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January 13, 2012

BY E-MAIL

The Honorable Lisa Jackson

Administrator U.S. EPA Headquarters Ariel Rios Building

Mail Code: 1101A 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 jackson.lisa@epa.gov

Dear Administrator Jackson:

We are writing collectively as representatives of t he mobile source emissions control industry to respectfully urge you to advance the agency’s propo sal for Tier 3 emission and fuel standards this month and adopt the new standards by mid-year. We fear that delay will jeopardize the ultimate adoption of these new standards and deny the countr y of the health and economic benefits associated

with the new rule.

The potential health benefits associated with Tier 3 are well established by numerous health effects studies. The plain fact is passenger vehicles are a major source of emissions of ozone precursors, carbon monoxide, and particulate matter. Studies h ave shown that these pollutants threaten human health by reducing lung function, aggravating asthm a and other chronic lung diseases, causing permanent lung damage through repeated exposure, an d causing heart attacks. 1 These health threats can lead to premature death. Tier 3 has the potent ial to substantially reduce these health threats by cutting overall vehicle emissions of nitrogen oxide s by 29%, carbon monoxides by 38%, and volatile organic compounds by 26% by 2030. 2

Reducing the sulfur content of gasoline is critical to achieving these emission reductions on new vehicles. State-of-the-art emission control system s require low sulfur fuel to achieve optimal performance in terms of both emissions reduction an d cost. Importantly, reducing the sulfur content

of the fuel will also reduce harmful emissions from the in-use-fleet by almost 30% in the first year o f the program.

In addition to these important environmental benefi ts, Tier 3 also has the potential to generate substantial economic benefits. First among these i s the ability of the auto industry and its supplier s to scale production and maximize efficiency in the man ufacture of new vehicles and systems that are designed to meet the tighter tailpipe emission stan dards.

1 Health Effects Institute, “Traffic-Related Air Pol lution: A Critical Review of the Literature on Emis sions, Exposure, and Health Effects, Special Report 17,” J anuary 12, 2010.

2 National Association of Clean Air Agencies, “Clean er Cars, Cleaner Fuel, Cleaner Air: The Need for an d Benefits of Tier 3 Vehicle and Fuel Regulations,” O ctober 2011, p 16.

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California is adopting new emission standards under their LEV III rule to address serious ozone and PM nonattainment problems in many regions of the st ate. If EPA does not move forward promptly to adopt Tier 3, other states with ozone and PM nonatt ainment problems will likely adopt emission standards similar to LEV III, as they are authorize d to do so under the Clean Air Act. This would result in automakers and their suppliers having to manufacture vehicles with different emission systems for different state markets.

Tier 3 addresses this problem by harmonizing emissi on standards across the country. This would enable car makers and their suppliers to scale prod uction to one set of standards, thereby minimizing

the cost of the emissions reduction for the auto in dustry, its suppliers, and consumers alike.

The second important economic benefit is the increa sed investment that will be driven by Tier 3. Automakers, their suppliers, and petroleum refiners will have to make an increased investment to meet the new tailpipe and fuel standards. This inv estment will most certainly generate employment opportunities in the United States. Our industry i s willing and eager to make this investment to improve the national economy.

The third economic benefit is the technology develo pment that will be required to meet the new Tier 3 standards. Over the last forty years, our indust ry has collaborated with our customers in the auto industry to develop successive generations of emiss ion control technologies to meet the evertightening emission standards. Because the United States has led the world in mobile source regulation, we have also led the world in the devel opment of emissions reduction technology. Tier 3

will be no different. It will establish a new thre shold of tighter standards that will set the stage for the next step of emission reductions around the world. We will develop technology that will meet the

new Tier 3 standards in the United States first. A nd, as these new standards migrate around the world

, we will be in the best position to supply product i nto these new expanding markets.

The experience of our industry over the last 40 yea rs vividly demonstrates this connection between regulation and economic development. Prior to 1970 , our industry did not exist. But, with the enactment of the Clean Air Act in 1970, our industr y has flourished, developing successive generations of technology to meet ever tightening r egulatory standards. Since the introduction of the catalytic converter in 1975, more than 500 million light-duty vehicles have been sold in the United States equipped with exhaust and evaporative emissi on control technologies developed by our industry. This generated an estimated $250-$300 bi llion in economic activity since 1975. In 2010 alone, our industry generated $12 billion of econom ic activity and accounted for 65,000 U.S. jobs, mostly in manufacturing. 3

We understand that other parties have argued agains t the adoption of low sulfur fuel standards because of increased investment that may be necessa ry at the refinery level to meet the lower sulfur standard and because of an alleged increase in the cost of gasoline for consumers. We believe that increased business investment is good for America a nd we are prepared to make the investment to meet the new Tier 3 tailpipe standards. We believe our customers in the automobile industry share

this view. 4

3 Manufacturers of Emission Controls Association, “M ECA Highlights Economic Benefits of Mobile Source Emissions Control Industry,” March 11, 2011.

4 Bainwol, Mitch. Letter. Alliance of Automobile Man ufacturers, October 6, 2011.

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We also believe that the cost to consumers of low s ulfur fuel is insignificant, at less than $5 per ye ar for an average American driver. 5 This small increased cost of fuel will be more th an offset for American consumers by the health benefits of cleane r air arising from the new Tier 3 emission and

fuel standards.

We appreciate the opportunity to make our views kno wn and stand ready to be of assistance to your agency as you proceed with your consideration of Ti er 3.

Sincerely,

Joseph Kubsh Timothy Regan

Executive Director President

Manufacturers of Emission Controls Association Emis sions Control Technology Association

www.meca.org www.ectausa.com

BASF Corporation BorgWarner Inc. Bosal Emission Control Systems North America Clean Diesel Technologies Inc., including Catalytic Solutions Inc. and Engine Control Systems Limited Corning Incorporated Johnson Matthey Inc.

MANN+HUMMEL USA NGK Automotive Ceramics USA, Inc. Stoneridge Inc.
Tenneco, Inc.

Umicore Autocat USA

Unifrax I LLC

cc: Bob Perciasepe, Deputy Administrator, EPA ( perciasepe.bob@epa.gov ) Gina McCarthy, Assistant Administrator, OAR ( mccarthy.gina@epa.gov ) Nancy Sutley, Chair, CEQ ( Nancy_H._Sutley@ceq.eop.gov ) Gary Guzy, Deputy Director, CEQ ( Gary_S._Guzy@ceq.eop.gov ) Margo Oge, Director, OAR/OTAQ ( oge.margo@epa.gov ) Cass Sunstein, Administrator, OIRA ( Cass_R._Sunstein@omb.eop.gov ) Heather Zichal, Deputy Assistant to the President f or Energy and Climate Change, ( Heather_R._Zichal@who.eop.gov )

5 National Association of Clean Air Agencies, “Clean er Cars, Cleaner Fuel, Cleaner Air: The Need for an d Benefits of Tier 3 Vehicle and Fuel Regulations,” O ctober 2011, p 15. The sulfur provision translates to a cost of $4.80 per year for the average driver or the equ ivalent of about 1.5 gallons of gasoline at current prices (assumes 12,000 miles/year, 25 mpg, 1 cent/gal).