# Tier 3 Final Rule

Analy sis R esults Brief ing for Int er ag ency

R eview ers Fe bruar y 5, 2014

1

# Ov er vie w  

## Chang es to baseline  

## Ve hicle co sts  

## Fu el co sts  

## Emissions impacts  

## Air q uality i mpacts  

## Benef its  

## Schedule a nd next

s te ps

2

# Chang es t o Baseline since NPRM  

### Ac co unt ed for

LE V III inCalifornia

a nd Section1 77 stat es  Tier 3 sulfur co ntrol still applies t o Section17 7 states  No fuel changesmodeled for California  Tier 3 ve hicleleak

standard provides e missionreductions nation wide  This is the o nly

Tier 3 emissions benef

it inCalifornia  Affects both emissions a nd co st a nal ys is 

###  

### Included LD GHG 201 7 and HD GHG rules  Both rules a re included inr eferenc e and co ntrol cases  Projected ve hiclef

leet is the201 7 - 20 25 GHG f leet  To tal fuel vo lumes i n baselinereduc ed due to LD GHG 201 7 

###  

### Up dat ed re newablefuels vo lumes a nd blends  NP RM assumed full RFS ethanol vo lumes with E10 and E1 5  FRM anal

ys es are based on A EO 2 01 3, which assumes:  Re newable fuel vo lumes are much less thanfull RFS  Mix o f E10, E15 and E85 

###  

### Us ing 2011 dollars (FRM) ra ther t han2010 dollars (NP RM) 3

###  

### FRM anal

ys is re fl ects LE V III, LD GHG 201 7 and HD GHG  Acco unts f

or LE V III in Section 17 7 stat es a nd California  NP RM only

a cco unted for

California  Us es 201 7 - 20 25 GHG projected fl eet  Tier 3 f inal co sts d o not

include re sear ch and somed evelopment co sts associated with LE V I II 

###  

### Ve hicleco st

a nalysis u pdat es  Impr ove d methodology u sed to p roject c atalyst loading co sts, based on co mments r ec ei

ve d in theNP RM  Up dated technology p enetr ationra tes for s ever al technologies  Sec ondar y a ir

injection, optimized thermal manag ement  Other s pecif icc hang es in technology/hardwarec osts  Us e o f passiv

e hy drocarbon adsorbers instead of a ctiv e  Improv

ements to evap hardwarec osts based ono ther te chnology c hang es  Addition of

e nginecalibr ationco sts based ono ther te chnology c hang es  Us ed most

re ce nt ( MY2013) ce rtif

icatione missionte st

d ata 

# Ve hicle Cos t Analy sis Upda te s

4

# Ve hicle Cos ts – Tier 3 FRM

Model Ye ar All Ti er 3

Ve hic le s 2017 $28 2018 $58 2019 $61 2020 $65 2021 $68 2022 $71 2023 $71 2024 $71 2025 $72 Model Ye ar All Ti er 3

Ve hic le s 2017 $28 2018 $58 2019 $61 2020 $65 2021 $68 2022 $71 2023 $71 2024 $71 2025 $72 

### $/V ehicle Exhaust & Evapor ative Co ntr ols 2011 dollars $/Y ear in2030 All Ve hiclePr ogr amC osts* 2011 dollars

* Exhaust, evaporative, operating, facilities Ca le nd ar Ye ar $M illio ns Ch an ge

fr om NP RM 2030 $761 -63% Ca le nd ar Ye ar $M illio ns Ch an ge

fr om NP RM 2030 $761 -63% 63 % lo we r c osts i n 2030 due to:

- Lo we r $/vehicle($130 do wn to $72)

- Smaller fleet
— FRM ex cludes California & other L EV III stat es ( 36% of

fleet) wh ileNP RM ex cluded California o nly . 5

# Re finery Modeling and Fuel Cos t Upda te s  

## FRM analys is re fl ects A EO 2013 fuel suppl y, including re duc ed fuel vo lumes d ue to LD GHG 201 7 and chang es to re newable f uels  

## Re fi ner y - by - re fi ner y model also u pdat ed for the FRM  

### Us ed new

d ata for re fi ner y t hr oughput

vo lumes t hat

p rov ides gr eat er c ertainty

o n re fi ner y o per ations  

### Calibr at ed re fi ner y FC C vo lumes based onF CC under cut ting , pr opylene a nd ar omatics s ales , et c.  

### Adjust ed to a ctual starting sulfur level by re fi ner y ( NP RM assumed 30 ppm)  

### Obtained additional ve ndor d ata  

### Applied lessco nser va tive c rit eria t re ating other

s tr eams (e.g ., butane, LSR)  

### Incr eased capital co st o ffsit e and co nting ency f act ors 6

# Re finery Modeling and Fuel Cos t Upda te s  

## FRM pr ojectsnation

widet ra ding inst ead of

just intr ac ompan

y , asa ssumed int heNP RM  

### Majority

o f cr edits a rebeing tr aded between co mpanies, not

w ithin

7 **2012 Sulfur**

**Cr edit**  **T ra**  **nsactions** Vintag e of

Credit **To tal**  2012 2011 2010 2009 2008 2007 BillionCredits **590** 13 60 56 39 189 233 % of All 2012 Credit Tr ansactions 2 10 9 7 32 39 % Interc ompan

y **56** 28 59 31 16 60 66

# Tier 3 Fuel Cos ts **NP RM**  **FRM %Chang**  **e** Cost (c/gal) 0.89 0.65 - 27 % 2030 Annual Cost

$B 1.320 0.696 - 47 %* Capital Cost

$B 2.203 2.025 - 8% # Gr assroots Un its 16 1 # Revamps 67 62 **Chang es**  **in t**  **he Ref** 

**inery Co**  **st**

**M odel**  **Impact o**  **n Co**  **st** Na tional credit

tr ading instead of intr ac ompan y credit tr ading Remov ed ButaneT

reating Reduc ed LSR Hy

drotreating Added propylenep roduction and F CC naphtha d ow ngr ading Increased capital co st

o ffsitefact or

a nd co nting ency

f actor Va rious o ther updates a nd tweaks d ueto co mments/peer review 8 * Also reflectslo we r fuel consumption for FRM (AE O2013) vs NP RM (AEO2011)

# Tier 3 Fuel Cos ts

9

# Tier 3 Sulfur Le ve ls

10

# Emissions/

AQ /Bene fits Analy sis Upda te s  

### LE V III, LD GHG 201 7 and HD GHG included inbothre fer enc e and co ntr ol cases  

### First a nal ys isye ar i s 2018  

### Impr ove d modeling of onr oad emissionsw ithMOVES  

### Impr ove d re pr esentationo f local fuel pr opertiesa nd upstr eam impacts  

### Ne w a ir

q uality modeling platform  2007 instead of

2005 baseye ar 

###  

### CMA Q updat es: CMA Q v 5.0.1 (NP RM used v 4.7.1)  

### Benef its a nal ys isu pdat ed to be co nsist ent w ithf inal PM NAAQS methodolog y 11

# Tier 3 Impacts

12 **2018 2030**  Reduction (US To ns ) % reduction in

onroad inventor y Reduction

(US To ns ) % reduction in

onroad inventor y NOx - 264,000 - 10% - 32 9,000 - 25 % VO C - 47 ,500 - 3% - 168,000 - 16% PM2.5 - 130 - 0.1% - 7,890 - 16% Benzene - 1,920 - 6% - 4,760 - 26%

• Lo we r NOx , VO C, and PM2.5 emissions lead to • Mo der ateto larg e o zoned ecreases a cross t heco untr y • Small to moder atePM decreases a cross t heco untr y13 

# AQ Impacts in 2018 - Oz one14 

# AQ Impacts in 2030 - Oz one15 

# AQ Impacts in 2018 – Annual PM 2.516 

# AQ Impacts in 2030 – Annual PM 2.517 

# Bene fits in 2030
 

### Ozonea nd PM - re lat ed Pr ematur e Mo rtality A vo ided:  

### PM: 660 to 1,500 avo ided ( Krewski et a l., 2009 & Le peule et

a l., 2012) 

###  

### Ozone: 110 t o 500 avo ided (based onra ng e of s ix s tudies)  

### To tal: 77 0 t o 2,000 pr ematur e deaths 

###  

### To tal M onetized Benef its  

### $7.4 t **o $19**  Billion(3% DR); **$6.7 t o**  **$18** Billion(7% DR) 

###  

### To tal C osts  

### $1.5 Billion 

###  

### Benef it - to - Co st

Ratio  

### 4.5 **to 12.7** 18 

# Bene fits in 2018
 

### Impacts in2018 primaril y d ueto thee ffects o f sulfur o n the existing (pr e - Tier

3) fleet  

### Ozonea nd PM - re lat ed Pr ematur e Mo rtality A vo ided:  

### PM: 180 t o 400 avo ided ( Krewski et a l., 2009 & Lepeule et

a l., 2012) 

###  

### Ozone: 4 5 to 210 avo ided (based onra ng e of s ix s tudies)  

### To tal: 22 5 to 610 pr ematur e deaths 

###  

### To tal M onetized Benef its  

### $2.1 **to $5.6**  Billion(3% DR); **$1.9 t o**  **$5.3** Billion(7% DR) 

###  

### To tal C osts  

### $1.4 Billion

# Ne xt St eps
 

## EP A re questing 30 - da

y OMB re view  

### Clear anc e Fe b. 24

Deliber ative -- Do not cite or q uote 19