35430 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

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 highefficiency 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 diesel@epa.gov.

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

borushko.margaret@epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated Entities

This proposed action would affect

you if you produce or import new

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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.

Category NAICS

Codes a SIC Codes b Examples of potentially regulated entities

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

a North American Industry Classification System (NAICS).

bStandard 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 ShortTerm 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 LowSulfur 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

35432 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 LightDuty 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35433

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 highefficiency 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.

35434 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

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.

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 heavyduty 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 heavyduty 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,

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35435

2Environmental 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

3For 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).

the relative contribution of diesel

engines to air quality problems will go

even higher if diesel-equipped lightduty 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

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 highefficiency 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 advancedtechnology 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

35436 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 heavyduty 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 heavyduty 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 lightduty 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 dieselpowered 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 dieselpowered 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 gasolinefueled 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 lightduty 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 heavyduty 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 lightduty 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 heavyduty 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) (onhighway 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

35438 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

4Regularly updated information on this effort can

be obtained at a website maintained by the ARB

staff: www.arb.ca.gov/toxics/diesel/diesel.htm

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.

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 dieselfueled 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 dieselfueled 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.

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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35439

6Memo from Thomas M. Baines to Docket A–99–

06, October 29, 1999, Docket #A–99–06, Item II–G–

12.

7EPA is revising this draft document in response

to comments by the CASAC.

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.

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 dieselpowered, 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.

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

35440 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

8Letters from States and environmental

organizations are located in the docket for this

proposal.

9National Air Quality and Emissions Trends

Report, 1997, US EPA, December 1998.

10National Emissions Trends database.

11Trends in Daily Maximum 1-hour Ozone in

Selected Urban Areas, 1989–1998.

12Memorandum 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)

14Current 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.

15Achieving 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).

these areas to achieve and sustain clean,

healthful air.8

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

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.

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

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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35441

16Table 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 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.

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

CMSA/MSAs 2007 Control

case

2030 Control

case

1996 Population

(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 people

28 areas/83.7

million 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

35442 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

17See Tier 2 Response to Comments document for

a longer decision.

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, BeaumontPort 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35443

18We 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.

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.

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 reapply 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.

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

35444 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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

Metropolitan area/State

Proposed reinstatement of

ozone standard

1996 population

(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-Atlantic City, PA-NJ-DE-MD ......................................................................... 6.0

Sacramento, CA ................................................................................................................................... 1.5

San Joaquin Valley, CA *possible future reclassification and change of attainment date to 2005 .... 2.7

Ventura County, CA ............................................................................................................................. 0.7

Washington-Baltimore, DC-MD-VA-WV ............................................................................................... 7.2

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, MA ......................................................................................................... X 5.6

Houma, LA ............................................................................................................................................ X 0.2

Providence-Fall River-Warwick, RI-MA ................................................................................................ X 1.1

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-IN* ........................................................................................................... 1.9

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, MS MSA ................................................................................................... X 0.3

Cleveland-Akron, OH CMSA ................................................................................................................ X 2.9

Detroit-Ann Arbor-Flint, MI CMSA ........................................................................................................ X 5.3

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 heavyduty 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).

35446 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

19U.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.

20The 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.

21California 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.

22Steenland, 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.

23Harris, J.E. (1983) Diesel emissions and Lung

Cancer. Risk Anal. 3:83–100.

24See 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.

25As 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.

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

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.

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.

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.

As discussed in section I.C.6,

‘‘Actions in California’’, the Office of

Environmental Health Hazard

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35447

26Office of Environmental Health Hazard

Assessment (1998) Health risk assessment for diesel

exhaust, April 1998. California Environmental

Protection Agency, Sacramento, CA.

27National 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.

29World Health Organization (1996) Diesel fuel

and exhaust emissions: International program on

chemical safety. World Health Organization,

Geneva, Switzerland.

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.

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

Area Classification 1990 population

(millions)

Clark Co., NV ........................................................................................................... Serious .................................................... 0.741

El Paso, TXb ............................................................................................................ Moderate ................................................. 0.515

Hayden/Miami, AZ .................................................................................................... Moderate ................................................. 0.003

Imperial Valley, CAb ................................................................................................. 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 Basin, CA .................................................................. Serious .................................................... 13.00

Nogales, AZ .............................................................................................................. Moderate ................................................. 0.019

Wallula, WAc ............................................................................................................ 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. bEPA 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. cThe 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

35448 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 threeyear 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.

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.

TABLE II.B–4.—AREAS WITH SIGNIFICANT RISK OF EXCEEDING THE PM10 NAAQS WITHOUT FURTHER EMISSION

REDUCTIONS

Area 1990 population

(millions)

Areas Currently Exceeding the PM10 Standard:

Clark Co., NV ............................................................................................................................................................. 0.741

El Paso, TXa .............................................................................................................................................................. 0.515

Imperial Valley, CAa ................................................................................................................................................... 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 Risk of Exceeding the PM10 Standard: 10 Areas, Total 1990 Population .................................................................................................................................................................... 27.39

aEPA 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35449

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.

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 μg/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.

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

35450 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35451

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.

35Environmental Protection Agency,

Carcinogenic Effects of Benzene: An Update,

National Center for Environmental Assessment,

Washington, DC. 1998.

36Environmental Protection Agency, Health Risk

Assessment of 1,3-Butadiene. EPA/600/P–98/001A,

February 1998.

37An SAB Report: Review of the Health Risk

Assessment of 1,3-Butadiene. EPA–SAB–EHC–98,

August, 1998.

38Environmental 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. 39U.S. EPA (1993) Environmental Protection

Agency, Integrated Risk Information System (IRIS),

Office of Health and Environmental Assessment,

Environmental Criteria and Assessment Office,

Cincinnati, OH.

40U.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.

41Much 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.

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.

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

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.

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.

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

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.

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

35452 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

43Much 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.

44Terrestrial nitrogen deposition can act as a

fertilizer. In some agricultural areas, this effect can

be beneficial.

45Much 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.

46The 1996 National Toxics Inventory, Office of

Air Quality Planning and Standards, October 1999.

have acidity levels incompatible with

the survival of sensitive fish species.

Many of the over 1,350 acidic streams

in the Mid-Atlantic Highlands (midAppalachia) 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 acidrelated 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.

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.

Excessive fertilization with nitrogencontaining 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.

Deposition of nitrogen from heavyduty 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.

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°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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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]

Metropolitan statistical

area

Portion

of total

NOX

Portion

of

mobile

source

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 heavyduty 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

Metropolitan statistical area

PM10

contribution 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

35454 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

47Zaebst, 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.

49Warner-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.

50Pierson, W.R., Brachazek, W. W. (1983)

Particulate Matter Associated with Vehicles on the

Road. Aerosol Sci. & Tech. 2:1–40.

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 coemission 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 nonroad 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 onhighway 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.

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

Location Year of sampling Diesel PM2.5

μg/m3

Diesel PM %

of 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, CAa ...................................................... 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, NYe ............................................................ 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.

aSchauer, 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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. eWittorff, 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. fFujita, 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

Location Year of sampling Diesel PM2.5

μ/m3

Diesel PM %

of 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, CAa ............................................................... 1982, annual ................................................................. ** 3.8 16

Claremont, CAb ............................................................ 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, CAc .............................................................. 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. bKleeman, 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. cKleeman, 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

Location Year of sampling Diesel PM2.5

μg/m3

Diesel PM %

of 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, NYa ............................................................. 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.

aSalmon, 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. bSisler, 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. cSouth 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

35456 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

51-62 [Reserved]

63Exhausted by Diesel: How America’s

Dependence on Diesel Engines Threatens Our

Health, Natural Resources Defense Council,

Coalition for Clean Air, May 1998.

64The 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.

65We 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.

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.

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 heavyduty 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

BILLING CODE 6560–50–P

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35457

66Sulfate 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.

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 heavyduty 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.

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 pre2007 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.

35458 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35459

BILLING CODE 6560–50–C

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 heavyduty 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

Calendar year

CO benefit (thousand short

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 heavyduty 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

Calendar year

SOX benefit (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

35460 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

67National Air Quality and Emissions Trends

Report, 1997, (EPA 1998), p. 74.

68California 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.

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).

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]

Calendar year Benzene Formaldehyde

Acetaldehyde1,3-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 LowSulfur 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 lowsulfur 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35461

69The 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.

70See Chapter IV.A of the final Tier 2 Regulatory

Impact Analysis, contained in Air Docket A–97–10.

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 HeavyDuty 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 lowsulfur 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 ‘‘incylinder’’ 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.

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.

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

Standard

(g/bhp-hr)

Phase-in by model year

(In percent)

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

35462 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

71From 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.’’

72See the Tier 2 Response to Comments

document contained in Air Docket A–97–10.

73Note 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.

74Please 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.

TABLE III.C–1.—PROPOSED FULL USEFUL LIFE HEAVY-DUTY ENGINE EMISSION STANDARDS AND PHASE-INS—Continued

Standard

(g/bhp-hr)

Phase-in by model year

(In percent)

2007 2008 2009 2010

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 heavyduty 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.

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 methanolfueled 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.

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 heavyduty 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 phasedin; those standards are discussed

below.74 Nonetheless, we request

comment on possible alternative phaseins 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–

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35463

75Torque 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.

76Letters 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.

77Medium-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)

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.

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.

Similarly, to help ensure that heavyduty 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.

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 heavyduty 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.

35464 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

78Engine 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.

79See the Tier 2 Response to Comments

document contained in Air Docket A–97–10.

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 heavyduty 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

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 heavyduty 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 petroleumfueled 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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35465

80The 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 lightduty 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.

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 phaseins 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 heavyduty 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 heavyduty gasoline-fueled vehicles and

engines, and methanol-fueled heavyduty 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 HEAVYDUTY EVAPORATIVE EMISSION

STANDARDS*

[Grams per test]

Category

3 day diurnal +

hot soak

Supplemental 2

day diurnal + 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.

The proposed standards for 8,500 to

14,000 pound vehicles are consistent

with the Tier 2 standards for mediumduty 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

35466 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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/bhrhr 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/bhphr 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35467

81For PM trap regeneration without precious

metals, temperatures in excess of 650°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°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°C to 450°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°C to 300°C.

82Cooper and Thoss, Johnson Matthey, SAE

890404.

83See the Draft RIA for more detail on the

relationship of fuel sulfur to sulfate make.

84Allansson, et at., SAE 2000–01–0480.

85Letter from Dr. Barry Cooper to Don Lopinski

US EPA, EPA Docket A–99–06.

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 ‘‘incylinder’’ 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

• 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

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.

Diesel particulate traps reduce

particulate matter (PM) by capturing

and burning particles. Ninety percent of

35468 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

88Hawker, P., et al., Effect of a Continuously

Regenerating Diesel Particulate Filter on NonRegulated Emissions and Particle Size Distribution,

SAE 980189.

89The Euro IV standards are 2.6 g/hp-hr NOX and

0.015 g/hp-hr PM.

90Memorandum from Charles Schenk, EPA, to

Air Docket A–99–06, ‘‘Summary of EPA PM

Efficiency Data,’’ May 8, 2000.

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.

93 Kawanami, M., et al., Advanced Catalyst

Studies of Diesel NOX Reduction for On-Highway

Trucks, SAE 950154.

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).

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.

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.

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 steadystate 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.

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 steadystate 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35469

94Letter from Barry Wallerstein, Acting Executive

Officer, SCAQMD, to Rober Danziger, Goal Line

Environmental Technologies, dated December 8,

1997, www.glet.com.

95Reyes and Cutshaw, SCONOX Catalytic

Absorption System, December 8, 1998.

www.glet.com.

96Pott, E., et al., Potential of NOX-Trap Catalyst

Application for DI–Diesel Engines.

97Letter from Bruce Bertelsen, Executive Director,

Manufacturers of Emission Controls Association, to

Margo Oge, EPA, dated April 5, 2000.

98 Dou, D., Bailey, O., Investigation of NOX

Adsorber Catalyst Deactivation, SAE 982594.

catalyst does not appear to be capable of

enabling the significantly lower NOX

emissions required by the proposed

NOX standard.

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

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 adsorberbased 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

Likewise, in the United States, heavyduty 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 incylinder 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

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°C to 450°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.

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

35470 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

99Memorandum 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.

100This 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.

101SRC 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.

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.

105 ‘‘The Impact of Sulfur in Diesel Fuel on

Catalyst Emission Control Technology,’’ report by

the Manufacturers of Emission Controls

Association, March 15, 1999.

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.

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.

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°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.

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

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35471

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.

107Letter from Marty Barris Donaldson

Corporation to Byron Bunker US EPA, March 2000.

EPA Air Docket A–99–06.

108The term, ‘‘space velocity,’’ is a measure of the

volume of exhaust gas that flows through a device.

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 steadystate 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.

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 heavyduty 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.

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 tradeoffs will be crucial to effective

implementation of exhaust emission

control devices on diesel applications.

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 LowEmission 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.

35472 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35473

109Hawker, P. et al, Experience with a New

Particulate Trap Technology in Europe, SAE

970182.

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 heavyduty 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°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°C through the use of base metal

catalytic technologies. Unfortunately,

for a broad range of operating conditions

diesel exhaust is significantly cooler

than 400°C. If oxidation of the trapped

PM could be assured to occur at exhaust

temperatures lower than 300°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°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 washcoat 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.

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

35474 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

110Hawker, P. et al, Experience with a New

Particulate Trap Technology in Europe, SAE

970182.

111Through 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.

112Allansson, et al. SAE 2000–01–0480.

113Letter from Dr. Barry Cooper, Johnson

Matthey, to Don Kopinski, US EPA, Air Docket A–

99–06.

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.

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.

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°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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35475

114Note 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.

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

TABLE III.F–1.—ESTIMATED PM EMISSIONS FROM A HEAVY-DUTY DIESEL

ENGINE AT THE INDICATED AVERAGE

FUEL SULFUR LEVELS

Avg. Fuel Sulfur [ppm]

Supplemental steady state

Tailpipe PM [g/

bhp-hr]

Relative to

3 ppm 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

35476 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

118Memo from Byron Bunker, to docket A–99–06,

‘‘Estimating Fuel Economy Impacts of NOX

Adsorber De-Sulfurization.’’

119The Impact of Sulfur in Diesel Fuel on

Catalyst Emissions Control Technology—

Manufacturers of Emission Controls Association

(MECA), March 15, 1999, www.meca.org.

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 °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.

TABLE III.F–2.—ESTIMATED FUEL

ECONOMY IMPACT FROM

DESULFATION OF A 90% EFFICIENT

NOX ADSORBER

Fuel sulfur cap

[ppm]

Average

fuel sulfur

[ppm]

Fuel economy 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 lowsulfur 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35477

120Whitacre, Shawn. ‘‘Catalyst Compatible’’

Diesel Engine Oils, DECSE Phase II, Presentation at

DOE/NREL Workshop ‘‘Exploring Low Emission

Diesel Engine Oils.’’ January 31, 2000.

121This 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.

122Typically the filtering media is a porous

ceramic monolith or a metallic fiber mesh.

123Engine, 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.

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.

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.

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 ‘‘lowsulfur’’ 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.

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 threeway-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

35478 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

124 Dou, D. and Bailey, O., ‘‘Investigation of NOX

Adsorber Catalyst Deactivation’’ SAE982594.

125Herzog, P. et al., NOX Reduction Strategies for

DI Diesel Engines, SAE 920470, Society of

Automotive Engineers 1992 (from Figure 1).

126Zelenka, 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.

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.

While NOX adsorbers require nonpower 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

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.

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 enginebased 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 lowsulfur 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 nonconformance 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 highefficiency 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

35480 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 yearround 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 lowsulfur 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 inuse 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 inuse 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35481

127Letter to Carol Browner, Administrator of EPA

from Bruce Bertelsen, Executive Director of

Manufacturers of Emission Controls Association,

May 3, 2000.

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.

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 highefficiency 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 abovediscussed 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

35482 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

suggest that a 10 ppm average would

achieve essentially the same average inuse 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 purchaserconsumers 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 lowsulfur 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 lowsulfur 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35483

128Typical 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.

129LCOs are not homogeneous and can vary

dramatically in chemical composition from refiner

to refiner. The discussion here applies to a typical

LCO composition.

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 lightduty 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 lightduty vehicles, and thus it would be

difficult to justify the costs. We

welcome comments on requiring lowsulfur 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.

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

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 pressureswing 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

35484 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

130California 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.

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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35485

131By 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.

132Rykowski, Richard A., ‘‘Implementation of

Ultra Low Sulfur Diesel Fuel: Construction Capacity

and Aggregate Capital Investment,’’ EPA

Memorandum to the Record, Docket A–99–06.

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.

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.

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

35486 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 enduser, 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 offhighway, 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35487

133See the draft RIA for a more detailed

discussion.

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 lubricityenhancing 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 lubricityenhancing 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).

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 lowaromatics 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.

35488 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 highersulfur 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35489

134This is the proposed retail-level compliance

date. The proposed compliance date at the refinery

level is April 1, 2006.

135ARCO Products Company news release dated

October 7, 1999, Docket A–99–06 Item II–G–13.

136ARCO Products Company news release dated

December 15, 1999.

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 sulfursensitive exhaust emission control

equipment intended for use in heavyduty 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 lowsulfur 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 inuse 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.

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.

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 lowsulfur 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 emissioncontrol 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

35490 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

137 ‘‘Learning Curves in Manufacturing,’’ Linda

Argote and Dennis Epple, Science, February 23,

1990, Vol. 247, pp. 920–924.

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 heavyduty 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 lowemitting 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, ‘‘nearterm’’ costs are those calculated for the

2007 model year and ‘‘long term’’ costs

are those calculated for 2012 and later

model years.

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]

Vehicle class Model year Hardware cost Life-cycle 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 lowerVerDate 11<MAY>2000 16:30 Jun 01, 2000 Jkt 190000 PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 E:\FR\FM\02JNP2.SGM pfrm03 PsN: 02JNP2
Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35491

138Letter 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.

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 heavyduty 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 heavyduty 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 heavyduty 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

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 lowsulfur 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

35492 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

139See Chapter V of the final Tier 2 Regulatory

Impact Analysis, contained in Air Docket A–97–10.

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 heavyduty vehicles, $249 for medium heavyduty vehicles and $610 for heavy heavyduty 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 heavyduty 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 heavyduty 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 heavyduty 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.

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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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]

Vehicle class Model year Incremental

system cost

Life-cycle 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 lowsulfur 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

Affected components Effect of lower sulfur Potential impact on engine system

Piston Rings ...................................................... Reduce corrosion wear .................................... Extended engine life and less frequent rebuilds.

Cylinder Liners ................................................... Reduce corrosion wear .................................... Extended engine life and less frequent rebuilds.

Oil Quality .......................................................... Reduce deposits and less need for alkaline

additives.

Reduce wear on piston ring and cylinder liner

and less frequent oil changes.

Exhaust System (tailpipe) .................................. Reduces corrosion wear .................................. Less frequent part replacement.

EGR ................................................................... Reduces corrosion wear .................................. Less frequent part 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.

35494 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

140Edward H. Murphy, API to Margo Oge, US

EPA, October 26,1999.

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-pergallon 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 perrefinery 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.

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 offhighway 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35495

141Highway 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.

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 phasein 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 lowsulfur 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.

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

35496 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

142Figure 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.

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.

BILLING CODE 6560–50–P

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,

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 costeffectiveness 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 costeffectiveness of the program from the

point of view of the vehicles and

engines which will be used to meet the

new requirements. However, the pervehicle 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 pervehicle 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 costeffectiveness 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 costeffectiveness 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 pervehicle, net present value lifetime costs,

NMHC + NOX and PM emission

reductions, and resulting costeffectiveness 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 costeffectiveness, 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 costeffectiveness 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.

35498 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

143This 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.

TABLE V.F–1.—PER-ENGINE COST EFFECTIVENESS OF THE PROPOSED STANDARDS FOR 2007 AND LATER MY VEHICLES

Pollutants

Discounted

lifetime

vehicle &

fuel costs

Discounted

lifetime

emission

reductions

(tons)

Discounted

lifetime cost

effectiveness per ton

Discounted

lifetime cost

effectiveness per ton

with 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. bAs 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. engine, vehicle, & fuel

costs (in billions)

30-year

n.p.v. reduction (tons)

(in millions)

30-year

n.p.v. cost

effectiveness per ton

30-year

n.p.v. cost

effectiveness per ton

with SO2

credit b

NOX + NMHC .................................................................................................................. $28.9 18.9 $1,531 $1,531

PM .................................................................................................................................... 8.8 0.79 11,248 1,850

aThis 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 lightduty 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35499

145The ‘‘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).

below the average of those choices, and

is near the lower end of the range of

potential future strategies.

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 BenefitCost 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.

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

35500 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 heavyduty 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 BenefitCost 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-bypollutant 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 SourceReceptor 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 heavyduty 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

Pollutant Quantified and monetized effects Alternative quantified and/or monetized

effects Unquantified effects

Ozone Health .......... Minor restricted activity days/acute respiratory symptoms; Hospital admissions—respiratory and cardiovascular; Emergency room visits for

asthma.

Premature mortality; a Increased airway

responsiveness to stimuli; Inflammation in the lung; Chronic respiratory

damage; Premature aging 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 crops.Decreased yields for commercial forests; Decreased yields for fruits and

vegetables.

PM Health ............... Premature mortality; Bronchitis—

chronic and acute; Hospital admissions—respiratory and cardiovascular; Emergency room visits for

asthma; Lower and upper respiratory

illness; Shortness of breath; Minor

restricted activity days/acute respiratory symptoms; Work loss days.

Infant mortality; Low birth weight;

Changes in pulmonary function;

Chronic respiratory diseases other

than chronic bronchitis; Morphological changes; Altered host defense mechanisms; Cancer; Nonasthma respiratory emergency room

visits.

35502 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

146Specifically, 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).

TABLE V.G–1.—HUMAN HEALTH AND WELFARE EFFECTS OF POLLUTANTS AFFECTED BY THE PROPOSED HEAVY-DUTY

VEHICLE RULE—Continued

Pollutant Quantified and monetized effects Alternative quantified and/or monetized

effects Unquantified effects

PM Welfare ............. Visibility in California, Southwestern,

and Southeastern Class I areas.

Visibility in Northeastern, Northwestern, and Midwestern Class I

areas; Household soiling.

Nitrogen and Sulfate

Deposition Welfare.

Costs of nitrogen controls to reduce

eutrophication in selected eastern

estuaries.

Impacts of acidic sulfate and nitrate

deposition on commercial forests;

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.

aPremature 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$).

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 peerreview 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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, ageadjusted 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 heavyduty 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 heavyduty 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

35504 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 phasein 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35505

147Comment 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).

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.

149For more information, see the Report of the

Small Business Advocacy Review Panel, contained

in the docket.

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.

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 lowsulfur 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.

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

35506 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

150Letter from Independent Terminal Operators

Association, July 13, 1999 (Item # II–D–80).

151Letter from Petroleum Marketers Association

of America, November 8, 1999, Docket A–99–06.

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.

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 phasein 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.

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 pre2007 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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

35508 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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

35510 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 aftertreatmentequipped 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35511

152Memorandum to Docket A–99–06 from Jeffrey

Herzog, EPA, entitled: ‘‘Diesel Throughput Volume

by Percentage of Diesel Fuel Retailers,’’ May 5,

2000.

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 purchaserconsumer 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.

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

35512 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

153 ‘‘Summary Data on Diesel Fuel Retailers,’’

Memo to the docket from Jeffrey Herzog, EPA,

March 23, 2000 (Docket item # II–B–07).

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)

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35513

154 ‘‘Very-Low-Sulfur Diesel Distribution Cost,’’

Baker & O’Brien Inc., for the Engine Manufacturers

Association, August 1999.

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 lowsulfur 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 heavyduty 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.

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

35514 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

155Cooper and Thoss, Johnson Matthey, SAE

890404.

156See section III and Table III.F–2 for more

detail on desulfation and the associated fuel

economy impacts.

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.

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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 onestage 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]

Calendar year Baseline

15 ppm average 15 ppm cap

(for comparison)

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.

35516 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

157See for example letter from Patrick

Charbonneau of Navistar to Robert Perciasepe of

EPA dated July 21, 1999, EPA, docket A–99–06.

TABLE VI.B–2.—HDDE SOX EMISSION REDUCTIONS WITH A 15 PPM AVERAGE/25 PPM SULFUR CAP

[Thousand short tons]

Calendar year 15 ppm 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 costeffectiveness 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

Pollutants

Discounted lifetime vehicle & fuel

costs

Discounted lifetime emission reductions (tons)Discounted lifetime cost effectiveness per ton

Discounted lifetime cost effectiveness per ton

with SO2 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. bAs 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

costs

(billion)

30-year NPV

reduction

(million tons)

30-year NPV

cost effectiveness per ton

30-year NPV

cost effectiveness per ton

with 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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35517

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.

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 nonsulfate 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:

—There is increased difficulty and cost

associated with correcting offspecification batches in the

distribution system.

—Measurement accuracy becomes more

limiting.

—The pipeline compliance margin

becomes more limiting at refineries.

—Supply outages due to offspecification 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

35518 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

160Letter from Red Cavaney of API to EPA

Administrator Carol Browner, dated February 7,

2000, EPA docket A–99–06.

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.

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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 highefficiency exhaust control technology at

all.

TABLE VI.B–5.—SUMMARY OF EMISSIONS AND COST IMPACTS AT DIFFERENT FUEL SULFUR LEVELS

Sulfur level

2020 emission reductions

(thousand tons/year)

Cost impacts

NOX PM Vehicle c

Fuel

consumption

(percent)

Fuel

(¢/gal)

Aggregate

30-yr NPV

($ 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. bThis 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. dFuel 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

35520 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

161Lee, et al., SAE 982649.

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.

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

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 nonsulfur 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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35521

163See further discussion in the Draft RIA

(Chapter VIII).

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

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

35522 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

164Copies 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.

165See 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.

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.

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 twostep 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 highsulfur (>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.

b. What are the Relevant Factors?

The key relevant factors unique to

these territories, briefly discussed

below, are discussed in detail in the

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 lowsulfur 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

35524 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 inuse 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 lightduty 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 highemitting 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 pervehicle 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 nonconformity. For discussion of related

issues, see the final rule for sparkignition 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

35526 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 pickup 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 lightduty 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35527

166Today’s notice proposes to apply the heavyduty 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.

167See, 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.

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.

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 heavyduty 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.

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

35528 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

168See 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.

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 lowsulfur 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.

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 lowsulfur 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 lowsulfur 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 lightduty diesel vehicles certified to the final

Tier 2 standards as well, because these

vehicles are expected to require the lowsulfur 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35529

169 40 CFR 80.29–80.30.

170See 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.

171See section 4082 of the Internal Revenue Code.

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.

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 offhighway 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

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.

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

35530 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

172Section 203(a)(3) of the Act, 42 U.S.C.

7522(a)(3).

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 DieselFueled 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

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35531

173Repeatability 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.

174Side-window vs end-window refers to the

location of the sample cup.

175EPA 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.

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).

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 everybatch 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.

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 sidewindow 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 endwindow configuration.

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.

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

35532 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

177On 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.

updates have provided clarification and

have eliminated certain requirements

that are not necessary for sampling

petroleum products such as diesel fuel.

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 purchaserconsumers. 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35533

178An additional type of liability, vicarious

liability, is also imposed on branded refiners under

these fuels programs.

179Section 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.)

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.

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.

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 nonconforming 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 purchaserconsumers, 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

35534 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 twentyfive 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.

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 noncomplying 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35535

180Hydrotreating 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.

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).

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

35536 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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-bycase 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 recentlypromulgated 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

35538 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35539

181See the final rule, 63 FR 56968, October 23,

1998 for more about the history of these regulations.

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 caseby-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 antibacksliding 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

35540 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

182 Information from recent national fuel surveys

by the National Institute for Petroleum and Energy

Research (NIPER) and the Alliance of Automobile

Manufacturers.

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.

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

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: diesel@epa.gov. 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35541

183The Initial RFA is contained in Chapter VII of

the Draft RIA.

184Report 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.

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:

—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.

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

35542 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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.

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 antidumping 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.

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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 EPAdeveloped 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

35544 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 heavyduty 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.

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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:

§ 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 nonexempt 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 § 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:

§ 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 § 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:

§ 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 § 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 § 80.330(b), as applicable,

and the appropriate testing

methodologies specified in § 80.461(a)

or (b) for sulfur, § 80.2(w) for cetane

index, and § 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:

35546 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

§ 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 §§ 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 § 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 §§ 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 § 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 purchaserconsumers?

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

§ 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 § 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 § 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 § 80.446

and § 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.

§ 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 § 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 §§ 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 § 80.462.

§§ 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?

(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 § 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.

§ 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 § 80.463, except as

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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.

§ 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.

§ 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.

§§ 80.450–80.452 [Reserved]

§ 80.453 What labeling requirements apply

to retailers and wholesale purchaserconsumers?

Any retailer or wholesale purchaserconsumer 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.

§§ 80.454–80.460 [Reserved]

Sampling and Testing

§ 80.461 What are the sampling and test

methods for sulfur?

(a) Diesel fuel. For purposes of

§ 80.446, the sulfur content of diesel

fuel is the sulfur content as determined

by:

(1) Sampling method. The applicable

sampling methodology provided in

§ 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 Xray 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 tertbutylbenzene, 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

§ 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

§ 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

§ 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 purchaserfacility, the transferor must provide to

the transferee a product transfer

document identifying the fuel as motor

vehicle diesel fuel, and which:

35548 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

(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.

§ 80.463 What are the product transfer

document requirements for additives to be

used in motor vehicle diesel fuel?

(a) Except as provided in § 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 purchaserconsumers, 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.

§ 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 §§ 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

§ 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.

§ 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?

(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 §§ 80.446 through 80.448.

(4) With regard to control, a

demonstration that the program affords

EPA a monitoring capability, including:

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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

§ 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 purchaserconsumer 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 reapplication 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.

§ 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 § 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

§ 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.

§§ 80.468–469 [Reserved]

Violation Provisions

§ 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 § 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

§ 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 § 80.448.

(d) Introduction violation. Introduce,

or permit the introduction of, fuel into

diesel motor vehicles which does not

comply with the standards of § 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.

35550 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

(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 § 80.446, or cause

any diesel fuel additive to be in the

distribution system which does not

comply with the sulfur standard of

§ 80.447.

§ 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 §§ 80.446 and

80.448 shall be determined based on the

level of the applicable component or

parameter, using the sampling

methodologies specified in § 80.330(b),

as applicable, and the appropriate

testing methodologies specified in

§ 80.461(a) or (b) for sulfur, § 80.2(w) for

cetane index, and § 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 §§ 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.

§ 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 § 80.470(a) through (d) occurred, is

deemed liable for the applicable

violation.

(ii) Any person who violates

§ 80.470(a) through (d) is liable for the

violation.

(iii) Any person who causes another

person to violate § 80.470(a) through (d)

is liable for a violation of § 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 § 80.470(a), is deemed in

violation of § 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 § 80.446 or § 80.447, is deemed in

violation of § 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 § 80.470(a)

occurred, is deemed in violation of

§ 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 purchaserconsumer 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.

§ 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 § 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 purchaserconsumers 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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.

§ 80.474 What penalties apply under this

subpart?

(a) Any person liable for a violation

under § 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

§ 80.472(a)(1) for a violation of an

applicable standard or requirement

under § 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

§ 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

§ 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 noncomplying motor vehicle diesel fuel

remained in the distribution system for

fewer than or more than twenty-five

days.

(c) Any person liable under

§ 80.472(a)(1) for blending into motor

vehicle diesel fuel an additive violating

the sulfur standard under § 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

§ 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:

§ 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:

§ 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 § 86.007–10 is added to

subpart A to read as follows:

§ 86.007–10 Emission standards for 2007

and later model year Otto-cycle heavy-duty

engines and vehicles.

This § 86.007–10 includes text that

specifies requirements that differ from

§ 86.099–10. Where a paragraph in

§ 86.099–10 is identical and applicable

to § 86.007–10, this may be indicated by

specifying the corresponding paragraph

and the statement ‘‘[Reserved]. For

guidance see § 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 § 86.007–15 or

§ 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

35552 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

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 heavyduty 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 gasfueled 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 § 86.1230–96,

diurnal plus hot soak measurements: 1.4

grams per test.

(2) For the supplemental two-diurnal

test sequence described in § 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 § 86.1230–96,

diurnal plus hot soak measurements: 1.9

grams per test.

(2) For the supplemental two-diurnal

test sequence described in § 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 § 86.1230–96,

diurnal plus hot soak measurements: 1.4

grams carbon per test.

(2) For the supplemental two-diurnal

test sequence described in § 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 § 86.1230–96,

diurnal plus hot soak measurements: 1.9

grams carbon per test.

(2) For the supplemental two-diurnal

test sequence described in § 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 § 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

§ 86.099–10.

12. A new § 86.007–11 is added to

subpart A to read as follows:

§ 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

§ 86.004–11. Where a paragraph in

§ 86.004–11 is identical and applicable

to § 86.007–11, this may be indicated by

specifying the corresponding paragraph

and the statement ‘‘[Reserved]. For

guidance see § 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 § 86.007–15 or

§ 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35553

restrictions described in § 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 § 86.007–

23(c)(2).

(3)(i) The weighted average exhaust

emissions, as determined under

§ 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

§ 86.1360–2004(f), when the engine is

operated in the steady-state control area

defined under § 86.1360–2004(d).

(4)(i) The weighted average emissions,

as determined under § 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

§ 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 § 86.1360(d).

(b)[Reserved]. For guidance see

§ 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

§ 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

§ 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 § 86.007–15 is added to

Subpart A to read as follows:

§ 86.007–15 NOX and particulate

averaging, trading, and banking for heavyduty engines.

Section 86.007–15 includes text that

specifies requirements that differ from

§ 86.004–15. Where a paragraph in

§ 86.004–15 is identical and applicable

to § 86.007–15, this may be indicated by

specifying the corresponding paragraph

and the statement ‘‘[Reserved]. For

guidance see § 86.004–15.’’

(a) through (k) [Reserved]. For

guidance see § 86.004–15.

(l) The following provisions apply for

model year 2007 and later engines.

These provisions apply instead of the

provisions of § 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 § 86.007-10 (a)(1) or § 86.007–

11 (a)(1); or

(ii) The engines using the credits are

certified under the § 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 § 86.007–23 is added to

Subpart A to read as follows:

§ 86.007–23 Required data.

Section 86.007–23 includes text that

specifies requirements that differ from

§ 86.095–23, § 86.098–23, or § 86.001–

23. Where a paragraph in § 86.095–23,

§ 86.098–23, or § 86.001–23 is identical

and applicable to § 86.007–23, this may

35554 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 86.095–23.’’, ‘‘[Reserved]. For

guidance see § 86.098–23.’’, or

‘‘[Reserved]. For guidance see § 86.001–

23.’’.

(a) through (b)(1) [Reserved]. For

guidance see § 86.098–23.

(b)(2) [Reserved]. For guidance see

§ 86.001–23.

(b)(3) and (b)(4) [Reserved]. For

guidance see § 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

§ 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 methanolfueled 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

§ 86.000–26(c)(4). In lieu of providing

emission data on idle CO emissions or

particulate emissions from methanolfueled 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 petroleumfueled 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 § 86.098–23.

(e)(2) and (e)(3) [Reserved]. For

guidance see § 86.001–23.

(f) through (g) [Reserved]. For guidance

see § 86.095–23.

(h) through (k) [Reserved]. For guidance

see § 86.098–23.

(l) [Reserved]. For guidance see

§ 86.095–23.

(m) [Reserved]. For guidance see

§ 86.098–23.

15. A new § 86.007–25 is added to

Subpart A to read as follows:

§ 86.007–25 Maintenance.

Section 86.007–25 includes text that

specifies requirements that differ from

§ 86.094–25, § 86.098–25, or § 86.004–

25. Where a paragraph in § 86.094–25,

§ 86.098–25, or § 86.004–25 is identical

and applicable to § 86.007–25, this may

be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 86.094–25.’’, ‘‘[Reserved]. For

guidance see § 86.098–25.’’, or

‘‘[Reserved]. For guidance see § 86.004–

25.’’

(a) through (b)(3)(v)(H) [Reserved]. For

guidance see § 86.004–25.

(b)(3)(vi)(A) through (b)(3)(vi)(D)

[Reserved]. For guidance see

§ 86.094–25.

(b)(3)(vi)(E) through (b)(3)(vi)(J)

[Reserved]. For guidance see

§ 86.098–25.

(b)(4) introductory text through

(b)(4)(iii)(C) [Reserved]. For guidance

see § 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 § 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 § 86.004–25.

(b)(7) through (h) [Reserved]. For

guidance see § 86.094–25.

16. A new § 86.007–35 is added to

Subpart A to read as follows:

§ 86.007–35 Labeling.

Section 86.007–35 includes text that

specifies requirements that differ from

§ 86.095–35. Where a paragraph in

§ 86.095–35 is identical and applicable

to § 86.007–35, this may be indicated by

specifying the corresponding paragraph

and the statement ‘‘[Reserved]. For

guidance see § 86.095–35.’’.

(a) Introductory text through

(a)(1)(iii)(L) [Reserved]. For guidance

see § 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 § 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 § 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 Administratorapproved 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

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 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 § 86.095–

35.

(a)(2)(iii)(F) [Reserved]

(a)(2)(iii)(G) through (a)(2)(iii)(K)

[Reserved]. For guidance see § 86.095–

35.

(a)(2)(iii)(L) [Reserved]

(a)(2)(iii)(M) through (a)(2)(iii)(N)

[Reserved]. For guidance see § 86.095–

35.

(a)(2)(iii)(O)(1) For vehicles exempted

from compliance with certain revised

performance warranty procedures, as

specified in § 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 § 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 Administratorapproved alternative test procedure to

be performed.

(a)(3) heading through (b) [Reserved].

For guidance see § 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 § 86.095–35.

17. A new § 86.007–38 is added to

Subpart A to read as follows:

§ 86.007–38 Maintenance Instructions.

Section 86.007–38 includes text that

specifies requirements that differ from

those specified in § 86.094–38 or

§ 86.004–38. Where a paragraph in

§ 86.094–38 or § 86.004–38 is identical

and applicable to § 86.007–38, this may

be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 86.094–38.’’, or ‘‘[Reserved]. For

guidance see § 86.004–38.’’

(a) through (f) [Reserved]. For guidance

see § 86.004–38.

(g) [Reserved]. For guidance see

§ 86.094–38.

(h) [Reserved]. For guidance see

§ 86.004–38.

(i) For each new diesel-fueled engine

subject to the standards prescribed in

§ 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 § 86.113–07 is added to

subpart B to read as follows:

§ 86.113–07 Fuel specifications.

Section 86.113–07 includes text that

specifies requirements that differ from

§ 86.113–94 or § 86.113–04. Where a

paragraph in § 86.113–94 or § 86.113–04

is identical and applicable to § 86.113–

07, this may be indicated by specifying

the corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 86.113–94 or ‘‘[Reserved]. For

guidance see § 86.113–04’’.

(a) [Reserved]. For guidance see

§ 86.113–04.

(b)(1) [Reserved]. For guidance see

§ 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 .............................................................................................................................. °F

(°C)

D86 340–400

(171.1–204.4)

(B) 10 pct. point ................................................................................................................ °F

(°C)

D86 400–460

(204.4–237.8)

(C) 50 pct. point ................................................................................................................ °F

(°C)

D86 470–540

(243.3–282.2)

(D) 90 pct. point ................................................................................................................ °F

(°C)

D86 560–630

(293.3–332.2)

(E) EP ............................................................................................................................... °F

(°C)

D86 610–690

(321.1–365.6)

(iv) Gravity ................................................................................................................................ °API D287 32–37

(v) Total sulfur .......................................................................................................................... ppm D2622 7–15

(vi) Hydrocarbon composition:

Aromatics, minimum (Remainder shall be paraffins, naphthenes, and olefins) ............... pct. D5186 27

35556 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

Item

ASTM

test

method

No.

Type 2–D

(vii) Flashpoint, min. ................................................................................................................. °F

(°C)

D93 130

(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 ...................................................................................................................... °F D86 540–630

(iv) Gravity ................................................................................................................................ °API D287 30–39

(v) Total sulfur .......................................................................................................................... ppm D2622 7–15

(vi) Flashpoint, min. .................................................................................................................. °F

(°C)

D93 130

(54.4)

(vii) Viscosity ............................................................................................................................ centistokes D445 1.5–4.5

(b)(4) through (g) [Reserved]. For

guidance see § 86.113–94.

19. A new § 86.1313–07 of subpart N

is added to read as follows:

§ 86.1313–07 Fuel specifications.

Section 86.1313–07 includes text that

specifies requirements that differ from

§ 86.1313–94. Where a paragraph in

§ 86.1313–94 is identical and applicable

to § 86.1313–07, this may be indicated

by specifying the corresponding

paragraph and the statement

‘‘[Reserved]. For guidance see

§ 86.1313–94.’’.

(a) through (b)(1) [Reserved]. For

guidance see § 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

Item

ASTM

test

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

(°C)

D86 330–390

(165.6–198.9)

340–400

(171.1–204.4)

(B) 10 pct. point ....................................................................................... °F

(°C)

D86 370–430

187.8–221.1)

400–460

(204.4–237.8)

(C) 50 pct. point ....................................................................................... °F

°C)

D86 410–480

(210.0–248.9)

470–540

(243.3–282.2)

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35557

TABLE N07–2—Continued

Item

ASTM

test

method

No.

Type 1–D Type 2–D

(D) 90 pct. point ....................................................................................... °F

(°C)

D86 460–520

(237.8–271–1)

560–630

(293.3–332.2)

(E) EP ...................................................................................................... °F

(°C)

D86 500–560

(260.0–293.3)

610–690

(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 (Remainder shall be paraffins, naphthenes, and

olefins).

pct D5186 8 27

(vii) Flashpoint, min ........................................................................................ °F

(°C)

93 120

(48.9)

130

(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

Item

ASTM

test

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

(°C)

D86 440–530

226.7–276–7)

540–630

(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

(°C)

D93 130

(54.4)

130

(54.4)

(vii) Viscosity ................................................................................................... centistokes D445 1.2–2.2 1.5–4.5

(b)(4) through (g) [Reserved]. For

guidance see § 86.1313–94.

20. A new § 86.1337–07 is added to

subpart N to read as follows:

§ 86.1337–07 Engine dynamometer test

run.

Section 86.1337–07 includes text that

specifies requirements that differ from

§ 86.1337–96. Where a paragraph in

§ 86.1337–96 is identical and applicable

to § 86.1337–07, this may be indicated

by specifying the corresponding

paragraph and the statement

‘‘[Reserved]. For guidance see

§ 86.1337–96.’’.

(a) through (c) [Reserved]. For guidance

see § 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 § 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.)

35558 Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules

1Section 86.1816–04 was proposed to be added

at 64 FR 58559, October 29, 1999.

21. A new § 86.1808–07 is added to

subpart S to read as follows:

§ 86.1808–07 Maintenance instructions.

Section 86.1808–07 includes text that

specifies requirements that differ from

those specified in § 86.1808–01. Where

a paragraph in § 86.1808–01 is identical

and applicable to § 86.1808–07, this

may be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 86.1808–01.’’.

(a) through (f) [Reserved]. For guidance

see § 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:

§ 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 heavyduty 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 nonTier 2 ethanol fueled vehicles.

* * * * *

23. A new § 86.1816–07 is added to

subpart S, to read as follows:

§ 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 § 86.1816–04.1 Where

a paragraph in § 86.1816–04 is identical

and applicable to § 86.1816–07, this

may be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 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:

(i) [Reserved]

(ii) Non-methane hydrocarbons. 0.195

grams per mile; this requirement may be

satisfied by measurement of nonmethane 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 nonmethane 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 § 86.1816–04.

24. A new § 86.1824–07 is added to

subpart S, to read as follows:

§ 86.1824–07 Durability demonstration

procedures for evaporative emissions.

Section 86.1824–07 includes text that

specifies requirements that differ from

those specified in § 86.1801–01. Where

a paragraph in § 86.1824–01 is identical

and applicable to § 86.1824–07, this

may be indicated by specifying the

corresponding paragraph and the

statement ‘‘[Reserved]. For guidance see

§ 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 § 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:

Federal Register / Vol. 65, No. 107 / Friday, June 2, 2000 / Proposed Rules 35559

§ 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 petroleumfueled 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