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. Environmental Protection Agency Draft Final Rule, “Control of Air Pollution from 

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 higher 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 Response: 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 companies (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 credits will be available by 

year. This would help provide refiners with compliance planning and help maintain 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 coordinated 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 generated 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 available 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 in 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