P.1 

OAR Box 1812 

Prepped by Ollie Stewart 

Document Number: 

205) / / • P~ $ 

Docket Number: 

A-86-03 

Printed 11/3/2008 7:52:05 AM Sheet 205 of 280 
P.2 

U- F-3 

Summary of 

EPA's Proposed Regulation of Diesel Fuel Quality 

Briefing for OMB 

Office of Mobile Sources 

June 2, 1989 
P.3 

Overview 

Background and Joint Industry Proposal 

Description of Proposal 

Environmental and Economic Impacts 

Timing of EPA's Rulemaking Action 
P.4 

EPA Rulemaking Development 

EPA promulgated emission standards for heavy-duty engines 

in March, 1985 (Table 1) 

Need for sulfur control was raised in comments - EPA 

committed to continue to evaluate need 

Funded a contractor study on diesel fuel issue 

Found both sulfur and aromatic control to be cost 

effective 

Published report in June 1986 and requested comments 

Initiated a comprehensive internal study in 1987 

EPA considered lowering levels of both sulfur and 

aromatics in on-highway diesel fuel 

Encouraged engine manufacturers to approach oil industry 

to develop a mutual agreement on future fuel quality 
P.5 

Table 1 

Model 

Year 

1988 

1990 

1991 

1994 

Particulate and NOx Emission Standards 

for 

Particulate 

(q/BHP-hr) 

0.60 

0.25 

0.10 

0.10 

Heavy-Duty Diesel Engines 

NOx 

(q/BHP-hr) 

10,7 

6.0 

5.0 

5.0 

5.0 

Comments 

First HDDE particulate 

standard 

Delayed from 1988 by court 

order 

All HDDE's except urban 

buses 

Urban buses only 

All HDDE's 
P.6 

Joint Industry Proposal 

EPA encouraged discussions between engine manufacturers 

and oil industry 

Representatives of the two industries proposed: 

0,051 sulfur on-highway diesel available by October 

1, 1993 

Cetane index minimum of 40 (as a cap on aromatics) 

Refiners allowed flexibility to change segregation 

patterns in meeting new requirements 

Engine certification on 0,051 sulfur fuel beginning 

in 1991 
P.7 

Revised Industry Proposal 

• Same as earlier proposal except requests 0,101 sulfur 

certification fuel in 1991 instead of 0,051 

• Proposal has the support of : 

-API 

-NAPR 

-EMA 

-NCFC 

-NRDC 

• EMA also proposes to undertake a cooperative test program 

of emission testing in-use engines, 

• Manufacturers will also strive to implement 1991 

technology early, 

• Leadtime is critical for 1994 fuel control 
P.8 

EPA's Response to Industry Proposal 

Industry's proposed reduction of fuel sulfur to 0,051 

would result in cost-effective emission control 

The proposed cetane standard would prevent fuel aromatics 

levels from climbing; would avoid costly aromatics 

reduction 

Clean Air Act limits regulations to highway fuels 

However, changing 1991 engine certification to 0.05% 

sulfur would make certification testing unrepresentative 

of in-use emissions 

EPA calculations indicated that average sulfur 

levels for 1991-1993 HDEs over their certified 

useful life would be approximately 0,10% 

Certification at 0,10% would therefore keep 

1991-1993 lifetime emissions the same as was 

expected without sulfur control 
P.9 

The Notice of Proposed Rulemaking 

Proposes implementing the most recent joint industry 

proposal 

Establishes 0,051 as maximum sulfur level for 

on-highway diesel fuel after October 1993 

Establishes interim cert fuel level of 0,10% for 

1991-1993 engines 

Caps aromatics at current levels 

Requests comments in several specific areas to allow the 

assessment of economic and environmental impacts of 

control to be improved for the final rule 

Enforcement scheme will follow approach used for volatility 

All parties in distribution network from refiners to 

retailers are covered by these regulations 

EPA will randomly test at various distribution points 
P.10 

Environmental Impacts: Sulfur Control 

Significant gaseous SO control 

2 

Large indirect (atmospheric) sulfate effect (not 

considered by engine emission standards) 

Significant reduction in direct sulfate emissions 

Overall effect (see Table 2) 

Net PM emission reductions will be significant 

Allows use of catalysts; long-term urban HC and CO 

emission reduction of 30,000 and 329,000 tons/yr, 

respectively (0,4% and 1% of current inventories) 

Improved urban air quality and visibility 

Benefits proportional to degree of sulfur control 

Some small cancer benefit possible 
P.11 

Table 2 

Environmental Impacts: Sulfur Control to 0.05* 

Annual Urban Emission Reductions 

PM (effective tons/yr) 

10 

(t of 1986 total) 

SO (tons/yr) 

2 

(t of 1986 total) 

Annual Ambient Urban Benefit (|ig/m') 

NAAQS 

PM - Large city 50 

10 

Small city 50 

Visibility Improvement (\) 

Large city 

Small city 

1995 

35-95,000 

2,9-5,8 

110-275,000 

1,3-2.5 

1995 

1.4-3.8 

0.9-2,3 

1995 

2,8-8,6 

0,5-1,5 

2015 

57-156,000 

4.7-9,5 

195-470,000 

2,3-4,2 

2015 

2,3-6,3 

1,4-3,8 

2015 

3,8-14,6 

0,6-2,4 
P.12 

Cost of Control 

Cost dependent on degree to which refiners segregate 

on-highway diesel from other fuels in production 

Cost with maximum segregation would be 1.8 cents per 

gallon of diesel fuel 

Cost with minimum segregation would be 2,3 cents per 

gallon of diesel fuel 

Costs are offset by (Table 3): 

reduction in cost of complying with 1994 

particulate standards 

reduction in engine wear 

reduction in fuel consumption by changes in 

aftertreatment 
Table 3 

Total Annual Costs and Savings 

• Increased fuel cost: 

- $370 - 910 million in 1995 

$530 - 1,300 million in 2010 

• Decreased technology costs: 

$140 million in 1995 

$220 million in 2010 

• Decreased fuel consumption: 

$60 million in 1995 

$250 million in 2010 

• Decreased engine wear: 

- $160 - 2,300 million in 1995 

$400 - 3,700 million in 2010 
P.M 

Cost Effectiveness 

0 Numerous pollutants controlled 

Primary focus: particulate 

No credits taken for other pollutants controlled 

(such as HC, CO, and SO ) 

2 

0 Sulfur control to 0,05% 

Without any wear credit, cost per urban ton of PM is 

$2,800 to $6,i 

From -$3,900 to $4,300 per urban ton of PM with 

smallest engine wear credit 

Cost effectiveness would be negative if HC, CO, and 

SO credits are added 

2 

For comparison, urban cost effectiveness of the 1994 

0.lg/BHP-m particulate standard was $11,000 (1985 

dollars) 
P.15 

Effect on Compliance With 

Particulate Standards 

Advanced engines already meeting emission levels below the 

1991 truck standard 

Manufacturers argue that low sulfur fuel is needed to 

assure compliance with 1991 standard; fuel sulfur control 

reduces engine-out particulate approximately ,04 g/BHP-hr 

Change in 1991 certification fuel will not change 

1991-1993 engines, but will improve compliance margins 

Some type of aftertreatment technology appears necessary 

to meet 1994 standard 

Sulfur control important for 1994 compliance 

Particulate reduction increases confidence of 

manufacturers meeting the standard 

Allows use of lower cost traps designs 

Allows use of oxidation catalysts 
P.16 

Timing 

Because of the broad consensus of industry and 

environmental support, rulemaking is expected to proceed 

quickly 

Publication of this NP l must occur soon for several 

reasons: 

Refiners need to make advanced decisions on capital 

requirements to meet October 1993 deadline 

Manufacturers may need this sulfur control to meet 

1994 standards 

Changing certification fuel specifications to 0,10% 

sulfur may impact need for NCPs in 1991 

API already indicating that without a prompt proposal, 

1994 deadline is in jeopardy 

Final rulemaking will need to follow the NP l quickly