# UNITED STATES ENVIRONMEN TAL PROTECTION AGENCY

NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY

2000 TRAVERWOOD DRIVE

ANN ARBOR, MI 48105-2498

OFFICE OF

AIR AND RADIATION



# May 2, 2013

MEMORANDUM

SUBJECT: Meeting with Lake Michigan Ai r Directors Consortium Members Regarding the

Proposed Tier 3 Standards

FROM: Catherine Yanca, Assess ment and Standards Division

Office of Transportation and Air Quality

TO: EPA Docket # EPA-HQ-OAR-2011-0135

This memo documents a meeting held on May 2, 2013 between representa tives of the Lake

Michigan Air Directors Consortium (LADCO) a nd the Environmental Protection Agency (EPA)

to discuss EPA’s proposed Tier 3 standards fo r motor vehicle emissions and fuels. The

following LADCO members attended the meeting via phone:

Illinois

Laurel Kroack

Jim Ross

David Bloomberg

Indiana

Keith Baugues

Scott Deloney

Michigan

Vince Helwig

Mary Maupin

Minnesota

David Thornton

Ohio

Bob Hodanbosi

# Wisconsin

Bart Sponseller

Joe Hoch

LADCO

Rob Kaleel

The following EPA representatives participated in the meeting:

EPA Office of Transpor tation and Air Quality

Leila Cook

Rudy Kapichak

Paul Machiele

Michael Olechiw

Kathryn Sargeant

Catherine Yanca

EPA Region 5

John Summerhays

Frank Acevedo

The meeting included an overview of the proposed Tier 3 standards presented by EPA, slides

attached below, followed by a clarifyi ng questions from LADCO members.

Attachment:Tier 3 Vehicle and Fuel Standards:Proposal OverviewApril 20131Overview• What is Tier 3?• Why Tier 3?• Overview of the Program• Benefits and Costs2What is Tier 3?• Systems approach to reducing motor vehiclepollution: more stringent vehicle standards enabledby gasoline sulfur controlbygasolinesulfurcontrol• Creates a harmonized vehicle program– Coordinated with California LEV III and Light-duty GHGstandards finalized last year for model years (MY) 2017-standardsfinalizedlastyearformodelyears(MY)20172025– Enables auto industry to produce and sell one vehiclenationwide• Part of comprehensive approach to create cleaner,more efficient vehicles–Begins phasing in with model year 20173Beginsphasinginwithmodelyear2017– To allow coordinated compliance with LEV III and LD GHGWhy Tier 3: Air Quality and Public Health• Tier 3 standards would have immediate healthand air quality benefits• Will help attain and maintain ozone and PMNAAQS– Provides cost-effective national reductions that avoidmore expensive local controls• Reduces pollution near roadsMore than 50 million people live work or go to school–Morethan50millionpeoplelive,work,orgotoschoolnear major roads4Why Tier 3: Harmonized Vehicle Program• California finalized LEV III standards last yearEPA i d i d CAA i D b 2012–EPAissueda waiver underCAAinDecember2012•The auto industry supports Tier 3 because theyTheautoindustrysupportsTier3becausetheywant to produce and sell one vehicle nationwide• Tier 3 is harmonized with LEV III– Would begin in 2017 to allow coordinated compliancewith GHG and LEV IIIwithGHGandLEVIII5Tier 3 Vehicle Standards•Phase in between 2017 and 2025Phaseinbetween2017and2025• Tighter VOC and NOx tailpipe standards– 80% reduction from today’s fleet average• Tighter PM tailpipe standard– 70% reduction in per-vehicle standard•Evaporative emissions standardsEvaporativeemissionsstandards– Reduced fuel vapor emissions and improved system durability• Revised certification test fuel to better reflect in-usegasoline expected in 2017gasolineexpectedin2017– Current certification test fuel has no ethanol• Regulatory streamlining/harmonization changes int th P id t’ R l t R i i iti tiresponsetothePresident’sRegulatoryReviewinitiative6Why Lower Sulfur Gasoline?B h Ti 3 d LEV III hi l d d d d l•BothTier3andLEVIIIvehicle standardsdependuponlowersulfur gasoline– Sulfur at current levels degrades the performance of vehicle catalyticconverters the primary emission control system on vehiclesconverterstheprimaryemissioncontrolsystemonvehicles• Tier 3 vehicle standards not achievable without lower sulfur• Lower sulfur also provides immediate reductions in NOx and VOCemissions from the existing fleetCalifornia alread has lo er s lf r gasoline (as do E rope•Californiaalreadyhaslowersulfurgasoline(asdoEurope,Japan, S. Korea, and several other countries)– Other states prohibited from controlling gasoline sulfur on their own• Enables some lower-cost technologies for complying with vehiclegreenhouse gas standards7Tier 3 Fuel Standards• Lower the average sulfur standard from 30 to 10ppm startingJanuary1, 2017g y– California is already 10 ppm sulfur on average, andEurope and Japan have a 10 ppm cap• Proposing to either maintain the current pergallon sulfur caps (80 ppm at refinery gate, 95gallonsulfurcaps(80ppmatrefinerygate,95ppm at retail) or lower them to 50 ppm and 65ppm respectively8Fuel Flexibilities•Proposing the superset of flexibilities that have proven successful inProposingthesupersetofflexibilitiesthathaveprovensuccessfulinpast EPA fuel programs•Annual averagestandard with a sufficiently high per-gallon cap•Early creditprogram to phase in the sulfur standard from January 1,2014 through December 31, 2019•Relief for small refiners and refineries<75 000 barrels per dayReliefforsmallrefinersandrefineries<75,000barrelsperday– Delay of 3 years through December 31,2019, consistentwith the end of theearly credit phase-in for large refiners– Total of 35 refineries representing atotal of 10% of gasoline production•Economic and Technical Hardshipprovisions available to allrefiners– EPA has granted hardship relief to overa dozen refineries under past fuelregulations; many more for RFSregulations;manymoreforRFS9Tier 3 Emission ImpactsNational Onroad Inventory Reductions2017 2030Tons Percent Tons PercentNOx284,000 8 525,000 28VOC45,000 3 226,000 23PM 2.5NA NA 7,500 10CO747,000 4 5,765,000 30Ben ene1 62548 58136Benzene,,Total air toxics15,000 3 90,000 23• Emission reductions will continue to grow beyond 2030 as more of the fleetcontinues to turn over to Tier 3 vehicles10Benefits of Tier 3Total Ozone and PM-related Premature Mortality Avoided:820-2,400 in 2030 (based on rangeof ozone and PM mortality studies)Other PM- and ozone-related health impacts avoided in 2030:Hospital admissions and asthma-related ER visits: 3,200Asthma exacerbations: 22,000Upper and lower respiratory symptoms in children: 23,000Lost school days, work days, and minor restricted activity days: 1.8 millionTotal Monetized Benefits in 2030 (2010$):$8 to $23 Billion11Summary of Costs and Benefits• Fuel Sulfur Standard– 0.89 cents per gallon–$2.1 billion in capital costs over 6yearphase-inperiodyp– Based on a detailed, peer-reviewed, refinery-by-refinery analysis• Vehicle Standards in 2025$130 per vehicle–$130pervehicle• Annual Cost in 2030– Vehicle Program: $2.0 billion–Fuel Program: $1.3 billion– Total Program: $3.4 billion•Total Monetized Benefits in 2030TotalMonetizedBenefitsin2030–$8 to $23 Billion12