## Summary	of	Interagency	Working	Comments	on	Draft	Language	under

E.O.	13563	and	12866	Interagency	Review.		Subject	to Further	Policy	Review. **EPA Response (2/20/2014): Comments on U.S.**  **Environm ental Protection Agency Draft Final**  **Rule, “** **Control of Air Pollution f rom**  **Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards ,” RIN 2060**  **- AQ86**  RIA Cost Discussion 1. Does EPA present the range of fuel costs for various trading scenarios? A suggest range of costs would be to present the lowest cost option as the full trading scenario and the highest cost option being no trading. The rationale that would support the hi gher end of the cost range as refiners have stated that reliance on the credits to comply with the program may provide a short term solution, but that over the long term capital equipment will need to be installed to meet the program requirements. **EPA R esponse: Yes, Section 5.2 of the RIA provides cost estimates based on different credit**  **trading scenarios. Full nationwide credit trading (our best estimate for the cost of the program) is**  **estimated to cost 0.65 c/gal, credit trading solely within compani es (intracompany) is estimated to**  **cost 0.75 c/gal, and if there were no credit trading we estimate that Tier 3 would cost 0.87 cents per gallon.** 
2. Suggest that EPA present a credit analysis that shows how many sulfur cre dits will be available by year. Th is would help provide refiners with compliance planning and help mainta in liquidity with inter
- company trading. **EPA Response: Our cost analysis only assesses the means and the cost of compliance for the fully implemented Tier 3 sulfur control program.**  **Our uncertainty about the order that refineries will**  **comply between 2014 and 2020**  **(for example, we don’t know: each refinery’s financial situation,**  **the other investments which may be occurring at refineries that Tier 3 investments would need to be coord**  **inated with, when refineries can tie in their new Tier 3 investments and the length of time required to design and start**  **- up individual revamp projects) greatly reduces the value of EPA**  **providing an estimate of credit availability during the phase -**  **in of the program.**  **We acknowledge this uncertainty in**  **RIA section 4.5.2.3 and provide examples of this uncertainty in Tables 4.7 and**  **4.8 contained in that section by providing a**  **range of phase -**  **in scenarios (the scenarios vary by the number of early credits generat**  **ed and when refineries make their tie -**  **ins) of how refiners might comply with Tier 3.**  **Furthermore, we are concerned that picking a single Tier 3 phase -**  **in scenario could be counterproductive since it could bias refiners away from a more cost** **- effective phase**  **- in**  **strategy.**
3. Does EPA present a table with the number of revamps, number of grassroots, and number of credits likely to be a vailable from 2014 through 2019? This would be a helpful analysis to include in the cost section of the RIA. **EPA Response: Yes , Table 4** **- 6 in the RIA contains such a summary of revamps, grassroots units**  **and the number of refineries which do not invest but purchase credits (or in some cases generate credits) instead.**  **We do not estimate the number of credits expected to be traded i**  **n our cost**  **analysis.**

## Summary	of	Interagency	Working	Comments	on	Draft	Language	under

E.O.	13563	and	12866	Interagency	Review.		Subject	to Further	Policy	Review.

**Table 4 -**  **6 Summary of Investment Types in 2017 and 2020 Assuming no Early Credit Use**  Grassroots Units Revamps No Investments Refineries Complying in 2017 10 ppm 0 31 19

5 ppm 1 21 Small Refiners/Refineries Complying in 2020 10 ppm 0 8 21

5 ppm 0 7 Total 10 ppm 0 39 40