Excerpt from Preamble V.A.1.d

When considering the proposed Tier 3 sulfur standards, refineries can be grouped into 

three general categories based on their current post-Tier 2 refinery configurations: those without 

an FCC unit, those hydrotreating the gasoline stream coming from their FCC unit (i.e., 

postreating)1, and those hydrotreating their FCC feed (i.e., pretreating). Most refineries without 

FCC units would not need to do anything to meet the proposed Tier 3 sulfur standards. 

Refineries equipped with FCC units that invested in an FCC postreater under Tier 2 would likely 

just need to revamp (i.e., renovate) their existing unit for a modest cost. Refineries that only 

have an FCC pretreater would meet the Tier 3 sulfur standards by either revamping their existing 

pretreaters (perhaps also cutting the heavy portion of FCC naphtha into the diesel pool) or invest 

in a grassroots FCC postreater. Our refinery-by-refinery modeling suggests that 29 refineries 

would not need to make any capital changes, 66 would need to revamp their existing FCC 

postreaters, and 16 would need to add grassroots postreaters (we did not model any undercutting 

of heavy FCC naphtha into the distillate pool).

2

 Refiners that need to install a new postreater 

would have to make the largest desulfurization investments under Tier 3, typical of many of the 

refinery investments made under Tier 2. For more on our estimated sulfur control costs, refer to 

Section VII.B. 

We believe that the choice of technology for each refinery is fairly insensitive to capital 

cost assumptions. Revamping an existing FCC postreater will almost always be the preferred 

compliance path if it is available. The 16 refineries we project would add grassroots postreaters 

do not have existing postreaters that could be revamped. We believe based on conversations 

with industry technology vendors and engineering firms that installing a grassroots postreater 

would be more likely for these refineries than revamping their pretreater, which would still incur 

a significant capital cost and reduce compliance flexibility. Thus, the refinery-by-refinery

analysis performed by EPA for this proposal, higher capital costs (either directly or thru a higher 

ROI) would be unlikely to alter the selection of pretreater vs postreater control technology in our 

analysis. Higher capital costs would likely impact both technology options proportionally with 

no overall effect.

We have built in a number of flexibilities that will reduce the compliance burden for 

refiners. In particular, coupling the proposed 10-ppm annual average sulfur standard with 

refinery gate and downstream per-gallon caps should continue to allow for batch-to-batch 

variability, refinery upsets, and turnarounds while still maintaining the overall air quality benefits 

of the program. For more information on the applicable per-gallon sulfur caps, refer to Section 

V.A.3.

 

1

Some of them may also have an FCC pretreater.

2 Our in-house refinery modeling considers 111 operational refineries producing non-California gasoline. 
Excerpt from Preamble III.B.7

These reductions would be offset to some degree by CO2 emissions associated with 

higher energy use required in the process of removing sulfur within the refinery. To assess the 

potential refinery permitting implications of the Tier 3 proposal, we calculated the CO2 emission 

impacts on a refinery-by-refinery basis. We used the projected refinery-specific changes from 

our refinery-by-refinery modeling (see Chapter 5 of the draft RIA) to estimate changes in process 

energy and then applied emission factors that correspond to those changes. The results showed 

an increase of up to 4.6 MMTCO2e in 2017 with the implementation of the lower sulfur 

standards.3 The actual increase is expected to be considerably lower, since this is a permitting 

analysis and refineries will not be operating at their permit capacity. The actual increase will 

also be a function of several factors, including technology options selected by the refineries and 

the projected use of averaging, banking and trading in avoiding the need for investments at some 

refineries. As a result, 4.6 MMTCO2e represents an upper-bound estimate of the possible 

increase in refinery CO2 emissions due to the need for additional process heat and hydrogen 

production to enable the additional hydrotreating required. 

 

3 Keller, P. (February, 2013). New Source Review Permitting Impact Analysis for Proposed Tier 3 Gasoline 

Program. Memorandum to the docket.