering resources. Small refiners have suggested
that a 50 ppm may afford them the flexibility to purchase sufficient
blendstocks on the market to blend with their production and still
comply with a 50 ppm cap. However, at the proposed 15 ppm standard this
flexibility may no longer exist. Nevertheless, they are still
interested in the Agency considering a cap for small refiners of 50
ppm. Therefore, we request comment on a 50 ppm cap for small refiners,
and on any underlying data and analyses that would be relevant to a
decision in the final rule on whether to incorporate a 50 ppm cap for
small refiners. For this approach to work, to keep from damaging the
vehicle exhaust emission control technologies and also maintain their
effectiveness (as discussed in section III.F.), small refiner's fuel
would somehow have to be blended downstream of the refinery to 15 ppm
(i.e., in the distribution system). However, we question whether small
refiners' 50 ppm fuel could simply be ``blended away'' with ultra-low
sulfur fuel in the distribution system (i.e., after the fuel leaves the
refiner's control). Information submitted by small refiners indicates
that most sell highway diesel fuel directly via the refinery rack, for
distribution to local truck stops, service stations, and fleet
customers. Only a few small refiners distribute highway diesel via
pipelines. Therefore, small refiners' highway diesel fuel indeed would
go directly into vehicles, and commonly would not be ``blended'' to a
significant extent with other refiners' fuel within the distribution
system (i.e., downstream of the refinery). Nevertheless, we believe it
is appropriate to seek comment on this approach, and welcome any data
and analyses that would influence a final decision about this approach.
IX. Standards and Fuel for Nonroad Diesel Engines
Although today's proposal covers only highway diesel engines and
highway diesel fuel, our potential plans for nonroad diesel engines--
and especially the sulfur content of nonroad diesel fuel--are clearly
related. For example, depending on whether and how nonroad diesel fuel
is regulated, factors including the costs, leadtime, environmental
impacts, and impacts on competitive relationships in the marketplace
associated with today's proposed program could be affected. We would
need to address these factors in any future regulatory action on
nonroad diesel fuel.
Because of these relationships, various stakeholders interested in
today's proposal have asked to also know the potential requirements
that could apply to nonroad diesel fuel. This section summarizes the
background of this issue and our current thinking about future
regulation of nonroad diesel engines and fuel.
After establishing an initial set of emission standards for nonroad
diesel engines in 1994, EPA proposed in 1997, and finalized in 1998, a
comprehensive program of emission standards for most diesel engines
designed for nonroad use.\181\ This program established
NMHC+NOX and PM standards that are phasing in over the 1999-
2006 time frame, with engines of different
[[Page 35540]]
horsepower ranges coming into the program in different years. At the
same time, we set long-term (``Tier 3'') NMHC+NOX
standards--but not PM standards--for medium and high horsepower
engines, to begin in 2006. Built into the 1998 final rule was a plan to
reassess the Tier 3 NMHC+NOX standards and to establish PM
standards in the 2001 time frame. The 1998 rule also anticipated an EPA
reassessment of the Tier 2 NMHC+NOX standards for the
smaller engines (less than 50 horsepower), which are to be phased in
beginning in 2004.
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\181\ See the final rule, 63 FR 56968, October 23, 1998 for more
about the history of these regulations.
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EPA did not include nonroad diesel fuel in the diesel fuel sulfur
restrictions established in 1993 for highway diesel fuel. We estimate
that the average sulfur content for nonroad diesel fuel is currently
around 3000 ppm, as compared to the cap for highway diesel fuel of 500
ppm.\182\
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\182\ Information from recent national fuel surveys by the
National Institute for Petroleum and Energy Research (NIPER) and the
Alliance of Automobile Manufacturers.
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We believe that any specific new requirements for nonroad diesel
fuel we might propose would need to be carefully considered in the
context of a proposal for further nonroad diesel engine emission
standards. This is because of the close interrelationship between fuels
and engines--the best emission control solutions may not come through
either fuel changes or engine improvements alone, but perhaps through
an appropriate balance between the two. This is especially significant
to the extent that manufacturers would need to address potential
challenges related to simultaneously meeting the standards that may be
proposed. Thus we need to address issues in both the fuel and engine
arenas together.
The many issues connected with any rulemaking for nonroad engines
and fuel warrant serious attention, and we believe it would be
premature today for us to attempt to propose resolutions to them. We
plan to initiate action in the future to formulate thoughtful proposals
covering both nonroad diesel fuel and engines.
X. Public Participation
Publication of this document opens a formal comment period on this
proposal. You may submit comments during the period indicated under
DATES above. We encourage everyone who has an interest in the program
described in this preamble and the associated rulemaking documents to
offer comment on all aspects of the action. Throughout this proposal
you will find requests for specific comment on various topics.
We consider and respond in the final rule to every comment we
receive before the end of the comment period. We give equal weight to
all comments regardless of whether they are submitted on paper,
electronically, or in person at a public hearing. The most useful
comments are generally those supported by appropriate and detailed
rationales, data, and analyses. We also encourage commenters who
disagree with the proposed program to suggest and analyze alternate
approaches to meeting the air quality goals of this proposed program.
We have previously received many comments from a range of
interested parties on our ANPRM and as part of the our outreach to
small entities (see section XI.B). These comments are found in the
docket, and information gathered from them is reflected in the
proposal.
A. Submitting Written and E-mail Comments
If you would like to submit comments in writing, please send them
to the contact listed in FOR FURTHER INFORMATION CONTACT above on or
before the end of the comment period. You can send your comments by e-
mail to the following address: [email protected]. It is usually best to
include your comments in the body of the email message rather than as
an attachment.
Commenters who wish to submit proprietary information for
consideration should clearly separate such information from other
comments. Such submissions should be clearly labeled as ``Confidential
Business Information'' and be sent to the contact person in FOR FURTHER
INFORMATION CONTACT (not to the public docket). This will help ensure
that proprietary information is not placed in the public docket. If a
commenter wants EPA to use a submission of confidential information as
part of the basis for the final rule, then a nonconfidential version of
the document that summarizes the key data or information must be sent
to the contact person for inclusion in the public docket.
We will disclose information covered by a claim of confidentiality
only to the extent allowed by the procedures set forth in 40 CFR part
2. If no claim of confidentiality accompanies a submission when we
receive it, we will make it available to the public without further
notice to the commenter.
B. Public Hearings
We will hold public hearings in New York City, NY, Chicago, IL,
Atlanta, GA, Los Angeles, CA, and Denver, CO. See ADDRESSES near the
beginning of this document for the locations of the hearings. If you
would like to present testimony at one or more of the public hearings,
we ask that you notify the contact person listed above ten days before
the date of the hearing at which you plan to testify. We also suggest
that you bring about fifty copies of the statement or material to be
presented for the EPA panel and audience. In addition, it is helpful if
the contact person receives a copy of the testimony or material before
the hearing. An overhead projector and a carousel slide projector will
be available.
The hearings will be conducted informally, and technical rules of
evidence will not apply. We will, however, prepare a written transcript
of each hearing. The official record of the hearings will be kept open
until the end of the comment period to allow submittal of supplementary
information. Each hearing will begin at 10:00 a.m. local time. In
general, we expect to organize the hearings in a panel format, with
representatives of several different perspectives on each panel. We
will reserve the last part of each hearing for any previously
unscheduled testimony. There will be a sign-in sheet, and we will hear
the testimony of anyone signed in by 6:30 p.m. local time.
XI. Administrative Requirements
A. Administrative Designation and Regulatory Analysis
Under Executive Order 12866 (58 FR 51735, Oct. 4, 1993), the Agency
is required to determine whether this regulatory action would be
``significant'' and therefore subject to review by the Office of
Management and Budget (OMB) and the requirements of the Executive
Order. The order defines a ``significant regulatory action'' as any
regulatory action that is likely to result in a rule that may:
Have an annual effect on the economy of $100 million or
more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or,
Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
[[Page 35541]]
Pursuant to the terms of Executive Order 12866, EPA has determined
that this proposal is a ``significant regulatory action'' because the
proposed engine standards, diesel fuel sulfur standards, and other
proposed regulatory provisions, if implemented, would have an annual
effect on the economy in excess of $100 million. Accordingly, a Draft
RIA has been prepared and is available in the docket for this
rulemaking. This action was submitted to the OMB for review as required
by Executive Order 12866. Written comments from OMB on today's action
and responses from EPA to OMB comments are in the public docket for
this rulemaking.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601-612, was amended by
the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Public Law 104-121, to ensure that concerns regarding small
entities are adequately considered during the development of new
regulations that affect them. In response to the provisions of this
statute, EPA has identified industries subject to this proposed rule
and has provided information to, and received comment from, small
entities and representatives of small entities in these industries. To
accompany today's proposal, an Initial Regulatory Flexibility Analysis
(IRFA) has been prepared by the Agency to evaluate the economic impacts
of today's proposal on small entities.\183\ The key elements of the
IRFA include:
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\183\ The Initial RFA is contained in Chapter VII of the Draft
RIA.
--The number of affected small entities;
--The projected reporting, recordkeeping, and other compliance
requirements of the proposed rule, including the classes of small
entities that would be affected and the type of professional skills
necessary for preparation of the report or record;
--Other federal rules that may duplicate, overlap, or conflict with the
proposed rule; and,
--Any significant alternatives to the proposed rule that accomplish the
stated objectives of applicable statutes and that minimize significant
economic impacts of the proposed rule on small entities.
The Agency convened a Small Business Advocacy Review Panel (the
Panel) under section 609(b) of the Regulatory Flexibility Act as added
by SBREFA. The purpose of the Panel was to collect the advice and
recommendations of representatives of small entities that could be
directly affected by today's proposed rule and to report on those
comments and the Panel's findings as to issues related to the key
elements of the IRFA under section 603 of the Regulatory Flexibility
Act. The report of the Panel has been placed in the rulemaking
record.\184\ The IRFA can be found in the Draft RIA associated with
today's proposal.
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\184\ Report of the Small Business Advocacy Review Panel on
Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine
Standards and Diesel Fuel Sulfur Control Requirements, March 24,
2000.
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The contents of both today's proposal and the IRFA reflect the
recommendations in the Panel's report. We summarize our outreach to
small entities and our responses to the recommendations of the Panel
below. The Agency continues to be interested in the potential impacts
of the proposed rule on small entities and welcomes additional comments
during the rulemaking process on issues related to such impacts.
1. Potentially Affected Small Businesses
Today's proposed program, which would establish new emission
standards for heavy-duty engines and new standards for the sulfur
content of highway diesel fuel, would directly affect manufacturers of
heavy-duty engines and petroleum refiners that produce highway diesel
fuel, respectively. In addition, but to a lesser extent, the program
would directly affect diesel distributors and marketers.
We have not identified any manufacturers of heavy-duty engines that
meet SBA's definition of a small business. However, we have identified
several petroleum refiners that produce highway diesel fuel and meet
the SBA's definitions for a small business for the industry category.
According to the SBA's definition of a small business for a petroleum
refining company (Standard Industrial Classification (SIC) 2911), a
company must have 1500 or fewer employees to qualify as an SBA small
business. Of the approximately 158 refineries in the U.S. today, we
estimate that approximately 22 refiners (owning 26 refineries) have
1500 or fewer employees and produce highway diesel fuel. Two of these
refineries are currently shutdown, but have indicated that they expect
to reopen this year. We estimate that these 22 small refiners comprise
3.7 percent of nationwide crude capacity and produce approximately four
percent of highway diesel fuel.
EPA also has identified several thousand businesses in the diesel
distribution and marketing industry that meet SBA's definitions of
small business. More information about these industries is contained in
the IRFA. Under today's proposal, there are some, fairly minimal,
regulatory requirements on these parties downstream of the refineries
related to segregating the low sulfur highway diesel fuel throughout
the distribution system. However, these proposed compliance provisions
for downstream parties are fairly consistent with those in place today
for other fuel programs, including the current highway diesel fuel
program, and are not expected to impose significant new burdens on
small entities.
2. Small Business Advocacy Review Panel and the Evaluation of
Regulatory Alternatives
The Small Business Advocacy Review Panel was convened by EPA on
November 12, 1999. The Panel consisted of representatives of the Small
Business Administration (SBA), the Office of Management and Budget
(OMB) and EPA. During the development of today's proposal, EPA and the
Panel were in contact with representatives from the small businesses
that would be subject to the provisions in today's proposal. In
addition to verbal comments from industry noted by the Panel at
meetings and teleconferences, written comments were received from each
of the affected industry segments or their representatives. The Panel
report contains a summary of these comments, the Panel's
recommendations on options that could mitigate the adverse impacts on
small businesses. Today's proposal requests comment on the alternatives
and issues suggested by the Panel for implementing the fuel program.
The Panel considered a range of options and regulatory alternatives
for providing small businesses with flexibility in complying with new
sulfur standards for highway diesel fuel. As part of the process, the
Panel requested and received comment on several early ideas for
flexibility that were suggested by SERs and Panel members. Taking into
consideration the comments received on these ideas, as well as
additional business and technical information gathered about
potentially affected small entities, we summarize the Panel's
recommendations below.
The Panel recommended that EPA seek comment on an option that would
provide a process for refiners to seek case-by-case approval of
applications for temporary waivers to the diesel sulfur standards,
based on a demonstration of extreme hardship circumstances. Small
refiners commented to the Panel that there is no ``one size fits all''
approach to flexibility--given the wide variety of refinery
circumstances and
[[Page 35542]]
configurations. Thus, the Panel believed that it would be appropriate
for EPA to consider a case-by-case approach to flexibility. The Panel
further recognized that there may be case-by-case flexibilities that
are feasible, environmentally neutral, and warranted to meet the unique
needs of an individual refiner, but that, if applied across the board,
might jeopardize the environmental benefits of the program. The Panel
envisioned that this option would be modeled after a similar provision
in the recently-promulgated gasoline sulfur program. This option would
allow domestic and foreign refiners, including small refiners, to
request additional flexibility based on a showing of unusual
circumstances that result in extreme hardship and significantly affect
the ability to comply by the applicable date, despite their best
efforts.
In addition, the Panel recommended that EPA seek comment on two
options for small refiner flexibility. First, the Panel recommended
that EPA seek comment on a 50 ppm cap for small refiners, as well as
any data or underlying analyses that could support such a decision.
Second, the Panel recommended that EPA seek comment on an option that
would allow small refiners to continue selling their current 500 ppm
highway diesel, provided there are adequate safeguards to prevent
contamination and misfueling. The Panel further recommended that EPA
request comment on an appropriate duration for this option. This option
would effectively delay the low sulfur compliance date for small
refiners, and allow them to continue selling their current fuel to the
highway diesel market. To ensure the environmental benefits of the rule
were achieved while implementing this flexibility option, there would
have to be certain safeguards with refiners as well as downstream
parties to prevent contamination of the ultra-low sulfur fuel, and to
prevent misfueling of new vehicles.
The Panel also discussed the merits of phasing in the fuel program,
and alternatives that could potentially limit the burden of such a
program on small refiners and distributors.
The Panel's recommendations are discussed in detail in the Panel
Report, contained in the docket. In addition, EPA's request for comment
on these options is contained in section VIII.E of this preamble.
The Initial Regulatory Flexibility Analysis evaluates the financial
impacts of the proposed heavy-duty engine standards and fuel controls
on small entities. EPA believes that the regulatory alternatives we
seek comment on in this proposal could provide substantial relief to
qualifying small businesses from the potential adverse economic impacts
of complying with today's proposed rule.
C. Paperwork Reduction Act
The information collection requirements (ICR) for this proposed
rule will be submitted for approval to OMB under the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. The Agency may not conduct or
sponsor an information collection, and a person is not required to
respond to a request for information, unless the information collection
request displays a currently valid OMB control number. The OMB control
numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR
chapter 15.
The information collection requirements associated with today's
proposed rule pertain to the proposed requirements for diesel fuel
sulfur content. A draft information collection request document
entitled, ``Draft Information Collection Request--Recordkeeping
Requirements for the Fuel Quality Regulations for Diesel Fuel Sold in
2006 and Later Years' has been prepared and is available from the Air
Docket at the location indicated in ADDRESSES section or from the
person(s) listed in FOR FURTHER INFORMATION CONTACT section. We request
comments on the costs associated with the regulatory language as
proposed and with regard to other specific approaches outlined in this
notice that may affect information collection burdens.
The Paperwork Reduction Act stipulates that ICR documents estimate
the burden of activities that would be required of regulated parties
within a three year time period. Consequently, the draft ICR document
that accompanies today's proposed rule provides estimates for the
activities that would be required under the first three years of the
proposed program. Many of the reporting and recordkeeping requirements
for refiners and importers regarding the sulfur content of diesel fuel
on which the proposed rule would rely currently exist under EPA's 500
ppm highway diesel fuel and anti-dumping programs.\185\ The ICR for the
500 ppm program covered start up costs associated with reporting diesel
fuel sulfur content under the 500 ppm program. Consequently, much of
the cost of the information collection requirements under the proposed
diesel sulfur control program has already been accounted for under the
500 ppm program.
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\185\ ``Regulations of Fuel and Fuel Additives; Fuel Quality
Regulations for Highway Diesel Sold in 1993 and Later Calendar
Years; Recordkeeping Requirements,'' OMB Control Number 2060-0308,
EPA ICR Number 1718.12 (expires July 31, 2001). Copies of this ICR
may be obtained from Sandy Farmer, Office of Policy, Regulatory
Information Division, U.S. Environmental Protection Agency (Mail
Code 2137), 401 M Street, SW, Washington, DC 20460. Please mark
requests, ``Attention: Desk Officer for EPA'' and include the ICR in
any correspondence.
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We request comments on the Agency's need for the information
proposed to be collected, the accuracy of our estimates of the
associated burdens, and any suggested methods for minimizing the
burden, including the use of automated techniques for the collection of
information. Comments on the draft ICR should be sent to: the Office of
Policy, Regulatory Information Division, U.S. Environmental Protection
Agency (Mail Code 2136), 401 M Street, SW, Washington, DC 20460, marked
``Attention: Director of OP;'' and to the Office of Information and
Regulatory Affairs, Office of Management and Budget, 725 17th Street,
NW, Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''
Include the ICR number in any such correspondence. OMB is required to
make a decision concerning the ICR between 30 and 60 days after
publication of a proposed rule. Therefore, comments to OMB on the ICR
are most useful if received within 30 days of the publication date of
this proposal. Any comments from OMB and from the public on the
information collection requirements in today's proposal will be placed
in the docket and addressed by EPA in the final rule.
Copies of the ICR documents can be obtained from Sandy Farmer,
Office of Policy, Regulatory Information Division, U.S. Environmental
Protection Agency (Mail Code 2137), 401 M Street, SW, Washington, DC
20460, or by calling (202) 260-2740. Insert the ICR title and/or OMB
control number in any correspondence. Copies may also be downloaded
from the Internet at http://www.epa.gov/ncepihom/catalog.html.
D. Intergovernmental Relations
1. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments, and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the
[[Page 35543]]
private sector, of $100 million or more for any single year. Before
promulgating a rule, for which a written statement is needed, section
205 of the UMRA generally requires EPA to identify and consider a
reasonable number of regulatory alternatives and adopt the least
costly, most cost effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative that is not the least
costly, most cost effective, or least burdensome alternative if EPA
provides an explanation in the final rule of why such an alternative
was adopted.
Before we establish any regulatory requirement that may
significantly or uniquely affect small governments, including tribal
governments, we must develop a small government plan pursuant to
section 203 of the UMRA. Such a plan must provide for notifying
potentially affected small governments, and enabling officials of
affected small governments to have meaningful and timely input in the
development of our regulatory proposals with significant federal
intergovernmental mandates. The plan must also provide for informing,
educating, and advising small governments on compliance with the
regulatory requirements.
This proposed rule contains no federal mandates for state, local,
or tribal governments as defined by the provisions of Title II of the
UMRA. The rule imposes no enforceable duties on any of these
governmental entities. Nothing in the proposed rule would significantly
or uniquely affect small governments.
EPA has determined that this rule contains federal mandates that
may result in expenditures of more than $100 million to the private
sector in any single year. As discussed at length in section VI of this
proposal, EPA considered and evaluated a wide range of regulatory
alternatives before arriving at the program proposed today. EPA
believes that the proposed program represents the least costly, most
cost effective approach to achieve the air quality goals of the
proposed rule. Nevertheless, as is clear in section VI and throughout
the preamble, we continue to investigate and seek comment on
alternatives that may achieve the proposals objectives but at a lower
cost. See the ``Administrative Designation and Regulatory Analysis''
(section XI.A) for further information regarding these analyses.
2. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian Tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the OMB, in a separately identified section
of the preamble to the rule, a description of the extent of EPA's prior
consultation with representatives of affected tribal governments, a
summary of the nature of their concerns, and a statement supporting the
need to issue the regulation. In addition, Executive Order 13084
requires EPA to develop an effective process permitting elected
officials and other representatives of Indian tribal governments ``to
provide meaningful and timely input in the development of regulatory
policies on matters that significantly or uniquely affect their
communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian Tribal governments. The proposed engine
emissions, diesel fuel, and other related requirements for private
businesses in this proposal would have national applicability, and thus
would not uniquely affect the communities of Indian Tribal Governments.
Further, no circumstances specific to such communities exist that would
cause an impact on these communities beyond those discussed in the
other sections of this proposal. Thus, EPA's conclusions regarding the
impacts from the implementation of today's proposed rule discussed in
the other sections of this proposal are equally applicable to the
communities of Indian Tribal governments. Accordingly, the requirements
of section 3(b) of Executive Order 13084 do not apply to this rule.
E. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), section 12(d) of Public Law 104-113, directs EPA
to use voluntary consensus standards in its regulatory activities
unless it would be inconsistent with applicable law or otherwise
impractical. Voluntary consensus standards are technical standards
(e.g., materials specifications, test methods, sampling procedures, and
business practices) developed or adopted by voluntary consensus
standards bodies. The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards.
This proposed rule references technical standards adopted by the
Agency through previous rulemakings. No new technical standards are
proposed in this proposal. The standards referenced in today's proposed
rule involve the measurement of diesel fuel parameters and engine
emissions. The measurement standards for diesel fuel parameters
referenced in today's proposal are all voluntary consensus standards.
The engine emissions measurement standards referenced in today's
proposed rule are government-unique standards that were developed by
the Agency through previous rulemakings. These standards have served
the Agency's emissions control goals well since their implementation
and have been well accepted by industry. EPA is not aware of any
voluntary consensus standards for the measurement of engine emissions.
Therefore, the Agency proposes to use the existing EPA-developed
standards found in 40 CFR part 86 for the measurement of engine
emissions.
EPA welcomes comments on this aspect of the proposed rulemaking
and, specifically, invites the public to identify potentially-
applicable voluntary consensus standards and to explain why such
standards should be used in this regulation.
F. Executive Order 13045: Children's Health Protection
Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that (1) is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, section 5-501 of the Order directs the Agency to
evaluate the environmental health or safety effects of the planned rule
on children, and explain why the planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.
This proposed rule is subject to the Executive Order because it is
an economically significant regulatory
[[Page 35544]]
action as defined by Executive Order 12866 and it concerns in part an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children.
This rulemaking will achieve significant reductions of various
emissions from heavy-duty engines, primarily NOX, but also
PM. These pollutants raise concerns regarding environmental health or
safety risks that EPA has reason to believe may have a disproportionate
effect on children, such as impacts from ozone, PM and certain toxic
air pollutants. See section II and the Draft RIA for a further
discussion of these issues.
The effects of ozone and PM on children's health were addressed in
detail in EPA's rulemaking to establish the NAAQS for these pollutants,
and EPA is not revisiting those issues here. EPA believes, however,
that the emission reductions from the strategies proposed in this
rulemaking will further reduce air toxics and the related adverse
impacts on children's health. EPA will also be addressing the issues
raised by air toxics from engines and their fuels in a separate
rulemaking that EPA will initiate in the near future under section
202(l) of the Act. That rulemaking will address the emissions of
hazardous air pollutants from engines and fuels, and the appropriate
level of control of HAPs from these sources.
In this proposal, EPA has evaluated several regulatory strategies
for reductions in emissions from heavy-duty engines. (See section III
of this proposal as well as the Draft RIA.) For the reasons described
there, EPA believes that the strategies proposed are preferable under
the CAA to other potentially effective and reasonably feasible
alternatives considered by the Agency, for purposes of reducing
emissions from these sources as a way of helping areas achieve and
maintain the NAAQS for ozone and PM. Moreover, EPA believes that it has
selected for proposal the most stringent and effective control
reasonably feasible at this time, in light of the technology and cost
requirements of the Act.
G. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law, unless
the Agency consults with State and local officials early in the process
of developing the proposed regulation.
Section 4 of the Executive Order contains additional requirements
for rules that preempt State or local law, even if those rules do not
have federalism implications (i.e., the rules will not have substantial
direct effects on the States, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government). Those
requirements include providing all affected State and local officials
notice and an opportunity for appropriate participation in the
development of the regulation. If the preemption is not based on
express or implied statutory authority, EPA also must consult, to the
extent practicable, with appropriate State and local officials
regarding the conflict between State law and Federally protected
interests within the agency's area of regulatory responsibility.
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Section 211(d)(4)(A) of the CAA
prohibits states from prescribing or attempting to enforce controls or
prohibitions respecting any fuel characteristic or component if EPA has
prescribed a control or prohibition applicable to such fuel
characteristic or component under section 211(c)(1) of the Act. This
proposed rule merely modifies existing EPA diesel fuel and heavy-duty
vehicle standards and therefore will merely continue an existing
preemption of State and local law as discussed in section VIII.C. Thus,
Executive Order 13132 does not apply to this rule.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA did consult with representatives of various State and local
governments in developing this rule. In particular EPA consulted with
the State of Alaska in the design of the program as it applies to them,
as discussed in section VI. EPA also talked to representatives from the
State of California as well as representatives from STAPPA/ALAPCO,
which represents state and local air pollution officials.
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.
XII. Statutory Provisions and Legal Authority
Statutory authority for the engine controls proposed in this notice
can be found in sections 202, 203, 206, 207, 208, and 301 of the CAA,
as amended, 42 U.S.C. 7521, 7522, 7525, 7541, 7542, and 7601.
Statutory authority for the fuel controls proposed in this document
comes from section 211(c) and 211(i) of the CAA, which allows EPA to
regulate fuels that either contribute to air pollution which endangers
public health or welfare or which impair emission control equipment
which is in general use or has been in general use. Additional support
for the procedural and enforcement-related aspects of the fuel's
controls in today's proposal, including the proposed recordkeeping
requirements, comes from sections 114(a) and 301(a) of the CAA.
List of Subjects
40 CFR Part 69
Environmental protection. Air pollution control.
40 CFR Part 80
Environmental protection, Diesel fuel, Fuel additives, Gasoline,
Imports, Labeling, Motor vehicle pollution, Penalties, Reporting and
recordkeeping requirements.
40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Confidential business information, Labeling, Motor vehicle pollution,
Penalties, Reporting and recordkeeping requirements.
[[Page 35545]]
Dated: May 17, 2000.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, we propose to amend
Parts 69, 80 and 86 of chapter I of Title 40 of the Code of Federal
Regulations to read as follows:
PART 69--[AMENDED]
1. The authority citation for part 69 is revised to read as
follows:
Authority: 42 U.S.C. 7545(c), (g) and (i), and 7625-1.
Subpart E--Alaska
2. Section 69.51 of subpart E is revised to read as follows:
Sec. 69.51 Title II exemptions and exclusions.
(a) Diesel fuel that is designated for use only in Alaska and is
used only in Alaska, is exempt from the sulfur standard of 40 CFR
80.29(a)(1)(i) and the dye provisions of 40 CFR 80.29(a)(1)(iii) and 40
CFR 80.29(b) until the implementation dates set out in 40 CFR 80.440,
provided that:
(1) The fuel is segregated from non-exempt diesel fuel from the
point of such designation; and
(2) On each occasion that any person transfers custody or title to
the fuel, except when it is dispensed at a retail outlet or wholesale
purchaser-facility, the transferor must provide to the transferee a
product transfer document stating:
This diesel fuel is for use only in Alaska. It is exempt from
the federal low sulfur standards applicable to motor vehicle diesel
fuel and red dye requirements applicable to non-motor vehicle diesel
fuel only if it is used in Alaska.
(b) Beginning on the implementation dates set out in Sec. 80.440,
diesel fuel that is designated for use only in Alaska or is used only
in Alaska, is subject to the applicable provisions of 40 CFR part 80,
subpart I, except as provided under paragraph (c) of this section.
Alaska may submit for EPA approval an alternative plan for implementing
the sulfur standard in Alaska by [date one year after the effective
date of the final rule]. EPA shall approve or disapprove the plan
within one year of receiving Alaska's submission.
(c) If such diesel fuel is designated as fuel that does not comply
with the standards and requirements for motor vehicle diesel fuel under
40 CFR part 80, subpart I, it is exempt from the dye presumption of 40
CFR 80.446(b)(2) provided that:
(1) The fuel is segregated from all motor vehicle diesel fuel.
(2) On each occasion that any person transfers custody or title to
the fuel, except when it is dispensed at a retail outlet or wholesale
purchaser-facility, the transferor must provide to the transferee a
product transfer document complying with the requirements of 40 CFR
80.462(a) and (d) and stating:
This diesel fuel is for use only in Alaska and is not for use in
motor vehicles. It is exempt from the red dye requirement applicable
to non-motor vehicle diesel fuel only if it is used in Alaska.
(3) Any pump dispensing the fuel must comply with the labeling
requirements in 40 CFR 80.453.
PART 80--[AMENDED]
3. The authority citation for part 80 continues to read as follows:
Authority: Sections 114, 211, and 301(a) of the Clean Air Act,
as amended (42 U.S.C. 7414, 7545 and 7601(a)).
4. Section 80.2 is amended by revising paragraphs (x) and (y) and
adding paragraphs (bb) and (nn), to read as follows:
Sec. 80.2 Definitions.
* * * * *
(x) Diesel fuel means any fuel sold in any state and suitable for
use in diesel motor vehicles, diesel motor vehicle engines or diesel
nonroad engines, and which is commonly or commercially known as diesel
fuel.
(y) Motor vehicle diesel fuel means any diesel fuel, or any
distillate product, that is used, intended for use, or made available
for use, as a fuel in diesel motor vehicles or diesel motor vehicle
engines. Motor vehicles or motor vehicle engines do not include nonroad
vehicles or nonroad engines.
* * * * *
(bb) Sulfur percentage is the percentage of sulfur in diesel fuel
by weight, as determined using the applicable sampling and testing
methodologies set forth in Sec. 80.461.
* * * * *
(nn) Batch of motor vehicle diesel fuel means a quantity of diesel
fuel which is homogeneous with regard to those properties that are
specified for motor vehicle diesel fuel under subpart I of this part.
* * * * *
5. Section 80.29 is amended by revising paragraphs (a)(1)
introductory text and (b), to read as follows:
Sec. 80.29 Controls and prohibitions on diesel fuel quality.
(a) Prohibited activities. (1) Beginning October 1, 1993 and
continuing until the implementation dates for subpart I of this part as
specified in Sec. 80.440, except as provided in 40 CFR 69.51, no
person, including but not limited to, refiners, importers,
distributors, resellers, carriers, retailers or wholesale purchaser-
consumers, shall manufacture, introduce into commerce, sell, offer for
sale, supply, store, dispense, offer for supply or transport any diesel
fuel for use in motor vehicles, unless the diesel fuel:
* * * * *
(b) Determination of compliance. (1) Any diesel fuel which does not
show visible evidence of being dyed with dye solvent red 164 (which has
a characteristic red color in diesel fuel) shall be considered to be
available for use in diesel motor vehicles and motor vehicle engines,
and shall be subject to the prohibitions of paragraph (a) of this
section.
(2) Compliance with the sulfur, cetane, and aromatics standards in
paragraph (a) of this section shall be determined based on the level of
the applicable component or parameter, using the sampling methodologies
specified in Sec. 80.330(b), as applicable, and the appropriate testing
methodologies specified in Sec. 80.461(a) or (b) for sulfur,
Sec. 80.2(w) for cetane index, and Sec. 80.2(z) for aromatic content.
Any evidence or information, including the exclusive use of such
evidence or information, may be used to establish the level of the
applicable component or parameter in the diesel fuel, if the evidence
or information is relevant to whether that level would have been in
compliance with the standard if the appropriate sampling and testing
methodology had been correctly performed. Such evidence may be obtained
from any source or location and may include, but is not limited to,
test results using methods other than the compliance methods in this
paragraph (b), business records, and commercial documents.
(3) Determination of compliance with the requirements of this
section other than the standards described in paragraph (a) of this
section, and determination of liability for any violation of this
section, may be based on information obtained from any source or
location. Such information may include, but is not limited to, business
records and commercial documents.
* * * * *
6. Section 80.30 is amended by revising paragraphs (g)(2)(ii) and
(g)(4)(i), and adding paragraph (h), to read as follows:
[[Page 35546]]
Sec. 80.30 Liability for violations of diesel fuel controls and
prohibitions.
* * * * *
(g) Defenses. * * *
* * * * *
(2) * * *
(ii) Test results, performed in accordance with the applicable
sampling and testing methodologies set forth in Secs. 80.2(w), 80.2(z),
80.2(bb), and 80.461, which evidence that the diesel fuel determined to
be in violation was in compliance with the diesel fuel standards of
Sec. 80.29(a) when it was delivered to the next party in the
distribution system;
* * * * *
(4) * * *
(i) Test results, performed in accordance with the applicable
sampling and testing methodologies set forth in Secs. 80.2(w), 80.2(z),
80.2(bb), and 80.461, which evidence that the diesel fuel determined to
be in violation was in compliance with the diesel fuel standards of
Sec. 80.29(a) when it was delivered to the next party in the
distribution system;
* * * * *
(h) Detection of violations. In paragraphs (a) through (f) of this
section, the term ``is detected at'' means that the violation existed
at the facility in question, and the existence of the violation at that
facility may be established through evidence obtained or created at
that facility, at any other location, and by any party.
7. Subpart I is added to read as follows:
Subpart I--Diesel Fuel Sulfur Control
Sec.
General Information
80.440 What are the implementation dates for the diesel fuel
sulfur control program?
80.441 What diesel fuel is subject to the provisions of this
subpart?
80.442-80.445 [Reserved]
Motor Vehicle Diesel Fuel Standards and Requirements
80.446 What are the standards and dye requirements for motor
vehicle diesel fuel?
80.447 What are the standards and identification requirements for
additives that are blended into or are offered for sale for use in
motor vehicle diesel fuel?
80.448 May used motor oil be dispensed into diesel motor vehicles?
80.449 What diesel fuel designation requirements apply to refiners
and importers?
80.450-80.452 [Reserved]
80.453 What labeling requirements apply to retailers and wholesale
purchaser-consumers?
80.454-80.460 [Reserved]
Sampling and Testing
80.461 What are the sampling and test methods for sulfur?
Recordkeeping and Reporting Requirements
80.462 What are the product transfer document requirements for
motor vehicle diesel fuel?
80.463 What are the product transfer document requirements for
additives to be used in motor vehicle diesel fuel?
80.464 What records must be kept?
80.465 [Reserved]
Exemptions
80.466 What are the requirements for obtaining an exemption for
motor vehicle diesel fuel used for research, development or testing
purposes?
80.467 What are the requirements for an exemption for motor
vehicle diesel fuel for use in the Territories?
80.468-80.469 [Reserved]
Violation Provisions
80.470 What acts are prohibited under the diesel fuel sulfur
control program?
80.471 What evidence may be used to determine compliance with the
prohibitions and requirements of this subpart and liability for
violations of this subpart?
80.472 Who is liable for violations of this subpart?
80.473 What defenses apply to persons deemed liable for a
violation of a prohibited act?
80.474 What penalties apply under this subpart?
Subpart I--Diesel Fuel Sulfur Control General Information
Sec. 80.440 What are the implementation dates for the diesel fuel
sulfur control program?
(a) [Reserved]
(b) Standards applicable to refiners and importers. Beginning April
1, 2006, standards for motor vehicle diesel fuel under Sec. 80.446
apply to motor vehicle diesel fuel produced by any refinery or imported
by any importer.
(c) Standards applicable downstream of the refinery or importer.
Beginning May 1, 2006, standards for motor vehicle diesel fuel under
Sec. 80.446 apply to motor vehicle diesel fuel at any facility in the
diesel fuel distribution system downstream of the refinery or importer
except at retail outlets and wholesale purchaser-consumer facilities.
(d) Standards applicable to retailers and wholesale purchaser-
consumers. Beginning June 1, 2006, standards for motor vehicle diesel
fuel under Sec. 80.446 and Sec. 80.453 apply to motor vehicle diesel
fuel at any facility in the diesel fuel distribution system.
(e) [Reserved]
(f) Other provisions. All other provisions of this subpart apply
April 1, 2006.
Sec. 80.441 What diesel fuel is subject to the provisions of this
subpart?
(a) Included fuel. The provisions of this subpart apply to motor
vehicle diesel fuel as defined in Sec. 80.2(y), and to diesel fuel
additives and motor oil that are used as fuel in diesel motor vehicles
or are blended with diesel fuel for use in diesel motor vehicles at any
point downstream of the refinery, as provided in Secs. 80.447 and
80.448.
(b) Excluded fuel. The provisions of this subpart do not apply to
motor vehicle diesel fuel that is designated for export outside the
United States, and identified for export by a transfer document as
required under Sec. 80.462.
Secs. 80.442--80.445 [Reserved]
Motor Vehicle Diesel Fuel Standards and Requirements
Sec. 80.446 What are the standards and dye requirements for motor
vehicle diesel fuel?
(a) Standards. All motor vehicle diesel fuel is subject to the
following per-gallon standards:
(1) Sulfur content. 15 parts per million (ppm);
(2) Cetane index and aromatic content. (i) A minimum cetane index
of 40; or
(ii) A maximum aromatic content cap of 35 volume percent.
(b) Dye requirements. (1) All motor vehicle diesel fuel shall be
free of visible presence of dye solvent red 164 (which has a
characteristic red color in diesel fuel), except for motor vehicle
diesel fuel that is used in a manner that is tax exempt under section
4082 of the Internal Revenue Code (26 U.S.C. 4082).
(2) Any diesel fuel that does not show visible presence of dye
solvent red 164 shall be considered to be motor vehicle diesel fuel and
subject to all the requirements of this subpart for motor vehicle
diesel fuel, except for diesel fuel designated for use only in:
(i) Guam, American Samoa, or the Commonwealth of the Northern
Mariana Islands as provided under Sec. 80.467;
(ii) The State of Alaska as provided under 40 CFR 69.51; or
(iii) Jet aircraft, research and development testing, or for
export.
Sec. 80.447 What are the standards and identification requirements for
additives that are blended into or are offered for sale for use in
motor vehicle diesel fuel?
(a) Any additive that is blended into motor vehicle diesel fuel
downstream of the refinery or is offered for sale for use in diesel
motor vehicles shall have a sulfur content not exceeding 15 ppm.
(b) Transfer of the diesel fuel additive shall be accompanied by a
transfer document under Sec. 80.463, except as
[[Page 35547]]
provided in paragraph (c) of this section.
(c) For additives sold in containers for use by the ultimate
consumer of diesel fuel, each transferor shall include on the additive
container, in a legible and conspicuous manner, the following accurate
printed statement:
This diesel fuel additive complies with the federal sulfur
content requirements for use in diesel motor vehicles.
Sec. 80.448 May used motor oil be dispensed into diesel motor
vehicles?
No person shall introduce used motor oil, or used motor oil blended
with diesel fuel, into model year 2007 or later diesel motor vehicles,
unless the following requirements have been met:
(a) The engine manufacturer has received a Certificate of
Conformity for the vehicle engine under 40 CFR part 86 that is
explicitly based on the addition of motor oil having the greatest
sulfur content of any motor oil that is commercially available; and
(b) The oil is added in a manner consistent with the conditions of
the certificate.
Sec. 80.449 What diesel fuel designation requirements apply to
refiners and importers?
Any refiner or importer shall accurately and clearly designate all
fuel it produces or imports for use in motor vehicles as motor vehicle
diesel fuel.
Secs. 80.450-80.452 [Reserved]
Sec. 80.453 What labeling requirements apply to retailers and
wholesale purchaser-consumers?
Any retailer or wholesale purchaser-consumer who sells, dispenses,
or offers for sale or dispensing, non-road diesel fuel and motor
vehicle diesel fuel, must prominently and conspicuously display in the
immediate area of each pump stand from such fuel is offered for sale or
dispensing, the following legible label, in block letters of no less
than 36-point bold type, printed in a color contrasting with the
background, and placed in a location that is readily visible to the
fuel recipient:
This is high sulfur diesel fuel which is not to be used in any
highway motor vehicle. The use of high sulfur diesel fuel in highway
motor vehicles may damage emissions controls, harm engine
operations, and void your emissions warranty.
Secs. 80.454-80.460 [Reserved]
Sampling and Testing
Sec. 80.461 What are the sampling and test methods for sulfur?
(a) Diesel fuel. For purposes of Sec. 80.446, the sulfur content of
diesel fuel is the sulfur content as determined by:
(1) Sampling method. The applicable sampling methodology provided
in Sec. 80.330(b).
(2) Test method for sulfur. The American Society for Testing and
Materials (ASTM) standard method D 2622-98, entitled ``Standard Test
Method for Sulfur in Petroleum Products by Wavelength Dispersive X-ray
Fluorescence Spectrometry,'' modified as follows:
(i)(A) The blank stock used as a diluent for all calibration
standards and sample dilutions must be prepared by mixing the following
compounds at the specified proportions: 15 grams tert-butylbenzene, 15
grams decane, 15 grams dodecane, 15 grams tetradecane, 15 grams
hexadecane, 15 grams tetralin, 5 grams octadecane, 5 grams napthalene.
(B) The weight tolerances are +/-5 percent for each compound. The
compounds must have a minimum purity of 99 percent.
(ii) Standards must be prepared by gravimetric dilution of the
appropriate pure or certified sulfur compounds in the blank stock.
(iii) A standard series of 5 calibration points at standard levels
must be run. An additional blank calibration standard must be included
using the blank stock prepared pursuant to the requirements of this
section.
(iv) A graph of the calibration points must be prepared. This graph
must show the calibration data to be linear with minimal deviation from
the least squares line. Any deviation from linearity and/or any
standard that does not appear to lie on the least squares line must be
investigated.
(v) A new regression line must be calculated using the calibration
point from the blank and the single standard that falls closest to the
least squares line that was derived using all of the calibration
points. This is simply a recalculation using the same data, additional
standard analyses are not necessary for this recalculation. For this
recalculation, it is preferred that the non-zero standard be in the
upper portion of the calibration.
(vi) Analyzing the blank as an unknown, the blank must return a
zero within +/-1 ppm.
(vii) The following guidelines are useful in limiting test
variability: For ongoing verification when samples are in the single
digit range, it is good practice to include more duplicates and include
both blank samples and control fluid samples. For higher level samples,
it is good practice to analyze samples in batches of 12. One duplicate
and one control fluid sample should be analyzed with each batch of 12
samples. For lower level work, it is good practice to run samples in
batches of 6. One duplicate, one control fluid, and one blank should be
analyzed with each batch of 6 samples. As a general comment, care must
be taken not to pollute the blank with sulfur from higher samples or
standards through the process of preparing standards and analyzing the
blanks.
(3) Quality assurance test method. Any ASTM sulfur test method may
be used for quality assurance testing under Sec. 80.473, if the
protocols of the ASTM method are followed and the alternative method is
correlated to the method provided in paragraph (b) of this section.
(b) Motor Oil. For purposes of Sec. 80.448, the sulfur content of
unused motor oil for use in diesel fuel is the sulfur content as
determined by the use of American Society for Testing and Materials
(ASTM) standard method D 6443-99, entitled ``Standard Test Method for
Determination of Calcium, Chlorine, Copper, Magnesium, Phosphorous,
Sulfur, and Zinc, in Unused Lubricating Oils and Additives by
Wavelength Dispersive X-ray Fluorescence Spectrometry (Mathematical
Correction Procedure).''
(c) Incorporation by reference. ASTM Standard Method D 6443-99 is
incorporated by reference. This incorporation by reference was approved
by the Director of the Federal Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may be obtained from the American
Society for Testing and Materials, 100 Bar Harbor Dr., West
Conshohocken, PA 19428. Copies may be inspected at the Air Docket
Section (LE-131), room M-1500, U.S. Environmental Protection Agency,
Docket No. A-99-06, 401 M Street, SW, Washington, DC 20460, or at the
Office of the Federal Register, 800 North Capitol Street, NW, Suite
700, Washington, DC.
Recordkeeping and Reporting Requirements
Sec. 80.462 What are the product transfer document requirements for
motor vehicle diesel fuel?
On each occasion that any person transfers custody or title to
motor vehicle diesel fuel, except when such fuel is dispensed into
motor vehicles at a retail outlet or wholesale purchaser-facility, the
transferor must provide to the transferee a product transfer document
identifying the fuel as motor vehicle diesel fuel, and which:
[[Page 35548]]
(a) Identifies the name and address of the transferor and
transferee, and the date of transfer;
(b) Except as provided in 40 CFR 69.51, includes an accurate
statement, as applicable, that:
(1) ``This fuel complies with the 15 ppm sulfur standard for motor
vehicle diesel fuel.'';
(2) ``This is high sulfur motor vehicle diesel fuel for use only in
Guam, American Samoa, or the Northern Mariana Islands.'';
(3) ``This diesel fuel is for export use only.''; or
(4) ``This diesel fuel is for research, development, or testing
purposes only.''
(c) For motor vehicle diesel fuel that contains visible evidence of
the dye solvent red 164, the following accurate statement:
This fuel is motor vehicle diesel fuel for tax-exempt use only,
in accordance with Section 4082 of the Internal Revenue Code.
(d) Except for transfers to truck carriers, retailers or wholesale
purchaser-consumers, product codes may be used to convey the
information required by paragraph (a) of this section if such codes are
clearly understood by each transferee.
Sec. 80.463 What are the product transfer document requirements for
additives to be used in motor vehicle diesel fuel?
(a) Except as provided in Sec. 80.447(c), on each occasion that any
person transfers custody or title to an additive for use in motor
vehicle diesel fuel, to a party in the motor vehicle diesel fuel
distribution system downstream of the refiner, the transferor must
provide to the transferee a product transfer document which identifies
the type of additive, and which:
(1) Identifies the name and address of the transferor and
transferee, and the date of transfer; and
(2) Includes the following accurate statement:
This additive complies with the federal 15 ppm sulfur standard
for motor vehicle diesel fuel.
(b) Except for transfers of motor vehicle diesel fuel to truck
carriers, retailers or wholesale purchaser-consumers, product codes may
be used to convey the information required under paragraph (a) of this
section, if such codes are clearly understood by each transferee.
Sec. 80.464 What records must be kept?
(a) Records that must be kept. Beginning April 1, 2006, any person
who produces, imports, sells, offers for sale, dispenses, distributes,
supplies, offers for supply, stores, or transports motor vehicle diesel
fuel subject to the provisions of this subpart must keep the following
records:
(1) The product transfer documents required under Secs. 80.462 and
80.463.
(2) For any sampling and testing for sulfur content, cetane index
or aromatics content of motor vehicle diesel fuel or additives,
conducted as part of a quality assurance program or otherwise:
(i) The location, date, time and storage tank or truck
identification for each sample collected;
(ii) The name and title of the person who collected the sample and
the person who performed the testing; and
(iii) The results of the tests for diesel fuel properties as
required under this subpart and the volume of product in the storage
tank or container from which the sample was taken.
(3) The actions the party has taken, if any, to stop the sale or
distribution of any diesel fuel found not to be in compliance with the
standards specified in this subpart, and the actions the party has
taken, if any, to identify the cause of any noncompliance and prevent
future instances of noncompliance.
(4) Business records establishing compliance with the designation
and/or segregation requirements pursuant to the requirements of this
subpart.
(b) [Reserved]
(c) Additive distribution system records. Beginning April 1, 2006,
any person who produces, imports, sells, offers for sale, dispenses,
distributes, supplies, offers for supply, stores, or transports an
additive for use in motor vehicle diesel fuel and who is required to
transfer or receive a product transfer document for that additive
pursuant to Sec. 80.463, must maintain such documents.
(d) Length of time records must be kept. The records required under
this section must be maintained for five years from the date they were
created.
(e) Make records available to EPA. The records required to be
maintained under this section must be made available to the
Administrator or the Administrator's authorized representative upon
request.
Sec. 80.465 [Reserved]
Exemptions
Sec. 80.466 What are the requirements for obtaining an exemption for
motor vehicle diesel fuel used for research, development or testing
purposes?
(a) Written request for R&D exemption. Any person may receive an
exemption from the provisions of this subpart for motor vehicle diesel
fuel used for research, development, or testing (``R&D'') purposes by
submitting the information listed in paragraph (c) of this section to:
(1) Director (6406J), Transportation and Regional Programs
Division, U.S. Environmental Protection Agency, Ariel Rios Building,
1200 Pennsylvania Avenue, NW., Washington, DC 20460 (postal mail); or
(2) Director (6406J), Transportation and Regional Programs
Division, U.S. Environmental Protection Agency, 501 3rd Street, NW.,
Washington, DC 20001 (express mail/courier); and
(3) Director (2242A), Air Enforcement Division, U.S. Environmental
Protection Agency, Ariel Rios Building, 1200 Pennsylvania Avenue, NW.,
Washington, DC 20460.
(b) Criteria for an R&D exemption. For an R&D exemption to be
granted, the person requesting an exemption must:
(1) Demonstrate a purpose that constitutes an appropriate basis for
exemption;
(2) Demonstrate that an exemption is necessary;
(3) Design an R&D program to be reasonable in scope; and
(4) Exercise a degree of control consistent with the purpose of the
program and EPA's monitoring requirements.
(c) Information required to be submitted. To demonstrate each of
the elements in paragraphs (b)(1) through (4) of this section, the
person requesting an exemption must include the following information
in the written request required under paragraph (a) of this section:
(1) A concise statement of the purpose of the program demonstrating
that the program has an appropriate R&D purpose.
(2) An explanation of why the stated purpose of the program cannot
be achieved in a practicable manner without performing one or more of
the prohibited acts under this subpart.
(3) To demonstrate the reasonableness of the scope of the program:
(i) An estimate of the program's duration in time and, if
appropriate, mileage;
(ii) An estimate of the maximum number of vehicles or engines
involved in the program;
(iii) The manner in which the information on vehicles and engines
used in the program will be recorded and made available to the
Administrator upon request; and
(iv) The quantity of diesel fuel which does not comply with the
requirements of Secs. 80.446 through 80.448.
(4) With regard to control, a demonstration that the program
affords EPA a monitoring capability, including:
[[Page 35549]]
(i) The site(s) of the program (including facility name, street
address, city, county, state, and zip code);
(ii) The manner in which information on vehicles and engines used
in the program will be recorded and made available to the Administrator
upon request;
(iii) The manner in which information on the diesel fuel used in
the program (including quantity, fuel properties, name, address,
telephone number and contact person of the supplier, and the date
received from the supplier), will be recorded and made available to the
Administrator upon request;
(iv) The manner in which the party will ensure that the R&D fuel
will be segregated from motor vehicle diesel fuel and fuel pumps will
be labeled to ensure proper use of the R&D diesel fuel;
(v) The name, address, telephone number and title of the person(s)
in the organization requesting an exemption from whom further
information on the application may be obtained; and
(vi) The name, address, telephone number and title of the person(s)
in the organization requesting an exemption who is responsible for
recording and making available the information specified in this
paragraph, and the location where such information will be maintained.
(d) Additional requirements. (1) The product transfer documents
associated with R&D motor vehicle diesel fuel must comply with
requirements of Sec. 80.462(b)(5).
(2) The R&D diesel fuel must be designated by the refiner or
supplier, as applicable, as R&D diesel fuel.
(3) The R&D diesel fuel must be kept segregated from non-exempt
motor vehicle diesel fuel at all points in the distribution system.
(4) The R&D diesel fuel must not be sold, distributed, offered for
sale or distribution, dispensed, supplied, offered for supply,
transported to or from, or stored by a diesel fuel retail outlet, or by
a wholesale purchaser-consumer facility, unless the wholesale
purchaser-consumer facility is associated with the R&D program that
uses the diesel fuel.
(5) At the completion of the program, any emission control systems
or elements of design which are damaged or rendered inoperative shall
be replaced, or the responsible person will be liable for a violation
of the Clean Air Act Section 203(a)(3) unless sufficient evidence is
supplied that the emission controls or elements of design were not
damaged.
(e) [Reserved]
(f) Mechanism for granting of an exemption. A request for an R&D
exemption will be deemed approved by the earlier of sixty (60) days
from the date on which EPA receives the request for exemption,
(provided that EPA has not notified the applicant of potential
disapproval by that time), or the date on which the applicant receives
a written approval letter from EPA.
(1) The volume of diesel fuel subject to the approval shall not
exceed the estimated amount in paragraph (c)(3)(iv) of this section,
unless EPA grants a greater amount in writing.
(2) Any exemption granted under this section will expire at the
completion of the test program or three years from the date of
approval, whichever occurs first, and may only be extended upon re-
application consistent will all requirements of this section.
(3) The passage of sixty (60) days will not signify the acceptance
by EPA of the validity of the information in the request for an
exemption. EPA may elect at any time to review the information
contained in the request, and where appropriate may notify the
responsible person of disapproval of the exemption.
(4) In granting an exemption the Administrator may include terms
and conditions, including replacement of emission control devices or
elements of design, that the Administrator determines are necessary for
monitoring the exemption and for assuring that the purposes of this
subpart are met.
(5) Any violation of a term or condition of the exemption, or of
any requirement of this section, will cause the exemption to be void ab
initio.
(6) If any information required under paragraph (c) of this section
should change after approval of the exemption, the responsible person
must notify EPA in writing immediately. Failure to do so may result in
disapproval of the exemption or may make it void ab initio, and may
make the party liable for a violation of this subpart.
(g) Effects of exemption. Motor vehicle diesel fuel that is subject
to an R&D exemption under this section is exempt from other provisions
of this subpart provided that the fuel is used in a manner that
complies with the purpose of the program under paragraph (c) of this
section and the requirements of this section.
(h) Notification of Completion. The party shall notify EPA in
writing within thirty (30) days of completion of the R&D program.
Sec. 80.467 What are the requirements for an exemption for motor
vehicle diesel fuel for use in the Territories?
The sulfur standards and dye requirement of Sec. 80.446(a)(1) and
(b) do not apply to diesel fuel that is produced, imported, sold,
offered for sale, supplied, offered for supply, stored, dispensed, or
transported for use in the Territories of Guam, American Samoa or the
Commonwealth of the Northern Mariana Islands provided that such diesel
fuel is:
(a) Designated by the refiner or importer as high sulfur diesel
fuel only for use in Guam, American Samoa, or the Commonwealth of the
Northern Mariana Islands;
(b) Used only in Guam, American Samoa, or the Commonwealth of the
Northern Mariana Islands;
(c) Accompanied by documentation that complies with the product
transfer document requirements of Sec. 80.462(b)(3); and
(d) Segregated from non-exempt highway and other diesel fuel at all
points in the distribution system from the point the diesel fuel is
designated as exempt fuel only for use in Guam, American Samoa, or the
Commonwealth of the Northern Mariana Islands, while the exempt fuel is
in the United States but outside these Territories.
Secs. 80.468-469 [Reserved]
Violation Provisions
Sec. 80.470 What acts are prohibited under the diesel fuel sulfur
program?
No person shall:
(a) Standard or dye violation. Produce, import, sell, offer for
sale, dispense, supply, offer for supply, store or transport motor
vehicle diesel fuel that does not comply with the applicable standards
and dye requirements under Sec. 80.446.
(b) Additive violation. Blend or permit the blending into motor
vehicle diesel fuel downstream of the refinery, or use, or permit the
use, as motor vehicle diesel fuel, of additives which do not comply
with the requirements of Sec. 80.447.
(c) Motor Oil violation. Introduce into diesel motor vehicles, or
permit the introduction into such vehicles of motor oil, or motor oil
blended with diesel fuel, which does not comply with the requirements
of Sec. 80.448.
(d) Introduction violation. Introduce, or permit the introduction
of, fuel into diesel motor vehicles which does not comply with the
standards of Sec. 80.446.
(e) Cause another party to violate. Cause another person to commit
an act in violation of paragraphs (a) through (d) of this section.
[[Page 35550]]
(f) Cause violating fuel or additive to be in the distribution
system. Cause diesel fuel to be in the diesel fuel distribution system
which does not comply with the applicable standard or dye requirements
of Sec. 80.446, or cause any diesel fuel additive to be in the
distribution system which does not comply with the sulfur standard of
Sec. 80.447.
Sec. 80.471 What evidence may be used to determine compliance with the
prohibitions and requirements of this subpart and liability for
violations of this subpart?
(a) Compliance with sulfur, cetane, and aromatics standards.
Compliance with the standards in Secs. 80.446 and 80.448 shall be
determined based on the level of the applicable component or parameter,
using the sampling methodologies specified in Sec. 80.330(b), as
applicable, and the appropriate testing methodologies specified in
Sec. 80.461(a) or (b) for sulfur, Sec. 80.2(w) for cetane index, and
Sec. 80.2(z) for aromatic content. Any evidence or information,
including the exclusive use of such evidence or information, may be
used to establish the level of the applicable component or parameter in
the diesel fuel, or motor oil to be used in diesel fuel, if the
evidence or information is relevant to whether that level would have
been in compliance with the standard if the appropriate sampling and
testing methodology had been correctly performed. Such evidence may be
obtained from any source or location and may include, but is not
limited to, test results using methods other than the compliance
methods in this paragraph, business records, and commercial documents.
(b) Compliance with other requirements. Determination of compliance
with the requirements of this subpart other than the standards
described in paragraph (a) of this section and in Secs. 80.446 and
80.448, and determination of liability for any violation of this
subpart, may be based on information obtained from any source or
location. Such information may include, but is not limited to, business
records and commercial documents.
Sec. 80.472 Who is liable for violations of this subpart?
(a) Persons liable for violations of prohibited acts.--(1)
Standard, dye, additives, motor oil, and introduction violations. (i)
Any refiner, importer, distributor, reseller, carrier, retailer, or
wholesale purchaser-consumer who owned, leased, operated, controlled or
supervised a facility where a violation of Sec. 80.470(a) through (d)
occurred, is deemed liable for the applicable violation.
(ii) Any person who violates Sec. 80.470(a) through (d) is liable
for the violation.
(iii) Any person who causes another person to violate
Sec. 80.470(a) through (d) is liable for a violation of Sec. 80.470(e).
(iv) Any refiner, importer, distributor, reseller, carrier,
retailer, or wholesale purchaser-consumer who produced, imported, sold,
offered for sale, dispensed, supplied, offered to supply, stored,
transported, or caused the transportation or storage of, diesel fuel
that violates Sec. 80.470(a), is deemed in violation of Sec. 80.470(e).
(2) Cause violating diesel fuel or additive to be in the
distribution system. Any refiner, importer, distributor, reseller,
carrier, retailer, or wholesale purchaser-consumer who owned, leased,
operated, controlled or supervised a facility from which motor vehicle
diesel fuel or additive was released into the distribution system which
does not comply with the applicable standards or dye requirement of
Sec. 80.446 or Sec. 80.447, is deemed in violation of Sec. 80.470(f).
(3) Branded refiner/importer liability. Any refiner or importer
whose corporate, trade, or brand name, or whose marketing subsidiary's
corporate, trade, or brand name appeared at a facility where a
violation of Sec. 80.470(a) occurred, is deemed in violation of
Sec. 80.470(a).
(4) Carrier causation. In order for a carrier to be liable under
paragraph (a)(1)(iii) or (iv) of this section, EPA must demonstrate, by
reasonably specific showing by direct or circumstantial evidence, that
the carrier caused the violation.
(5) Parent corporation. Any parent corporation is liable for any
violations of this subpart that are committed by any subsidiary.
(6) Joint venture. Each partner to a joint venture is jointly and
severally liable for any violation of this subpart that occurs at the
joint venture facility or is committed by the joint venture operation.
(b) Persons liable for failure to meet other provisions of this
subpart. Any refiner, importer, distributor, reseller, carrier,
retailer, or wholesale purchaser-consumer who:
(1) Fails to meet a provision of this subpart not addressed in
paragraph (a) of this section is liable for a violation of that
provision; or
(2) Causes another person to fail to meet a provision of this
subpart not addressed in paragraph (a) of this section, is liable for
causing a violation of that provision.
Sec. 80.473 What defenses apply to persons deemed liable for a
violation of a prohibited act?
(a) Presumptive liability defenses. Any person deemed liable for a
violation of a prohibition under Sec. 80.472 (a)(1)(i) or (a)(1)(iv),
(a)(2) or (a)(3), will not be deemed in violation if the person
demonstrates that:
(1) The violation was not caused by the person or the person's
employee or agent;
(2) Product transfer documents account for fuel or additive found
to be in violation and indicate that the violating product had met the
applicable requirements when it was under the party's control; and
(3) The person conducted a quality assurance sampling and testing
program, as described in paragraph (d) of this section. A carrier may
rely on the quality assurance program carried out by another party,
including the party who owns the diesel fuel in question, provided that
the quality assurance program is carried out properly. Retailers and
wholesale purchaser-consumers are not required to conduct quality
assurance programs.
(b) Branded refiner defenses. In the case of a violation found at a
facility operating under the corporate, trade or brand name of a
refiner or importer, or a refiner's or importer's marketing subsidiary,
the refiner or importer must show, in addition to the defense elements
required under paragraphs (a)(1) and (a)(2) of this section, that the
violation was caused by:
(1) An act in violation of law (other than the Clean Air Act or
this part 80), or an act of sabotage or vandalism;
(2) The action of any refiner, importer, retailer, distributor,
reseller, oxygenate blender, carrier, retailer or wholesale purchaser-
consumer in violation of a contractual agreement between the branded
refiner or importer and the person designed to prevent such action, and
despite periodic sampling and testing by the branded refiner or
importer to ensure compliance with such contractual obligation; or
(3) The action of any carrier or other distributor not subject to a
contract with the refiner or importer, but engaged for transportation
of diesel fuel, despite specifications or inspections of procedures and
equipment which are reasonably calculated to prevent such action.
(c) Causation demonstration. Under paragraph (a)(1) of this section
for any person to show that a violation was not caused by that person,
or under paragraph (b) of this section to show that a violation was
caused by any of the specified actions, the person must
[[Page 35551]]
demonstrate by reasonably specific showing, by direct or circumstantial
evidence, that the violation was caused or must have been caused by
another person and that the person asserting the defense did not
contribute to that other person's causation.
(d) Quality assurance and testing program. (1) To demonstrate an
acceptable quality assurance program under paragraph (a)(2) of this
section, a person must present evidence of the following:
(i) A periodic sampling and testing program to ensure the motor
vehicle diesel fuel or additive the person sold, dispensed, supplied,
stored, or transported, meets the applicable standards; and
(ii) On each occasion when motor vehicle diesel fuel or additive is
found not in compliance with the applicable standard:
(A) The person immediately ceases selling, offering for sale,
dispensing, supplying, offering for supply, storing or transporting the
non-complying product; and
(B) The person promptly remedies the violation and the factors that
caused the violation (for example, by removing the non-complying
product from the distribution system until the applicable standard is
achieved and taking steps to prevent future violations of a similar
nature from occurring).
(2) For any carrier who transports motor vehicle diesel fuel or
additive in a tank truck, the quality assurance program required under
this paragraph (d) need not include periodic sampling and testing of
the motor vehicle diesel fuel or additive in the tank truck, but in
lieu of such tank truck sampling and testing, the carrier shall
demonstrate evidence of an oversight program for monitoring compliance
with the requirements of this subpart relating to the transport or
storage of such product by tank truck, such as appropriate guidance to
drivers regarding compliance with the applicable sulfur standard and
product transfer document requirements, and the periodic review of
records received in the ordinary course of business concerning motor
vehicle diesel fuel or additive quality and delivery.
Sec. 80.474 What penalties apply under this subpart?
(a) Any person liable for a violation under Sec. 80.472 is subject
to civil penalties as specified in section 205 of the Clean Air Act for
every day of each such violation and the amount of economic benefit or
savings resulting from each violation.
(b)(1) Any person liable under Sec. 80.472(a)(1) for a violation of
an applicable standard or requirement under Sec. 80.446, or of causing
another party to violate such standard or requirement, is subject to a
separate day of violation for each and every day the non-complying
motor vehicle diesel fuel remains any place in the distribution system.
(2) Any person liable under Sec. 80.472(a)(2) for causing motor
vehicle diesel fuel to be in the distribution system which does not
comply with an applicable standard or requirement of Sec. 80.446, is
subject to a separate day of violation for each and every day that the
non-complying motor vehicle diesel fuel remains any place in the motor
vehicle diesel fuel distribution system.
(3) For purposes of this paragraph (b), the length of time the
motor vehicle diesel fuel in question remained in the motor vehicle
diesel fuel distribution system is deemed to be twenty-five days,
unless a person subject to liability or EPA demonstrates by reasonably
specific showings, by direct or circumstantial evidence, that the non-
complying motor vehicle diesel fuel remained in the distribution system
for fewer than or more than twenty-five days.
(c) Any person liable under Sec. 80.472(a)(1) for blending into
motor vehicle diesel fuel an additive violating the sulfur standard
under Sec. 80.447(a)(1), or of causing another party to violate that
requirement, is subject to a separate day of violation for each and
every day the non-complying motor vehicle diesel fuel remains any place
in the system.
(d) Any person liable under Sec. 80.472(b) for failure to meet, or
causing a failure to meet, a provision of this subpart is liable for a
separate day of violation for each and every day such provision remains
unfulfilled.
PART 86--[AMENDED]
8. The authority citation for part 86 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
9. Section 86.004-2 of subpart A is amended by adding in
alphabetical order a definition of ``U.S.-directed production'' to read
as follows:
Sec. 86.004-2 Definitions.
* * * * *
U.S.-directed production means the engines or vehicles produced by
a manufacturer for which the manufacturer has reasonable assurance that
sale was or will be made to ultimate purchasers in the United States.
* * * * *
10. Section 86.004-40 of subpart A is amended by revising the
introductory text to read as follows:
Sec. 86.004-40 Heavy-duty engine rebuilding practices.
The provisions of this section are applicable to heavy-duty engines
subject to model year 2004 or later standards and are applicable to the
process of engine rebuilding (or rebuilding a portion of an engine or
engine system). The process of engine rebuilding generally includes
disassembly, replacement of multiple parts due to wear, and reassembly,
and also may include the removal of the engine from the vehicle and
other acts associated with rebuilding an engine. Any deviation from the
provisions contained in this section is a prohibited act under section
203(a)(3) of the Clean Air Act (42 U.S.C. 7522(a)(3)).
* * * * *
11. A new Sec. 86.007-10 is added to subpart A to read as follows:
Sec. 86.007-10 Emission standards for 2007 and later model year Otto-
cycle heavy-duty engines and vehicles.
This Sec. 86.007-10 includes text that specifies requirements that
differ from Sec. 86.099-10. Where a paragraph in Sec. 86.099-10 is
identical and applicable to Sec. 86.007-10, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.099-10.''
(a)(1) Exhaust emissions from new 2007 and later model year Otto-
cycle HDEs shall not exceed:
(i)(A) Oxides of Nitrogen (NOX). 0.20 grams per brake
horsepower-hour (0.075 grams per megajoule).
(B) A manufacturer may elect to include any or all of its Otto-
cycle HDE families in any or all of the NOX and
NOX plus NMHC emissions ABT programs for HDEs, within the
restrictions described in Sec. 86.007-15 or Sec. 86.004-15. If the
manufacturer elects to include engine families in any of these
programs, the NOX FEL may not exceed 0.50 grams per brake
horsepower-hour (0.19 grams per megajoule). This ceiling value applies
whether credits for the family are derived from averaging, banking, or
trading programs.
(ii)(A) Non-methane Hydrocarbons (NMHC) for engines fueled with
either gasoline, natural gas, or liquefied petroleum gas. 0.14 grams
per brake horsepower-hour (0.052 gram per megajoule).
(B) Non-methane Hydrocarbon Equivalent (NMHCE) for engines fueled
with methanol. 0.14 grams per brake
[[Page 35552]]
horsepower-hour (0.052 gram per megajoule).
(iii)(A) Carbon monoxide. 14.4 grams per brake horsepower-hour
(5.36 grams per megajoule).
(B) Idle Carbon Monoxide. For all Otto-cycle HDEs utilizing
aftertreatment technology: 0.50 percent of exhaust gas flow at curb
idle.
(iv) Particulate. 0.01 gram per brake horsepower-hour (0.0037 gram
per megajoule).
(v) Formaldehyde. 0.016 grams per brake horsepower-hour (0.0060
gram per megajoule)
(2) The standards set forth in paragraph (a)(1) of this section
refer to the exhaust emitted over the operating schedule set forth in
paragraph (f)(1) of appendix I to this part, and measured and
calculated in accordance with the procedures set forth in subpart N or
P of this part.
(3) [Reserved]
(4) [Reserved]
(b) Evaporative emissions from heavy-duty vehicles shall not exceed
the following standards. The standards apply equally to certification
and in-use vehicles. The spitback standard also applies to newly
assembled vehicles. For certification vehicles only, manufacturers may
conduct testing to quantify a level of nonfuel background emissions for
an individual test vehicle. Such a demonstration must include a
description of the source(s) of emissions and an estimated decay rate.
The demonstrated level of nonfuel background emissions may be
subtracted from emission test results from certification vehicles if
approved in advance by the Administrator.
(1) Hydrocarbons (for vehicles equipped with gasoline-fueled,
natural gas-fueled or liquefied petroleum gas-fueled engines). (i) For
vehicles with a Gross Vehicle Weight Rating of up to 14,000 lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 1.4 grams per
test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements (gasoline-fueled
vehicles only): 1.75 grams per test.
(B) Running loss test (gasoline-fueled vehicles only): 0.05 grams
per mile.
(C) Fuel dispensing spitback test (gasoline-fueled vehicles only):
1.0 gram per test.
(ii) For vehicles with a Gross Vehicle Weight Rating of greater
than 14,000 lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 1.9 grams per
test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements (gasoline-fueled
vehicles only): 2.3 grams per test.
(B) Running loss test (gasoline-fueled vehicles only): 0.05 grams
per mile.
(2) Total Hydrocarbon Equivalent (for vehicles equipped with
methanol-fueled engines). (i) For vehicles with a Gross Vehicle Weight
Rating of up to 14,000 lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 1.4 grams carbon
per test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 1.75 grams carbon
per test.
(B) Running loss test: 0.05 grams carbon per mile.
(C) Fuel dispensing spitback test: 1.0 gram carbon per test.
(ii) For vehicles with a Gross Vehicle Weight Rating of greater
than 14,000 lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 1.9 grams carbon
per test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 2.3 grams carbon
per test.
(B) Running loss test: 0.05 grams carbon per mile.
(3)(i) For vehicles with a Gross Vehicle Weight Rating of up to
26,000 lbs, the standards set forth in paragraphs (b)(1) and (b)(2) of
this section refer to a composite sample of evaporative emissions
collected under the conditions and measured in accordance with the
procedures set forth in subpart M of this part.
(ii) For vehicles with a Gross Vehicle Weight Rating of greater
than 26,000 lbs., the standards set forth in paragraphs (b)(1)(ii) and
(b)(2)(ii) of this section refer to the manufacturer's engineering
design evaluation using good engineering practice (a statement of which
is required in Sec. 86.098-23(b)(4)(ii)).
(4) All fuel vapor generated in a gasoline-or methanol-fueled
heavy-duty vehicle during in-use operations shall be routed exclusively
to the evaporative control system (e.g., either canister or engine
purge). The only exception to this requirement shall be for
emergencies.
(c) No crankcase emissions shall be discharged into the ambient
atmosphere from any new 2007 or later model year Otto-cycle HDE.
(d) Every manufacturer of new motor vehicle engines subject to the
standards prescribed in this section shall, prior to taking any of the
actions specified in section 203(a)(1) of the Act, test or cause to be
tested motor vehicle engines in accordance with applicable procedures
in subpart N or P of this part to ascertain that such test engines meet
the requirements of this section. (e)[Reserved]. For guidance see
Sec. 86.099-10.
12. A new Sec. 86.007-11 is added to subpart A to read as follows:
Sec. 86.007-11 Emission standards for 2007 and later model year diesel
heavy-duty engines and vehicles.
Section 86.007-11 includes text that specifies requirements that
differ from Sec. 86.004-11. Where a paragraph in Sec. 86.004-11 is
identical and applicable to Sec. 86.007-11, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.004-11.''
(a)(1) Exhaust emissions from new 2007 and later model year diesel
HDEs shall not exceed the following:
(i)(A) Oxides of Nitrogen (NOX). 0.20 grams per brake
horsepower-hour (0.075 gram per megajoule).
(B) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the NOX and NOX
plus NMHC emissions ABT programs for HDEs, within the restrictions
described in Sec. 86.007-15 or Sec. 86.004-15. If the manufacturer
elects to include engine families in any of these programs, the
NOX FELs may not exceed 0.50 grams per brake horsepower-hour
(0.19 grams per megajoule). This ceiling value applies whether credits
for the family are derived from averaging, banking, or trading
programs.
(ii)(A) Non-methane Hydrocarbons (NMHC) for engines fueled with
either diesel fuel, natural gas, or liquefied petroleum gas. 0.14 grams
per brake horsepower-hour (0.052 gram per megajoule).
(B) Non-methane Hydrocarbon Equivalent ( NMHCE) for engines fueled
with methanol. 0.14 grams per brake horsepower-hour (0.052 gram per
megajoule).
(iii) Carbon monoxide. (A) 15.5 grams per brake horsepower-hour
(5.77 grams per megajoule).
(B) 0.50 percent of exhaust gas flow at curb idle (methanol-,
natural gas-, and liquefied petroleum gas-fueled diesel HDEs only).
(iv) Particulate. (A) 0.01 gram per brake horsepower-hour (0.0037
gram per megajoule).
(B) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the particulate ABT programs for HDEs,
within the
[[Page 35553]]
restrictions described in Sec. 86.007-15 or superseding applicable
sections. If the manufacturer elects to include engine families in any
of these programs, the particulate FEL may not exceed 0.02 gram per
brake horsepower-hour (0.0075 gram per megajoule).
(v) Formaldehyde. 0.016 grams per brake horsepower-hour (0.0060
gram per megajoule).
(2) The standards set forth in paragraph (a)(1) of this section
refer to the exhaust emitted over the operating schedule set forth in
paragraph (f)(2) of appendix I to this part, and measured and
calculated in accordance with the procedures set forth in subpart N or
P of this part, except as noted in Sec. 86.007-23(c)(2).
(3)(i) The weighted average exhaust emissions, as determined under
Sec. 86.1360-2004(e)(5) pertaining to the supplemental steady-state
test cycle, for each regulated pollutant shall not exceed 1.0 times the
applicable emission standards or FELs specified in paragraph (a)(1) of
this section.
(ii) Exhaust emissions shall not exceed the Maximum Allowable
Emission Limits (for the corresponding speed and load), as determined
under Sec. 86.1360-2004(f), when the engine is operated in the steady-
state control area defined under Sec. 86.1360-2004(d).
(4)(i) The weighted average emissions, as determined under
Sec. 86.1370 pertaining to the not-to-exceed test procedures, for each
regulated pollutant shall not exceed 1.25 times the applicable emission
standards or FELs specified in paragraph (a)(1) of this section, except
as noted in paragraph (a)(4)(ii) of this section.
(ii) Exhaust emissions shall not exceed either the Maximum
Allowable Emission Limits (for the corresponding speed and load), as
determined under Sec. 86.1360(f) or the exhaust emissions specified in
paragraph (a)(4)(i) of this section, whichever is numerically lower,
when the engine is operated in the steady-state control area defined
under Sec. 86.1360(d).
(b)[Reserved]. For guidance see Sec. 86.004-11.
(c) No crankcase emissions shall be discharged into the ambient
atmosphere from any new 2007 or later model year diesel HDE.
(d) Every manufacturer of new motor vehicle engines subject to the
standards prescribed in this section shall, prior to taking any of the
actions specified in section 203(a)(1) of the Act, test or cause to be
tested motor vehicle engines in accordance with applicable procedures
in subpart I or N of this part to ascertain that such test engines meet
the requirements of paragraphs (a), (b), (c), and (d) of this section.
(e)[Reserved]. For guidance see Sec. 86.004-11.
(f) Optional phase-in provisions. For model years 2007, 2008, and
2009, manufacturers may certify some of their engine families to the
combined NOx plus NMHC standard applicable to model year 2006 engines
under Sec. 86.004-11, in lieu of the separate NOX, NMHC, and
formaldehyde standards specified in this section. These engines must
comply with all other requirements applicable to model year 2007
engines.
(1) The following sales limits apply:
(i) For model year 2007, the combined number of engines in the
engine families certified to the 2006 combined NOX plus NMHC
standard may not exceed 75 percent of the manufacturer's U.S.-directed
production of heavy-duty diesel motor vehicle engines for model year
2007.
(ii) For model year 2008, the combined number of engines in the
engine families certified to the 2006 combined NOX plus NMHC
standard may not exceed 50 percent of the manufacturer's U.S.-directed
production of heavy-duty diesel motor vehicle engines for model year
2008.
(iii) For model year 2009, the combined number of engines in the
engine families certified to the 2006 combined NOX plus NMHC
standard may not exceed 25 percent of the manufacturer's U.S.-directed
production of heavy-duty diesel motor vehicle engines for model year
2009.
(2) During the phase-in period, manufacturers may not average
together (as part of the ABT program) engine families certified to the
NOX plus NMHC standards applicable to model year 2006 and
engine families certified to the separate NOX and NMHC
standards specified in this section.
(g)(1) Diesel heavy-duty engines and vehicles for sale in Guam,
American Samoa, or the Commonwealth of the Northern Mariana Islands
shall be subject to the same standards and requirements as apply to
2006 model year diesel heavy-duty engines and vehicles, but only if the
vehicle or engine bears a permanently affixed label stating:
THIS ENGINE (or VEHICLE, as applicable) CONFORMS TO US EPA
EMISSION STANDARDS APPLICABLE TO MODEL YEAR 2006. THIS ENGINE (or
VEHICLE, as applicable) DOES NOT CONFORM TO US EPA EMISSION
REQUIREMENTS IN EFFECT AT TIME OF PRODUCTION AND MAY NOT BE IMPORTED
INTO THE UNITED STATES OR ANY TERRITORY OF THE UNITED STATES EXCEPT
GUAM, AMERICAN SAMOA, OR THE COMMONWEALTH OF THE NORTHERN MARIANA
ISLANDS.
(2) The importation or sale of such a vehicle or engine for use at
any location other than Guam, American Samoa, or the Commonwealth of
the Northern Mariana Islands shall be considered a violation of section
203(a)(1) of the Clean Air Act. In addition, vehicles or vehicle
engines subject to this exemption may not subsequently be imported or
sold into any state or territory of the United States other than Guam,
American Samoa, or Commonwealth of the Northern Mariana Islands.
13. A new Sec. 86.007-15 is added to Subpart A to read as follows:
Sec. 86.007-15 NOX and particulate averaging, trading, and
banking for heavy-duty engines.
Section 86.007-15 includes text that specifies requirements that
differ from Sec. 86.004-15. Where a paragraph in Sec. 86.004-15 is
identical and applicable to Sec. 86.007-15, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.004-15.''
(a) through (k) [Reserved]. For guidance see Sec. 86.004-15.
(l) The following provisions apply for model year 2007 and later
engines. These provisions apply instead of the provisions of
Sec. 86.004-15 (a) through (k) to the extent that they are in conflict.
(1) Credits are calculated as NOX credits. Banked
NOX plus NMHC credits and PM credits generated in prior
model years (before 2007) may not be used in the 2007 and later
NOX and PM averaging programs, unless:
(i) The engines generating the credits meet all of the applicable
standards listed in Sec. 86.007-10 (a)(1) or Sec. 86.007-11 (a)(1); or
(ii) The engines using the credits are certified under the
Sec. 86.007-11(f).
(2) The FEL must be expressed to the same number of decimal places
as the standard (one-hundredth of a gram per brake horsepower-hour).
(3) Credits are rounded to the nearest one-hundredth of a Megagram.
(4) Credits generated for 2007 and later model year engine families
are not discounted, and do not expire.
14. A new Sec. 86.007-23 is added to Subpart A to read as follows:
Sec. 86.007-23 Required data.
Section 86.007-23 includes text that specifies requirements that
differ from Sec. 86.095-23, Sec. 86.098-23, or Sec. 86.001-23. Where a
paragraph in Sec. 86.095-23, Sec. 86.098-23, or Sec. 86.001-23 is
identical and applicable to Sec. 86.007-23, this may
[[Page 35554]]
be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.095-23.'',
``[Reserved]. For guidance see Sec. 86.098-23.'', or ``[Reserved]. For
guidance see Sec. 86.001-23.''.
(a) through (b)(1) [Reserved]. For guidance see Sec. 86.098-23.
(b)(2) [Reserved]. For guidance see Sec. 86.001-23.
(b)(3) and (b)(4) [Reserved]. For guidance see Sec. 86.098-23.
(c) Emission data--(1) Certification vehicles. The manufacturer
shall submit emission data (including, methane, methanol, formaldehyde,
and hydrocarbon equivalent, as applicable) on such vehicles tested in
accordance with applicable test procedures and in such numbers as
specified. These data shall include zero-mile data, if generated, and
emission data generated for certification as required under
Sec. 86.000-26(a)(3). In lieu of providing emission data the
Administrator may, on request of the manufacturer, allow the
manufacturer to demonstrate (on the basis of previous emission tests,
development tests, or other information) that the engine will conform
with certain applicable emission standards of this part Standards
eligible for such manufacturer requests are those for idle CO
emissions, smoke emissions, or particulate emissions from methanol-
fueled diesel-cycle certification vehicles, those for particulate
emissions from gasoline-fueled or methanol-fueled Otto-cycle
certification vehicles, and those for formaldehyde emissions from
petroleum-fueled vehicles. Also eligible for such requests are
standards for total hydrocarbon emissions from model year 1994 and
later certification vehicles. By separate request, including
appropriate supporting test data, the manufacturer may request that the
Administrator also waive the requirement to measure particulate or
formaldehyde emissions when conducting Selective Enforcement Audit
testing of Otto-cycle vehicles.
(2) Certification engines. The manufacturer shall submit emission
data on such engines tested in accordance with applicable emission test
procedures of this subpart and in such numbers as specified. These data
shall include zero-hour data, if generated, and emission data generated
for certification as required under Sec. 86.000-26(c)(4). In lieu of
providing emission data on idle CO emissions or particulate emissions
from methanol-fueled diesel-cycle certification engines, on particulate
emissions from Otto-cycle engines, on CO emissions from petroleum-
fueled or methanol-fueled diesel certification engines, or on
formaldehyde emissions from petroleum-fueled engines the Administrator
may, on request of the manufacturer, allow the manufacturer to
demonstrate (on the basis of previous emission tests, development
tests, or other information) that the engine will conform with the
applicable emission standards of this part . In lieu of providing
emission data on smoke emissions from methanol-fueled or petroleum-
fueled diesel certification engines, the Administrator may, on the
request of the manufacturer, allow the manufacturer to demonstrate (on
the basis of previous emission tests, development tests, or other
information) that the engine will conform with the applicable emissions
standards of this part In lieu of providing emissions data on smoke
emissions from petroleum-fueled or methanol-fueled diesel engines, or
on formaldehyde emissions from petroleum-fueled engines when conducting
Selective Enforcement Audit testing under subpart K of this part, the
Administrator may, on separate request of the manufacturer, allow the
manufacturer to demonstrate (on the basis of previous emission tests,
development tests, or other information) that the engine will conform
with the applicable smoke emissions standards of this part.
(d) through (e)(1) [Reserved]. For guidance see Sec. 86.098-23.
(e)(2) and (e)(3) [Reserved]. For guidance see Sec. 86.001-23.
(f) through (g) [Reserved]. For guidance see Sec. 86.095-23.
(h) through (k) [Reserved]. For guidance see Sec. 86.098-23.
(l) [Reserved]. For guidance see Sec. 86.095-23.
(m) [Reserved]. For guidance see Sec. 86.098-23.
15. A new Sec. 86.007-25 is added to Subpart A to read as follows:
Sec. 86.007-25 Maintenance.
Section 86.007-25 includes text that specifies requirements that
differ from Sec. 86.094-25, Sec. 86.098-25, or Sec. 86.004-25. Where a
paragraph in Sec. 86.094-25, Sec. 86.098-25, or Sec. 86.004-25 is
identical and applicable to Sec. 86.007-25, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.094-25.'', ``[Reserved]. For guidance see
Sec. 86.098-25.'', or ``[Reserved]. For guidance see Sec. 86.004-25.''
(a) through (b)(3)(v)(H) [Reserved]. For guidance see Sec. 86.004-25.
(b)(3)(vi)(A) through (b)(3)(vi)(D) [Reserved]. For guidance see
Sec. 86.094-25.
(b)(3)(vi)(E) through (b)(3)(vi)(J) [Reserved]. For guidance see
Sec. 86.098-25.
(b)(4) introductory text through (b)(4)(iii)(C) [Reserved]. For
guidance see Sec. 86.004-25.
(b)(4)(iii)(D) Particulate trap or trap oxidizer systems including
related components (adjustment and cleaning only for filter element,
replacement of the filter element is not allowed during the useful
life).
(b)(4)(iii)(E) [Reserved]. For guidance see Sec. 86.004-25.
(F) Catalytic converter (adjustment and cleaning only for catalyst
beds, replacement of the bed is not allowed during the useful life).
(b)(4)(iii)(G) through (b)(6) [Reserved]. For guidance see
Sec. 86.004-25.
(b)(7) through (h) [Reserved]. For guidance see Sec. 86.094-25.
16. A new Sec. 86.007-35 is added to Subpart A to read as follows:
Sec. 86.007-35 Labeling.
Section 86.007-35 includes text that specifies requirements that
differ from Sec. 86.095-35. Where a paragraph in Sec. 86.095-35 is
identical and applicable to Sec. 86.007-35, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.095-35.''.
(a) Introductory text through (a)(1)(iii)(L) [Reserved]. For
guidance see Sec. 86.095-35.
(a)(1)(iii)(M) [Reserved]
(a)(1)(iii)(N)(1) For vehicles exempted from compliance with
certain revised performance warranty procedures, as specified in
Sec. 86.096-21(j), a statement indicating the specific performance
warranty test(s) of 40 CFR part 85, subpart W, not to be performed.
(2) For vehicles exempted from compliance with all revised
performance warranty procedures, as specified in Sec. 86.096-21(k), a
statement indicating:
(i) That none of the performance warranty tests of 40 CFR part 85,
subpart W, is to be performed, and
(ii) The name of the Administrator-approved alternative test
procedure to be performed.
(2) Light-duty truck and heavy-duty vehicles optionally certified
in accordance with the light-duty truck provisions.
(i) A legible, permanent label shall be affixed in a readily
visible position in the engine compartment.
(ii) The label shall be affixed by the vehicle manufacturer who has
been issued the certificate of conformity for such vehicle, in such a
manner that it cannot be removed without destroying or defacing the
label. The label shall not
[[Page 35555]]
be affixed to any equipment which is easily detached from such vehicle.
(iii) The label shall contain the following information lettered in
the English language in block letters and numerals, which shall be of a
color that contrasts with the background of the label:
(A) The label heading: Important Vehicle Information;
(B) Full corporate name and trademark of the manufacturer;
(C) Engine displacement (in cubic inches or liters), engine family
identification, and evaporative/refueling family;
(a)(2)(iii)(D) through (a)(2)(iii)(E) [Reserved]. For guidance see
Sec. 86.095-35.
(a)(2)(iii)(F) [Reserved]
(a)(2)(iii)(G) through (a)(2)(iii)(K) [Reserved]. For guidance see
Sec. 86.095-35.
(a)(2)(iii)(L) [Reserved]
(a)(2)(iii)(M) through (a)(2)(iii)(N) [Reserved]. For guidance see
Sec. 86.095-35.
(a)(2)(iii)(O)(1) For vehicles exempted from compliance with
certain revised performance warranty procedures, as specified in
Sec. 86.096-21(j), a statement indicating the specific performance
warranty test(s) of 40 CFR part 85, subpart W, not to be performed.
(2) For vehicles exempted from compliance with all revised
performance warranty procedures, as specified in Sec. 86.096-21(k), a
statement indicating:
(i) That none of the performance warranty tests of 40 CFR part 85,
subpart W, is to be performed, and
(ii) The name of the Administrator-approved alternative test
procedure to be performed.
(a)(3) heading through (b) [Reserved]. For guidance see
Sec. 86.095-35.
(c) Model year 2007 and later diesel heavy-duty vehicles, and
diesel-fueled Tier 2 vehicles as defined in Subpart S of this Part,
must include permanent readily visible labels on the dashboard (or
instrument panel) and near the fuel inlet that states ``Ultra Low
Sulfur Diesel Fuel Only''.
(d) through (i) [Reserved]. For guidance see Sec. 86.095-35.
17. A new Sec. 86.007-38 is added to Subpart A to read as follows:
Sec. 86.007-38 Maintenance Instructions.
Section 86.007-38 includes text that specifies requirements that
differ from those specified in Sec. 86.094-38 or Sec. 86.004-38. Where
a paragraph in Sec. 86.094-38 or Sec. 86.004-38 is identical and
applicable to Sec. 86.007-38, this may be indicated by specifying the
corresponding paragraph and the statement ``[Reserved]. For guidance
see Sec. 86.094-38.'', or ``[Reserved]. For guidance see Sec. 86.004-
38.''
(a) through (f) [Reserved]. For guidance see Sec. 86.004-38.
(g) [Reserved]. For guidance see Sec. 86.094-38.
(h) [Reserved]. For guidance see Sec. 86.004-38.
(i) For each new diesel-fueled engine subject to the standards
prescribed in Sec. 86.007-11, as applicable, the manufacturer shall
furnish or cause to be furnished to the ultimate purchaser a statement
that ``This engine must be operated only with ultra low sulfur diesel
fuel (i.e., diesel fuel meeting EPA specifications for highway diesel
fuel, including a 15 ppm sulfur cap).''
18. A new Sec. 86.113-07 is added to subpart B to read as follows:
Sec. 86.113-07 Fuel specifications.
Section 86.113-07 includes text that specifies requirements that
differ from Sec. 86.113-94 or Sec. 86.113-04. Where a paragraph in
Sec. 86.113-94 or Sec. 86.113-04 is identical and applicable to
Sec. 86.113-07, this may be indicated by specifying the corresponding
paragraph and the statement ``[Reserved]. For guidance see Sec. 86.113-
94 or ``[Reserved]. For guidance see Sec. 86.113-04''.
(a) [Reserved]. For guidance see Sec. 86.113-04.
(b)(1) [Reserved]. For guidance see Sec. 86.113-94.
(b)(2) Petroleum fuel for diesel vehicles meeting the following
specifications, or substantially equivalent specifications approved by
the Administrator, must be used in exhaust emissions testing. The grade
of petroleum diesel fuel recommended by the engine manufacturer,
commercially designated as ``Type 2-D'' grade diesel, must be used:
----------------------------------------------------------------------------------------------------------------
Item ASTM test method No. Type 2-D
----------------------------------------------------------------------------------------------------------------
(i) Cetane Number................. D613 40-50
----------------------------------------------------------------------------------------------------------------
(ii) Cetane Index................. D976 40-50
----------------------------------------------------------------------------------------------------------------
(iii) Distillation range:
(A) IBP....................... deg.F D86 340-400
( deg.C) (171.1-204.4)
----------------------------------------------------------------------------------------------------------------
(B) 10 pct. point............. deg.F D86 400-460
( deg.C) (204.4-237.8)
----------------------------------------------------------------------------------------------------------------
(C) 50 pct. point............. deg.F D86 470-540
( deg.C) (243.3-282.2)
----------------------------------------------------------------------------------------------------------------
(D) 90 pct. point............. deg.F D86 560-630
( deg.C) (293.3-332.2)
----------------------------------------------------------------------------------------------------------------
(E) EP........................ deg.F D86 610-690
( deg.C) (321.1-365.6)
----------------------------------------------------------------------------------------------------------------
(iv) Gravity...................... deg.API D287 32-37
----------------------------------------------------------------------------------------------------------------
(v) Total sulfur.................. ppm D2622 7-15
----------------------------------------------------------------------------------------------------------------
(vi) Hydrocarbon composition:
Aromatics, minimum (Remainder pct. D5186 27
shall be paraffins,
naphthenes, and olefins).
----------------------------------------------------------------------------------------------------------------
[[Page 35556]]
(vii) Flashpoint, min............. deg.F D93 130
( deg.C) (54.4)
----------------------------------------------------------------------------------------------------------------
(viii) Viscosity.................. centistokes D445 2.0-3.2
----------------------------------------------------------------------------------------------------------------
(3) Petroleum fuel for diesel vehicles meeting the following
specifications, or substantially equivalent specifications approved by
the Administrator, shall be used in service accumulation. The grade of
petroleum diesel fuel recommended by the engine manufacturer,
commercially designated as ``Type 2-D'' grade diesel fuel, shall be
used:
----------------------------------------------------------------------------------------------------------------
Item ASTM test method No. Type 2-D
----------------------------------------------------------------------------------------------------------------
(i) Cetane Number................. D613 38-58
----------------------------------------------------------------------------------------------------------------
(ii) Cetane Index................. D976 min. 40
----------------------------------------------------------------------------------------------------------------
(iii) Distillation range:
90 pct. point................. deg.F D86 540-630
----------------------------------------------------------------------------------------------------------------
(iv) Gravity...................... deg.API D287 30-39
----------------------------------------------------------------------------------------------------------------
(v) Total sulfur.................. ppm D2622 7-15
----------------------------------------------------------------------------------------------------------------
(vi) Flashpoint, min.............. deg.F D93 130
( deg.C) (54.4)
----------------------------------------------------------------------------------------------------------------
(vii) Viscosity................... centistokes D445 1.5-4.5
----------------------------------------------------------------------------------------------------------------
(b)(4) through (g) [Reserved]. For guidance see Sec. 86.113-94.
19. A new Sec. 86.1313-07 of subpart N is added to read as follows:
Sec. 86.1313-07 Fuel specifications.
Section 86.1313-07 includes text that specifies requirements that
differ from Sec. 86.1313-94. Where a paragraph in Sec. 86.1313-94 is
identical and applicable to Sec. 86.1313-07, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1313-94.''.
(a) through (b)(1) [Reserved]. For guidance see Sec. 86.1313-94.
(b)(2) Petroleum fuel for diesel engines meeting the specifications
in Table N07-2, or substantially equivalent specifications approved by
the Administrator, shall be used in exhaust emissions testing. The
grade of petroleum fuel used shall be commercially designated as ``Type
2-D'' grade diesel fuel except that fuel commercially designated as
``Type 1-D'' grade diesel fuel may be substituted provided that the
manufacturer has submitted evidence to the Administrator demonstrating
to the Administrator's satisfaction that this fuel will be the
predominant in-use fuel. Such evidence could include such things as
copies of signed contracts from customers indicating the intent to
purchase and use ``Type 1-D'' grade diesel fuel as the primary fuel for
use in the engines or other evidence acceptable to the Administrator.
Table N07-2 follows:
Table N07-2
----------------------------------------------------------------------------------------------------------------
ASTM test
Item method No. Type 1-D Type 2-D
----------------------------------------------------------------------------------------------------------------
(i) Cetane Number............ D613 40-54 40-50
----------------------------------------------------------------------------------------------------------------
(ii) Cetane Index............ D976 40-54 40-50
----------------------------------------------------------------------------------------------------------------
(iii) Distillation range:
(A) IBP.................. F D86 330-390 340-400
(C) (165.6-198.9) (171.1-204.4)
----------------------------------------------------------------------------------------------------------------
(B) 10 pct. point........ F D86 370-430 400-460
(C) 187.8-221.1) (204.4-237.8)
----------------------------------------------------------------------------------------------------------------
(C) 50 pct. point........ F D86 410-480 470-540
C) (210.0-248.9) (243.3-282.2)
----------------------------------------------------------------------------------------------------------------
[[Page 35557]]
(D) 90 pct. point........ F D86 460-520 560-630
(C) (237.8-271-1) (293.3-332.2)
----------------------------------------------------------------------------------------------------------------
(E) EP................... F D86 500-560 610-690
(C) (260.0-293.3) (321.1-365.6)
----------------------------------------------------------------------------------------------------------------
(iv) Gravity................. API D287 40-44 32-37
----------------------------------------------------------------------------------------------------------------
(v) Total sulfur............. ppm D2622 7-15 7-15
----------------------------------------------------------------------------------------------------------------
(vi) Hydrocarbon composition:
Aromatics, minimum pct D5186 8 27
(Remainder shall be
paraffins, naphthenes,
and olefins).
----------------------------------------------------------------------------------------------------------------
(vii) Flashpoint, min........ F 93 120 130
(C) (48.9) (54.4)
----------------------------------------------------------------------------------------------------------------
(viii) Viscosity............. centistokes D445 1.6-2.0 2.0-3.2
----------------------------------------------------------------------------------------------------------------
(3) Petroleum diesel fuel for diesel engines meeting the
specifications in table N07-3, or substantially equivalent
specifications approved by the Administrator, shall be used in service
accumulation. The grade of petroleum diesel fuel used shall be
commercially designated as ``Type 2-D'' grade diesel fuel except that
fuel commercially designated as ``Type 1-D'' grade diesel fuel may be
substituted provided that the manufacturer has submitted evidence to
the Administrator demonstrating to the Administrator's satisfaction
that this fuel will be the predominant in-use fuel. Such evidence could
include such things as copies of signed contracts from customers
indicating the intent to purchase and use ``Type 1-D'' grade diesel
fuel as the primary fuel for use in the engines or other evidence
acceptable to the Administrator. Table N07-03 follows:
Table N07-3
----------------------------------------------------------------------------------------------------------------
ASTM test
Item method No. Type 1-D Type 2-D
----------------------------------------------------------------------------------------------------------------
(i) Cetane Number............ D613 40-56 38-58
----------------------------------------------------------------------------------------------------------------
(ii) Cetane Index............ D976 min. 40 min. 40
----------------------------------------------------------------------------------------------------------------
(iii) Distillation range:
90 pct. point............ F D86 440-530 540-630
(C) 226.7-276-7) (293.3-332.2)
----------------------------------------------------------------------------------------------------------------
(iv) Gravity................. API D287 39-45 30-39
----------------------------------------------------------------------------------------------------------------
(v) Total sulfur............. ppm D2622 7-15 7-15
----------------------------------------------------------------------------------------------------------------
(vi) Flashpoint, min......... F D93 130 130
(C) (54.4) (54.4)
----------------------------------------------------------------------------------------------------------------
(vii) Viscosity.............. centistokes D445 1.2-2.2 1.5-4.5
----------------------------------------------------------------------------------------------------------------
(b)(4) through (g) [Reserved]. For guidance see Sec. 86.1313-94.
20. A new Sec. 86.1337-07 is added to subpart N to read as follows:
Sec. 86.1337-07 Engine dynamometer test run.
Section 86.1337-07 includes text that specifies requirements that
differ from Sec. 86.1337-96. Where a paragraph in Sec. 86.1337-96 is
identical and applicable to Sec. 86.1337-07, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.1337-96.''.
(a) through (c) [Reserved]. For guidance see Sec. 86.1337-96.
(d) For engines equipped with an aftertreatment device that is
intermittently regenerated:
(1) Repeat the ``hot start cycle'' until the regeneration event
occurs;
(2) Complete the ``hot start cycle'' in which the regeneration
event occurs;
(3) Measure emission during each of the ``hot start cycles''; and
(4) Use the measured emission values for the ``hot start cycle''
with the highest emissions as the ``hot start cycle'' emissions for
calculations in Sec. 86.1342. (Note: If the highest emission values for
each pollutant do not occur in the same ``hot start cycle'', then use
the emissions for the cycle in which the emissions come closest to
causing an exceedance of an applicable standard.)
[[Page 35558]]
21. A new Sec. 86.1808-07 is added to subpart S to read as follows:
Sec. 86.1808-07 Maintenance instructions.
Section 86.1808-07 includes text that specifies requirements that
differ from those specified in Sec. 86.1808-01. Where a paragraph in
Sec. 86.1808-01 is identical and applicable to Sec. 86.1808-07, this
may be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.1808-01.''.
(a) through (f) [Reserved]. For guidance see Sec. 86.1808-01.
(g) For each new diesel-fueled Tier 2 vehicle, the manufacturer
shall furnish or cause to be furnished to the purchaser a statement
that ``This vehicle must be operated only with ultra low sulfur diesel
fuel (i.e., diesel fuel meeting EPA specifications for highway diesel
fuel, including a 15 ppm sulfur cap).''.
22. Section 86.1810-01 is amended by revising the introductory text
to read as follows:
Sec. 86.1810-01 General standards; increase in emissions; unsafe
conditions; waivers.
This section applies to model year 2001 and later light-duty
vehicles and light-duty trucks fueled by gasoline, diesel, methanol,
natural gas and liquefied petroleum gas fuels. This section also
applies to complete heavy-duty vehicles certified according to the
provisions of this subpart. Multi-fueled vehicles (including dual-
fueled and flexible-fueled vehicles) shall comply with all requirements
established for each consumed fuel (or blend of fuels in the case of
flexible fueled vehicles). The standards of this subpart apply to both
certification and in-use vehicles unless otherwise indicated. For Tier
2 and interim non-Tier 2 vehicles, this section also applies to hybrid
electric vehicles and zero emission vehicles. Unless otherwise
specified, requirements and provisions of this subpart applicable to
methanol fueled vehicles are also applicable to Tier 2 and interim non-
Tier 2 ethanol fueled vehicles.
* * * * *
23. A new Sec. 86.1816-07 is added to subpart S, to read as
follows:
Sec. 86.1816-07 Emission standards for complete heavy-duty vehicles.
Section 86.1816-07 includes text that specifies requirements that
differ from those specified in Sec. 86.1816-04.\1\ Where a paragraph in
Sec. 86.1816-04 is identical and applicable to Sec. 86.1816-07, this
may be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.1816-04.'' This
section applies to 2007 and later model year complete heavy-duty
vehicles (excluding MDPVs) fueled by gasoline, methanol, natural gas
and liquefied petroleum gas fuels except as noted. Multi-fueled
vehicles shall comply with all requirements established for each
consumed fuel. For methanol fueled vehicles, references in this section
to hydrocarbons or total hydrocarbons shall mean total hydrocarbon
equivalents and references to non-methane hydrocarbons shall mean non-
methane hydrocarbon equivalents.
(a) Exhaust emission standards. (1) Exhaust emissions from 2007 and
later model year complete heavy-duty vehicles at and above 8,500 pounds
Gross Vehicle Weight Rating but equal to or less than 10,000 Gross
Vehicle Weight Rating pounds shall not exceed the following standards
at full useful life:
---------------------------------------------------------------------------
\1\ Section 86.1816-04 was proposed to be added at 64 FR 58559,
October 29, 1999.
---------------------------------------------------------------------------
(i) [Reserved]
(ii) Non-methane hydrocarbons. 0.195 grams per mile; this
requirement may be satisfied by measurement of non-methane hydrocarbons
or total hydrocarbons, at the manufacturer's option.
(iii) Carbon monoxide. 7.3 grams per mile.
(iv) Oxides of nitrogen. 0.20 grams per mile.
(v) Particulate. 0.02 grams per mile.
(vi) Formaldehyde. 0.016 grams per mile.
(2) Exhaust emissions from 2007 and later model year complete
heavy-duty vehicles above 10,000 pounds Gross Vehicle Weight Rating but
less than 14,000 pounds Gross Vehicle Weight Rating shall not exceed
the following standards at full useful life:
(i) [Reserved]
(ii) Non-methane hydrocarbons. 0.23 grams per mile; this
requirement may be satisfied by measurement of non-methane hydrocarbons
or total hydrocarbons, at the manufacturer's option.
(iii) Carbon monoxide. 8.1 grams per mile.
(iv) Oxides of nitrogen. 0.40 grams per mile.
(v) Particulate. 0.02 grams per mile.
(vi) Formaldehyde. 0.021 grams per mile.
(b) [Reserved]
(c) [Reserved]
(d) Evaporative emissions. Evaporative hydrocarbon emissions from
gasoline-fueled, natural gas-fueled, liquefied petroleum gas-fueled,
and methanol-fueled complete heavy-duty vehicles shall not exceed the
following standards. The standards apply equally to certification and
in-use vehicles. The spitback standard also applies to newly assembled
vehicles.
(1) For the full three-diurnal test sequence, diurnal plus hot soak
measurements: 1.4 grams per test.
(2) Gasoline and methanol fuel only. For the supplemental two-
diurnal test sequence, diurnal plus hot soak measurements: 1.75 grams
per test.
(3) Gasoline and methanol fuel only. Running loss test: 0.05 grams
per mile.
(4) Gasoline and methanol fuel only. Fuel dispensing spitback test:
1.0 grams per test.
(e) through (h) [Reserved]. For guidance see Sec. 86.1816-04.
24. A new Sec. 86.1824-07 is added to subpart S, to read as
follows:
Sec. 86.1824-07 Durability demonstration procedures for evaporative
emissions.
Section 86.1824-07 includes text that specifies requirements that
differ from those specified in Sec. 86.1801-01. Where a paragraph in
Sec. 86.1824-01 is identical and applicable to Sec. 86.1824-07, this
may be indicated by specifying the corresponding paragraph and the
statement ``[Reserved]. For guidance see Sec. 86.1824-01.''. This
section applies to gasoline-, methanol-, natural gas- and liquefied
petroleum gas-fueled LDV/Ts, MDPVs, and HDVs.
(a) through (f) [Reserved]. For guidance see Sec. 86.1824-01.
25. Section 86.1829-01 is amended by revising paragraph
(b)(1)(iii)(B) and adding paragraph (b)(1)(iii)(F) to read as follows:
[[Page 35559]]
Sec. 86.1829-01 Durability and emission testing requirements; waivers.
* * * * *
(b)* * *(1) * * *
(iii) * * *
(B) In lieu of testing an Otto-cycle light-duty vehicle, light-duty
truck, or heavy-duty vehicle for particulate emissions for
certification, a manufacturer may provide a statement in its
application for certification that such vehicles comply with the
applicable standards. Such a statement must be based on previous
emission tests, development tests, or other appropriate information.
* * * * *
(F) In lieu of testing a petroleum-fueled heavy-duty vehicle for
formaldehyde emissions for certification, a manufacturer may provide a
statement in its application for certification that such vehicles
comply with the applicable standards. Such a statement must be based on
previous emission tests, development tests, or other appropriate
information.
* * * * *
[FR Doc. 00-12952 Filed 6-1-00; 8:45 am]
BILLING CODE 6560-50-P