# Tier 3 Motor Vehicle and Fuel

Standards Summary of Comments

Briefing for OMB November 6, 20132 

# Overview • Recap of the Proposed Standards • Commenters • Overview of Comments – Fuel Issues – Vehicle Issues – State and NGOs 

## • Next Steps3 

# Tier 3 Program Recap • Systems approach: more stringent vehicle standards enabled by gasoline sulfur control – Sulfur interferes with catalyst function – Further reductions in gasoline sulfur are needed to allow vehicles to reach the Tier 3 standards – Sulfur reduction achieves large emission reductions from the in use fleet 

## • Harmonized vehicle program – Coordinated with California LEV III and GHG for model years (MY) 2017-2025 – Broadly supported by auto industry so they can produce and sell a single fleet of vehicles nationwide 

## • Phase-in begins with MY 2017 for vehicles and CY 2017 for fuels – To allow coordinated compliance with GHG and LEV III4 

# Proposed Fuel Standards • Fuel sulfur standards: – 10 ppm annual average sulfur standard, beginning January 1, 2017 • Small refiner and small volume refinery delay until January

1 , 2020 – Two main options for the refinery gate and downstream caps • Maintain current 80 ppm refinery gate and 95 ppm downstream caps • Lower to 50 ppm/65 ppm caps (beginning January 1 , 2020) • Asked for comment on 20 ppm/25 ppm caps 

### • Nationwide credit trading program, with a 3-year early credit program (2014-2016) and 3-year early credit use period (2017- 19) • Requested comment on potential fuel quality standards for flex-fueled vehicle (FFV) fuel • Various fuel technical amendments and streamlining provisions5 

# Proposed Vehicle Standards

• Passenger cars (all) • Light trucks and SUVs (Escape) • Minivans and crossovers (Caravan) 0-6k lbs. • LD Pick-ups (F150) • Large SUVs (Jeep GC) • Medium Duty Passenger Vehicles (MDPVs) – large passenger vans 6k8.5k lbs. • HD pickups (F250/350) • Large vans (Sprinter, E250) 8.5k14k lbs. 

### Light **- duty**  **Ve hicles**  **Heavy -** **duty Ve** **hicles 5**  

## Ve hicles addressed:6 

# Proposed Vehicle Standards • More stringent tailpipe standards – Beginning with model year (MY) 2017 for lighter vehicles and MY 2018 for heavier vehicles – Tighter non -methane organic gas and nitrogen oxides ( NMOG+NOx) standards – Tighter particulate matter (PM) standards 

### • More stringent evaporative emissions standards – Lower standards to “zero levels” and improve system durability – New fuel/evap leak standard – Upgrade on -board diagnostic system requirements and align with California ARB 

### • Extension of useful life to 150,000 miles • Revised certification test fuel to E15 (15% ethanol) to better reflect in -use gasoline expected in 2017 – Asked for comment on E10 (10% ethanol) – Also included an option for high-octane E30 (30% ethanol) 

### • Updated vehicle certification test procedures7 

# Public Comments • About 140 unique organization comments • About 3,800 citizen comments (not part of mass campaigns) • About 230,000 comments from 25 unique mass campaigns8 

# Fuel Industry Commenters • **Refiners** – American Petroleum Institute(API)/American Fuel and Petrochemical Manufacturers (AFPM) – BP – Chevron – CHS, Inc. – CountryMark – ExxonMobil – Flint Hills Resources – Marathon – Monroe Energy – PBF Energy – Phillips 66 – Shell – Small Refiners – Sunoco – Wyoming Refining Company • **Aftermarket Additives**  – Auto Aftermarket Industry Association – Automotive Specialty Products Assoc (ASPA) – Int’ l Fed. of Inspection Agencies / America’ s Petroleum Regional Technical Committee • **Ethanol/Renewables** – American Coalition for Ethanol (ACE) – American Council on Renewable Energy (ACORE) – Algenol Biofuels – American Gas Assoc. – Advanced Biofuels Assoc. – Biotechnology Industry Organization (BIO) – Clean Fuels Development Coalition – Growth Energy – INEOS Bio – Mid-Continental Energy – National Biodiesel Board (NBB) – National Corn Growers Association (NCGA) – Natural Gas Vehicles for America – National Propane Gas Association (NPGA) – Poet – Renewable Fuels Association (RFA) – Sutherland Asbill Brennan • **Terminals/Downstream** – Ind. Fuel Terminal Operators Assoc. (IFTOA) (importers) – Irving Oil – Kinder Morgan – Magellan – Petroleum Marketers Assoc of America (PMAA) – Society of Independent Gasoline Marketers/National Association of Convenience Stores (SIGMA/NACS) • **Other** – Weaver – Turner, Mason & Company9 

## Vehicle and Engine Related Commenters • Alliance of Automobile Manufacturers / Global Automakers (GA) • American Motorcyclist Association • Aston-Martin • BMW • Chrysler • Cummins • Dupont • Emissions Control Technology Association (ETCA) • Truck and Engine Manufacturers Association (EMA) • Ferrari • Ford • GM • Honda • Lotus • McLaren Automotive • Manufacturers of Emission Controls Association (MECA) • Motor & Equipment Mfrs Association • Mercedes-Benz • Mitsubishi • National Automobile Dealers Association (NADA) • National Marine Mfrs Association • Outdoor Power Equipment Association • Revecorp Consulting • Robert Bosch • U.S. Coalition for Advanced Diesel Cars • Volvo • Vehicle Services Consulting, Inc. • Volkswagen10 

# State/NGO commenters **Env ironmental**  **NGOs** Appalachian Mountain Club Chesapeake Bay Foundation Environmental Defense Fund Medical Advocates for Healthy Air and Clean Air Carolina Natural Resources Defense Council (NRDC) Sierra Club Union of Concerned Scientists (UCS) Consumers Union (CU) ICCT Health Organizations American Lung Association American Lung Association State and Local Chapters Children's Environmental Health Network Joint comments from: American Academy of Pediatrics American Lung Association American Public Health Association American Thoracic Society Asthma and Allergy Foundation of America Health Care Without Harm National Association of City and County Health Officials Trust for America’s Health Environmental Justice Organizations Concerned Citizens Around Murphy WEACT for Environmental Justice Other Commenters of Interest Mercatus Center (George Mason University) Art Fraas **State and Local A** **ir Ag** **encies** California Air Resources Board (CARB) Delaware Department of Natural Resources Kentucky Division for Air Quality Maryland Department of the Environment Metropolitan Washington Air Quality Committee Michigan Department of Environmental Quality (MDEQ) Mid -Atlantic Regional Air Management Assoc. (MARAMA) National Assoc. of Clean Air Agencies (NACAA) New York State Department of Env. Conservation (NY DEP) Northeast States for Coordinated Air Use Management (NESCAUM) Ozone Transport Commission (OTC) Pennsylvania Department of Env. Protection (PA DEP) Utah Air Quality Board (UT AQB) Other State/Local Agencies Ann Arundel Country, Maryland Boulder County Health Board Maryland Department of Transportation Chicago Metropolitan Agency for Planning Southern California Association of Governments Sugar House Community Council Elected Representatives Governor of Utah Congressman Patrick Meehan of Pennsylvania Attorneys General of NY, CT, DE, MD, MA, ME, NH, NC, OR, RI, VT, WA, Washington D.C., New York, Chicago Governors’ Biofuels Coalition Utah State Legislators11 

# Overview of Fuel Comments • Primarily focused on several main issues – Case for additional sulfur control – Leadtime – Downstream sulfur cap 

## • Many comments generally supporting the structure of the proposed fuel standards – e.g., averaging, banking and trading (ABT), early credits, etc. – Some of these were detailed comments on suggested changes to the proposed program 

## • Limited number of other issues raised **11**12 

# Case/Need for Sulfur Control • Proposed: 10 ppm annual average sulfur standard starting in 2017 • API/AFPM comments challenged our case for sulfur control, including requesting more analysis, but did not provide new data or information showing why control was unnecessary • The Alliance of Automobile Manufacturers, as well as individual auto manufacturers, supported the need for sulfur control – Significant sulfur reductions needed to meet increasingly stringent criteria pollutant requirements because sulfur impedes catalyst performance. – Sulfur reduction also supports increased vehicle efficiency to meet CAFE/GHG requirements – Alliance has submitted supplemental comments addressing API’s comments and we expect Ford to also submit additional data 

### • MECA submitted comments regarding the need for low sulfur and supplemental comments in response to API **12**13 

# Leadtime • Proposed: 10 ppm average sulfur standard beginning January 1, 2017, with small refiners/small volume refineries delayed until January 1, 2020 • Refiners argued that 5 years of lead time is needed to ensure that any changes made for the rule fall within normal 4-5 year maintenance turnaround schedules **13**14 

# Gasoline Sulfur Cap Comments • Co-proposed: – Maintain the current 80 ppm refinery gate and 95 ppm downstream caps; or – Lower to 50 ppm/65 ppm, respectively, beginning January 1, 2020 – Also sought comment on 20 ppm/25 ppm 

### • Fuels industry supported maintaining the current caps – Provided a study showing significantly increased costs for lower caps 

### • Some state and environmental groups supported moving to 50 ppm/65 ppm – Some in the fuels industry commented that 50/65 could be done, but would reduce supply

flexibility 

### • Other environmental groups and most automakers expressed support for 20 ppm/25 ppm – Fuels industry strongly opposed 20 ppm/25 ppm, saying this would result in: • Substantial modifications to refineries and pipeline & terminal distribution system • Less supply flexibility/fuel shortages • Higher costs 

### 1415 

# Other Fuel/Oil Industry Comments • Fuel costs – NPRM fuel costs: average of 0.89 cents/gallon – Fuel industry reiterated past arguments/studies that support marginal cost of 6 to 9 cents/gallon – Other commenters thought the fuel standards are cost-effective, and petroleum industry costs often exaggerated 

### • Marathon suggested increased small volume refinery threshold to 90,000 barrels per calendar day ( bpcd ) – NPRM uses 75,000 bpcd (as set by Congress for the Renewable Fuels Standard) 

### • Range of comments from auto, oil, and ethanol groups on provisions for higher level ethanol blends – Auto, oil, and some ethanol industry comments supported the provisions and provided detailed comments – Renewable Fuels Association simply does not want such fuels to be regulated 

### • API/AFPM commented that streamlining items are not related to Tier 3 and should be finalized sooner • Oil industry had detailed comments on emissions/air quality reductions and benefits of the Tier 3 program **15**16 

# Overview of Vehicle Comments • Majority of comments stress the importance of harmonizing program with LEV III and finalizing it ASAP to support LEV III and LDGHG/CAFE product planning – Alliance and Chrysler presented arguments for a delay in the schedule for >6000 lbs GVWR vehicles 

## • Many detailed comments submitted related to exhaust standards, evaporative emission standards and test procedures • Priority issues include: – Start Date/Leadtime – Certification Test Fuel (Ethanol & RVP) – PM Standards17 

# Vehicle Certification Test Fuel • Certification test fuel ethanol level – Proposed: E15 test fuel and requested comment on E10 • Current certification test fuel is E0 – Broad support for move to E10 cert fuel • Autos, oil, NGOs/states, nonroad engine/equipment manufacturers, and some in the ethanol industry want E10 • Others in the ethanol industry still want E15

– A number of commenters encouraged continued monitoring of ethanol trends and some support a trigger if E15 market share increases 

### • Certification test fuel RVP (Reid Vapor Pressure) level – Proposed: 9 psi RVP • Current certification test fuel is 9 psi • Other option not proposed is10 psi – Auto industry

strongly supports 9 psi RVP because changing to 10 psi would require system redesigns and testing (large effort/cost) – Some NGOs support 10 psi because it would be more protective18 

# PM Standards • PM Federal Test Procedure (FTP; represents typical driving) Standard for LDVs – Proposed: PM FTP standard of 3 mg/mi – States/NGOs recommend adopting CARB’s 1 mg/mi for 2025, or at least assessing it through a joint process with CARB – Alliance and Global automakers did not comment 

### • PM Supplemental FTP (SFTP; represents aggressive driving) Standard for light-duty vehicles – Proposed: 10 mg/mi and 20 mg/mi for cars and trucks respectively • NPRM sought comment on whether standards should be lower, given recent data (presented in RIA) showing that all tested vehicles perform below 5 mg/mi – State/NGO support lower standard for both cars and trucks • Under 10 mg/mi; some suggest 4 mg/mi or 6 mg/mi – Alliance and some individual auto manufacturers support proposed 10 and 20 mg/mi levels • Cited potential feasibility issues with 10 mg/mi for trucks • Did not directly

address more recent data showing 5 mg/mi19 

# Other Vehicle Comments • Small volume manufacturers (SVMs) and auto associations support even further relaxing start dates and standards for SVMs (NPRM proposed start date of MY 2022) • Detailed comments received from auto manufacturers on very specific aspects of evaporative emission and other test procedures • Two commenters thought the vehicle costs might be overestimated and included detailed technical assessment20 

# State/NGO Comments • Strongly supportive of health and AQ need for Tier 3 and estimated emissions/AQ reductions and benefits of the Tier 3 program • Emphasize importance of implementation beginning in 2017 • Major vehicle-related comments include support for: – E10 cert fuel – Tighter PM standards 

## • Major fuel-related comments: – Support for lower sulfur cap – A few raised issues with streamlining related to refinery permitting21 

# Next Steps/Project Milestones

**21** Draft Deliberative 

### Action **Ta rget**  **Dates** Brief OMB on key programmatic decisions December 2013 Brief OMB on final rule analyses Early January 2013 Final rule to OMB (30-day review) January 2014 Final rule signature February 2014