Document ID: EPA-HQ-OAR-2003-0049-0013
Agency: epa
Document Type: Proposed Rule
Title: Control of Air Pollution From New Motor Vehicles:  Tier II Motor Vehicle Emission Standards and Gasoline Sulfur Control Requirements - Final Rule
Posted Date: 2003-09-16T04:00Z

Thursday,

February
10,
2000
Part
II
Environmental
Protection
Agency
40
CFR
Parts
80,
85,
and
86
Control
of
Air
Pollution
From
New
Motor
Vehicles:
Tier
2
Motor
Vehicle
Emissions
Standards
and
Gasoline
Sulfur
Control
Requirements;
Final
Rule
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
ENVIRONMENTAL
PROTECTION
AGENCY
40
CFR
Parts
80,
85,
and
86
[
AMS
 
FRL
 
6516
 
2]

RIN
2060
 
AI23
Control
of
Air
Pollution
From
New
Motor
Vehicles:
Tier
2
Motor
Vehicle
Emissions
Standards
and
Gasoline
Sulfur
Control
Requirements
AGENCY:
Environmental
Protection
Agency
(
EPA).
ACTION:
Final
rule.

SUMMARY:
Today's
action
finalizes
a
major
program
designed
to
significantly
reduce
the
emissions
from
new
passenger
cars
and
light
trucks,
including
pickup
trucks,
vans,
minivans,
and
sport­
utility
vehicles.
These
reductions
will
provide
for
cleaner
air
and
greater
public
health
protection,
primarily
by
reducing
ozone
and
PM
pollution.
The
program
is
a
comprehensive
regulatory
initiative
that
treats
vehicles
and
fuels
as
a
system,
combining
requirements
for
much
cleaner
vehicles
with
requirements
for
much
lower
levels
of
sulfur
in
gasoline.
A
list
of
major
highlights
of
the
program
appears
at
the
beginning
of
the
SUPPLEMENTARY
INFORMATION
section
of
this
Federal
Register.
The
program
we
are
finalizing
today
will
phase
in
a
single
set
of
tailpipe
emission
standards
that
will,
for
the
first
time,
apply
to
all
passenger
cars,
light
trucks,
and
larger
passenger
vehicles
operated
on
any
fuel.
This
set
of
``
Tier
2
standards''
is
feasible
and
the
use
of
a
single
set
of
standards
is
appropriate
because
of
the
increased
use
of
light
trucks
for
personal
transportation.
The
miles
traveled
in
light
trucks
is
increasing
and
the
emissions
from
these
vehicles
are
thus
an
increasing
problem.
This
approach
builds
on
the
recent
technology
improvements
resulting
from
the
successful
National
Low­
Emission
Vehicles
(
NLEV)
program.
To
enable
the
very
clean
Tier
2
vehicle
emission
control
technology
to
be
introduced
and
to
maintain
its
effectiveness,
we
are
also
requiring
reduced
gasoline
sulfur
levels
nationwide.
The
reduction
in
sulfur
levels
will
also
contribute
directly
to
cleaner
air
in
addition
to
its
beneficial
effects
on
vehicle
emission
control
systems.
Refiners
will
generally
install
additional
refining
equipment
to
remove
sulfur
in
their
refining
processes.
Importers
of
gasoline
will
be
required
to
import
and
market
only
gasoline
meeting
the
sulfur
standards.
Today's
action
also
introduces
an
averaging,
banking,
and
trading
program
to
provide
flexibility
for
refiners
and
ease
implementation
of
the
gasoline
sulfur
control
program.
The
overall
program
focuses
on
reducing
the
passenger
car
and
light
truck
emissions
most
responsible
for
causing
ozone
and
particulate
matter
problems.
Without
today's
action,
we
project
that
emissions
of
nitrogen
oxides
from
these
vehicles
will
represent
as
much
as
40
percent
of
this
ozoneforming
pollutant
in
some
cities,
and
almost
20
percent
nationwide,
by
the
year
2030.
Today's
program
will
bring
about
major
reductions
in
annual
emissions
of
these
pollutants
and
also
reduce
the
emissions
of
sulfur
compounds
resulting
from
the
sulfur
in
gasoline.
For
example,
we
project
a
reduction
in
oxides
of
nitrogen
emissions
of
at
least
856,000
tons
per
year
by
2007
and
1,236,000
by
2010,
the
time
frame
when
many
states
will
have
to
demonstrate
compliance
with
air
quality
standards.
Emission
reductions
will
continue
increasing
for
many
years,
reaching
at
least
2,220,000
tons
per
year
in
2020
and
continuing
to
rise
further
in
future
years.
In
addition,
the
program
will
reduce
the
contribution
of
vehicles
to
other
serious
public
health
and
environmental
problems,
including
VOC,
PM,
and
regional
visibility
problems,
toxic
air
pollutants,
acid
rain,
and
nitrogen
loading
of
estuaries.
Furthermore,
we
project
that
these
reductions,
and
their
resulting
environmental
benefits,
will
come
at
an
average
cost
increase
of
less
than
$
100
per
passenger
car,
an
average
cost
increase
of
less
than
$
200
for
light
trucks,
and
an
average
cost
increase
of
about
$
350
for
medium­
duty
passenger
vehicles,
and
an
average
increase
of
less
than
2
cents
per
gallon
of
gasoline
(
or
about
$
120
over
the
life
of
an
average
vehicle).
DATES:
This
rule
is
effective
April
10,
2000.
The
incorporation
by
reference
of
certain
publications
contained
in
this
rule
are
approved
by
the
Director
of
the
Federal
Register
as
of
April
10,
2000.
ADDRESSES:
Comments:
All
comments
and
materials
relevant
to
today's
action
have
been
placed
in
Public
Docket
No.
A
 
97
 
10
at
the
following
address:
U.
S.
Environmental
Protection
Agency
(
EPA),
Air
Docket
(
6102),
Room
M
 
1500,
401
M
Street,
S.
W.,
Washington,
D.
C.
20460.
EPA's
Air
Docket
makes
materials
related
to
this
rulemaking
available
for
review
at
the
above
address
(
on
the
ground
floor
in
Waterside
Mall)
from
8:
00
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.
FOR
FURTHER
INFORMATION
CONTACT:
Carol
Connell,
U.
S.
EPA,
National
Vehicle
and
Fuels
Emission
Laboratory,
2000
Traverwood,
Ann
Arbor
MI
48105;
Telephone
(
734)
214
 
4349,
FAX
(
734)
214
 
4816,
E­
mail
connell.
carol@
epa.
gov.

SUPPLEMENTARY
INFORMATION:

Highlights
of
the
Tier2/
Gasoline
Sulfur
Program
For
cars,
and
light
trucks,
and
larger
passenger
vehicles,
the
program
will
 
·
Starting
in
2004,
through
a
phasein
apply
for
the
first
time
the
same
set
of
emission
standards
covering
passenger
cars,
light
trucks,
and
large
SUVs
and
passenger
vehicles.
These
emission
levels
(``
Tier
2
standards'')
are
feasible
for
these
vehicles.
The
Tier
2
standards
are
also
appropriate
because
of
the
increased
use
of
light
trucks
for
personal
transportation
 
the
miles
traveled
in
light
trucks
is
increasing
and
the
emissions
from
these
vehicles
are
thus
an
increasing
problem.
·
Introduce
a
new
category
of
vehicles,
``
medium­
duty
passenger
vehicles,''
thus
bringing
larger
passenger
vans
and
SUVs
into
the
Tier
2
program.
·
During
the
phase­
in,
apply
interim
fleet
emission
average
standards
that
match
or
are
more
stringent
than
current
federal
and
California
``
LEV
I''
(
Low­
Emission
Vehicle,
Phase
I)
standards.
·
Apply
the
same
standards
to
vehicles
operated
on
any
fuel.
·
Allow
auto
manufacturers
to
comply
with
the
very
stringent
new
standards
in
a
flexible
way
while
ensuring
that
the
needed
environmental
benefits
occur.
·
Build
on
the
recent
technology
improvements
resulting
from
the
successful
National
Low­
Emission
Vehicles
(
NLEV)
program
and
improve
the
performance
of
these
vehicles
through
lower
sulfur
gasoline.
·
Set
more
stringent
particulate
matter
standards.
·
Set
more
stringent
evaporative
emission
standards.
For
commercial
gasoline,
the
program
will
 
·
Significantly
reduce
average
gasoline
sulfur
levels
nationwide
as
early
as
2000,
fully
phased
in
in
2006.
Refiners
will
generally
add
refining
equipment
to
remove
sulfur
in
their
refining
processes.
Importers
of
gasoline
will
be
required
to
import
and
market
only
gasoline
meeting
the
sulfur
limits.

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2000
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and
Regulations
·
Provide
for
flexible
implementation
by
refiners
through
an
averaging,
banking,
and
trading
program.
·
Encourage
early
introduction
of
cleaner
fuel
into
the
marketplace
through
an
early
sulfur
credit
and
allotment
program.
·
Apply
temporary
gasoline
sulfur
standards
to
certain
small
refiners
and
gasoline
marketed
in
a
limited
geographic
area
in
the
western
U.
S.
·
Enable
the
new
Tier
2
vehicles
to
meet
the
emission
standards
by
greatly
reducing
the
degradation
of
vehicle
emission
control
performance
from
sulfur
in
gasoline.
Lower
sulfur
gasoline
also
appears
to
be
necessary
for
the
introduction
of
advanced
technologies
that
promise
higher
fuel
economy
but
are
very
susceptible
to
sulfur
poisoning
(
for
example,
gasoline
direct
injection
engines).
·
Reduce
emissions
from
NLEV
vehicles
and
other
vehicles
already
on
the
road.

Regulated
Entities
This
action
will
affect
you
if
you
produce
new
motor
vehicles,
alter
individual
imported
motor
vehicles
to
address
U.
S.
regulation,
or
convert
motor
vehicles
to
use
alternative
fuels.
It
will
also
affect
you
if
you
produce,
distribute,
or
sell
gasoline
motor
fuel.
The
table
below
gives
some
examples
of
entities
that
may
have
to
comply
with
the
regulations.
But
because
these
are
only
examples,
you
should
carefully
examine
these
and
existing
regulations
in
40
CFR
parts
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
.........................................................................
336111
3711
Motor
Vehicle
Manufacturers.
336112
336120
Industry
.........................................................................
336311
3592
Alternative
fuel
vehicle
converters.
336312
3714
422720
5172
454312
5984
811198
7549
541514
8742
541690
8931
Industry
.........................................................................
811112
7533
Commercial
Importers
of
Vehicles
and
Vehicle
Components
811198
7549
541514
8742
Industry
.........................................................................
324110
2911
Petroleum
Refiners.
Industry
.........................................................................
422710
5171
Gasoline
Marketers
and
Distributors.
422720
5172
Industry
.........................................................................
484220
4212
Gasoline
Carriers.
484230
4213
a
North
American
Industry
Classification
System
(
NAICS).
b
Standard
Industrial
Classification
(
SIC)
system
code.

Access
to
Rulemaking
Documents
Through
the
Internet
Today's
action
is
available
electronically
on
the
day
of
publication
from
the
Office
of
the
Federal
Register
Internet
Web
site
listed
below.
Electronic
copies
of
this
preamble
and
regulatory
language
as
well
as
the
Response
to
Comments
document,
the
Regulatory
Impact
Analysis
and
other
documents
associated
with
today's
final
rule
are
available
from
the
EPA
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
already
incur
for
connecting
to
the
Internet.
Federal
Register
Web
Site:
http://
www.
epa.
gov/
docs/
fedrgstr/
epa­
air/
(
Either
select
a
desired
date
or
use
the
Search
feature.)
Office
of
Mobile
Sources
(
OMS)
Web
Site:
http://
www.
epa.
gov/
oms/
(
Look
in
``
What's
New''
or
under
the
``
Automobiles''
topic.)
Please
note
that
due
to
differences
between
the
software
used
to
develop
the
document
and
the
software
into
which
the
document
may
be
downloaded,
changes
in
format,
page
length,
etc.,
may
occur.

Outline
of
This
Preamble
I.
Introduction
A.
What
Are
the
Basic
Components
of
the
Program?
1.
Vehicle
Emission
Standards
2.
Gasoline
Sulfur
Standards
B.
What
Is
Our
Statutory
Authority
for
Today's
Action?
1.
Light­
Duty
Vehicles
and
Trucks
2.
Gasoline
Sulfur
Controls
C.
The
Tier
2
Study
and
the
Sulfur
Staff
Paper
D.
Relationship
of
Diesel
Fuel
Sulfur
Control
to
the
Tier
2/
Gasoline
Sulfur
Program
II.
Tier
2
Determination
A.
There
Is
a
Substantial
Need
for
Further
Emission
Reductions
in
Order
To
Attain
and
Maintain
National
Ambient
Air
Quality
Standards
B.
More
Stringent
Standards
for
Light­
Duty
Vehicles
and
Trucks
Are
Technologically
Feasible
C.
More
Stringent
Standards
for
Light­
Duty
Vehicles
and
Trucks
Are
Needed
and
Cost
Effective
Compared
to
Available
Alternatives
III.
Air
Quality
Need
For
and
Impact
of
Today's
Action
A.
Americans
Face
Serious
Air
Quality
Problems
That
Require
Further
Emission
Reductions
B.
Ozone
1.
Background
on
Ozone
Air
Quality
2.
Additional
Emission
Reductions
Are
Needed
To
Attain
and
Maintain
the
Ozone
NAAQS.
a.
Summary
b.
Ozone
Modeling
Presented
in
Our
Proposal
and
Supplemental
Notice
c.
Updated
and
Additional
Ozone
Modeling
d.
Results
and
Conclusions
e.
Issues
and
Comments
Addressed
f.
8­
Hour
Ozone
3.
Cars
and
Light­
Duty
Trucks
Are
a
Big
Part
of
the
NOX
and
VOC
Emissions,
and
Today's
Action
Will
Reduce
This
Contribution
Substantially
4.
Ozone
Reductions
Expected
From
This
Rule
C.
Particulate
Matter
1.
Background
on
PM
2.
Need
for
Additional
Reductions
to
Attain
and
Maintain
the
PM10
NAAQS
3.
PM25
Discussion
4.
Emission
Reductions
and
Ambient
PM
Reductions
D.
Other
Criteria
Pollutants:
Carbon
Monoxide,
Nitrogen
Dioxide,
Sulfur
Dioxide
E.
Visibility
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28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
F.
Air
Toxics
G.
Acid
Deposition
H.
Eutrophication/
Nitrification
I.
Cleaner
Cars
and
Light
Trucks
Are
Critically
Important
to
Improving
Air
Quality
IV.
What
Are
the
New
Requirements
for
Vehicles
and
Gasoline?
A.
Why
Are
We
Proposing
Vehicle
and
Fuel
Standards
Together?
1.
Feasibility
of
Stringent
Standards
for
Light­
Duty
Vehicles
and
Light­
Duty
Trucks
a.
Gasoline
Fueled
Vehicles
i.
LDVs
and
LDT1s
 
LDT4s
ii.
Medium­
Duty
Passenger
Vehicles
(
MDPVs)
b.
Diesel
Vehicles
2.
Gasoline
Sulfur
Control
Is
Needed
To
Support
the
Proposed
Vehicle
Standards
a.
How
Does
Gasoline
Sulfur
Affect
Vehicle
Emission
Performance?
b.
How
Large
Is
Gasoline
Sulfur's
Effect
on
Emissions?
c.
Sulfur's
Negative
Impact
on
Tier
2
Catalysts
d.
Sulfur
Has
Negative
Impacts
on
OBD
Systems
B.
Our
Program
for
Vehicles
1.
Overview
of
the
Vehicle
Program
a.
Introduction
b.
Corporate
Average
NOx
Standard
c.
Tier
2
Exhaust
Emission
Standard
``
Bins'
d.
Schedules
for
Implementation
i.
Implementation
Schedule
for
Tier
2
LDVs
and
LLDTs
ii.
Implementation
Schedule
for
Tier
2
HLDTs
e.
Interim
Standards
i.
Interim
Exhaust
Emission
Standards
for
LDV/
LLDTs
ii
Interim
Exhaust
Emission
Standards
for
HLDTs
iii.
Interim
Programs
Will
Provide
Reductions
Over
Previous
Standards
f.
Generating,
Banking,
and
Trading
NOx
Credits
2.
Why
Are
We
Finalizing
the
Same
Set
of
Standards
for
Tier
2
LDVs
and
LDTs?
3.
Why
Are
We
Finalizing
the
Same
Standards
for
Both
Gasoline
and
Diesel
Vehicles?
4.
Key
Elements
of
the
Vehicle
Program
a.
Basic
Exhaust
Emission
Standards
and
``
Bin''
Structure
i.
Why
Are
We
Including
Extra
Bins?
b.
The
Program
Will
Phase
In
the
Tier
2
Vehicle
Standards
Over
Several
Years
i.
Primary
Phase­
in
Schedule
ii.
Alternative
Phase­
in
Schedule
c.
Manufacturers
Will
Meet
a
``
Corporate
Average''
NOX
Standard
d.
Manufacturers
Can
Generate,
Bank,
and
Trade
NOX
Credits
i.
General
Provisions
ii.
Averaging,
Banking
and
Trading
of
NOX
Credits
Fulfills
Several
Goals
iii.
How
Manufacturers
Can
Generate
and
Use
NOX
Credits
iv.
Manufacturers
Can
Earn
and
Bank
Credits
for
Early
NOX
Reductions
v.
Tier
2
NOX
Credits
Will
Have
Unlimited
Life
vi.
NOX
Credit
Deficits
Can
Be
Carried
Forward
vii.
Encouraging
the
Introduction
of
Ultra
Clean
Vehicles
e.
Interim
Standards
i.
Interim
Exhaust
Emission
Standards
for
LDV/
LLDTs
ii.
Interim
Exhaust
Emission
Standards
for
HLDTs
f.
Light­
Duty
Evaporative
Emission
Standards
g.
Passenger
Vehicles
Above
8,500
Pounds
GVWR
C.
Our
Program
for
Controlling
Gasoline
Sulfur
1.
Gasoline
Sulfur
Standards
for
Refiners
and
Importers
a.
Standards
and
Deadlines
That
Refiners/
Importers
Must
Meet
i.
What
Are
the
Per­
Gallon
Caps
on
Gasoline
Sulfur
Levels
in
2004
and
Beyond?
ii.
What
Standards
Must
Refiners/
Importers
Meet
on
a
Corporate
Average
Basis?
iii.
What
Standards
Must
Be
Met
by
Individual
Refineries/
Importers?
b.
Standards
and
Deadlines
for
Refiners/
Importers
Which
Provide
Gasoline
to
the
Geographic
Phase­
in
Area
(
GPA)
i.
Justification
for
Our
Geographic
Phase­
in
Approach
ii.
What
Is
the
Geographic
Phase­
in
Area
and
How
Was
It
Established?
iii.
Standards/
Deadlines
for
Gasoline
Sold
in
the
Geographic
Phase­
in
Area
iv.
What
Are
the
Per­
Gallon
Caps
on
Gasoline
Sulfur
Levels
in
the
Phase­
in
Area?
v.
How
Do
Refiners/
Importers
Account
for
GPA
Fuel
in
Their
Corporate
Average
Calculations?
vi.
How
Do
Refiners/
Importers
Apply
for
the
Geographic
Phase­
in
Area
Standards?
vii.
How
Will
EPA
Establish
the
GPA
in
Adjacent
States?
c.
How
Does
the
Sulfur
Averaging,
Banking,
and
Trading
Program
Work?
i.
Generating
Allotments
Prior
to
2004
ii.
Generating
Allotments
in
2004
and
2005
iii.
Using
Allotments
in
2004
and
2005
iv.
How
Long
Do
Allotments
Last?
v.
Establishing
Individual
Refinery
Sulfur
Baselines
for
Credit
Generation
Purposes
vi.
Generating
Sulfur
Credits
Prior
to
2004
vii.
Generating
Sulfur
Credits
in
2004
and
Beyond
viii.
Using
Sulfur
Credits
ix.
How
Long
Do
Credits
Last?
x.
Conversion
of
Allotments
Into
Credits
d.
How
are
State
Sulfur
Programs
Affected
by
EPA's
Program?
2.
Hardship
Provision
for
Qualifying
Refiners
a.
Hardship
Provision
for
Qualifying
Small
Refiners
i.
How
Are
Small
Refiners
Defined?
ii.
Standards
That
Small
Refiners
Must
Meet
iii.
How
Do
Small
Refiners
Apply
for
Small
Refiner
Status?
iv.
How
Do
Small
Refineries
Apply
for
a
Sulfur
Baseline?
v.
Volume
Limitation
on
Use
of
a
Small
Refinery
Standard
vi.
Extensions
Beyond
2007
for
Small
Refiners
vii.
Can
Small
Refiners
Participate
in
the
ABT
Program?
b.
Temporary
Waivers
From
Low
Sulfur
Requirements
in
Extreme
Unforeseen
Circumstances
c.
Temporary
Waivers
Based
on
Extreme
Hardship
Circumstances
3.
Streamlining
of
Refinery
Air
Pollution
Permitting
Process
a.
Brief
Summary
of
Proposal
b.
Significant
Comments
Received
c.
Today's
Action
i.
Major
New
Source
Review
ii.
Environmental
Justice
D.
What
Are
the
Economic
Impacts,
Cost
Effectiveness
and
Monetized
Benefits
of
the
Tier
2
Program?
1.
What
Are
the
Estimated
Costs
of
the
Vehicle
Standards?
2.
Estimated
Costs
of
the
Gasoline
Sulfur
Standards
3.
What
Are
the
Aggregate
Costs
of
the
Tier
2/
Gasoline
Sulfur
Final
Rule?
4.
How
Does
the
Cost­
Effectiveness
of
This
Program
Compare
to
Other
Programs?
a.
Cost
Effectiveness
of
this
Program
b.
How
Does
the
Cost
Effectiveness
of
This
Program
Compare
With
Other
Means
of
Obtaining
Mobile
Source
NOX+
NMHC
Reductions?
c.
How
Does
the
Cost
Effectiveness
of
This
Program
Compare
With
Other
Known
Non­
Mobile
Source
Technologies
for
Reducing
NOX+
NMHC?
5.
Does
the
Value
of
the
Benefits
Outweigh
the
Cost
of
the
Standards?
a.
What
Is
the
Purpose
of
This
Benefit­
Cost
Comparison?
b.
What
Was
Our
Overall
Approach
to
the
Benefit­
Cost
Analysis?
c.
What
Are
the
Significant
Limitations
of
the
Benefit­
Cost
Analysis?
d.
How
Was
the
Benefit­
Cost
Analysis
Changed
From
Proposal?
e.
How
Did
We
Perform
the
Benefit­
Cost
Analysis?
f.
What
Were
the
Results
of
the
Benefit­
Cost
Analysis?
V.
Other
Vehicle­
Related
Provisions
A.
Final
Tier
2
CO,
HCHO
and
PM
Standards
1.
Carbon
Monoxide
(
CO)
Standards
2.
Formaldehyde
(
HCHO)
Standards
3.
Use
of
NMHC
Data
To
Show
Compliance
With
NMOG
Standards;
Alternate
Compliance
With
Formaldehyde
Standards.
4.
Particulate
Matter
(
PM)
Standards
B.
Useful
Life
1.
Mandatory
120,000
Mile
Useful
Life
2.
150,000
Mile
Useful
Life
Certification
Option
C.
Supplemental
Federal
Test
Procedure
(
SFTP)
Standards
1.
Background
2.
SFTP
Under
the
NLEV
Program
3.
SFTP
Standards
for
the
Interim
and
Tier
2
LDVs
and
LDTs:
As
Proposed
4.
Final
SFTP
Standards
for
Interim
and
Tier
2
LDVs
and
LDTs
5.
Adding
a
PM
Standard
to
the
SFTP
Standards
6.
Future
Efforts
Relevant
to
SFTP
Standards
D.
LDT
Test
Weight
E.
Test
Fuels
F.
Changes
to
Evaporative
Certification
Procedures
to
Address
Impacts
of
Alcohol
Fuels
G.
Other
Test
Procedure
Issues
H.
Small
Volume
Manufacturers
1.
Special
Provisions
for
Independent
Commercial
Importers
(
ICIs)
2.
Hardship
Provision
for
Small
Volume
Manufacturers
I.
Compliance
Monitoring
and
Enforcement
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10,
2000
/
Rules
and
Regulations
1.
Application
of
EPA's
Compliance
Assurance
Program,
CAP2000
2.
Compliance
Monitoring
3.
Relaxed
In­
Use
Standards
for
Vehicles
Produced
During
the
Phase­
in
Period
4.
Enforcement
of
the
Tier
2
and
Interim
Corporate
Average
NOX
Standards.
J.
Addressing
Environmentally
Beneficial
Technologies
Not
Recognized
by
Test
Procedures
K.
Adverse
Effects
of
System
Leaks
L.
The
Future
Development
of
Advanced
Technology
and
the
Role
of
Fuels
M.
Miscellaneous
Provisions
VI.
Gasoline
Sulfur
Program
Compliance
and
Enforcement
Provisions
A.
Overview
B.
Requirements
for
Foreign
Refiners
and
Importers
1.
Requirements
for
Foreign
Refiners
With
Individual
Refinery
Sulfur
Standards
or
Credit
Generation
Baselines
2.
Requirements
for
Truck
Importers
C.
What
Standards
and
Requirements
Apply
Downstream?
D.
Testing
and
Sampling
Methods
and
Requirements
1.
Test
Method
for
Sulfur
in
Gasoline
2.
Test
Method
for
Sulfur
in
Butane
3.
Quality
Assurance
Testing
4.
Requirement
to
Test
Every
Batch
of
Gasoline
Produced
or
Imported
5.
Exceptions
to
the
Every­
Batch
Testing
Requirement
6.
Sampling
Methods
7.
Gasoline
Sample
Retention
Requirements
E.
Federal
Enforcement
Provisions
for
California
Gasoline
and
for
Use
of
California
Test
Methods
to
Determine
Compliance
F.
Recordkeeping
and
Reporting
Requirements
1.
Product
Transfer
Documents
2.
Recordkeeping
Requirements
3.
Reporting
Requirements
G.
Exemptions
for
Research,
Development,
and
Testing
H.
Liability
and
Penalty
Provisions
for
Noncompliance
I.
How
Will
Compliance
With
the
Sulfur
Standards
Be
Determined?
VII.
Public
Participation
VIII.
Administrative
Requirements
A.
Administrative
Designation
and
Regulatory
Analysis
B.
Regulatory
Flexibility
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
3.
Executive
Order
13132
(
Federalism)
E.
National
Technology
Transfer
and
Advancement
Act
F.
Executive
Order
13045:
Children's
Health
Protection
G.
Congressional
Review
Act
IX.
Statutory
Provisions
and
Legal
Authority
I.
Introduction
Since
the
passage
of
the
1990
Clean
Air
Act
Amendments,
the
U.
S.
has
made
significant
progress
in
reducing
emissions
from
passenger
cars
and
light
trucks.
The
National
Low­
Emission
Vehicle
(
NLEV)
and
Reformulated
Gasoline
(
RFG)
programs
are
important
examples
of
control
programs
that
are
in
place
and
will
continue
to
help
reduce
car
and
light­
duty
truck
emissions
into
the
near
future.
Nonetheless,
due
to
increasing
vehicle
population
and
vehicle
miles
traveled,
passenger
cars
and
light
trucks
will
continue
to
be
significant
contributors
to
air
pollution
inventories
well
into
the
future.
In
fact,
the
emission
contribution
of
light
trucks
and
sport
utility
vehicles
now
matches
that
of
passenger
cars.
(
This
is
occurring
because
of
the
combination
of
growth
in
miles
traveled
by
light
trucks
and
the
fact
that
their
emission
standards
are
currently
less
stringent
than
those
of
passenger
cars).
The
program
we
describe
below
builds
on
the
NLEV
and
RFG
Phase
II
programs
to
develop
a
strong
new
national
program
to
protect
public
health
and
the
environment
well
into
the
next
century.
The
program,
while
reducing
VOC
and
other
emissions,
focuses
especially
on
NOX,
because
that
is
where
the
largest
air
quality
gains
can
be
achieved.
We
have
followed
several
overarching
principles
in
developing
this
final
rule:
·
Design
a
strong
national
program
that
will
assist
states
in
every
region
of
the
country
to
meet
their
air
quality
objectives
and
that
will
ensure
that
cars
and
trucks
continue
to
contribute
a
fair
share
to
our
nation's
overall
air
quality
solutions;
·
View
vehicles
and
fuels
as
an
integrated
system,
recognizing
that
only
by
addressing
both
can
the
best
overall
emission
performance
be
achieved;
·
Establish
a
single
set
of
emission
standards
that
apply
regardless
of
the
fuel
used
and
whether
the
vehicle
is
a
car,
a
light
truck,
or
a
larger
passenger
vehicle;
·
Provide
compliance
flexibilities
that
allow
vehicle
manufacturers
and
oil
refiners
to
adjust
to
future
market
trends
and
honor
consumer
preferences;
·
Not
preclude
the
development
of
advanced
low
emission
or
fuel
efficient
technologies
such
as
lean­
burn
engines;
and
·
Ensure
sufficient
leadtime
for
phase­
in
of
the
Tier
2
and
gasoline
sulfur
program.
With
these
principles
as
background,
we
turn
now
to
an
overview
of
the
vehicle
and
fuel
aspects
of
the
program.
Sections
I
and
II
of
this
preamble
will
give
you
a
brief
overview
of
our
program
and
our
rationale
for
implementing
it.
Subsequent
sections
will
expand
on
the
air
quality
need,
technological
feasibility,
economic
impacts,
and
provide
a
detailed
description
of
the
specifics
of
the
program.
A
public
participation
section
reviews
the
process
we
followed
in
soliciting
and
responding
to
public
comment.
The
final
sections
deal
with
several
administrative
requirements.
You
may
also
want
to
review
our
Final
Regulatory
Impact
Analysis
(
RIA)
and
our
Response
to
Comments
document,
both
of
which
are
found
in
the
docket
and
on
the
Internet.
They
provide
additional
analyses
and
discussions
of
many
topics
raised
in
this
preamble.

A.
What
Are
the
Basic
Components
of
the
Program?

The
nation's
air
quality,
while
certainly
better
than
in
the
past,
will
nevertheless
continue
to
expose
tens
of
millions
of
Americans
to
unhealthy
levels
of
air
pollution
well
into
the
future
in
the
absence
of
significant
new
controls
on
emissions
from
motor
vehicles.
EPA
is
therefore
finalizing
a
major,
comprehensive
program
designed
to
reduce
emission
standards
for
passenger
cars,
light
trucks,
and
large
passenger
vehicles
(
including
sportutility
vehicles,
minivans,
vans,
and
pickup
trucks)
and
to
reduce
the
sulfur
content
of
gasoline.
Under
the
program,
automakers
will
produce
vehicles
designed
to
have
very
low
emissions
when
operated
on
low­
sulfur
gasoline,
and
oil
refiners
will
provide
that
much
cleaner
gasoline
nationwide.
In
this
preamble,
we
refer
to
the
comprehensive
program
as
the
``
Tier
2/
Gasoline
Sulfur
program.''

1.
Vehicle
Emission
Standards
Today's
action
sets
new
federal
emission
standards
(``
Tier
2
standards'')
for
passenger
cars,
light
trucks,
and
larger
passenger
vehicles.
The
program
is
designed
to
focus
on
reducing
the
emissions
most
responsible
for
the
ozone
and
particulate
matter
(
PM)
impact
from
these
vehicles
 
nitrogen
oxides
(
NOX)
and
non­
methane
organic
gases
(
NMOG),
consisting
primarily
of
hydrocarbons
(
HC)
and
contributing
to
ambient
volatile
organic
compounds
(
VOC).
The
program
will
also,
for
the
first
time,
apply
the
same
set
of
federal
standards
to
all
passenger
cars,
light
trucks,
and
medium­
duty
passenger
vehicles.
Light
trucks
include
``
light
light­
duty
trucks''
(
or
LLDTs),
rated
at
less
than
6000
pounds
gross
vehicle
weight
and
``
heavy
light­
duty
trucks''
(
or
HLDTs),
rated
at
more
than
6000
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10,
2000
/
Rules
and
Regulations
1
A
vehicle's
``
Gross
Vehicle
Weight
Rating,''
or
GVWR,
is
the
curb
weight
of
the
vehicle
plus
its
maximum
recommended
load
of
passengers
and
cargo.
2
By
comparison,
the
NOX
standards
for
the
National
Low
Emission
Vehicle
(
NLEV)
program,
which
will
be
in
place
nationally
in
2001,
range
from
0.30
g/
mi
for
passenger
cars
to
0.50
g/
mi
for
medium­
sized
light
trucks
(
larger
light
trucks
are
not
covered).
For
further
comparison,
the
standards
met
by
today's
Tier
1
vehicles
range
from
0.60
g/
mi
to
1.53
g/
mi.
3
There
are
also
NMOG
standards
associated
with
both
the
interim
and
Tier
2
standards.
The
NMOG
standards
vary
depending
on
which
of
various
individual
sets
of
emission
standards
manufacturers
choose
to
use
in
complying
with
the
average
NOX
standard.
This
``
bin''
approach
is
described
more
fully
in
section
IV.
B.
of
this
preamble.
4
LDTs
with
a
loaded
vehicle
weight
less
than
or
equal
to
3750
pounds,
called
LDT1s
and
LDT2s.
5
Section
202(
b)(
1)(
C)
forbids
EPA
from
promulgating
mandatory
standards
more
stringent
than
Tier
1
standards
until
the
2004
model
year.
pounds
gross
vehicle
weight).
1
``
Medium­
duty
passenger
vehicles''
(
or
MDPVs)
form
a
new
class
of
vehicles
introduced
by
this
rule
that
includes
SUVs
and
passenger
vans
rated
at
between
8,500
and
10,000
GVWR.
The
program
thus
ensures
that
essentially
all
vehicles
designed
for
passenger
use
in
the
future
will
be
very
clean
vehicles.
The
Tier
2
standards
finalized
today
will
reduce
new
vehicle
NOX
levels
to
an
average
of
0.07
grams
per
mile
(
g/
mi).
For
new
passenger
cars
and
light
LDTs,
these
standards
will
phase
in
beginning
in
2004,
with
the
standards
to
be
fully
phased
in
by
2007.2
For
heavy
LDTs
and
MDPVs,
the
Tier
2
standards
will
be
phased
in
beginning
in
2008,
with
full
compliance
in
2009.
During
the
phase­
in
period
from
2004
 
2007,
all
passenger
cars
and
light
LDTs
not
certified
to
the
primary
Tier
2
standards
will
have
to
meet
an
interim
average
standard
of
0.30
g/
mi
NOX,
equivalent
to
the
current
NLEV
standards
for
LDVs
and
more
stringent
than
NLEV
for
LDT2s
(
e.
g.,
minivans).
3
During
the
period
2004
 
2008,
heavy
LDTs
and
MDPVs
not
certified
to
the
final
Tier
2
standards
will
phase
in
to
an
interim
program
with
an
average
standard
of
0.20
g/
mi
NOX,
with
those
not
covered
by
the
phase­
in
meeting
a
per­
vehicle
standard
(
i.
e.,
an
emissions
``
cap'')
of
0.6
g/
mi
NOX
(
for
HLDTs)
and
0.9
g/
mi
NOX
(
for
MDPVs).
The
average
standards
for
NOX
will
allow
manufacturers
to
comply
with
the
very
stringent
new
standards
in
a
flexible
way,
assuring
that
the
average
emissions
of
a
company's
production
meet
the
target
emission
levels
while
allowing
the
manufacturer
to
choose
from
several
more­
and
less­
stringent
emission
categories
for
certification.
We
are
also
setting
stringent
particulate
matter
standards
that
will
be
especially
important
if
there
is
substantial
future
growth
in
the
sales
of
diesel
vehicles.
Before
2004,
we
are
establishing
more
stringent
interim
PM
standards
for
most
light
trucks
than
exist
now
under
NLEV.
With
higher
sales
of
diesel
cars
and
light
trucks,
they
could
easily
contribute
between
onehalf
and
two
percent
of
the
PM10
concentration
allowed
by
the
NAAQS,
with
some
possibility
that
the
contribution
could
be
as
high
as
5
to
40
percent
in
some
roadside
situations
with
heavy
traffic.
These
increases
would
make
attainment
even
more
difficult
for
8
counties
which
we
already
predict
to
need
further
emission
reductions
even
without
an
increase
in
diesel
sales,
and
would
put
at
risk
another
18
counties
which
are
now
within
10
percent
of
a
NAAQS
violation.
Thus,
by
including
a
more
stringent
PM
standard
in
the
program
finalized
today,
we
help
address
environmental
concerns
about
the
potential
growth
in
the
numbers
of
light­
duty
diesels
on
the
road
 
even
if
that
growth
is
substantial.
The
new
requirements
also
include
more
stringent
hydrocarbon
controls
(
exhaust
NMOG
and
evaporative
emissions
standards).
We
will
also
monitor
the
progress
of
the
development
of
advanced
technologies
and
the
role
of
fuels.

2.
Gasoline
Sulfur
Standards
The
other
major
part
of
today's
action
will
significantly
reduce
average
gasoline
sulfur
levels
nationwide.
We
expect
these
reductions
could
begin
to
phase
in
as
early
as
2000,
with
full
compliance
for
most
refiners
occurring
by
2006.
Refiners
will
generally
install
advanced
refining
equipment
to
remove
sulfur
during
the
production
of
gasoline.
Importers
of
gasoline
will
be
required
to
import
and
market
only
gasoline
meeting
the
sulfur
limits.
Temporary,
less
stringent
standards
will
apply
to
a
few
small
refiners
through
2007.
In
addition,
temporary,
less
stringent
standards
will
apply
to
a
limited
geographic
area
in
the
western
U.
S.
for
the
2004
 
2006
period.
This
significant
new
control
of
gasoline
sulfur
content
will
have
two
important
effects.
The
lower
sulfur
levels
will
enable
the
much­
improved
emission
control
technology
necessary
to
meet
the
stringent
vehicle
standards
of
today's
rule
to
operate
effectively
over
the
useful
life
of
the
new
vehicles.
In
addition,
as
soon
as
the
lower
sulfur
gasoline
is
available,
all
gasoline
vehicles
already
on
the
road
will
have
reduced
emissions
 
from
less
degradation
of
their
catalytic
converters
and
from
fewer
sulfur
compounds
in
the
exhaust.
Today's
action
will
encourage
refiners
to
reduce
sulfur
in
gasoline
as
early
as
2000.
The
program
requires
that
most
refiners
and
importers
meet
a
corporate
average
gasoline
sulfur
standard
of
120
ppm
and
a
cap
of
300
ppm
beginning
in
2004.
By
2006,
the
cap
will
be
reduced
to
80
ppm
and
most
refineries
must
produce
gasoline
averaging
no
more
than
30
ppm
sulfur.
The
program
builds
upon
the
existing
regulations
covering
gasoline
composition
as
it
relates
to
emissions
performance.
It
includes
provisions
for
trading
of
sulfur
credits,
increasing
the
flexibility
available
to
refiners
for
complying
with
the
new
requirements.
We
intend
for
the
credit
program
to
ease
compliance
uncertainties
by
providing
refiners
the
flexibility
to
phase
in
early
controls
in
2000
 
2003
and
use
credits
gained
in
these
years
to
delay
some
control
until
as
late
as
2006.
As
finalized
today,
the
program
will
achieve
the
needed
environmental
benefits
while
providing
substantial
flexibility
to
refiners.

B.
What
Is
Our
Statutory
Authority
for
Today's
Action?

1.
Light­
Duty
Vehicles
and
Trucks
We
are
setting
motor
vehicle
emission
standards
under
the
authority
of
section
202
of
the
Clean
Air
Act.
Sections
202(
a)
and
(
b)
of
the
Act
provide
EPA
with
general
authority
to
prescribe
vehicle
standards,
subject
to
any
specific
limitations
otherwise
included
in
the
Act.
Sections
202(
g)
and
(
h)
specify
the
current
standards
for
LDVs
and
LDTs,
which
became
effective
beginning
in
model
year
1994
(``
Tier
1
standards'').
Section
202(
i)
of
the
Act
provides
specific
procedures
that
EPA
must
follow
to
determine
whether
standards
more
stringent
than
Tier
1
standards
for
LDVs
and
certain
LDTs
4
are
appropriate
beginning
between
the
2004
and
2006
model
years.
5
Specifically,
we
are
required
to
first
issue
a
study
regarding
``
whether
or
not
further
reductions
in
emissions
from
light­
duty
vehicles
and
light­
duty
trucks
should
be
required
*
*
*''
(
the
``
Tier
2
Study'').
This
study
``
shall
examine
the
need
for
further
reductions
in
emissions
in
order
to
attain
or
maintain
the
national
ambient
air
quality
standards.''
It
is
also
to
consider:
(
1)
The
availability
of
technology
to
meet
more
stringent
standards,
taking
cost,
lead
time,
safety,
and
energy
impacts
into
consideration;
and
(
2)
the
need
for,
and
cost
effectiveness
of,
such
standards,
including
consideration
of
alternative
methods
of
attaining
or
maintaining
the
national
ambient
air
quality
standards.
A
certain
set
of
``
default''
emission
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Rules
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Regulations
6
LDTs
that
have
gross
vehicle
weight
ratings
above
6000
pounds
are
considered
``
heavy­
duty
vehicles''
under
the
Act.
See
section
202(
b)(
3).
For
regulatory
purposes,
we
refer
to
these
LDTs
as
``
heavy
light­
duty
trucks''
made
up
of
LDT3s
and
LDT4s.
7
We
currently
have
regulatory
requirements
for
conventional
and
reformulated
gasoline
adopted
under
Sections
211(
c)
and
211(
k)
of
the
Act,
in
addition
to
the
``
substantially
similar''
requirements
for
fuel
additives
of
Section
211(
f).
These
requirements
have
the
effect
of
limiting
sulfur
levels
in
gasoline
to
some
extent.
See
the
Final
RIA
for
more
details.
8
On
April
28,
1998,
EPA
published
a
notice
of
availability
announcing
the
release
of
a
draft
of
the
Tier
2
study
and
requesting
comments
on
the
draft.
The
final
report
to
Congress
included
a
summary
and
analysis
of
the
comments
EPA
received.
standards
for
these
vehicle
classes
is
among
those
options
for
new
standards
that
EPA
is
to
consider.
After
the
study
is
completed
and
the
results
are
reported
to
Congress,
EPA
is
required
to
determine
by
rulemaking
whether:
(
1)
There
is
a
need
for
further
emission
reductions;
(
2)
the
technology
for
more
stringent
emission
standards
from
the
affected
classes
is
available;
and
(
3)
such
standards
are
needed
and
cost­
effective,
taking
into
account
alternatives.
If
EPA
answers
``
yes''
to
these
questions,
then
the
Agency
is
to
promulgate
new,
more
stringent
motor
vehicle
standards
(``
Tier
2
standards'').
EPA
submitted
its
report
to
Congress
on
July
31,
1998.
Today's
final
rule
makes
affirmative
responses
to
the
three
questions
above
(
see
Section
II
below)
and
sets
new
standards
that
are
more
stringent
than
the
default
standards
in
the
Act.
EPA
is
also
setting
standards
for
larger
light­
duty
trucks
and
MDPVs
under
the
general
authority
of
Section
202(
a)(
1)
and
202(
b)
and
under
Section
202(
a)(
3)
of
the
Act,
which
requires
that
standards
applicable
to
emissions
of
hydrocarbons,
NOX,
CO
and
PM
from
heavy­
duty
vehicles
6
reflect
the
greatest
degree
of
emission
reduction
available
for
the
model
year
to
which
such
standards
apply,
giving
appropriate
consideration
to
cost,
energy,
and
safety.
We
are
also
setting
standards
for
formaldehyde
under
our
authority
in
sections
202(
a)
and
(
l).

2.
Gasoline
Sulfur
Controls
We
are
adopting
gasoline
sulfur
controls
pursuant
to
our
authority
under
Section
211(
c)(
1)
of
the
Clean
Air
Act.
7
Under
Section
211(
c)(
1),
EPA
may
adopt
a
fuel
control
if
at
least
one
of
the
following
two
criteria
is
met:
(
1)
The
emission
products
of
the
fuel
cause
or
contribute
to
air
pollution
which
may
reasonably
be
anticipated
to
endanger
public
health
or
welfare;
or
(
2)
the
emission
products
of
the
fuel
will
significantly
impair
emissions
control
systems
in
general
use
or
which
will
be
in
general
use
were
the
fuel
control
to
be
adopted.
We
are
adopting
gasoline
sulfur
controls
based
on
both
of
these
criteria.
Under
the
first
criterion,
we
believe
that
sulfur
in
gasoline
used
in
Tier
1
and
LEV
technology
vehicles
contributes
to
ozone
pollution,
air
toxics,
and
PM.
Under
the
second
criterion,
we
believe
that
gasoline
sulfur
in
fuel
will
significantly
impair
the
emissions
control
systems
expected
to
be
used
in
Tier
2
technology
vehicles,
as
well
as
emissions
control
systems
currently
used
in
LEVs.
Please
refer
to
Section
IV.
C.
below
and
to
the
Final
Regulatory
Impact
Analysis
(
RIA)
for
more
details
of
our
analysis
and
findings.
The
RIA
includes
a
more
detailed
discussion
of
EPA's
authority
to
set
gasoline
sulfur
standards,
including
a
discussion
of
our
conclusions
relating
to
the
factors
required
to
be
considered
under
Section
211(
c).

C.
The
Tier
2
Study
and
the
Sulfur
Staff
Paper
On
July
31,
1998,
EPA
submitted
its
report
to
Congress
containing
the
results
of
the
Tier
2
study.
8
The
study
indicated
that
in
the
2004
and
later
time
frame,
there
will
be
a
need
for
emission
reductions
to
aid
in
meeting
and
maintaining
the
National
Ambient
Air
Quality
Standards
(
NAAQS)
for
both
ozone
and
PM.
Air
quality
modeling
showed
that
in
the
2007
 
2010
time
frame,
when
Tier
2
standards
will
become
fully
effective,
a
number
of
areas
will
still
be
in
nonattainment
for
ozone
and
PM
even
after
the
implementation
of
existing
emission
controls.
The
study
also
noted
the
continued
existence
of
carbon
monoxide
(
CO)
nonattainment
areas.
It
also
found
ample
evidence
that
technologies
will
be
available
to
meet
more
stringent
Tier
2
standards.
In
addition,
the
study
provided
evidence
that
such
standards
could
be
implemented
at
a
similar
cost
per
ton
of
reduced
pollutants
as
other
programs
aimed
at
similar
air
quality
problems.
Finally,
the
study
identified
several
additional
issues
in
need
of
further
examination,
including
the
relative
stringency
of
car
and
light
truck
emission
standards,
the
appropriateness
of
identical
versus
separate
standards
for
gasoline
and
diesel
vehicles,
and
the
effects
of
sulfur
in
gasoline
on
catalyst
efficiency.
Section
IV
of
this
preamble
describes
the
steps
we
have
taken
to
follow
up
on
the
Tier
2
Study.
In
addition,
on
May
1,
1998,
EPA
released
a
staff
paper
presenting
EPA's
understanding
of
the
impact
of
gasoline
sulfur
on
emissions
from
motor
vehicles
and
exploring
what
gasoline
producers
and
automobile
manufacturers
could
do
to
reduce
sulfur's
impact
on
emissions.
The
staff
paper
noted
that
gasoline
sulfur
degrades
the
effectiveness
of
catalytic
converters
and
that
high
sulfur
levels
in
commercial
gasoline
could
affect
the
ability
of
future
automobiles
 
especially
those
designed
for
very
low
emissions
 
to
meet
more
stringent
standards
in
use.
It
also
pointed
out
that
sulfur
control
will
provide
additional
benefits
by
lowering
emissions
from
the
current
fleet
of
vehicles.

D.
Relationship
of
Diesel
Fuel
Sulfur
Control
to
the
Tier
2/
Gasoline
Sulfur
Program
In
the
NPRM,
we
raised
the
question
of
what
if
any
changes
to
diesel
fuel
may
be
needed
to
enable
diesel
vehicles
to
meet
the
Tier
2
standards
or
any
future
heavy­
duty
diesel
engine
standards.
Specifically,
we
raised
the
question
of
whether
diesel
sulfur
levels
need
to
be
controlled.
Since
diesel
fuel
controls
of
any
kind
would
have
an
impact
on
the
refinery
as
a
whole,
and
since
in
some
cases
(
including
potential
diesel
sulfur
limits)
could
have
implications
for
gasoline
sulfur
control,
we
requested
comment
on
this
issue
in
our
proposal.
We
also
indicated
that
we
planned
to
release
an
Advance
Notice
of
Proposed
Rulemaking
to
solicit
more
information
on
this
subject.
We
published
the
ANPRM
on
May
13,
1999
(
64
FR
26142).
We
are
in
the
process
of
considering
all
of
the
comments
received
in
response
to
the
ANPRM
and
plan
to
issue
a
Notice
of
Proposed
Rulemaking
(
NPRM)
in
early
spring
of
2000.
We
received
many
comments
on
the
subject
of
diesel
fuel
control
along
with
the
comments
submitted
on
the
proposed
Tier
2/
Gasoline
Sulfur
regulations.
We
have
prepared
brief
responses
to
some
of
these
comments
in
the
Response
to
Comments
document,
and
will
deal
fully
with
these
comments
as
part
of
the
forthcoming
NPRM
on
diesel
fuel.
We
are
taking
no
action
on
diesel
fuel
as
part
of
today's
action.

II.
Tier
2
Determination
Based
on
the
statutory
requirements
described
above
and
the
evidence
provided
in
the
Tier
2
Study
and
since
its
release,
as
described
elsewhere
in
this
preamble,
EPA
has
determined
that
new,
more
stringent
emission
standards
are
indeed
needed,
technologically
feasible,
and
cost
effective.

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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
9
The
Final
RIA
contains
a
more
detailed
analysis,
and
Section
IV.
A.
below
has
further
discussion
of
the
technological
feasibility
of
our
standards
including
detailed
discussions
of
the
various
technology
options
that
we
believe
manufacturers
may
use
to
meet
these
standards.
A.
There
Is
a
Substantial
Need
for
Further
Emission
Reductions
in
Order
to
Attain
and
Maintain
National
Ambient
Air
Quality
Standards
EPA
finds
that
there
is
a
clear
air
quality
need
for
new
emission
standards,
based
on
the
continuing
air
quality
problems
predicted
to
exist
in
future
years.
As
the
discussion
in
Section
III.
B.
illustrates,
26
metropolitan
areas
are
each
certain
or
highly
likely
to
need
additional
reductions.
These
areas
are
distributed
across
most
regions
of
the
U.
S.,
and
have
a
combined
population
of
over
86
million.
Section
III.
B.
also
shows
that
an
additional
12
areas
each
has
a
moderate
to
significant
probability
of
needing
additional
reductions,
representing
another
25
million
people.
This
provides
ample
evidence
that
further
emission
reductions
are
needed
to
meet
the
1­
hour
ozone
NAAQS.
In
addition
to
these
ozone
concerns,
our
analysis
of
PM10
monitoring
data
and
PM10
projections
indicates
that
15
PM10
nonattainment
counties
violated
the
PM10
NAAQS
in
recent
years,
and
that
8
of
them
with
a
1996
population
of
almost
8
million
have
a
high
risk
of
failing
to
attain
and
maintain
without
more
emission
reductions.
Eighteen
other
counties,
with
a
population
of
23
million
have
a
significant
risk
of
failing
or
are
within
10
percent
of
violating
the
PM10
NAAQS.
It
is
also
important
to
recognize
that
nonattainment
areas
remain
for
other
criteria
pollutants
(
e.
g.,
CO)
and
that
non­
criteria
pollution
(
e.
g.,
air
toxics
and
regional
haze)
also
contributes
to
environmental
and
health
concerns.

B.
More
Stringent
Standards
for
Light­
Duty
Vehicles
and
Trucks
Are
Technologically
Feasible
We
find
that
emission
standards
significantly
more
stringent
than
current
Tier
1
and
National
Low
Emission
Vehicle
(
NLEV)
levels
are
technologically
feasible.
This
is
true
both
for
the
LDVs
and
LDTs
specifically
covered
in
section
202(
i)
and
for
the
medium­
duty
passenger
vehicles
also
included
in
today's
final
rule.
Manufacturers
are
currently
producing
NLEV
vehicles
that
meet
more
stringent
standards
than
similar
Tier
1
models.
Our
analysis
shows
that
mainly
through
improvements
in
engine
control
software
and
catalytic
converter
technology,
manufacturers
can
build
and
are
building
durable
vehicles
and
trucks,
including
heavy
light­
duty
trucks,
which
have
very
low
emission
levels.
9
Section
IV.
A.
below
discusses
our
feasibility
conclusions
in
more
detail.
Many
current
production
vehicles
are
already
certified
at
or
near
the
Tier
2
standards.
For
year
2000
certification
(
although
not
yet
complete),
over
50
vehicle
models
have
emissions
at
or
below
Tier
2
levels.
In
addition,
we
performed
a
demonstration
program
at
our
EPA
laboratory
that
showed
that
even
large
vehicles,
which
would
be
expected
to
face
the
toughest
challenges
reaching
Tier
2
emission
levels,
can
do
so
with
conventional
technology.
Others,
including
the
Manufacturers
of
Emission
Controls
Association
(
MECA)
and
the
State
of
California,
have
also
performed
demonstration
programs,
with
similar
results.
Manufacturers
have
also
certified
LDVs
and
LDTs
to
NMOG
and
CO
levels
as
much
as
80
percent
below
Tier
1
standards.
Furthermore,
for
passenger
vehicles
greater
than
8500
lbs
GVWR,
we
believe
that
by
using
technologies
and
control
strategies
similar
to
what
will
be
used
on
lighter
vehicles,
manufacturers
will
be
able
to
meet
the
Tier
2
emission
standards.
Thus,
we
believe
that,
by
the
2004
 
2009
time
frame,
manufacturers
will
be
fully
able
to
comply
with
the
new
Tier
2
emission
standard
levels.
In
addition,
to
facilitate
manufacturers'
efforts
to
meet
these
new
standards,
the
Tier
2
regulations
include
a
phase­
in
over
several
years
and
a
corporate
fleet
average
NOX
standard,
which
will
allow
manufacturers
to
optimize
the
deployment
of
technology
across
their
product
lines
with
no
loss
of
environmental
benefit.
Our
analysis
of
the
available
technology
improvements
and
the
very
low
emission
levels
already
being
realized
on
these
vehicles
leads
us
to
find
that
the
standards
adopted
today
are
fully
feasible
for
LDVs
and
LDTs.

C.
More
Stringent
Standards
for
Light­
Duty
Vehicles
and
Trucks
Are
Needed
and
Cost
Effective
Compared
to
Available
Alternatives
In
this
action,
we
also
find
that
more
stringent
motor
vehicle
standards
are
both
necessary
and
cost
effective.
As
discussed
above,
substantial
further
reductions
in
emissions
are
needed
to
help
reduce
the
levels
of
unhealthy
air
pollution
to
which
millions
of
people
are
being
exposed;
in
particular,
we
expect
that
a
number
of
areas
will
not
attain
or
maintain
compliance
with
the
National
Ambient
Air
Quality
Standards
for
ozone
and
PM10
without
such
reductions.
(
We
describe
this
further
in
Section
III
below
and
in
the
RIA.)
Furthermore,
mobile
sources
are
important
contributors
to
the
air
quality
problem.
As
we
will
explain
more
fully
later
in
this
preamble,
in
the
year
2030,
the
cars
and
light
trucks
that
are
the
subject
of
today's
final
rule
are
projected
to
contribute
as
much
as
40
percent
of
the
total
NOX
inventory
in
some
cities,
and
almost
20
percent
of
nationwide
NOX
emissions.
This
situation
would
have
been
considerably
worse
without
the
NLEV
program
created
by
vehicle
manufacturers,
EPA,
the
Northeastern
states,
and
others.
These
emission
reductions
are
clearly
necessary
to
meet
and
maintain
the
1­
hour
ozone
NAAQS.
We
project
that
while
the
emission
reductions
of
this
program
will
lead
to
substantial
progress
in
meeting
and
maintaining
the
NAAQS,
many
areas
will
still
not
come
into
attainment
even
with
this
magnitude
of
reductions.
We
find
that
the
Tier
2/
Gasoline
Sulfur
program
is
a
reasonable,
costeffective
method
of
providing
substantial
progress
towards
attainment
and
maintenance
of
the
NAAQS,
costing
about
$
2000
per
ton
of
NOX
plus
hydrocarbon
emissions
reduced.
This
program
will
reduce
annual
NOX
emissions
by
about
2.2
million
tons
per
year
in
2020
and
2.8
million
tons
per
year
in
2030
after
the
program
is
fully
implemented.
By
way
of
comparison,
when
EPA
established
its
8­
hour
NAAQS
for
ozone,
we
identified
several
types
of
emission
control
programs
that
were
reasonably
cost
effective.
If
all
of
the
controls
identified
in
that
analysis
costing
less
than
$
10,000/
ton
were
implemented
nationwide,
they
would
produce
NOX
emission
reductions
of
about
2.9
million
tons
per
year.
(
That
is,
to
achieve
about
the
same
emission
reductions
as
the
Tier
2/
Gasoline
Sulfur
program,
other
alternative
measures
would
have
a
significantly
higher
cost
per
ton).
These
emission
reductions
are
clearly
necessary
to
meet
and
maintain
the
one­
hour
ozone
NAAQS.
We
project
that
while
the
emission
reductions
of
this
program
will
lead
to
substantial
progress
in
meeting
and
maintaining
the
NAAQS,
many
areas
will
still
not
come
into
attainment
even
with
this
magnitude
of
reductions.
In
addition,
the
magnitude
of
emission
reductions
that
can
be
achieved
by
a
comprehensive
national
Tier
2/
Gasoline
Sulfur
program
will
be
difficult
to
achieve
from
any
other
source
category.
Given
the
large
contribution
that
light­
duty
mobile
source
emissions
make
to
the
national
emissions
inventory
and
the
range
of
control
programs
ozone­
affected
areas
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
10
National
Air
Quality
and
Emissions
Trend
Report,
1997,
Air
Quality
Trends
Analysis
Group,
Office
of
Air
Quality
Planning
and
Standards,
U.
S.
Environmental
Protection
Agency,
Research
Triangle
Park,
N.
C.,
December
1998
(
available
on
the
World
Wide
Web
at
http://
www/
epa.
gov/
oar/
aqtrnd97/).
11
U.
S.
Environmental
Protection
Agency,
Latest
Findings
on
National
Air
Quality:
1997
Status
and
Trends.
December
1998.
already
have
in
place
or
would
be
expected
to
implement,
we
believe
it
will
be
very
difficult,
if
not
impossible,
to
meet
(
and
maintain)
the
ozone
NAAQS
in
a
cost­
effective
manner
without
large
emission
reductions
from
LDVs
and
LDTs.
We
expect
emissions
from
MDPVs
to
also
play
an
increasing
role.
Furthermore,
we
project
that
the
Tier
2/
Gasoline
Sulfur
program
will
significantly
reduce
direct
and
secondary
particulate
matter
coming
from
LDVs,
LDTs,
and
MDPVs
 
by
about
36,000
tons
per
year
of
direct
PM
alone
by
2030;
large
secondary
PM
reductions
from
significantly
lower
NOX
and
SOX
emissions
will
add
to
the
overall
positive
impact
on
airborne
particles.
These
reductions
will
be
very
cost­
effective
compared
to
other
measures
to
reduce
PM
pollution.
Because
direct
PM
emissions
from
gasoline
vehicles
are
related
the
presence
of
sulfur
in
gasoline,
no
new
emission
control
devices,
beyond
what
manufacturers
are
expected
to
install
to
meet
the
NOX
and
NMOG
standards,
will
be
necessary
to
provide
the
reductions
expected
for
these
pollutants
under
the
program.
The
standards
will
provide
valuable
insurance
against
increases
in
PM
emissions
from
LDVs,
LDTs,
and
MDPVs.
Finally,
the
Tier
2/
Gasoline
Sulfur
program
will
significantly
reduce
CO
emissions
from
LDVs,
LDTs,
and
MDPVs.
(
See
Chapter
III
of
the
RIA
for
an
analysis
of
these
reductions.)
The
technical
changes
needed
to
meet
the
NMOG
standards
will
also
result
in
CO
reductions
sufficient
to
meet
the
CO
standards.
Thus,
these
CO
reductions
will
be
very
cost­
effective
since
they
will
not
require
any
new
emission
control
devices
beyond
what
manufacturers
are
expected
to
install
to
meet
the
NOX
and
NMOG
standards.
We
conclude,
then,
that
today's
final
rule
is
a
major
source
of
ozone
precursor,
PM,
and
CO
emission
reductions
when
compared
to
other
available
options.
The
discussions
of
cost
and
cost
effectiveness
later
in
this
preamble
and
in
the
RIA
explain
the
derivation
of
cost
effectiveness
estimates
and
compares
them
to
the
cost
effectiveness
of
other
alternatives.
That
discussion
indicates
that
this
program
will
have
a
cost
effectiveness
comparable
to
both
the
Tier
1
and
NLEV
standards
and
will
also
be
cost
effective
when
compared
to
non­
mobile
source
programs.

III.
Air
Quality
Need
For
and
Impact
Of
Today's
Action
In
the
absence
of
significant
new
controls
on
emission,
tens
of
millions
of
Americans
would
continue
to
be
exposed
to
unhealthy
levels
of
air
pollution.
Emissions
from
passenger
cars
and
light
trucks
are
a
significant
contributor
to
a
number
of
air
pollution
problems.
Today's
action
will
significantly
reduce
emissions
from
cars
and
light
trucks
and
hence
will
significantly
reduce
the
health
risks
posed
by
air
pollution.
This
section
summarizes
the
results
of
the
analyses
we
performed
to
arrive
at
our
determination
that
continuing
air
quality
problems
are
likely
to
exist,
that
these
air
quality
problems
would
be
in
part
due
to
emissions
from
cars
and
light
trucks,
and
that
the
new
standards
promulgated
by
today's
final
rule
will
improve
air
quality
and
mitigate
other
environmental
problems.

A.
Americans
Face
Serious
Air
Quality
Problems
That
Require
Further
Emission
Reductions
Air
quality
in
the
United
States
continues
to
improve.
Nationally,
the
1997
air
quality
levels
were
the
best
on
record
for
all
six
criteria
pollutants.
10
In
fact,
the
1990s
have
shown
a
steady
trend
of
improvement,
due
to
reductions
in
emissions
from
most
sources
of
air
pollution,
from
factories
to
motor
vehicles.
Despite
great
progress
in
air
quality
improvement,
in
1997
there
were
still
approximately
107
million
people
nationwide
who
lived
in
counties
with
monitored
air
quality
levels
above
the
primary
national
air
quality
standards.
11
There
are
also
people
living
in
counties
outside
of
the
air
monitoring
network
where
violations
of
the
NAAQS
could
have
also
occurred
during
the
year.
Moreover,
unless
there
are
reductions
in
overall
emissions
beyond
those
that
are
scheduled
to
be
achieved
by
already
committed
controls,
many
of
these
Americans
will
continue
to
be
exposed
to
unhealthy
air.
Ambient
ozone
is
formed
in
the
lower
atmosphere
through
a
complex
interaction
of
VOC
and
NOX
emissions.
Cars
and
light
trucks
emit
a
substantial
fraction
of
these
emissions.
Ambient
PM
is
emitted
directly
from
cars
and
light
trucks;
it
also
forms
in
the
atmosphere
from
NOX,
sulfur
oxides
(
SOX),
and
VOC,
all
of
which
are
emitted
by
motor
vehicles.
When
ozone
exceeds
the
air
quality
standards,
otherwise
healthy
people
often
have
reduced
lung
function
and
chest
pain,
and
hospital
admissions
for
people
with
respiratory
ailments
like
asthma
increase;
for
longer
exposures,
permanent
lung
damage
can
occur.
Similarly,
fine
particles
can
penetrate
deep
into
the
lungs.
Results
of
studies
suggest
a
likely
causal
role
of
ambient
PM
in
contributing
to
reported
effects,
such
as:
premature
mortality,
increased
hospital
admissions,
increased
respiratory
symptoms,
and
changes
in
lung
tissue.
When
either
ozone
or
PM
air
quality
problems
are
present,
those
hardest
hit
tend
to
be
children,
the
elderly,
and
people
who
already
have
health
problems.
The
health
effects
of
high
ozone
and
PM
levels
are
not
the
only
reason
for
concern
about
continuing
air
pollution.
Ozone
and
PM
also
harm
plants
and
damage
materials.
PM
reduces
visibility
and
contributes
to
significant
visibility
impairment
in
our
national
parks
and
monuments
and
in
many
urban
areas.
In
addition,
air
pollution
from
motor
vehicles
contributes
to
cancer
and
other
health
risks,
acidification
of
lakes
and
streams,
eutrophication
of
coastal
and
inland
waters,
and
elevated
drinking
water
nitrate
levels.
These
problems
impose
a
substantial
burden
on
public
health,
our
economy,
and
our
ecosystems.
In
recognition
of
this
burden,
Congress
has
passed
and
subsequently
amended
the
Clean
Air
Act.
The
Clean
Air
Act
requires
each
state
to
have
an
approved
State
Implementation
Plan
(
SIP)
that
shows
how
an
area
plans
to
meet
its
air
quality
obligations,
including
achieving
and
then
maintaining
attainment
of
all
of
the
National
Ambient
Air
Quality
Standards
(
NAAQS),
such
as
those
for
ozone
and
PM.
The
Clean
Air
Act
also
requires
EPA
to
periodically
re­
evaluate
the
NAAQS
in
light
of
new
scientific
information.
Our
most
recent
reevaluation
of
the
ozone
and
PM
NAAQS
led
us
to
revise
both
standards
(
62
FR
38856,
July
18,
1997
and
62
FR
38652,
July
18,
1997).
These
revised
standards
reflected
additional
information
that
had
become
available
since
the
previous
revision
of
the
ozone
and
PM
standards,
respectively.
On
May
14,
1999,
a
panel
of
the
United
States
Court
of
Appeals
for
the
District
of
Columbia
Circuit
reviewed
EPA's
revisions
to
the
ozone
and
PM
NAAQS
and
found,
by
a
2
 
1
vote,
that
sections
108
and
109
of
the
Clean
Air
Act,
as
interpreted
by
EPA,
represent
unconstitutional
delegations
of
Congressional
power.
American
Trucking
Ass'n.,
Inc.
et
al.,
v.
Environmental
Protection
Agency,
175
F.
3d
1027
(
D.
C.
Cir.
1999).
Among
other
things
the
Court
remanded
the
record
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Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
for
the
8­
hour
ozone
NAAQS
and
the
PM2.5
NAAQS
to
EPA.
On
October
29,
1999,
EPA's
petition
for
rehearing
by
the
three
judge
panel
was
denied,
with
the
exception
that
the
panel
modified
its
prior
ruling
regarding
EPA's
authority
to
implement
a
revised
ozone
NAAQS
under
Part
D
subpart
2
of
Title
I.
EPA's
petition
for
rehearing
en
banc
by
the
full
Circuit
was
also
denied,
although
five
of
the
nine
judges
considering
the
petition
agreed
to
rehear
the
case.
As
a
result
of
the
Court's
decision,
requirements
on
the
States
to
implement
the
new
8­
hour
ozone
standard
have
been
suspended
although
the
standard
itself
is
still
in
force
and
the
science
behind
it
has
generally
not
been
contradicted.
The
court
also
did
not
question
EPA's
findings
regarding
the
health
effects
of
PM10
and
PM2.5.
However,
due
to
the
uncertainty
regarding
the
status
of
the
new
NAAQS,
we
will
rely
on
the
preexisting
NAAQS
in
determining
air
quality
need
under
section
202(
i)
of
the
Act.
Carbon
monoxide
(
CO)
can
cause
serious
health
effects
for
those
who
suffer
from
cardiovascular
disease,
such
as
angina
pectoris.
There
has
been
considerable
progress
in
attaining
the
longstanding
NAAQS
for
carbon
monoxide,
largely
through
more
stringent
standards
for
CO
from
motor
vehicles.
This
progress
has
been
made
despite
large
increases
in
travel
by
vehicle.
In
1997,
there
were
about
9
million
people
living
in
three
counties
with
CO
concentrations
above
the
level
of
the
CO
NAAQS.
In
the
recent
past,
this
figure
has
fluctuated
up
and
down.
At
the
present
time
there
are
15
counties
classified
as
serious
CO
nonattainment
areas,
all
with
a
recent
history
of
NAAQS
violations.
At
this
time,
prospects
for
these
areas
attaining
by
the
serious
CO
area
attainment
deadline
of
December
31,
2000
are
uncertain.
While
violations
of
the
NAAQS
have
not
occurred
recently
in
most
of
the
other
33
counties
still
classified
as
nonattainment,
even
these
must
demonstrate
that
they
will
remain
safely
below
the
NAAQS
for
ten
years
despite
expected
growth
in
vehicle
travel
and
other
sources
of
CO
emissions
before
they
can
be
reclassified
to
attainment.
Because
of
the
large
role
of
motor
vehicles
in
causing
high
ambient
CO
concentrations,
where
there
is
reason
to
be
concerned
about
CO
attainment
and
maintenance,
local
areas
look
to
national
emission
standards
for
most
of
the
solution.
As
discussed
below,
EPA
has
also
finalized
regulations
that
regions
and
states
implement
plans
for
protecting
and
improving
visibility
in
the
156
mandatory
Federal
Class
I
areas
as
defined
in
Section
162(
a)
of
the
Clean
Air
Act.
These
areas
are
primarily
national
parks
and
wilderness
areas.
To
accomplish
the
goal
of
full
attainment
in
all
areas
according
to
the
schedules
for
the
various
NAAQS,
and
to
achieve
the
goals
of
the
visibility
program,
the
federal
government
must
assist
the
states
by
reducing
emissions
from
sources
that
are
not
as
practical
to
control
at
the
state
level
as
at
the
federal
level.
Vehicles
and
fuels
move
freely
among
the
states,
and
they
are
produced
by
national
or
global
scale
industries.
Most
individual
states
are
not
in
a
position
to
regulate
these
industries
effectively
and
efficiently.
The
Clean
Air
Act
therefore
gives
EPA
primary
authority
to
regulate
emissions
from
the
various
types
of
highway
vehicles
and
their
fuels.
Our
actions
to
reduce
emissions
from
these
and
other
national
sources
are
a
crucial
and
essential
complement
to
actions
by
states
to
reduce
emissions
from
more
localized
sources.
If
we
were
not
to
adopt
new
standards
to
reduce
emissions
from
cars
and
light
trucks,
emissions
from
these
vehicles
would
remain
a
large
portion
of
the
emissions
burden
that
causes
elevated
ozone
and
continued
nonattainment
with
the
ozone
NAAQS,
which
in
turn
would
affect
tens
of
millions
of
Americans.
Because
the
contribution
of
cars
and
light
trucks
to
both
local
emissions
and
transported
pollution
would
be
so
great,
and
the
expected
emission
reduction
shortfall
in
many
areas
is
so
large,
further
reductions
from
cars
and
light
trucks
will
be
an
important
element
of
many
attainment
strategies,
especially
for
ozone
in
the
2007
to
2010
time
frame.
The
contribution
of
these
vehicles
to
PM
exposure
and
PM
nonattainment
would
also
remain
significant,
and
would
increase
considerably
if
diesel
engines
are
used
in
more
cars
or
light
trucks.
Furthermore,
without
new
standards,
steady
annual
increases
in
fleet
size
and
miles
of
travel
would
outstrip
the
benefits
of
current
emission
controls,
and
would
cause
ozone­
forming
emissions
from
cars
and
trucks
to
grow
each
year
starting
about
2013.
The
standards
being
promulgated
by
today's
actions
will
reduce
emissions
of
ozone
precursors
and
PM
precursors
from
cars
and
light
trucks
greatly.
However,
even
with
this
decrease,
many
areas
will
likely
still
find
it
necessary
to
obtain
additional
reductions
from
other
sources
in
order
to
fully
attain
the
ozone
and
PM
NAAQS.
Their
task
will
be
easier
and
the
economic
impact
on
their
industries
and
citizens
will
be
lighter
as
a
result
of
the
standards
promulgated
by
today's
actions.
Following
implementation
of
the
Regional
Ozone
Transport
Rule,
states
will
have
already
adopted
emission
reduction
requirements
for
nearly
all
large
sources
of
VOC
and
NOX
for
which
costeffective
control
technologies
are
known.
Those
that
remain
in
nonattainment
therefore
will
have
to
consider
their
remaining
alternatives.
Many
of
the
state
and
local
programs
states
may
consider
as
alternatives
are
very
costly,
and
the
emissions
impact
from
each
additional
emissions
source
subjected
to
new
emissions
controls
would
be
considerably
smaller
than
the
emissions
impact
of
the
standards
being
promulgated
today.
Therefore,
the
emission
reductions
from
these
standards
for
gasoline,
cars,
and
light
trucks
will
ease
the
need
for
states
to
find
first­
time
reductions
from
the
mostly
smaller
sources
that
have
not
yet
been
controlled,
including
area
sources
that
are
closely
connected
with
individual
and
small
business
activities.
The
emission
reductions
from
the
standards
being
promulgated
today
will
also
reduce
the
need
for
states
to
seek
even
deeper
reductions
from
large
and
small
sources
already
subject
to
emission
controls.
We
project
that
today's
actions
will
also
have
important
benefits
for
carbon
monoxide,
regional
visibility,
acid
rain,
and
coastal
water
quality.
For
these
and
other
reasons
discussed
in
this
document,
we
have
determined
that
significant
emission
reductions
will
still
be
needed
by
the
middle
of
the
next
decade
and
beyond
to
achieve
and
maintain
further
improvements
in
air
quality
in
many,
geographically
dispersed
areas.
We
also
believe
that
a
significant
portion
of
these
emission
reductions
will
be
obtained
by
reducing
emissions
from
cars
and
light
trucks
as
a
result
of
today's
actions.
We
believe
that
such
reductions
are
necessary
(
since
cars
and
light
trucks
are
such
large
contributors
to
current
and
projected
ozone
problems)
and
reasonable
(
since
these
reductions
can
be
achieved
at
a
reasonable
cost
compared
to
other
alternative
reductions).
The
remainder
of
this
section
describes
the
health
and
environmental
problems
that
today's
actions
will
help
mitigate
and
the
expected
health
and
environmental
benefits
of
these
actions.
Ozone
is
discussed
first,
followed
by
PM,
other
criteria
pollutants,
visibility,
air
toxics,
and
other
environmental
impacts.
The
emission
inventories
and
air
quality
analyses
are
explained
more
fully
in
the
Regulatory
Impact
Analysis
for
today's
actions.

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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
12
Total
column
ozone,
a
large
percentage
of
which
occurs
in
the
stratosphere
and
a
smaller
percentage
of
which
occurs
in
the
troposphere,
helps
to
provide
a
protective
layer
against
ultraviolet
radiation.
B.
Ozone
1.
Background
on
Ozone
Air
Quality
Ground­
level
ozone
is
the
main
harmful
ingredient
in
smog.
12
Ozone
is
produced
by
complex
chemical
reactions
when
its
precursors,
VOC
and
NOX,
react
in
the
presence
of
sunlight.
Short­
term
(
1
 
3
hours)
and
prolonged
(
6
 
8
hours)
exposures
to
ambient
ozone
at
levels
common
in
many
cities
have
been
linked
to
a
number
of
health
effects
of
concerns.
For
example,
increased
hospital
admissions
and
emergency
room
visits
for
respiratory
causes
have
been
associated
with
ambient
ozone
exposures
at
such
levels.
Repeated
exposures
to
ozone
can
make
people
more
susceptible
to
respiratory
infection,
result
in
lung
inflammation,
and
aggravate
pre­
existing
respiratory
diseases
such
as
asthma.
Other
health
effects
attributed
to
ozone
exposures
include
significant
decreases
in
lung
function
and
increased
respiratory
symptoms
such
as
chest
pain
and
cough.
These
effects
generally
occur
while
individuals
are
engaged
in
moderate
or
heavy
exertion.
Children
active
outdoors
during
the
summer
when
ozone
levels
are
at
their
highest
are
most
at
risk
of
experiencing
such
effects.
Other
at­
risk
groups
include
adults
who
are
active
outdoors
(
e.
g.,
outdoor
workers),
and
individuals
with
pre­
existing
respiratory
disease
such
as
asthma
and
chronic
obstructive
lung
disease.
In
addition,
longer­
term
exposures
to
moderate
levels
of
ozone
present
the
possibility
of
irreversible
changes
in
the
lungs
which
could
lead
to
premature
aging
of
the
lungs
and/
or
chronic
respiratory
illnesses.
Ozone
also
affects
vegetation
and
ecosystems,
leading
to
reductions
in
agricultural
and
commercial
forest
yields,
reduced
growth
and
survivability
of
tree
seedlings,
and
increased
plant
susceptibility
to
disease,
pests,
and
other
environmental
stresses
(
e.
g.,
harsh
weather).
In
long­
lived
species,
these
effects
may
become
evident
only
after
several
years
or
even
decades,
thus
having
the
potential
for
long­
term
effects
on
forest
ecosystems.
Groundlevel
ozone
damage
to
the
foliage
of
trees
and
other
plants
also
can
decrease
the
aesthetic
value
of
ornamental
species
as
well
as
the
natural
beauty
of
our
national
parks
and
recreation
areas.
Many
areas
which
were
classified
as
nonattainment
when
classifications
were
made
under
the
1990
Clean
Air
Act
Amendments
have
not
experienced
violations
more
recently.
However,
50
metropolitan
areas
had
ozone
design
values
above
the
NAAQS
in
either
or
both
of
the
1995
 
1997
and
the
1996
 
1998
monitoring
periods.
In
many
urban
areas,
the
downward
trend
in
ozone
that
prevailed
earlier
has
become
less
strong
or
stopped
in
the
last
few
years,
even
when
adjustments
are
made
for
meteorological
conditions.
We
believe
that
one
factor
that
has
worked
against
ozone
improvement
in
the
last
few
years
has
been
the
growing
use
of
light
trucks
with
higher
emissions
than
the
cars
used
formerly.
The
predictions
of
future
ozone
concentrations
used
in
developing
today's
action
take
account
of
this
growing
use
of
light
trucks.

2.
Additional
Emission
Reductions
Are
Needed
To
Attain
and
Maintain
the
Ozone
NAAQS
a.
Summary
We
have
determined
that
additional
emission
reductions
are
needed
to
attain
and
maintain
the
1­
hour
ozone
NAAQS.
This
overall
conclusion
is
based
on
our
prediction
that
26
metropolitan
areas
are
each
certain
or
highly
likely
to
need
additional
reductions,
and
that
an
additional
12
areas
each
have
a
moderate
to
significant
probability
of
needing
them.
To
determine
whether
additional
reductions
are
needed
in
order
to
attain
and
maintain
the
ozone
NAAQS,
we
used
ozone
modeling
to
predict
what
areas
would
not
attain
the
NAAQS
in
the
future.
We
accounted
for
the
emission
reductions
that
have
already
been
achieved,
those
that
will
be
achieved
in
the
future
by
actions
already
underway,
and
increases
in
emissions
expected
from
increased
use
of
sources
of
pollution.
In
our
May
13,
1999
proposal,
we
presented
information
from
photochemical
modeling
we
performed
to
predict
what
areas
would
meet
the
ozone
NAAQS
in
2007.
The
year
2007
falls
after
the
expected
date
of
most
emission
reductions
which
states
are
required
to
achieve
or
have
otherwise
committed
to
achieve,
and
near
the
attainment
deadline
for
many
ozone
nonattainment
areas.
We
presented
additional
information
from
the
same
photochemical
modeling
work
in
two
supplemental
notices,
on
June
30,
1999
(
to
better
explain
the
basis
for
our
proposal
in
light
of
the
Court's
ruling
on
the
8­
hour
ozone
NAAQS),
and
October
25,
1999
(
to
explain
the
implications
for
our
Tier
2/
Gasoline
Sulfur
proposal
from
our
more
recent
proposal,
which
we
expect
to
make
final
shortly,
to
reinstate
the
1­
hour
ozone
NAAQS
in
many
areas).
In
Response
to
Comments
on
these
Federal
Register
notices,
we
made
revisions
to
our
own
ozone
modeling.
We
also
obtained
ozone
modeling
results
from
a
number
of
state
air
planning
agencies
and
from
members
of
the
automobile
manufacturing
industry.
We
have
considered
all
of
this
information
as
part
of
our
determination
that
the
regulations
promulgated
in
this
rule
are
needed
and
appropriate.
Based
on
the
available
ozone
modeling
and
other
information,
we
project
that
there
are
26
metropolitan
areas
which
will
be
unable
to
attain
and
maintain
the
NAAQS,
in
the
absence
of
additional
reductions.
These
areas
had
a
combined
population
of
over
86
million
in
1996,
and
are
distributed
across
most
regions
of
the
U.
S.
We
have
concluded
that
each
is
certain
or
very
likely
to
require
additional
reductions
to
attain
the
NAAQS.
Taken
together
and
considering
their
number,
size,
and
geographic
distribution,
these
areas
establish
the
case
that
additional
reductions
are
needed
in
order
to
attain
and
maintain
the
1­
hour
standard.
In
addition,
our
analysis
suggests
there
will
be
other
areas
that
will
have
problems
attaining
and
maintaining
compliance
with
the
one­
hour
ozone
standard
in
the
future.
There
are
12
additional
metropolitan
areas
with
a
total
1996
population
of
over
25
million
people
in
this
category.
EPA's
ozone
modeling
for
2007
predicts
exceedances
for
each
of
these
areas.
However,
for
six
of
them
local
recent
monitoring
information
is
not
indicating
nonattainment.
Given
how
close
to
nonattainment
these
areas
are,
EPA
believes
it
is
likely
that
at
least
a
significant
subset
of
this
group
of
areas
will
face
compliance
problems
by
2007
or
beyond
if
additional
actions
to
lower
air
emissions
are
not
taken.
This
belief
is
based
on
historical
experience
with
areas
that
will
undergo
economic
and
population
growth
over
time
and
that
are
in
larger
regions
that
are
also
experiencing
growth.
The
other
six
areas
in
this
group
are
nonattainment
now,
and
local
modeling
shows
them
reaching
attainment
by
2005
or
2007.
Modeling
uncertainties
and
growth
beyond
the
attainment
date
make
it
likely
that
at
least
some
of
these
areas
will
also
face
compliance
problems
if
additional
actions
to
lower
air
emissions
are
not
taken.
This
situation
further
supports
our
determination
that
additional
reductions
in
mobile
source
emissions
are
needed
for
attainment
and
maintenance.
We
would
like
to
emphasize
that
the
advantages
of
the
Tier
2/
Gasoline
Sulfur
program
will
be
enjoyed
by
the
whole
country.
There
are
important
advantages
for
approximately
30
more
metropolitan
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Register
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28
/
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February
10,
2000
/
Rules
and
Regulations
13
As
measured
by
ozone
design
value.
14
While
the
use
of
these
emissions
estimates
was
new
to
our
baseline
ozone
modeling
in
the
latest
ozone
modeling,
they
were
not
new
to
this
rulemaking,
having
already
been
used
in
calculations
of
cost­
effectiveness
in
the
draft
RIA.
We
therefore
were
able
to
consider
public
comments
on
these
estimates
prior
to
using
them
in
the
latest
ozone
modeling
areas,
with
close
to
30
million
people
residing
in
them,
whose
ozone
levels
are
now
within
10
percent
of
violating
the
1­
hour
NAAQS.
13
Most
of
these
areas
have
been
in
nonattainment
in
the
past.
We
believe
the
emission
reductions
from
the
Tier
2/
Gasoline
Sulfur
program
are
an
important
component
of
an
overall
EPA­
state
approach
to
enable
these
areas
to
continue
to
maintain
clean
air
given
expected
growth.
EPA
believes
that
the
long
term
ability
of
the
states
to
continue
to
meet
the
NAAQS
is
extremely
important.
In
the
future,
EPA
will
be
considering
additional
approaches
for
assisting
in
maintenance
of
the
NAAQS.
Also,
we
believe
that
the
Tier
2/
Gasoline
Sulfur
program
has
important
benefits
for
other
nonattainment
areas
which
our
modeling
and
local
modeling
show
to
be
on
a
path
to
come
into
attainment
in
the
next
eight
years.
For
these
areas,
the
extra
emission
reductions
from
the
program
will
take
some
of
the
uncertainty
out
of
their
plan
to
attain
the
standard
and
give
them
a
head
start
on
developing
their
plan
to
stay
in
attainment.
In
every
area
of
the
country,
the
new
standards
will
give
transportation
planning
bodies
and
industrial
development
leaders
more
options
within
the
area's
overall
emissions
constraints.
This
will
allow
local
and
state
officials
to
better
accommodate
local
needs
and
growth
opportunities.
With
these
new
standards
for
vehicles
and
gasoline,
unusually
adverse
weather
or
strong
local
economic
growth
will
be
less
likely
to
cause
ozone
levels
high
enough
to
trigger
the
planning
requirements
of
the
Clean
Air
Act.
In
addition,
by
reducing
emissions
and
ozone
levels
across
the
nation
as
a
whole,
there
will
be
less
transport
of
ozone
between
areas,
reducing
the
amount
of
ozone
entering
downwind
areas.
This
will
give
the
downwind
areas
a
better
opportunity
to
maintain
and
attain
the
NAAQS
through
local
efforts.
All
of
our
determinations
presented
here
about
the
need
for
the
Tier
2/
Gasoline
Sulfur
program
take
into
account
the
prior
NOX
reductions
we
expect
from
the
Regional
Ozone
Transport
Rule.
This
rule
is
now
in
litigation.
If
the
outcome
of
that
litigation
reduces
the
NOX
reductions
that
will
be
achieved,
the
need
for
the
Tier
2/
Gasoline
Sulfur
program
will
be
even
greater.
b.
Ozone
Modeling
Presented
in
Our
Proposal
and
Supplemental
Notices
The
ozone
modeling
we
presented
in
our
proposal
and
the
two
supplemental
notices
was
originally
conducted
as
part
of
our
development
of
the
Regional
Ozone
Transport
Rule.
The
``
revised
budget''
emission
control
scenario
we
modeled
for
the
Regional
Ozone
Transport
Rule
contained
the
right
set
of
existing
and
committed
emission
controls
for
it
to
serve
as
the
starting
point
for
making
our
determination
on
the
need
for
additional
emission
reductions.
We
added
a
new
``
control
case''
to
represent
the
effects
of
our
proposed
vehicle
and
gasoline
standards.
This
ozone
modeling
provided
predictions
of
ozone
concentrations
in
2007
across
the
eastern
U.
S.,
under
certain
meteorological
conditions.
Predictions
of
attainment
or
nonattainment
are
based
on
these
predicted
ozone
concentrations.
Two
approaches
to
making
attainment
predictions
have
been
used
or
advocated
in
the
past:
a
rollback
approach
and
an
exceedance
approach.
In
the
NPRM
of
May
13,
1999,
we
presented
predictions
of
attainment
and
nonattainment
using
a
rollback
approach.
For
the
1­
hour
standard,
we
reported
that
8
metropolitan
areas
and
two
rural
counties
were
predicted
to
be
in
nonattainment
in
2007
under
the
rollback
method.
In
the
first
supplemental
notice
of
June
30,
1999
we
presented
a
prediction
that
17
areas
would
be
nonattainment
based
on
the
exceedance
method,
and
invited
comment
on
all
aspects
of
the
modeling
and
its
interpretation.
Our
second
and
last
notice
on
October
27,
1999,
presented
predictions
of
violations
using
the
exceedance
method
for
additional
areas
which
we
had
previously
excluded
because
the
1­
hour
standard
did
not
apply
to
them.
This
was
in
anticipation
of
the
reinstatement
of
the
1­
hour
standard
to
these
areas,
which
we
proposed
on
October
25,
1999
and
expect
to
complete
very
soon.
64
FR
57524.
We
also
announced
that
we
were
conducting
another
round
of
modeling,
described
below.
See
the
Response
to
Comments
document
for
more
discussion
of
the
rollback
and
exceedance
approaches.

c.
Updated
and
Additional
Ozone
Modeling
We
have
updated
and
expanded
our
ozone
modeling.
We
updated
the
ozone
modeling
so
that
it
is
now
based
on
estimates
of
vehicle
emissions
that
reflect
the
most
recent
data
and
our
best
understanding
of
several
aspects
of
emissions
estimation.
14
We
also
changed
most
of
the
episodes
for
which
we
modeled
ozone
concentrations,
with
all
of
our
final
episode
days
coming
from
a
single
calendar
year.
By
selecting
days
from
within
a
single
year,
we
responded
to
a
comment
that
the
original
episode
periods
might
together
contain
an
atypically
high
number
of
days
favorable
to
ozone
formation
for
some
parts
of
the
country.
The
new
episodes
are
also
better
at
representing
conditions
that
lead
to
high
ozone
in
areas
along
the
Gulf
Coast,
whose
ozone­
forming
conditions
were
not
well
represented
in
the
episodes
used
for
the
original
modeling.
While
we
considered
these
improvements
necessary
and
appropriate
in
light
of
comments
and
other
information
available
to
us,
the
actual
results
of
the
two
rounds
of
modeling
with
regard
to
the
need
for
additional
reductions
have
turned
out
to
be
similar.
The
latest
round
of
modeling
provided
us
ozone
predictions
for
2007
and
2030
in
the
eastern
U.
S.,
and
for
2030
in
the
western
U.
S.
There
are
some
differences
in
specific
results,
where
and
when
the
two
models
can
be
directly
compared.
However,
the
same
conclusion
would
be
reached
from
either,
namely
that
there
is
a
broad
set
of
areas
with
predicted
ozone
concentrations
in
2007
above
0.124
ppm,
in
the
baseline
scenario
without
additional
emission
reductions.
We
have
compared
and
supplemented
our
own
ozone
modeling
with
other
modeling
studies,
either
submitted
to
us
as
comments
to
this
rulemaking,
as
state
implementation
plan
(
SIP)
revisions,
or
brought
to
our
attention
through
our
consultations
with
states
on
SIP
revisions
that
are
in
development.
The
ozone
modeling
in
the
SIP
revisions
has
the
advantage
of
using
emission
inventories
that
are
more
specific
to
the
area
being
modeled,
and
of
using
meteorological
conditions
selected
specifically
for
each
area.
Also,
the
SIP
revisions
included
other
evidence
and
analysis,
such
as
analysis
of
air
quality
and
emissions
trends,
observation
based
models
that
make
use
of
data
on
concentrations
of
ozone
precursors,
alternative
rollback
analyses,
and
information
on
the
responsiveness
of
the
air
quality
model.
For
some
areas,
we
decided
that
the
predictions
of
attainment
or
nonattainment
from
our
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/
Rules
and
Regulations
15
EPA's
modeling
presumed
that
cars
and
light
trucks
will
continue
to
meet
the
emission
levels
of
the
National
Low
Emissions
Vehicle
(
NLEV)
program
after
model
year
2003,
even
though
the
program
will
end
in
model
year
2003
or
shortly
thereafter.
Had
our
modeling
not
included
such
levels
in
its
inventory
assumptions,
trends
for
ozone
concentrations
would
have
shown
earlier
increases
in
ozone
concentrations.
16
The
date
of
the
predicted
violation
was
2007
for
most
areas,
2010
in
the
case
of
Los
Angeles,
CA,
and
2030
in
the
case
of
Portland­
Salem,
OR.
17
With
regard
to
eventual
final
action
on
the
1­
hour
attainment
demonstration
for
Washington,
DC,
the
issue
of
the
continuation
of
the
NLEV
standards
is
mooted
by
the
promulgation
of
the
Tier
2/
Gasoline
Sulfur
program.
A
portion
of
the
emission
reductions
from
this
program
will
replace
the
post­
2003
model
year
NLEV
reductions
assumed
in
the
SIP.
modeling
were
less
reliable
than
conclusions
that
could
be
drawn
from
this
additional
evidence
and
analysis.
For
example,
in
some
areas
our
episodes
did
not
capture
the
meteorological
conditions
that
have
caused
high
ozone,
while
local
modeling
did
so.

d.
Results
and
Conclusions
As
discussed
in
detail
below,
it
is
clear
that
the
NOX
and
VOC
reductions
to
be
achieved
through
the
Tier
2/
Gasoline
Sulfur
program
are
needed
to
attain
and
maintain
compliance
with
the
1
hour
ozone
NAAQS.
Although
the
general
pattern
observed
in
our
modeling
indicates
improvements
in
the
near
term,
growth
in
overall
emissions
will
lead
to
worsening
of
air
quality
over
the
long
term.
Based
on
our
ozone
modeling,
we
have
analyzed
ozone
predictions
for
52
metropolitan
areas
for
1996,
2007,
and
2030.
In
addition,
we
reviewed
ozone
attainment
modeling
and
other
evidence
covering
15
of
these
areas,
from
SIP
submittals
or
from
modeling
underway
to
support
SIP
revisions.
This
local
modeling
addressed
only
the
current
or
requested
attainment
date
in
each
area.
We
then
made
attainment
and
nonattainment
predictions
from
this
information.
The
general
pattern
we
observed
with
the
baseline
scenario,
i.
e.,
without
new
emission
reductions,
is
a
broad
reduction
between
1996
and
2007
in
the
geographic
extent
of
ozone
concentrations
above
the
NAAQS,
and
in
the
frequency
and
severity
of
exceedances.
This
is
consistent
with
the
national
emissions
inventory
trend
between
these
two
years.
At
the
same
time,
we
also
found
that
peak
ozone
concentrations
and
the
frequency
of
exceedances
in
2030
were
generally
somewhat
higher
than
in
2007
for
most
areas
analyzed.
This
too
is
consistent
with
our
analysis
of
emission
inventory
trends,
which
shows
that
the
total
NOX
inventory
from
all
sources
will
decline
from
2007
to
about
2015
and
then
begin
to
increase
due
to
growth
in
the
activity
of
emission
sources.
In
2030,
our
analysis
predicts
that
NOX
emissions
from
all
sources
will
be
about
one
percent
higher
than
in
2007.
While
we
did
not
model
ozone
concentrations
for
years
between
2007
and
2030,
we
expect
that
they
would
track
the
national
emissions
trend
by
showing
a
period
of
improvement
after
2007
and
then
deterioration,
although
individual
areas
will
vary
due
to
local
source
mix
and
growth
rates.
15
Within
this
general
pattern
of
ozone
attainment
changes
between
1996
and
2030,
we
have
determined
that
26
metropolitan
areas
are
certain
or
highly
likely
to
need
additional
reductions
to
attain
and
maintain
the
1­
hour
ozone
NAAQS.
These
26
areas
are
those
that
have
current
violations
of
the
1­
hour
ozone
NAAQS
and
are
predicted
by
the
best
ozone
modeling
we
have
available
to
still
be
in
violation
without
a
new
federal
vehicle
program
in
2007.16
Based
on
the
general
trends
described
above,
without
further
emissions
reductions
many
of
these
areas
may
also
have
violations
continuously
throughout
the
period
from
2007
to
2030,
while
others
may
briefly
attain
and
then
return
to
nonattainment
on
or
before
2030.
These
26
metropolitan
areas
are
listed
in
Table
III.
B
 
1,
along
with
their
1996
population
which
totals
over
86
million.
The
sizes
of
these
areas
and
their
geographical
distribution
strongly
support
an
overall
need
for
additional
reductions
in
order
to
attain
and
maintain
under
section
202(
i).
Because
ozone
concentration
patterns
causing
violations
of
the
1­
hour
NAAQS
are
well
established
to
endanger
public
health
or
welfare,
this
determination
also
supports
our
actions
today
under
the
general
authority
of
sections
202(
a)(
1),
202(
a)(
3),
and
202(
b).
As
indicated
above,
in
reaching
this
conclusion
about
these
26
areas,
we
examined
local
ozone
modeling
in
SIP
submittals.
These
local
analyses
are
considered
to
be
more
extensive
than
our
own
modeling
for
estimating
whether
there
would
be
NAAQS
nonattainment
without
further
emission
reductions,
when
interpreted
by
a
weight
of
evidence
method
which
meets
our
guidance
for
such
modeling.
One
of
the
areas
which
submitted
a
SIP
revision
was
a
special
case.
We
have
recently
proposed
to
approve
the
1­
hour
ozone
attainment
demonstration
for
the
nonattainment
area
of
Washington,
D.
C.
(
but
not
Baltimore).
We
have
nevertheless
included
this
area
on
the
list
of
26
that
are
certain
or
highly
likely
to
require
further
reductions
to
attain
and
maintain,
because
its
SIP
attainment
demonstration
assumed
emission
reductions
from
vehicles
meeting
the
National
Low
Emissions
Vehicle
(
NLEV)
standards.
However,
by
its
own
terms,
the
NLEV
standards
would
not
extend
beyond
the
2003
model
year
if
we
did
not
promulgate
Tier
2
vehicle
standards
at
least
as
stringent
as
the
NLEV
standards.
See
40
CFR
86.1701
 
99(
c).
Thus,
the
emission
reductions
relied
upon
from
2004
and
later
model
year
NLEV
vehicles
are
themselves
``
further
reductions''
for
the
purposes
of
CAA
section
202(
i).
17
The
local
modeling
indicating
attainment
with
these
reductions
is
therefore
strong
evidence
that
further
reductions
are
needed
past
2003,
beyond
those
provided
by
the
Tier
1
program.
Based
on
this,
and
on
the
fact
that
our
own
ozone
modeling
showed
the
Washington,
DC
area
to
violate
the
NAAQS
in
2007
even
with
full
NLEV
emission
reductions,
we
have
concluded
that
it
should
be
included
with
areas
that
do
require
further
reductions
to
attain
and
maintain
the
1­
hour
ozone
NAAQS.
The
1­
hour
ozone
NAAQS
presently
does
not
apply
in
12
of
the
26
areas
listed
in
Table
III.
B
 
1,
but
we
have
proposed
to
re­
instate
it
and
expect
to
complete
that
action
shortly.
These
areas
are
indicated
in
the
table.
Our
decision
to
include
these
areas
on
this
list
is
based
on
the
contingency
that
we
will
re­
instate
the
1­
hour
standard
in
these
areas.
However,
even
if
we
considered
only
the
14
areas
where
the
1­
hour
standard
applies
as
of
the
signature
date
of
this
notice,
we
have
concluded
that
our
determination
would
be
the
same.

TABLE
III.
B
 
1.
 
TWENTY­
SIX
METROPOLITAN
AREAS
WHICH
ARE
CERTAIN
OR
HIGHLY
LIKELY
TO
REQUIRE
ADDITIONAL
EMISSION
REDUCTIONS
IN
ORDER
TO
ATTAIN
AND
MAINTAIN
THE
1­
HOUR
OZONE
NAAQS
Metropolitan
area
1996
Population
(
millions)

Atlanta,
GA
MSA
......................
3.5
Barnstable­
Yarmouth,
MA
MSAa
....................................
0.2
Baton
Rouge,
LA
MSA
.............
0.6
Beaumont­
Port
Arthur,
TX
MSA
0.4
Birmingham,
AL
MSA
...............
0.9
Boston­
Worcester­
Lawrence,
MA
 
NH
 
ME
 
CT
CMSAa
......
5.6
Charlotte­
Gastonia­
Rock
Hill,
NC
 
SC
MSA
a
.......................
1.3
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10,
2000
/
Rules
and
Regulations
18
The
SIP
revisions
for
Chicago
and
Milwaukee
demonstrated
that
these
two
areas
as
well
as
Benton
Harbor
and
Grand
Rapids
areas
in
Michigan
(
which
are
maintenance
areas
but
have
experienced
ozone
NAAQS
violations
recently)
would
not
experience
NAAQS
violations
in
2007,
with
a
strategy
that
relied
only
on
Tier
1
vehicle
emission
standards.
We
have
also
recently
proposed
to
approve
the
1­
hour
attainment
demonstration
for
Greater
Connecticut,
covering
the
Hartford
and
New
London
areas,
which
assumed
full
NLEV
emission
reductions.
However,
Connecticut
is
committed
in
its
SIP
to
adopt
California
vehicle
standards
if
NLEV
does
end
with
the
2003
model
year
if
a
more
stringent
federal
program
is
not
promulgated.
The
California
standards
are
more
stringent
than
NLEV.
The
case
of
one
additional
area
whose
attainment
demonstration
we
recently
proposed
to
approve,
Western
Massachusetts
(
Springfield),
should
be
explained
here
to
avoid
possible
confusion.
Our
own
ozone
modeling
predicted
that
Springfield
would
attain
the
NAAQS
in
2007.
Massachusetts
has
adopted
the
California
vehicle
emission
standards,
so
there
is
no
issue
of
the
continuation
of
the
NLEV
standards.
TABLE
III.
B
 
1.
 
TWENTY­
SIX
METROPOLITAN
AREAS
WHICH
ARE
CERTAIN
OR
HIGHLY
LIKELY
TO
REQUIRE
ADDITIONAL
EMISSION
REDUCTIONS
IN
ORDER
TO
ATTAIN
AND
MAINTAIN
THE
1­
HOUR
OZONE
NAAQS
 
Continued
Metropolitan
area
1996
Population
(
millions)

Cincinnati­
Hamilton,
OH
 
KY
 
IN
CMSA
....................................
1.9
Dallas­
Fort
Worth,
TX
CMSA
...
4.6
Houma,
LA
MSA
a
....................
0.2
Houston­
Galveston­
Brazoria,
TX
CMSA
..............................
4.3
Huntington­
Ashland,
WV
 
KY
 
OH
MSAa
..............................
0.3
Indianapolis,
IN
MSA
a
..............
1.5
Los
Angeles­
Riverside­
San
Bernardino
CA
CMSA
...........
15.5
Louisville,
KY
 
IN
MSA
.............
1.0
Macon,
GA
MSA
a
....................
0.3
Memphis,
TN
 
AR
 
MS
MSA
a
...
1.1
Nashville,
TN
MSA
a
.................
1.1
New
York­
Northern
New
Jersey
Long
Island,
NY
 
NJ
 
CT
 
PA
CMSA
.......................
19.9
Philadelphia­
Wilmington­
Atlantic
City,
PA
 
NJ
 
DE
 
MD
CMSA
....................................
6.0
Pittsburgh,
PA
MSA
..................
2.4
Portland­
Salem,
OR
 
WA
CMSAa
..................................
2.1
Providence­
Fall
River­
Warwick,
RI
 
MA
MSA
a
........................
1.1
Richmond­
Petersburg,
VA
MSAa
....................................
0.9
St.
Louis,
MO
 
IL
MSA
..............
2.5
Washington­
Baltimore,
DC
 
MD
 
VA
 
WV
CMSA
..............
7.2
Total
Population
.............
86.3
Notes:
a
The
1­
hour
ozone
NAAQS
does
not
currently
apply,
but
we
have
proposed
and
expect
to
re­
instate
it
shortly.

There
are
12
additional
metropolitan
areas,
with
another
25.3
million
people
in
1996,
for
which
the
available
ozone
modeling
suggests
significant
risk
of
failing
to
attain
and
maintain
the
1­
hour
ozone
NAAQS
without
additional
emission
reductions.
Table
III.
B
 
2
lists
the
areas
we
put
in
this
second
category.
Our
own
ozone
modeling
predicted
these
12
areas
to
need
further
reductions
to
avoid
violations
in
2007.
For
six
of
these
areas,
recent
air
quality
monitoring
data
indicate
violation,
but
we
have
reviewed
local
ozone
modeling
and
other
evidence
indicating
attainment
in
2007.18
Based
on
this
evidence,
we
have
kept
these
areas
separate
from
the
previous
set
of
26
areas
which
we
consider
certain
or
highly
likely
to
need
additional
reductions.
However,
we
still
consider
there
to
be
a
significant
risk
of
failure
to
attain
and
maintain
in
these
six
areas
because
this
local
modeling
has
inherent
uncertainties,
as
all
ozone
modeling
does.
Moreover,
the
local
modeling
did
not
examine
the
period
after
initial
attainment.
For
the
other
six
of
the
12
areas,
the
air
quality
monitoring
data
shows
current
attainment
but
with
less
than
a
10
percent
margin
below
the
NAAQS.
This
suggests
these
areas
may
remain
without
violations
for
some
time,
but
we
believe
there
is
still
a
moderate
risk
of
future
violation
of
the
NAAQS
because
meteorological
conditions
may
be
more
severe
in
the
future.
It
is
highly
likely
that
at
least
some
of
these
12
areas
will
violate
the
NAAQS
without
additional
reductions,
and
it
is
a
distinct
possibility
that
many
of
them
will
do
so.
We
consider
the
situation
in
these
areas
to
support
our
determination
that,
overall,
additional
reductions
are
needed
for
attainment
and
maintenance.
However,
we
reiterate
that
our
predictions
for
the
26
areas
listed
in
Table
III.
B
 
1,
and
even
our
predictions
for
only
the
14
of
those
26
for
which
the
1­
hour
standard
now
applies,
are
a
sufficient
basis
for
our
determination
of
an
overall
need
for
additional
reductions
and
for
our
actions
today.

TABLE
III.
B
 
2.
 
TWELVE
METROPOLITAN
AREAS
WITH
MODERATE
TO
SIGNIFICANT
RISK
OF
FAILING
TO
ATTAIN
AND
MAINTAIN
THE
1­
HOUR
OZONE
NAAQS
WITHOUT
ADDITIONAL
EMISSION
REDUCTIONS
Metropolitan
area
1996
Population
(
millions)

Benton
Harbor,
MI
MSA
a
.........
0.2
Biloxi­
Gulfport­
Pascagoula,
MS
MSAa
....................................
0.3
TABLE
III.
B
 
2.
 
TWELVE
METROPOLITAN
AREAS
WITH
MODERATE
TO
SIGNIFICANT
RISK
OF
FAILING
TO
ATTAIN
AND
MAINTAIN
THE
1­
HOUR
OZONE
NAAQS
WITHOUT
ADDITIONAL
EMISSION
REDUCTIONS
 
Continued
Metropolitan
area
1996
Population
(
millions)

Chicago­
Gary­
Kenosha,
IL
 
IN
 
WI
CMSA
..............................
8.6
Cleveland­
Akron,
OH
CMSA
a
..
2.9
Detroit­
Ann
Arbor­
Flint,
MI
CMSAa
..................................
5.3
Grand
Rapids­
Muskegon­
Holland
MI
MSA
a
......................
1.0
Hartford,
CT
MSA
.....................
1.1
Milwaukee­
Racine,
WI
CMSA
..
1.6
New
London­
Norwich,
CT
 
RI
MSAa
....................................
1.3
New
Orleans,
LA
MSA
a
...........
0.3
Pensacola,
FL
MSA
a
...............
0.4
Tampa,
FL
MSA
a
.....................
2.2
Total
Population
.............
25.3
Notes:
a
The
1­
hour
ozone
NAAQS
does
not
currently
apply,
but
we
have
proposed
and
expect
to
re­
instate
it
shortly.

e.
Issues
and
Comments
Addressed
We
received
detailed
comments
from
the
automobile
industry
related
to
ozone
modeling
and
the
need
for
additional
emission
reductions
in
order
to
attain
and
maintain.
These
were
of
three
types.
Accuracy
of
modeling
ozone
concentrations.
 
The
automobile
industry
commenters
pointed
out
that
in
the
modeling
presented
with
our
proposal,
the
ozone
model
and
exceedance
predicted
violations
of
the
NAAQS
in
1995
in
areas
where
monitoring
data
indicated
no
violations.
They
cited
these
cases
as
examples
of
model
inaccuracy.
We
have
made
improvements
to
our
emissions
estimates,
our
episodes,
and
other
aspects
of
the
modeling
system.
These
changes
have
improved
the
accuracy
of
the
predicted
ozone
concentrations.
Also,
as
stated
above,
our
list
of
26
areas
that
support
our
finding
that
additional
reductions
are
needed
does
not
include
any
areas
where
recent
monitoring
data
shows
no
violations.
The
final
RIA
addresses
issues
of
model
accuracy
in
more
depth.
As
explained
in
the
final
RIA,
our
very
latest
estimates
of
car
and
light
truck
emissions
without
the
benefits
of
our
new
standards
are
actually
somewhat
higher
than
the
estimates
used
in
the
final
round
of
ozone
modeling,
because
the
most
recent
data
indicate
even
more
serious
adverse
emissions
effects
from
sulfur
in
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Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
19
We
did
not
include
the
Los
Angeles­
Riverside­
San
Bernardino
area
in
this
analysis,
since
it
was
not
covered
by
our
2007
modeling,
but
we
do
believe
it
is
rightly
part
of
the
basis
for
a
determination
on
the
need
for
additional
reductions.
20
As
explained
in
the
final
RIA,
our
very
lastest
estimates
of
car
and
light
truck
emissions
without
the
benefits
of
our
new
standards
are
actually
somewhat
higher
than
the
estimates
used
in
the
final
round
of
ozone
modeling,
because
more
recent
data
indicate
even
more
serious
adverse
emissions
effects
from
sulfur
in
gasoline.
Thus,
we
think
our
predictions
of
ozone
nonattainment
may
be
conservative.
gasoline.
Thus,
we
think
our
predictions
of
ozone
nonattainment
using
emission
estimates
prepared
before
this
most
recent
data
on
sulfur
was
considered,
may
be
conservative.
This
topic
is
discussed
in
more
detail
in
section
III.
B.
3.
Prediction
of
attainment/
nonattainment.
 
For
most
areas,
we
predicted
2007
or
2030
attainment
or
nonattainment
based
on
the
exceedance
method.
The
exceedance
method
predicts
an
area
to
be
in
attainment
only
if
there
are
no
predicted
exceedances
of
the
NAAQS
during
any
episode
day.
However,
for
the
areas
for
which
we
have
received
1­
hour
attainment
demonstrations
in
SIP
revisions,
our
predictions
were
based
on
a
larger
and
more
robust
set
of
data.
When
a
state's
modeling
shows
an
exceedance
that
would
otherwise
indicate
nonattainment,
we
allow
the
state
to
submit
a
variety
of
other
evidence
and
analysis,
such
as
locality
specific
meteorological
conditions,
analysis
of
air
quality
and
emissions
trends,
observational
based
models
that
make
use
of
data
on
concentrations
of
ozone
precursors,
a
rollback
analysis,
and
information
on
the
responsiveness
of
the
air
quality
model.
We
then
make
a
weight­
of­
evidence
determination
of
attainment
or
nonattainment
based
on
consideration
of
all
this
local
evidence.
We
did
this
in
forming
the
set
of
26
areas
we
consider
certain
or
highly
likely
to
need
additional
reductions
to
attain
or
maintain,
in
some
cases
concluding
that
attainment
was
demonstrated
and
in
others
that
it
was
not.
The
auto
industry
commenters
recommended
the
use
of
rollback
as
the
single
method
for
making
attainment
and
nonattainment
predictions
from
predicted
ozone
concentrations.
They
stated
that
the
rollback
method
would
be
more
consistent
than
the
exceedance
method
with
the
NAAQS's
allowance
of
three
exceedances
in
a
three
year
period.
They
also
believed
that
the
rollback
method
would
compensate
for
what
they
considered
to
be
model
over
predictions
of
ozone
concentrations.
We
believe
that
the
rollback
method
is
not
appropriate
for
use
as
the
sole,
or
even
a
primary,
test
of
1­
hour
ozone
attainment
or
nonattainment.
A
rollback
analysis
may
overlook
violations
that
occur
away
from
ozone
monitors,
and
it
may
inappropriately
project
the
effect
of
a
recent
period
of
favorable
weather
into
the
prediction
of
future
attainment.
In
determining
the
attainment
and
maintenance
prospects
of
numerous
areas,
as
here,
it
is
not
possible
to
assemble
and
consider
the
full
set
of
local
evidence
that
should
accompany
any
consideration
of
a
rollback
analysis.
In
such
a
situation,
we
believe
that
the
exceedance
method
is
the
appropriate
choice.
A
fuller
explanation
of
our
reasons
for
considering
the
exceedance
method
more
appropriate
than
rollback
is
given
in
our
Response
to
Comments
document.
We
have
not
completely
excluded
the
rollback
approach
from
the
determinations
in
this
rulemaking.
We
have
considered
it
for
those
areas
for
which
we
had
enough
information
to
allow
us
to
consider
it
in
its
proper
context,
i.
e.,
for
those
areas
covered
by
recent
1­
hour
SIP
submissions.
Of
these
areas,
we
concluded
that
some
will
not
attain
without
additional
reductions
and
some
will.
While
we
disagree
with
the
use
of
the
rollback
method,
we
have
conducted
a
hypothetical
analysis
of
2007
attainment
in
all
areas
based
only
on
our
own
ozone
modeling,
applying
the
rollback
method
recommended
by
the
commenters.
We
calculated
in
this
analysis
that
15
metropolitan
areas
and
three
other
counties
with
nearly
56
million
in
population
in
1996
would
violate
the
NAAQS
in
2007.
Moreover,
these
15
metro
areas
are
geographically
spread
out
19.
We
believe
that
this
result
using
the
rollback
method
does
not
fully
capture
the
likely
nonattainment
that
would
exist
in
2007
in
the
absence
of
additional
emission
reductions.
However,
even
if
we
were
to
consider
the
use
of
rollback
valid,
we
consider
this
set
of
areas
to
also
be
an
adequate
basis
for
making
the
same
determinations
we
have
made
based
on
the
more
appropriate
exceedance­
based
analysis.
The
details
of
our
hypothetical
analysis
using
the
rollback
method
are
given
in
the
final
RIA
and
the
technical
support
document
for
our
ozone
modeling
analyses.
Ozone
modeling
and
predictions.
 
Members
of
the
automobile
manufacturing
industry
submitted
two
modeling
studies:
(
1)
a
repetition
of
our
first
round
of
modeling
of
the
37­
state
eastern
U.
S.
domain
but
with
their
recommendations
regarding
estimates
of
motor
vehicle
emissions
in
2007
and
with
the
rollback
method
used
to
predict
2007
nonattainment,
and
(
2)
finer
grid
modeling
for
three
smaller
domains,
also
with
their
recommended
estimates
of
emissions
and
with
nonattainment
predicted
using
a
rollback
method.
Both
modeling
efforts
showed
less
widespread
nonattainment
than
we
have
determined
and
described
here.
Taken
together,
these
studies
predicted
2007
violations
by
the
rollback
method
in
or
downwind
of
New
York
City,
Chicago,
Milwaukee,
western
Michigan,
Baton­
Rouge,
and
Houston.
The
main
difference
between
the
automobile
industry's
ozone
modeling
and
ours
is
in
the
emission
estimates.
We
have
reviewed
the
emissions
estimates
used
in
the
industry
studies.
We
concluded
that
the
industry's
emissions
estimates
employ
inappropriate
analytical
steps
in
the
calculation.
Among
the
problems
are
that
the
adjustments
for
the
benefits
of
inspection
and
maintenance
programs
were
not
consistent
with
the
base
estimate
of
in­
use
emissions,
and
the
sales
trend
towards
light
trucks
and
SUVs
was
not
properly
captured.
Also,
as
stated,
we
disagree
with
the
use
of
the
rollback
approach
as
the
sole
test
of
attainment.
As
a
consequence,
we
conclude
that
the
industry's
ozone
modeling
is
not
an
appropriate
basis
for
making
predictions
of
future
attainment
or
nonattainment.
The
final
RIA
explains
in
detail
how
we
have
addressed
these
and
other
emissions
modeling
issues
in
a
manner
which
is
more
technically
consistent
and
correct,
20
and
how
we
have
considered
the
results
from
rollback
analyses
but
only
as
part
of
broad
weight­
of­
evidence
determinations
for
areas
for
which
this
was
possible
at
this
time.
Our
point­
bypoint
review
is
given
in
our
Response
to
Comments
document.
The
material
on
ozone
modeling
submitted
by
the
commenters,
having
been
prepared
by
the
rollback
method,
was
difficult
to
re­
interpret
according
to
our
preferred
exceedance
method.
However,
it
appears
that
if
this
modeling
were
interpreted
by
the
exceedance
method,
it
would
indicate
2007
nonattainment
in
Baltimore
and
Washington,
D.
C.
in
addition
to
New
York
City,
Chicago,
Milwaukee,
western
Michigan,
Baton­
Rouge,
and
Houston.
Overall,
we
conclude
that
the
material
submitted
by
the
automobile
industry
does
not
contradict
the
facts
we
have
used
to
make
our
determinations
or
the
actions
we
are
taking
today.

f.
8­
Hour
Ozone
The
predictions
of
ozone
concentrations
from
the
ozone
modeling
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February
10,
2000
/
Rules
and
Regulations
21
Emission
Trend
Report,
1997.
22
The
auto
manufacturer
and
northeastern
state
commitments
to
the
NLEV
program
are
scheduled
to
end
in
2004
without
further
EPA
action
on
Tier
2
standards,
although
continued
voluntary
compliance
by
automobile
manufacturers
and
the
affected
states
is
a
possibility.
Our
analysis
of
emission
trends
and
the
emission
benefits
expected
from
today's
action
assumes
for
the
base
scenario
a
continuation
of
the
NLEV
program
past
2004.
If
the
NLEV
program
does
not
continue
beyond
2004,
the
reductions
resulting
from
Tier
2
would
be
larger
than
what
is
shown
here.
It
also
includes
all
other
control
measures
assumed
to
be
implemented
in
local
areas,
such
as
reformulated
gasoline
in
all
required
and
opt­
in
areas
and
enhanced
I/
M
where
required.
23
Also,
if
the
NLEV
program
ends
in
model
year
2004
or
shortly
thereafter,
as
scheduled,
this
trend
would
reverse
more
quickly
in
all
areas.
can
be
used
to
make
predictions
of
attainment
or
nonattainment
with
the
8­
hour
ozone
NAAQS.
In
our
draft
RIA,
we
estimated
that
28
metropolitan
areas
and
4
rural
counties
with
a
combined
population
of
80
million
people
would
violate
the
8­
hour
ozone
NAAQS
in
2007
without
additional
emission
reductions.
Commenters
noted
differences
between
exact
rollback
procedure
we
had
used
in
this
projection
and
the
steps
specified
in
recent
draft
guidance
we
have
issued
on
8­
hour
ozone
modeling.
We
agree
with
the
commenters
that
the
steps
specified
in
our
guidance
are
the
correct
ones
to
use.
However,
since
we
are
not
basing
our
promulgation
of
the
Tier
2/
Gasoline
Sulfur
Program
on
the
8­
hour
ozone
NAAQS,
we
have
not
made
any
new
predictions
of
8­
hour
ozone
nonattainment
areas
in
2007.
Based
on
our
findings
in
previous
analyses
of
this
sort,
however,
we
believe
that
in
the
absence
of
the
Tier
2/
Gasoline
Sulfur
program
there
would
be
8­
hour
nonattainment
areas
that
are
not
also
areas
which
we
have
concluded
are
certain
or
highly
likely
to
violate
the
1­
hour
NAAQS.
If
we
considered
it
appropriate
to
proceed
with
implementation
of
the
8­
hour
standard,
these
areas
would
support
our
determination
on
the
need
for
emission
reductions,
and
the
appropriateness
and
necessity
of
the
vehicle
and
gasoline
standards
we
are
establishing.

3.
Cars
and
Light­
duty
Trucks
Are
a
Big
Part
of
the
NOX
and
VOC
Emissions,
and
Today's
Action
Will
Reduce
This
Contribution
Substantially
Emissions
of
VOCs
and
NOX
come
from
a
variety
of
sources,
both
natural
and
man­
made.
Natural
sources,
including
emissions
that
have
been
traced
to
vegetation,
account
for
a
substantial
portion
of
total
VOC
emissions
in
rural
areas.
The
remainder
of
this
section
focuses
on
the
contribution
of
motor
vehicles
to
emissions
from
human
sources.
Manmade
VOCs
are
released
as
byproducts
of
incomplete
combustion
as
well
as
evaporation
of
solvents
and
fuels.
For
gasoline­
fueled
cars
and
light
trucks,
approximately
half
of
the
VOC
emissions
come
from
the
vehicle
exhaust
and
half
come
from
the
evaporation
of
gasoline
from
the
fuel
system.
NOX
emissions
are
dominated
by
man­
made
sources,
most
notably
high­
temperature
combustion
processes
such
as
those
occurring
in
automobiles
and
power
plants.
Emissions
from
cars
and
light
trucks
are
currently,
and
will
remain,
a
major
part
of
nationwide
VOC
and
NOX
emissions.
In
1996,
cars
and
light
trucks
comprised
25
percent
of
the
VOC
emissions
and
21
percent
of
the
NOX
emissions
from
human
sources
in
the
U.
S.
21
The
contribution
in
metropolitan
areas
was
generally
larger.
We
have
made
significant
improvements
in
the
analysis
used
to
estimate
the
emission
inventory
impacts
of
this
action,
including
improving
the
emission
factor
modeling,
using
more
detailed
local
modeling
input,
and
using
a
more
conservative
(
lower)
estimate
of
VMT
growth.
These
changes
are
detailed
in
the
Regulatory
Impact
Analysis
for
this
rule.
The
following
discussion
is
based
on
this
improved
analysis.
In
addition
to
the
improvements
which
are
incorporated
in
this
analysis,
we
also
made
further
improvements
in
the
emission
factor
modeling
after
analyzing
comments
which
we
did
not
have
time
to
incorporate
into
the
detailed
inventory
analysis
described
here.
The
most
notable
change
is
related
to
data
which
indicates
that
NOX
and
NMOG
emissions
are
even
more
sensitive
to
gasoline
sulfur
than
previously
thought.
This
change
and
others
are
described
in
detail
in
the
Response
to
Comments.
Our
early
analysis
of
these
changes
indicates
that
incorporating
them
into
this
analysis
would
provide
further
support
for
this
action
because
these
changes
result
in
both
increases
in
the
baseline
emissions
without
Tier
2
and
in
the
reductions
that
would
result
from
Tier
2.
For
example,
in
the
detailed
inventory
analysis
we
report
below,
we
project
nationwide
Tier
2/
Gasoline
Sulfur
control
NOX
reductions
from
cars
and
light
trucks
of
856,471
tons
per
year
in
2007.
Using
the
version
of
the
emission
factor
model
that
incorporates
these
additional
changes
increases
the
estimated
Tier
2
reductions
to
approximately
1.0
million
tons
per
year
in
2007
(
estimated
baseline
emissions
without
Tier
2
increase
from
3.1
million
tons
per
year
in
2007
to
approximately
3.7
million
tons
per
year
using
the
version
of
the
emission
factor
model
that
incorporates
these
additional
changes).
Therefore,
the
estimates
of
the
inventory
reductions
given
here
(
and
used
as
the
basis
for
the
ozone
air
quality
analysis)
are
clearly
conservative.
Motor
vehicle
emission
controls
have
led
to
significant
improvements
in
emissions
released
to
the
air
(
the
``
emission
inventory'')
and
will
continue
to
do
so
in
the
near
term
22.
In
the
current
analysis,
we
continue
to
find
that
total
emissions
from
the
car
and
light
truck
fleet
would
continue
to
decline
for
a
period,
even
if
we
were
not
establishing
the
Tier
2/
Gasoline
Sulfur
program.
This
decline
would
result
from
the
introduction
of
cleaner
reformulated
gasoline
in
2000,
the
introduction
of
National
Low
Emission
Vehicles
(
NLEVs)
and
vehicles
complying
with
the
Enhanced
Evaporative
Test
Procedure
and
Supplemental
Federal
Test
Procedures,
and
the
continuing
removal
of
older,
higher­
emitting
vehicles
from
the
in­
use
vehicle
fleet.
On
a
per
mile
basis,
VOC
and
NOX
emissions
from
cars
and
light
trucks
combined
would
have
continued
to
decline
well
beyond
2015,
reflecting
the
continuing
effect
of
fleet
turnover
under
existing
emission
control
programs.
However,
projected
increases
in
vehicle
miles
traveled
(
VMT)
will
cause
total
emissions
from
these
vehicles
to
increase.
With
this
increase
in
travel
and
without
additional
controls,
we
project
that
combined
NOX
and
VOC
emissions
for
cars
and
light
trucks
without
the
Tier
2/
Gasoline
Sulfur
program
would
increase
starting
in
2013
and
2016,
respectively,
so
that
by
2030
they
would
return
to
levels
above
or
nearly
the
same
as
they
will
be
in
2000.
In
cities
experiencing
rapid
growth,
such
as
Charlotte,
North
Carolina,
the
near­
term
trend
towards
lower
emissions
tends
to
reverse
sooner.
23
With
additional
improvements
in
the
modeling
done
in
Response
to
Comments,
we
now
estimate
that
without
the
Tier
2/
Gasoline
Sulfur
program,
there
will
be
a
constant
increase
in
these
emission
over
time.
Figure
III
 
1
illustrates
this
expected
trend
in
car
and
light
truck
NOX
emissions
in
the
absence
of
today's
action.
The
figure
also
allows
the
contribution
of
cars
to
be
distinguished
from
that
of
light
trucks.
The
figure
clearly
shows
the
impact
of
steady
growth
in
light
truck
sales
and
travel
on
overall
light­
duty
NOX
emissions;
the
decrease
in
overall
light­
duty
emission
levels
is
due
solely
to
reductions
in
LDV
emissions.
In
2000,
we
project
that
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Rules
and
Regulations
24
Today's
action
for
both
vehicles
and
fuels
will
apply
in
49
states
and
the
U.
S.
territories,
excluding
only
California.
There
will
also
be
emissions
reductions
in
California
from
vehicles
that
relocate
or
visit
from
other
states.
However,
much
of
the
emissions
inventory
analysis
for
this
action
was
made
for
a
47­
state
region
which
excludes
California,
Alasks,
and
Hawaii.
The
latter
two
states
were
not
included
in
the
scope
of
ozone,
PM
and
economic
benefits
modeling.
trucks
will
produce
about
50
percent
of
combined
car
and
light
truck
NOX
emissions.
We
project
that
truck
emissions
would
actually
increase
after
2000,
and
over
the
next
30
years,
trucks
would
grow
to
dominate
light­
duty
NOX
emissions.
By
2010,
we
project
trucks
would
make
up
two­
thirds
of
light­
duty
NOX
emissions;
by
2020,
nearly
threequarters
of
all
light­
duty
NOX
emissions
would
be
produced
by
trucks.

BILLING
CODE
6560
 
50
 
P
BILLING
CODE
6560
 
50
 
C
Today's
action
will
significantly
decrease
NOX
and
VOC
emissions
from
cars
and
light
trucks,
and
will
delay
the
date
by
which
NOX
and
VOC
emissions
will
begin
to
increase
due
to
continued
VMT
growth.
With
Tier
2/
Gasoline
Sulfur
control,
light­
duty
vehicle
NOX
and
VOC
emissions
are
projected
to
continue
their
downward
trend
past
2020.
Table
III.
B
 
3
shows
the
annual
tons
of
NOX
that
we
project
will
be
reduced
by
today's
action.
24
These
projections
include
the
benefits
of
low
sulfur
fuel
and
the
introduction
of
Tier
2
car
and
light
truck
standards.

TABLE
III.
B
 
3.
 
NOX
EMISSIONS
FROM
CARS
AND
LIGHT
TRUCKS
AS
PERCENT
OF
TOTAL
EMISSIONS,
AND
REDUCTIONS
DUE
TO
TIER
2/
GASOLINE
SULFUR
CONTROL
(
TONS
PER
YEAR)
a
Year
Light­
duty
tons
 
without
tier
2
Light­
duty
percent
of
total
without
tier
2
Light­
duty
tons
reduced
by
tier
2
c,
c
2007
.............................................................................................................................................
3,095,698
16
856,471
2010
.............................................................................................................................................
2,962,093
16
1,235,882
2015
.............................................................................................................................................
2,968,707
17
1,816,767
2020
.............................................................................................................................................
3,160,155
17
2,220,210
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/
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10,
2000
/
Rules
and
Regulations
25
California
Air
Resources
Board,
Executive
Order
G
 
99
 
037,
May
20,
1999,
Attachment
A,
6
 
7,
10.
These
NOX
reductions
represent
a
small
fraction
of
the
emission
reductions
needed
in
the
South
Coast
to
attain
the
NAAQS.
TABLE
III.
B
 
3.
 
NOX
EMISSIONS
FROM
CARS
AND
LIGHT
TRUCKS
AS
PERCENT
OF
TOTAL
EMISSIONS,
AND
REDUCTIONS
DUE
TO
TIER
2/
GASOLINE
SULFUR
CONTROL
(
TONS
PER
YEAR)
a
 
Continued
Year
Light­
duty
tons
 
without
tier
2
Light­
duty
percent
of
total
without
tier
2
Light­
duty
tons
reduced
by
tier
2
b,
c
2030
.............................................................................................................................................
3,704,747
19
2,795,551
Notes:
a
Estimates
exclude
California,
Alaska,
and
Hawaii,
although
reductions
will
occur
in
all
three.
b
Does
not
include
emission
reductions
from
heavy­
duty
gasoline
vehicles.
c
These
numbers
represent
a
conservative
estimate
of
the
benefits
of
the
Tier
2/
Sulfur
program.
Based
on
the
updated
emission
factor
model
developed
in
response
to
comments,
the
program
will
result
in
significantly
larger
benefits.
For
example,
our
new
model
projects
NOX
reductions
of
1,100,000
tons
in
2007.

The
lower
sulfur
levels
in
today's
action
will
produce
large
emission
reductions
on
pre­
Tier
2
vehicles
as
soon
as
low­
sulfur
gasoline
is
introduced,
in
addition
to
enabling
Tier
2
vehicles
to
achieve
lower
emission
levels.
Among
the
pre­
Tier
2
vehicles,
the
largest
per
vehicle
emission
reductions
from
lower
sulfur
in
gasoline
will
be
achieved
from
vehicles
which
automobile
manufacturers
will
have
sold
under
the
voluntary
National
Low
Emission
Vehicle
program.
These
vehicles
are
capable
of
substantially
lower
emissions
when
operated
on
low
sulfur
fuel.
Older
technology
vehicles
experience
a
smaller
but
significant
effect.
In
2007,
when
all
gasoline
will
meet
the
new
sulfur
limit
and
when
large
numbers
of
2004
and
newer
vehicles
meeting
these
standards
will
be
in
use,
the
combined
NOX
emission
reduction
from
vehicles
and
fuels
will
be
over
850,000
tons
per
year.
After
2007,
emissions
will
be
reduced
further
as
the
fleet
turns
over
to
Tier
2
vehicles
operating
on
low
sulfur
fuel.
By
2020,
NOX
emissions
will
be
reduced
by
70%
from
the
levels
that
would
occur
without
today's
action.
This
reduction
equals
the
NOX
emissions
from
over
164
million
pre­
Tier
2
cars
and
light
trucks.
This
reduction
represents
a
12
percent
reduction
in
NOX
emissions
from
all
manmade
sources.
VOC
emissions
will
also
be
reduced
by
today's
action,
with
reductions
increasing
as
the
fleet
turns
over.
We
estimate
that
the
reductions
as
a
percent
of
emissions
from
cars
and
light
trucks
will
be
7
percent
in
2007
and
grow
to
17
percent
in
2020.
As
discussed
earlier,
in
California,
smaller
but
still
substantial
reductions
in
both
NOX
and
VOC
will
be
achieved
because
vehicles
visiting
and
relocating
to
California
will
be
designed
to
meet
these
standards.
Also,
vehicles
from
California
visiting
other
states
will
not
be
exposed
to
high
sulfur
fuel.
California
Air
Resources
Board
staff
have
estimated
that
Tier
2/
Sulfur
will
reduce
NOX
emissions
in
the
South
Coast
Air
Quality
Management
District
by
approximately
4
tons
per
day
in
2007.25
CARB
staff
plan
to
incorporate
these
reductions
in
their
revised
attainment
plan
for
this
district,
which
includes
most
of
the
Los
Angeles­
Long
Beach
region.
These
estimates
of
emission
reductions
reflect
a
mixture
of
urban,
suburban,
and
rural
areas.
However,
cars
and
light
trucks
generally
make
up
a
larger
fraction
of
the
emission
inventory
for
urban
and
suburban
areas,
where
human
population
and
personal
vehicle
travel
is
more
concentrated
than
emissions
from
other
sources
such
as
heavy­
duty
highway
vehicles,
power
plants,
and
industrial
boilers.
We
have
estimated
emission
inventories
for
three
cities
using
the
same
methods
as
were
used
to
project
the
nationwide
inventories,
and
we
present
the
results
for
2007
below
in
Table
III.
B
 
4.
These
results
confirm
that
light­
duty
vehicles
make
up
a
greater
share
of
the
NOX
emission
inventories
in
urban
areas
than
they
do
in
the
nationwide
inventory.
While
these
vehicles'
share
of
national
NOX
emissions
in
2007
is
about
16
percent,
it
is
estimated
to
be
about
34
percent
in
the
Atlanta
area.
There
is
also
a
range
in
VOC
contributions,
with
Atlanta
again
being
the
area
with
the
largest
car
and
light
truck
contribution
at
17
percent.
In
metropolitan
areas
with
high
car
and
light
truck
contributions,
today's
action
will
represent
a
larger
step
towards
attainment
since
it
will
have
a
larger
effect
on
total
emissions.

TABLE
III.
B
 
4
 
Proportion
of
the
Total
Urban
Area
NOX
and
VOC
Inventory
in
2007
Attributable
to
Light­
Duty
Vehiclesa
Region
NOX
(
percent)
VOC
(
percent)

Nationwide
.......................................................................................................................................................................
16
13
New
York
urban
area
......................................................................................................................................................
18
6
Atlanta
urban
area
...........................................................................................................................................................
34
17
Charlotte
urban
area
........................................................................................................................................................
24
15
Notes:
a
The
estimates
reflect
continuation
of
NLEV
beyond
2004.

Another
useful
perspective
from
which
to
view
the
magnitude
of
the
emission
reductions
from
today's
proposal
is
in
terms
of
the
additional
emission
reductions
from
all
human
sources
that
areas
will
need
to
attain
the
1­
hour
ozone
standard.
For
this
analysis,
we
reviewed
our
proposals
for
action
on
the
1­
hour
attainment
demonstrations
submitted
by
the
states.
With
these
proposals,
EPA
identified
estimates
of
additional
emission
reductions
(
measures
in
addition
to
those
submitted
by
the
state
in
their
plans)
necessary
for
attainment
for
some
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and
Regulations
26
EPA
assessment
of
air
quality
changes
for
2007
and
2030
focused
on
37
states
in
the
East
because
these
states
cover
most
of
the
areas
with
1­
hour
nonattainment
problems.
of
the
areas.
These
estimates
of
additional
emission
reductions
are
documented
in
the
individual
Federal
Register
Notices.
Using
these
estimates
and
the
estimates
of
Tier
2
reductions
developed
for
today's
action,
we
have
determined
what
portion
of
these
additional
emission
reductions
would
be
accounted
for
by
today's
action.
These
estimates
are
reported
in
Table
III.
B
 
5,
which
shows
the
contribution
of
Tier
2/
Sulfur
NOX
reductions
to
the
additional
emission
reduction
necessary
for
attainment
for
three
metropolitan
areas.
For
example,
for
the
New
York
nonattainment
area,
89%
of
the
additional
NOX
emission
reductions
needed
for
attainment
are
provided
for
with
today's
action.
This
leaves
11%
of
the
additional
NOX
emission
reductions
to
be
addressed
by
the
State
through
other
local
sources.
EPA
and
the
States
already
have
significant
efforts
underway
to
lower
ozone
precursor
emissions
through
national
regulations
and
State
Implementation
Plans.
Table
III.
B
 
5
shows
the
contribution
of
Tier
2
to
the
substantial
State­
led
efforts
to
provide
attainment
with
the
ozone
NAAQS.
Since
the
Tier
2
program
has
evolved
in
the
past
year
after
much
of
the
States'
efforts
were
completed,
many
of
the
States
were
unable
to
estimate
the
benefits
of
Tier
2
in
their
areas.
EPA's
proposal
actions
on
these
SIPs
for
the
ozone
NAAQS
addresses
the
need
for
Tier
2
in
many
areas.
More
specifically,
Tier
2
is
being
used
to
help
States
identify
additional
measures,
in
addition
to
those
in
their
plans,
necessary
for
attainment.
These
estimates
are
subject
to
change
as
the
states
review
and
comment
on
our
proposed
action
on
the
SIPs.
These
figures
show
that
today's
proposal
would
make
a
very
substantial
contribution
to
these
cities'
attainment
programs,
but
that
there
will
still
be
a
need
for
additional
reductions
from
other
sources.
The
emission
reductions
from
today's
proposal
would
clearly
not
exceed
the
reductions
needed
from
an
air
quality
perspective
for
these
areas.

TABLE
III.
B
 
5.
 
CONTRIBUTION
OF
TIER
2/
SULFUR
NOX
REDUCTIONS
TO
OZONE
ATTAINMENT
EFFORTS
OF
SELECTED
NONATTAINMENT
AREAS
Nonattainment
area
(
attainment
date)
Percent
of
additional
NOX
reductions
necessary
for
attainment
From
tier
2
Needed
after
tier
2
Baltimore
(
2005)
..............................................................................................................................................................
100
0
New
York
(
2007)
..............................................................................................................................................................
89
11
Philadelphia
(
2005)
..........................................................................................................................................................
87
13
4.
Ozone
Reductions
Expected
From
This
Rule
The
large
reductions
in
emissions
of
ozone
precursors
from
today's
standards
will
be
very
beneficial
to
federal
and
state
efforts
to
lower
ozone
levels
and
bring
about
attainment
with
the
current
one­
hour
ozone
standard.
The
air
quality
modeling
for
the
final
rule
shows
that
improvements
in
ozone
levels
are
expected
to
occur
throughout
the
country
because
of
the
Tier
2/
Gasoline
Sulfur
program.
26
EPA
found
that
the
program
significantly
lowers
model­
predicted
exceedances
of
the
ozone
standard.
In
2007
the
number
of
exceedances
in
CMSA/
MSAs
is
forecasted
to
decline
by
nearly
onetenth
and
in
2030,
when
full
turnover
of
the
vehicle
fleet
has
occurred,
the
program
lowers
such
exceedances
by
almost
one­
third.
In
these
same
areas,
the
total
amount
of
ozone
above
the
NAAQS
is
forecasted
to
decline
by
about
15
percent
in
2007
and
by
more
than
one­
third
in
2030.
In
the
vast
majority
of
areas,
the
air
quality
modeling
predicts
that
the
program
will
lower
peak
summer
ozone
concentrations
for
both
2007
and
2030.
The
reduction
in
daily
maximum
ozone
is
nearly
2
ppb
on
average
in
2007
and
over
5
ppb
on
average
in
2030.
These
reductions
contribute
to
EPA's
assessment
that
the
program
will
provide
the
large
set
of
public
health
and
environmental
benefits
summarized
in
Section
IV.
D
of
the
Preamble.
The
forecasted
impacts
of
the
program
on
ozone
in
2007
and
2030
are
further
described
in
the
Tier
2
Air
Quality
Modeling
Technical
Support
Document.
During
the
public
comment
period
on
the
proposed
rule,
EPA
received
several
comments
that
expressed
concern
about
potential
increases
in
ozone
that
might
occur
as
a
result
of
this
rule.
As
indicated
above,
the
air
quality
modeling
results
indicate
an
overall
reduction
in
ozone
levels
in
2007
and
2030
during
the
various
episodes
modeled.
In
addition
to
ozone
reductions,
a
few
areas
had
predicted
ozone
increases
in
portions
of
the
area
during
parts
of
the
episodes
modeled.
In
most
of
these
cases,
we
observed
a
net
reduction
in
ozone
levels
in
these
areas
due
to
the
program.
In
the
very
small
number
of
exceptions
to
this,
the
Agency
did
find
benefit
from
reduction
of
peak
ozone
levels.
Based
upon
a
careful
examination
of
this
issue,
including
EPA's
modeling
results
as
well
as
consideration
of
the
modeling
and
analyses
submitted
by
commenters,
it
is
clear
that
the
significant
ozone
reductions
from
this
rule
outweigh
the
limited
ozone
increases
that
may
occur.
Additional
details
on
this
issue
are
provided
in
the
Response
to
Comments
document
and
in
the
Tier
2
Air
Quality
Modeling
Technical
Support
Document.
Taken
together,
EPA
believes
these
results
indicate
that
it
will
be
much
easier
for
States
to
develop
State
Implementation
Plans
which
will
attain
and
maintain
compliance
with
the
onehour
ozone
standard.
EPA
will
work
with
States
conducting
more
detailed
local
modeling
of
their
specific
ozone
situation,
to
ensure
that
their
SIPs
will
provide
attainment.
Notably,
there
are
also
other
upcoming
federal
measures
to
lower
ozone
precursors
that
will
aid
these
efforts.
If
the
State
modeling
of
local
programs
shows
a
need,
the
Agency
will
work
with
states
to
plan
further
actions
to
produce
attainment
with
the
NAAQS
in
order
to
protect
the
public's
health
and
the
environment.
Further
details
on
EPA's
modeling
results
can
be
found
in
the
Agency's
Response
to
Comments
and
technical
support
documents.

C.
Particulate
Matter
The
need
to
control
the
contribution
of
cars
and
light
trucks
to
ambient
concentrations
of
particulate
matter
(
PM)
is
the
basis
for
our
adoption
of
the
new
PM
emission
standards
for
vehicles.
PM
is
also
a
supplemental
consideration
in
our
promulgation
of
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10,
2000
/
Rules
and
Regulations
27
U.
S.
EPA
(
1998)
National
Air
Pollutant
Emission
Trends
Update,
1970
 
1997.
EPA
 
454/
E
 
98
 
007.
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
concentrations
(
of
both
PM10
and
PM2.5)
than
this
inventory
share
would
suggest.
the
vehicle
emission
standards
for
NOX
and
VOC,
and
for
the
limits
on
sulfur
in
gasoline,
because
SOx,
NOX,
and
VOC
are
PM
precursors.
For
cars
and
for
light
trucks
under
3750
pounds
loaded
vehicle
weight,
we
are
establishing
new
emission
standards
under
the
provisions
of
CAA
section
202(
i),
which
ties
our
action
to
the
need
for
additional
emission
reductions
in
order
to
attain
and
maintain
the
NAAQS.
The
NAAQS
relevant
to
the
PM
emission
standards
is
the
PM10
NAAQS.
The
PM10
NAAQS
also
provides
additional
but
not
essential
support
to
our
promulgation
of
the
NOX
and
VOC
standards,
since
these
standards
are
fully
supportable
on
the
basis
of
the
1­
hour
ozone
NAAQS.
For
the
vehicles
not
subject
to
CAA
202(
i),
and
for
the
gasoline
sulfur
limits,
our
actions
are
tied
to
determinations
regarding
public
health
and
welfare
risks
more
broadly,
under
CAA
sections
202(
a),
202(
b),
and
211(
c).
The
role
of
NOX,
VOC,
and
PM
emissions
in
contributing
to
atmospheric
concentrations
of
PM10
is
an
important
element
of
the
risk
that
these
emissions
pose
to
public
health
and
welfare.
PM
also
poses
risks
to
public
health
not
fully
reflected
in
the
PM10
NAAQS.
Though
EPA
has
not
relied
on
the
adverse
health
impacts
of
fine
PM
to
promulgate
this
rule,
it
is
well
established
that
such
impacts
exist.
A
summary
of
these
effects
is
given
in
the
next
section.
In
addition,
based
on
the
available
science,
EPA's
Office
of
Research
and
Development
has
recently
submitted
to
a
committee
of
our
Science
Advisory
Board
a
draft
assessment
document
which
contains
a
proposed
conclusion
that
diesel
exhaust
is
a
likely
human
cancer
hazard
and
is
a
potential
cause
of
other
nonmalignant
respiratory
effects.
The
scientific
advisory
committee
has
met
to
discuss
this
document,
and
we
are
awaiting
written
review
comments
from
the
committee.
We
expect
to
submit
a
further
revision
of
the
document
to
the
advisory
committee
before
we
make
the
document
final.

1.
Background
on
PM
Particulate
matter
(
PM)
represents
a
broad
class
of
chemically
and
physically
diverse
substances
that
exist
as
discrete
particles
(
liquid
droplets
or
solids)
over
a
wide
range
of
sizes.
The
NAAQS
that
regulates
PM
addresses
only
PM
with
a
diameter
less
than
or
equal
to
10
microns,
or
PM10.
The
coarse
fraction
of
PM10
consists
of
those
particles
which
have
a
diameter
in
the
range
between
2.5
and
10
microns,
and
the
fine
fraction
consists
of
those
particles
which
have
a
diameter
less
than
or
equal
to
2.5
microns,
or
PM2.5.
These
particles
and
droplets
are
produced
as
a
direct
result
of
human
activity
and
natural
processes,
and
they
are
also
formed
as
secondary
particles
from
the
atmospheric
transformation
of
emissions
of
SOX,
NOX,
ammonia,
and
VOCs.
Natural
sources
of
particles
in
the
coarse
fraction
of
PM10
include
windblown
dust,
salt
from
dried
sea
spray,
fires,
biogenic
emanation
(
e.
g.,
pollen
from
plants,
fungal
spores),
and
volcanoes.
Fugitive
dust
and
crustal
material
(
geogenic
materials)
comprise
approximately
80%
of
the
coarse
fraction
of
the
PM10
inventory
as
estimated
by
methods
in
use
today.
27
Manmade
sources
of
these
coarser
particles
arise
predominantly
from
combustion
of
fossil
fuel
by
large
and
small
industrial
sources
(
including
power
generating
plants,
manufacturing
plants,
quarries,
and
kilns),
wind
erosion
from
crop
land,
roads,
and
construction,
dust
from
industrial
and
agricultural
grinding
and
handling
operations,
metals
processing,
and
burning
of
firewood
and
solid
waste.
Coarse­
fraction
PM10
remains
suspended
in
the
atmosphere
a
relatively
short
period
of
time.
Most
of
the
emission
sources
listed
for
coarse
particles
also
have
a
substantial
fine
particle
fraction.
Their
share
of
the
PM2.5
inventory
is
somewhat
smaller,
however,
because
of
the
role
of
other
sources
that
give
rise
primarily
to
PM2.5.
The
other
sources
of
PM2.5
include
carbon­
based
particles
emitted
directly
from
gasoline
and
diesel
internal
combustion
engines,
sulfate­
based
particles
formed
from
SOX
and
ammonia,
nitrate­
based
particles
formed
from
NOX
and
ammonia,
and
carbonaceous
particles
formed
through
transformation
of
VOC
emissions.
PM2.5
particles
from
fugitive
dust
and
crustal
sources
comprise
substantially
less
than
their
share
of
coarse
PM
emissions,
approximately
one­
half
of
the
directly
emitted
PM2.5
inventory
as
estimated
by
methods
in
use
today.
The
presence
and
magnitude
of
crustal
PM2.5
in
the
ambient
air
is
much
lower
even
than
suggested
by
this
smaller
inventory
share,
due
to
the
additional
presence
of
secondary
PM
from
non­
crustal
sources
and
the
removal
of
a
large
portion
of
crustal
emissions
close
to
their
source.
This
near­
source
removal
results
from
crustal
PM's
lack
of
inherent
thermal
buoyancy,
low
release
height,
and
interaction
with
surrounding
vegetation
(
which
acts
to
filter
out
some
of
these
particles).
Secondary
PM
is
dominated
by
sulfate
particles
in
the
eastern
U.
S.
and
parts
of
the
western
U.
S.,
with
nitrate
particles
and
carbonaceous
particles
dominant
in
some
western
areas.
Mobile
sources
can
reasonably
be
estimated
to
contribute
to
ambient
secondary
nitrate
and
sulfate
PM
in
proportion
to
their
contribution
to
total
NOX
and
SOX
emissions.
The
sources,
ambient
concentration,
and
chemical
and
physical
properties
of
PM10
vary
greatly
with
time,
region,
meteorology,
and
source
category.
A
first
step
in
developing
a
plan
to
attain
the
PM10
NAAQS
is
to
disaggregate
ambient
PM10
into
the
basic
categories
of
sulfate,
nitrate,
carbonaceous,
and
crustal
PM,
and
then
determine
the
major
contributors
to
each
category
based
on
knowledge
of
local
and
upwind
emission
sources.
Following
this
approach,
SIP
strategies
to
reduce
ambient
PM
concentrations
have
generally
focused
on
controlling
fugitive
dust
from
natural
soil
and
soil
disturbed
by
human
activity,
paving
dirt
roads
and
controlling
soil
on
paved
roads,
reducing
emissions
from
residential
wood
combustion,
and
controlling
major
stationary
sources
of
PM10
where
applicable.
The
control
programs
to
reduce
stationary,
area,
and
mobile
source
emissions
of
sulfur
dioxide,
oxides
of
nitrogen,
and
volatile
organic
compounds
in
order
to
achieve
attainment
with
the
sulfur
dioxide
and
ozone
NAAQS
also
have
contributed
to
reductions
in
the
fine
fraction
of
PM10
concentrations.
In
addition,
the
EPA
standards
for
PM
emissions
from
highway
and
nonroad
engines
are
contributing
to
reducing
PM10
concentrations.
As
a
result
of
all
these
efforts,
in
the
last
ten
years,
there
has
been
a
downward
trend
in
PM10
concentrations,
with
a
leveling
off
in
the
later
years.
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
in
contributing
to
a
series
of
health
effects.
The
key
health
effects
categories
associated
with
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),
changes
in
lung
function
and
increased
respiratory
symptoms,
changes
to
lung
tissues
and
structure,
and
altered
respiratory
defense
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
28
U.
S.
EPA,
1996,
Air
Quality
Criteria
for
Particulate
Matter,
EPA/
600/
P
 
95/
001aF.
Review
of
the
National
Ambient
Air
Quality
Standards
for
Particulate
Matter:
Policy
Assessment
of
Scientific
and
Technical
Information,
OAQPS
Staff
Paper,
EPA
 
452
R
 
96
 
013,
July
1996.
29
The
annual
average
PM10
NAAQS
is
based
on
a
three­
year
average,
and
the
24­
hour
NAAQS
is
based
on
expected
exceedances
over
a
three­
year
period.
30
Health
Assessment
Document
for
Diesel
Emissions,
SAB
Review
Draft
EPA/
600/
8
 
90/
057D.
November
1999.
The
document
is
available
electronically
at
http://
www.
epa.
gov/
ncea/
diesel.
htm.
mechanisms.
PM
also
causes
damage
to
materials
and
soiling.
It
is
a
major
cause
of
substantial
visibility
impairment
in
many
parts
of
the
U.
S.
Motor
vehicle
particle
emissions
and
the
particles
formed
by
the
transformation
of
motor
vehicle
gaseous
emissions
tend
to
be
in
the
fine
particle
range.
Fine
particles
are
a
special
health
concern
because
they
easily
reach
the
deepest
recesses
of
the
lungs.
Scientific
studies
have
linked
fine
particles
(
alone
or
in
combination
with
other
air
pollutants),
with
a
series
of
significant
health
problems,
including
premature
death;
respiratory
related
hospital
admissions
and
emergency
room
visits;
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.
These
effects
are
discussed
further
in
EPA's
``
Staff
Paper''
and
``
Air
Quality
Criteria
Document''
for
particulate
matter.
28
EPA
first
established
primary
(
healthbased
and
secondary
(
welfare­
based)
National
Ambient
Air
Quality
Standards
for
PM10
in
1987.
The
annual
and
24­
hour
primary
PM10
standards
were
set
at
50
m
g/
m33,
and
150
m
g/
m3,
respectively.
29
In
July
1997,
the
primary
standards
were
revised
to
add
two
new
PM2.5
standards.
At
the
same
time,
we
changed
the
statistical
form
of
the
primary
PM10
standard
and
set
all
the
secondary
standards
to
be
the
same
as
the
primary.
On
May
14,
1999,
a
panel
of
the
U.
S.
Court
of
Appeals
for
the
District
of
Columbia
Circuit
reviewed
EPA's
revisions
to
the
ozone
and
PM
NAAQS
and
found,
by
a
2
 
1
vote,
that
sections
108
and
109
of
the
Clean
Air
Act,
as
interpreted
by
EPA,
represent
unconstitutional
delegations
of
Congressional
power.
American
Trucking
Ass'ns,
Inc.,
et
al.,
v.
Environmental
Protection
Agency,
175
F.
3d
1027
(
D.
C.
Cir.
1999).
Among
other
things
the
Court
remanded
the
record
for
the
8­
hour
ozone
NAAQS
and
the
PM2.5
NAAQS
to
EPA.
On
October
29,
1999,
EPA's
petition
for
rehearing
by
the
three
judge
panel
was
denied,
with
an
exception
regarding
the
revised
ozone
NAAQS.
EPA's
petition
for
rehearing
en
banc
by
the
full
Circuit
was
also
denied,
although
five
of
the
nine
judges
considering
the
petition
agreed
to
rehear
the
case.
The
pre­
existing
PM10
NAAQS
remains
in
effect
(
except
for
one
area
 
Boise,
ID
 
where
prior
to
the
court's
decision
we
had
determined
it
no
longer
to
apply).
We
believe
that
given
the
uncertain
status
of
the
new
PM2.5
NAAQS,
it
is
most
appropriate
to
rely
primarily
on
the
pre­
existing
PM10
NAAQS
in
establishing
the
Tier
2/
Gasoline
Sulfur
program's
vehicle
emission
standards
and
limits
on
sulfur
in
gasoline.
However,
because
we
believe,
and
the
Court
did
not
dispute,
that
there
are
very
substantial
public
health
risks
from
PM2.5
and
substantial
health
and
economic
benefits
from
reducing
PM2.5
concentrations,
we
have
conducted
analyses
of
the
PM2.5
changes
likely
to
occur
from
the
Tier
2/
Gasoline
Sulfur
program.
These
analyses
are
summarized
in
the
section
of
this
preamble
dealing
with
the
economic
benefits
of
the
new
standards,
section
IV.
D.
5,
and
corresponding
sections
of
the
final
RIA.
There
is
additional
concern
regarding
the
health
effects
of
PM
from
diesel
vehicles,
apart
from
the
health
effects
which
were
considered
in
setting
the
NAAQS
for
PM10
and
PM2.5.
Diesel
PM
contains
small
quantities
of
chemical
species
that
are
known
carcinogens,
and
diesel
PM
as
a
whole
has
been
implicated
in
occupational
epidemiology
studies.
EPA's
Office
of
Research
and
Development
has
considered
these
studies,
and
has
recently
submitted
to
a
committee
of
our
Science
Advisory
Board
a
draft
conclusion
that
diesel
exhaust
is
a
``
highly
likely''
human
cancer
hazard.
30
Because
we
are
awaiting
a
formal
response
from
our
advisory
committee
before
revising
and
finalizing
our
assessment
document,
we
are
not
relying
on
the
conclusions
in
this
document
as
formal
support
for
our
action
today.
More
information
about
this
aspect
of
PM
air
quality
is
given
in
section
III.
F
of
this
preamble.

2.
Need
for
Additional
Reductions
to
Attain
and
Maintain
the
PM10
NAAQS
The
most
recent
PM10
monitoring
data
indicates
that
15
designated
PM10
nonattainment
counties,
with
a
population
of
almost
9
million
in
1996,
violated
the
PM10
NAAQS
in
the
period
1996
 
1998.
The
areas
that
are
violating
do
so
because
of
exceedances
of
the
24­
hour
PM10
NAAQS.
No
areas
had
monitored
violations
of
the
annual
standard
in
this
period.
Table
III.
C
 
1
lists
the
15
counties.
The
table
also
indicates
the
classification
for
each
area
and
the
status
of
our
review
of
the
State
Implementation
Plan.

TABLE
III.
C
 
1.
 
FIFTEEN
PM10
NONATTAINMENT
AREAS
VIOLATING
THE
PM10
NAAQS
IN
1996
 
1998
a
Area
Classification
SIP
approved?
1996
Population
(
millions)

Clark
Co.,
NV
.................................................................................................................
Serious
....................
No
.....................
0.93
El
Paso,
TX
....................................................................................................................
Moderate
.................
Yes
...................
0.67
Gila,
AZ
...........................................................................................................................
Moderate
.................
No
.....................
0.05
Imperial
Co.,
CA
.............................................................................................................
Moderate
.................
No
.....................
0.14
Inyo
Co.,
CA
...................................................................................................................
Moderate
.................
No
.....................
0.02
Kern
Co.,
CA
..................................................................................................................
Serious
....................
No
.....................
0.62
Mono
Co.,
CA
.................................................................................................................
Moderate
.................
No
.....................
0.01
Kings
Co.,
CA
.................................................................................................................
Serious
....................
No
.....................
0.11
Maricopa
Co.,
AZ
...........................................................................................................
Serious
....................
No
.....................
2.61
Power
Co.,
ID
.................................................................................................................
Moderate
.................
No
.....................
0.01
Riverside
Co.,
CA
...........................................................................................................
Serious
....................
No
.....................
1.41
San
Bernardino
Co.,
CA
.................................................................................................
Serious
....................
No
.....................
1.59
Santa
Cruz
Co.,
AZ
........................................................................................................
Moderate
.................
No
.....................
0.04
Tulare
Co.,
CA
................................................................................................................
Serious
....................
No
.....................
0.35
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
31
Regulatory
Impact
Analyses
for
the
Particulate
Matter
and
Ozone
National
Ambient
Air
Quality
Standards
and
Proposed
Regional
Haze
Rule,
Innovative
Strategies
and
Economics
Group,
Office
of
Air
Quality
Planning
and
Standards,
U.
S.
Environmental
Protection
Agency,
Research
Triangle
Park,
N.
C.,
July
16,
1997.
32
We
used
the
more
recent
modeling
for
2030
rather
than
the
earlier
modeling
for
2010,
because
the
modeling
the
2030
incorporates
more
recent
estimates
of
emissions
inventories.
Our
emission
estimates
in
our
final
RIA
indicate
that
PM10
emissions
under
the
basline
scenario
increase
steadily
between
1996
and
2030,
for
47
states
combined
and
for
four
specific
cities,
suggesting
that
areas
in
nonattainment
in
both
1996
 
1998
and
2030
will
be
in
nonatainment
in
the
intermediate
years
as
well
assuming
no
further
emission
reductions.
A
factor
tending
to
make
Table
III.
C
 
2
shorter
is
that
we
have
not
relied
on
the
sourcereceptor
matrix
model's
prediction
of
24­
hour
nonattainment,
as
those
predictions
on
an
individual
areas
basis
are
less
reliable
than
the
predictions
of
annual
average
nonattainment.
TABLE
III.
C
 
1.
 
FIFTEEN
PM10
NONATTAINMENT
AREAS
VIOLATING
THE
PM10
NAAQS
IN
1996
 
1998
a
 
Continued
Area
Classification
SIP
approved?
1996
Population
(
millions)

Walla
Walla
Co.,
WA
......................................................................................................
Moderate
.................
Yes
...................
0.05
Total
Population
...................................................................................................
.............................
......................
8.61
a
Although
we
do
not
believe
that
we
are
limited
to
considering
only
designated
nonattainment
areas
in
implementing
CAA
section
202(
i),
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
results
of
PM10
exceedances
attributable
to
natural
events.
In
addition
to
these
designated
nonattainment
areas,
there
are
15
unclassified
counties
in
12
geographically
spread
out
states,
with
a
1996
population
of
over
4
million,
for
which
the
state
has
reported
PM10
monitoring
data
for
this
period
indicating
a
PM10
NAAQS
violation.
We
have
not
yet
excluded
the
possibility
that
a
one­
time
monitoring
upset
or
a
natural
event(
s)
is
responsible
for
the
monitored
violations
in
1996
 
1998
in
the
15
unclassified
counties.
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.
The
Tier
2/
Gasoline
Sulfur
program
will
reduce
PM10
concentrations
in
these
15
unclassified
counties,
because
all
have
car
and
light
truck
travel
that
contributes
to
PM10
and
precursor
emissions
loadings.
This
reduction
will
assist
these
areas
in
reducing
their
PM10
nonattainment
problem,
if
a
problem
is
confirmed
upon
closer
examination
of
each
local
situation.
Boise,
ID,
had
also
been
classified
as
a
PM10
nonattainment
area
at
one
time
and
was
monitored
to
have
a
PM10
NAAQS
violation
in
1996
 
1998.
However
the
pre­
existing
PM10
NAAQS
does
not
presently
apply
in
Boise,
ID,
because
in
the
period
between
our
revision
of
the
old
PM10
NAAQS
and
the
Court's
decision
to
vacate
the
revised
PM10
NAAQS,
we
determined
that
Boise
was
in
attainment
with
the
old
PM10
NAAQS
and
that
it
therefore
no
longer
applied
in
that
area.

Because
the
types
and
sources
of
PM10
are
complex
and
vary
from
area
to
area,
the
best
projections
of
future
PM10
concentrations
are
the
local
emission
inventory
and
air
quality
modeling
analyses
that
states
have
developed
or
are
still
in
the
process
of
developing
for
their
PM10
attainment
plans.
We
do
employ
a
modeling
approach,
known
as
the
source­
receptor
matrix
approach,
for
relating
emission
reductions
to
PM10
reductions
on
a
national
scale.
This
approach
is
one
of
our
established
air
quality
models
for
purposes
of
quantifying
the
health
and
welfare
related
economic
benefits
of
PM
reductions
from
major
regulatory
actions.
One
application
of
this
modeling
approach
was
for
the
Regulatory
Impact
Analysis
for
the
establishment
of
the
new
PM
NAAQS
31.
This
model
is
also
the
basis
for
the
estimates
of
PM10
(
and
PM2.5)
concentrations
reductions
we
have
used
to
estimate
the
economic
benefits
of
the
Tier
2/
Gasoline
Sulfur
program
in
2030.
Its
use
for
this
purpose
is
described
in
the
final
RIA.
In
both
applications,
we
modeled
an
emissions
scenario
corresponding
to
controls
currently
in
place
or
committed
to
by
states.
As
such,
this
scenario
is
an
appropriate
baseline
for
determining
if
further
reductions
in
emissions
are
needed
in
order
to
attain
and
maintain
the
PM10
NAAQS.
In
the
RIA
for
the
establishment
of
the
PM
NAAQS,
we
projected
that
in
2010
there
will
be
45
counties
not
in
attainment
with
the
original
PM10
NAAQS
.
We
cited
these
modeling
results
in
our
proposal
for
the
Tier
2/
Gasoline
Sulfur
program
and
in
our
first
supplemental
notice.
After
reviewing
public
comments
on
our
presentation
of
these
modeling
results,
we
have
concluded
that
while
the
sourcereceptor
matrix
approach
is
a
suitable
model
for
estimating
PM
concentration
reductions
for
economic
benefits
estimation,
it
is
not
a
tool
we
can
use
with
high
confidence
for
predicting
that
individual
areas
that
are
now
in
attainment
will
become
nonattainment
in
the
future.
However,
we
believe
the
source­
receptor
matrix
approach
is
appropriate
for,
and
is
a
suitable
tool
for,
determining
that
a
current
designated
nonattainment
area
has
a
high
risk
of
remaining
in
PM10
nonattainment
at
a
future
date.
Therefore,
we
have
cross­
matched
the
results
for
2030
from
our
final
RIA
for
Tier
2
and
the
list
of
current
PM10
nonattainment
areas
with
monitored
violations
in
1996
to
1998
shown
in
Table
III.
C
 
1.32
Based
on
this,
we
conclude
that
the
8
areas
shown
in
Table
III.
C
 
2
have
a
high
risk
of
failing
to
attain
and
maintain
without
further
emission
reductions.
These
areas
have
a
population
of
nearly
8
million.
Included
in
the
group
are
the
counties
that
are
part
of
the
Los
Angeles,
Phoenix,
and
Las
Vegas
metropolitan
areas,
where
traffic
from
cars
and
light
trucks
is
substantial.
California
areas
will
benefit
from
the
Tier
2/
Gasoline
Sulfur
program
because
of
travel
within
California
by
vehicles
originally
sold
outside
the
state,
and
by
reduced
poisoning
of
catalysts
from
fuel
purchased
outside
of
California.

TABLE
III.
C
 
2.
 
EIGHT
AREAS
WITH
A
HIGH
RISK
OF
FAILING
TO
ATTAIN
AND
MAINTAIN
THE
PM10
NAAQS
WITHOUT
FURTHER
REDUCTIONS
IN
EMISSIONS
Area
1996
population
(
millions)

Clark
Co.,
NV
...........................
0.93
Imperial
Co.,
CA
.......................
0.14
Kern
Co.,
CA
............................
0.62
Kings
Co.,
CA
...........................
0.11
Maricopa
Co.,
AZ
.....................
2.61
Riverside
Co.,
CA
.....................
1.41
San
Bernardino
Co.,
CA
...........
1.59
Tulare
Co.,
CA
..........................
0.35
Total
population
.............
7.76
Table
III.
C
 
2
is
limited
to
designated
PM10
nonattainment
areas
which
both
had
monitored
violations
of
the
PM10
NAAQs
in
1996
 
1998
and
are
predicted
to
be
in
nonattainment
in
2030
in
our
PM10
air
quality
modeling.
This
gives
us
high
confidence
that
these
areas
require
further
emission
reductions
to
attain
and
maintain,
but
does
not
fully
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Rules
and
Regulations
33
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
m
g/
m3
value
of
the
NAAQS.
These
two
areas
are
not
included
in
the
Table
III.
C
 
2
list
of
areas
with
a
high
risk
of
failing
to
attain
and
maintain
because
lower
PM10
levels
in
1996
and
1997
caused
their
three­
year
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.
consider
the
possibility
that
there
are
other
areas
which
are
now
meeting
the
PM10
NAAQS
which
have
at
least
a
significant
probability
of
requiring
further
reductions
to
continue
to
maintain
it.
Our
air
quality
modeling
predicted
2030
violations
of
the
annual
average
PM10
NAAQS
in
five
additional
counties
that
in
either
1997
or
1998
had
single­
year
annual
average
monitored
PM10
levels
of
at
least
90
percent
of
the
NAAQS,
but
did
not
exceed
the
formal
definition
of
the
NAAQS
over
the
threeyear
period
ending
in
1998
33.
These
areas
are
shown
in
Table
III.
C
 
3.
They
have
a
combined
population
of
almost
17
million,
and
a
broad
geographic
spread.
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
these
areas
currently
enjoy
will
likely
erode;
the
PM
air
quality
modeling
suggests
that
it
will
be
reversed.
We
therefore
consider
these
areas
to
each
individually
have
a
significant
risk
of
failing
to
maintain
the
NAAQS
without
further
emission
reductions.
There
is
a
substantial
risk
that
at
least
some
of
them
would
fail
to
maintain
without
further
emission
reductions.
The
emission
reductions
from
the
Tier
2/
Gasoline
Sulfur
program
will
help
to
keep
them
in
attainment.

TABLE
III.
C
 
3.
 
FIVE
AREAS
WITH
A
SIGNIFICANT
RISK
OF
FAILING
TO
ATTAIN
AND
MAINTAIN
THE
PM10
NAAQS
WITHOUT
FURTHER
REDUCTIONS
IN
EMISSIONS
Area
1996
population
(
millions)

New
York
Co.,
NY
....................
1.33
Cuyahoga
Co.,
OH
...................
1.39
Harris,
Co.,
TX
..........................
3.10
San
Diego
Co.,
CA
...................
2.67
Los
Angeles
Co.,
CA
................
8.11
Total
population
.............
16.6
Taken
together
and
considering
their
number,
size,
and
geographic
distribution,
these
13
areas
are
sufficient
to
establish
the
case
that
additional
reductions
are
needed
in
order
to
attain
and
maintain
the
PM10
NAAQS.
This
determination
provides
additional
support
for
the
NOx
and
VOC
standards
and
for
the
limits
on
gasoline
sulfur,
which
are
also
fully
supported
on
ozone
attainment
and
health
effects
considerations.
The
sulfate
particulate,
sulfur
dioxide,
NOX,
and
VOC
emission
reductions
from
the
Tier
2/
Gasoline
Sulfur
program
will
help
the
8
areas
in
Table
III.
C
 
2
and
the
5
areas
in
Table
III.
C.
 
3
to
attain
and
maintain
the
PM10
NAAQS.
The
new
PM
standards
for
gasoline
and
diesel
vehicles
are
also
supported
by
this
PM10
determination.
We
are
also
establishing
the
new
PM
emissions
standard
today
to
avoid
the
possibility
that
PM10
concentrations
in
these
and
other
areas
do
get
even
worse
due
to
an
increase
in
sales
of
diesel
vehicles,
which
could
create
a
need
for
further
reductions
which
would
be
larger
and
would
affect
more
areas
of
the
country.
At
the
present
time,
virtually
all
cars
and
light
trucks
being
sold
are
gasoline
fueled.
The
ambient
PM10
air
quality
data
for
1996
to
1998
reflects
that
current
situation,
and
this
data
was
an
important
factor
in
what
areas
are
listed
in
Tables
III.
C
 
2
and
III.
C
 
3.
Also,
the
predictions
of
future
PM10
air
quality,
used
to
develop
the
Tables
III.
C
 
2
and
III.
C
 
3
lists
of
areas
with
high
or
significant
risk
of
being
unable
to
attain
and
maintain,
are
based
on
an
assumption
that
this
will
continue
to
be
true.
However,
we
are
concerned
over
the
possibility
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.
Because
current
diesel
vehicles
emit
higher
levels
of
PM10
than
gasoline
vehicles,
a
larger
number
of
diesel
vehicles
could
dramatically
increase
levels
of
exhaust
PM10,
especially
if
more
stringent
PM
emissions
standards
are
not
in
place.
The
new
PM
emissions
standards
will
ensure
that
an
increase
in
the
sales
of
diesel
cars
and
light
trucks
will
not
increase
PM
emissions
from
cars
and
light
trucks
so
substantially
as
to
endanger
PM10
attainment
and
maintenance
on
a
more
widespread
basis.
Given
this
potential,
it
is
appropriate
to
establish
the
new
PM
emissions
standards
now
on
the
basis
of
the
increase
in
sales
of
diesel
vehicles
being
a
reasonable
possibility
without
such
standards.
Establishing
the
new
PM
emissions
standards
now
avoids
the
public
health
impact
and
industry
disruption
that
could
result
if
we
waited
until
an
increase
in
sales
of
diesels
with
high
PM
emissions
had
already
occurred.
In
order
to
assess
the
potential
impact
of
increased
diesel
sales
penetration
on
PM
emissions,
we
analyzed
the
increase
in
PM10
emissions
from
cars
and
trucks
under
a
scenario
in
which
the
use
of
diesel
engines
in
cars
and
light
trucks
increases.
We
used
projections
developed
by
A.
D.
Little,
Inc.
as
part
of
a
study
conducted
for
the
American
Petroleum
Institute.
The
``
Most
Likely''
case
projected
by
A.
D.
Little
forecasts
that
diesel
engines''
share
of
the
light
truck
market
will
grow
to
24
percent
by
the
2015
model
year.
Diesel
engines'
share
of
the
car
market
would
grow
somewhat
more
slowly,
reaching
9
percent
by
2015.
The
A.
D.
Little
forecasts
did
not
address
the
period
after
2015;
we
have
assumed
that
diesel
sales
stabilize
at
the
level
reached
in
2015,
with
the
fraction
of
in­
use
vehicles
with
diesel
engines
continuing
to
increase
through
turnover.
We
believe
these
projections
are
more
realistic
than
the
scenario
of
even
higher
sales
of
diesels
described
in
the
notice
for
the
proposed
Tier
2/
Gasoline
Sulfur
program,
though
the
A.
D.
Little
forecasts
still
show
much
higher
percentages
of
diesel
vehicles
in
the
light­
duty
fleet
than
have
ever
existed
historically
in
the
U.
S.
The
A.
D.
Little
scenario
of
increased
diesels,
and
even
more
so
the
scenario
described
in
our
proposal,
would
result
in
dramatic
increases
in
direct
PM10
emissions
from
cars
and
light
trucks,
if
there
were
no
change
in
these
vehicles'
PM
standards.
The
increase
in
diesel
exhaust
PM10
emissions
would
more
than
overcome
the
reduction
in
direct
PM10
attributable
to
the
sulfur
reduction
in
gasoline.
With
no
change
in
the
existing
PM
standards
for
cars
and
light
trucks,
our
analysis
of
this
scenario
shows
that
direct
PM10
emissions
in
2020
would
be
approximately
98,000
tons
per
year,
which
is
nearly
two
times
the
50,000
tons
projected
if
diesel
sales
do
not
increase.
The
portion
of
ambient
PM10
concentrations
attributable
to
cars
and
light
trucks
would
climb
steadily.
The
final
RIA
presents
alternative
estimates
of
the
amount
by
which
future
PM10
concentrations
could
increase
due
to
such
an
emissions
increase,
based
on
extrapolations
from
several
studies'
estimates
of
the
contribution
that
heavyduty
diesel
vehicles
have
made
to
recent
or
PM10
concentrations.
The
increase
is
estimated
to
range
from
0.6
to
20
m
g/
m3.
The
added
PM10
emissions
from
cars
and
trucks
due
to
an
increase
in
diesel
sales
without
action
to
reduce
PM10
from
new
diesel
vehicles
would
exacerbate
the
PM10
nonattainment
problems
of
the
areas
listed
in
Tables
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Federal
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
III.
C
 
2
and
III.
C
 
3,
for
which
our
air
quality
modeling
predicted
future
nonattainment
even
without
an
increase
in
diesel
sales.
Moreover,
it
might
cause
PM10
nonattainment
in
additional
areas.
In
addition
to
the
counties
already
listed
in
Tables
III.
C
 
2
and
III.
C
 
3,
there
are
other
areas
for
which
1997
and
1998
data
indicate
that
maintenance
of
the
PM10
NAAQS
is
at
risk
if
diesel
sales
of
cars
and
light
truck
increase.
Table
III.
C
 
4
lists
additional
counties
for
which
either
1997
or
1998
monitoring
data,
or
both,
indicated
a
second­
high
PM10
concentration
for
the
single
year
within
10
percent
of
the
PM10
24­
hour
NAAQS
or
an
annual
average
PM10
concentration
within
10
percent
of
the
annual
average
PM10
NAAQS.
Only
counties
which
are
part
of
metropolitan
statistical
areas
are
listed
in
Table
III.
C
 
4,
in
order
to
focus
on
those
in
which
traffic
densities
are
high.
Considering
both
the
annual
and
24­
hour
NAAQS,
there
were
13
areas
within
10
percent
of
the
standard.
Increases
in
PM10
emissions
from
more
diesel
vehicles
would
put
these
areas
in
greater
risk
of
violating
the
PM10
NAAQS,
especially
if
growth
in
other
sources
is
high
or
meteorological
conditions
are
more
adverse
than
in
the
1996
to
1998
period.

TABLE
III.
C
 
4.
 
THIRTEEN
METROPOLITAN
STATISTICAL
AREA
COUNTIES
WITH
1997
AND/
OR
1998
AMBIENT
PM10
Concentrations
Within
10
Percent
of
the
Annual
or
24­
Hour
the
PM10
NAAQSa
1996
population
(
millions)

Areas
within
10
percent
of
the
annual
PM10
NAAQS:

Lexington
Co.,
SC
...........................
0.20
Union
Co.,
TN
.................................
0.02
Washoe
Co.,
NV
.............................
0.30
Madison
Co.,
IL
...............................
0.26
Dona
Ana
Co.,
NM
..........................
0.16
El
Paso
Co.,
TX
..............................
0.68
Ellis
Co.,
TX
....................................
0.97
Fresno
Co.,
CA
...............................
0.74
Philadelphia
Co.,
PA
.......................
1.47
Areas
within
10
percent
of
the
24­
hour
PM10
NAAQS:

Lexington
Co.,
SC
...........................
0.20
El
Paso
Co.,
TX
..............................
0.68
Union
Co.,
TN
.................................
0.02
Mobile
Co.,
AL
................................
0.40
Dona
Ana
Co.,
NM
..........................
0.16
Lake
Co.,
IN
....................................
0.48
Philadelphia
Co.,
PA
.......................
1.47
Pennington
Co.,
SD
........................
0.09
Ventura
Co.,
CA
..............................
0.71
Total
Population
of
all
13
areas
.................................
6.48
Notes:
a
These
areas
are
listed
based
on
their
second
high
24­
hour
concentration
and
annual
average
concentration
in
1997,
1998,
or
both.
Official
nonattainment
determinations
are
made
based
on
three
years
of
data,
and
on
estimates
of
expected
exceedances
of
the
24­
hour
standard.

Fortunately,
the
standards
included
in
today's
actions
will
result
in
a
steady
decrease
in
total
direct
PM10
from
cars
and
light
trucks
even
if
this
increase
in
the
use
of
diesel
engines
in
these
vehicles
were
to
occur.
If
the
A.
D.
Little
``
Most
Likely''
scenario
for
increased
diesel
engines
in
light
trucks
were
to
occur,
today's
actions
would
reduce
diesel
PM10
from
cars
and
light
trucks
by
over
75
percent
in
2020.
Stated
differently,
by
2030
today's
actions
would
reduce
98,000
tons
of
the
potential
increase
in
PM10
emissions
from
passenger
cars
and
light
trucks.
The
result
would
be
less
direct
PM10
than
is
emitted
today,
because
the
increase
in
diesel
PM10
would
be
more
than
offset
by
the
reduction
in
PM10
emissions
from
gasoline
vehicles
resulting
from
lower
gasoline
sulfur
levels.
We
are
establishing
tighter
PM
standards
for
cars
and
light
trucks
to
help
avoid
the
adverse
impact
of
greater
diesel
PM
emissions
on
PM10
attainment
and
public
health
and
welfare
if
diesel
sales
increased
in
the
future
without
the
protection
of
the
tighter
standards.
Because
diesel
vehicles
will
essentially
be
performing
the
same
functions
as
the
gasoline
vehicles
they
will
replace,
it
is
appropriate
for
the
new
PM
standards
to
also
apply
equally
to
gasoline
and
diesel
vehicles.
We
expect
that
gasoline
vehicles
will
need
little
or
no
redesign
to
meet
the
new
PM
standards
when
free
of
defects
and
properly
operating.
However,
the
new
vehicle
and
gasoline
sulfur
standards
may
achieve
some
reduction
in
real
world
PM
emissions
from
gasoline
vehicles
by
encouraging
more
durable
designs
and
by
ensuring
that
these
vehicles
are
operated
on
lower­
sulfur
fuel.
The
new
standards
for
PM
will
also
prevent
any
changes
in
gasoline
engine
design
which
would
increase
PM
emissions.
These
changes
would
otherwise
be
possible
because
the
current
PM
standard
is
so
much
higher
than
the
current
performance
on
the
gasoline
vehicles.

3.
PM2.5
Discussion
We
are
not
basing
our
promulgation
of
the
Tier
2
vehicle
standards
on
a
finding
on
the
need
for
additional
emission
reductions
in
order
to
attain
and
maintain
the
NAAQS
for
PM2.5.
We
are
providing
this
information
to
explain
that
this
program
will
result
in
substantial
benefit
in
reduction
of
PM2.5
concentrations,
to
an
even
broader
set
of
geographic
areas
than
will
benefit
in
terms
of
PM10
attainment.
The
annual
and
24­
hour
PM2.5
NAAQS
set
in
1997
are
numerically
much
lower
than
the
corresponding
PM10
standards:
15
versus
50
m
g/
m3
for
the
annual
average
standards
and
65
versus
150
m
g/
m3
for
the
24­
hour
average
standards.
While
geographically
broad
PM2.5
monitoring
is
just
now
reaching
the
end
of
the
first
of
three
years
of
operation
needed
to
determine
compliance,
our
best
analysis
from
the
more
limited
PM2.5
conducted
in
some
areas
indicates
that
many
areas
that
are
in
compliance
with
the
PM10
standards
will
be
found
to
be
in
violation
of
the
annual
average
PM2.5
standard.
Violations
of
the
24­
hour
PM2.5
standard
appear
to
be
infrequent.
Therefore,
if
we
considered
it
appropriate
to
proceed
with
implementing
the
PM2.5
NAAQS,
we
are
confident
that
there
would
be
a
larger
set
of
areas
for
which
we
would
determine
that
further
reductions
in
emissions
are
needed
in
order
to
attain
and
maintain
the
NAAQS.
Moreover,
gasoline
and
diesel
cars
and
light
trucks
have
a
more
important
contributing
role
for
ambient
PM2.5
concentrations,
and
other
emission
sources
that
play
a
major
role
in
ambient
PM10
concentrations
will
be
relatively
less
important.
Cars
and
light
trucks
contribute
essentially
the
same
absolute
amount
to
ambient
concentrations
of
PM10
and
of
PM2.5.
However,
most
other
sources
contribute
much
more
to
PM10
than
to
PM2.5,
so
the
relative
contribution
from
cars
and
light
trucks
is
larger.
In
addition,
the
absolute
contribution
from
cars
and
light
trucks
is
larger
in
relationship
to
the
numerically
lower
PM2.5
standard,
making
them
more
important
to
attainment
and
maintenance.
This
is
also
true
for
the
potential
contribution
that
more
diesel
cars
and
light
trucks
would
make
to
ambient
PM2.5
concentrations.

4.
Emission
Reductions
and
Ambient
PM
Reductions
The
NOX
and
VOC
emission
reductions
from
the
Tier
2/
Gasoline
Sulfur
program
are
presented
in
the
ozone
section
above.
The
SOX
and
PM
reductions
are
presented
in
our
final
RIA,
and
are
essentially
unchanged
from
those
presented
in
our
proposal,
except
for
the
revision
of
the
diesel
sales
scenario
discussed
above.
Because
virtually
all
of
the
PM
reduction
from
the
Tier
2/
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Regulations
34
``
National
Parks
and
the
American
Public:
A
National
Public
Opinion
Survey
on
the
National
Park
System,''
Summary
Report,
National
Parks
and
Conservation
Association,
June
1998.
35
``
Recommendations
for
Improving
Western
Vistas,''
Report
of
the
Grand
Canyon
Visibility
Transport
Commission
to
the
United
States
Environmental
Protection
Agency,
June
10,
1996.
Sulfur
program
is
in
the
fine
fraction
of
PM10,
our
estimates
of
the
PM2.5
and
PM10
reductions
are
essentially
the
same.
Estimates
of
the
ambient
PM
reductions
in
2030
in
different
parts
of
the
nation,
after
full
phase
in
of
the
vehicle
standards,
are
presented
in
the
final
RIA.
The
reductions
in
ambient
PM
are
largest
in
the
parts
of
the
country
with
more
vehicle
travel,
i.
e,
larger
in
the
east
than
in
the
west
and
larger
in
urban
areas
than
in
rural
areas.
In
the
eastern
half
of
the
nation,
the
reductions
in
annual
average
PM
concentrations
range
from
0.2
to
over
1.2
micrograms
per
cubic
meter.

D.
Other
Criteria
Pollutants:
Carbon
Monoxide,
Nitrogen
Dioxide,
Sulfur
Dioxide
The
standards
being
promulgated
today
will
help
reduce
levels
of
three
other
pollutants
for
which
NAAQSs
have
been
established:
carbon
monoxide
(
CO),
nitrogen
dioxide
(
NO2),
and
sulfur
dioxide
(
SO2).
As
of
1998,
every
area
in
the
United
States
has
been
designated
to
be
in
attainment
with
the
NO2
NAAQS.
As
of
1997,
one
area
(
Buchanan
County,
Missouri)
did
not
meet
the
primary
SO2
short­
term
standard,
due
to
emissions
from
the
local
power
plant.
There
are
currently
20
designated
CO
nonattainment
areas,
with
a
combined
population
of
33
million.
There
are
also
24
designated
maintenance
areas
with
a
combined
population
of
22
million.
However,
the
broad
trends
indicate
that
ambient
levels
of
CO
are
declining.
In
1997,
6
of
537
monitoring
sites
reported
ambient
CO
levels
in
excess
of
the
CO
NAAQS.
The
reductions
in
SO2
precursor
emissions
from
today's
actions
are
essentially
equal
to
the
SOX
reductions
described
in
Section
III.
B.
and
III.
C.,
respectively.
The
impact
of
today's
actions
on
NO2
emissions
depends
on
the
specific
emission
control
technologies
used
to
meet
the
Tier
2
vehicle
emission
standards.
However,
essentially
all
of
the
NOX
emitted
by
cars
and
light
trucks
converts
to
NO2
in
the
atmosphere;
therefore,
it
is
reasonable
to
assume
that
today's
actions
will
substantially
reduce
ambient
NO2
levels
by
the
same
proportion.
Today's
rule
also
will
require
light
trucks
to
meet
more
stringent
CO
standards.
These
more
stringent
standards
will
help
extend
the
trend
towards
lower
CO
emissions
from
motor
vehicles
and
thereby
help
the
remaining
CO
nonattainment
areas
reach
attainment
while
helping
other
areas
remain
in
attainment
with
the
CO
NAAQS.
Our
analysis
of
CO
reductions
from
today's
program
is
found
in
Chapter
III
of
the
RIA.
The
analysis
of
economic
benefits
and
costs
found
in
Section
IV.
D.
 
5.
does
not
account
for
the
economic
benefits
of
the
CO
reductions
expected
to
result
from
today's
proposal.

E.
Visibility
Visibility
impairment
occurs
as
a
result
of
the
scattering
and
absorption
of
light
by
particles
and
gases
in
the
atmosphere.
It
is
most
simply
described
as
the
haze
that
obscures
the
clarity,
color,
texture,
and
form
of
what
we
see.
The
principal
cause
of
visibility
reduction
is
fine
particles
between
0.1
and
1
m
m
in
size.
Of
the
pollutant
gases,
only
NO2
absorbs
significant
amounts
of
light;
it
is
partly
responsible
for
the
brownish
cast
of
polluted
skies.
While
the
contribution
of
NO2
to
visibility
impairment
varies
from
area
to
area,
it
is
generally
responsible
for
less
than
ten
percent
of
visibility
reduction.
The
CAA
requires
EPA
to
protect
visibility,
or
visual
air
quality,
through
a
number
of
programs.
These
programs
include
the
national
visibility
program
under
Sections
169a
and
169b
of
the
Act,
the
Prevention
of
Significant
Deterioration
program
for
the
review
of
potential
impacts
from
new
and
modified
sources,
and
the
secondary
NAAQS
for
PM10
and
PM2.5.
The
national
visibility
program
established
in
1980
requires
the
protection
of
visibility
in
156
mandatory
federal
Class
I
areas
across
the
country
(
primarily
national
parks
and
wilderness
areas).
More
than
65
million
visitors
travel
each
year
to
these
parks
and
wilderness
areas.
The
CAA
established
as
a
national
visibility
goal,
``
the
prevention
of
any
future,
and
the
remedying
of
any
existing,
impairment
of
visibility
in
mandatory
federal
Class
I
areas
in
which
impairment
results
from
manmade
air
pollution.''
The
Act
also
calls
for
state
programs
to
make
``
reasonable
progress''
toward
the
national
goal.
In
addition,
a
recent
national
opinion
poll
on
the
state
of
the
national
parks
found
that
more
than
80
percent
of
Americans
believe
air
pollution
affecting
these
parks
should
be
cleaned
up
for
the
benefit
of
future
generations.
34
There
has
been
improvement
in
visibility
in
the
western
part
of
the
country
over
the
last
ten
years.
However,
visibility
impairment
remains
a
serious
problem
in
Class
I
areas.
Visibility
in
the
East
does
not
seem
to
have
improved.
As
one
part
of
addressing
this
national
problem,
EPA
has
required
states
to
adopt
and
implement
effective
plans
for
protecting
and
improving
visibility
in
Class
I
federal
areas
(
64
FR
35714,
July
1,
1999).
Today's
actions
will
result
in
visibility
improvements
due
to
the
reduction
in
local
and
upwind
PM
and
PM
precursor
emissions.
Since
mobile
source
emissions
contribute
to
the
formation
of
visibility­
reducing
PM,
control
programs
that
reduce
the
mobile
source
emissions
of
direct
and
secondary
PM
would
have
the
effect
of
improving
visibility.
The
Grand
Canyon
Visibility
Transport
Commission's
final
recommendations
report
35
found
that
reducing
total
mobile
source
emissions
is
an
essential
part
of
any
program
to
protect
visibility
in
the
Western
U.
S.
The
Commission
found
that
motor
vehicle
exhaust
is
responsible
for
about
14
percent
of
human­
caused
visibility
reduction
(
excluding
road
dust).
A
substantial
portion
of
motor
vehicle
exhaust
comes
from
cars
and
light
trucks.
In
light
of
that
impact,
the
Commission's
recommendations
in
1996
supported
federal
Tier
2/
Gasoline
Sulfur
standards,
as
EPA
is
proposing
today.
More
recently,
a
number
of
Western
Governors
noted
the
importance
of
controlling
mobile
sources
as
part
of
efforts
to
improve
visibility
in
their
comments
on
the
Regional
Haze
Rule
and
on
the
need
to
protect
the
16
Class
I
areas
on
the
Colorado
Plateau.
In
their
joint
letter
dated
June
29,
1998,
they
stated
that,
``*
*
*
the
federal
government
must
do
its
part
in
regulating
emissions
from
mobile
sources
that
contribute
to
regional
haze
in
these
areas.
*
*
*''
and
called
on
EPA
to
make
a
``
binding
commitment
*
*
*
to
fully
consider
the
Commission's
recommendations
related
to
the
*
*
*
federal
national
mobile
source
emission
control
strategies.''
These
recommendations
included
Tier
2
vehicle
standards
and
reductions
in
gasoline
sulfur
levels.
The
recent
Northern
Front
Range
Air
Quality
Study
provides
another
indication
of
how
important
car
and
light
truck
emissions
can
be
to
fine
PM
and
visibility.
This
study
reported
findings
that
indicate
that
cars
and
light
trucks
are
responsible
for
39
percent
of
fine
PM
at
a
site
within
the
metropolitan
Denver
area,
and
for
40
percent
at
a
downwind
rural
site.
This
contribution
includes
both
direct
PM
and
indirect
PM
formed
from
sulfur
dioxide
and
NOX
from
these
vehicles.

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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
36
EPA's
diesel
health
assessment
(
Health
Assessment
Document
for
Diesel
Emissions,
SAB
Review
Draft,
U.
S.
Environmental
Protection
Agency,
Washington,
DC.
EPA/
600/
8
 
90/
057D,
November
1999)
can
be
found
at
the
following
EPA
website:
http://
www.
epa.
gov/
ncea/
diesel.
htm.
37
National
Institute
for
Occupational
Safety
and
Health
(
1988)
Carcinogenic
effects
of
exposure
to
diesel
exhaust.
NIOSH
Current
Intelligence
Bulletin
50.
DHHS
(
NIOSH)
Publication
No.
88
 
116.
Centers
for
Disease
Control,
Atlanta,
GA.
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
Health
Organization,
International
Agency
for
Research
on
Cancer,
Lyon,
France.
World
Health
Organization
(
1996)
Diesel
fuel
and
exhaust
emissions:
International
program
on
chemical
safety.
World
Health
Organization,
Geneva,
Switzerland.
California
Environmental
Protection
Agency,
Office
of
Environmental
Health
Hazard
Assessment:
Proposed
Identification
of
Diesel
Exhaust
as
a
Toxic
Air
Contaminant,
Part
B
Health
Risk
Assessment
for
Diesel
Exhaust.
April
22,
1998.
38
California
Environmental
Protection
Agency,
Office
of
Environmental
Health
Hazard
Assessment:
Proposed
Identification
of
Diesel
Exhaust
as
a
Toxic
Air
Contaminant,
Part
B
Health
Risk
Assessment
for
Diesel
Exhaust.
April
22,
1998.
39
``
U.
S.
Light­
Duty
Dieselization
Scenarios
 
Preliminary
Study'',
report
to
the
American
Petroleum
Institute,
July
2,
1999.
Prepared
by
Arthur
D.
Little,
Inc.
The
analysis
of
economic
benefits
and
costs
found
in
Section
IV.
D.
5.
accounts
for
the
economic
benefits
of
the
visibility
improvements
expected
to
result
from
today's
actions.

F.
Air
Toxics
Section
202(
a)
provides
that
EPA
may
promulgate
standards
regulating
any
air
pollutants
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(
l)
provides
specific
provisions
for
regulation
of
hazardous
air
pollutants
from
motor
vehicles
and
fuels,
and
states
that
at
a
minimum
such
regulations
should
apply
to
emissions
of
benzene
and
formaldehyde.
Emissions
from
cars
and
light
trucks
include
a
number
of
air
pollutants
that
are
known
or
suspected
human
or
animal
carcinogens
or
that
are
known
or
suspected
to
have
other,
non­
cancer
health
impacts.
These
pollutants
include
benzene,
formaldehyde,
acetaldehyde,
1,3­
butadiene,
and
diesel
particulate
matter.
For
several
of
these
pollutants,
motor
vehicle
emissions
are
believed
to
account
for
a
significant
proportion
of
total
nation­
wide
emissions.
All
of
these
compounds
are
present
in
exhaust
emissions;
benzene
is
also
found
in
evaporative
emissions
from
gasoline­
fueled
vehicles.
The
health
effects
of
diesel
particulate
matter
are
of
particular
relevance
to
today's
actions,
because
of
the
possibility
for
increased
diesel­
powered
truck
sales
and
the
more
stringent
PM
standard
that
will
apply
to
these
trucks
as
a
result
of
today's
actions.
While
we
have
not
finalized
our
decision
about
the
carcinogenicity
of
diesel
exhaust,
we
are
in
the
process
of
addressing
this
question.
The
Agency's
recently
released
draft
assessment
36
concludes
that
diesel
exhaust
is
a
highly
likely
human
lung
cancer
hazard,
but
that
the
data
are
currently
unsuitable
to
make
a
confident
quantitative
statement
of
risk.
The
draft
report
concludes,
however,
that
this
risk
is
applicable
to
ambient
exposures
and
that
the
risk
may
be
in
the
range
of
regulatory
interest
(
greater
than
one
in
a
million
over
a
lifetime).
Several
other
agencies
and
governing
bodies
have
designated
diesel
exhaust
or
diesel
PM
as
a
``
potential''
or
``
probable''
human
carcinogen.
37
The
California
Air
Resources
Board
(
ARB),
for
example,
found
that
diesel
particulate
matter
constituted
a
toxic
air
contaminant
and
estimated
a
potency
range
of
1.3
´
 
10
¥
4
to
2.4
´
 
10
¥
3
per
m
g/
m3.38
The
ARB's
findings
suggest
that
130
to
2400
persons
in
one
million
exposed
to
1
m
g/
m3
of
diesel
exhaust
particulate
continuously
for
their
lifetime
(
70
years)
would
develop
cancer
as
a
result
of
their
exposure.
Because
our
assessment
for
diesel
exhaust
is
not
complete,
we
are
not
presenting
absolute
estimates
of
how
potential
cancer
risks
from
diesel
particulate
matter
could
be
affected
by
today's
rule.
However,
we
can
offer
a
qualitative
or
relative
discussion
of
these
risks.
Diesel
engines
used
in
nonroad
equipment
and
heavy­
duty
highway
vehicles
currently
constitute
a
far
larger
source
of
diesel
PM
than
cars
and
light­
duty
trucks,
since
diesel
engines
are
used
in
a
very
small
portion
of
the
cars
and
light­
duty
trucks
in
service
today.
However,
engine
and
vehicle
manufacturers
have
projected
that
diesel
engines
are
likely
to
be
used
in
an
increasing
share
of
cars
and
light
trucks,
and
some
manufacturers
have
announced
capital
investments
to
build
such
engines.
If
these
projections
are
valid,
then
the
proportion
of
cars
and
light
trucks
powered
by
diesel
engines,
and
the
associated
potential
health
risks
from
diesel
PM,
could
increase
substantially.
We
modeled
the
most
likely
level
of
increase
in
light
duty
diesel
engine
sales
developed
for
the
American
Petroleum
Institute.
39
We
found
that
the
greater
diesel
engine
usage
in
cars
and
light
trucks
resulted
in
an
80
percent
increase
in
emissions
from
all
diesel­
powered
highway
vehicles
by
2020
 
emissions
that
have
been
implicated
in
potential
cancer
risks
 
assuming
no
change
in
the
current
light­
duty
diesel
PM
standards.
Today's
rule
would
limit
the
increase
in
the
potential
cancer
risks
from
cars
and
light
trucks
associated
with
any
potential
increase
in
light­
duty
diesel
engines.
Using
the
same
sales
projections
discussed
above,
we
have
estimated
that
today's
rule
would
limit
the
increase
in
total
highway
diesel
PM
emissions
in
2020
due
to
growth
in
light
duty
diesels
to
under
10
percent,
in
contrast
to
the
80
percent
increase
projected
to
occur
without
the
Tier
2
PM
standards.
An
analogous
analysis
that
accounted
for
exposure
patterns,
but
that
assumed
even
more
widespread
use
of
diesels
in
the
car
and
light
truck
fleet,
found
that
today's
rule
would
limit
the
increase
in
total
highway
diesel
PM
exposure
to
about
8
percent.
This
analysis
is
discussed
more
fully
in
Chapter
III.
F.
2
of
the
Regulatory
Impact
Analysis.
In
addition,
the
VOC
emission
reductions
resulting
from
today's
rule
would
reduce
the
potential
cancer
risk
posed
by
air
pollutants
other
than
diesel
PM
emitted
by
cars
and
light
trucks,
since
many
of
these
pollutants
are
themselves
VOCs.
Furthermore,
the
rule
would
align
the
formaldehyde
standards
for
all
Tier
2
LDVs
and
LDTs
with
the
formaldehyde
standards
for
LDVs
and
LDT1s
from
the
NLEV
program,
thereby
helping
to
harmonize
the
Federal
and
California
formaldehyde
standards.
The
analysis
of
economic
benefits
and
costs
found
in
Section
IV.
D.
5.
does
not
account
for
the
economic
benefits
of
the
reduction
in
cancer
risk
from
air
toxics
that
could
result
from
today's
rule.
Although
we
have
completed
a
peer
reviewed
assessment
of
the
impact
of
today's
rule
on
exposure
to
toxic
emissions,
we
have
not
engaged
in
a
peer­
reviewed
assessment
of
the
baseline
air
toxics
risks
(
including
a
final
quantitative
risk
assessment
of
the
diesel
particulate
risks)
or
of
the
reductions
that
would
be
achieved
by
today's
rule.
We
plan
to
complete
our
analysis
of
air
toxics
risks
as
part
of
our
responsibilities
under
section
202(
l)(
2)
of
the
Clean
Air
Act,
which
requires
EPA
to
establish
regulations
for
the
control
of
hazardous
air
pollutants
from
motor
vehicles.
The
regulations
may
address
vehicle
emissions
or
fuel
properties
that
influence
emissions,
or
both.
We
plan
to
issue
a
proposal
to
address
this
requirement
in
April
2000,
and
a
final
rule
in
December
2000.

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/
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10,
2000
/
Rules
and
Regulations
40
Much
of
the
information
in
this
section
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,
November
1995.
41
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.
42
Much
of
this
information
was
taken
from
the
following
EPA
documenta:
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.
43
Terrestrial
nitrogen
deposition
can
act
as
a
fertilizer.
In
some
agricultural
areas,
this
effect
can
be
beneficial.
G.
Acid
Deposition
40
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.
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.
The
general
economic
and
environmental
effects
of
acid
rain
are
discussed
at
length
in
the
RIA.
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
have
acidity
levels
incompatible
with
the
survival
of
sensitive
fish
species.
Many
of
the
over
1,350
acidic
streams
in
the
Mid­
Atlantic
Highlands
(
mid­
Appalachia)
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
actions
will
help
reduce
acid
rain
and
acid
deposition,
thereby
helping
to
reduce
acidity
levels
in
lakes
and
streams
throughout
the
U.
S.
These
reductions
will
help
accelerate
the
recovery
of
acidified
lakes
and
streams
and
the
revival
of
ecosystems
adversely
affected
by
acid
deposition.
Reduced
acid
deposition
levels
will
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
will
be
reduced,
and
the
costs
borne
to
prevent
acid­
related
damage
may
also
decline.
While
the
reduction
in
sulfur
and
nitrogen
acid
deposition
will
be
roughly
proportional
to
the
reduction
in
SOX
and
NOX
emissions,
respectively,
the
precise
impact
of
today's
vehicle
and
fuel
standards
will
differ
across
different
areas.
Each
area
is
affected
by
emissions
from
different
source
regions,
and
the
mobile
source
contribution
to
the
total
SOX
and
NOX
emission
inventory
will
differ
across
different
source
regions.
Nonetheless,
the
projected
impact
of
today's
actions
on
SOX
and
NOX
emission
inventories
provides
a
rough
indicator
of
the
likely
effect
of
the
Tier
2/
Gasoline
Sulfur
standards
on
acid
deposition.
Our
analysis
indicates
that
today's
actions
will
reduce
SOX
emissions
by
1.8
percent
and
NOX
emissions
by
14.5
percent
in
2030.
The
analysis
of
economic
benefits
and
costs
found
in
Section
IV.
D.
5.
did
not
account
for
the
economic
benefits
of
the
reduction
in
acid
deposition
expected
to
result
from
today's
actions.

H.
Eutrophication/
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
41.
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
42.
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
43.
Research
suggests
that
nitrogen
fertilization
can
alter
growth
patterns
and
change
the
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Rules
and
Regulations
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
cars
and
light
trucks
contributes
to
these
problems.
As
discussed
in
Section
III.
B.
above,
today's
actions
will
reduce
total
NOX
emissions
by
4.5
percent
in
2007
and
by
14.5
percent
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.
Since
air
deposition
accounts
for
12
 
44
percent
of
total
nitrogen
loadings
in
coastal
waters,
the
reduction
in
NOX
from
today's
actions
is
projected
to
reduce
nitrogen
loadings
by
0.5
 
2.0
percent
in
2007
and
1.7
 
6.4
percent
in
2030.
To
put
these
reductions
in
perspective,
the
reductions
expected
in
the
Chesapeake
Bay
area
would
amount
to
about
9
percent
of
the
total
reduction
in
nitrogen
loading
needed
to
maintain
the
reduction
in
nutrient
loads
agreed
to
by
the
signatory
states
in
the
Chesapeake
Bay
Agreement
(
40
percent
of
``
controllable
nutrient
loads''
by
the
year
2000).
The
analysis
of
economic
benefits
and
costs
found
in
Section
IV.
D.
5.
does
not
account
for
the
economic
benefits
of
reduced
eutrophication
or
reduced
terrestrial
nitrogen
deposition
expected
to
result
from
today's
actions.

I.
Cleaner
Cars
and
Light
Trucks
Are
Critically
Important
to
Improving
Air
Quality
Despite
continued
progress
in
reducing
ozone
and
PM
levels,
tens
of
millions
of
Americans
are
still
exposed
to
levels
of
these
pollutants
that
exceed
the
National
Ambient
Air
Quality
Standards.
Our
projections
show
that
without
further
action
to
reduce
these
pollutants,
tens
of
millions
of
Americans
will
continue
to
breathe
unhealthy
air
for
decades
to
come.
Our
projections
also
show
that
emissions
from
cars
and
light
trucks
will
continue
to
contribute
a
substantial
share
of
the
ozone
and
PM
precursors
in
current
and
projected
nonattainment
areas,
and
in
upwind
areas
whose
emissions
contribute
to
downwind
nonattainment,
unless
additional
measures
are
taken
to
reduce
their
emissions.
Cars
and
light
trucks
also
contribute
substantially
to
ambient
concentrations
of
CO.
These
vehicles
will
also
continue
to
contribute
to
the
ambient
PM
that
affects
visibility
in
Class
I
federal
areas
and
some
urban
areas.
Emissions
from
cars
and
light
trucks
also
play
a
significant
role
in
a
wide
range
of
health
and
environmental
problems,
including
known
and
potential
cancer
risks
from
inhalation
of
air
pollutants
(
a
problem
that
could
become
more
significant
if
sales
of
diesel­
powered
cars
and
light
trucks
were
to
increase),
health
risks
from
elevated
drinking
water
nitrate
levels,
acidification
of
lakes
and
streams,
and
eutrophication
of
inland
and
coastal
waters.
Today's
actions
will
reduce
NOX,
VOC,
CO,
PM,
and
SOX
emissions
from
these
vehicles
substantially.
These
reductions
will
help
reduce
ozone
levels
nationwide
and
reduce
the
extent
and
severity
of
violations
of
the
1­
hour
ozone
standard.
These
reductions
will
also
help
reduce
PM
levels,
both
by
reducing
direct
PM
emissions
and
by
reducing
emissions
that
give
rise
to
secondary
PM.
The
CO
reductions
will
help
extend
the
downward
trend
in
carbon
monoxide
levels,
thereby
helping
the
remaining
CO
nonattainment
areas
attain
the
CO
standard
and
helping
other
areas
stay
in
attainment
with
the
CO
standard
despite
continued
increases
in
vehicle
miles
traveled.
The
NOX
and
SOX
reductions
will
help
reduce
acidification
problems,
and
the
NOX
reductions
will
help
reduce
eutrophication
problems
and
drinking
water
nitrate
levels.
The
PM
standards
included
in
today's
actions
will
help
improve
visibility
and
would
help
mitigate
adverse
health
effects
in
the
event
of
increases
in
light­
duty
diesel
engine
sales.

IV.
What
Are
the
New
Requirements
for
Vehicles
and
Gasoline?

A.
Why
Are
We
Proposing
Vehicle
and
Fuel
Standards
Together?

1.
Feasibility
of
Stringent
Standards
for
Light­
Duty
Vehicles
and
Light­
Duty
Trucks.

a.
Gasoline
Fueled
Vehicles
We
believe
that
the
standards
being
promulgated
today
for
gasoline­
fueled
vehicles
are
well
within
the
reach
of
existing
control
technology.
Our
determination
of
feasibility
is
based
on
the
use
of
catalyst­
based
strategies
that
are
already
in
use
and
are
well
proven
on
the
existing
fleet
of
vehicles.
In
fact,
as
you
will
see
below,
many
current
engine
families
are
already
certified
to
levels
at
or
below
the
new
final
Tier
2
requirements.
All
of
the
certification
and
research
testing
discussed
below
was
performed
on
low­
sulfur
test
fuel
(
nominally
30
ppm).

i.
LDVs
and
LDT1s
 
LDT4s
Certainly,
larger
vehicles
and
trucks,
which
are
heavier
and
have
larger
frontal
areas,
will
face
the
biggest
challenges
in
meeting
the
final
Tier
2
standards.
However,
conventional
technology
will
be
sufficient
for
even
these
vehicles,
especially
in
light
of
the
extra
leadtime
we
have
provided
before
LDT3s
and
LDT4s
have
to
meet
Tier
2
levels.
We
are
also
changing
the
test
conditions
for
these
trucks
from
``
adjusted
loaded
vehicle
weight''
to
``
loaded
vehicle
weight.''
Adjusted
loaded
vehicle
weight,
suitable
for
commercial
truck
operation,
loads
the
truck
to
half
of
its
full
payload.
Loaded
vehicle
weight,
on
the
other
hand,
represents
curb
weight
plus
300
pounds.
This
change
more
accurately
reflects
how
these
vehicles
are
used
and
makes
heavy
LDT
testing
consistent
with
passenger
car
and
light
LDT
testing.
This
change
is
consistent
with
treating
these
vehicles
as
they
were
designed,
i.
e.,
for
light­
load
use.
Emission
control
technology
has
evolved
rapidly
in
recent
years.
Emission
standards
applicable
to
1990
model
year
vehicles
required
roughly
90
percent
reductions
in
exhaust
HC
and
CO
emissions
and
a
75
percent
reduction
in
NOX
emissions
compared
to
uncontrolled
emissions.
Today,
some
vehicles
currently
in
production
are
well
below
these
levels,
showing
even
greater
overall
emissions
reductions
of
all
three
of
these
pollutants.
These
vehicles'
emissions
are
well
below
those
necessary
to
meet
the
current
federal
Tier
1
and
even
California
Low­
Emission
Vehicle
(
LEV
 
I)
standards.
The
reductions
have
been
brought
about
by
ongoing
improvements
in
engine
airfuel
management
hardware
and
software
plus
improvements
in
catalyst
designs,
all
of
which
are
described
fully
in
the
RIA.
The
types
of
changes
being
seen
on
current
vehicles
have
not
yet
reached
their
technological
limits,
and
continuing
improvement
will
allow
both
LDVs
and
LDTs
to
meet
the
final
standards.
The
RIA
describes
a
range
of
specific
techniques
that
we
believe
could
be
used.
These
range
from
improved
computer
software
and
engine
air­
fuel
controls
to
increases
in
precious
metal
loading
and
other
exhaust
system/
catalyst
system
improvements.
All
of
these
technologies
are
currently
used
on
one
or
more
production
vehicle
models.
There
is
no
need
to
invent
new
approaches
or
technologies.
The
focus
of
the
effort
is
primarily
development,

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44
Powertrain
control
modules
are
computers
used
to
control
engine,
transmission,
and
other
vehicle
functions
on
newer
automobiles
and
trucks.
The
changes
involved
software
changes
in
the
case
of
the
EPA­
NVFEL
work,
or
the
use
of
alternate
means
of
engine
control
in
the
case
of
the
SwRI
work.

45
Although
this
testing
was
done
on
vehicles
with
catalysts
aged
to
50,000,
we
belive
the
overall
experiments
also
strongly
suggest
that
the
Tier
2
full­
life
standards
would
be
achieved
by
highmileage
vehicles.
application,
and
optimization
of
these
existing
technologies.
We
can
gain
significant
insight
into
the
difficulty
of
meeting
the
final
new
standards
by
looking
at
current
full­
life
certification
data.
There
are
at
least
48
engine
family­
control
systems
combinations,
out
of
approximately
400,
certified
in
1999
at
levels
below
the
Tier
2
NOX
standard
of
0.07
g/
mi.
Of
these,
35
also
have
hydrocarbon
levels
of
0.09
g/
mi
or
below.
Looking
at
a
somewhat
higher
threshold
to
identify
vehicles
certified
near
the
final
standard,
there
are
an
additional
113
car
and
light
truck
families
certified
at
levels
between
0.07
g/
mi
and
0.10
g/
mi
NOX.
Although
not
yet
complete
at
this
time,
we
also
examined
the
2000
model
year
certification
data
and
found
that
there
are
at
least
60
engine
family­
control
systems
combinations
certified
at
levels
below
the
Tier
2
NOX
standard
of
0.07
g/
mi
and
of
those,
52
also
have
hydrocarbon
levels
of
0.09
g/
mi
or
below.
All
of
the
above
vehicles
are
already
able,
or
close
to
being
able,
to
certify
to
our
final
standards.
The
further
reductions
needed
are
those
to
provide
a
compliance
margin,
or
cushion,
between
the
certified
level
and
the
emission
standard.
The
degree
of
compliance
margin
required
is
a
function
of
a
variety
of
factors
designed
to
provide
the
manufacturer
a
high
confidence
that
production
vehicles
will
meet
the
standards
in­
use
over
their
useful
life.
Historically,
these
determinations
are
manufacturer
specific,
with
cushions
generally
growing
smaller
as
standards
decline
(
reflecting
more
precision
and
repeatability
in
vehicle
performance
as
more
sophisticated
controls
are
developed).
The
certification
data
reflects
compliance
cushions
from
as
little
as
20
percent
below
the
standard
to
as
high
as
80
percent
below
the
standard.
The
manufacturers
commented
that
the
most
difficult
vehicles
to
bring
into
compliance
with
the
Tier
2
standards
would
be
the
larger
light­
duty
trucks,
specifically
those
trucks
currently
certified
under
the
LDT3
and
LDT4
weight
categories.
Because
of
this,
we
undertook
a
technology
demonstration
program
aimed
at
lowering
the
emissions
of
several
large
1999
lightduty
trucks.
Two
LDT3
Chevrolet
Silverado
pick­
up
trucks
were
tested,
one
internally
and
one
under
contract.
Two
LDT4
Ford
Expedition
sport­
utility
vehicles
were
also
tested,
also
with
one
tested
internally
and
one
under
contract.
Both
types
of
vehicles
were
tested
with
optional
high
horsepower
engines
(
270
hp
for
the
Silverado
and
230
hp
for
the
Expedition)
and
were
equipped
with
four­
wheel
drive.
The
vehicles
had
curb
weights
of
4,500
pounds
(
GVWR
of
6,100
lbs)
for
the
Silverados
and
5,800
pounds
(
GVWR
of
7,200
lbs)
for
the
Expeditions.
Figures
IV.
A.
 
1
and
IV.
A.
 
2
show
the
results
to
date
of
the
emissions
tests
performed
during
this
demonstration
program
at
our
National
Vehicle
and
Fuel
Emissions
Laboratory
(
NVFEL)
and
also
for
emissions
tests
conducted
in
parallel
by
and
under
contract
at
Southwest
Research
Institute
(
SwRI)
using
similar
Ford
Expeditions
and
GM
Chevrolet
Silverados.
During
the
evaluation,
the
trucks
were
equipped
with
a
variety
of
catalysts
that
typically
featured
higher
volume,
higher
precious
metal
loading,
and
higher
cell­
densities
than
the
original
hardware
used
by
the
vehicles
to
meet
California
LEV
 
I
standards.
Details
of
the
catalysts
tested
are
included
in
the
RIA.
Different
exhaust
manifolds
featuring
an
insulating
air­
gap
and
low
thermal
mass
were
also
evaluated.
Finally,
calibration
changes
were
made
to
the
powertrain
control
modules
44
to
better
match
engine
operating
characteristics
to
the
new
catalyst
systems,
and
to
lower
engine­
out
NOx
emissions.
The
Silverado
and
Expedition
had
very
similar
results.
Similar
results
were
also
achieved
by
us
and
SwRI,
but
by
fairly
different
methods.
The
SwRI
work
on
both
trucks
relied
primarily
on
engine
calibration
changes
and
secondary
air
injection.
The
advanced
catalyst
systems
used
by
SwRI
contained
advanced
washcoat
formulations
with
only
minor
changes
to
catalyst
volume
and
precious
metal
content
compared
to
the
manufacturer's
original
configuration.
The
work
we
conducted
on
the
Expedition
also
relied
primarily
on
engine
calibration
changes
with
no
secondary
air
injection.
The
catalyst
system
also
contained
advanced
washcoat
formulations
with
modest
changes
to
catalyst
volume
and
precious
metal
content.
The
work
we
conducted
on
the
Silverado
relied
primarily
on
an
advanced
catalyst
system
with
volume
and
precious
metal
content
changes,
with
only
minor
changes
to
engine
calibration.
As
can
be
seen
in
the
charts,
the
emissions
of
the
vehicles
tested
clearly
show
the
feasibility
of
the
Tier
2
standards
on
the
most
difficult
to
certify
vehicle
categories.
All
vehicles
reached
emission
levels
well
below
the
Tier
2
full­
life
NOx
and
NMOG
standards.
At
the
same
time,
there
were
no
significant
impacts
on
either
fuel
economy
or
performance
of
the
vehicles.
Compared
to
the
intermediate
(
50,000
mile)
standards,
the
Ford
Expedition
tested
at
NVFEL
consistently
emitted
NOx
at
less
than
one­
third
of
the
intermediate
useful
life
standard.
45
NMHC/
NMOG
emissions
were
slightly
below
the
intermediate
standard
level
with
no
use
of
secondary­
air­
injection
for
cold­
start
hydrocarbon
control.
The
Silverado
tested
at
NVFEL
met
the
intermediate
standards
with
primarily
hardware
(
catalyst)
changes
and
only
very
minor
calibration
changes.
The
trucks
tested
at
SwRI
differed
from
those
tested
at
NVFEL
in
their
combination
of
emissions
control
hardware
and
calibration
strategies,
but
achieved
approximately
the
same
emissions
levels.
The
above
results
point
out
that
not
only
are
the
Tier
2
standards
feasible
for
larger
trucks,
but
there
are
multiple
means
that
can
be
taken
in
order
to
achieve
the
necessary
emissions
levels.
All
of
those
paths
involve
fairly
simple
enhancements
to
current
technology
systems.
Furthermore,
the
testing
was
conducted
with
a
very
limited
budget
over
a
limited
amount
of
time.
With
the
interim
program
for
heavy
trucks
under
Tier
2,
the
manufacturers
will
have
9
years
from
the
publishing
of
the
Tier
2
rule
to
bring
the
largest
trucks
into
compliance
with
the
Tier
2
standards.
Manufacturers
will
also
have
considerably
more
resources
with
respect
to
calibration
changes
and
hardware
design
to
bring
trucks
of
this
type
within
compliance
than
were
available
within
this
limited,
but
successful,
demonstration.

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BILLING
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50
 
C
The
Manufacturers
of
Emission
Controls
Association
(
MECA)
sponsored
a
program
that
took
two
LDVs
(
a
Crown
Victoria
and
a
Buick
LeSabre)
and
one
LDT2
(
a
Toyota
T100)
certified
to
the
federal
Tier
1
standards
and
replaced
the
original
catalytic
converter
systems
with
more
advanced
catalytic
converters,
thermally
aged
to
approximately
50,000
miles.
With
these
systems
and
some
related
emission
control
modifications,
the
LeSabre
and
T100
emissions
were
well
below
our
intermediate
(
50,000
mile)
useful
life
standards,
and
the
Crown
Victoria
was
well
below
the
NMOG
standard
and
very
close
to
the
NOX
standard.
Finally,
the
California
Air
Resources
Board
(
ARB)
tested
five
different
production
LEV
light­
duty
vehicle
models.
Three
of
the
five
models
met
the
Tier
2
standards
for
NMOG
and
NOX
prior
to
any
modifications.
After
installing
low
mileage
advanced
catalytic
converters
and
making
some
minor
adjustments
to
fuel
bias,
air
injection,
and
spark
timing,
all
of
the
vehicles
had
emission
levels
well
below
the
Tier
2
intermediate
useful
life
NMOG
and
NOX
standards.
ARB
also
tested
several
Ford
Expeditions
(
LDT4)
equipped
with
advanced
catalytic
converters.
By
adjusting
several
parameters,
they
were
able
to
reduce
NOX
emissions
to
0.06
g/
mi
and
NMOG
to
0.07
g/
mi
with
a
catalyst
aged
to
50,000
miles
of
use.
A
more
expanded
analysis
of
the
feasibility
of
the
Tier
2
standards
for
gasoline
fueled
vehicles
can
be
found
in
the
RIA,
considering
the
types
of
changes
that
will
allow
manufacturers
to
extend
effective
new
controls
to
the
entire
fleet
of
affected
vehicles.
That
analysis
includes
discussion
of
gasoline
direct­
injection
engines,
as
well
as
the
feasibility
of
the
CO,
formaldehyde
and
evaporative
emission
standards.
The
conclusion
of
all
of
our
analyses
is
that
the
standards
are
feasible
for
gasolinefueled
vehicles.
As
gasoline­
fueled
vehicles
represent
the
overwhelming
majority
of
the
LDV
and
LDT
population
(
i.
e.,
over
99%),
EPA
concludes
that
the
Tier
2
standards
are
feasible
overall
for
LDVs
and
LDTs
under
8500
lbs
GVWR.

ii.
Medium­
Duty
Passenger
Vehicles
(
MDPVs)

The
technologies
and
emission
control
strategies
that
will
be
used
for
LDT3
and
LDT4
vehicles
with
a
GVWR
less
than
8,500
pounds
should
apply
directly
to
MDPV
vehicles
that
have
a
GVWR
greater
than
8,500
pounds.
In
our
LDT
technology
demonstration
program
discussed
above,
we
found
that
a
combination
of
calibration
changes
and
improvements
to
the
catalyst
system
resulted
in
emission
levels
for
NOX
well
below
and
NMHC/
NMOG
approximately
at
the
Tier
2
intermediate
useful
life
standards.
The
catalyst
improvements
consisted
of
increases
in
volume
and
precious
metal
loading,
and
higher
cell­
densities
than
those
found
in
the
original
hardware.
We
are
confident
that
the
use
of
secondary­
air­
injection
will
greatly
help
cold­
start
hydrocarbon
control,
making
the
NMOG
standards
achievable.
The
most
significant
difference
between
LDT4s
less
than
8,500
pounds
GVWR
and
MDPVs
greater
than
8,500
pounds
GVWR
is
that
MDPVs
have
a
vehicle
weight
up
to
800
pounds
more
than
LDT4s.
MDPVs
will
also
be
typically
equipped
with
larger
displacement
engines.
The
potential
impact
of
these
differences
is
higher
engine­
out
emissions
than
LDT4s
due
to
the
larger
engine
displacement
and
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28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
46
``
Cummins
Sees
Diesel
Feasible
for
Early
Years
of
Tier
2''.
Hart
Diesel
Fuel
News,
Sept.
20,
1999,
p.
2.
47
Harts
Diesel
Fuel
News,
August
9,
1999,
p4.
greater
load
that
the
engine
will
be
operated
under
due
to
the
extra
weight.
However,
neither
of
these
preclude
manufacturers
from
applying
the
same
basic
emission
control
technologies
and
strategies
as
used
by
LDVs
and
LDTs.
The
only
difference
will
likely
be
the
need
for
larger
catalysts
with
higher
precious
metal
loading
than
found
in
LDT4s.
We
are
confident
that
MDPVs
will
be
capable
of
meeting
the
final
Tier
2
standards.
We
are
currently
testing
a
Ford
Excursion
as
part
of
our
LDT
technology
demonstration
program.
Preliminary
baseline
results
with
a
`
green''
(
i.
e.,
nearly
new)
catalyst
indicate
that
emission
levels
are
higher
than
baseline
emissions
for
the
Ford
Expedition.
These
results,
although
with
a
green
catalyst,
are
well
below
our
interim
Tier
2
upper
bin
standards.
In
fact,
the
majority
of
these
vehicles
certified
on
the
chassis
dynamometer
in
California
have
certification
levels
well
below
our
interim
upper
bin
standards.
While
this
testing
is
ongoing,
we
feel
that
the
preliminary
results
are
encouraging
since
they
suggest
that
the
difference
in
emissions
between
the
Excursion
and
Expedition
suggest
that
the
strategies
used
on
the
Expedition
can
be
successful
with
the
Excursion.
Therefore,
we
believe
that
by
using
technologies
and
control
strategies
similar
to
what
will
be
used
by
LDVs
and
LDTs,
combined
with
larger
catalysts,
MDPVs
will
be
able
to
meet
our
Tier
2
emission
standards.

b.
Diesel
Vehicles
As
discussed
above,
the
Tier
2
standards
are
intended
to
be
``
fuel
neutral.''
In
today's
document,
we
establish
that
the
Tier
2
standards
are
technologically
feasible
and
costeffective
for
LDVs
and
LDTs
overall,
based
on
the
discussion
in
Section
IV.
A.
1.
a.
above.
Under
the
principle
of
fuel
neutrality,
all
cars
and
light
trucks,
including
those
using
diesel
engines,
will
be
required
to
meet
the
Tier
2
standards.
Contrary
to
some
of
the
comments
received
on
our
proposal,
given
that
the
overwhelming
majority
of
vehicles
in
these
classes
are
gasolinefueled
we
do
not
believe
it
is
appropriate
to
provide
less
stringent
standards
for
diesel­
fueled
vehicles.
Manufacturers
of
LDVs
and
LDTs
today
provide
consumers
with
a
wide
choice
of
vehicles
that
are
overwhelmingly
gasoline­
fueled.
Less
stringent
standards
for
diesels
would
create
provisions
that
could
undermine
the
emission
reductions
expected
from
this
program,
especially
given
the
expectation
that
some
manufacturers
may
intend
to
greatly
increase
their
diesel
sales.
As
with
gasoline
engines,
manufacturers
of
diesels
have
made
abundant
progress
over
the
past
10
years
in
reducing
engine­
out
emissions
from
diesel
engines.
In
heavy
trucks
and
buses,
PM
emission
standards,
which
were
projected
to
require
the
use
of
exhaust
aftertreatment
devices,
were
actually
met
with
only
engine
modifications.
Indeed,
emissions
and
performance
of
lighter
diesel
engine
are
rapidly
approaching
the
characteristics
of
gasoline
engines,
while
retaining
the
durability
and
fuel
economy
advantages
that
diesels
enjoy.
Against
this
background
of
continuing
progress,
we
believe
that
the
technological
improvements
that
would
be
needed
could
be
made
in
the
time
that
would
be
available
before
diesels
would
have
to
meet
the
new
Tier
2
standards.
Manufacturers
may
take
advantage
of
the
flexibilities
in
today's
rulemaking
to
delay
the
need
for
diesel
LDVs
and
LDTs
to
meet
the
final
Tier
2
levels
until
late
in
the
phase­
in
period
(
as
late
as
2007
for
LDVs/
LLDTs
and
2009
for
HLDTs),
giving
manufacturers
a
relatively
large
amount
of
leadtime.
In
a
recent
public
statement,
Cummins
Engine
Company
has
indicated
that
the
interim
Tier
2
standards
in
effect
for
vehicles
and
trucks
in
the
early
years
of
the
Tier
2
program
are
feasible
for
diesel
equipped
models
through
further
development
of
currently
available
engine
and
exhaust
aftertreatment
technology.
46
While
reductions
in
``
engine­
out''
emissions,
including
incorporation
of
EGR
strategies,
may
continue
to
be
made,
increasing
emphasis
is
being
placed
on
various
aftertreatment
devices
for
diesels.
We
believe
that
the
use
of
aftertreatment
devices
will
allow
diesels
to
comply
with
the
Tier
2
standards
for
NOX
and
PM.
For
NOX
emissions,
potential
aftertreatment
technologies
include
lean
NOX
catalysts,
NOX
adsorbers
and
selective
catalytic
reduction
(
SCR).
Lean
NOX
catalysts
are
still
under
development,
but
generally
appear
capable
of
reducing
NOX
emissions
by
about
15
 
30%.
This
efficiency
is
not
likely
to
be
sufficient
to
enable
compliance
with
the
final
Tier
2
standards,
but
it
could
be
used
to
meet
the
interim
standards
that
would
begin
in
2004,
with
current
diesel
fuel.
NOX
adsorbers
appear
capable
of
reaching
efficiency
levels
as
high
as
90%.
Efficiency
in
this
range
is
likely
to
be
sufficient
to
enable
compliance
with
the
proposed
Tier
2
standards.
NOX
adsorbers
temporarily
store
the
NOX
and
thus
the
engine
must
be
run
periodically
for
a
brief
time
with
excess
fuel,
so
that
the
stored
NOX
can
be
released
and
converted
to
nitrogen
and
oxygen
using
a
conventional
three­
way
catalyst,
like
that
used
on
current
gasoline
vehicles.
There
is
currently
a
substantial
amount
of
development
work
being
directed
at
NOX
adsorber
technology.
While
there
are
technical
hurdles
to
be
overcome,
progress
is
continuing
and
it
is
our
judgement
that
the
technology
should
be
available
by
the
time
it
would
be
needed
for
the
final
Tier
2
standards.
One
serious
concern
with
current
NOX
adsorbers
is
that
they
are
quickly
poisoned
by
sulfur
in
the
fuel.
Some
manufacturers
have
strongly
emphasized
their
belief
that,
in
order
to
meet
the
final
Tier
2
levels,
low
sulfur
diesel
fuel
would
also
be
required
to
mitigate
or
prevent
this
poisoning
problem.
In
its
comments
on
the
NPRM,
Navistar
indicated
that
the
Tier
2
standards
may
be
achievable
given
low
sulfur
fuel
and
other
programmatic
changes
such
as
those
included
in
this
Final
Rule.
Navistar
has
also
been
quoted
publically
as
describing
the
Tier
2
standards
as
``
challenging
but
achievable''
given
appropriate
low
sulfur
fuel.
47
We
intend
to
issue
a
Notice
of
Proposed
Rulemaking
early
in
the
year
2000
intended
to
reduce
sulfur
in
highway
diesel
fuel
as
a
step
to
enable
the
technology
most
likely
to
be
used
to
meet
the
Tier
2
standards.
SCR
has
been
demonstrated
commercially
on
stationary
diesel
engines
and
can
reduce
NOX
emissions
by
80
 
90%.
This
efficiency
would
be
sufficient
to
enable
compliance
with
the
proposed
Tier
2
standards.
However,
SCR
requires
that
the
chemical
urea
be
injected
into
the
exhaust
before
the
catalyst
to
assist
in
the
destruction
of
NOX.
The
urea
must
be
injected
at
very
precise
rates,
which
is
difficult
to
achieve
with
an
on­
highway
engine,
because
of
widely
varying
engine
operating
conditions.
Otherwise,
emissions
of
ammonia,
which
have
a
very
objectionable
odor,
can
occur.
Substantial
amounts
of
urea
are
required,
meaning
that
vehicle
owners
would
have
to
replenish
their
vehicles'
supply
of
urea
frequently,
possibly
as
often
as
every
fill­
up
of
fuel.
As
the
engine
and
vehicle
would
operate
satisfactorily
without
the
urea
(
only
NOX
emissions
would
be
affected),
some
mechanism
would
be
needed
to
ensure
that
vehicle
owners
maintained
their
supply
of
urea.
Otherwise,
little
NOX
emission
reduction
would
be
expected
in­
use.

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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
48
The
air
quality
impacts
discussed
above
under
Section
III
above
do
not
reflect
these
new
estimates.
Regarding
PM,
applicable
aftertreatment
devices
tend
to
fall
into
two
categories:
Oxidation
catalysts
and
traps.
Diesel
oxidation
catalysts
can
reduce
total
PM
emissions
by
roughly
15
 
30%.
They
would
need
to
be
used
in
conjunction
with
further
reductions
in
PM
engine­
out
emissions
in
order
to
meet
the
proposed
Tier
2
standards.
Diesel
particulate
traps,
on
the
other
hand,
can
eliminate
up
to
90%
of
diesel
PM
emissions.
However,
some
of
the
means
of
accomplishing
the
regeneration
of
particulate
traps
involve
catalytic
processes
that
also
convert
sulfur
dioxide
in
the
exhaust
to
sulfate.
These
techniques,
if
used,
would
also
require
a
low
sulfur
fuel.
In
summary,
we
believe
that
the
structure
of
our
final
program,
including
the
available
bins
and
phase­
in
periods,
will
allow
the
orderly
development
of
clean
diesel
engine
technologies.
We
believe
that
the
interim
standards
are
feasible
for
diesel
LDV/
LDTs,
within
the
bin
structure
of
this
rule
and
without
further
reductions
in
diesel
fuel
sulfur
levels.
And,
as
indicated
earlier,
at
least
one
major
diesel
engine
manufacturer
(
Cummins)
has
publicly
agreed
with
this
assessment.
We
further
believe
that
in
the
long­
term,
the
final
standards
will
be
within
reach
for
diesel­
fueled
vehicles
in
combination
with
appropriate
changes
to
diesel
fuel
to
facilitate
aftertreatment
technologies.
Manufacturers
have
argued
that
low
sulfur
diesel
fuel
will
be
required
to
permit
diesels
to
meet
the
final
Tier
2
standards,
and
we
agree.
At
least
one
major
manufacturer
(
Navistar)
has
indicated
its
belief
that
the
final
Tier
2
standards
may
be
achievable
for
diesel
engines
with
low
sulfur
diesel
fuel.

2.
Gasoline
Sulfur
Control
Is
Needed
to
Support
the
Proposed
Vehicle
Standards
As
we
discussed
in
the
previous
section,
we
believe
that
the
stringent
standards
in
this
final
rule
are
needed
to
meet
air
quality
goals
and
are
feasible
for
LDVs
and
LDTs.
At
the
same
time,
we
believe
that
for
these
standards
to
be
feasible
for
gasoline
LDVs
and
LDTs,
low
sulfur
gasoline
must
be
made
available.
The
following
paragraphs
explain
why
we
think
gasoline
sulfur
control
must
accompany
Tier
2
vehicle
standards.
Catalyst
manufacturers
generally
use
low
sulfur
gasoline
in
the
development
of
their
catalyst
designs.
Vehicle
manufacturers
then
equip
their
vehicles
with
these
catalysts
and
EPA
certifies
them
to
the
exhaust
emission
standards,
usually
based
on
testing
the
manufacturer
does
using
low
sulfur
gasoline.
However,
fundamental
chemical
and
physical
characteristics
of
exhaust
catalytic
converter
technology
generally
result
in
a
significant
degradation
of
emission
performance
when
these
vehicles
use
gasoline
with
sulfur
levels
common
in
most
of
the
country
today.
This
sensitivity
of
catalytic
converters
to
gasoline
sulfur
varies
somewhat
depending
on
a
number
of
factors,
some
better
understood
than
others.
Clearly,
however,
as
we
discuss
in
the
following
paragraphs,
gasoline
sulfur's
impact
is
large,
especially
in
vehicles
designed
to
meet
very
low
emission
standards.
This
is
the
reason
EPA
has
decided
to
adopt
a
comprehensive
approach
to
addressing
emissions
from
cars
and
light
trucks,
including
provisions
to
get
low
sulfur
gasoline
into
the
field
in
the
same
time
frame
needed
for
Tier
2
vehicles.

a.
How
Does
Gasoline
Sulfur
Affect
Vehicle
Emission
Performance?
We
know
that
gasoline
sulfur
has
a
negative
impact
on
vehicle
emission
controls.
Vehicles
depend
on
the
catalytic
converter
to
reduce
emissions
of
HC,
CO,
and
NOX.
Sulfur
and
sulfur
compounds
attach
or
``
adsorb''
to
the
precious
metal
catalysts
that
are
required
to
convert
these
emissions.
Sulfur
also
blocks
sites
on
the
catalyst
designed
to
store
oxygen
that
are
necessary
to
optimize
NOX
emissions
conversions.
While
the
amount
of
sulfur
contamination
can
vary
depending
on
the
metals
used
in
the
catalyst
and
other
aspects
of
the
design
and
operation
of
the
vehicle,
some
level
of
sulfur
contamination
will
occur
in
any
catalyst.
Sulfur
sensitivity
is
impacted
not
only
by
the
catalyst
formulation
(
the
types
and
amounts
of
precious
metals
used
in
the
catalyst)
but
also
by
factors
including
the
following:
·
The
materials
used
to
provide
oxygen
storage
capacity
in
the
catalyst,
as
well
as
the
general
design
of
the
catalyst,
·
The
location
of
the
catalyst
relative
to
the
engine,
which
impacts
the
temperatures
inside
the
catalyst,
·
The
mix
of
air
and
fuel
entering
the
engine
over
the
course
of
operation,
which
is
varied
by
the
engine's
computer
in
response
to
the
driving
situation
and
affects
the
mix
of
gases
entering
the
catalyst
from
the
engine,
and
·
The
speeds
the
car
is
driven
at
and
the
load
the
vehicle
is
carrying,
which
also
impact
the
temperatures
experienced
by
the
catalyst.
Since
these
factors
vary
for
every
vehicle,
the
sulfur
impact
varies
for
every
vehicle
to
some
degree.
There
is
no
single
factor
that
guarantees
that
a
vehicle
will
be
very
sensitive
or
very
insensitive
to
sulfur.
We
now
believe
that
there
are
not
(
and
will
not
be
in
the
foreseeable
future)
emission
control
devices
available
for
gasoline­
powered
vehicles
that
can
meet
the
proposed
Tier
2
emission
standards
that
would
not
be
significantly
impaired
by
gasoline
with
sulfur
levels
common
today.

b.
How
Large
Is
Gasoline
Sulfur's
Effect
on
Emissions?
High
sulfur
levels
have
been
shown
to
significantly
impair
the
emission
control
systems
of
cleaner,
later
technology
vehicles.
The
California
LEV
standards
and
Federal
NLEV
standards,
as
well
as
California's
new
LEV
 
II
standards
and
our
Tier
2
standards,
require
catalysts
to
be
extremely
efficient
to
adequately
reduce
emissions
over
the
full
useful
life
of
the
vehicle.
In
the
NPRM
we
estimated
that,
based
on
data
from
test
programs
conducted
by
EPA
and
the
automotive
and
oil
industries,
LEV
and
ULEV
vehicles
could
experience,
on
average,
a
40
percent
increase
in
NMHC
and
134
percent
increase
in
NOX
emissions
when
operated
on
330
ppm
sulfur
fuel
(
our
estimate
in
the
NPRM
of
the
current
national
average
sulfur
level)
compared
to
30
ppm
sulfur
fuel.
New
data
generated
since
the
NPRM
on
similar
LEVs
and
ULEVs
show
that
when
these
vehicles
were
driven
on
high
sulfur
(
330
ppm)
fuel
for
a
few
thousand
miles
(
as
opposed
to
less
than
100
miles
for
the
previous
data),
the
NMHC
and
NOX
emission
increase
due
to
high
sulfur
fuel
increased
by
149
percent
and
47
percent,
respectively.
In
other
words,
instead
of
the
previous
estimated
40
percent
and
134
percent
increases
in
NMHC
and
NOX
emissions,
respectively,
more
realistic
estimates
would
be
100
percent
and
197
percent,
respectively.
48
Also,
new
data
generated
since
the
NPRM
for
late
model
LEV
and
ULEV
vehicles
that
meet
the
federal
and
California
supplemental
federal
test
procedure
(
SFTP)
standards
and
also
have
very
low
FTP
emission
levels,
indicate
that,
on
average,
a
51
percent
increase
in
NMHC
and
a
242
percent
increase
in
NOX
emissions
when
operated
for
a
short
period
of
time
on
330
ppm
compared
to
30
ppm
could
be
realized.
This
level
of
emissions
increase
is
significant
enough
on
its
own
to
cause
a
vehicle
to
exceed
the
full
useful
life
emission
standards
when
operated
on
sulfur
levels
that
are
substantially
higher
than
the
levels
required
by
today's
rule,
even
with
the
margin
of
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Rules
and
Regulations
safety
that
auto
manufacturers
generally
include.
Average
sulfur
levels
in
the
U.
S.
are
currently
high
enough
to
significantly
impair
the
emissions
control
systems
in
new
technology
vehicles,
and
to
potentially
cause
these
vehicles
to
fail
emission
standards
required
for
vehicles
up
through
100,000
miles
(
or
more)
of
operation.
For
older
vehicles
designed
to
meet
Tier
0
and
Tier
1
emission
standards,
the
effect
of
sulfur
contamination
is
somewhat
less.
Still,
testing
shows
that
gasoline
sulfur
increases
emissions
of
NMHC
and
NOX
by
almost
17%
when
one
of
these
vehicles
is
operated
on
gasoline
for
less
than
100
miles
containing
330
ppm
sulfur
compared
to
operation
on
gasoline
with
30
ppm
sulfur.
Thus,
Tier
0
and
Tier
1
vehicles
can
also
have
higher
emissions
when
they
are
exposed
to
sulfur
levels
substantially
higher
than
the
proposed
sulfur
standard.
This
increase
is
generally
not
enough
to
cause
a
vehicle
to
exceed
the
full
useful
life
emission
standards
in
practice,
but
it
can
result
in
in­
use
emissions
increases
since
the
vehicle
could
emit
at
levels
higher
than
it
would
if
it
operated
consistently
on
30
ppm
sulfur
gasoline.
As
discussed
in
the
RIA,
NLEV
and
Tier
2
vehicles
are
significantly
more
sensitive
to
sulfur
poisoning
than
Tier
1
and
Tier
0
vehicles.
Because
of
this,
even
in
the
absence
of
Tier
2
standards,
gasoline
sulfur
control
to
30
ppm
would
achieve
about
700,000
tons
of
NOX
reductions
per
year
from
LDVs
and
LDTs
by
2020.
This
represents
about
a
third
of
the
national
NOX
emission
reductions
otherwise
available
from
these
vehicles.
Without
these
potential
emission
reductions,
many
states
would
face
the
potentially
unmeetable
challenge
of
finding
enough
other
costeffective
sources
of
NOX
emission
reductions
to
address
their
ozone
nonattainment
and
maintenance
problems.
Sulfur
reductions
will
result
in
reductions
of
other
pollutants
as
well.
For
example,
the
increase
in
CO
emissions
at
330
ppm
compared
to
30
ppm
were
very
similar
to
the
results
above
for
NMHC.
Thus,
sulfur
reductions
would
greatly
reduce
CO
emissions.
Another
example
is
sulfur
reductions
will
help
reduce
emissions
of
particulate
matter,
providing
some
benefit
to
PM
nonattainment
areas
(
which
may
or
may
not
coincide
with
ozone
nonattainment
areas)
as
well
as
with
visibility
problems.
Sulfur
reductions
will
also
have
benefits
for
areas
across
the
country
with
acid
deposition
problems.
Furthermore,
sulfur
reduction,
by
enabling
tighter
Tier
2
standards
and
by
improving
emissions
performance
of
the
vehicles
already
on
the
road,
will
lead
to
fewer
NMOG
emissions,
since,
as
explained
in
the
RIA,
NMOG
emissions
are
also
impacted
by
gasoline
sulfur
(
although
to
a
lesser
extent
than
NOX
emissions).
Some
of
the
NMOG
emissions
reduced
are
air
toxics.
As
described
in
Section
III
above,
air
toxics,
also
known
as
hazardous
air
pollutants,
or
HAPs,
contribute
to
a
variety
of
human
health
problems.

c.
Sulfur's
Negative
Impact
on
Tier
2
Catalysts
As
we
discussed
in
the
last
section,
sulfur
contaminates
the
catalyst.
In
addition,
essentially
all
vehicles
that
have
been
tested
show
that
this
effect
is
not
reversible
for
one
or
more
pollutants.
The
ability
to
reverse
sulfur's
negative
effect
on
catalyst
performance
is
dependent
on
a
number
of
factors.
The
same
factors
that
impact
sulfur
sensitivity
also
impact
the
irreversibility
of
the
sulfur
effect.
For
example,
the
location
of
the
catalyst
relative
to
the
engine,
the
materials
used
to
provide
oxygen
storage
capacity
in
the
catalyst,
and
the
general
design
of
the
catalyst
and
the
mix
of
air
and
fuel
(
A/
F)
entering
the
engine
over
the
course
of
operation
affect
irreversibility,
to
name
a
few.
Perhaps
the
most
significant
factors
for
reversibility
are
the
mixture
of
air
and
fuel
entering
the
engine
and
catalyst
temperature.
The
results
of
numerous
studies
and
test
programs
show
that
rich
exhaust
(
absence
of
oxygen)
mixtures
in
addition
to
high
catalyst
temperatures
(
in
excess
of
700
°
C)
can
remove
sulfur
from
the
catalyst.
Rich
exhaust
mixtures
can
occur
intentionally
and
unintentionally,
depending
on
the
level
of
sophistication
of
the
fuel
control
system.
An
intentional
rich
exhaust
mixture
is
known
as
fuel
``
enrichment.''
There
are
different
types
of
enrichment.
For
example,
there
is
``
commanded''
enrichment,
which
is
used
to
provide
extra
power
when
the
engine
is
under
a
load
(
e.
g.,
accelerations),
as
well
as
a
means
to
cool
the
catalyst.
Also,
there
is
enrichment
which
results
from
the
normal
fluctuations
in
A/
F
that
occur
during
typical
``
closed­
loop''
FTP
operating
conditions.
The
amount
of
enrichment
necessary
for
sulfur
removal
is
a
function
of
several
factors:
the
``
magnitude''
of
the
enrichment
event,
the
duration
of
the
enrichment
event,
and
the
frequency
of
which
the
enrichment
event
occurs.
While
the
amount
of
fuel
enrichment
is
critical
in
the
removal
of
sulfur
from
the
catalyst,
high
catalyst
temperature
is
equally
as
important.
In
order
to
meet
strict
Tier
2
standards,
manufacturers
are
going
to
have
to
balance
tight
A/
F
control
with
improved
catalyst
performance,
with
an
eye
towards
better
catalyst
thermal
management.
Many
manufacturers
are
going
to
have
to
depend
more
on
the
precious
metal
palladium
for
oxidation
of
NMOG
and
CO
emissions,
as
well
as
the
reduction
of
NOX,
because
palladium
is
more
tolerant
to
high
temperatures.
Since
the
vast
majority
of
emissions
still
occur
immediately
following
a
cold
start
when
the
catalyst
is
still
cool,
further
reductions
to
cold
start
emissions
can
be
achieved
by
locating
the
catalysts
very
close
to
the
engine.
The
closer
proximity
to
the
engine
helps
to
activate
the
catalyst
sooner
by
taking
advantage
of
the
additional
heat
supplied
to
the
catalyst
by
the
exhaust
manifolds.
Palladium
is
very
sensitive
to
sulfur
and,
consequentially,
catalyst
systems
that
rely
heavily
on
this
metal
tend
to
be
more
sensitive
to
sulfur
and
less
reversible.
The
precious
metal
platinum,
although
usually
a
little
more
effective
at
oxidizing
NMOG
and
CO
and
slightly
less
sensitive
to
sulfur
than
palladium,
is
too
sensitive
to
high
temperature
to
survive
the
close
proximity
to
the
engine
and
is
not
anticipated
to
be
used
for
close­
coupled
applications.
As
discussed
above,
manufacturers
will
need
to
make
modifications
to
their
emission
system
calibrations
by
optimizing
fuel
control,
spark
timing,
EGR
and
other
parameters
in
conjunction
with
improvements
to
catalyst
systems,
in
order
to
meet
Tier
2
emission
standards.
This
combination
of
emission
control
strategies
can
result
in
significant
trade­
offs
between
NMOG
and
NOX
control.
There
can
be
considerable
uncertainty
associated
with
balancing
these
trade­
offs
at
very
low
emissions
levels
if
the
vehicle
is
periodically
operated
on
high
sulfur
fuels.
Our
federal
supplemental
federal
test
procedure
(
SFTP)
standards,
as
well
as
California's
SFTP
standards,
both
of
which
take
effect
in
the
2001
model
year,
can
further
exacerbate
this
problem.
The
SFTP
standards
are
intended
to
better
address
and
control
emissions
under
driving
conditions
not
captured
when
compliance
with
our
FTP­
based
exhaust
emissions
standards
is
demonstrated,
such
as
operation
with
the
air
conditioning
turned
on
or
driving
at
very
high
rates
of
acceleration
and
vehicle
speeds
(
hereafter
referred
to
simply
as
aggressive
driving).
This
is
an
important
factor
in
assessing
sulfur
irreversibility,
because
Tier
2
vehicles
will
have
to
meet
more
stringent
exhaust
emission
standards
and
will
have
to
meet
these
standards
over
the
wider
variety
of
operating
conditions
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Vol.
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Thursday,
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10,
2000
/
Rules
and
Regulations
49
The
FTP
(
Federal
Test
Procedure)
is
the
basic
driving
cycle
used
for
federal
emissions
testing;
the
LA4
cycle
is
a
component
of
the
FTP.
The
REP05
cycle
developed
by
EPA
is
representative
of
all
driving
that
occurs
outside
the
LA4
or
FTP
cycle.
All
but
one
of
the
aggressive
accelerations
found
in
the
US06
cycle
were
taken
from
the
REP05.
While
each
segment
of
the
US06
cycle
was
taken
from
actual
in­
use
driving,
the
timing
and
combination
of
these
segments
is
not
representative
of
in­
use
driving
in
the
way
REP05
is
representative.
included
in
the
SFTP
provisions.
Hence,
they
will
have
to
be
designed
to
meet
the
emission
standards
under
all
such
operating
conditions;
these
design
changes
may
influence
how
irreversible
the
sulfur
effect
will
be,
as
explained
below.
Since
wide
variations
in
the
A/
F
ratio
help
to
remove
sulfur
from
the
catalytic
surface,
there
is
concern
that
vehicles
which
meet
the
SFTP
standards,
when
driven
aggressively,
will
experience
insufficient
enrichment
to
purge
sulfur
from
the
catalyst.
Currently,
when
driven
aggressively,
the
A/
F
ratio
for
most
vehicles
(
those
not
certified
to
SFTP
standards)
is
quite
variable.
Meeting
the
SFTP
standards
will
ensure
that
manufacturers
carefully
control
the
A/
F
ratio
over
essentially
all
in­
use
driving
conditions.
This
absence
of
widely
varying
A/
F
could
therefore
inhibit
the
removal
of
sulfur
from
the
catalyst
once
operation
on
high
sulfur
fuel
ceased.
In
order
to
quantify
how
irreversible
the
sulfur
effect
would
be
when
catalysts
exposed
to
high
sulfur
fuel
are
then
exposed
to
lower
sulfur
fuel,
several
test
programs
were
developed
by
EPA
and
industry.
The
vehicles
in
these
test
programs
consisted
of
LDVs
and
LDTs
that
met
either
EPA
Tier
1
or
California
LEV
and
ULEV
emission
standards.
All
of
the
vehicles
were
first
tested
at
a
low
sulfur
level
(
e.
g.,
30
or
40
ppm)
to
establish
a
baseline.
The
vehicles
were
then
re­
tested
with
high
sulfur
fuel
(
e.
g.,
350
to
540
ppm).
After
emission
results
had
stabilized,
the
vehicles
were
again
re­
tested
with
low
sulfur
fuel.
Prior
to
each
of
the
second
series
of
low
sulfur
tests,
the
vehicles
were
operated
over
a
short
driving
cycle
to
help
purge
(
i.
e.,
remove)
sulfur
from
the
catalyst.
Two
different
cycles
were
used
to
purge
sulfur,
representing
different
types
of
driving:
moderate
urban
conditions
and
aggressive
conditions.
The
FTP
cycle,
which
represents
moderate
urban
driving,
and
the
REP05
49
cycle,
which
represents
very
aggressive
driving
(
e.
g.,
hard
accelerations,
high
speed
cruises),
were
the
two
cycles
used.
The
vehicles
tested
exhibited
a
wide
range
of
irreversibility,
for
reasons
that
are
not
fully
understood.
The
data
published
in
the
NPRM,
showed
that
the
effect
of
operation
on
high
sulfur
fuel
was
irreversible
on
one
or
more
pollutants
after
operation
on
low
sulfur
fuel.
NOX
emissions
were
15
percent
irreversible.
None
of
the
vehicles
were
designed
or
modified
to
meet
either
the
California
or
federal
SFTP
emissions
standards.
The
only
data
used
in
an
attempt
to
quantify
the
effect
of
aggressive
operation
on
sulfur
reversibility
was
from
a
catalyst
manufacturer
that
performed
some
vehicle
testing
with
catalysts
which
were
bench
aged
with
low
and
high
sulfur
fuel
that
appeared
to
closely
approximate
the
impact
aggressive
operation
would
have
on
sulfur
irreversibility.
It
was
this
data
on
which
we
based
our
projection
of
sulfur
irreversibility
for
Tier
2
vehicles
at
50
percent
for
NMHC
and
NOX
emissions.
Subsequent
comments
on
the
validity
of
these
estimates
after
the
publishing
of
the
NPRM
prompted
several
additional
test
programs
on
sulfur
irreversibility.
The
sulfur
irreversibility
test
programs
that
followed
the
NPRM
focused
on
vehicles
that
had
emission
levels
that
met
or
were
close
to
Tier
2
emission
standards
and
also
met
the
US06
or
aggressive
driving
portion
of
the
SFTP
emission
standards.
Although
numerous
vehicles
were
tested,
only
four
met
both
of
the
above
criteria.
(
We
had
tried
to
supplement
the
data
base,
but
we
were
only
able
to
add
a
limited
number
of
vehicles.)
We
also
decided
to
quantify
irreversibility
for
NMHC
and
NOX
emissions
together
instead
of
independently,
because
per
our
discussion
above,
sensitivity
and
irreversibility
of
either
pollutant
appears
to
be
very
dependent
on
the
particular
strategy
chosen
to
reduce
these
emissions
(
particularly
engine
calibration
and
catalyst
loading
of
precious
metals
and
oxygen
storage).
The
new
data
exhibited
a
range
of
variability
among
vehicles
and
pollutants,
similar
to
the
data
presented
in
the
NPRM.
The
most
important
distinction
between
the
new
FRM
data
and
the
old
NPRM
data
was
that
the
new
data
showed
that,
on
average,
NMHC+
NOX
emissions
in
three
out
of
four
vehicles
were
not
fully
reversible
after
aggressive
driving.
Based
on
this
data,
we
project
that
NMHC+
NOX
emissions
will
be
20
to
65
percent
irreversible
for
Tier
2
vehicles
under
typical
in­
use
driving,
including
aggressive
driving.
As
discussed
above,
the
combination
of
calibration
changes
and
emission
system
hardware
modifications
needed
to
meet
our
stringent
Tier
2
emissions
standards,
can
result
in
significant
trade­
offs
between
NMHC/
NMOG
and
NOX
control.
There
can
be
considerable
uncertainty
associated
with
balancing
these
trade­
offs
at
very
low
emissions
levels
if
the
vehicle
is
periodically
operated
on
high
sulfur
fuels,
making
the
ability
to
remove
sulfur
from
the
catalyst
highly
uncertain.
For
example,
a
given
catalyst
today
may
be
fully
reversible
for
one
pollutant
and
only
partially
reversible
for
another.
However,
because
of
the
trade­
off
in
NMOG
and
NOX
performance,
the
modifications
necessary
to
get
that
vehicle
to
meet
both
emission
standards
may
result
in
the
opposite
effect
for
reversibility;
i.
e.,
full
reversibility
for
NMOG
and
partial
reversibility
for
NOX.
There
is
no
technical
certainty
that
both
the
NMOG
and
NOX
emission
standards
can
be
met
without
compromising
reversibility
performance.
Therefore,
we
continue
to
believe
that
sulfur's
negative
impact
on
Tier
2
catalysts
is
a
substantial
concern.
The
preceding
discussion
focused
on
the
irreversibility
of
the
sulfur
impact
on
emissions
from
current
gasoline
engine
technologies.
There
are
new
technologies
under
development,
which
could
be
sold
in
the
U.
S.
in
the
middle
of
the
next
decade
(
the
same
time
that
Tier
2
vehicles
are
being
introduced),
which
also
appear
to
be
very
sensitive
to
sulfur
and
largely
unable
to
reverse
this
sulfur
impact.
One
of
these
technologies
is
the
direct
injection
gasoline
(
GDI)
engine.
These
engines
utilize
much
more
air
than
is
needed
to
burn
the
fuel,
unlike
conventional
gasoline
engines
that
operate
under
conditions
where
only
just
enough
air
to
completely
burn
the
fuel
is
introduced
into
the
engine.
This
GDI
technology
allows
these
engines
to
be
up
to
25%
more
fuel
efficient
than
current
gasoline
engines
and
to
emit
up
to
20%
less
carbon
dioxide.
GDI
engines
are
currently
being
introduced
in
both
Japan
and
Europe
(
which
have
or
will
soon
require
low
sulfur
gasolines).
Because
of
the
significant
operating
differences
with
GDI
engines,
these
vehicles
will
likely
require
emission
control
technology
substantially
different
from
that
used
on
conventional
gasoline
engines.
For
example,
a
GDI
engine
may
require
a
NOX
adsorber
to
meet
the
proposed
Tier
2
NOX
standard.
High
fuel
sulfur
levels
quickly
and
permanently
degrade
the
performance
of
these
NOX
adsorbers.
Thus,
to
enable
the
sale
of
advanced,
high
efficiency
GDI
engines
in
the
U.
S.
under
the
Tier
2
standards,
it
appears
that
low
sulfur
gasoline
would
have
to
be
available
nationwide
by
the
time
this
technology
becomes
available.
The
fuel
cell
is
another
promising
propulsion
system
that
is
being
developed
for
possible
introduction
to
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February
10,
2000
/
Rules
and
Regulations
50
U.
S.
EPA,
``
OBD
&
Sulfur
Status
Report:
Sulfur's
Effect
on
the
OBD
Catalyst
Monitor
on
Low
Emission
Vehicles,''
March
1997,
updated
September
1997.
51
In
this
section
and
also
in
section
V,
we
make
various
references
to
the
Tier
2
program,
the
interim
program
(
or
standards)
and
the
final
Tier
2
standards.
The
Tier
2
program
includes
the
interim
program
(
or
standards)
and
the
final
Tier
2
standards.
Some
discussion
is
applicable
to
the
entire
Tier
2
program,
some
to
the
interim
program
(
or
standards)
only
and
some
is
only
applicable
to
the
final
Tier
2
standards.
As
the
program
is
complex,
we
advise
you
to
read
carefully
to
discern
the
applicability
of
the
text
to
the
proper
model
years
and
categories
of
vehicles.
consumers
early
in
the
next
century.
Fuel
cells
are
being
designed
to
operate
on
a
variety
of
fuels,
including
gasoline
and
diesel
fuel.
The
basic
fuel
cell
technology
is
highly
sensitive
to
sulfur.
Almost
any
level
of
sulfur
in
the
fuel
will
disable
the
fuel
cell.
One
possible
solution
is
to
install
a
technology
that
essentially
filters
out
the
sulfur
before
it
enters
the
fuel
cell.
However,
such
sulfur
``
guards''
are
costly
and
could
not
practically
be
used
like
a
disposable
filter
(
requiring
the
vehicle
owner
to
change
the
sulfur
guard
frequently,
much
like
changing
an
oil
filter)
in
situations
where
constant
exposure
to
high
sulfur
levels
occurs.
(
Even
exposure
to
relatively
low
sulfur
levels
will
likely
require
periodic
replacement
of
the
sulfur
guard
to
ensure
adequate
protection
for
the
fuel
cell.)
Therefore,
the
amount
of
sulfur
in
the
fuel
must
be
limited
to
that
which
can
be
removed
by
one
or
at
most
two
sulfur
guards
over
the
life
of
the
vehicle.
Thus,
in
order
for
fuel
cells
operating
on
gasoline
to
be
feasible
in
the
U.
S.,
low
sulfur
fuels
would
have
to
be
available
nationwide
by
the
time
this
technology
becomes
available.

d.
Sulfur
Has
Negative
Impacts
on
OBD
Systems
As
discussed
in
more
detail
in
the
RIA,
EPA
believes
that
sulfur
in
gasoline
can
adversely
impact
the
onboard
diagnostic
(
OBD)
systems
of
current
vehicles
as
well
as
vehicles
meeting
the
Tier
2
standards.
This
is
an
important
factor
supporting
the
need
for
a
national
sulfur
control
program.
EPA's
onboard
diagnostics
(
OBD)
regulations
require
that
all
vehicles
be
equipped
with
a
system
that
monitors,
among
other
things,
the
performance
of
the
catalyst
and
warns
the
owner
if
the
catalyst
is
not
functioning
properly.
The
OBD
catalyst
monitor
is
designed
to
identify
those
catalysts
with
pollutant
conversion
efficiencies
that
have
been
reduced
to
the
extent
that
tailpipe
emissions
would
exceed
a
specified
multiple
of
the
applicable
hydrocarbon
emissions
standard.
For
California
LEV
and
federal
NLEV
vehicles,
that
multiple
is
1.75
times
the
applicable
hydrocarbon
emissions
standard;
for
federal
Tier
1
vehicles,
that
multiple
is
1.5
times
the
applicable
hydrocarbon
standard
added
to
the
4,000
mile
emission
level.
We
want
to
ensure
that
OBD
systems
operate
correctly,
and
thus
the
possibility
that
gasoline
sulfur
may
interfere
with
these
systems
was
another
consideration
when
evaluating
the
need
for
a
national
sulfur
program.
Our
evaluation
of
sulfur's
effect
on
OBD
systems
was
summarized
in
a
staff
paper
in
1997.50
We
concluded
that
sulfur
can
affect
the
decisions
made
by
the
OBD
systems.
Sulfur
appears
to
affect
the
oxygen
sensor
downstream
of
the
catalyst,
which
is
used
in
the
OBD
systems,
and
it
is
not
clear
that
the
conditions
that
seem
to
reverse
sulfur's
effect
on
the
catalyst
will
also
reverse
any
sulfur
impact
on
the
downstream
oxygen
sensors.
Indirectly,
sulfur
impacts
OBD
systems
because
it
can
impair
a
catalyst
that
would
otherwise
be
operating
satisfactorily,
thereby
triggering
the
OBD
warning
lights.
While
this
would
indicate
a
properly
operating
OBD
system,
auto
manufacturers
have
expressed
the
concern
that
consumers
using
high
sulfur
fuel
may
experience
OBD
warnings
much
more
frequently
than
they
would
if
operating
on
low
sulfur
gasoline,
and
that
this
could
lead
to
a
loss
of
consumer
confidence
in
or
support
for
OBD
systems.
Consumers
may
then
ignore
the
OBD
warning
system
and
drive
a
potentially
high
emitting
vehicle
(
which
may
have
nothing
to
do
with
exposure
to
sulfur),
contributing
even
more
to
air
quality
problems.
Another
possible
scenario
is
that
the
OBD
system
may
be
impaired
by
sulfur
in
such
a
way
that
it
does
not
register
an
improperly
functioning
catalyst,
even
if
the
catalyst
is
impaired
for
reasons
unrelated
to
exposure
to
sulfur.
This
would
defeat
the
purpose
of
OBD
systems.
The
reduction
of
sulfur
levels
for
gasoline
should
resolve
any
concerns
over
the
ability
of
the
OBD
system
to
make
proper
decisions.
The
use
of
low
sulfur
fuel
should
ensure
that
the
OBD
warning
light
goes
on
when
it
is
supposed
to
and
is
not
influenced
by
sulfur
contamination
of
the
catalyst
and/
or
OBD
system.

B.
Our
Program
for
Vehicles
The
program
we
are
establishing
today
for
cars,
light
trucks,
and
large
passenger
vehicles
will
achieve
the
same
large
NOX
reductions
that
we
projected
for
the
proposed
program.
The
program
is
very
similar
to
our
proposed
program
in
all
major
respects.
We
have
been
able
to
retain
the
general
structure,
stringency,
and
emissions
benefits
of
the
proposal
in
this
final
rule.
Where
we
have
made
adjustments
to
the
proposed
program,
we
have
done
so
in
ways
that
improve
the
implementation
of
the
program
without
changing
the
overall
environmental
benefits
that
the
program
will
achieve.
And
by
creating
a
new
category
of
vehicles
subject
to
the
Tier
2
standards,
medium­
duty
passenger
vehicles,
the
final
rule
will
ensure
that
all
passenger
vehicles
expected
to
be
on
the
road
in
the
foreseeable
future
will
be
very
clean.
We
have
seriously
considered
the
input
of
all
stakeholders
in
developing
our
final
rule
and
believe
the
program
finalized
below
balances
the
concerns
of
all
stakeholders
while
achieving
the
needed
air
quality
benefits.
In
general,
the
adjustments
we
have
made
are
aimed
at
improving
the
implementation
efficiency
of
the
program
by
better
aligning
the
federal
Tier
2
program
with
the
NLEV
program
and
with
California's
program
especially
during
the
interim
program.
51
Extensive
comments
from
manufacturers
led
us
to
conclude
that
better
harmony
between
the
two
programs
would
reduce
the
engineering,
testing
and
certification
workload
related
to
our
interim
program.
Where
we
could
make
changes
to
increase
the
overlap
of
the
two
programs
while
maintaining
the
NOX
reductions
of
the
proposal,
we
have
done
so.
These
changes
are
discussed
in
detail
in
this
section
IV.
B.
and
in
sections
V.
A.
and
V.
B.
Our
final
rule
also
includes
provisions
to
regulate
complete
heavyduty
passenger
vehicles
(
primarily
SUVs
and
passenger
vans)
of
less
than
10,000
pounds
GVWR
within
the
Tier
2
program.
Standards
for
these
vehicles
were
not
included
in
the
Tier
2
NPRM,
but
were
proposed
in
a
subsequent
NPRM
on
October
29,
1999
(
64
FR
58472).
The
final
provisions
for
these
vehicles
are
addressed
in
section
IV.
B.
4.
g.
These
heavier
vehicles
have
been
recategorized
as
medium
duty
passenger
vehicles
(
MDPVs).
They
are
included
in
the
Tier
2
program
starting
with
model
year
2004
and
will
be
treated
similarly
to
HLDTs,
unless
otherwise
noted.
The
next
sections
of
the
preamble
describe
our
final
program
in
detail
and
include
changes
and
adjustments
from
the
NPRM
that
we
believe
address
many
concerns
raised
by
the
Alliance
and
others.
While
these
changes
ease
the
burden
on
manufacturers,
they
have
little
or
no
impact
on
the
air
quality
benefits
of
the
Tier
2
program.

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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
52
The
NLEV
program
is
a
voluntary
program,
adopted
by
all
major
LDV
and
LDT
manufacturers.
It
applies
only
to
LDVs,
LDT1s
and
LDT2s.
It
does
not
apply
to
HLDTs.
53
Throughout
this
text,
the
term
``
full
life''
is
used
in
reference
to
vehicle
standards
to
mean
``
full
useful
life''
which
is
currently
10
years/
100,000
miles
for
LDVs
and
LLDTs,
but
11
years/
120,000
miles
for
HLDTs.
Similarly,
``
intermediate
life''
refers
to
intermediate
useful
life
standards
which
apply
for
the
period
of
5
years/
50,000
miles.
In
this
rulemaking
we
are
retaining
the
current
full
useful
life
period
for
interim
LDVs
and
LLDTs,
but
raising
it
for
Tier
2
vehicles
to
10
years/
120,000
miles.
In
a
number
of
places
in
the
following
text,
we
mention
that
changes
are
being
made
``
in
response
to
comments''.
For
a
full
summary
of
the
comments
and
for
our
responses
to
those
comments,
we
refer
you
to
the
Response
to
Comments
document
contained
in
the
docket
for
this
rulemaking
or
available
from
the
Office
of
Mobile
Sources
web
site
(
see
web
address
at
the
beginning
of
this
document).

1.
Overview
of
the
Vehicle
Program
The
vehicle­
related
part
of
today's
final
rule
covers
a
wide
range
of
standards,
concepts,
and
provisions
that
affect
how
vehicle
manufacturers
will
develop,
certify,
produce,
and
market
Tier
2
vehicles.
This
Overview
subsection
provides
readers
with
a
broad
summary
of
the
major
vehiclerelated
aspects
of
the
rule.
Readers
for
whom
this
Overview
is
sufficient
may
want
to
move
on
to
the
discussion
of
the
key
gasoline
sulfur
control
provisions
(
Section
IV.
C.).
Readers
wishing
a
more
detailed
understanding
of
the
vehicle
provisions
can
continue
beyond
the
Overview
to
deeper
discussions
of
key
issues
and
provisions
(
Sections
IV.
B.
 
2,
3,
and
4)
as
well
as
discussions
of
additional
provisions
(
Section
V.
A.).
Readers
should
refer
to
the
regulatory
language
found
at
the
end
of
this
preamble
for
a
complete
compilation
of
the
requirements.
To
understand
how
the
program
will
work,
it
is
useful
to
review
EPA's
classification
system
for
light­
duty
vehicles
and
trucks.
The
light­
duty
category
of
motor
vehicles
includes
all
vehicles
and
trucks
at
or
below
8500
pounds
gross
vehicle
weight
rating,
or
GVWR
(
i.
e.,
vehicle
weight
plus
rated
cargo
capacity).
Table
IV.
B.
 
1
shows
the
various
light­
duty
categories
and
also
shows
our
new
medium­
duty
passenger
vehicle
(
MDPV)
category,
discussed
in
section
IV.
B.
4.
g..
In
the
discussion
below,
we
make
frequent
reference
to
two
separate
groups
of
light
vehicles:
(
1)
LDV/
LLDTs,
which
include
all
LDVs
and
all
LDT1s
and
LDT2s;
and
(
2)
HLDTs,
which
include
LDT3s
and
LDT4s.
We
also
make
mention
of
MDPVs
although
the
details
of
our
program
for
those
vehicles
are
deferred
to
IV.
B.
4.
g.
at
the
end
of
section
IV.
B.
TABLE
IV.
B.
 
1
LIGHT­
DUTY
VEHICLES
AND
TRUCKS
AND
MEDIUM­
DUTY
PASSENGER
VEHICLES;
CATEGORY
CHARACTERISTICS
Characteristics
LDV
....................
A
passenger
car
or
passenger
car
derivative
seating
12
passengers
or
less.
Light
LDT
(
LLDT)
Any
LDT
rated
at
up
through
6,000
lbs
GVWR.
Includes
LDT1
and
LDT2.
Heavy
LDT
(
HLDT).
Any
LDT
rated
at
greater
than
6,000
lbs
GVWR.
Includes
LDT3
and
LDT4s.
MDPV
.................
A
heavy­
duty
passenger
vehicle
rated
at
less
than
10,000
lbs
GVWR.
(
The
inclusion
of
MDPVs
is
discussed
primarily
in
Section
IV.
B.
4.
g.)

a.
Introduction
Today's
final
rule
incorporates
concepts
from
the
federal
NLEV
program
which
began
phase­
in
in
the
1999
model
year
for
LDV/
LLDTs.
52
The
program
in
today's
rule
takes
the
corporate
averaging
concept
and
other
provisions
from
NLEV
but
changes
the
focus
from
NMOG
to
NOX
and
applies
them
to
all
LDVs
and
LDTs.
The
final
rule
is
compatible
with
the
California
LEV
II
(
CalLEV
II)
program
scheduled
to
take
effect
in
2004.
The
emission
standard
``
bins''
used
for
this
average
calculation
are
different
in
several
respects
from
those
of
the
CalLEV
II
program,
yet
still
allow
harmonization
of
federal
and
California
vehicle
technology.
The
Tier
2
corporate
average
NOX
level
to
be
met
through
these
requirements
ultimately
applies
to
all
of
a
manufacturer's
LDVs
and
LDTs
(
subject
to
two
different
phase­
in
schedules)
regardless
of
the
fuel
used.
Meanwhile,
until
the
final
Tier
2
standards
are
completely
phased
in,
separate
interim
standards
apply
to
LDV/
LLDTs
and
HLDTs.
As
proposed
in
the
NPRM
and
finalized
in
today's
document,
the
Tier
2
program
will
take
effect
in
2004,
with
full
phase
in
occurring
by
2007
for
LDV/
LLDTs
and
2009
for
HLDTs.
During
the
phase­
in
years
of
2004
 
2008,
vehicles
not
certified
to
Tier
2
requirements
will
meet
interim
requirements
also
using
a
bins
system,
but
with
less
stringent
corporate
average
NOX
standards.
In
the
discussions
below,
we
set
forth
different
Tier
2
phase­
in
schedules
for
the
two
different
groups
of
vehicles
(
LDV/
LLDTs
and
HLDTs)
as
well
as
two
different
interim
fleet
average
NOX
standards
for
2004
and
later
model
year
vehicles
awaiting
phase­
in
to
the
Tier
2
standards.
In
the
NPRM,
we
set
forth
separate
tables
of
full
life
standard
bins
for
the
interim
programs
and
the
final
Tier
2
program,
but
we
proposed
that
manufacturers
could
use
all
bins
for
interim
or
Tier
2
vehicles
during
the
phase­
in
years.
53
We
also
proposed
similar
sets
of
tables
for
intermediate
life
standards.
In
this
final
rule,
for
simplicity
and
to
accommodate
additional
bins,
including
some
suggested
by
the
Alliance,
we
have
combined
all
of
the
full
life
bins
into
one
table
and
all
of
the
intermediate
life
bins
into
one
table.
The
bins
system
and
the
choice
of
the
individual
bins
is
discussed
in
detail
below.

References
to
California
LEV
II
Program
Throughout
this
preamble,
we
make
reference
to
California's
LEV
II
program
and
its
requirements.
The
LEV
II
program
was
approved
by
the
California
ARB
at
a
hearing
of
November
5,
1998.
Numerous
draft
documents
were
prepared
by
ARB
staff
in
advance
of
that
hearing
and
made
available
to
the
public.
Those
documents
were
referenced
in
our
NPRM
and
included
in
the
docket.
Some
of
those
documents
were
modified
as
a
result
of
changes
to
the
proposed
program
made
at
the
hearing
and
due
to
comments
received
after
the
hearing.
ARB
prepared
final
documents
without
significant
change.
The
final
program
was
approved
by
California's
Office
of
Administrative
Law
on
October
28,
1999
and
filed
with
the
Secretary
of
State
to
become
effective
on
November
27,
1999.
We
have
placed
copies
of
the
latest
available
documents,
some
of
which
we
used
in
the
preparation
of
this
final
rule,
in
the
docket.
You
may
also
obtain
these
documents
and
other
information
about
California's
LEV
II
program
from
ARB's
web
site:
(
www.
arb.
ca.
gov/
regact/
levii/
levii.
htm).
In
the
regulatory
text
that
follows
this
preamble,
we
incorporate
by
reference
a
number
of
documents
related
to
LEVII
and
California
test
procedures
under
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54
These
bins
are
unlikely
to
be
used
in
the
Federal
program
because
they
contain
the
same
NOX
standard
as
the
Federal
bins,
but
contain
more
stringent
NMOG
standards
than
the
Federal
bins.
These
bins,
which
provide
extra
opportunity
for
a
manufacturer
to
gain
NMOG
credits
in
California
are
not
needed
or
useful
in
the
Federal
program
where
there
is
no
NMOG
corporate
average
standard.
The
two
deleted
bins
are
bin
4
from
the
proposed
Tier
2
bins
and
bin
3
from
the
proposed
interim
bins
for
LDV/
LLDTs.
Dropping
these
bins
does
not
affect
harmonization
with
California
standards
because
the
federal
program
includes
bins
having
the
same
NOX
standard
with
higher
NMOG
standards.
LEVII.
These
documents
are
available
in
the
docket
for
today's
rulemaking.

b.
Corporate
Average
NOX
Standard
The
program
we
are
finalizing
today
will
ultimately
require
each
manufacturer's
average
full
life
NOX
emissions
over
all
of
its
Tier
2
vehicles
to
meet
a
NOX
standard
of
0.07
g/
mi
each
model
year.
Manufacturers
will
have
the
flexibility
to
certify
Tier
2
vehicles
to
different
sets
of
exhaust
standards
that
we
refer
to
as
``
bins,''
but
will
have
to
choose
the
bins
so
that
their
corporate
sales
weighted
average
full
life
NOX
level
for
their
Tier
2
vehicles
is
no
more
than
the
0.07
g/
mi.
(
We
discuss
the
bins
in
the
next
subsection.)
A
corporate
average
standard
enables
the
program's
air
quality
goals
to
be
met
while
allowing
manufacturers
the
flexibility
to
certify
some
models
above
and
some
models
below
the
standard.
Manufacturers
can
apply
technology
to
different
vehicles
in
a
more
costeffective
manner
than
under
a
single
set
of
standards
that
all
vehicles
have
to
meet.
Each
manufacturer
will
determine
its
year­
end
corporate
average
NOX
level
by
computing
a
sales­
weighted
average
of
the
full
life
NOX
standards
from
the
various
bins
to
which
it
certified
any
Tier
2
vehicles.
The
manufacturer
will
be
in
compliance
with
the
standard
if
its
corporate
average
NOX
emissions
for
its
Tier
2
vehicles
meets
or
falls
below
0.07
g/
mi.
In
years
when
a
manufacturer's
corporate
average
is
below
0.07
g/
mi,
it
can
generate
credits.
It
can
trade
(
sell)
those
credits
to
other
manufacturers
or
use
them
in
years
when
its
average
exceeds
the
standard
(
i.
e.
when
the
manufacturer
runs
a
deficit).
The
averaging
program
is
described
in
detail
in
later
text.

c.
Tier
2
Exhaust
Emission
Standard
``
Bins''

We
are
finalizing
a
Tier
2
bin
structure
having
eight
emission
standards
bins
(
bins
1
 
8),
each
one
a
set
of
standards
to
which
manufacturers
can
certify
their
vehicles.
Table
IV.
B.
 
2a
shows
the
full
useful
life
standards
that
will
apply
for
each
bin
in
our
final
Tier
2
program,
i.
e.
after
full
phase­
in
occurs
for
all
LDVs
and
LDTs.
Two
additional
bins,
bins
9
and
10,
will
be
available
only
during
the
interim
program
and
will
be
deleted
before
final
phase­
in
of
the
Tier
2
program.
Table
IV.
B.
 
2b
shows
all
the
bins
from
Table
IV.
B.
 
2a
and
also
shows
extra
bins
and
higher
available
standards
for
certain
pollutants
that
are
available
prior
to
full
Tier
2
phase­
in.
An
eleventh
bin,
only
for
MDPVs
is
discussed
in
section
IV.
B.
4.
g.
Many
bins
have
the
same
values
as
bins
in
the
California
LEV
II
program
as
a
means
to
increase
the
economic
efficiency
of
the
transition
to
as
well
as
model
availability.
Further,
we
added
bins
that
are
not
a
part
of
the
California
program
to
modestly
increase
the
flexibility
of
the
program
for
manufacturers
without
compromising
air
quality
goals.
As
discussed
in
Section
IV.
B.
4.
below,
we
believe
these
extra
bins
will
help
provide
incentives
for
manufacturers
to
produce
vehicles
with
emissions
below
0.07
g/
mi
NOX.
The
two
highest
of
the
ten
bins
shown
in
Table
IV.
B.
2b.
are
designed
to
provide
flexibility
only
during
the
phase­
in
years
and
will
terminate
after
the
standards
are
fully
phased
in,
leaving
eight
bins
in
place
for
the
duration
of
the
Tier
2
program.
The
NPRM
full
life
standards
contained
seven
Tier
2
bins
as
well
as
two
separate
tables
of
bins
for
interim
vehicles.
We
proposed
that
manufacturers
would
be
able
to
use
all
the
bins
during
the
phase
in
years
regardless
of
whether
they
were
certifying
Tier
2
vehicles
or
interim
vehicles.
The
program
we
are
finalizing
today:
·
Combines
the
bins
from
the
NPRM;
·
Omits
two
bins
that
were
included
in
the
NPRM
for
harmony
with
California
but
which
are
unlikely
to
be
used;
54;
·
Adds
2
bins
to
increase
compliance
flexibility
without
reducing
environmental
benefits;
·
Adds
a
temporary
bin
only
for
MDPVs
that
expires
after
2008.
This
bin
is
in
addition
to
the
10
bins
shown
in
tables
of
bins
in
this
preamble;
·
Establishes
a
PM
value
for
the
highest
bin
available
during
the
interim
program
(
bin
10)
that
is
more
stringent
than
the
corresponding
standard
in
the
NLEV
program;
·
Provides
temporary
higher
NMOG
standards
that
expire
after
2006
for
certain
interim
LDT2s
and
LDT4s
produced
by
qualifying
manufacturers.
Tables
IV.
B.
 
2a
and
2b
show
the
bins
for
full
life
standards.
Table
IV.
B.
 
2b
is
repeated
later
in
the
text
where
intermediate
life
standards
are
also
shown.
These
tables
omit
the
temporary
bin
for
MDPVs.
This
bin
is
usable
only
by
MDPVs
and
is
addressed
separately
in
section
IV.
B.
4.
g.

TABLE
IV.
B.
 
2A.
 
FINAL
TIER
2
LIGHT­
DUTY
FULL
USEFUL
LIFE
EXHAUST
EMISSION
STANDARDS
[
Grams
per
mile]

Bin
No.
NOX
NMOG
CO
HCHO
PM
8
...............................................................................................................
0.20
0.125
4.2
0.018
0.02
7
...............................................................................................................
0.15
0.090
4.2
0.018
0.02
6
...............................................................................................................
0.10
0.090
4.2
0.018
0.01
5
...............................................................................................................
0.07
0.090
4.2
0.018
0.01
4
...............................................................................................................
0.04
0.070
2.1
0.011
0.01
3
...............................................................................................................
0.03
0.055
2.1
0.011
0.01
2
...............................................................................................................
0.02
0.010
2.1
0.004
0.01
1
...............................................................................................................
0.00
0.000
0.0
0.000
0.00
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Vol.
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/
Thursday,
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10,
2000
/
Rules
and
Regulations
55
In
the
NPRM,
we
proposed
that
hydrocarbon
standards
would
be
measured
in
terms
of
``
nonmethane
organic
gases''
(
NMOG)
regardless
of
fuel.
For
reasons
explained
elsewhere
in
this
preamble
we
will
permit
non­
methane
hydrocarbons
(
NMHC)
as
an
option
in
the
final
rule
for
all
fuels
except
alcohol
fuels
and
compressed
natural
gas
.
NMHC
and
NMOG
are
very
similar
for
gasoline
and
diesel
fuel
emissions.
TABLE
IV.
B.
 
2B.
 
TIER
2
LIGHT­
DUTY
FULL
USEFUL
LIFE
EXHAUST
EMISSION
STANDARDS
 
INCLUDING
BINS
APPLICABLE
DURING
INTERIM
PROGRAM
ONLY
[
Grams
per
mile]

Bin
No.
NOX
NMOG
CO
HCHO
PM
Comments
10
................................................
0.6
0.156/
0.230
4.2/
6.4
.........
0.018/
0.027
0.08
a
b
c
d
9
..................................................
0.3
0.090/
0.180
4.2
...............
0.018
...........
0.06
a
b
c
8
..................................................
0.20
0.125/
0.156
4.2
...............
0.018
...........
0.02
b
f
Notes:
a
Bin
deleted
at
end
of
2006
model
year
(
2008
for
HLDTs).
b
The
higher
of
the
two
temporary
NMOG,
CO
and
HCHO
values
apply
only
to
HLDTs.
c
An
additional
higher
temporary
bin
restricted
to
MDPVs
is
discussed
in
section
IV.
B.
4.
g.
d
Optional
temporary
NMOG
standard
of
0.280
g/
mi
applies
for
qualifying
LDT4s
and
MDPVs
only,
see
text.
e
Optional
temporary
NMOG
standard
of
0.130
g/
mi
applies
for
qualifying
LDT2s
only,
see
text.
fHigher
temporary
NMOG
value
of
0.156g/
mi
deleted
at
end
of
2008
model
year.

The
corporate
average
concept
using
bins
will
provide
a
program
that
gets
essentially
the
same
emission
reductions
we
would
expect
from
a
straight
0.07
g/
mi
standard
for
all
vehicles
because
all
NOX
emissions
from
Tier
2
vehicles
in
bins
above
0.07
g/
mi
will
need
to
be
offset
by
NOX
emissions
from
Tier
2
vehicles
in
bins
below
0.07
g/
mile.
This
focus
on
NOX
allows
NMOG
55
emissions
to
``
float''
in
that
the
fleet
NMOG
emission
rate
depends
on
the
mix
of
bins
used
to
meet
the
NOX
standard.
However,
as
you
can
see
by
examining
the
bins,
any
combination
of
vehicles
meeting
the
0.07
g/
mi
average
NOX
standard
will
have
average
NMOG
levels
below
0.09
g/
mi.
The
actual
value
will
vary
by
manufacturer
depending
on
the
sales
mix
of
the
vehicles
used
to
meet
the
0.07
g/
mi
average
NOX
standard.
In
addition,
there
will
be
overall
improvements
in
NMOG
since
Tier
2
incorporates
HLDTs,
which
are
not
covered
by
the
NLEV
program.
Tier
2
also
imposes
tighter
standards
on
LDT2s
than
the
NLEV
program
by
making
them
average
with
the
LDVs
and
LDT1s.
NLEV
has
separate,
higher
standards
for
LDT2s.
We
did
not
adopt
any
bins
for
LDVs
and
LDTs
with
standards
higher
than
we
proposed.

d.
Schedules
for
Implementation
We
recognize
that
the
Tier
2
standards
pose
greater
technological
challenges
for
larger
light
duty
trucks
(
HLDTs)
than
for
LDVs
and
smaller
trucks
(
LDT1s
and
LDT2s).
We
believe
that
additional
leadtime
is
appropriate
for
HLDTs.
HLDTs
have
historically
been
subject
to
less
stringent
vehicle­
based
standards
than
lighter
trucks
and
LDVs.
Also,
HLDTs
were
not
subject
to
the
voluntary
emission
reductions
implemented
for
LDVs,
LDT1s
and
LDT2s
in
the
NLEV
program.
Consequently
we
are
finalizing
as
proposed,
separate
phase­
in
programs
for
HLDTs
and
LDV/
LLDTs
.
Our
phasein
approach
will
provide
HLDTs
with
extra
time
before
they
need
to
begin
phase­
in
to
the
final
Tier
2
standards
and
will
also
provide
two
additional
years
for
them
to
fully
comply.
Table
IV.
B
 
3
provides
a
graphical
representation
of
how
the
phase­
in
of
the
Tier
2
program
will
work
for
all
vehicles.
This
table
shows
several
aspects
of
the
program:
·
Phase­
in
of
the
Tier
2
standards;
·
Phase­
in/
phase­
out
requirements
of
the
interim
programs;
·
Phase­
in
requirements
of
new
evaporative
standards;
·
Years
that
can
be
included
in
alternative
phase­
in
schedules;
·
Years
in
which
manufacturers
can
bank
NOX
credits
through
``
early
banking''
and
·
`
`
Boundaries''
on
averaging
sets
in
the
Tier
2
and
interim
programs.
·
Averaging
provisions
for
MDPVs
(
see
section
IV.
B.
4.
g.
for
discussion)
We
discuss
each
of
these
topics
in
detail
below
and
make
numerous
references
to
Table
IV.
B
 
3.

BILLING
CODE
6560
 
50
 
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BILLING
CODE
6560
 
50
 
C
As
described
in
detail
in
the
Response
to
Comments
document,
the
Alliance
proposal
would
have
delayed
final
implementation
of
Tier
2
standards
until
2011.
We
are
not
adopting
the
Alliance's
time
schedule,
because
we
believe
the
shorter
schedule
we
proposed
is
feasible
and
that
there
is
no
reason
to
delay
the
final
benefits
of
the
Tier
2
standards.
In
fact,
numerous
commenters
representing
state,
environmental
and
health
groups
argued
that
our
original
proposal
gave
manufacturers
too
much
time
to
bring
the
HLDTs
into
line
with
LDVs
and
LLDTs.
We
believe
the
two
extra
years
proposed
in
the
NPRM
remain
appropriate.
HLDTs
will
face
greater
challenges
than
LDVs/
LLDTs
because
their
emission
control
systems
will
need
to
be
durable
under
potentially
heavier
loads
and
tougher
operating
conditions
than
LDV/
LLDTs.
Their
sales
are
small
relative
to
the
rest
of
the
light
duty
fleet
(
they
will
comprise
about
14%
of
the
light
duty
fleet
in
2004),
and
they
will
benefit
from
industry
experience
with
the
lighter
vehicles.
In
addition,
HLDTs
will
not
remain
at
high
Tier
1
levels
until
they
phase­
in
to
Tier
2.
Rather,
they
will
have
to
meet
interim
standards
that
impose
a
NOX
cap
of
0.60
g/
mi
and
phase­
in
a
corporate
average
NOX
standard
of
0.20
g/
mi.
These
standards
represent
a
significant
reduction
from
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56
Under
Tier
1
standards,
LDT3s
are
subject
to
a
0.98
g/
mi
NOX
standard
while
LDT4s
are
subject
to
an
even
higher
NOX
standard
of
1.53
g/
mi.
57
The
NLEV
program
imposes
NMOG
average
standards
that
translate
into
full
useful
life
NOX
levels
of
about
0.3
g/
mi
for
LDV/
LDT1s
and
0.5
g/
mi
for
LDT2s.
58
The
NLEV
program
does
not
impose
average
NOX
standards,
but
the
NMOG
average
standards
that
it
does
impose
will
lead
to
full
useful
life
NOX
levels
of
about
0.3
g/
mi
for
LDV/
LDT1s.
applicable
Tier
1
standards.
56
Interim
standards
are
discussed
in
detail
later
in
this
preamble.

i.
Implementation
Schedule
for
Tier
2
LDVs
and
LLDTs
We
are
finalizing
the
implementation
schedule
for
the
Tier
2
standards
as
proposed
in
the
NPRM.
Thus,
the
standards
will
take
effect
beginning
with
the
2004
model
year
for
light
duty
vehicles
and
trucks
at
or
below
6000
pounds
GVWR
(
LDV/
LLDTs).
Manufacturers
will
phase
their
vehicles
into
the
Tier
2
standards
beginning
with
25
percent
of
LDV/
LLDT
sales
that
year,
50
percent
in
2005,
75
percent
in
2006,
and
100
percent
in
2007.
Manufacturers
will
be
free
to
choose
which
vehicles
are
phased­
in
each
year.
However,
in
each
year
during
(
and
after)
the
phase­
in,
the
manufacturer's
average
NOX
for
its
Tier
2
vehicles
must
meet
the
0.07
g/
mi
corporate
average
standard.
This
phasein
schedule,
which
is
consistent
with
that
of
the
California
LEV
II
program,
provides
between
four
and
seven
years
of
leadtime
for
the
manufacturers
to
bring
all
of
their
LDV/
LLDT
production
into
compliance.
These
vehicles
constitute
about
86
percent
of
the
light
duty
fleet.
To
increase
manufacturer
flexibility
and
provide
incentives
for
early
introduction
of
Tier
2
vehicles,
we
are
also
finalizing
provisions
from
the
NPRM
that
permit
manufacturers
to
use
alternative
phase­
in
schedules
that
will
still
require
100
percent
phase­
in
by
2007,
but
recognize
the
benefits
of
early
introduction
of
Tier
2
vehicles,
and
allow
manufacturers
to
adjust
their
phase­
in
to
better
fit
their
own
production
plans.
(
See
section
IV.
B.
4.
b.
ii.
below.)

ii.
Implementation
Schedule
for
Tier
2
HLDTs
The
Tier
2
phase­
in
schedule
for
HLDTs
is
also
being
finalized
as
proposed.
The
phase­
in
for
final
Tier
2
standards
for
HLDTs
will
start
later
and
end
later
than
that
for
LDVs
and
LLDTs.
Fifty
percent
of
each
manufacturer's
HLDTs
must
meet
Tier
2
standards
in
2008,
and
100
percent
must
meet
Tier
2
standards
in
2009.
As
with
the
LDV/
LLDTs,
the
Tier
2
HLDTs
must
meet
a
corporate
average
NOX
standard
of
0.07
g/
mi.
This
delayed
phase­
in
schedule:

·
Provides
significant
interim
emission
reductions
starting
in
2004
(
discussed
separately
below);
·
Recognizes
the
relatively
high
emission
standards
that
currently
apply
to
HLDTs;
·
Provides
manufacturers
with
adequate
lead
time
before
they
must
bring
HLDTs
into
compliance
with
final
Tier
2
standards;
·
Provides
manufacturers
the
opportunity
to
apply
and
evaluate
Tier
2
technology
on
LDV/
LLDTs
before
having
to
apply
it
to
HLDTs;
and
·
Provides
manufacturers
the
opportunity
to
apply
and
evaluate
Tier
2
technology
on
HLDTs
on
a
relatively
small
scale
to
meet
California
LEV
II
requirements
before
having
to
apply
it
to
HLDTs
nationwide.
As
with
the
LDV/
LLDTs
above,
to
encourage
early
introduction
of
Tier
2
HLDTs
and
to
provide
manufacturers
with
greater
flexibility,
we
are
finalizing
provisions
to
permit
manufacturers
to
generate
early
Tier
2
NOX
credits
and
to
use
alternative
phase­
in
schedules
that
still
result
in
100%
phase­
in
by
2009.
(
See
sections
IV.
B.
4.
d.
iv.
and
IV.
B.
4.
b.
ii,
respectively,
below.)

e.
Interim
Standards
The
interim
standards
discussed
below
are
a
major
source
of
emission
reductions
in
the
early
years
of
the
vehicle
control
program.
The
NOX
emission
standards
for
LDT2s
and
LDT4s,
which
comprise
about
40
percent
of
the
fleet,
are
more
stringent
than
the
corresponding
standards
in
the
NLEV
and
CAL
LEV
I
programs.
These
standards
also
are
important
because
they
set
the
stage
for
a
smooth
transition
to
the
final
Tier
2
standards.
The
two
groups
of
vehicles
(
LDV/
LLDTs
and
HLDTs)
will
be
approaching
the
Tier
2
standards
from
quite
different
emission
``
backgrounds''.
LDV/
LLDTs
will
be
at
NLEV
levels,
which
require
NOX
emissions
of
either
0.3
or
0.5g/
mi
on
average,
57
while
HLDTs
will
be
at
Tier
1
levels
facing
NOX
standards
of
either
0.98
or
1.53
g/
mi,
depending
on
truck
size.
These
Tier
1
NOX
levels
for
HLDTs
are
very
high
(
by
a
factor
of
14
 
22)
relative
to
our
0.07
g/
mi
Tier
2
NOX
average.
To
address
the
disparity
in
emission
``
backgrounds'',
while
gaining
air
quality
benefits
from
vehicles
during
the
phase­
in
period,
we
proposed
and
are
finalizing
separate
interim
average
NOX
standards
for
the
two
vehicle
groups
during
the
phase­
in
period.
The
provisions
described
below
will
apply
in
2004
for
all
LDVs
and
LDTs
not
certified
to
Tier
2
standards.
The
relationship
of
the
interim
programs
to
the
final
Tier
2
standards
is
shown
in
Table
IV.
B
 
3.
Interim
vehicles
will
certify
to
the
same
bins
as
Tier
2
vehicles.
As
described
earlier
in
this
preamble,
we
have
merged
the
tables
of
bins
from
the
NPRM
for
simplicity
and
added
a
few
bins.
Bins
9
and
10
were
drawn
from
the
tables
of
interim
bins
in
the
NPRM,
and
are
intended
only
for
use
during
the
phase­
in
years.
Therefore,
these
two
bins
will
be
discontinued
after
2006
(
2008
for
HLDTs).

i.
Interim
Exhaust
Emission
Standards
for
LDV/
LLDTs
Beginning
with
the
2004
model
year,
all
new
LDVs,
LDT1s
and
LDT2s
not
incorporated
under
the
Tier
2
phase­
in
will
be
subject
to
an
interim
corporate
average
NOX
standard
of
0.30
g/
mi.
This
is
effectively
the
LEV
NOX
emission
standard
for
LDVs
and
LDT1s
under
the
NLEV
program.
58
This
interim
program
will
hold
LDVs
and
LLDTs
to
NLEV
levels
if
they
are
not
yet
subject
to
Tier
2
standards
during
the
phase­
in.
By
implementing
these
interim
standards
for
LDVs
and
LLDTs
we
will
ensure
that
the
accomplishments
of
the
NLEV
program
continue.
Additionally,
this
program
will
bring
about
substantial
and
important
NOX
emission
reductions
from
LDT2s
in
the
early
years
of
the
program.
LDT2s
will
be
held
to
a
0.3
g/
mi
NOX
average
in
contrast
to
a
0.5
g/
mi
average
in
the
NLEV
program.
Because
the
Tier
2
standards
are
phased­
in
beginning
in
the
2004
model
year,
the
interim
standards
for
LDVs
and
LLDTs
apply
to
fewer
vehicles
each
year,
i.
e.,
they
are
``
phase­
out''
standards.
Table
IV.
B
 
2
shows
the
maximum
percentage
of
LDVs
and
LLDTs
subject
to
the
interim
standards
each
year
 
75%
in
2004,
50%
in
2005,
25%
in
2006
and
0%
in
2007.
As
mentioned
above,
the
interim
program
for
LDV/
LLDTs
is
designed
to
hold
these
vehicles
to
the
NLEV
NOX
level
for
LDVs
and
LDT1s,
and
a
few
of
our
bins
are
derived
from
the
NLEV
program.
Our
proposal
to
bring
LDT2s
into
line
with
the
LDVs
and
LDT1s
during
the
interim
program
by
requiring
all
LDVs,
LDT1s
and
LDT2s
to
meet
the
same
average
NOX
standard
(
0.30)
g/
mi
was
of
concern
to
industry
commenters.
In
the
final
rule,
we
are
retaining
this
requirement,
but
we
are
providing
an
optional
NMOG
standard
of
0.130
for
LDT2s
certified
to
bin
9
when
the
manufacturers
of
those
LDT2s
elect
to
bring
all
of
their
2004
model
year
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59
In
the
Tier
1
program,
exhaust
hydrocarbon
standards
are
in
terms
of
NMHC,
not
NMOG.
However,
as
we
have
explained
elsewhere
in
this
preamble,
NMHC
and
NMOG
results
are
very
similar
for
gasoline
and
diesel­
fueled
vehicles.
HLDTs
under
our
interim
program
and
phase
25%
of
those
HLDTs
into
the
0.20
g/
mi
average
NOX
standard.
(
See
ii.
below).
These
provisions
are
discussed
in
detail
below
and
also
in
the
Response
to
Comments
document.

ii.
Interim
Exhaust
Emission
Standards
for
HLDTs
Our
interim
standards
for
HLDTs
will
begin
in
the
2004
model
year
similar
to
our
proposal
in
the
NPRM.
The
Interim
Program
for
HLDTs
will
require
compliance
with
a
corporate
average
NOX
standard
of
0.20
g/
mi
that
will
be
phased
in
between
2004
and
2007.
The
interim
HLDT
standards,
like
those
for
LDV/
LLDTs
will
make
use
of
the
bins
in
Tables
IV.
B.
 
4
and
 
5.
We
believe
that
our
interim
standards,
which
start
in
2004,
will
produce
significant
emission
reductions
from
HLDTs
produced
during
the
interim
period.
For
example,
HLDTs
will
have
to
reduce
emissions
in
the
interim
program
relative
to
the
NLEV
program.
These
standards,
by
themselves,
represent
a
major
reduction
in
emission
standards
and
we
believe
it
is
likely
that
some
manufacturers
will
apply
their
Tier
2
technology
to
HLDTs
in
order
to
comply
with
the
interim
standards.
As
shown
in
Table
IV.
B.
 
3,
the
phasein
schedule
for
HLDTs
to
the
0.20
g/
mi
corporate
average
NOX
standard
will
be
25
percent
in
the
2004
model
year
(
except
as
noted
below),
50
percent
in
2005,
75
percent
in
2006,
and
100
percent
in
2007.
As
for
the
Tier
2
standards,
alternative
phase­
in
schedules
(
see
Section
IV.
B.
4.
b.
ii.)
will
be
available.
The
interim
program
will
remain
in
effect
through
2008
to
cover
those
HLDTs
not
yet
phased
into
the
Tier
2
standards
(
a
maximum
of
50%).
Interim
HLDTs
not
subject
to
the
interim
corporate
average
NOX
standard
during
the
applicable
phase­
in
years
(
2004
 
2006
or
2005
 
2006)
will
be
subject
to
the
least
stringent
bins
so
their
NOX
emissions
will
be
effectively
capped
at
0.60
g/
mi.
These
vehicles
will
be
excluded
from
the
calculation
to
determine
compliance
with
the
interim
0.20
g/
mi
average
NOX
standard.
This
approach
will
allow
more
time
for
manufacturers
to
bring
the
more
difficult
HLDTs
to
Tier
2
levels
while
achieving
real
reductions
from
those
HLDTs
that
may
present
less
of
a
challenge.
Due
to
statutory
leadtime
considerations,
we
were
not
able
to
finalize
the
HLDT
standards
to
be
in
effect
by
the
time
the
2004
model
year
begins.
For
this
reason,
we
are
providing
incentives
for
HLDTs
to
comply
with
the
Tier
2
standards
for
all
2004
model
year
HLDTs.
This
change
and
the
leadtime
issue
are
discussed
further
under
section
IV.
B.
4.
e.
below
and
also
in
the
Response
to
Comments
document.

iii.
Interim
Programs
Will
Provide
Reductions
Over
Previous
Standards
As
is
the
case
with
the
primary
Tier
2
standard
structure,
the
interim
programs
will
focus
on
NOX
but
will
also
provide
reductions
in
NMOG
beyond
the
NLEV
program.
This
is
because
the
interim
programs
will
reduce
emissions
from
LDT2s
and
HLDTs
compared
to
their
previous
standards.
Without
the
interim
standards,
HLDTs
could
be
certified
to
the
Tier
1
NMHC
levels
(
0.46
g/
mi
or
0.56
g/
mi).
With
the
interim
standards,
however,
exhaust
NMOG
59
should
average
approximately
0.09
g/
mi
for
all
non­
Tier
2
LDV/
LLDTs
and
0.24
g/
mi
or
less
for
HLDTs.
CO
under
Tier
1
could
be
as
high
as
7.3
g/
mi
for
LDT4s.
Under
the
interim
program,
CO
standards
for
most
bins
will
be
well
below
7.3
g/
mi.

f.
Generating,
Banking,
and
Trading
NOX
Credits
As
proposed
in
the
NPRM
and
finalized
in
this
notice,
manufacturers
will
be
permitted
to
average
the
NOX
emissions
of
their
Tier
2
vehicles
and
comply
with
a
corporate
average
NOX
standard.
In
addition,
when
a
manufacturer's
average
NOX
emissions
fall
below
the
corporate
average
NOX
standard,
it
can
generate
NOX
credits
for
later
use
(
banking)
or
to
sell
to
another
manufacturer
(
trading).
NOX
credits
will
be
available
under
the
Tier
2
standards,
the
interim
standards
for
LDVs
and
LLDTs,
and
the
interim
standards
for
HLDTs.
These
NOX
credit
provisions
will
facilitate
compliance
with
the
fleet
average
NOX
standards
and
be
very
similar
to
those
currently
in
place
for
NMOG
emissions
under
California
and
federal
NLEV
regulations.
A
manufacturer
with
an
average
NOX
level
for
its
Tier
2
vehicles
in
a
given
model
year
below
the
0.07
gram
per
mile
corporate
average
standard
can
generate
Tier
2
NOX
credits
that
it
can
use
in
a
future
model
year
when
its
average
NOX
might
exceed
the
0.07
standard.
Manufacturers
must
calculate
their
corporate
average
NOX
emissions
at
year
end
and
then
compute
credits
generated
based
on
how
far
below
0.07
g/
mi
the
corporate
average
falls.
Manufacturers
will
be
free
to
retain
any
credits
they
generate
for
future
use
or
to
trade
(
sell)
those
credits
to
other
manufacturers.
Credits
retained
or
purchased
can
be
used
by
manufacturers
with
corporate
average
Tier
2
NOX
levels
above
0.07
g/
mi.
Under
provisions
described
in
Section
IV.
B.
4.
d.
iv.,
manufacturers
can
implement
NOX
emission
reductions
as
early
as
the
2001
model
year
and
earn
early
Tier
2
NOX
credits
to
help
LDVs
and
LLDTs
meet
Tier
2
standards.
Similarly,
manufacturers
can
earn
early
credits
for
HLDTs
as
early
as
the
2001
model
year.
In
model
years
up
through
2005,
manufacturers
can
earn
extra
credits
when
they
certify
vehicles
to
bins
1
or
2.
Banking
and
trading
of
NOX
credits
under
the
interim
non­
Tier
2
standards
will
be
similar
to
that
under
the
Tier
2
standards,
except
that
a
manufacturer
must
determine
its
credits
based
upon
the
0.30
or
0.20
gram
per
mile
corporate
average
NOX
standard
applicable
to
vehicles
in
the
interim
programs.
As
we
proposed
in
the
NPRM,
interim
credits
from
LDVs/
LLDTs
and
interim
credits
from
HLDTs
will
not
be
permitted
to
be
used
interchangeably
due
to
the
differences
in
the
interim
corporate
average
NOX
standards.
As
proposed
in
the
NPRM,
there
will
be
no
provisions
for
early
banking
under
the
interim
standards
and
manufacturers
will
not
be
allowed
to
use
interim
credits
to
address
the
Tier
2
NOX
average
standard.
This
is
because
we
remain
concerned
that
credits
can
be
generated
relatively
easily
under
less
stringent
standards
(
the
Tier
1
or
interim
standards)
and
then
used
in
such
a
way
to
delay
implementation
of
the
Tier
2
standards.
Banking
and
trading
of
NOX
credits
and
related
issues
are
discussed
in
greater
detail
in
Section
IV.
B.
4.
d.
below.

2.
Why
Are
We
Finalizing
the
Same
Set
of
Standards
for
Tier
2
LDVs
and
LDTs?
Before
we
provide
a
more
detailed
description
of
the
vehicle
program,
we
want
to
review
two
overarching
principles
of
today's
rule.
The
first
is
our
goal
to
bring
all
LDVs
and
LDTs
under
the
same
set
of
emission
standards.
Historically,
LDTs
 
and
especially
the
heavier
trucks
in
the
LDT3
and
LDT4
categories
 
have
been
subject
to
less
stringent
emission
standards
than
LDVs
(
passenger
cars).
In
recent
years
the
proportion
of
light
truck
sales
has
grown
to
approximately
50
percent.
Many
of
these
LDTs
are
minivans,
passenger
vans,
sport
utility
vehicles
and
pick­
up
trucks
that
are
used
primarily
or
solely
for
personal
transportation;
i.
e.,
they
are
used
like
passenger
cars.
As
vehicle
preferences
have
increasingly
shifted
from
passenger
cars
to
light
trucks
there
has
been
an
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60
Because
of
the
different
phase­
in
percentages
and
phase­
in
schedules
for
the
two
groups,
during
the
duration
of
the
phase­
in
(
through
2008),
manufacturers
will
average
Tier
2
LDV/
LLDTs
separately
from
HLDTs.
61
The
Alliance
proposed
NMHC
standards
in
lieu
of
the
NMOG
standards
we
proposed
and
are
finalizing
today.
We
are
including
a
provision
in
the
final
rule
to
accept
NMHC
results,
subject
to
an
adjustment
factor,
to
demonstrate
compliance
with
NMOG
standards,
although
we
are
not
adopting
the
fixed
standards
proposed
by
the
Alliance.
62
The
interim
PM
standard
in
this
new
bin,
which
represents
a
reduction
from
the
NLEV
PM
standards,
should
be
feasible
without
aftertreatment.
The
technologies
needed
to
meet
the
PM
standard
we
proposed
for
this
bin
would
likely
have
required
low
sulfur
diesel
fuel,
which
may
not
be
widely
available
during
the
interim
program.
This
change
is
also
discussed
in
section
V.
A.
accompanying
increase
in
emissions
over
what
otherwise
would
have
occurred
because
of
the
increase
in
miles
traveled
by
LDTs
and
the
less
stringent
standards
for
LDTs
as
compared
to
LDVs.
As
Section
III.
above
makes
clear,
reductions
in
these
excess
emissions
(
and
in
other
mobile
and
stationary
source
emissions)
are
seriously
needed.
Since
both
LDVs
and
LDTs
are
within
technological
reach
of
the
standards
in
the
Tier
2
bin
structure,
and
since
none
of
the
comments
have
been
persuasive
that
manufacturers
can
not
meet
the
standards,
we
are
finalizing
our
proposal
to
equalize
the
regulatory
useful
life
mileage
for
LDVs
and
LDTs
and
apply
the
same
Tier
2
exhaust
emission
standard
bins
to
all
of
them.
This
program
will
ensure
that
substantial
reductions
occur
in
all
portions
of
the
light­
duty
fleet
and
that
the
movement
from
LDVs
to
LDTs
will
not
counteract
these
reductions.
Once
the
phase
in
periods
end
for
all
vehicles
in
2009,
manufacturers
will
include
all
LDVs
and
LDTs
together
in
calculating
their
corporate
average
NOX
levels.
60
As
mentioned
above
and
described
in
more
detail
in
Section
IV.
B.
 
4.
below,
manufacturers
can
choose
the
emission
bin
for
any
test
group
of
vehicles
provided
that,
on
a
sales
weighted
average
basis,
the
manufacturer
meets
the
average
NOX
standard
of
0.07
g/
mi
for
its
Tier
2
vehicles
that
year.
Some
manufacturers
have
suggested
that
a
program
with
different
requirements
is
needed
for
heavy
LDTs.
Recognizing
that
compliance
will
be
most
challenging
for
HLDTs,
the
delay
in
the
start
of
the
phase­
in
and
the
additional
phase­
in
years
for
those
vehicles
will
allow
manufacturers
to
delay
the
initial
impact
of
the
Tier
2
standards
until
the
2008
model
year.
This
represents
four
additional
model
years
of
leadtime
beyond
the
time
when
passenger
cars
and
LDT1s
and
LDT2s
will
achieve
Tier
2
standards
in
substantial
numbers.
We
believe
this
phase­
in
and
other
provisions
of
this
rule
respond
to
these
concerns.
Note
that
in
the
NPRM,
we
requested
comments
on
the
need
for
different
hydrocarbon
standards
for
these
vehicles
recognizing
that
a
tradeoff
often
exists
between
HC
and
NOX
emissions.
We
also
proposed
that
several
bins
have
higher
hydrocarbon
standards
for
HLDTs
during
the
interim
program.
We
are
finalizing
these
bins
as
proposed.
Also,
as
an
option,
we
are
permitting
the
use
of
NMOG
values
similar
to
those
in
the
NLEV
program
for
bins
9
and
10
only
for
certain
LDT2s
and
LDT4s
during
the
interim
program
(
see
section
IV.
B.
1.
e.
ii.
above
for
details).
We
are
not
adopting
the
Alliance's
proposed
phase­
in
schedule
which
would
have
provided
a
phase­
in
lasting
until
2011.
At
the
end
of
the
Alliance's
proposed
phase­
in,
all
vehicles
would
comply
with
an
average
NOX
standard
of
0.07
g/
mi.
A
fixed
0.09
NMHC
standard
would
apply
to
LDVs
and
LLDTs
while
a
fixed
0.156
NMHC
standard
would
apply
to
HLDTs.
61
Our
final
program
provides
HLDTs
until
2008
before
any
have
to
meet
0.07
g/
mi
on
average
and
permits
them
to
be
averaged
with
LDV/
LLDTs
beginning
in
2009,
when
all
must
meet
0.07
g/
mi
NOX
on
average.
We
believe
that
eight
years
is
a
significant
amount
of
leadtime
to
apply
Tier
2
technology.
We
heard
clearly
from
the
public
hearings
and
written
comments
that
the
public
sees
no
justification
for
and
does
not
want
even
more
time
provided
for
HLDTs.
Furthermore,
we
see
no
technological
need
for
more
time
than
we
proposed.
Indeed,
many
believe
that
HLDTs
should
meet
the
Tier
2
standards
in
step
with
the
LDV/
LLDTs.
We
are
not
promulgating
the
fixed
NMHC
standards
suggested
by
the
Alliance,
but
are
sticking
with
the
concept
of
bins
containing
lower
NMOG
standards
connected
to
lower
NOX
(
and
other)
standards.
We
believe
that
providing
final
exhaust
emission
standards
for
HLDTs
that
deviate
from
those
for
LDV/
LLDTs
would
violate
one
of
the
overarching
principles
of
the
Tier
2
program,
i.
e.
that
all
LDVs
and
LDTs
should
be
subject
to
the
same
exhaust
emission
standards.
Further,
the
idea
of
NMOG
values
that
differ
from
California's
runs
counter
to
other
arguments
raised
by
the
Alliance
that
EPA
should
align
bins
with
California's
to
promote
50
state
certification
of
test
groups.

3.
Why
Are
We
Finalizing
the
Same
Standards
for
Both
Gasoline
and
Diesel
Vehicles?
The
second
overarching
principle
of
our
vehicle
program
is
the
use
of
the
same
Tier
2
standards
for
all
LDVs
and
LDTs,
regardless
of
the
fuel
they
are
designed
to
use.
The
same
exhaust
emission
standards
and
useful
life
periods
we
are
finalizing
today
will
apply
whether
the
vehicle
is
built
to
operate
on
gasoline
or
diesel
fuel
or
on
an
alternative
fuel
such
as
methanol
or
natural
gas.
Diesel
powered
LDVs
and
LDTs
tend
to
be
used
in
the
same
applications
as
their
gasoline
counterparts,
and
thus
we
believe
they
should
meet
the
same
standards.
Less
stringent
standards
for
diesels
could
create
incentives
for
manufacturers
to
build
more
diesel
vehicles,
thus
endangering
the
emission
reductions
expected
by
this
program.
Manufacturers
have
expressed
concerns
that
diesel­
fueled
vehicles
would
have
difficulty
meeting
NOX
and
particulate
matter
levels
like
those
contained
in
today's
rule.
Clearly,
these
standards
will
be
challenging.
As
discussed
in
Section
IV.
A.
 
1.
above,
we
expect
that
the
Tier
2
NOX
and
NMOG
standards
will
be
challenging
for
gasoline
vehicles,
but
that
major
technological
innovations
will
not
be
required.
For
diesels,
however,
the
final
Tier
2
NOX
and
PM
standards
will
likely
require
applications
of
aftertreatment,
most
likely
accompanied
by
changes
in
diesel
fuel
as
such
devices
are
sensitive
to
diesel
fuel
quality,
particularly
sulfur
content.
We
do
not
believe
such
devices
will
be
necessary
to
meet
the
top
bin
for
our
interim
standards.
62
Given
the
small
percentage
of
diesel
vehicles
and
the
phase­
in
of
the
standards,
that
bin
should
be
sufficient
for
any
manufacturer
to
market
diesels
and
still
comply
with
the
interim
program.
We
anticipate
that
manufacturers
that
choose
to
build
diesel
vehicles
for
the
final
Tier
2
standards
will
adopt
aftertreatment
technologies
such
as
NOX
adsorber
catalysts
and
continuously
regenerating
particulate
traps
to
meet
Tier
2
requirements.
We
issued
an
Advanced
Notice
of
Proposed
Rulemaking
to
seek
input
on
potential
diesel
fuel
quality
changes
on
May
13,
1999
(
64
FR
26142).
We
anticipate
issuing
a
Notice
of
Proposed
Rulemaking
to
reduce
the
sulfur
limit
on
diesel
fuel
in
the
spring
of
2000
followed
by
a
final
rule
in
late
2000.
Our
goal
in
that
rulemaking
is
to
have
low
sulfur
diesel
fuel
available
which
will
allow
diesel
vehicles
to
meet
the
Tier
2
standards,
within
the
bin
structure,
by
the
time
the
Tier
2
standards
are
required
for
the
entire
fleet.

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2000
/
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and
Regulations
63
A
``
test
group''
is
the
basic
classification
unit
for
certification
of
light­
duty
vehicles
and
trucks
under
EPA
certification
procedures
for
the
CAP2000
program.
``
Test
group''
is
a
broader
classification
unit
than
``
engine
family''
used
prior
to
the
implementation
of
the
CAP2000
program.
We
discuss
the
CAP2000
program
in
more
detail
in
section
V.
A.
9.
of
this
preamble.
64
The
regulatory
``
useful
life''
value
for
Tier
2
vehicles
is
specifically
addressed
in
Section
V.
A.
2.
of
this
preamble.
Full
useful
life
will
be
10
years
or
120,000
miles
for
all
vehicles
except
LDT3s
and
LDT4s,
for
which
it
is
11
years
or
120,000
miles.
Intermediate
useful
life,
where
standards
are
applicable,
is
5
years
or
50,000
miles.

65
EPA's
current
standards
for
Clean
Fuel
Vehicles
are
less
stringent
than
the
Tier
2
standards.
See
40
CFR
88.104
 
94.
The
Tier
2
standards
will
supercede
the
current
CFV
standards,
and
the
Agency
intends
to
undertake
a
rulemaking
to
revise
the
CFV
standards
accordingly.

66
In
some
cases
our
bins
do
not
match
California's
exactly,
because
they
have
higher
NMOG
standards.
These
bins
``
cover''
the
California
bin
in
that
a
vehicle
certified
to
the
California
standards
will
comply
with
the
standards
in
these
bins.
Today,
diesels
comprise
less
than
one­
half
of
one
percent
of
all
LDV/
LDT
sales.
While
this
is
a
small
fraction,
the
potential
exists
for
diesels
to
gain
a
considerable
market
share
in
the
future.
All
one
need
do
is
review
the
dramatic
increase
in
recent
years
of
diesel
engine
use
in
the
lightest
category
of
heavy
duty
vehicles
(
8500
 
10,000
pounds
GVWR)
to
see
the
potential
for
significant
diesel
engine
use
in
LDTs,
and
perhaps
LDVs,
in
the
future.
Just
ten
years
ago,
diesels
made
up
less
than
10
percent
of
this
class
of
vehicles.
In
1998,
this
fraction
approached
50
percent.
The
potential
impact
of
large­
scale
diesel
use
in
the
light­
duty
fleet
underscores
the
need
for
the
same
standards
to
apply
to
diesels
as
other
vehicles.
Given
the
health
concerns
associated
with
diesel
PM
emissions
(
see
Section
III.
above),
we
believe
that
it
is
prudent
to
address
PM
emissions
from
diesel
LDVs
and
LDTs
while
their
numbers
are
relatively
small.
In
this
way
the
program
can
minimize
the
PM
impact
that
would
accompany
significant
growth
in
this
market
segment
while
allowing
manufacturers
to
incorporate
low­
emission
technology
into
new
light­
duty
diesel
engine
designs.
4.
Key
Elements
of
the
Vehicle
Program
The
previous
subsections
IV.
B.
 
1.2.
and
3.
provide
an
overview
of
the
Tier
2
vehicle
program
and
the
two
key
principles
it
is
built
on.
This
subsection
elaborates
on
the
major
vehicle­
related
elements
of
today's
rule.
Later
in
this
preamble,
Section
V.
A.
discusses
the
rest
of
the
vehicle
provisions.

a.
Basic
Exhaust
Emission
Standards
and
``
Bin''
Structure
Our
final
Tier
2
program
contains
a
basic
requirement
that
each
manufacturer
meet,
on
average,
a
full
useful
life
NOX
standard
of
0.07
g/
mi
for
all
its
Tier
2
LDVs
and
LDTs.
Manufacturers
will
have
the
flexibility
to
choose
the
set
of
standards
that
a
particular
test
group
63
of
vehicles
must
meet.
For
a
given
test
group
of
LDVs
or
LDTs,
manufacturers
will
select
a
set
of
full
useful
life
64
standards
from
the
same
row
(``
emission
bin''
or
simply
``
bin'')
in
Table
IV.
B.
 
4.
below.
Each
bin
contains
a
set
of
individual
NMOG,
CO,
HCHO,
NOX,
and
PM
standards.
For
technology
harmonization
purposes,
our
proposed
emission
bins
include
or
otherwise
cover
all
of
those
adopted
in
California's
LEV
II
program.
65,66
In
the
NPRM,
we
proposed
that
interim
vehicles
and
Tier
2
vehicles
(
except
for
those
Tier
2
vehicles
in
the
lowest
bins)
would
also
have
to
meet
intermediate
useful
life
standards,
i.
e.,
standards
that
apply
for
5
years
or
50,000
miles.
We
are
finalizing
these
intermediate
useful
life
standards
as
proposed.
Where
we
have
added
new
full
life
bins,
we
have
included
corresponding
intermediate
life
bins
as
appropriate.
Our
intermediate
life
standards
are
generally
aligned
with
California's,
they
only
impact
the
higher
bins,
and
we
do
not
believe
they
add
substantial
burden
to
the
program.
Further,
they
provide
a
check
on
the
allowed
emission
deterioration
during
the
life
of
the
vehicle.
For
the
final
rule,
we
have
made
two
changes
involving
intermediate
life
standards.
First,
we
are
providing
that
diesel
vehicles,
which
will
likely
certify
to
bin
10
during
the
interim
program,
may
opt
not
to
meet
the
intermediate
life
standards
associated
with
this
bin.
Low
sulfur
diesel
fuel
may
be
needed
for
diesels
to
meet
our
interim
intermediate
life
standards
and
it
is
not
likely
to
be
widely
available
during
the
time
frame
of
the
interim
program.
Secondly,
for
all
vehicles,
we
are
finalizing
a
provision
that
will
make
intermediate
life
standards
optional
for
any
test
group
that
is
certified
to
a
full
useful
life
of
150,000
miles.
This
provision
is
described
in
more
detail
with
other
useful
life
issues
in
section
V.
B.

TABLE
IV.
B
 
4.
 
TIER
2
LIGHT
 
DUTY
FULL
USEFUL
LIFE
EXHAUST
EMISSION
STANDARDS
[
Grams
per
mile]

Bin
No.
NOX
NMOG
CO
HCHO
PM
Comments
10
...............................................
0.6
0.156/
0.230
4.2/
6.4
.........
0.018/
0.027
0.08
(
a,
b,
c,
d)
9
.................................................
0.3
0.090/
0.180
4.2
...............
0.018
...........
0.06
(
a,
b,
e)

The
above
temporary
bins
expire
in
2006
(
for
LDVs
and
LLDTs)
and
2008
(
for
HLDTs)

8
.................................................
0.20
0.125/
0.156
4.2
...............
0.018
...........
0.02
(
b,
f)
7
.................................................
0.15
0.090
...........
4.2
...............
0.018
...........
0.02
6
.................................................
0.10
0.090
...........
4.2
...............
0.018
...........
0.01
5
.................................................
0.07
0.090
...........
4.2
...............
0.018
...........
0.01
4
.................................................
0.04
0.070
...........
2.1
...............
0.011
...........
0.01
3
.................................................
0.03
0.055
...........
2.1
...............
0.011
...........
0.01
2
.................................................
0.02
0.010
...........
2.1
...............
0.004
...........
0.01
1
.................................................
0.00
0.000
...........
0.0
...............
0.000
...........
0.00
Notes:
a
Bin
deleted
at
end
of
2006
model
year
(
2008
for
HLDTs).
b
The
higher
temporary
NMOG,
CO
and
HCHO
values
apply
only
to
HLDTs
and
expire
after
2008.
c
An
additional
temporary
higher
bin
restricted
to
MDPVs
is
discussed
in
section
IV.
B.
4.
g.
d
Optional
temporary
NMOG
standard
of
0.280
g/
mi
applies
for
qualifying
LDT4s
and
MDPVs
only.
e
Optional
temporary
NMOG
standard
of
0.130
g/
mi
applies
for
qualifying
LDT2s
only,
see
text.
f
Higher
temporary
NMOG
standard
is
deleted
at
end
of
2008
model
year.

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/
Rules
and
Regulations
TABLE
IV.
B.
 
5.
 
LIGHT­
DUTY
INTERMEDIATE
USEFUL
LIFE
(
50,000
MILE)
EXHAUST
EMISSION
STANDARDS
[
Grams
per
mile]

Bin
No.
NOX
NMOG
CO
HCHO
PM
Comments
10
...............................................
0.4
0.125/
0.160
3.4/
4.4
.........
0.015/
0.018
(
a,
b,
c,
d,
f,
h)
9
.................................................
0.2
0.075/
0.140
3.4
...............
0.015
...........
(
a,
b,
e,
h)

The
above
temporary
bins
expire
in
2006
(
for
LDVs
and
LLDTs)
and
2008
(
for
HLDTs)

8
.................................................
0.14
0.100/
0.125
3.4
...............
0.015
...........
(
b,
g,
h)
7
.................................................
0.11
0.075
...........
3.4
...............
0.015
...........
(
h)
6
.................................................
0.08
0.075
...........
3.4
...............
0.015
...........
(
h)
5
.................................................
0.05
0.075
...........
3.4
...............
0.015
...........
(
h)

Notes:
a
Bin
deleted
at
end
of
2006
model
year
(
2008
for
HLDTs).
b
The
higher
temporary
NMOG,
CO
and
HCHO
values
apply
only
to
HLDTs
and
expire
in
2008.
c
An
additional
higher
temporary
bin
restricted
to
MDPVs
is
discussed
in
section
IV.
B.
4.
g.
d
Optional
temporary
NMOG
standard
of
0.195
g/
mi
applies
for
qualifying
LDT4s
and
MDPVs
only.
e
Optional
temporary
NMOG
standard
of
0.100
g/
mi
applies
for
qualifying
LDT2s
only,
see
text.
f
Intermediate
life
standards
are
optional
for
diesels
certified
to
bin
10.
g
Higher
temporary
NMOG
value
deleted
at
end
of
2008
model
year.
h.
Intermediate
life
standards
are
optional
for
any
test
group
certified
to
a
150,000
mile
useful
life
(
if
credits
are
not
claimed).

Under
a
``
bins''
approach,
a
manufacturer
may
select
a
set
of
emission
standards
(
a
bin)
to
comply
with,
and
a
test
group
must
meet
all
standards
within
that
bin.
Ultimately,
the
manufacturer
must
also
ensure
that
the
emissions
of
a
targeted
pollutant
 
NOX
in
this
case
 
from
all
of
its
vehicles
taken
together
meet
a
``
corporate
average''
emission
standard.
This
corporate
average
emission
standard
ensures
that
a
manufacturer's
production
yields
the
required
overall
emission
reductions.
(
See
Section
IV.
B.
 
4.
c.
below
for
more
discussion
of
the
corporate
average
NOX
standard.)
In
addition
to
the
Tier
2
standards
described
above,
we
are
also
finalizing
an
interim
average
NOX
standard
derived
from
the
LDV/
LDT1
NLEV
program
to
cover
all
non­
Tier
2
LDVs
and
LLDTs
during
the
Tier
2
phase­
in.
We
are
finalizing
a
separate
interim
average
NOX
standard
for
HLDTs.
As
in
the
Tier
2
program,
manufacturers
will
select
bins
from
Table
IV.
B.
 
4
to
use
to
comply
with
the
interim
standards.
Bins
with
NOX
values
at
or
above
0.07
g/
mi
also
have
associated
intermediate
life
standards
which
are
shown
in
Table
IV.
B.
 
5.
(
We
describe
the
interim
standards
in
detail
in
Section
IV.
B.
4.
e.
below.)

i.
Why
Are
We
Including
Extra
Bins?
Compared
to
the
CalLEV
II
program,
our
Tier
2
proposal
included
additional
bins.
The
California
program
contains
no
bins
that
will
allow
NOX
levels
above
the
0.07
g/
mi
level.
Therefore,
under
the
California
program,
no
engine
family
can
be
certified
above
0.07
g/
mi,
even
with
the
application
of
offsetting
credits.
We
proposed
to
add
two
bins
(
with
NOX
values
of
0.15
and
0.20)
above
the
0.07
bin
and
another
below
(
with
a
NOX
value
of
0.04)
to
provide
manufacturers
with
additional
flexibility.
Based
upon
comments
received
from
the
Alliance
and
others
that
additional
bins
provide
important
added
flexibility,
we
are
finalizing
a
total
of
three
bins
above
the
LEV
level
(
the
additional
bin
has
a
NOX
value
of
0.10
g/
mi)
and
are
adding
one
more
below
the
LEV
level
(
this
additional
bin
has
a
NOX
value
of
0.03
g/
mi).
Due
to
the
NOX
averaging
requirement
of
this
rule,
these
bins
will
not
result
in
any
increase
in
NOX
emissions.
Further,
these
bins
will
address
concerns
raised
by
some
that
a
wider
variety
of
bins,
and
bins
with
higher
NOX
values,
are
needed
to
avoid
a
situation
where
the
Tier
2
program
discourages
the
development
of
advanced
technology
high
fuel
economy
vehicles,
which
may,
at
least
in
their
earliest
years,
have
NOX
emissions
higher
than
more
conventional
vehicles.
In
our
NPRM
we
proposed
that
during
the
Tier
2
phase­
in
years
(
through
2006
for
LDV/
LLDTs
and
2008
for
HLDTs),
bins
from
the
applicable
interim
program
would
be
available
to
enhance
the
flexibility
of
the
program
by
providing
manufacturers
with
additional
bins
having
NOX
standards
above
0.07
g/
mi.
In
the
NPRM,
we
showed
the
interim
bins
in
separate
tables
for
LDV/
LLDTs
and
HLDTs.
There
was
considerable
overlap
across
the
two
tables
and
with
the
Tier
2
bins.
In
this
final
rule,
we
have
consolidated
the
interim
bins
and
the
Tier
2
bins
into
one
table
for
simplicity
and
ease
of
reference.
The
interim
programs
for
non­
Tier
2
vehicles
are
described
in
detail
in
section
IV.
B.
4.
e.
While
some
commenters
were
concerned
about
the
existence
of
bins
above
NOX
=
0.07
g/
mi,
we
believe
that
the
additional
higher
bins
actually
provide
incentive
for
manufacturers
to
produce
vehicles
below
0.07
g/
mi
of
NOX.
We
believe
this
incentive
exists
because
manufacturers
will
have
some
vehicles
(
especially
larger
LDTs)
that
they
might
find
more
cost
effective
to
certify
to
levels
above
the
0.07
g/
mi
average
standard.
However,
to
do
this
they
will
have
to
offset
those
vehicles
in
our
NOX
averaging
system
with
vehicles
certified
below
0.07
g/
mi.
The
bins
at
NOX
=
0.04
g/
mi
and
NOX
=
0.03
g/
mi
will
provide
greater
opportunity
to
do
this.
Thus,
the
extra
bins
serve
two
purposes;
they
provide
additional
flexibility
to
manufacturers
to
address
technological
differences
and
costs,
and
they
provide
those
manufacturers
with
incentives
to
produce
cleaner
vehicles
and
thus
advance
emission
control
technology.
We
are
finalizing
a
bins
approach
with
the
bins
shown
in
Tables
IV.
B.
4
and
5
to
provide
adequate
and
appropriate
emission
reductions
and
manufacturer
flexibility.
This
structure
will
help
to
accelerate
technological
innovation.
We
requested
comment
on
whether
we
should
include
up
to
two
additional
bins
between
NOX
=
0.07
and
NOX
=
0.15.
Based
upon
manufacturer
comment,
we
have
added
an
additional
bin
(
bin
6
)
with
NOX
=
0.10.
This
bin
will
provide
greater
flexibility
for
manufacturers
who
may
find
it
more
cost­
effective
to
produce
some
vehicles
slightly
above
0.07
but
have
difficulties
meeting
a
0.07
g/
mi
average
NOX
standard
if
they
must
certify
them
to
a
NOX
level
of
0.15
g/
mi.
We
requested
comment
on
whether
our
Tier
2
bin
in
the
NPRM
with
NOX
=
0.20
(
our
final
bin
8)
should
be
eliminated
when
the
Tier
2
phase­
in
is
completed
(
after
2007
for
LDV/
LLDTs
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10,
2000
/
Rules
and
Regulations
67
For
Tier
2
vehicles
(
and
for
interim
vehicles),
the
term
``
U.
S.
sales''
means,
for
a
given
model
year,
those
sales
in
states
other
than
California
and
any
states
that
have
adopted
the
California
program.
and
after
2009
for
HLDTs).
Numerous
commenters
argued
that
our
highest
bins
were
too
lenient.
Comments
from
manufacturers
were
opposed
to
eliminating
bin
8
and
we
see
little
downside
to
having
bins
higher
than
the
0.07
NOX
standard,
given
that,
for
all
of
the
vehicles
that
will
use
this
bin,
manufacturers
will
have
to
offset
the
excess
emissions
by
selling
vehicles
certified
below
0.07
g/
mi
NOX
under
the
averaging
requirement.
Thus,
we
are
retaining
bin
8.

b.
The
Program
Will
Phase
in
the
Tier
2
Vehicle
Standards
Over
Several
Years
i.
Primary
Phase­
In
Schedule
We
are
finalizing
as
proposed
our
plan
to
phase
in
the
Tier
2
standards
for
LDV/
LLDTs
over
a
four
year
period
beginning
in
2004
and
we
are
also
finalizing
as
proposed
a
delayed
two
year
phase­
in
beginning
in
2008
for
HLDTs.
These
phase­
in
schedules
are
shown
in
Table
IV.
B.
 
2
and
are
also
shown
separately
in
Tables
IV.
B.
 
6
and
7.
We
believe
the
flexibility
of
this
dual
phase­
in
approach
is
appropriate
because
the
Tier
2
program
will
encompass
all
light­
duty
vehicles
and
trucks
and
will
result
in
widespread
applications
of
upgraded
and
improved
technology
across
the
fleet.
The
program
will
require
research,
development,
proveout,
and
certification
of
all
lightduty
models,
and
manufacturers
may
need
longer
lead
time
for
some
vehicles,
especially
HLDTs.
Also,
manufacturers
may
wish
to
time
compliance
with
the
Tier
2
standards
to
coincide
with
other
changes
such
as
the
roll
out
of
new
engines
or
new
models.
In
order
to
begin
the
introduction
of
very
clean
vehicles
as
soon
as
possible
while
avoiding
imposing
unnecessary
inefficiencies
on
vehicle
manufacturers,
we
believe
this
practical
but
aggressive
phase­
in
schedule
effectively
balances
air
quality,
technology,
and
cost
considerations.
In
each
year,
manufacturers
will
have
to
ensure
that
the
specified
fraction
of
their
U.
S.
sales:
67
·
Meets
Tier
2
standards
for
exhaust
emissions,
including
Supplemental
Federal
Test
Procedure
(
SFTP)
standards
(
discussed
in
Section
V.
A.
 
3.
below);
·
Meets
Tier
2
standards
for
evaporative
emissions
(
discussed
in
Section
IV.
B.
 
4.
f.
below);
and
·
Meets
the
corporate
average
Tier
2
NOX
standard.
Manufacturers
will
have
to
meet
the
Tier
2
exhaust
requirements
(
i.
e.,
all
the
standards
of
a
particular
bin
plus
the
SFTP
standards)
using
the
same
vehicles.
Vehicles
not
covered
by
the
Tier
2
standards
during
the
phase­
in
years
(
2004
 
2008)
will
have
to
meet
interim
standards
described
in
Section
IV.
B.
4.
e.
below
and
the
existing
evaporative
emission
as
well
as
the
applicable
SFTP
standards.
Manufacturers
can
elect
to
meet
the
percentage
phase­
in
requirements
for
evaporative
and
exhaust
emissions
using
two
different
sets
of
vehicles.
We
believe
that
because
of
interactions
between
evaporative
and
exhaust
control
strategies,
manufacturers
will
generally
address
the
Tier
2
evaporative
phase­
in
with
the
same
vehicles
that
they
use
to
meet
the
exhaust
phase­
in.
However,
the
primary
focus
of
today's
proposal
is
on
exhaust
emissions,
and
the
flexibility
for
manufacturers
to
use
different
sets
of
vehicles
in
complying
with
the
phase­
in
schedule
for
evaporative
standards
and
for
the
exhaust
standards
will
have
no
environmental
down
side
that
we
are
aware
of.
It
is
possible
that
some
exhaust
emission
improvements
might
even
occur
sooner
than
they
otherwise
would
if
a
manufacturer
is
able
to
move
ahead
with
the
roll­
out
of
a
model
with
cleaner
exhaust
emissions
without
having
to
wait
for
the
development
of
suitable
evaporative
controls
to
be
completed
for
that
model.

TABLE
IV.
B.
 
6.
 
PRIMARY
PHASE­
IN
SCHEDULE
FOR
SALES
OF
TIER
2
LDVS
AND
LLDTS
Model
year
Required
percentage
of
light­
duty
vehicles
and
light
light­
duty
trucks
(
percent)

2004
......................................
25
2005
......................................
50
2006
......................................
75
2007
......................................
100
TABLE
IV.
B.
 
7.
 
PRIMARY
PHASE­
IN
SCHEDULE
FOR
SALES
OF
TIER
2
HLDTS
Model
year
Required
percentage
of
heavy
lightduty
trucks
(
percent)

2008
......................................
50
2009
......................................
100
We
are
finalizing
our
proposed
phasein
approach,
in
which
vehicle
sales
will
be
determined
according
to
the
``
point
of
first
sale''
method
outlined
in
the
NLEV
rule.
Vehicles
with
points
of
first
sale
in
California
or
a
state
that
has
adopted
the
California
LEV
II
program
(
if
any)
will
be
excluded
from
the
calculation.
The
``
point
of
first
sale''
method
recognizes
that
most
vehicle
sales
will
be
to
dealers
and
that
the
dealers'
sales
will
generally
be
to
customers
in
the
same
geographic
area.
While
some
sales
to
California
residents
(
or
residents
of
states
that
adopt
California
standards)
may
occur
from
other
states
and
vice­
versa,
we
believe
these
sales
will
be
far
too
small
to
have
any
significant
impact
on
the
air
quality
benefits
of
the
Tier
2
program
or
the
manufacturers'
ability
to
demonstrate
compliance.

ii.
Alternative
Phase­
In
Schedule
We
are
finalizing,
as
proposed,
that
manufacturers
may
introduce
vehicles
earlier
than
required
to
earn
the
flexibility
to
make
offsetting
adjustments,
on
a
one­
for
one
basis,
to
the
phase­
in
percentages
in
later
years.
However,
they
will
still
need
to
reach
100%
of
sales
in
the
2007
model
year
(
2009
for
HLDTs).
Manufacturers
will
have
the
option
to
use
this
alternative
to
meet
phase­
in
requirements
for
LDV/
LLDTs
and/
or
HLDTs.
They
can
use
separate
alternative
phase­
in
schedules
for
exhaust
and
evaporative
emissions,
or
an
alternative
phase­
in
schedule
for
one
set
of
standards
and
the
primary
(
25/
50/
75/
100%
or
50%/
100%)
schedule
for
the
other.
Under
these
alternative
schedules,
manufacturers
will
have
to
introduce
vehicles
that
meet
or
surpass
the
0.07
g/
mi
Tier
2
NOX
average
standard
before
they
are
required
to
do
so,
or
else
introduce
vehicles
that
meet
or
surpass
the
0.07
standard
in
greater
quantities
than
required.
Alternative
phase­
in
schedules
essentially
credit
the
manufacturer
for
its
early
or
accelerated
efforts
and
allow
the
manufacturer
greater
flexibility
in
subsequent
years
during
the
phase­
in.
Thus,
the
alternative
phase­
in
schedule
provisions
provide
incentive
and
flexibility
to
manufacturers
to
introduce
Tier
2
vehicles
before
2004
(
or
2008
for
HLDTs).
As
outlined
in
the
NPRM,
an
alternative
phase­
in
schedule
will
be
acceptable
if
it
passes
a
specific
mathematical
test.
We
have
designed
the
test
to
provide
manufacturers
benefit
from
certifying
to
the
Tier
2
standards
early
while
ensuring
that
significant
numbers
of
Tier
2
vehicles
are
introduced
during
each
year
of
the
alternative
phase­
in
schedule.
To
test
an
alternative
schedule,
a
manufacturer
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68
For
interim
vehicles,
this
average
NOX
standard
will
be
0.20
for
HLDTs
and
0.30
for
LDV/
LLDTs.
Compliance
with
these
interim
average
standards
will
be
calculated
in
the
same
manner
as
compliance
with
the
0.07
standard.
must
sum
its
yearly
percentages
of
Tier
2
vehicles
beginning
with
model
year
2001
and
compare
the
result
to
the
sum
that
results
from
the
primary
phase­
in
schedule.
If
an
alternative
schedule
scores
as
high
or
higher
than
the
base
option,
then
the
alternative
schedule
is
acceptable.
The
mathematical
technique
to
evaluate
alternative
phase­
in
schemes
is
somewhat
similar
to
that
used
in
our
NLEV
rule
and
in
California
rules.
For
LDV/
LLDTs,
the
final
sum
of
percentages
must
equal
or
exceed
250
 
the
sum
that
results
from
a
25/
50/
75/
100
percent
phase­
in.
For
example,
a
10/
25/
50/
65/
100
percent
phase­
in
that
begins
in
2003
will
have
a
sum
of
250
percent
and
is
acceptable.
In
this
example,
assuming
constant
levels
of
production,
each
Tier
2
vehicle
sold
early
(
i.
e.
in
2003)
will
permit
the
manufacturer
to
sell
one
less
Tier
2
vehicle
in
the
last
phase­
in
year
(
2006).
A
10/
20/
40/
70/
100
percent
phase­
in
that
begins
the
same
year
has
a
sum
of
240
percent
and
is
not
acceptable.
For
HLDTs,
the
sum
must
equal
or
exceed
150
percent.
To
ensure
that
significant
numbers
of
Tier
2
vehicles
are
introduced
in
the
2004
time
frame,
manufacturers
will
not
be
permitted
to
use
alternative
phase­
in
schedules
that
delay
the
implementation
of
the
Tier
2
LDV/
LLDT
requirements,
even
if
the
sum
of
the
phase­
in
percentages
meets
or
exceeds
250.
Such
a
situation
could
occur
if
a
manufacturer
delayed
implementation
of
its
Tier
2
production
until
2005
and
began
a
75/
85/
100
percent
phase­
in
that
year.
To
protect
against
this
possibility,
we
are
finalizing
the
proposed
requirement
that
for
any
alternative
phase­
in
schedule,
a
manufacturer's
phase­
in
percentages
from
the
2004
and
earlier
model
years
sum
to
at
least
25%.
In
the
final
rule
we
are
including
an
additional
measure
of
flexibility
to
the
requirements
for
alternative
phase­
in
schedules.
We
will
permit
manufacturers
to
achieve
a
2004
phasein
of
less
than
25%,
but
no
less
than
20%,
provided
that
in
2005
they
make
up
the
shortfall
in
a
two­
for­
one
manner.
So,
as
an
example,
a
manufacturer
that
phased
in
5%
in
2003
and
15%
in
2004
would
achieve
a
total
of
20%
through
the
2004
model
year
and
would
need
to
comply
with
Tier
2
requirements
for
at
least
60%
of
its
LDV/
LLDTs
in
2005.
We
believe
that
this
flexibility
is
appropriate
because
the
required
response
for
2005
model
year
vehicles
more
than
makes
up
for
the
environmental
loss
from
the
2004
model
year
vehicles.
We
requested
comment
on
whether
alternative
phase­
in
schedules
should
be
structured
to
permit
manufacturers
to
extend
phase
in
past
the
final
year
of
the
primary
phase­
in
schedule
(
2007
or
2009).
While
the
Alliance
proposal
and
comments
clearly
support
phase­
ins
that
run
past
2007
and
2009,
other
commenters
were
opposed
to
any
extensions
of
the
phase­
in
period.
In
fact
most
commenters
who
addressed
the
length
of
the
phase­
in
indicated,
as
previously
discussed,
that
the
phase­
in
for
HLDTs
should
be
moved
ahead
to
2007
to
coincide
with
LDV/
LLDTs.
We
are
not
finalizing
any
provisions
that
will
permit
alternative
phase­
in
schedules
to
provide
additional
time
for
manufacturers
to
meet
any
final
100%
compliance
year.
In
the
NPRM,
we
pointed
out
that
phase­
in
schedules,
in
general,
add
little
flexibility
for
manufacturers
with
limited
product
offerings
because
a
manufacturer
with
only
one
or
two
test
groups
can
not
take
full
advantage
of
a
25/
50/
75/
100
percent
or
similar
phasein
For
manufacturers
meeting
EPA's
definition
of
``
small
volume
manufacturer,''
we
proposed
to
exempt
those
manufacturers
from
the
phase­
in
schedules
and
require
them
to
simply
comply
with
the
final
100%
compliance
requirement.
We
are
finalizing
this
provision
for
small
volume
manufacturers.
This
provision
is
only
intended
to
apply
to
small
volume
manufacturers
and
not
to
small
test
groups
of
larger
manufacturers.
For
larger
manufacturers
having
a
limited
product
line,
we
recognize
that
our
phase­
in
schedule
may
lack
flexibility,
however,
we
are
not
including
any
provisions
to
address
this
issue
as
we
are
for
small
volume
manufacturers
because
we
do
not
believe
these
manufacturers
need
the
relief
and
we
do
not
want
to
sacrifice
any
air
quality
benefits
of
the
program.

c.
Manufacturers
Will
Meet
a
``
Corporate
Average''
NOX
Standard
While
the
manufacturer
will
be
free
to
certify
a
test
group
to
any
applicable
bin
of
standards
in
Table
IV.
B.
 
2,
it
will
have
to
ensure
that
the
sales­
weighted
average
of
NOX
standards
from
all
of
its
test
groups
of
Tier
2
vehicles
meet
a
full
useful
life
standard
of
0.07
g/
mi.
68
Using
a
calculation
similar
to
that
for
the
NMOG
corporate
average
standard
in
the
California
and
NLEV
programs,
manufacturers
must
determine
their
compliance
with
the
corporate
average
NOX
standard
at
the
end
of
the
model
year
by
computing
a
sales
weighted
average
of
the
full
useful
life
NOX
standards
from
each
bin.
Manufacturers
must
use
the
following
formula:

Corporate
total
Tier
Average
NO
Tier
2
NO
std
for
each
bin)
(
sales
for
each
bin)

sales
X
X
=
´
å
(

2
Manufacturers
must
exclude
vehicles
sold
in
California
or
states
adopting
California
LEV
II
standards
from
the
calculation.
As
indicated
above,
manufacturers
must
compute
separate
NOX
averages
for
LDV/
LLDTs
and
HLDTs
through
model
year
2008.
The
corporate
average
NOX
standards
of
the
primary
Tier
2
program
and
the
interim
programs
for
LDV/
LLDTs
and
HLDTs
will
ensure
that
expected
fleetwide
emission
reductions
are
achieved.
At
the
same
time,
the
corporate
average
standards
allow
us
to
permit
the
sale
of
some
vehicles
above
the
levels
of
the
average
standards
to
address
the
greater
technological
challenges
some
vehicles
face
and
to
reduce
the
overall
costs
of
the
program.
We
discuss
how
manufacturers
can
generate,
use,
buy
and
sell
NOX
credits
under
the
interim
and
Tier
2
programs
in
the
next
subsection.
Given
the
corporate
average
NOX
standards,
we
do
not
believe
a
corporate
average
NMOG
standard
as
used
by
California
is
essential
because
meeting
the
corporate
average
NOX
standard
will
automatically
bring
the
NMOG
fleet
average
to
approximately
0.09
g/
mi
or
below.

d.
Manufacturers
Can
Generate,
Bank,
and
Trade
NOX
Credits
i.
General
Provisions
As
mentioned
in
the
Overview
above,
we
are
finalizing
our
proposal
that
manufacturers
with
year­
end
corporate
average
NOX
emissions
for
their
Tier
2
vehicles
below
0.07
g/
mi
can
generate
Tier
2
NOX
credits.
Credits
can
be
saved
(
banked)
for
use
in
a
future
model
year
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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
or
for
trading
(
sale)
to
another
manufacturer.
Manufacturers
can
use
credits
if
their
corporate
average
NOX
emissions
are
above
0.07
g/
mi.
As
proposed,
the
Tier
2
standards
will
apply
regardless
of
the
fuel
the
vehicle
is
designed
for,
and
there
will
be
no
restrictions
on
averaging,
banking
or
trading
of
credits
across
vehicles
of
different
fuel
types.
Consequently,
a
gasoline
fueled
LDV
might
help
a
manufacturer
generate
NOx
credits
in
one
year
that
could
be
banked
for
the
next
year
when
they
could
be
used
to
average
against
NOX
emissions
of
a
diesel
fueled
LDT
within
the
appropriate
averaging
structure.
Because
of
the
split
phase­
in
and
the
different
interim
programs
we
are
finalizing
for
the
two
different
groups
of
vehicles
(
LDV/
LLDTs
and
HLDTs),
we
are
also
finalizing
the
proposed
requirement
that
manufacturers
compute
their
corporate
Tier
2
NOX
averages
separately
for
LDV/
LLDTs
and
HLDTs
through
2008.
As
we
proposed,
credit
exchanges
between
LDVs/
LLDTs
and
HLDTs
will
not
be
allowed
nor
will
credit
exchanges
across
the
interim
programs
or
between
the
interim
programs
and
the
final
Tier
2
program
be
allowed.
These
restrictions
will
end
with
the
2009
model
year
at
which
time
both
phase­
ins
and
all
interim
standards
will
have
ended
and
the
program
will
permit
free
averaging
across
all
Tier
2
vehicles.
As
noted
in
the
NPRM,
we
are
concerned
that
allowing
cross­
trading
between
interim
and
Tier
2
vehicles
will
reduce
the
expected
benefits
of
the
program
and
delay
fleet
turnover
to
Tier
2
emission
levels.
For
this
reason
we
did
not
propose
and
are
not
finalizing
to
permit
such
exchanges.

ii.
Averaging,
Banking,
and
Trading
of
NOX
Credits
Fulfills
Several
Goals
We
explained
in
the
NPRM
why
we
believe
the
provisions
for
averaging,
banking,
and
trading
of
NOX
credits
(
ABT)
will
be
valuable.
In
short:
·
An
ABT
program
is
an
important
factor
that
EPA
takes
into
consideration
in
setting
emission
standards
that
are
appropriate
under
section
202
of
the
Clean
Air
Act.
ABT
allows
us
to
consider
a
more
stringent
emission
standard
than
might
otherwise
be
appropriate
under
the
CAA,
since
ABT
reduces
the
cost
and
improves
the
technological
feasibility
of
achieving
the
standard;
·
ABT
enhances
the
technological
feasibility
and
cost
effectiveness
of
the
proposed
standard
and
allows
the
standard
to
be
attainable
earlier
than
might
otherwise
be
possible;
·
ABT
provides
manufacturers
with
additional
product
planning
flexibility
and
the
opportunity
for
a
more
cost
effective
introduction
of
product
lines;
·
ABT
creates
incentive
for
early
introduction
of
new
technology,
allowing
certain
engine
families
to
act
as
trail
blazers
for
new
technology;
We
view
the
ABT
provisions
in
today's
rule
as
environmentally
neutral
because
the
use
of
credits
by
some
vehicles
is
offset
by
credits
generated
by
other
vehicles.
However,
when
coupled
with
the
new
standards,
ABT
will
have
environmental
benefits
because
it
allows
the
new
standards
to
be
implemented
earlier
than
would
otherwise
be
appropriate.

iii.
How
Manufacturers
Can
Generate
and
Use
NOX
Credits
Manufacturers
will
determine
their
year­
end
corporate
average
NOX
emission
level
by
computing
a
salesweighted
average
of
the
NOX
standard
from
each
bin
to
which
the
manufacturer
certifies
any
LDVs
or
LDTs.
Tier
2
NOX
credits
will
be
generated
when
a
manufacturer's
average
is
below
the
0.07
gram
per
mile
corporate
average
NOX
standard,
according
to
this
formula:
NOX
Credits=(
0.07
g/
mi
¥
Corporate
Average
NOX)
´
Sales
The
manufacturer
can
use
these
NOX
credits
in
future
years
if
its
corporate
NOX
average
is
above
0.07,
or
it
can
trade
(
sell)
the
credits
to
other
manufacturers.
Tier
2
credits
can
be
generated
via
this
mechanism
beginning
in
the
first
phase­
in
year,
i.
e.,
2004
for
LDV/
LLDTs
and
2008
for
HLDTs.
The
use
of
NOX
credits
will
not
be
permitted
to
address
Selective
Enforcement
Auditing
or
in­
use
testing
failures.
The
enforcement
of
the
NOX
averaging
standard
will
occur
through
the
vehicle's
certificate
of
conformity.
A
manufacturer's
certificate
of
conformity
will
be
conditioned
upon
compliance
with
the
averaging
provisions.
The
certificate
will
be
void
ab
initio
if
a
manufacturer
fails
to
meet
the
corporate
average
NOX
standard
and
does
not
obtain
appropriate
credits
to
cover
its
shortfall
in
that
model
year
or
in
the
next
three
model
years
(
see
deficit
carryforward
provision
below).
Manufacturers
will
need
to
track
their
certification
levels
and
sales
unless
they
produce
only
vehicles
certified
to
bins
containing
NOX
levels
of
0.07
g/
mi
or
below
and
do
not
plan
to
bank
NOX
credits.

iv.
Manufacturers
Can
Earn
and
Bank
Credits
for
Early
NOX
Reductions
In
the
NPRM,
we
proposed
that
to
the
extent
a
manufacturer's
corporate
average
NOX
level
of
its
``
early
Tier
2''
vehicles
was
below
0.07
g/
mi,
the
manufacturer
could
bank
NOX
credits
for
later
use.
We
recognize
(
and
the
comments
assert)
that
this
provision
may
be
lightly
used,
because
it
requires
a
large
reduction
from
prior
standards
to
produce
any
credits.
However,
our
goal
is
to
bring
vehicles
to
Tier
2
levels
as
quickly
as
possible
and
we
are
concerned
that
any
other
approach
could
provide
credits
for
reductions
manufacturers
would
make
relatively
easily
from
previous,
higher
standards.
Such
credits
would
then
be
used
to
delay
the
impact
of
the
0.07
g/
mi
NOX
standard.
Further,
we
believe
that
our
provision
for
alternative
phase­
in
schedules
provides
what
is
essentially
a
supplemental,
or
perhaps
even
primary,
early
banking
program,
in
that
it
permits
manufacturers
to
trade­
off
earlier
phasein
percentages
for
later
phase­
in
percentages.
To
provide
manufacturers
with
greater
flexibility
and
with
incentives
to
certify,
produce
and
sell
Tier
2
vehicles
as
early
as
possible,
we
are
finalizing
the
alternative
phase­
in
provisions.
(
See
IV.
B.
4.
b.
ii
above.)
Under
such
schedules,
a
manufacturer
can
certify
vehicles
to
an
average
NOX
level
of
0.07
g/
mi
or
below
in
years
prior
to
the
first
required
phase­
in
year
and
then
phase
its
remaining
vehicles
in
over
a
more
gradual
phase­
in
schedule
that
will
still
lead
to
100%
compliance
by
2007
(
2009
for
HLDTs).
Thus,
we
are
finalizing
our
provision
for
early
NOX
credits
essentially
as
proposed.
To
the
extent
that
a
manufacturer's
corporate
average
NOX
level
of
its
``
early
Tier
2''
vehicles
is
below
0.07
g/
mi,
the
manufacturer
can
bank
NOX
credits
for
later
use.
Manufacturers
will
compute
these
early
credits
by
calculating
a
sales­
weighted
corporate
average
NOX
emission
level
of
their
Tier
2
vehicles,
as
in
the
basic
Tier
2
program
described
above.
In
section
IV.
B.
4.
d.
vii.
below,
we
describe
provisions
we
are
adding
to
the
final
rule
that
will
enable
manufacturers
to
generate
extra
credits
from
vehicles
certified
to
very
low
levels.
In
addition
to
encouraging
production
of
very
clean
vehicles,
these
provisions,
which
apply
beginning
in
2001,
will
enhance
the
abilities
of
manufacturers
to
generate
early
credits.
Early
Tier
2
credits
will
have
all
the
same
properties
as
credits
generated
by
vehicles
subject
to
the
primary
phase­
in
schedule.
We
proposed
that
these
credits
could
not
be
used
in
the
NLEV,
Tier
1
or
interim
program
for
non­
Tier
2
vehicles
in
any
way.
We
are
finalizing
this
restriction
as
proposed.
We
are
also
finalizing
as
proposed
that
the
NMOG
emissions
of
these
vehicles
(
LDVs
and
LLDTs
only)
can
be
used
in
the
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69
Because
of
the
limited
duration
of
the
interim
programs,
we
proposed
that
a
manufacturer
could
carry
a
credit
deficit
in
the
interim
program
forward
until
the
2006
model
year
(
2008
for
HLDTs).
The
interim
program,
in
its
entirety,
lasts
only
five
years
and
therefore
we
saw
little
risk
of
prolonged
deficits.
calculation
of
the
manufacturer's
corporate
average
NMOG
emissions
under
NLEV
through
2003.
To
provide
manufacturers
with
maximum
flexibility
in
the
period
prior
to
2004,
when
LDV/
LLDT
useful
lives
will
still
be
at
100,000
miles,
we
proposed
and
are
finalizing
that
manufacturers
may
choose
between
the
Tier
2
120,000
mile
useful
life
or
the
current
100,000
mile
useful
life
requirement
for
early
Tier
2
LDV/
LLDTs.
(
HLDTs
already
have
a
120,000
mile
useful
life.)
Early
LDV/
LLDT
NOX
credits
for
100,000
mile
useful
life
vehicles
will
have
to
be
prorated
by
100,000/
120,000
(
5/
6)
so
that
they
can
be
properly
applied
to
120,000
mile
Tier
2
vehicles
in
2004
or
later.
We
proposed
to
restrict
early
banking
of
HLDT
Tier
2
NOX
credits
to
the
four
year
period
from
2004
 
2007.
This
restriction
was
due
to
a
concern
about
excessive
credits
generation
if
a
longer
credit
generation
period
was
available.
Based
on
our
review
of
the
comments
and
from
reconsideration
of
the
restrictive
nature
of
our
approach
for
early
credits,
we
are
much
less
concerned
that
allowing
generation
of
early
HLDT
Tier
2
credits
in
years
prior
to
2004
will
result
in
excessive
credits.
Prior
to
2004,
manufacturers
will
only
be
required
to
meet
the
Tier
1
standards
which
are
much
higher
than
the
final
Tier
2
standards.
Manufacturers
will
have
to
make
large
cuts
in
emissions
to
bank
the
small
amount
of
credits
offered
by
our
early
banking
provision.
Further,
we
recognize
that
vehicles
that
meet
the
Tier
2
standards
early
provide
an
environmental
benefit,
and
the
earlier
that
benefit
occurs,
the
earlier
that
areas
can
use
such
benefits
to
reach
or
come
close
to
attainment.
Lastly,
we
believe
it
is
appropriate
to
match
the
period
of
early
credit
generation
with
the
years
in
which
we
will
permit
alternative
phasein
schedules.
Consequently,
we
are
finalizing
our
provisions
for
early
banking
such
that
manufacturers
may
bank
early
Tier
2
NOX
credits
in
model
years
2001
 
2007.
We
recognize
that
vehicles
generating
early
Tier
2
NOX
credits
may
be
doing
so
without
the
emissions
benefit
of
low
sulfur
fuel,
and
thus
these
vehicles
may
not
achieve
the
full
in­
use
emission
reduction
for
which
they
received
credit.
When
these
credits
are
used
to
permit
the
sale
of
higher­
emitting
vehicles,
there
may
be
a
net
increase
in
emissions.
For
the
most
part,
this
is
a
problem
anyway,
since
NLEV
vehicles
are
also
sensitive
to
gasoline
sulfur.
We
believe
that
the
benefits
of
early
introduction
of
Tier
2
technology
described
above
are
significant
enough
that
they
are
worth
the
risk
of
some
emission
losses
that
might
occur
if
and
when
the
early
credits
are
used.
Also,
we
believe
that
some
fuel
sulfur
reductions
will
occur
prior
to
2004
as
refiners
upgrade
their
refineries
or
bring
new
refining
capacity
on
stream
in
anticipation
of
the
2004
requirements
and
take
advantage
of
the
phase­
in
proposed
in
the
gasoline
sulfur
ABT
program
(
described
in
Section
IV.
C.
below).

v.
Tier
2
NOX
Credits
Will
Have
Unlimited
Life
We
discussed
in
the
preamble
to
the
NPRM
why
we
did
not
propose
to
apply
the
California
schedule
of
discounting
unused
credits
adopted
for
NMOG
credits
in
the
NLEV
program.
This
schedule
serves
to
limit
credit
life
throughout
the
program
by
reducing
unused
credits
to
50,
25
and
0
percent
of
their
original
number
at
the
end
of
the
second,
third
and
fourth
year,
respectively,
following
the
year
in
which
they
were
generated.
We
agree
that
such
a
scheme
may
be
appropriate
in
the
California
program
with
its
declining
NMOG
average
standard,
but
in
the
federal
program,
once
the
phasein
period
ends
in
model
year
2009,
all
LDVs
and
LDTs
will
comply
on
average
with
a
fixed
Tier
2
NOX
standard.
Credits
allow
manufacturers
flexibility
to
meet
standards
cost
effectively
and
to
address
unexpected
shifts
in
sales
mix.
When
matched
with
a
NOX
average
standard,
credits
provide
flexibility
constrained
by
the
requirement
that
all
vehicles,
on
average,
must
comply
with
a
fixed
standard.
Defined
bins
of
standards
prevent
any
one
vehicle
from
having
extremely
high
emissions,
while
the
need
to
offset
higher
vehicles
with
lower
vehicles
to
meet
an
average
NOX
standard
prevents
large
numbers
of
vehicles
from
utilizing
the
higher
bins.
We
requested
comment
in
the
NPRM
on
the
need
for
discounting
of
credits
or
limits
on
credit
life
and
what
those
discount
rates
or
limits,
if
any,
should
be.
The
0.07
NOX
emission
standard
in
the
Tier
2
program
is
quite
stringent
and
does
not
present
easy
opportunities
to
generate
credits.
The
degree
to
which
manufacturers
invest
the
resources
to
achieve
extra
NOX
reductions
provides
environmental
benefit
for
years
to
come
and
it
is
appropriate
that
the
manufacturer
get
credits.
We
do
not
want
to
take
measures
to
reduce
the
incentive
for
manufacturers
to
bank
credits
nor
do
we
want
to
take
measures
to
encourage
unnecessary
credit
use.
Consequently
we
are
finalizing
our
proposal
that
Tier
2
NOX
credits,
including
early
credits,
have
unlimited
lives.
vi.
NOX
Credit
Deficits
Can
Be
Carried
Forward
When
a
manufacturer
has
a
NOX
deficit
at
the
end
of
a
model
year
 
that
is,
its
corporate
average
NOX
level
is
above
the
required
corporate
average
NOX
standard
 
we
proposed
that
the
manufacturer
could
carry
that
deficit
forward
into
the
next
model
year.
Such
a
carry­
forward
could
only
occur
after
the
manufacturer
used
any
banked
credits.
If
the
deficit
still
existed
and
the
manufacturer
chose
not
to
or
was
unable
to
purchase
credits,
the
deficit
could
be
carried
over.
At
the
end
of
that
next
model
year,
according
to
our
proposal,
the
deficit
would
need
to
be
covered
with
an
appropriate
number
of
NOX
credits
that
the
manufacturer
generated
or
purchased.
Any
remaining
deficit
would
be
subject
to
an
enforcement
action.
To
prevent
deficits
from
being
carried
forward
indefinitely,
the
manufacturer
would
not
be
permitted
to
run
a
deficit
for
two
years
in
a
row.
69
Manufacturers
made
the
persuasive
case
that
by
the
time
they
can
tabulate
their
average
NOX
emissions
for
a
particular
model
year,
the
next
model
year
is
likely
well
underway
and
it
is
too
late
to
make
calibration,
marketing
or
sales
mix
changes
to
adjust
that
year's
credit
generation.
Therefore,
based
upon
comments,
we
are
finalizing
a
modified
approach
to
credit
deficits
such
that
a
manufacturer
having
a
credit
deficit
in
the
interim
or
Tier
2
program
can
carry
that
deficit
forward
for
a
total
of
three
years,
but
the
manufacturer
must
apply
all
its
available
credits
to
that
deficit
on
a
one­
for­
one
basis
in
each
of
the
first
two
succeeding
model
years.
If
the
deficit
is
not
covered
by
the
third
model
year,
the
manufacturer
must
apply
credits
at
a
rate
of
1.2:
1.
No
deficit
may
be
carried
into
the
fourth
year.
In
order
to
accommodate
this
modification
to
our
proposal,
we
must
also
modify
our
proposed
provision
that
would
have
prevented
manufacturers
from
running
a
deficit
in
two
consecutive
model
years
so
that
deficits
can
not
be
shifted
from
one
year
to
the
next
and
thus
carried
forward
indefinitely.
Because
we
are
permitting,
in
this
final
rule,
deficits
to
be
carried
forward
for
as
long
as
three
years
we
are
finalizing
that
manufacturers
can
not
run
a
deficit
in
any
year
in
which
it
is
paying
off
a
deficit
from
a
previous
year.
The
effect
of
this
provision
is
the
same
as
that
in
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Vol.
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28
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Thursday,
February
10,
2000
/
Rules
and
Regulations
the
NPRM
 
to
keep
manufacturers
from
shifting
deficits
forward
indefinitely.
We
note
that
under
our
modified
final
approach,
manufacturers
will
have
the
flexibility
to
carry
deficits
from
the
interim
program
forward
into
the
final
Tier
2
program.
This
feature
is
likely
to
be
used
only
in
an
extreme
situation
since
the
Tier
2
credits
needed
to
offset
the
interim
credit
deficit
will
be
more
difficult
to
generate.
Consequently,
we
do
not
believe
this
provision
is
inconsistent
with
our
approach
of
segregating
interim
and
Tier
2
credits.
In
fact,
manufacturers
electing
to
cover
an
interim
credit
deficit
with
Tier
2
credits
will
likely
have
to
accelerate
the
introduction
of
Tier
2
vehicles
to
get
the
necessary
credits
to
cover
the
deficit.
We
are
finalizing
that
small
volume
manufacturers
may
not
use
the
credit
deficit
carryforward
provision
until
they
have
been
in
compliance
with
the
relevant
average
NOX
standard
for
one
model
year.
In
section
V
of
this
preamble
we
explain
that
we
are
not
requiring
small
volume
manufacturers
to
comply
with
intermediate
phase­
in
requirements
under
our
interim
or
Tier
2
phase­
ins.
Rather,
they
will
just
have
to
comply
for
all
of
their
vehicles
in
the
last
phase­
in
year.
Because
they
do
not
have
to
comply
with
intermediate
phase­
in
requirements,
small
volume
manufacturers
effectively
get
more
time
to
comply
(
as
much
as
three
years).
We
do
not
want
to
create
a
situation
where
they
could
get
even
more
time
to
comply
by
using
the
credit
deficit
carryforward
provision.

vii.
Encouraging
the
Introduction
of
Ultra­
Clean
Vehicles
We
requested
comment
in
the
NPRM
as
to
whether
we
should
provide
additional
NOX
credits
for
vehicles
that
certify
to
very
low
levels.
We
stated
in
the
NPRM
that
we
believe
it
is
appropriate
to
provide
inducements
to
manufacturers
to
certify
vehicles
to
very
low
levels
and
that
these
inducements
may
help
pave
the
way
for
greater
and/
or
more
cost
effective
emission
reductions
from
future
vehicles.
We
believe
it
is
important
in
a
rule
of
this
nature
to
provide
extra
incentive
to
encourage
manufacturers
to
produce
and
market
very
clean
vehicles.
We
believe
this
is
especially
important
in
the
earliest
years
of
the
program
when
manufacturers
must
make
resource
commitments
to
technologies
and
vehicle
designs
that
will
have
multiyear
life
spans.
We
believe
this
program
provides
a
strong
incentive
for
manufacturers
to
maximize
their
development
and
introduction
of
the
best
available
vehicle/
engine
emission
control
technology,
and
this
in
turn
provides
a
stepping
stone
to
the
broader
introduction
of
this
technology
soon
thereafter.
Early
production
of
cleaner
vehicles
enhances
the
early
benefits
of
our
program
and
vehicles
certified
to
these
lowest
bins
produce
not
just
lower
NOX
but
also
lower
NMOG,
CO
and
HCHO
emissions.
If
a
manufacturer
can
be
induced
to
certify
to
a
lower
bin
by
the
promise
of
reasonable
extra
credits,
the
benefits
of
that
decision
to
the
program
may
last
for
many
years.
We
are
finalizing
provisions
to
permit
manufacturers,
at
the
beginning
of
the
program,
to
weight
LDV/
Ts
certified
to
the
lowest
two
bins
more
heavily
when
calculating
their
fleet
average
NOX
emissions.
Under
this
provision,
which
applies
through
the
2005
model
year,
manufacturers
may
apply
a
multiplier
to
the
number
of
LDV/
Ts
sold
that
are
certified
to
bins
1
and
2
(
ZEVs
and
SULEVs
in
California
terms).
This
adjusted
number
will
be
used
in
the
calculation
of
fleet
average
NOX
emissions
for
a
given
model
year
and
will
allow
manufacturers
having
vehicles
certified
to
these
bins
to
generate
additional
credits
(
or
use
fewer
credits)
that
year.
The
multipliers
that
manufacturers
may
use
are
found
in
Table
IV.
B.
 
8
below:

TABLE
IV.
B.
 
8.
 
MULTIPLIERS
FOR
ADDITIONAL
CREDITS
FOR
BIN
1
AND
2
LDV/
T
Bin
Model
year
Multiplier
2
..................................................................................................
2001,
2002,
2003,
2004,
2005
...................................................
1.5
1
..................................................................................................
2001,
2002,
2003,
2004,
2005
...................................................
2.0
e.
Interim
Standards
i.
Interim
Exhaust
Emission
Standards
for
LDV/
LLDTs
The
NLEV
program
referenced
throughout
this
discussion
is
a
voluntary
program
in
which
all
major
manufacturers
have
opted
to
produce
LDVs
and
LLDTs
to
tighter
standards
than
those
required
by
EPA's
Tier
1
regulations.
Under
the
NLEV
program,
manufacturers
must
meet
an
NMOG
average
outside
of
California
that
is
equivalent
to
California's
current
intermediate­
life
LEV
requirement
 
0.075
g/
mi
for
LDVs
and
LDT1s
(
0.10
g/
mi
for
LDT2s).
NLEV
requirements
apply
only
to
LDVs
and
LLDTs,
not
to
HLDTs.
The
NLEV
program
is
effective
beginning
in
the
northeastern
states
in
1999
and
in
the
remaining
states
in
2001,
except
that
the
program
does
not
apply
to
vehicles
sold
in
California
or
in
states
that
adopted
California's
LEV
program.
The
program
runs
at
least
through
model
year
2003
and
can
run
through
model
year
2005.
Under
the
Tier
2
phase­
in
we
are
finalizing
today,
not
all
LDV/
LLDTs
covered
under
NLEV
will
be
subject
to
Tier
2
standards
in
the
2004
to
2006
period.
Without
a
program
for
full
Tier
2
compliance
in
2004
(
i.
e.,
because
of
the
phase­
in),
these
vehicles
could
revert
to
Tier
1
standards.
The
NLEV
program,
moreover,
is
a
voluntary
program
that
contains
several
provisions
that
restrict
EPA's
flexibility
and
that
could
lead
to
a
manufacturer
or
a
covered
Northeastern
state
leaving
the
program
in
or
prior
to
2004.
To
resolve
these
concerns
we
are
finalizing
the
proposed
interim
program
for
all
non­
Tier
2
LDV/
LLDTs
for
the
2004
 
2006
model
years.
Our
interim
program
will
replace
the
NLEV
program,
which
will
terminate
at
the
end
of
2003.
The
transition
from
NLEV
to
the
interim
program
should
be
smooth
because
the
interim
program
will
employ
several
bins
derived
from
the
NLEV
standards
for
LDVs,
LDT1s
and
LDT2s.
The
interim
program
will
ensure
that
all
LDVs,
LDT1s
and
LDT2s
that
are
not
certified
to
Tier
2
levels
during
the
2004
 
2006
phase­
in
period
remain
at
levels
at
least
as
stringent,
on
average,
as
NLEV
levels.
The
interim
program
will
also
bring
the
emission
standards
for
LDT2s
more
into
line
with
those
for
the
LDVs
and
LDT1s
by
requiring
that
they
be
averaged
under
the
same
NOX
standard
rather
than
under
separate
standards
as
is
the
case
in
the
NLEV
program.
In
the
NPRM,
we
included
separate
sets
of
bins
for
the
interim
program
and
Tier
2
program.
However,
we
indicated
that
manufacturers
could
use
either
set
for
interim
vehicles.
In
today's
final
rule
we
have
combined
all
bins
into
one
table
for
simplicity.
We
have
also
added
two
new
bins
having
NOX
values
of
0.03
g/
mi
and
0.10
g/
mi.

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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
In
the
NPRM,
we
proposed
that,
for
LDV/
LLDTs,
all
bins
with
NOX
values
over
0.20
g/
mi
would
expire
at
the
end
of
the
2006
model
year
when
there
are
no
longer
any
interim
LDV/
LLDTs.
Table
IV
 
B.
 
4
shows
that
the
two
highest
bins,
bins
9
and
10,
which
were
derived
from
NLEV
and
included
to
smooth
the
transition
from
NLEV
to
the
interim
program
will
be
unuseable
for
LDV/
LLDTs
after
2006
 
the
last
year
of
the
LDV/
LLDT
phase­
in.
Otherwise
all
bins
will
remain
viable
for
the
duration
of
the
Tier
2
program
unless
altered
by
another
rulemaking.
We
proposed
to
align
the
useful
life
periods
for
interim
standards
with
those
of
the
Tier
2
standards
(
full
useful
life
of
120,000
miles),
as
discussed
in
Section
V.
B.
below.
The
end
result
of
this
proposal
would
have
been
that
all
LDV/
LLDTs
 
whether
in
the
Tier
2
program
or
interim
program
 
would
go
from
100,000
mile
useful
lives
to
120,000
mile
useful
lives
in
2004.
However,
manufacturers
were
extremely
concerned
about
the
certification
workload
burden
for
2004.
They
commented
that
they
would
be
unable
to
carry
any
of
their
LDV/
LLDTs
over
from
2003
and
that
they
would
have
to
recertify
all
of
their
vehicles
in
2004
and
then
likely
recertify
them
again
as
they
were
phased
into
the
Tier
2
standards.
Therefore,
based
upon
comments,
we
are
finalizing
that
useful
lives
of
the
interim
LDV/
LLDTs
may
remain
at
100,000
miles.
Our
reasons
for
this
change
are
discussed
in
greater
detail
in
Section
V.
B.
We
are
finalizing
as
proposed
a
corporate
average
full
useful
life
NOX
standard
of
0.30
g/
mi
for
this
interim
program.
This
standard
is
derived
from
the
NLEV
program
and
represents
the
full
useful
life
NOX
standard
in
NLEV
that
is
associated
with
LEV
LDVs
and
LDT1s.
LDVs
and
LDT1s
will
already
be
at
this
level,
on
average,
under
the
NLEV
program.
LDT2s
are
subject
to
standards
that
effectively
impose
a
NOX
average
standard
of
0.5
g/
mi
under
NLEV,
but
we
believe
they
should
readily
be
able
to
meet
the
0.30
g/
mi
average
especially
since
they
can
be
averaged
with
the
LDVs
and
LDT1s.
To
aid
LDV/
LLDTs
in
meeting
the
0.30
g/
mi
corporate
average
NOX
standard
in
the
interim
program,
we
are
providing
an
optional
NMOG
value
for
LDT2s
certifying
to
bin
9
(
where
the
NOX
standard=
0.3
g/
mi).
This
option
is
only
for
LDT2s,
and
only
for
those
produced
by
manufacturers
that
elect
to
comply
with
the
interim
requirements
for
all
of
their
HLDTs
for
the
2004
model
year
(
see
next
section).
The
optional
NMOG
values
for
qualifying
LDT2s
are
0.130
g/
mi
at
full
useful
life
and
0.100
at
intermediate
useful
life.
The
0.30
g/
mi
corporate
average
NOX
standard
will
apply
only
to
non­
Tier
2
(
interim)
LDV/
LLDTs
and
only
for
the
2004
 
2006
model
years.
Manufacturers
will
compute,
bank,
average,
trade,
account
for,
and
report
interim
NOX
credits
via
the
same
processes
and
equations
described
in
this
preamble
for
Tier
2
vehicles,
substituting
the
0.30
g/
mi
corporate
average
standard
for
the
0.07
g/
mi
corporate
average
standard
in
the
basic
program.
Also,
EPA
will
condition
the
certificates
of
conformity
on
compliance
with
the
corporate
average
standard,
as
described
for
Tier
2
vehicles.
These
NOX
credits
will
be
good
only
for
the
2004
 
2006
model
years
and
will
only
apply
to
the
interim
non­
Tier
2
LDV/
LLDTs.
Credits
will
not
be
subject
to
any
discounts,
and
credit
deficits
can
be
carried
forward
as
described
under
Section
IV.
B.
4.
d.
vi.
above.
NMOG
credits
from
the
NLEV
program
can
not
be
used
in
this
interim
program
in
any
way.
NOX
credits
generated
under
this
interim
program
will
not
be
applicable
to
the
Tier
2
NOX
average
standard
of
0.07
g/
mi
because
of
our
concern
that
a
windfall
credit
situation
could
occur.
This
could
happen
because
credits
are
relatively
easy
to
generate
under
a
0.30
g/
mi
standard
compared
to
generating
credits
under
a
0.07
g/
mi
standard.
As
we
indicated
in
the
preamble
to
the
NPRM
we
believe
the
application
of
credits
earned
under
the
interim
standard
to
the
Tier
2
standards
could
significantly
delay
the
fleet
turnover
to
Tier
2
vehicles.
We
do
not
believe
there
is
a
need
or
that
it
would
be
appropriate
to
allow
such
a
delay.
The
requirements
of
the
interim
program
will
be
monitored
and
enforced
in
the
same
fashion
as
for
Tier
2
vehicles.
For
the
reasons
cited
above,
we
believe
it
is
appropriate
to
extend
interim,
NLEV­
like
standards
beyond
2003
as
a
mandatory
program
and
to
bring
all
LDVs
and
LLDTs
within
its
scope.
Manufacturers
have
already
demonstrated
their
ability
to
make
LDVs
and
LLDTs
that
comply
at
levels
well
below
these
standards.
As
the
interim
standards
for
LDV/
LLDTs
are
essentially
`
phase­
out''
standards,
we
did
not
propose
and
are
not
finalizing
early
banking
provisions
for
the
interim
LDV/
LLDTs.

ii.
Interim
Exhaust
Emission
Standards
for
HLDTs
We
believe
these
interim
standards
are
necessary
and
reasonable
for
HLDTs.
While
these
trucks
make
up
a
fairly
small
portion
of
the
light­
duty
fleet
(
about
14%),
their
current
standards
under
Tier
1
are
far
less
stringent
than
the
NLEV
standards
that
apply
to
current
model
year
LDVs
and
LLDTs.
Given
the
delayed
phase­
in
we
are
finalizing
for
HLDTs,
we
believe
it
is
appropriate
to
require
some
interim
reductions
from
these
vehicles.
Further,
manufacturers
have
already
demonstrated
their
ability
to
meet
these
interim
standards
with
HLDTs.
These
standards
are
a
reasonable
first
step
toward
the
Tier
2
program
and
will
provide
meaningful
reductions
in
the
near
term
relative
to
current
certification
levels
under
the
Tier
1
emission
standards.
We
also
proposed
interim
standards
to
begin
in
2004
for
HLDTs.
These
vehicles
are
not
included
in
the
NLEV
program
and
will
be
subject
only
to
the
Tier
1
standards
prior
to
today's
rule
taking
effect.
Tier
1
standards
permit
NOX
emissions
of
0.98
g/
mi
for
LDT3s
and
1.53
g/
mi
for
LDT4s.
We
are
finalizing
these
standards
generally
as
proposed;
to
address
statutory
lead
time
requirements,
we
are
offering
two
options
for
the
phase­
in
of
HLDTs
to
the
interim
standards.
Manufacturers
can
choose
between
either
of
these
two
options:
(
Option
1)
Like
we
proposed
in
the
NPRM,
manufacturers
must
bring
their
entire
production
of
2004
model
year
HLDTs
under
the
interim
requirements
and
phase
25%
of
them
into
the
0.20
g/
mi
fleet
average
NOX
requirement,
followed
by
50%
in
2005,
75%
in
2006,
and
then
100%
in
2007;
or
(
Option
2)
We
are
including
this
option
to
address
statutory
lead
time
requirements
for
HLDTs.
In
the
case
of
2004
model
year
test
groups
whose
model
years
commence
before
the
fourth
anniversary
of
the
signature
date
of
today's
rule,
the
manufacturer
may
exclude
those
test
groups
from
the
interim
HLDT
provisions
of
the
rule.
In
the
case
of
2004
model
year
test
groups
whose
model
years
commence
on
or
after
the
fourth
anniversary
of
this
rule's
signature,
the
manufacturer
must
bring
all
such
HLDTs
under
the
requirements
of
our
interim
program,
and
all
such
vehicles
or
25%
of
the
manufacturer's
sales
of
2004
model
year
HLDTs,
whichever
is
less,
must
comply
with
the
corporate
average
NOX
standard
of
0.20
g/
mi.
The
manufacturer
must
then
bring
all
of
its
HLDTs
into
the
interim
requirements
beginning
with
the
2005
model
year
including
a
50%,
75%,
100%
phase­
in
to
the
0.20
g/
mi
fleet
average
NOX
standard
beginning
that
year.
The
beginning
of
a
test
group's
model
year
is
determined
under
section
202(
b)(
3)
of
the
Act
and
40
CFR
Part
85
Subpart
X.

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10FER2
6748
Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
70
Manufacturers
must
cite
this
declaration
in
their
LDT2
certification
applications
for
the
2004
 
2006
model
years
and
in
their
LDT4
applications
for
the
2004
 
2008
model
years.
If
manufacturers
employ
alternate
phase­
in
schedules
that
begin
prior
to
2004,
they
must
also
make
the
declaration
in
each
applicable
year
before
2004.
Our
final
rule
is
consistent
with
the
requirements
of
the
Act
because
manufacturers
won't
have
to
phase­
in
HLDTs
until
the
model
year
that
commences
four
years
from
the
signature
of
this
rule
if
they
don't
want
to.
However,
to
provide
incentive
for
manufacturers
to
comply
with
the
interim
requirements
for
all
of
their
HLDTs
beginning
with
the
2004
model
year,
i.
e.
to
elect
Option
1,
we
are
finalizing
a
provision
to
permit
those
manufacturers
to
use
higher
NMOG
values
in
two
situations.
Manufacturers
electing
to
meet
the
interim
requirements
for
all
of
their
2004
model
year
HLDTs
including
the
25%
phase­
in
number
must
so
declare
in
their
2004
model
year
HLDT
certification
applications.
They
may
then:
·
Use
a
full
useful
life
NMOG
value,
through
the
2008
model
year,
of
0.280
g/
mi
for
LDT4s
certified
to
bin
10
(
0.195
g/
mi
at
intermediate
life);
and
·
Use
a
full
useful
life
NMOG
value,
through
the
2006
model
year,
of
0.130
g/
mi
for
LDT2s
certified
to
bin
9
(
0.100
g/
mi
at
intermediate
life).
70
In
the
case
of
the
LDT4s,
the
optional
NMOG
standard
will
enable
manufacturers
to
more
easily
meet
our
interim
HLDT
NOX
standards,
the
highest
of
which
(
0.6
g/
mi)
is
one­
third
tighter
than
what
will
be
required
in
California
under
Cal
LEV
I
through
2006.
For
the
LDT2s,
the
optional
NMOG
standard
will
help
manufacturers
certify
more
LDT2s
to
bin
9
(
0.3
g/
mi)
than
they
likely
would
otherwise
(
they
would
probably
certify
some
LDT2s
to
bin
10
where
NOX=
0.6
g/
mi).
Therefore,
both
of
these
optional
standards
are
consistent
with
our
goal
to
achieve
important
early
NOX
benefits
from
our
program.
Except
for
the
application
of
the
new
option
described
above,
the
interim
standards
for
HLDTs
will
apply
as
proposed,
and
will
phase­
in
through
the
2007
model
year,
as
shown
in
Table
IV.
B.
 
2.
We
are
finalizing
the
proposed
corporate
average
full­
life
NOX
standard
of
0.20
g/
mi
for
interim
HLDTs.
Manufacturers
will
comply
with
the
corporate
average
HLDT
NOX
standard
by
certifying
their
interim
HLDTs
to
any
of
the
full
useful
life
bins
shown
in
Table
IV
 
B.
 
4.
Where
applicable,
manufacturers
will
also
comply
with
the
intermediate
useful
life
standards
shown
in
Table
IV.
B.
 
5.
Interim
HLDTs
not
needed
to
meet
the
phase­
in
percentages
during
model
years
2004
 
2006
will
have
to
be
certified
to
the
standards
of
one
of
the
bins
in
Table
IV.
B.
 
4
(
and
 
5),
and
NOX
will
thus
be
capped
at
0.60
g/
mi.
These
trucks
will
not
be
included
in
the
calculation
to
demonstrate
compliance
with
the
0.20
g/
mi
average.
At
the
end
of
each
model
year,
manufacturers
will
determine
their
compliance
with
the
0.20
NOX
standard
by
calculating
a
sales
weighted
average
of
all
the
bins
to
which
they
certified
any
interim
HLDTs,
excluding
those
not
needed
to
meet
the
applicable
phase­
in
requirements
during
2004
 
2006.
The
excluded
trucks
must
comply
with
the
standards
from
one
of
the
bins
in
Table
IV­
B
 
4
(
and
 
5)
which
effectively
caps
their
emissions
at
0.60
g/
mi.
For
HLDT
test
groups
that
are
not
subject
to
the
phase­
in
in
model
year
2004
under
Option
2
above,
the
same
requirements
as
described
above
apply
except
that
there
are
no
new
standards
for
these
vehicles
in
the
2004
model
year.
Also,
the
optional
higher
NMOG
values
for
LDT2s
and
LDT4s
do
not
apply
for
any
manufacturer
that
uses
Option
2.
Given
that
the
interim
HLDT
standards
are
``
phase­
in''
standards
through
2007
(
as
opposed
to
the
interim
LDV/
LLDT
standards,
which
are
``
phase­
out''
standards),
we
are
including
provisions
that
manufacturers
may
employ
alternative
phase­
in
schedules
as
proposed
for
the
Tier
2
standards
and
described
in
detail
in
section
IV.
B.
4.
b.
ii.
of
this
preamble.
These
schedules
provide
manufacturers
with
greater
flexibility
and
we
believe
they
also
provide
incentive
for
manufacturers
to
introduce
advanced
emission
control
technology
at
an
earlier
date.
Alternative
phase­
in
schedules
will
have
to
provide
100%
phase­
in
by
the
same
year
as
the
primary
phase­
in
schedule
(
2007).
Manufacturers
will
be
eligible
for
alternate
phase­
in
schedules
to
the
extent
that
they
produce
HLDTs
that
meet
or
surpass
the
NOX
average
standard
for
interim
HLDTs
of
0.20
g/
mi
in
2001
 
2003
or
to
the
extent
that
they
produce
more
HLDTs
than
required
that
meet
the
0.20
average
standard
in
2004
or
later.
Where
manufacturers
elect
not
to
meet
the
phase­
in
requirements
for
all
of
their
2004
model
year
HLDTs,
as
discussed
above
under
Option
2,
they
may
still
employ
alternate
phase­
in
schedules,
but
the
sum
of
225
percent
is
required
rather
than
the
250
percent
required
for
alternate
phase­
ins
described
in
section
IV.
B.
4.
b.
ii.
In
this
case,
the
sum
of
phase­
in
percentages
up
through
the
2005
model
year
must
total
to
at
least
50%.
Also,
manufacturers
must
raise
the
225%
value
to
the
extent
that
any
of
their
2004
HLDTs'
model
years
commence
on
or
after
the
fourth
anniversary
of
the
signature
date
of
this
rule
and
are
brought
into
compliance
with
the
0.20
g/
mi
average
NOX
standard.
Lastly,
note
that
for
bin
10,
which
is
only
usable
during
the
interim
program,
we
have
established
a
PM
standard
of
0.08
g/
mi,
which
is
more
stringent
than
the
Tier
1
standard
previously
in
effect
for
these
vehicles.
We
do
not
expect
low
sulfur
diesel
fuel
to
be
widely
available
during
the
time
frame
of
the
interim
program
but
we
expect
that
bin
10
levels
can
be
reached
by
diesel
technology
on
current
diesel
fuel.
As
a
part
of
this
overall
approach,
we
are
making
the
intermediate
life
standards
optional
for
diesels
for
this
bin.

f.
Light­
Duty
Evaporative
Emission
Standards
We
are
finalizing
as
proposed
a
set
of
more
stringent
evaporative
emission
standards
for
all
Tier
2
light­
duty
vehicles
and
light­
duty
trucks.
The
standards
we
are
finalizing
are
shown
in
Table
IV.
B.
 
9
and
represent,
for
most
vehicles,
more
than
a
50%
reduction
in
diurnal
plus
hot
soak
standards
from
those
that
will
be
in
effect
in
the
years
immediately
preceding
Tier
2
implementation.
The
higher
standards
for
HLDTs
provide
allowance
for
greater
non­
fuel
emissions
related
to
larger
vehicle
size.

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10FER2
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
71
The
heavy­
duty
definition
also
includes
vehicles
that
weigh
over
6000
lbs
curb
weight
regardless
of
their
GVWR.
We
are
not
aware
that
any
vehicles
currently
produced
have
curb
weights
above
6,000
lbs,
but
GVWRs
of
8,500
lbs
or
less.
Nevertheless,
this
discussion
and
our
requirements
includes
such
vehicles.
TABLE
IV.
B.
 
9.
 
FINAL
EVAPORATIVE
EMISSION
STANDARDS
[
Grams
per
test]

Vehicle
class
3
day
diurnal
+
hot
soak
Supplemental
2
day
diurnal
+
hot
soak
LDVs
and
LLDTs
...................................................................................................................................................
0.95
1.2
HLDTs
....................................................................................................................................................................
1.2
1.5
Evaporative
emissions
from
LDVs
and
LDTs
represent
nearly
half
of
the
light
duty
VOC
inventory
projected
for
the
2007
 
2010
time
frame,
according
to
MOBILE5
projections.
Manufacturers
are
currently
certifying
to
levels
that
are,
on
average,
about
half
of
the
current
standards,
and
in
many
cases,
much
less
than
half
the
standards.
Thus,
meeting
these
standards
appears
readily
feasible.
Even
though
manufacturers
are
already
certifying
at
levels
much
below
the
current
standard,
we
believe
that
reducing
the
standards
will
result
in
emission
reductions
as
all
manufacturers
seek
to
certify
with
adequate
margins
to
allow
for
in­
use
deterioration.
Further,
we
believe
that
tighter
standards
will
prevent
``
backsliding''
toward
the
current
standards
as
manufacturers
pursue
cost
reductions.
As
mentioned
in
section
IV.
B.
 
4.
b
above,
we
will
phase
in
the
Tier
2
evaporative
standards
by
the
same
mechanism
as
the
Tier
2
exhaust
standards;
e.
g.,
25/
50/
75/
100
percent
beginning
in
2004
for
LDV/
LLDTs
and
50/
100
percent
beginning
in
2008
for
HLDTs
(
as
shown
in
Table
IV.
B.
 
2).
As
for
the
exhaust
standards,
alternative
phase­
in
plans
will
also
be
available.
The
evaporative
emission
standards
we
proposed
and
are
finalizing
today
are
the
same
as
those
that
manufacturers'
associations
proposed
during
the
development
of
California's
LEV
II
proposal.
California
ultimately
opted
for
more
stringent
standards;
we
believe
that
our
standards
are
appropriate
for
federal
vehicles
certified
on
higher­
volatility
federal
test
fuel.

g.
Passenger
Vehicles
Above
8,500
Pounds
GVWR
Historically,
we
have
categorized
all
vehicles
above
8,500
pounds
GVWR
as
heavy­
duty
vehicles
regardless
of
their
application
and
they
have
been
subject
to
standards
and
test
procedures
designed
for
vehicles
used
in
heavier
work
applications.
71
In
the
Tier
2
NPRM,
we
requested
comment
on
whether
some
portion
of
vehicles
above
8,500
pounds
GVWR
should
be
included
in
the
Tier
2
program,
based
on
vehicle
use
or
design
characteristics.
The
Tier
2
proposals,
however,
applied
to
light­
duty
vehicles
and
light­
duty
trucks
and
did
not
cover
any
vehicles
above
8,500
pounds
GVWR.
On
October
29,
1999,
after
carefully
considering
all
of
the
comments
on
this
issue,
we
proposed
to
include
all
personal
use
passenger
vehicles
(
both
gasoline
and
diesel
fueled)
between
8,500
and
10,000
pounds
GVWR
in
the
Tier
2
program.
This
group
of
vehicles
would
include
large
SUVs
and
passenger
vans
and
may
include
other
types
of
``
crossover''
multipurpose
vehicles
in
the
future,
depending
on
new
vehicle
designs.
We
proposed
this
Tier
2
program
change
in
our
NPRM
concerning
emissions
standards
for
2004
and
later
heavy­
duty
vehicles
and
engines,
(
64
FR
58472).
Specifically,
we
proposed
to
revise
the
definition
of
light­
duty
truck
to
include
any
complete
vehicle
between
8,500
and
10,000
pounds
GVWR
that
is
designed
primarily
for
the
transportation
of
persons
and
has
a
capacity
of
not
more
than
12
persons.
We
expected
that
this
definition
would
exclude
vehicles
that
have
been
designed
for
a
legitimate
work
function
as
their
primary
use,
such
as
the
largest
pick­
up
trucks,
the
largest
passenger
vans,
and
cargo
vans;
these
vehicles
would
continue
to
be
categorized
as
heavy­
duty
and
would
be
subject
to
applicable
heavy­
duty
standards.
We
requested
comment
on
whether
the
proposed
definition
would
adequately
exclude
these
vehicles,
or
whether
additional
criteria
may
be
needed
and
how
that
criteria
might
be
used.
Today,
we
are
finalizing
Tier
2
standards
for
passenger
vehicles
above
8,500
pounds
GVWR.
These
vehicles
are
included
in
the
Tier
2
program
beginning
in
2004
and
are
required
to
meet
the
final
Tier
2
standards
in
2009
and
later.
As
we
intended
in
the
proposal,
these
vehicles
will
generally
be
subject
to
the
same
requirements
as
HLDTs.
We
have
made
modifications
to
the
program,
primarily
in
response
to
comments
we
received
in
two
areas:
(
1)
Changing
the
definition
of
light­
duty
truck
and
(
2)
the
interim
program
requirements.

New
Vehicle
Category:
Medium­
Duty
Passenger
Vehicles
(
MDPVs)

The
mechanism
we
proposed
to
bring
the
passenger
vehicles
over
8,500
pounds
into
the
Tier
2
program,
was
to
modify
the
definition
of
light­
duty
truck
to
include
those
vehicles.
The
objective
of
this
proposal
was
to
have
these
vehicles
treated
as
HLDTs
within
Tier
2.
We
are
finalizing
requirements
which
remain
consistent
with
our
objective
of
including
these
vehicles
in
Tier
2
beginning
in
2004.
However,
the
approach
we
are
finalizing
is
somewhat
different
than
that
proposed.
Rather
than
finalizing
the
revised
definitions
for
light­
duty
truck
as
we
proposed,
we
are
creating
a
new
category
of
heavy­
duty
vehicles
termed
``
medium­
duty
passenger
vehicles''
(
MDPVs).
These
vehicles
will
generally
be
grouped
with
and
treated
as
HLDTs
in
the
Tier
2
program.
The
MDPV
category
is
defined
along
the
lines
of
the
proposed
definition
change
for
the
LDT
category,
with
some
modification,
as
described
below.
Our
decision
to
create
a
new
sub­
category
of
heavy­
duty
vehicles
rather
than
modify
the
existing
LDT
definition
does
not,
in
and
of
itself,
change
the
way
in
which
Tier
2
standards
are
applied
to
the
vehicles.
We
decided
upon
the
above
approach
because
section
216
of
the
CAA
establishes
the
definition
for
LDT
as
having
the
meaning
contained
in
the
CFR
as
of
1990.
We
received
several
comments
that
EPA
may
not
change
the
definition
and
must
instead
devise
a
way
to
categorize
the
vehicles
for
purposes
of
Tier
2
which
does
not
change
the
definition
of
light­
duty
truck.
Rather
than
adopt
a
change
to
the
LDT
definition
that
would
be
questionable
from
a
legal
perspective,
we
are
adopting
an
approach
that
we
believe
is
clearly
legally
acceptable.
Under
this
approach
(
as
with
the
proposed
approach),
the
standards
for
these
vehicles
are
promulgated
under
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Federal
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
72
Vehicles
that
are
``
designed''
to
accommodate
more
than
nine
passengers
in
the
rearward
seating
area
in
their
standard
configuration
but
that
have
some
of
the
standard
rear
seating
removed
to
accommodate
two
or
more
wheel
chair
tie
downs
would
usually
not
be
considered
MDPVs.
73
Currently,
diesel
heavy­
duty
engines
are
certified
to
heavy­
duty
engine
standards
rather
than
vehicle
standards.
74
ALVW
is
the
average
of
curb
weight
and
GVWR.
The
test
weight
is
sometimes
refered
to
as
``
half
payload''.
section
202(
a)(
3),
which
applies
to
heavy­
duty
vehicles/
engines.
We
are
defining
medium­
duty
passenger
vehicles
as
any
complete
heavy
duty
vehicle
less
than10,000
pounds
GVWR
designed
primarily
for
the
transportation
of
persons
including
conversion
vans
(
i.
e.,
vans
which
are
intended
to
be
converted
to
vans
primarily
intended
for
the
transportation
of
persons.
The
conversion
from
cargo
to
passenger
use
usually
includes
the
installation
of
rear
seating,
windows,
carpet,
and
other
amenities).
We
are
not
including
any
vehicle
that
(
1)
has
a
capacity
of
more
than
12
persons
total
or,
(
2)
that
is
designed
to
accommodate
more
than
9
persons
in
seating
rearward
of
the
driver's
seat
or,
(
3)
has
a
cargo
box
(
e.
g.,
a
pick­
up
box
or
bed)
of
six
feet
or
more
in
interior
length.
We
would
consider
vehicles
designed
primarily
for
passenger
use
to
be
those
that
have
seating
available
behind
the
driver's
seat.
We
have
added
the
rear
passenger
seating
capacity
criterion
to
exclude
large
passenger
vehicles
which
are
primarily
used
in
heavy­
load
passenger
applications.
We
do
not
believe
vehicles
designed
primarily
for
personal
use
passenger
transportation
would
be
equipped
with
rear
seating
for
more
than
9
passengers.
72
We
have
added
the
pick­
up
bed
length
criterion
to
the
definition
to
clearly
distinguish
standard
pick­
ups
from
other
vehicles
meeting
the
GVWR
and
seating
capacity
criteria.
We
received
several
comments
that
although
the
proposal
clearly
states
our
intention
not
to
include
heavy­
duty
pick­
up
trucks
in
the
Tier
2
program,
the
proposed
regulatory
definition
was
unclear.
Currently,
heavy­
duty
pick­
ups
have
beds
in
excess
of
six
feet.
Any
future
offerings
of
vehicles
that
are
equipped
with
significantly
shorter
beds
would
be
included
in
the
MDPV
category,
if
the
vehicle
also
met
the
weight
and
seating
capacity
criteria.
EPA
is
making
a
distinction
based
on
bed
length
because
a
vehicle
introduced
with
a
shorter
bed
would
have
reduced
cargo
capacity
and
would
likely
have
increased
seating
capacity
relative
to
current
pick­
ups,
making
it
more
likely
to
be
used
primarily
as
a
passenger
vehicle.

Interim
Standards
As
noted
above,
the
MDPVs
and
HLDTs
must
meet
the
final
Tier
2
standards
by
2009
at
the
latest.
Prior
to
2009,
HLDTs
and
MDPVs
are
required
to
meet
interim
standards.
The
interim
standards,
as
described
earlier
in
section
IV.
B.
4,
are
based
on
a
corporate
average
full
life
NOX
standard
of
0.20
g/
mile
which
is
phased
in
25/
50/
75/
100
percent
in
2004
 
2007.
MDPVs
must
be
grouped
with
HLDTs
for
the
interim
standards
phase­
in.
We
received
several
comments
from
manufacturers
that
requiring
these
larger
vehicles
to
meet
a
new,
unique
standard
prior
to
phase­
in
to
the
interim
program
would
worsen
the
workload
burden
created
by
the
Tier
2
program.
Manufacturers
do
not
currently
have
facilities
available
for
chassis­
testing
diesel
vehicles
and
there
is
not
enough
time
to
fold
diesel
vehicles
into
a
chassis­
based
program
by
2004.73
To
address
this
situation,
we
are
providing
the
following
temporary
additional
flexibilities
for
MDPVs.
We
are
finalizing
an
additional
upper
bin
for
MDPVs
for
the
interim
program
(
effective
in
model
years
2004
through
2008).
This
bin
would
only
be
available
for
MDPVs.
The
bin,
shown
in
Table
IV.
B
 
10,
is
equivalent
to
the
California
LEV
I
standards
that
are
applicable
to
these
vehicles
prior
to
2004.
Vehicles
certified
to
this
bin
must
be
tested
at
adjusted
loaded
vehicle
weight
(
ALVW),
consistent
with
California
program
testing
requirements.
74
Including
this
upper
bin
provides
manufacturers
with
the
ability
to
carry
over
their
California
vehicles
to
the
federal
program
prior
to
their
phase­
in
to
the
interim
and
final
Tier
2
standards.
Once
phased
in
to
the
interim
standards
manufacturers
may
continue
to
use
the
upper
bin
but
the
vehicles
must
be
included
in
the
0.20
g/
mi
NOX
average.
The
upper
bin
is
not
available
to
manufacturers
for
the
final
Tier
2
program.

TABLE
IV.
B.
 
10.
 
TEMPORARY
INTERIM
EXHAUST
EMISSION
STANDARDS
BIN
FOR
MDPVS
a
NOX
NMOG
CO
HCHO
PM
Full
Useful
Life
(
120,000
mile)
.................................................................
0.9
0.280
7.3
0.032
0.12
Notes:
a
Bin
expires
after
model
year
2008.

We
proposed
that
HLDTs
not
needed
to
meet
the
phase­
in
percentages
for
the
interim
program
during
model
years
2004
 
2006
would
be
required
to
meet
one
of
the
interim
bins.
Such
vehicles,
however,
would
not
be
included
in
the
calculation
to
demonstrate
compliance
with
the
0.20
g/
mile
average.
Thus,
we
proposed
that
the
emissions
of
all
interim
HLDTs
would
be
capped
at
a
NOX
value
of
0.6
g/
mile.
We
are
retaining
the
bin
structure
and
requirements
which
effectively
cap
NOX
emissions
at
0.6
g/
mile
for
all
HLDTs
below
8,500
pounds
GVWR,
as
described
in
section
IV.
B.
Similarly,
for
MDPVs,
the
0.9
g
bin
described
above
is
the
highest
bin
available
and
acts
as
the
cap
for
vehicles
not
yet
phased­
in
to
the
interim
standards.
In
addition,
for
diesel
MDPVs
prior
to
2008,
we
are
allowing
manufacturers
the
option
of
meeting
the
heavy­
duty
engine
standards
in
place
for
the
coinciding
model
year.
Diesels
meeting
the
enginebased
standards
would
be
excluded
from
the
interim
program
averaging
pool.
In
2008,
the
manufacturers
must
chassis
certify
diesel
vehicles
and
include
them
either
in
the
interim
program
or
in
the
final
Tier
2
program.
In
2009
and
later,
all
MDPVs,
including
diesels,
must
be
brought
into
the
final
Tier
2
program.
As
with
the
higher
bin
of
chassis­
based
standards,
the
purpose
of
this
diesel
provision
is
to
provide
the
option
of
carry­
over
of
vehicles
until
they
are
brought
into
the
Tier
2
program.
We
believe
these
modifications
to
the
program
will
substantially
ease
the
workload
concerns
of
manufacturers
in
the
interim
years
by
allowing
them
to
carryover
vehicle
models
and
engine
families.
The
provisions
also
remain
consistent
with
EPA's
goal
of
including
the
vehicles
in
the
overall
Tier
2
program
structure.

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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
75
As
with
HLDTs,
the
California
OBDII
compliance
option
is
available
for
MDPVs.
76
For
Tier
2
MDPVs,
evaporative
standards
will
be
1.4
g/
test
for
the
3
day
diurnal+
hot
soak
test
and
1.75
g/
test
for
the
supplemental
2
day
diurnal+
hot
soak
test.
77
ORVR
requirements
are
phased
in
for
HLDTs,
at
40/
80/
100
percent
in
2004
 
2006
(
see
40
CFR
86.1810
 
01
(
k)).
For
diesel
engines
that
are
engine
certified
and
used
in
MDPVs,
as
allowed
through
model
year
2007,
we
are
requiring
those
engines
to
comprise
a
separate
averaging
set
under
the
averaging,
banking
and
trading
requirements
applicable
to
heavy­
duty
diesel
engines.
We
are
permitting
engine­
based
certification
for
these
diesel
vehicles
to
provide
time
and
flexibility
for
manufacturers
who
may
have
limited
experience
with
chassis
certifying
vehicles
containing
such
engines.
However,
we
do
not
want
to
create
a
situation
where
engines
above
applicable
engine
standards
could
be
used
in
these
vehicles,
when
other
MDPVs
are
being
brought
under
stringent
standards.
Therefore
we
believe
it
is
appropriate
to
constrain
the
application
of
credits
to
these
engines.
We
note
that
we
are
not
permitting
credits
from
other
programs
(
like
NLEV)
to
be
applied
in
any
way
to
Tier
2
or
interim
vehicles.
For
LDT4s,
we
have
finalized
an
optional
higher
NMOG
level
of
0.280
g/
mile
for
bin
10
(
0.6
g/
mile
NOX),
as
described
in
section
IV.
B.
4.
a
of
the
preamble.
MDPVs
placed
in
bin
10
may
also
certify
to
the
higher
NMOG
level
of
0.280
g/
mile.
This
provision
provides
manufacturers
with
the
incentive
of
selecting
the
lower
NOX
bin
for
MDPVs,
since
the
NMOG
level
is
not
an
obstacle
to
compliance.
As
described
in
section
IV.
B.
4.
e.
ii.,
manufacturers
have
two
options
for
the
start
of
the
program
requirements.
In
Option
1,
the
program
begins
with
the
2004
model
year
for
25
percent
all
vehicles.
In
Option
2,
manufacturers
can
exempt
2004
model
year
vehicle
test
groups
whose
model
years
begin
on
or
after
the
fourth
anniversary
of
this
rule's
signature.
These
options
are
also
available
for
MDPVs
for
the
same
reasons
we
are
providing
them
for
HLDTs.
However,
the
additional
0.9
g
bin
contained
in
Table
IV.
B.
 
10,
the
optional
higher
NMOG
standard
of
0.280
g/
mile
for
bin
10,
and
the
option
of
certifying
to
the
engine­
based
standards
for
diesels
are
available
only
with
Option
1.

Other
Emission
Control
Requirements
We
are
requiring
all
non­
diesel
MDPVs
to
be
OBDII
compliant
beginning
in
2004.
California
requires
OBDII
for
their
LEV
I
program
and
therefore,
the
new
OBDII
requirements
are
consistent
with
the
approach
of
allowing
vehicles
to
be
carried
over
from
California.
75
Diesel
vehicles
which
are
carried
over
from
the
California
program
are
required
to
be
equipped
with
the
OBD
system
as
the
system
is
certified
in
California.
Diesel
vehicles
not
carried
over
from
California
are
not
required
as
part
of
this
rulemaking
to
be
equipped
with
OBDII.
However,
we
have
proposed
OBDII
requirements
for
heavy­
duty
diesel
engines
in
our
heavyduty
engines
NPRM
(
64
FR
58472).
If
OBDII
requirements
are
finalized
for
heavy­
duty
engines
and
vehicles
as
part
of
that
rulemaking
the
OBDII
requirements
would
likewise
apply
to
diesels
in
the
MDPV
category.
As
proposed,
we
are
applying
Tier
2
evaporative
emissions
standards
and
existing
HLDT
ORVR
requirements
to
MDPVs.
MDPVs
must
be
grouped
with
HLDTs
for
purposes
of
phasing
in
to
the
Tier
2
evaporative
emission
standards
contained
in
this
rule.
We
have
added
somewhat
higher
standards
for
the
MDPVs
to
account
for
their
larger
fuel
tanks
and
vehicle
sizes.
76
However,
the
stringency
of
the
standards
remains
similar
to
that
for
HLDTs.
These
standards
are
described
in
section
IV.
B.
4.
f
of
the
preamble.
ORVR
requirements
currently
exist
for
HLDTs
and
are
to
be
phased­
in
through
model
years
2004
 
2006.77
We
proposed
to
apply
the
same
standards
and
phase­
in
requirements
to
vehicles
over
8,500
pounds
GVWR.
We
are
finalizing
these
ORVR
requirements
for
MDPVs,
which
must
be
grouped
with
HLDTs
for
purposes
of
phased­
in
to
the
ORVR
requirements.
For
those
manufacturers
electing
option
2,
OBD
is
required
when
the
vehicle
family
is
covered
under
these
new
requirements
(
i.
e.,
2004
or
2005
depending
on
when
certification
occurs).
For
ORVR,
the
situation
is
similar.
The
phase­
in
is
40
percent
of
any
2004
certifications
which
occur
four
years
after
this
rule
is
promulgated,
80
percent
in
2005,
and
100
percent
in
2006.
As
before,
the
vehicles
covered
by
these
phase­
ins
must
be
combined
with
those
in
the
LDT3/
4
phase­
in
for
purposes
of
calculating
compliance.
We
are
finalizing
Cold
CO
and
Certification
Short
Test
requirements
for
Tier
2
MDPVs.
However,
we
are
not
finalizing
SFTP
standards
for
MDPVs
in
today's
rulemaking.
Currently,
SFTP
standards
do
not
apply
to
any
vehicles
above
8,500
pounds
GVWR,
including
those
in
the
California
LEV
I
and
LEV
II
programs.
We
are
concerned,
therefore,
that
finalizing
SFTP
requirements
in
today's
rulemaking
would
prevent
manufacturers
from
carrying
over
vehicle
models
during
the
phase­
in
years
of
the
program.
We
are
currently
contemplating
a
new
SFTP
rulemaking
which
would
consider
``
Tier
2''
SFTP
standards
for
all
vehicles,
including
MDPVs.
California
is
also
interested
in
developing
more
stringent
SFTP
standards
within
the
context
of
their
LEV
II
program
and
we
are
coordinating
with
California
on
these
new
SFTP
standards.

Sustained
Severe
Use;
In­
Use
Testing
of
MDPVs
While
we
are
confident
that
MDPVs
can
comply
in­
use
with
the
standards
we
are
finalizing,
manufacturers
are
concerned
about
in­
use
liability
for
MDPVs
that
are
in
sustained
severe­
use.
In
our
in­
use
emission
testing
program,
we
generally
screen
vehicles
for
proper
maintenance
and
use
and
delete
vehicles
that
we
believe
may
have
been
misused
or
malmaintained.
Also,
in
the
regulations
for
manufacturer
in­
use
testing,
we
permit
manufacturers
to
delete
vehicles
from
samples
if
they
have
been
used
for
``
severe
duty
(
trailer
towing
for
passenger
cars,
snow
plowing,
racing)'',
and
we
provide
that
vehicles
may
be
deleted
for
other
reasons
upon
EPA
approval.
We
recognize
that
MDPVs
will
be
marketed
and
used
for
carrying
many
passengers,
carrying
heavy
loads
and
trailer
towing.
While
it
is
not
our
intention
to
exempt
vehicles
from
in­
use
liability
that
have
been
used
for
their
intended
purposes,
we
understand
that
some
MDPVs
may
be
subject
to
sustained
severe
service
applications,
such
as
frequent
overloading
or
frequent
towing
beyond
manufacturer's
advertised
capacity
and
could
not
be
considered
to
be
representative
of
properly
maintained
and
used
vehicles.
Furthermore,
we
would
not
necessarily
consider
to
be
representative
MDPVs
which
are
routinely
or
regularly
used
in
heavy­
load
hauling
application
or
towing
even
within
the
manufacturers
limits.
Thus,
for
example,
an
SUV
MDPV
used
on
a
daily
basis
to
haul
a
work
crew
and
tow
equipment
to
a
distant
work
site
may
not
be
representative
while
the
same
SUV
used
to
haul
the
family
and
tow
a
boat
to
the
lake
on
weekend
excursions
would
be
representative.
MDPVs
in
sustained
severe
operations
should
not
be
included
in
manufacturer
or
EPA
in­
use
test
programs,
while
those
that
see
less
frequent
severe
operation
should
be
included.

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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
C.
Our
Program
for
Controlling
Gasoline
Sulfur
As
with
our
program
for
vehicles,
the
program
we
are
establishing
today
for
reducing
sulfur
levels
in
commercial
gasoline
will
achieve
the
same
large
NOX
reductions
that
we
projected
for
the
proposed
program.
Here,
too,
the
final
program
is
very
similar
to
our
proposed
program.
Adjustments
we
have
made
to
the
proposed
program
will
smooth
the
refining
industry's
transition
to
the
low­
sulfur
requirements
and
encourage
earlier
introduction
of
cleaner
fuel.
With
today's
action,
we
are
requiring
substantial
reductions
in
gasoline
sulfur
levels
nationwide.
As
we
explained
in
Section
IV.
A,
because
sulfur
significantly
inhibits
the
ability
of
automotive
catalysts
to
control
emissions,
we
had
to
consider
sulfur's
impact
in
setting
the
Tier
2
standards.
We
knew
at
the
time
of
proposal
that
newer
catalysts
were
more
sensitive
to
sulfur
than
older
technologies,
and
projected
that
Tier
2
catalysts
would
be
as
or
even
more
sensitive
than
those
used
in
today's
NLEV
vehicles.
Furthermore,
we
believed
that
the
sulfur
build­
up
on
Tier
2
catalysts
may
be
irreversible.
Since
the
proposal,
additional
data
we've
collected
have
confirmed
and
strengthened
our
concerns.
It
now
appears
that
the
catalysts
expected
to
be
used
in
Tier
2
vehicles
will
be
even
more
sensitive
to
sulfur
than
we
originally
estimated,
and
that
this
sulfur
impact
will
be
approximately
45
percent
irreversible
under
typical
driving
conditions.
Thus,
the
gasoline
sulfur
standards
we
finalize
today
will
enable
the
stringent
tailpipe
emission
standards
we're
implementing
for
Tier
2
vehicles
and
will
help
to
ensure
that
these
low
emission
levels
will
be
realized
throughout
the
life
of
the
vehicle.
Furthermore,
since
vehicles
already
on
the
road,
including
NLEV
vehicles,
are
in
many
cases
quite
sensitive
to
sulfur,
gasoline
sulfur
control
will
also
help
to
reduce
emissions
of
pollutants
that
endanger
public
health
and
welfare
from
these
vehicles.
In
developing
this
gasoline
sulfur
control
program,
we
gave
substantial
consideration
to
the
ability
of
the
refining
industry
to
meet
these
requirements.
We
proposed
a
set
of
standards
applying
to
refiners
and
to
individual
refineries
combined
with
a
sulfur
averaging,
banking,
and
trading
(
ABT)
program
intended
to
provide
flexibility
in
meeting
the
standards.
We
concluded
that
our
proposal
was
reasonable
and
cost­
effective
based
on
our
projections
regarding
the
number
of
refineries
that
would
(
1)
need
to
reduce
sulfur
levels
each
year
as
the
standards
tightened,
(
2)
need
sulfur
ABT
credits
to
meet
the
30
ppm
refinery
average
standard
in
2004
and/
or
2005
to
defer
installation
of
desulfurization
equipment,
and
(
3)
install
desulfurization
equipment
prior
to
2004,
generating
the
needed
sulfur
credits.
This
analysis
formed
our
picture
of
the
industry's
investment
stream
 
a
year­
by­
year
estimate
of
how
many
refineries
would
be
constructing
new
equipment
and
what
technologies
these
refineries
would
choose.
We
assumed
that
any
investments
would
be
in
the
new,
lower
cost
technologies,
and
that
these
technologies
would
be
available
and
adequately
demonstrated
to
allow
refiners
to
select
them
as
early
as
the
year
2000
to
begin
operation
(
and
thus,
credit
generation)
as
early
as
2002.
Based
on
these
assumptions,
our
analysis
showed
that
sufficient
credits
would
be
generated
before
2004
to
enable
a
number
of
refineries
to
delay
construction
and
use
credits
to
meet
the
30
ppm
standard
in
2004,
and
in
some
cases,
even
in
2005.
Overall,
we
believed
our
analysis
represented
a
reasonable
and
balanced
rate
of
investment
by
the
industry
over
a
several
year
time
period.
In
response
to
our
proposal,
we
received
many
comments
which
raised
concerns
about
the
feasibility
of
our
program.
Some
comments
suggested
that
our
proposed
declining
cap
(
300
ppm
cap
for
2004
and
a
reduced
cap
of
180
ppm
for
2005)
could
be
an
additional
and
burdensome
expense
for
most
refiners
to
meet.
Specifically,
these
commenters
believed
that
the
declining
cap
would
be
more
constraining
than
compliance
with
the
corporate
average
or
even
the
refinery
average
standards
(
as
long
as
the
ABT
program
produced
sufficient
credits).
Because
refiners
probably
would
not
make
multiple
investments
in
such
a
short
time,
the
180
ppm
cap
could
force
some
refiners
to
install
the
equipment
needed
to
get
to
the
80
ppm
cap
earlier
than
otherwise
needed.
The
commenters
argued
that
this
would
force
all
of
the
industry's
investments
into
the
first
years
of
the
program
rather
than
allowing
for
a
smoother
transition
over
several
years
as
we
had
originally
envisioned.
Many
comments
also
suggested
that
since
there
have
not
been
long­
term
commercial
demonstrations
of
the
newer
gasoline
desulfurization
technologies,
refiners
would
not
consider
these
technologies
to
be
viable
and,
if
faced
with
our
proposed
30
ppm
standard
in
2004,
may
select
the
more
traditional,
higher
cost
sulfur
reduction
processes.
Some
of
these
commenters
suggested
that
we
should
delay
the
30
ppm
standard,
and
recommended
a
range
of
suggested
deadlines
(
2005
 
2007).
We
also
received
many
comments
which
suggested
that
the
ABT
program
restricted
the
generation
of
credits,
and
provided
no
certainty
that
credits
would
be
generated
prior
to
2004.
Commenters
stated
that
two
features
in
particular
 
the
delay
in
establishing
each
refinery's
sulfur
baseline
due
to
1997
 
98
data
review
and
the
strict
150
ppm
``
trigger''
for
generating
credits
 
caused
them
to
question
whether
adequate
sulfur
credits
would
be
available.
If
credits
could
not
be
guaranteed
early
enough
to
forestall
investment
decisions,
refiners
would
be
forced
to
begin
construction
earlier
than
we
had
projected.
Under
such
a
scenario,
the
costs
of
the
program
would
be
substantially
greater,
and
many
commenters
suggested
that,
regardless
of
cost,
it
would
be
impossible
for
the
entire
industry
to
meet
the
deadline
(
due
to
limitations
on
engineering
design
and
construction
resources
as
well
as
the
time
required
to
obtain
permits).
Finally,
we
received
many
comments
which
argued
that
not
all
refineries
would
be
able
to
concurrently
comply
with
the
proposed
standards
in
the
time
period
provided,
given
the
competition
for
engineering
resources
and
the
time
needed
for
construction
of
desulfurization
equipment.
These
comments
focused
specifically
on
small
refineries
(
owned
by
both
small
and
large
corporations)
and
refineries
that
were
relatively
isolated
geographically
(
such
as
many
refineries
in
the
Rocky
Mountain
region)
which
had
little
access
to
other
sources
of
gasoline
should
they
have
difficulty
in
complying
with
our
requirements.
The
commenters
generally
argued
that
these
refiners
needed
more
time
than
the
rest
of
the
industry
to
meet
our
proposed
standards.
Some
of
the
commenters
also
argued
that
the
standards
applicable
to
many
of
these
refiners
should
be
less
stringent
because
of
their
belief
that
the
environmental
needs
of
the
states
where
these
refineries
were
located
and/
or
marketed
gasoline
were
small
relative
to
the
needs
of
other
states.
Suggestions
for
temporary
and
permanent
regional
programs
which
provided
less
stringent
control
in
the
Western
half
of
the
country
were
included
with
many
of
these
comments.
Based
on
what
we've
learned
from
the
comments
received
and
additional
information
we've
gathered,
we
have
revised
our
analysis
of
when
refiners
will
invest
in
desulfurization
equipment
and
how
the
sulfur
ABT
program
can
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/
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February
10,
2000
/
Rules
and
Regulations
best
help
to
distribute
these
investments
over
several
years
while
maintaining
the
original
goals
of
the
program.
The
following
is
a
brief
summary
of
our
new
analysis;
a
more
complete
explanation
of
our
assumptions
can
be
found
in
the
RIA.
About
15
percent
of
current
domestic
gasoline
production
already
meets
the
gasoline
sulfur
standard,
or
can
do
so
with
very
little
additional
capital
investment,
and
at
most
a
small
increase
in
operating
cost.
The
remainder
of
the
industry
 
the
majority
of
U.
S.
refineries
 
will
have
to
install
at
least
one
desulfurization
processing
unit
to
lower
gasoline
sulfur
to
the
required
levels.
Furthermore,
many
of
these
refineries
will
need
to
make
changes
to
their
operations
in
advance
of
2004
simply
to
comply
with
the
300
ppm
cap
standard,
even
if
they
can
obtain
sufficient
ABT
credits
to
delay
compliance
with
the
30
ppm
refinery
average
standard.
Refiners
facing
this
situation
will
need
to
make
their
decisions
within
a
year
or
at
most
two
from
today's
action.
From
the
comments
we
received
and
discussions
we've
had
with
refiners
and
technology
vendors,
we
acknowledge
that
some
of
the
newer,
more
promising
processes
may
not
be
in
operation
for
sufficient
time
to
gain
valuable
operating
experience
(
one
to
two
years
of
operation)
until
2002
or
later.
Hence,
we
now
believe
that
some
refiners
may
choose
from
one
of
the
traditional,
commercially­
demonstrated
desulfurization
processes,
even
though
these
technologies
may
be
more
costly,
to
meet
our
standards.
However,
we
continue
to
believe
that
the
majority
of
refiners
will
delay
construction
(
taking
advantage
of
the
sulfur
ABT
program
and
perhaps
making
modest
operational
changes
in
the
interim)
and
will
have
a
wide
range
of
technological
options
to
choose
from,
at
reduced
capital
investment
and
operating
costs
compared
to
the
more
traditional
approaches.
Examples
of
these
technologies
are
CDHydro
and
CDHDS
(
licensed
by
the
company
CDTECH),
Octgain
125
and
Octgain
220
(
licensed
by
Mobil
Oil),
S
Zorb
(
licensed
by
Phillips),
IRVAD
(
licensed
by
Black
&
Veatch),
and
others.
These
technologies
generally
use
conventional
refining
processes
combined
in
new
ways,
with
improved
catalysts
and
other
design
changes
that
minimize
the
undesirable
impacts
(
such
as
a
substantial
loss
in
octane)
and
maximize
the
effectiveness
of
the
desulfurization
approach.
Since
these
processes
provide
less
costly
ways
to
reduce
gasoline
sulfur,
we
have
based
our
economic
assessment
(
summarized
in
Section
IV.
D.
below)
on
the
presumption
that
the
majority
of
refiners
will
elect
to
use
one
of
these
processes
to
meet
the
30
ppm
standard,
even
if
it
requires
delaying
compliance
(
through
the
purchase
of
ABT
program
credits)
until
2006.
However,
after
considering
the
data
available
to
us
about
current
refinery
sulfur
levels
and
the
ability
of
refiners
to
reduce
sulfur
levels
to
meet
the
standards,
we
have
made
several
modest
changes
to
the
program.
These
changes
will
not
affect
the
environmental
performance
of
the
proposed
program.
We
agree
that
the
declining
cap
had
the
unintended
consequence
of
forcing
investments
earlier
than
desired
for
an
orderly
transition
to
the
80
ppm
cap.
Thus,
we
have
changed
the
program
from
the
proposal,
establishing
a
300
ppm
per­
gallon
cap
in
2004
and
2005.
We
do
not
expect
this
change
to
have
an
impact
on
the
environment
(
or
on
the
Tier
2
vehicles
that
will
be
introduced
in
this
interim
period)
since
average
sulfur
levels
will
be
required
to
decrease
due
to
the
declining
corporate
average,
which
begins
in
2004.
We
kept
the
corporate
average
standards
proposed
for
2004
and
2005,
but
are
permitting
inter­
company
trading
around
these
standards.
We
believe
this
change
will
provide
further
flexibility
to
the
industry
in
allowing
some
refineries
to
delay
construction
and
encourage
others
to
move
forward
sooner.
Having
now
concluded
that
many
refiners
would
benefit
from
an
additional
year
to
evaluate
and
consider
the
technological
options
before
having
to
install
equipment
to
meet
the
30
ppm
standard,
we
have
delayed
this
standard
for
one
year.
In
acknowledgment
that
some
areas
of
the
country
have
less
urgent
environmental
needs
for
the
emissions
reductions
that
this
program
will
bring,
and
that
many
of
the
refiners
that
supply
gasoline
to
these
areas
are
ones
which
will
have
the
most
difficulty
in
meeting
the
standards,
we
have
finalized
a
geographic
phase­
in
of
the
standards
to
complement
the
temporal
phase­
in
applicable
to
the
rest
of
the
industry.
Thus,
in
certain
states
in
the
West,
refiners
have
the
option
of
meeting
interim
standards
while
delaying
compliance
with
the
30
ppm
average
until
2007.
Finally,
we
have
made
changes
to
the
sulfur
baseline
requirements
and
the
credit
trigger
to
help
ensure
that
the
sulfur
ABT
program
functions
as
we
originally
envisioned
it
would.
These
changes
will
encourage
reductions
in
gasoline
sulfur
levels
beginning
as
early
as
2000,
while
providing
enough
flexibility
to
require
the
majority
of
refineries
to
meet
a
30
ppm
average
sulfur
standard
by
2006.
Overall,
the
industry
will
be
able
to
spread
the
needed
investments
over
several
years
rather
than
having
to
comply
as
a
whole
by
2004,
and
will
be
able
to
maximize
the
use
of
the
most
efficient
and
lowest
cost
technologies.
While
we
have
provided
additional
flexibility
for
the
industry,
we
have
done
so
without
compromising
the
environmental
benefits
of
the
program
in
2004
and
beyond
when
compared
to
our
proposal.
The
following
sections
summarize
the
requirements
for
gasoline
refiners
and
importers,
including
our
geographic
phase­
in
requirements;
special
provisions
for
small
refiners,
and
our
plans
to
facilitate
the
construction
permitting
process
to
enable
refiners
to
install
gasoline
desulfurization
technology
in
a
timely
manner.
Section
VI
provides
additional
information
about
the
compliance
and
enforcement
provisions
that
will
accompany
these
requirements.
More
detailed
information
in
support
of
the
conclusions
presented
here
is
found
in
the
RIA
and
in
our
RTC
document.

1.
Gasoline
Sulfur
Standards
for
Refiners
and
Importers
This
section
explains
who
must
comply
with
the
gasoline
sulfur
control
requirements,
the
standards
and
deadlines
for
compliance,
and
how
refiners
can
use
the
ABT
program
to
meet
the
standards.
The
last
section
discusses
how
individual
state
gasoline
sulfur
programs
are
affected
by
today's
action.
Standards
specific
to
eligible
small
refiners
are
presented
in
Section
IV.
C.
2.

a.
Standards
and
Deadlines
that
Refiners/
Importers
Must
Meet
Anyone
who
produces
gasoline
for
sale
in
the
U.
S.
must
comply
with
these
regulations.
This
includes
anyone
meeting
our
definition
of
a
refiner
(
including
blenders,
in
most
instances)
and
importers.
Certain
refiners
may
qualify
for
temporarily
less
stringent
standards
and
deadlines
because
these
companies
either
(
1)
market
gasoline
in
the
temporary
geographic
phase­
in
area
(
explained
in
section
b
below),
or
(
2)
they
qualify
under
our
definition
of
small
refiner
(
explained
in
section
IV.
C.
2
below).
Foreign
refiners
may
also
have
separate
requirements,
if
they
qualify
as
small
refiners.
These
requirements
will
apply
to
all
gasoline
sold
in
the
U.
S.,
including
Alaska,
Hawaii,
Puerto
Rico,
American
Samoa,
the
Virgin
Islands,
Guam,
and
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/
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10,
2000
/
Rules
and
Regulations
78
Gasoline
sold
in
California
is
exempt
from
meeting
these
Federal
standards,
due
to
our
belief
that
California
gasoline
already
meets
or
exceeds
these
requirements.
See
Section
VI
for
more
discussion
on
this
issue.
79
Including
gasoline
produced
for
use
in
the
geographic
phase­
in
area
and
small
refiner
gasoline.
the
Northern
Mariana
Islands.
78
This
national
approach
is
appropriate,
based
on
our
conclusions
that
vehicle
emissions
must
be
reduced
nationwide
to
adequately
protect
public
health
and
the
environment
and
Tier
2
vehicles
require
protection
from
the
harmful
impacts
of
gasoline
sulfur
regardless
of
where
they
are
operated.
Table
IV.
C.
 
1.
summarizes
the
standards
for
gasoline
refiners
and
importers.
There
are
three
standards
which
refiners
and
importers
must
meet.
In
2004
and
beyond,
every
gallon
of
gasoline
produced
is
limited
by
a
pergallon
maximum
or
``
cap.''
The
cap
standard
becomes
effective
January
1,
2004
(
and
January
1
of
subsequent
years
as
the
cap
standard
changes).
Also,
in
2004
and
2005,
each
refiner
must
meet
an
annual­
average
standard
for
its
entire
corporate
gasoline
pool.
Finally,
each
individual
refinery
is
subject
to
a
refinery
average
standard,
beginning
in
2005.
Refineries
that
do
not
take
advantage
of
the
sulfur
ABT
program
will
have
actual
sulfur
levels
averaging
30
ppm
beginning
in
2005.
Additional
details
about
the
requirements
for
meeting
these
standards
is
found
in
the
following
sections.

TABLE
IV.
C.
 
1.
 
GASOLINE
SULFUR
STANDARDS
FOR
REFINERS,
IMPORTERS,
AND
INDIVIDUAL
REFINERIES
[
Excluding
Small
Refiners
and
GPA
Gasoline]

Compliance
as
of
 
2004
a
2005
2006+

Refinery
Average,
ppm
b
..........................................................................................................................
....................
30
30
Corporate
Pool
Average,
ppm
c
...............................................................................................................
120
90
....................
Per­
Gallon
Cap,
d
ppm
.............................................................................................................................
300
300
80
NOTES:
a
We
project
that
the
pool
averages
will
actually
be
below
120
ppm
in
2004.
For
a
discussion
of
how
the
program
gets
early
sulfur
reductions
before
2004,
see
section
IV.
C.
1.
c.
b
The
refinery
average
standard
can
be
met
through
the
use
of
sulfur
credits
or
allotments
from
the
sulfur
ABT
program,
as
long
as
the
applicable
corporate
pool
average
and
per­
gallon
caps
are
not
exceeded,
as
explained
in
Section
IV.
C.
1.
c.
viii.
c.
The
corporate
pool
average
standard
can
be
met
through
the
use
of
corporate
allotments
obtained
from
other
refiners,
if
necessary,
as
explained
in
Section
IV.
C.
1.
c.
iii.
d
In
2004,
exceedances
up
to
50
ppm
beyond
the
300
ppm
cap
are
allowed.
However,
in
2005,
the
cap
for
all
batches
will
be
reduced
by
the
magnitude
of
the
exceedance.

i.
What
Are
the
Per­
Gallon
Caps
on
Gasoline
Sulfur
Levels
in
2004
and
Beyond?

To
reduce
the
potential
for
permanent
damage
to
the
emission
controls
of
Tier
2
vehicles
and
later
NLEV
vehicles,
we
are
implementing
caps
on
the
sulfur
content
of
every
batch
of
gasoline
produced
or
imported
into
the
country
beginning
in
2004.
As
shown
in
Table
IV.
C.
 
1,
a
cap
of
300
ppm
is
first
implemented
in
2004.
This
cap
remains
in
2005.
In
2006
and
beyond,
the
cap
is
lowered
to
80
ppm.
These
caps
apply
at
the
refinery
gate.
Sulfur
caps
are
also
applied
to
gasoline
downstream
of
the
refinery;
see
Section
VI
for
additional
discussion
of
downstream
cap
standards.
These
downstream
caps
will
facilitate
compliance
and
enforcement
without
changing
the
way
the
distribution
system
currently
functions.
Several
commenters
suggested
the
rule
should
also
include
a
provision
to
address
the
occasions
when
refiners
must
temporarily
take
processing
units
out
of
operation
so
that
planned,
recurring
maintenance
can
be
performed,
commonly
termed
``
turnarounds,''
or
if
processing
units
are
unexpectedly
taken
out
of
operation
due
to
accident
or
malfunction,
commonly
termed
``
upsets.''
These
commenters
expressed
particular
concern
that
the
gasoline
produced
at
a
refinery
may
not
meet
the
sulfur
cap
standards
when
a
refinery's
desulfurization
unit
is
not
operating.
These
commenters
contended
that
the
regulations
should
allow
refiners
to
produce
gasoline
that
exceeds
the
cap
standard
for
a
limited
time
where
the
excess
sulfur
is
due
to
a
turnaround
or
upset.
However,
they
also
suggested
that
the
refiner
should
be
required
to
meet
the
refinery
average
standard
with
the
high
sulfur
gasoline
included
in
its
average
calculation
in
order
to
create
an
incentive
for
refiners
to
limit
the
volume
and
sulfur
content
of
high
sulfur
gasoline.
Today's
rule
does
not
grant
relief
to
refiners
because
of
turnarounds
or
upsets.
While
the
concern
raised
by
the
commenters
is
reasonable,
the
solution
they
suggested
would
nevertheless
result
in
distribution
of
gasoline
exceeding
the
cap
standards.
The
cap
standards
are
necessary
because
gasoline
with
higher
sulfur
levels
will
significantly
harm
or
destroy
the
emission
controls
used
in
Tier
2
vehicles.
We
believe
there
are
strategies
refiners
can
use
to
mitigate
or
eliminate
the
difficulties
associated
with
turnarounds
and
upsets.
For
example,
some
refiners
schedule
turnarounds
for
a
number
of
refinery
processing
units
at
the
same
time
when
the
refinery
largely
stops
producing
gasoline,
thereby
avoiding
the
need
to
produce
any
high
sulfur
gasoline.
In
other
situations
it
may
be
possible
for
a
refiner
to
store
high
sulfur
products
until
the
desulfurization
unit
is
operating
or
to
transfer
high
sulfur
products
to
a
neighboring
refinery
for
desulfurization.
We
commit
to
continue
evaluating
the
turnaround
issue
especially
as
new
technologies
are
introduced.
Based
on
our
evaluation,
if
a
problem
is
evident
and
if
an
appropriate
solution
can
be
devised,
we
will
act
at
that
time.
In
2004,
if
any
batch
of
gasoline
79
exceeds
the
300
ppm
cap
(
up
to
350
ppm),
then
the
cap
for
all
batches
produced
by
the
refinery
in
2005
will
be
reduced
by
the
magnitude
of
the
exceedance.
For
example,
if
any
given
batch
of
gasoline
has
a
cap
of
325
ppm
(
a
25
ppm
exceedance)
in
2004,
then
the
cap
becomes
275
ppm
for
all
batches
of
gasoline
produced
by
that
refinery
in
2005.
However,
at
no
time
in
2004
can
a
batch
be
higher
than
350
ppm
sulfur.
We
have
made
this
adjustment
to
accommodate
those
refiners
who
would
have
to
invest
in
control
technologies
to
meet
the
300
ppm
cap
in
2004
(
perhaps
at
a
higher
cost
than
they
would
incur
if
they
could
delay
the
investment
a
year)
but
could
otherwise
meet
a
slightly
higher
cap
through
operational
changes
which
would
not
require
new
equipment.

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10,
2000
/
Rules
and
Regulations
ii.
What
Standards
Must
Refiners/
Importers
Meet
on
a
Corporate
Average
Basis?

Refiners
and
importers
must
meet
annual­
average,
volume­
weighted
sulfur
standards
for
their
entire
corporate
gasoline
pool
in
2004
and
2005.
In
2004,
this
standard
is
120
ppm;
in
2005,
it
is
reduced
to
90
ppm.
In
2006
and
beyond,
there
will
no
longer
be
a
corporate
pool
average
standard,
since
each
refinery
and
importer
will
be
held
to
its
own
single
refinery
average
standard,
as
discussed
in
the
next
section.
These
standards
represent
the
maximum
allowable
sulfur
levels,
on
an
annual
average
basis,
for
each
refiner/
importer,
volume­
weighted
across
all
refineries
owned
and
operated
by
that
refiner
(
or
all
gasoline
imported
by
the
importer
in
the
calendar
year),
rather
than
at
each
individual
refinery
or
by
each
batch
of
gasoline.
Thus,
a
refiner's
gasoline
may
exceed
the
average
standard
of
120
ppm
at
one
refinery,
if
sufficient
gasoline
below
that
standard
is
produced
at
its
other
refinery(
ies),
such
that
its
corporate,
volumeweighted
average
sulfur
level
does
not
exceed
120
ppm.
Alternatively,
allotments
may
be
used
to
meet
this
requirement.
This
requirement
does
not
apply
to
small
entities
or
to
corporations
that
do
not
have
to
meet
the
pool
average
standard
in
the
GPA
program.
For
compliance
with
this
corporate
averaging
requirement,
as
well
as
with
the
other
requirements
of
this
subpart,
we
consider
a
parent
corporation
owning
wholly­
owned
subsidiaries
that
also
own
refineries
to
be
the
refiner
of
these
facilities.
Thus,
the
parent
corporation
must
comply
with
refiner
corporate
average
requirements.
In
its
compliance
calculations,
the
refiner
must
include
the
gasoline
produced
at
the
refineries
it
owns,
plus
the
gasoline
produced
at
the
refineries
owned
by
its
wholly­
owned
subsidiaries.
For
purposes
of
compliance,
we
proposed
that
a
joint
venture,
in
which
two
or
more
refiners
collectively
own
and
operate
one
or
more
refineries,
be
treated
as
a
separate
refining
corporation
under
the
gasoline
sulfur
requirements.
Hence,
a
refinery
owned
by
a
joint
venture
would
have
been
included
in
the
corporate
pool
calculations
of
the
joint
venture,
and
could
not
have
been
included
in
calculations
with
other
refineries
solely
owned
by
one
of
the
parties
to
the
joint
venture.
Based
on
comments
we
received
on
this
issue
which
argued
that
a
company
with
majority
ownership
in
the
joint
venture
should
be
allowed
to
count
the
jointly
held
refinery
in
its
corporate
average,
we
have
revised
our
treatment
of
refineries
owned
by
joint
ventures.
Each
joint
venture
must
separately
meet
the
corporate
pool
average
standard,
whether
the
joint
venture
owns
one
or
multiple
refineries.
If
a
joint
venture
fails
to
meet
the
corporate
pool
average
standard,
then
each
partner
in
the
joint
venture
is
jointly
and
severally
liable
for
the
violation.
However,
if
one
partner
to
a
joint
venture
refinery
includes
the
joint
venture
refinery
in
its
corporate
pool,
and
that
corporate
pool
meets
the
corporate
pool
average
standard,
then
the
joint
venture
will
be
considered
by
EPA
to
be
in
compliance
(
if
the
joint
venture
owns
only
the
one
refinery).
If
the
joint
venture
owns
multiple
refineries
and
only
one
or
some
of
the
refineries
is
included
in
the
corporate
pool
calculations
of
one
partner,
compliance
by
the
joint
venture
with
the
corporate
pool
average
standard
will
be
judged
based
on
the
average
sulfur
levels
of
the
remaining
refinery(
ies)
owned
by
the
joint
venture.
In
meeting
the
corporate
average
stds
in
2004
and
2005,
refiners
and
importers
may
use
allotments
as
discussed
in
IV.
C.
1.
c
below.

iii.
What
Standards
Must
be
Met
by
Individual
Refineries/
Importers?
Beginning
in
2005,
every
refinery
must
meet
an
average
standard
of
30
ppm
sulfur
at
the
refinery
gate
on
an
annual,
volume­
weighted
basis.
Similarly,
every
importer
must
meet
the
30
ppm
average
standard
beginning
in
2005.
(
These
requirements
do
not
apply
to
small
entities
or
to
GPA
gasoline).
In
meeting
this
standard,
individual
refineries
and
importers
may
use
credits
generated
or
purchased
under
the
provisions
of
the
sulfur
ABT
program
discussed
below
in
Section
IV.
C.
1.
c,
and/
or,
in
2005
(
only),
sulfur
allotments
(
as
described
in
the
previous
section)
obtained
from
a
refiner
who
has
excess
allotments
to
sell,
if
they
are
unable
to
comply
based
on
their
actual
gasoline
sulfur
levels.
Hence,
the
actual
average
sulfur
levels
for
gasoline
produced
at
some
refineries
can
be
higher
than
30
ppm
in
2005,
but
only
if
refiners
use
(
1)
credits
generated
from
cleaner
gasoline
produced
early
and/
or
(
2)
allotments
generated
by
a
refiner
which
produces
gasoline
averaging,
on
a
corporate
basis,
lower
than
90
ppm
in
2005.
However,
the
corporate
pool
average
standards
and
per­
gallon
caps
will
limit
the
degree
to
which
gasoline
can
exceed
30
ppm
on
average.
We
allow
refiners
to
use
either
sulfur
allotments
or
ABT
credits
to
meet
the
30
ppm
standard
in
2005
for
several
reasons.
First,
this
is
an
environmentally
neutral
approach
because
the
national
pool
in
2005
will
still
average
no
greater
than
90
ppm,
since
every
refiner
must
meet
the
corporate
average
standard
before
applying
allotments
to
the
compliance
of
any
refineries
with
the
30
ppm
standard.
Second,
it
provides
refiners
who
have
excess
allotments
in
2005
an
additional
market
for
those
allotments,
thus
giving
refiners
an
incentive
to
exceed
the
90
ppm
corporate
average
standard
in
2005.
In
either
case,
the
reductions
will
have
occurred
and
thus
the
allotments
and
credits
have
very
similar
purposes
and
thus
should
be
interchangeable.
In
2006
and
beyond,
the
30
ppm
refinery
average
standard
continues
to
be
a
requirement
for
every
refinery
or
importer.
The
sulfur
credits
generated
in
the
ABT
program
may
be
used
by
refineries
or
importers
to
comply
with
this
requirement.
However,
because
of
the
80
ppm
cap
in
these
years,
we
expect
that
the
majority
of
refiners/
importers
will
average
30
ppm,
although
some
individual
refineries/
importers
could
average
slightly
more
or
less
(
if
the
refineries/
importers
bank,
sell,
or
purchase
credits
to
meet
this
standard,
as
explained
in
the
ABT
discussion
below).
Furthermore,
the
majority
of
credits
will
expire
at
the
end
of
2006.

b.
Standards
and
Deadlines
for
Refiners/
Importers
Which
Provide
Gasoline
to
the
Geographic
Phase­
In
Area
(
GPA)
As
indicated
above,
certain
refiners
may
qualify
for
temporarily
less
stringent
standards
and
deadlines
for
some
or
all
of
their
gasoline
because
these
companies
either
(
1)
produce
gasoline
to
be
sold
in
the
temporary
geographic
phase­
in
area
(
GPA)
or
(
2)
qualify
under
our
definition
of
small
refiner.
In
this
section,
we
explain
the
geographic
phase­
in
area
of
our
program
and
the
interim
standards
and
deadlines
for
compliance
in
that
area.
The
provisions
that
apply
to
qualifying
small
refiners
are
described
in
section
IV.
C.
2.,
below.

i.
Justification
for
Our
Geographic
Phase­
In
Approach
In
addition
to
phasing
in
our
national
gasoline
sulfur
program
temporally
from
2004
 
2006,
we
are
phasing
in
our
program
geographically.
In
response
to
our
proposal,
we
received
many
comments
from
the
refining
industry
regarding
timely
implementation
of
our
proposed
gasoline
sulfur
program.
Commenters
argued
that
not
all
refineries
would
be
able
to
concurrently
comply
with
the
proposed
standards
in
the
time
period
provided,
given
the
competition
for
engineering
resources
and
the
time
needed
for
construction
of
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
80
Much
of
this
gasoline
is
produced
by
small
volume
refineries
that
are
not
owned
by
small
businesses,
and
are
therefore
not
afforded
the
flexibility
of
the
small
refiner
provisions
described
in
Section
IV.
C.
2.
81
Alaska,
Colorado,
Idaho,
Montana,
New
Mexico,
North
Dakota,
Utah,
and
Wyoming
desulfurization
equipment.
In
consideration
of
these
comments,
we
have
made
some
modifications
to
enhance
the
timing
of
our
program
without
compromising
the
environmental
benefits
we
expected
from
our
proposal.
As
part
of
our
assessment
we
also
examined
other
phase­
in
approaches
which
might
enhance
the
orderly
introduction
of
refining
technology
without
jeopardizing
the
environmental
benefits
of
our
program.
As
a
result
of
this
assessment,
we
have
concluded
that
many
states
in
the
Great
Plains
and
Rocky
Mountain
areas
of
the
United
States
have
a
somewhat
less
urgent
environmental
need
for
ozone
precursor
reductions
in
the
near
term.
Moreover,
their
gasoline
supply
is
dominated
by
that
produced
by
small
capacity,
geographically­
isolated
refineries
located
therein.
As
a
general
rule,
refineries
in
this
area
will
have
the
most
difficult
time
of
all
refineries
nationwide
in
competing
for
the
vendor,
supply,
engineering,
and
construction
resources
needed
to
modify
their
refineries
to
comply
with
the
standards.
Based
on
1998
Department
of
Energy
data,
over
80
percent
of
the
gasoline
sold
in
this
area
is
produced
by
the
relatively
small
refineries
located
within
the
region.
80
Similarly,
Alaska
faces
a
less
urgent
environmental
need
for
reductions
in
ozone
precursors
and
has
refineries
which
are
challenged
and
geographically
isolated.
A
more
orderly
and
cost­
efficient
phase­
in
of
the
30
ppm
standard
could
be
achieved
if
all
gasoline
sold
in
this
area
was
subject
to
somewhat
less
stringent
standards
than
those
in
the
rest
of
the
country
for
a
short
time.
This
approach
will
allow
the
refineries
producing
gasoline
for
use
in
this
area
more
compliance
flexibility,
more
time
to
install
and
prove
out
the
equipment
needed
for
compliance,
and
thus
a
greater
opportunity
to
reduce
their
overall
costs.
As
described
below,
this
approach
results
in
only
a
minimal
loss
in
emission
reduction
benefits.
By
stretching
out
demand
for
design,
engineering,
construction
and
other
related
services
during
the
2000
 
06
period,
these
provisions
should
also
help
to
reduce
the
overall
costs
of
the
gasoline
sulfur
program.
The
remainder
of
this
section
is
divided
into
two
parts.
The
first
describes
the
rationale
for
development
of
this
approach
and
how
we
identified
the
appropriate
area,
and
the
second
provides
a
description
of
the
requirements
for
refiners
and
importers
that
produce
fuel
for
sale
in
the
area.

ii.
What
Is
the
Geographic
Phase­
in
Area
(
GPA)
and
How
Was
it
Established?

As
we
considered
the
geographic
phase­
in
approach,
we
aimed
to
minimize
the
environmental
losses
which
could
occur
from
exposing
Tier
2,
NLEV,
(
and
other)
vehicles
to
higher
gasoline
sulfur
levels
when
the
gasoline
sulfur
standards
are
being
phased
in
nationwide.
We
used
two
criteria
to
develop
and
evaluate
this
approach:
(
1)
relative
environmental
need
and
(
2)
the
ability
of
U.
S.
refiners
and
the
distribution
system
to
provide
compliant
gasoline.
The
states
we
have
identified
for
the
GPA
are
shown
in
Figure
IV.
C
 
1.81
BILLING
CODE
6560
 
50
 
P
BILLING
CODE
6560
 
50
 
C
The
first
and
primary
criterion
we
considered
in
defining
this
area
was
environmental
need.
In
defining
the
GPA,
we
identified
those
states
that
have
somewhat
less
urgent
environmental
need
in
the
near
term
for
reductions
in
ozone
precursors
and
whose
emissions
are
less
important
in
terms
of
ozone
transport
concerns.
This
area
includes
some
states
that
are
located
in
the
Great
Plains
and
the
Rocky
Mountains,
as
well
as
Alaska.
Most
states
within
the
Rocky
Mountains
and
Great
Plains
do
not
have
a
compliance
problem
with
the
1­
hour
ozone
standard
in
the
near
term,
although
they
do
have
concerns
in
terms
of
maintaining
compliance
with
the
particulate
matter
standard.
However,
there
are
two
states
(
Arizona
and
Nevada)
in
the
Rocky
Mountain
vicinity
that
do
have
ozone
air
quality
concerns.
These
states
have
instituted
local
fuel
quality
programs
(
in
Phoenix,
AZ
and
Las
Vegas,
NV)
to
reduce
ozone
precursor
emissions.
In
addition,
as
shown
in
Table
III.
C
 
2,
Arizona
and
Nevada
are
projected
to
have
concerns
with
PM10
compliance
in
the
future.
Given
these
factors,
we
excluded
them
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82
As
discussed
below,
refiners
can
supply
gasoline
not
designated
as
GPA
gasoline
to
the
GPA,
provided
it
meets
the
standards
in
Table
IV.
C.
 
2.
Also,
the
GPA
standards
do
not
apply
to
gasoline
produced
by
small
refiners
that
is
used
in
the
GPA.
from
the
phase­
in
area
and
its
temporarily
less
stringent
standards
except
as
described
below
in
Section
IV.
C.
1.
b.
vii
for
counties
and
tribal
lands
in
adjacent
states.
We
also
defined
the
phase­
in
area
based
on
the
relative
difficulty
of
producing
or
obtaining
complying
gasoline.
The
refining
industry
in
the
GPA
is
dominated
by
relatively
low
capacity,
geographically­
isolated
refineries
many
of
which
are
owned
by
independent
companies.
Such
refineries
face
special
challenges
in
complying
with
the
requirements
of
the
national
program
by
2004
because
their
crude
capacity,
corporate
size,
and
location
make
it
difficult
for
them
to
compete
for
the
design,
engineering,
and
construction
resources
needed
to
comply
by
2004.
Furthermore,
an
assessment
of
1998
gasoline
production
and
use
data
and
information
on
the
products
pipeline
system
shows
that
states
in
the
GPA
and
portions
of
several
adjoining
states
are
solely
or
predominantly
dependent
on
gasoline
produced
by
these
refineries
and
have
limited
or
no
access
to
gasoline
from
other
parts
of
the
country.
Based
on
this
analysis,
we
concluded
that
several
states
and
portions
of
other
states
meeting
our
first
criterion
(
less
urgent
environmental
need
for
ozone
precursor
emission
reductions)
also
face
the
likelihood
of
a
supply
shortage
of
low
sulfur
gasoline.
Providing
low
sulfur
gasoline
to
these
states
and
adjoining
areas
is
expected
to
be
more
difficult
and
costly
in
the
near
term.
Section
IV.
C.
1.
b.
vii
below,
discusses
how
the
adjoining
areas
(
counties/
tribal
lands)
will
be
identified.
Thus,
we
believe
it
is
appropriate
to
phase
in
the
30
ppm
average,
80
ppm
cap
standards
in
these
areas
by
allowing
an
additional
year
compared
to
the
rest
of
the
country,
rather
than
delaying
implementation
of
the
standards
nationwide
to
accommodate
these
states.
Under
this
approach,
the
areas
with
the
most
urgent
need
for
the
ozone
reduction
benefits
associated
with
low
sulfur
gasoline
will
realize
them
as
soon
as
is
feasible,
and
other
areas
will
experience
them
shortly
thereafter.
On
the
other
hand,
much
of
the
area
in
the
adjoining
states
has
significant
pipeline,
rail,
barge,
and
truck
access
to
gasoline
which
will
be
capable
of
meeting
the
standards
in
Table
IV.
C
 
1
beginning
in
2004.
Even
if
these
states
have
less
environmental
need
in
the
near
term,
there
are
health
benefits
(
particulate
and
air
toxic
emission
reductions)
as
well
as
performance
benefits
for
vehicle
emission
control
systems
(
including
avoidable
irreversible
sulfur
effects)
which
need
not
be
foregone.
Therefore,
we
concluded
that
since
it
will
not
be
more
difficult
to
send
gasoline
to
these
adjoining
areas
through
the
distribution
system,
the
significant
environmental
benefits
of
requiring
low
sulfur
gasoline
as
early
as
is
feasible
justifies
excluding
these
states
from
the
GPA.
Some
might
argue
that
there
are
other
states
which
should
be
considered
under
this
program.
However,
based
on
our
criteria
of
environmental
need
(
including
ozone
transport
and
irreversibility
concerns)
challenged
refineries,
and
limited
access
to
complying
gasoline
we
could
identify
no
other
states
or
territories
which
to
include.

iii.
Standards/
Deadlines
for
Gasoline
Sold
in
the
Geographic
Phase­
in
Area
While
the
states
in
the
GPA
may
have
less
of
an
environmental
need
for
ozone
precursor
reductions
in
the
near
term,
there
are
significant
environmental
reasons
to
make
the
program
as
stringent
as
possible,
still
enabling
a
smooth
transition
to
low
sulfur
gasoline
nationwide.
Toward
that
end,
we
are
establishing
the
following
requirements
for
gasoline
sold
in
the
GPA,
which
we
view
as
the
appropriate
balance
between
these
two
factors.
The
GPA
provision
covers
all
gasoline
produced
or
imported
for
use
in
the
GPA,
whether
refined
there
or
brought
in
by
pipeline,
truck,
rail,
etc.
82
Foreign
refiners
are
involved
in
this
program
through
the
importers,
who
are,
in
fact,
the
regulated
entities.
Refineries
and
importers
must
meet
a
150
ppm
average
and
a
300
ppm
cap
for
all
gasoline
produced
or
imported
for
the
GPA
under
this
program
beginning
January
1,
2004.
However,
if
a
refinery's/
importer's
1997
 
98
average
sulfur
level
is
less
than
150
ppm,
then
that
refinery's/
importers
gasoline
has
a
standard
of
its
baseline
plus
30
ppm
but
in
no
case
greater
than
150
ppm.
For
example,
a
refinery
with
a
baseline
of
100
ppm
would
have
a
sulfur
standard
of
130
ppm
for
its
GPA
gasoline,
a
refinery
with
a
baseline
sulfur
level
of
140
ppm
would
have
a
standard
of
150
ppm
for
its
GPA
gasoline,
and
a
refinery
with
a
baseline
of
200
ppm
would
have
a
standard
of
150
ppm
for
its
GPA
gasoline.
Furthermore,
if
under
the
ABT
provisions
discussed
below
and
in
section
IV.
C.
1.
c,
a
refinery/
importer
generates
credits
(
in
2000
 
2003)
and/
or
allotments
(
in
2003)
by
dropping
its
refinery/
imported
gasoline
average
below
150
ppm
then
the
baseline
for
that
refinery
is
set
at
the
new
level
and
the
standard
becomes
baseline
plus
30
ppm
but
not
greater
than
150
ppm.
This
is
to
ensure
that
refineries
and
importers
who
already
are
lower
than
the
150
ppm
standard
on
average
maintain
current
sulfur
levels.
The
30
ppm
factor
is
intended
to
allow
some
flexibility
for
refineries
and
importers
whose
1997
and
1998
levels
are
an
aberration
from
normal
operations
or
who
face
changes
in
crude
slates
in
future
years.
Corporate
pool
average
standards
apply
in
the
national
gasoline
sulfur
program
for
calendar
years
2004
and
2005.
Most
refiners/
importers
producing
gasoline
for
use
in
the
GPA
market
the
majority
of
their
gasoline
outside
of
the
GPA
where
they
compete
with
many
other
refineries.
Since
the
phase­
in
of
the
national
program
expects
compliance
with
the
120/
90
ppm
corporate
pool
average
standards
in
2004
and
2005,
we
are
requiring
that
refiners/
importers
who
market
the
majority
(
greater
than
50
percent
of
production
volume)
of
their
gasoline
outside
of
the
GPA
to
account
for
the
sulfur
levels
of
their
GPA
gasoline
in
their
calculation
for
compliance
with
the
corporate
pool
average
standards.
To
provide
additional
flexibility
during
this
phase­
in,
refiners
may
use
sulfur
ABT
credits
and
allotments
(
as
explained
in
IV.
C.
1.
c)
to
meet
these
standards.
Refineries
producing
GPA
gasoline
can
generate
credits
beginning
in
2000
under
the
provisions
of
the
national
program
(
described
in
section
IV.
C.
1.
c).
Also,
refineries/
importers
marketing
gasoline
in
the
GPA
may
through
extraordinary
measures
be
able
to
generate
credits
in
2004
 
2006.
To
qualify
they
must
achieve
levels
below
150
ppm
or
their
more
stringent
baseline
levels
as
discussed
above
whichever
is
less.
Under
these
circumstances,
these
refineries/
importers
can
earn
credits
for
the
GPA
gasoline
they
produce
during
2004
 
06.
Credits
generated
under
the
GPA
program
are
fully
fungible
with
national
credits
and
are
subject
to
the
same
regulatory
requirements.
The
national
program
includes
provisions
which
permit
refiners/
importers
to
generate
allotments
for
use
in
2004
and
2005.
Refiners
and
importers
marketing
gasoline
in
the
GPA
may
only
generate
sulfur
allotments
in
2004
or
2005
if
their
corporate
average
sulfur
level
meets
the
corporate
pool
average
standards
for
each
year
(
as
indicated
in
Table
IV.
C.
1),
including
gasoline
produced
for
the
GPA,
if
applicable.
Refiners
not
compelled
to
meet
the
corporate
pool
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Rules
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83
These
segregation
and
designation
requirements
do
not
apply
to
gasoline
produced
by
refiners
subject
to
the
small
refiner
standards
described
in
Section
IV.
C.
2.
This
is
because
small
refiner
gasoline
can
be
sold
anywhere
in
the
country,
and
is
not
subject
to
different
standards
depending
on
where
it
is
sold.
average
standards
under
the
GPA
may
not
generate
allotments.
The
temporary
provisions
for
the
GPA
apply
for
three
years,
2004
through
2006.
Since
the
low
sulfur
standards
for
the
rest
of
the
country
require
compliance
with
a
30
ppm
refinery
average
standard
and
an
80
ppm
gallon
cap
in
2006,
the
geographic
phase­
in
provides
an
additional
year
to
reach
those
standards.
This
extra
year
and
the
somewhat
less
stringent
standards
during
the
phase­
in
will
provide
the
refining
industry
the
opportunity
for
more
orderly
transition
to
the
30/
80
ppm
standards
by
2007.
Requirements
for
gasoline
sold
in
the
GPA
are
summarized
in
Table
IV.
C.
 
2,
below.
Gasoline
produced
by
refiners
subject
to
the
small
refiner
standards
described
in
Section
IV.
C.
2.
of
this
notice
is
not
subject
to
the
provision
of
the
geographic
phase­
in,
since
the
small
refiner
provisions
apply
to
eligible
refiners
regardless
of
geographic
location.
Gasoline
produced
by
such
refiners
can
be
sold
nationwide,
including
in
the
GPA.

TABLE
IV.
C.
 
2.
 
GASOLINE
SULFUR
STANDARDS
FOR
THE
GEOGRAPHIC
PHASE­
IN
AREA
[
Excludes
Small
Refiners]

Compliance
as
of
 
2004
2005
2006
Refinery
GPA
Gasoline
Average
a,
ppm
.................................................................................
150
150
150.
Corporate
Pool
Average
b,
ppm
...............................................................................................
120
90
Not
Applicable.
Per­
Gallon
Cap
c,
ppm
............................................................................................................
300
300
300.

Notes:
a
The
refinery
average
standard
for
GPA
gasoline
is
the
more
stringent
of:
150
ppm;
the
refinery
1997
 
1998
baseline
plus
30
ppm;
or
the
sulfur
level
from
which
early
credits
were
generated
plus
30
ppm.
Refiners
can
use
credits
or
allotments
to
meet
the
average.
b
Applies
only
to
refiners/
importers
which
sell
>
50%
of
their
gasoline
outside
the
GPA.
c
As
discussed
above,
in
2004
both
GPA
and
Non­
GPA
gasoline
may
have
a
sulfur
content
as
high
as
350
in
which
case
the
refinery
or
importer
becomes
subject
to
a
correspondingly
more
stringent
cap
standard
in
2005.

iv.
What
Are
the
Per­
Gallon
Caps
on
Gasoline
Sulfur
Levels
in
the
Phase­
in
Area?
The
sulfur
level
caps
for
gasoline
sold
in
the
phase­
in
area
and
the
rest
of
the
nation
are
the
same
in
2004
and
2005,
but
in
2006
the
cap
remains
at
300
ppm
in
this
area
while
it
declines
to
80
ppm
for
the
rest
of
the
country.
To
assure
that
compliance
at
the
refinery
gate
is
correct
regardless
of
where
the
gasoline
is
ultimately
sold,
as
gasoline
intended
for
the
GPA
moves
in
the
distribution
system
to
or
through
the
geographic
area
it
must
be
identified
as
phase­
in
area
gasoline
in
product
transfer
documents
and
must
remain
segregated
from
gasoline
intended
for
use
outside
this
area.
In
addition,
use
of
phase­
in
area
gasoline
is
prohibited
outside
the
GPA,
but
the
converse
is
allowed,
i.
e.,
gasoline
designated
for
use
outside
the
GPA
can
be
used
in
this
area.
For
all
three
years,
refiners
and
importers
must
meet
the
requirements
described
in
Tables
IV
 
C.
1
and
IV
 
C.
2,
as
applicable,
and
therefore
must
maintain
refinery
or
import
records
as
applicable
as
to
where
a
gasoline
batch
is
sold.
83
We
recognize
that
this
higher
standard/
cap
for
one
year
could
create
the
incentive
for
those
not
marketing
gasoline
in
the
GPA
today
to
seek
a
market
to
sell
higher
sulfur
gasoline
and
for
others
to
seek
to
increase
market
share.
While
this
is
indeed
allowable
under
our
program
and
is
perhaps
to
be
anticipated
in
a
free
market
system,
in
all
likelihood
the
incentives
are
small.
Such
refiners/
importers
would
still
have
to
meet
the
150
ppm
average
and
would
perhaps
face
increased
shipping
and
marketing
costs.
Nonetheless,
we
plan
to
monitor
market
developments
to
assess
whether
such
a
provision
creates
significant
market
shifts
or
the
potential
for
increases
in
average
sulfur
levels
in
the
GPA
gasoline.

v.
How
Do
Refiners/
Importers
Account
for
GPA
Fuel
in
Their
Corporate
Average
Calculations?
Those
refiners
or
importers
that
sell
all
of
their
gasoline
to
the
GPA
(
i.
e.,
they
produce
no
fuel
for
use
outside
the
GPA),
regardless
of
whether
they
are
located
within
or
outside
of
the
area,
have
refinery/
importer
standards
that
are
equal
to
the
least
of
1)
150
ppm,
2)
the
refinery's
or
importer's
1997
 
98
average
sulfur
level
plus
30
ppm
or
3)
the
refinery's
or
importer's
lowest
actual
annual
sulfur
level
plus
30
ppm
in
any
year
2000
 
2003
if
credits
are
generated.
Because
the
refiners
produce
all
of
their
fuel
for
use
in
the
GPA,
they
are
exempt
from
the
corporate
average
standards
in
Table
IV.
C
 
1.
Furthermore,
any
refiner/
importer
which
certifies
50
percent
or
more
of
its
gasoline
production
volume
for
sale
as
GPA
gasoline
in
2004
and
2005
is
not
required
to
meet
the
corporate
pool
average
for
that
year
for
its
entire
gasoline
pool.
Not
only
would
it
be
difficult
to
comply
on
average
(
if
it
were
assumed
that
the
GPA
gasoline
was
150
ppm
and
non­
GPA
gasoline
was
30
ppm),
but
also
it
would
undermine
the
achievement
of
the
basic
goal
of
a
more
orderly
and
efficient
phase­
in
of
low
sulfur
gasoline
since
the
flexibility
afforded
by
the
GPA
could
be
diminished.
Otherwise,
those
who
produce
less
than
50
percent
of
their
gasoline
for
the
GPA
(
which
is
the
majority
of
those
refiners
which
market
in
both
locations),
must
meet
the
corporate
pool
average
standards
in
2004
and
2005
for
their
entire
gasoline
pool.
Thus,
such
refiners
must
compensate
for
the
higher
sulfur
levels
of
their
GPA
gasoline
by
producing
non­
GPA
gasoline
that
averages
sufficiently
less
than
120
ppm
in
2004
and
90
ppm
in
2005
to
ensure
that
their
corporate
average
meets
the
corporate
pool
average
standard
for
each
year.
Importers
who
provide
less
than
50
percent
of
their
gasoline
to
the
GPA
must
also
include
their
GPA
gasoline
in
their
overall
corporate
pool
average
calculation.
Alternatively,
the
refiner
can
use
sulfur
allotments
to
meet
the
corporate
pool
average
standard
for
its
total
gasoline
production,
including
gasoline
sold
inside
and
outside
the
phase­
in
area.
Since
most
refiners
which
sell
gasoline
both
in
and
outside
the
GPA
sell
the
vast
majority
outside
the
GPA
the
additional
flexibility
provided
for
gasoline
sold
in
the
phase­
in
area
should
not
significantly
affect
compliance
with
the
corporate
pool
average
standard
for
a
refiner's
nationwide
production.

vi.
How
Do
Refiners/
Importers
Apply
for
the
Geographic
Phase­
in
Area
Standards?
As
part
of
program
administration,
we
are
requiring
that
any
refiner/
importer
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84
If
a
refinery
has
a
baseline
sulfur
level
higher
than
120
ppm
(
as
described
below
in
IV.
C.
1.
c.
v.),
then
credits
are
generated
from
the
baseline
to
120
ppm
and
allotments
from
120
ppm
to
the
new
sulfur
level
(
and
discounted
20
percent
if
applicable).
expecting
to
sell
gasoline
in
this
area
during
the
phase­
in
period
(
2004
 
2006)
make
application
to
EPA
in
writing
by
December
31,
2000.
This
application
would
provide
the
minimum
information
needed
by
EPA
to
characterize
a
refiner's/
importer's
participation,
establish
the
applicable
standards
if
the
1997
 
98
average
is
less
than
150
ppm,
and
establish
our
enforcement
program
for
refiners/
importers
in
this
area
for
gasoline
entering
or
leaving
the
area.
Participation
on
the
part
of
any
refinery
or
importer
is
voluntary.
At
any
time,
a
refiner/
importer
who
previously
opted
into
the
GPA
program
may
produce
gasoline
meeting
the
standards
in
Table
IV.
C
 
1
in
the
GPA,
or
may
cease
producing
gasoline
for
the
GPA
(
and
produce
gasoline
meeting
the
standards
in
Table
IV.
C
 
1
solely
outside
of
the
GPA).
Such
a
decision
would
affect
the
averages/
caps
which
apply
to
the
gasoline
sold
in
the
GPA.
Gasoline
sold
in
the
GPA
that
is
not
designated
as
GPA
gasoline
is
considered
Non­
GPA
gasoline
for
purposes
of
compliance
with
the
corporate
pool
average
requirement
and
refinery
average
requirements.

vii.
How
Will
EPA
Establish
the
GPA
in
Adjacent
States?
EPA
is
establishing
a
geographic
phase­
in
area
that
encompasses
eight
states
(
MT,
ND,
ID
WY,
CO,
UT,
NM,
AK).
In
addition,
counties
and
tribal
lands
in
states
immediately
adjacent
to
these
which
received
a
majority
of
their
gasoline
in
calendar
year
1999
from
a
refinery(
ies)
located
within
the
GPA
will
be
covered
by
the
phase­
in
area
provisions.
The
criteria
to
identify
these
additional
counties
and
tribal
areas
are
designed
to
identify
areas
whose
gasoline
distribution
system
is
closely
tied
to
the
eight
states
such
that
they
share
the
same
characteristics
of
gasoline
supply.
Therefore,
dispensing
outlets
(
retail
and
private)
in
such
areas
will
continue
to
have
access
to
that
gasoline
in
most
cases.
Distribution
and
production
of
gasoline
in
these
additional
areas
will
be
subject
to
the
same
standards
and
requirements
as
gasoline
in
the
eight
states
identified
above.
At
this
time,
EPA
is
not
able
to
identify
all
the
counties
and
tribal
lands
that
would
be
included
in
the
phase
in
area.
In
light
of
the
air
quality
benefits
of
introducing
low
sulfur
gasoline
as
quickly
as
possible,
we
want
to
ensure
that
the
phase­
in
area
is
accurately
identified
and
that
including
any
areas
outside
these
eight
states
will
not
have
a
significant
adverse
air
quality
impact
on
any
counties
or
tribal
lands
that
are
included
in
the
phase­
in
area.
EPA
will
be
working
with
interested
stakeholders
will
to
conduct
an
assessment
to
determine
which
counties/
tribal
lands
within
the
immediately
adjacent
states
meet
the
criteria
as
described
in
the
regulatory
text.
EPA
expects
to
complete
action
on
this
assessment
by
December
31,
2000.
c.
How
Does
the
Sulfur
Averaging,
Banking,
and
Trading
Program
Work?
The
sulfur
ABT
program
provides
flexibility
to
refiners
by
giving
them
more
time
to
bring
all
of
their
refineries
into
compliance
with
the
corporate
averages
in
2004
and
2005
as
well
as
the
30
ppm
individual
refinery
standard
in
2005
and
beyond.
ABT
will
provide
the
opportunity
for
reduced
costs
by
allowing
the
industry
the
flexibility
to
average
sulfur
levels
among
different
refineries,
between
companies,
and
across
time.
With
ABT,
some
refineries
will
be
able
to
delay
installation
of
desulfurization
equipment,
because
other
refineries
will
generate
sulfur
allotments
and
credits
through
early
sulfur
reductions.
In
this
way,
installation
of
desulfurization
technology
will
be
spread
out
over
a
longer
period
of
time
than
would
be
the
case
without
ABT.
Since,
with
the
banking
provisions,
reductions
in
annual
average
sulfur
levels
which
occur
as
early
as
2000
have
a
value
during
program
implementation,
the
ABT
program
provides
an
incentive
for
technological
innovation
and
the
early
implementation
of
refining
technology.
The
ABT
program
also
provides
the
opportunity
for
meaningful
emissions
reductions
in
2004
because
it
allows
the
Tier
2
standards
to
be
implemented
earlier
than
might
otherwise
have
been
possible
(
if
the
Tier
2
standards
were
delayed
to
provide
the
refining
industry
more
time
to
comply),
and
because
it
provides
direct
environmental
benefits
even
in
the
years
before
Tier
2
vehicles
are
introduced.
One
benefit
is
related
to
the
effect
of
gasoline
sulfur
on
exhaust
emissions,
as
discussed
in
the
Regulatory
Impact
Analysis.
This
benefit
will
result
both
from
older
vehicles
on
the
road
(
Tier
0
and
Tier
1
emission
control
technologies,
which
have
some
degree
of
sulfur
sensitivity
and
will
benefit
from
sulfur
reductions
which
occur
prior
to
implementation
of
the
refiner
and
refinery
standards
summarized
in
Table
IV.
C
 
1)
and
from
NLEV
vehicles
(
which
are
more
sensitive
to
sulfur
than
earlier
technologies)
which
will
continue
to
be
sold
while
Tier
2
vehicles
are
phasedin
Another
environmental
benefit
is
the
reduction
in
atmospheric
sulfur
loads
as
a
direct
result
of
reduced
gasoline
sulfur
levels,
leading
to
reduced
emissions
of
sulfur­
containing
compounds
from
motor
vehicles.
The
following
sections
explain
the
requirements
for
participation
in
the
sulfur
ABT
program
for
allotments
and
credits.

Sulfur
Allotment
Program
i.
Generating
Allotments
Prior
to
2004
To
provide
additional
incentive
for
early
sulfur
reductions
and
to
enhance
the
overall
feasibility
and
cost
effectiveness
of
the
gasoline
sulfur
control
program,
we
are
implementing
a
sulfur
allotment
program.
While
few
commenters
supported
the
sulfur
allotment
concept
in
the
NPRM,
a
number
suggested
that
greater
flexibility
for
compliance
in
the
early
years
would
be
helpful.
The
program
described
below
is
in
addition
to
the
early
sulfur
credit
program
described
elsewhere.
For
2003,
refineries
can
generate
sulfur
allotments
(
in
ppm­
gallons)
by
producing
gasoline
containing
less
than
60
ppm
sulfur
on
an
annual­
average
basis.
This
60
ppm
``
trigger''
was
chosen
to
reward
refineries
who
demonstrate
compliance
using
technology
designed
to
meet
the
30
ppm
standard
before
2005.
Once
this
60
ppm
trigger
is
reached,
allotments
will
be
calculated
based
on
the
amount
of
reduction
from
120
ppm.
84
However,
these
allotments
may
be
discounted
depending
on
the
actual
sulfur
level.
If
a
refinery
fully
demonstrates
compliance
by
producing
gasoline
with
an
annual
average
sulfur
level
of
0
to
30
ppm,
the
allotments
retain
their
full
value
 
they
are
not
discounted
at
all.
For
actual
sulfur
levels
of
31
 
60
ppm,
which
are
indicative
of
a
partial
demonstration
of
compliance
with
the
ultimate
low
sulfur
standard,
the
allotments
are
discounted
20
percent.
For
example,
consider
a
refinery
that
has
an
average
sulfur
level
of
50
ppm
at
the
end
of
2003.
That
refinery
would
have
generated
56
sulfur
allotments
[(
120
ppm
¥
50
ppm)
´
 
0.8
´
 
Volume
(
in
gallons)]
to
be
used
or
sold
in
2004.
If
that
same
refinery
instead
produced
fuel
with
an
average
sulfur
level
of
20
ppm
at
the
end
of
2003,
then
it
would
have
generated
100
sulfur
allotments
[(
120
ppm
¥
20
ppm)
´
volume
(
in
gallons)]
to
be
used
or
sold
in
2004.

ii.
Generating
Allotments
in
2004
and
2005
For
2004
and
2005,
refiners
or
importers
(
but
not
individual
refineries)

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85
Allotments
used
for
GPA
gasoline
compliance
may
be
retained
until
February
2007.
Allotments
used
for
small
refiner
gasoline
compliance
may
be
retained
until
February
2008.
can
generate
allotments
by
producing
gasoline
that
has
a
sulfur
level
below
the
annual
corporate
average
standard
(
120
ppm
and
90
ppm).
The
number
of
allotments
generated
is
equal
to
the
difference
between
120
ppm
(
or
90
ppm)
and
the
corporate
average
sulfur
level.
Allotments
generated
by
refiners
or
importers
in
2004
and
2005
are
not
discounted,
unlike
some
of
those
that
are
generated
by
refineries
in
2003.
Refiners
that
sell
fuel
to
the
GPA
may
also
generate
allotments
by
producing
fuel
that
is
cleaner
than
the
corporate
average
standards,
regardless
of
the
volume
of
fuel
that
is
produced
for
use
in
the
GPA.
On
the
other
hand,
as
explained
in
Section
IV.
C.
2.,
gasoline
produced
by
small
refiners
who
are
complying
with
the
standards
in
Table
IV.
C.
 
3
cannot
be
used
to
generate
sulfur
allotments
since
these
producers
are
not
required
to
meet
a
corporate
average
standard.

iii.
Using
Allotments
in
2004
and
2005
Refiners
and
importers
can
use
sulfur
allotments
that
they
generate
or
purchase
from
other
refiners/
importers
to
demonstrate
compliance
with
the
120
ppm
corporate
standard
in
2004
and
the
90
ppm
corporate
standard
in
2005.
Each
refiner's
sulfur
allotment
for
2004
and
2005
will
be
calculated
based
on
the
total
volume
of
gasoline
imported
and
produced
at
their
refineries
(
or
only
imported
gasoline
in
the
case
of
companies
that
only
import
gasoline)
and
the
corporate
pool
average
standard
for
that
year.
In
anticipation
of
exceeding
or
falling
short
of
the
standard
for
any
one
year,
companies
may
trade
sulfur
allotments,
either
in
the
compliance
year
or
earlier
(
as
early
as
the
year
2000).
For
example,
a
refiner
that
expects
to
produce
a
total
of
2.5
billion
gallons
of
gasoline
in
2004
has
a
sulfur
allotment
of
300
billion
ppmgallons
(
120
ppm
´
 
2.5
billion
gallons).
If
its
corporate
pool
average
is
actually
200
ppm
in
2004,
it
will
exceed
its
2004
allotment
by
200
billion
ppm­
gallons
(
since
200
ppm
´
 
2.5
billion
gallons
=
500
ppm­
gallons),
and
must
obtain
sulfur
allotments
from
another
refiner
to
offset
this
increase.
Similarly,
if
this
refiner
expects
to
average
80
ppm
in
2004,
it
has
an
excess
of
100
billion
ppm­
gallons
to
trade
to
other
refiners.
However,
if
a
refiner
trades
away
part
of
its
allotment,
the
refiner
must
still
comply
with
the
corporate
standard,
just
as
another
refiner
has
to
do
if
it
does
not
trade
allotments.
In
2005,
refiners
must
comply
both
with
the
corporate
average
standard
and
the
refinery
average
standard
for
each
of
their
refineries.
Once
a
refiner
has
established
compliance
with
the
90
ppm
corporate
average
standard
(
with
or
without
the
use
of
allotments),
each
of
its
refineries
can
then
establish
compliance
with
the
30
ppm
refinery
standard
through
actual
production
of
30
ppm
gasoline
or
through
the
use
of
excess
allotments
and/
or
sulfur
credits.
Once
compliance
with
the
90
ppm
corporate
pool
average
standard
is
established,
the
refiner
would
use
90
ppm
as
each
of
its
refineries
actual
sulfur
level,
then
apply
an
appropriate
number
of
credits
or
allotments
to
meet
the
30
ppm
refinery
average
standard
for
each
refinery.
(
See
discussion
below
for
an
explanation
of
how
a
refiner
can
use
both
sulfur
ABT
credits
and
allotments
to
comply
with
the
refinery
average
standard
in
2005.)

iv.
How
Long
Do
Allotments
Last?

We
expect
most
refiners
will
trade
sulfur
allotments
well
before
the
end
of
each
compliance
year
so
they
will
have
the
needed
certainty
of
compliance
with
the
corporate
average
standard.
Our
program
allows
such
trades
to
occur
at
any
time
during
the
year,
although
the
refiner
is
liable
for
any
shortfall
in
compliance
resulting
from
having
traded
away
too
many
allotments.
A
refiner
may
also
carry
over
excess
2004
allotments
(
those
generated
in
2003
or
2004)
for
compliance
with
the
90
ppm
corporate
standard
for
2005.
However,
those
allotments
must
be
discounted
by
50
percent.
This
50
percent
discount
factor
is
needed
to
equalize
the
emission
impact
of
sulfur
control
between
2004
and
2005.
In
2005,
there
is
an
extra
model
year
of
NLEV/
Tier
2
vehicles
relative
to
2004.
In
addition,
the
NLEV/
Tier
2
fleet
is
one
year
older
in
2005
than
2004.
This
increased
age
translates
into
higher
vehicle
emissions
due
to
general
deterioration.
Since
sulfur
acts
on
a
percentage
basis,
the
absolute
emission
increase
due
to
sulfur
impacts
on
vehicle
emission
control
systems
in
2005
is
higher
than
in
2004.
As
discussed
below
in
section
IV.
C.
1.
c.
x,
a
refiner
or
importer
may
convert
allotments
into
credits
in
2004
and
2005
for
compliance
with
the
refinery
average
standards
in
2005
and
beyond.
All
transactions
between
refiners
involving
sulfur
allotments
must
conclude
by
the
last
day
of
February
in
the
calendar
year
following
the
compliance
year
in
which
the
allotments
are
to
be
used.
85
Sulfur
Credit
Program
v.
Establishing
Individual
Refinery
Sulfur
Baselines
for
Credit
Generation
Purposes
The
purpose
of
establishing
a
sulfur
baseline
for
each
refinery
is
to
provide
a
starting
point
for
determining
sulfur
credits
for
reductions
in
gasoline
sulfur
levels.
We
proposed
that
refiners
would
have
to
establish
a
sulfur
baseline
for
each
individual
refinery,
by
submitting
to
us
data
establishing
their
annual
average
gasoline
sulfur
level
based
on
the
average
of
their
1997
and
1998
operations.
We
would
review
the
data
and,
barring
any
discrepancies,
approve
a
sulfur
baseline
for
each
refinery.
We
received
comments
supporting
this
option
as
well
as
comments
stating
that
the
time
involved
for
this
application
and
approval
process
would
delay
the
refiner's
ability
to
plan
for
and
begin
construction
of
gasoline
desulfurization
technology.
Refiners
would
want
the
certainty
of
an
approved
sulfur
baseline
before
making
investment
decisions,
and
thus
would
wait
to
obtain
EPA's
approval
before
proceeding.
We
also
received
comments
about
what
year(
s)
would
be
most
appropriate
to
use
to
establish
a
sulfur
baseline.
Some
of
these
comments
argued
for
the
use
of
existing,
approved
1990
baselines,
or
some
adjusted
version
of
1990
baselines,
rather
than
new
data,
to
expedite
the
process
of
establishing
sulfur
baselines.
We
also
proposed
a
different
sulfur
baseline
for
reformulated
gasoline
(
RFG)
produced
in
the
summer
for
those
refineries
which
produce
reformulated
gasoline.
While
the
conventional
gasoline
sulfur
baseline
(
and
the
baseline
for
winter
RFG)
was
proposed
to
be
tied
to
current
sulfur
levels,
the
baseline
for
summer
reformulated
gasoline
was
proposed
to
be
150
ppm,
the
approximate
level
we
expect
summer
reformulated
gasoline
to
contain
in
2000
and
beyond
because
of
the
Phase
II
reformulated
gasoline
requirements,
which
take
effect
in
2000.
We
argued
that
winter
RFG
did
not
have
any
de
facto
sulfur
restrictions,
and
thus
winter
RFG
should
be
counted
with
conventional
gasoline
for
the
purpose
of
credit
generation
relative
to
the
refinery's
conventional
gasoline
sulfur
baseline.
Since
the
proposal,
we
have
learned
that
overall
gasoline
sulfur
levels
(
conventional
plus
reformulated)
are
significantly
lower
than
they
were
in
1990.
As
explained
in
the
Regulatory
Impact
Analysis,
national
average
sulfur
levels
when
both
conventional
and
reformulated
gasolines
are
considered
dropped
to
306
ppm
in
1997
and
268
ppm
in
1998,
compared
to
the
1990
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86
Refiners
may,
however,
include
oxygen
added
downstream
of
the
refinery
when
determining
Continued
national
gasoline
sulfur
average
of
339
ppm,
decreases
of
10
and
21
percent,
respectively.
The
substantial
drop
between
1997
and
1998
seems
to
be
related
to
the
mandatory
use
of
the
Complex
Model,
which
began
in
1998
and
had
implications
for
both
reformulated
and
conventional
gasoline
compliance.
Thus,
we
have
become
convinced
that
the
most
appropriate
sulfur
baseline
would
be
based
on
data
which
establish
current
sulfur
levels,
not
on
data
which
are
nearly
ten
years
old.
We
considered
reducing
all
1990
baselines
by
21
percent
to
reflect
the
national
average
decrease
since
1990,
but
determined
that
this
approach
would
be
inappropriate
because
some
refiners
have
reduced
levels
substantially
more
than
10
 
21
percent
since
1990,
and
would
thus
be
eligible
to
generate
a
very
large
number
of
credits
for
reductions
that
have
already
been
made.
Furthermore,
as
we
proposed,
and
some
commenters
argued,
we
have
concluded
that
averaging
data
from
two
years
is
the
most
appropriate
approach,
because
averaging
over
two
years
will
help
to
account
for
any
unusual
variations
in
operations
that
may
have
occurred
at
individual
refineries
in
either
of
these
years.
We
concluded
that
averaging
data
from
1998
and
1999
is
not
feasible,
because
the
1999
data
will
not
be
fully
available
to
EPA
until
after
the
reporting
deadline
of
May
2000.
Hence,
we
believe
it
is
preferable
to
use
1997
and
1998
data,
rather
than
delaying
the
time
baselines
are
established.
We
do
not
expect
significant
changes
in
1999
sulfur
levels
relative
to
1998
levels,
so
we
believe
the
use
of
the
1997
 
1998
data
provides
a
reasonable
representation
of
current
sulfur
levels.
We
have
also
learned
that
summer
reformulated
gasoline
is
already
averaging
close
to
our
expected
sulfur
level
for
the
year
2000.
Winter
RFG
does
not
show
this
same
decrease,
presumably
because
refiners
are
shifting
high
sulfur
blendstocks
out
of
RFG
in
the
summer
but
back
into
RFG
in
the
winter
to
maintain
compliance
with
the
conventional
gasoline
antidumping
requirements.
Thus,
it
appears
that
if
we
held
summer
RFG
to
a
lower
baseline,
as
proposed,
we
would
have
to
raise
the
winter
RFG
baseline
commensurately
to
reflect
actual
refinery
operations.
The
net
environmental
impact
would
be
no
different
than
if
we
had
a
single
sulfur
baseline
applying
to
all
RFG,
or
to
all
gasoline
produced
at
the
refinery,
since
the
annual
pool
sulfur
levels
are
constant
even
while
there
may
be
seasonal
variations.
Therefore,
we
are
not
finalizing
a
separate
sulfur
baseline
for
summer
RFG,
but
rather
combined
conventional
and
reformulated
gasoline
sulfur
levels.
Having
considered
the
comments
we
received
and
the
new
data
available
to
us,
we
have
concluded
that
refiner
sulfur
baselines
should
be
established
from
1997
and
1998
operating
data.
Hence,
we
are
requiring
refiners
which
wish
to
generate
sulfur
credits
prior
to
2004
to
establish
a
1997
 
98
sulfur
baseline
for
each
refinery
at
which
they
intend
to
generate
credits.
We
believe
the
process
we
have
defined
will
minimize
the
burden
to
the
industry
and
the
time
it
will
take
for
us
to
review
and
approve
the
sulfur
baselines.
Specifically,
refiners
which
plan
to
generate
sulfur
credits
must
submit
to
us
information
which
establishes
the
batch
report
numbers,
sulfur
levels,
and
volumes
of
each
batch
of
gasoline
produced
in
1997
and
1998,
as
well
as
the
annual
average
sulfur
level
calculated
from
these
data.
Within
60
days,
we
will
review
the
application
and
notify
the
refiner
of
approval
or
of
any
discrepancies
we
find
in
the
data
submitted.
If
we
do
not
respond
within
60
days,
the
baseline
should
be
considered
to
be
approved.
While
we
expect
most
refiners
will
apply
for
a
sulfur
baseline
in
the
near
future
(
to
maximize
the
time
that
they
can
generate
credits
before
2004),
there
is
no
cut­
off
date
for
applying
for
a
sulfur
baseline.
However,
if
the
refiner
wishes
to
generate
credits
for
a
given
calendar
year,
we
must
receive
his
baseline
application
no
later
than
September
30
of
that
year
to
provide
us
adequate
time
to
review
the
baseline
prior
to
the
end
of
the
year
(
at
which
time
any
credits
generated
in
that
year
would
be
assessed
and
reported
by
the
refiner).
We
believe
that
this
approach
for
establishing
sulfur
baselines
meets
our
goal
of
providing
a
workable
ABT
program
that
refiners
can
take
advantage
beginning
in
the
year
2000,
without
sacrificing
the
environmental
benefits
of
the
sulfur
standards.
Foreign
refiners
which
have
already
established
an
individual
refinery
baseline
with
us,
and
thus
have
submitted
reports
on
all
batches
of
gasoline
sent
to
the
U.
S.
in
1997
and
1998,
may
follow
this
same
procedure
if
they
wish
to
generate
sulfur
credits
prior
to
2004.
Foreign
refiners
which
have
not
reported
1997
 
98
gasoline
qualities
to
us
must
follow
an
alternate
approach.
Specifically,
they
must
follow
the
general
requirements
of
our
protocol
for
establishing
individual
refinery
baselines
(
see
§
§
80.91
 
94
and
also
§
80.410)
by
providing
sufficient
data
to
establish
the
volume
of
gasoline
imported
to
the
U.
S.
from
each
refinery
in
1997
 
98
and
the
annual
average
sulfur
level
of
that
gasoline.
If
the
test
method
used
to
identify
the
sulfur
level
differs
from
the
one
specified
in
today's
action,
the
refiner
must
provide
sufficient
information
about
the
test
method
to
allow
us
to
evaluate
the
appropriateness
of
the
alternative.
Because
this
information
will
be
new
to
us,
we
may
require
more
time
to
review
and
approve
their
1997
 
98
sulfur
baseline.
But,
consistent
with
our
previous
handling
of
foreign
refiner
submissions,
once
we
have
determined
that
the
submission
is
complete
and
the
protocol
has
been
followed,
they
may
use
the
baseline
while
waiting
for
our
formal
approval.
However,
the
refiner
will
be
held
to
the
baseline
that
is
ultimately
approved.
A
foreign
refiner
who
is
unable
to
generate
adequate
data
to
establish
a
1997
 
98
sulfur
baseline
will
not
be
permitted
to
generate
sulfur
credits
in
2000
 
2003.
Small
refiners
that
plan
to
request
small
refiner
standards
(
as
provided
in
Section
IV.
C.
2
below)
which
also
want
to
generate
early
sulfur
ABT
credits
will
use
the
same
data
required
to
define
their
small
refiner
baseline
to
determine
their
baseline
for
the
ABT
program.
In
other
words,
if
a
refiner
becomes
a
small
refiner
under
our
definition
and
procedures,
credits
generated
by
that
refinery
would
be
calculated
relative
to
the
refinery's
actual
1997
 
98
sulfur
average.
The
trigger
for
generating
sulfur
credits
under
the
ABT
program
(
discussed
in
the
next
section)
would
still
apply
for
small
refiners
generating
credits
prior
to
2004
relative
to
their
1997
 
98
sulfur
average.
In
addition,
the
applicable
interim
sulfur
standard
for
small
refiners
who
generate
credits
through
sulfur
reductions
prior
to
2004
will
be
calculated
based
on
the
reduced
sulfur
level,
rather
than
the
1997
 
98
baseline
level,
as
explained
below
in
Section
IV.
C.
2.
Importers
and
gasoline
blenders
will
not
be
assigned
a
sulfur
baseline
because
they
are
not
eligible
to
generate
early
credits
(
prior
to
2004)
under
the
ABT
program.
This
includes
gasoline
refiners
who
are
also
importers;
such
parties
cannot
generate
sulfur
credits
prior
to
2004
on
the
basis
of
their
imported
gasoline
but
may
only
generate
credits
based
on
the
gasoline
produced
by
their
refinery(
ies).
It
also
includes
oxygenate
blenders,
who,
as
discussed
in
Section
VI
below,
are
not
subject
to
the
sulfur
standards
but
are
responsible
for
compliance
with
the
downstream
provisions.
86
For
importers
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compliance
with
the
sulfur
standards
and
the
provisions
of
the
ABT
program.
This
is
consistent
with
existing
provisions
for
reformulated
and
conventional
gasolines.
87
As
explained
in
Section
IV.
C.
1.
c.
ix,
credits
generated
before
2004
expire
in
2006,
except
for
small
refiners
and
credits
used
for
GPA
gasoline
compliance.
and
most
gasoline
blenders,
this
represents
a
change
from
our
proposal,
but
one
we
believe
is
appropriate
and
necessary
to
ensure
that
the
environmental
benefits
of
the
ABT
program
are
maintained.
The
ABT
program
allows
the
refining
industry
to
trade
off
early
sulfur
reductions
(
2000
 
2003)
for
slight
delays
in
complying
with
the
30
ppm
refinery
average
standard
in
2005
 
2006.87
We
have
designed
the
ABT
program
to
ensure
that
sufficient
credits
can
be
generated
by
refiners
(
domestic
or
foreign)
to
enable
a
smooth
transition
to
the
30
ppm
standard.
Importers
and
blenders
do
not
have
the
same
need
for
the
ABT
program
that
refiners
have
because
they
will
not
have
to
make
the
same
level
of
investment
in
desulfurization
technology
and
thus
do
not
need
credits
generated
before
2004
to
help
their
transition
to
the
30
ppm
average
standard
after
2004.
Furthermore,
credits
could
be
generated
by
importers
without
the
overall
pool
of
imported
gasoline
becoming
incrementally
cleaner.
For
example,
say
that
Importer
A
had
a
1997/
98
sulfur
baseline
of
600
ppm
and
Importer
B
had
a
sulfur
baseline
of
100
ppm.
In
2002,
Importer
B
could
transfer/
sell
its
100
ppm
gasoline
to
Importer
A
prior
to
unloading
the
fuel
at
the
port
of
entry.
Once
the
import
transaction
was
completed,
Importer
A
will
have
generated
500
ppm
(
multiplied
by
the
fuel
volume)
credits
without
any
fuel
becoming
incrementally
cleaner.
We
are
concerned
that
if
importers
and
blenders
were
allowed
to
generate
early
credits,
they
would
generate
far
more
credits
than
needed
to
make
the
ABT
program
work,
without
necessarily
achieving
early
environmental
benefits
 
credits
which
either
importers
or
refiners
would
be
able
to
use
to
delay
compliance
with
the
30
ppm
standard
in
2005
and
beyond.
This
would
delay
the
environmental
benefits
of
our
program
by
prolonging
the
industry's
transition
to
the
30
ppm
standard.
In
the
proposal,
we
also
discussed
the
need
for
a
baseline
gasoline
volume
as
well
as
a
baseline
sulfur
level.
This
stemmed
from
the
design
of
our
current
conventional
gasoline
anti­
dumping
program,
which
requires
a
baseline
volume
so
that
we
can
confirm
that
conventional
gasoline
is
no
dirtier
now
than
it
was
in
1990.
However,
for
the
gasoline
sulfur
ABT
program,
we
have
determined
that
there
is
no
need
to
restrict
refineries'
sulfur
baselines
(
against
which
they
can
generate
sulfur
credits)
to
a
specific
volume
of
gasoline.
The
purpose
of
the
ABT
program
is
to
encourage
early
sulfur
reductions
by
some
refineries,
and
we
see
no
need
to
limit
the
amount
of
credits
such
a
refinery
can
generate
on
the
basis
of
a
historic
volume
of
gasoline
production.
In
fact,
additional
volumes
of
cleaner
gasoline
should
achieve
additional
early
environmental
benefits.

vi.
Generating
Sulfur
Credits
Prior
to
2004
In
our
proposal,
we
discussed
a
credit
generation
trigger
of
150
ppm
for
early
credit
generation
(
2000
 
2003),
arguing
that
we
wanted
to
encourage
investment
in
desulfurization
technologies
that
refineries
ultimately
need
to
get
to
a
30
ppm
average.
Many
comments
we
received
argued
that
the
150
ppm
trigger
was
too
restrictive,
requiring
capital
investments
that
most
refiners
could
not
make
earlier
than
2004
(
due
to
construction
limitations,
among
other
reasons).
Thus,
few
credits
would
be
generated,
and
without
sufficient
certainty
that
credits
would
be
generated,
refiners
would
not
be
able
to
count
on
the
flexibility
that
the
ABT
program
was
intended
to
provide
when
planning
their
compliance
strategies
for
2004
and
beyond.
Having
considered
these
comments
and
reanalyzed
the
ability
of
the
industry
to
comply
with
the
standards
in
2004
(
as
we
discussed
above
at
the
introduction
to
section
IV.
C.
1),
we
have
concluded
that
the
proposed
150
ppm
trigger
would
inappropriately
limit
the
credits
available.
While
we
want
to
encourage
refiners
to
make
reductions
early,
we
do
not
want
to
preclude
refiners
from
making
less
capital
intensive
sulfur
reductions
in
the
short
term
while
they
prepare
to
reach
the
30
ppm
average
in
the
long
term.
At
the
same
time,
we
believe
that
a
refinery
should
be
required
to
demonstrate
that
the
sulfur
reduction
was
real
and
not
just
a
consequence
of
national
variations
from
year
to
year.
Hence,
we
are
establishing
a
trigger
which
we
believe
represents
a
sulfur
reduction
that
requires
action
above
and
beyond
simple
annual
or
even
seasonal
fluctuations
in
crude
oil
sulfur
level
or
product
slate
variations
that
could
have
a
very
small
impact
on
annual
sulfur
average.
During
the
period
2000
 
2003,
credits
can
be
generated
annually
by
any
refinery
that
produces
gasoline
averaging
at
least
10
percent
lower
than
that
refinery's
baseline
sulfur
level.
In
other
words,
to
generate
credits,
the
refinery's
annual
average
sulfur
level
for
all
of
its
gasoline
on
average
must
be
0.9
´
 
(
baseline
sulfur
level).
Once
this
``
trigger''
is
reached,
credits
will
be
calculated
based
on
the
amount
of
reduction
from
the
refinery's
sulfur
baseline.
For
example,
if
in
2002
a
refinery
reduced
its
annual
average
sulfur
level
from
a
baseline
of
450
ppm
to
150
ppm
(
well
below
the
trigger
of
0.9
´
450=
405
ppm),
its
sulfur
credits
will
be
determined
based
on
the
difference
in
annual
sulfur
level
(
450
 
150=
300
ppm)
multiplied
by
the
volume
of
gasoline
produced
in
2002.
Similarly,
foreign
refineries
with
an
individual
sulfur
baseline
can
generate
credits
in
these
years
as
long
as
the
annual
average
sulfur
level
of
the
gasoline
imported
to
the
U.
S.
from
that
refinery
is
lower
than
90
percent
of
the
baseline
sulfur
level.
Although
by
adopting
a
more
modest
trigger
for
credit
generation
we
are
enabling
more
credits
to
be
generated,
the
environment
will
still
benefit
from
our
program.
Although
the
use
of
a
more
modest
trigger
keyed
to
each
refinery's
sulfur
baseline
may
allow
more
credits
to
be
generated,
we
believe
this
will
only
occur
because
the
credit
program
is
providing
incentives
to
refineries
to
reduce
sulfur
levels
earlier
than
they
would
have
otherwise,
particularly
with
a
strict
150
ppm
trigger.
Thus,
more
lower
sulfur
gasoline
will
be
in
the
marketplace
prior
to
2004
than
would
otherwise
have
occurred,
given
our
understanding
of
the
state
of
desulfurization
technologies
and
the
likely
pattern
of
investments
by
the
industry.
With
our
corporate
average
and
cap
standards,
sulfur
levels
will
continue
to
decrease
after
2004,
even
if
individual
refineries
take
an
added
year
or
two
to
meet
the
30
ppm
standard.
We
had
also
proposed
that
credit
generation
prior
to
2004
would
be
different
for
reformulated
gasoline
than
for
conventional
gasoline,
because
reformulated
gasoline's
assigned
sulfur
baseline
was
proposed
to
be
150
ppm.
Thus,
we
proposed
that
credits
could
only
be
generated
from
reformulated
gasoline
if
the
sulfur
level
averaged
below
150
ppm,
and
that
the
credits
would
be
calculated
based
on
the
difference
between
150
ppm
and
the
new,
lower
average.
Since
we
have
not
finalized
a
separate
baseline
for
reformulated
gasolines,
we
are
not
adopting
a
different
process
for
generating
credits
from
reformulated
gasoline.
All
gasoline
produced
at
the
refinery
in
2000
(
and
beyond)
is
considered
in
calculating
the
annual
average
sulfur
level,
compliance
with
the
90
percent
trigger,
and
the
sulfur
credits
earned,
if
any.

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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
88
Excluding
California.
Several
states
have
adopted
or
are
considering
adopting
gasoline
sulfur
control
programs
(
see
discussion
at
section
IV.
C.
1.
d
below
on
state
sulfur
programs).
While
we
had
proposed
to
exclude
this
gasoline
from
sulfur
credit
generation,
we
have
reconsidered
our
position.
Gasoline
produced
in
response
to
state
88
requirements
can
be
included
in
the
refinery's
calculation
of
sulfur
credits
generated
in
a
given
year.
However,
this
gasoline
will
be
included
in
the
total
volume
of
gasoline
produced
by
that
refinery,
requiring
the
annual
average
sulfur
level
for
total
gasoline
produced
at
that
refinery
to
exceed
the
trigger
specified
above
to
generate
any
credits
at
all.

vii.
Generating
Sulfur
Credits
in
2004
and
Beyond
In
2004
and
beyond,
refineries,
blenders,
and
importers
can
generate
credits,
but
only
if
the
actual
annual
sulfur
level
of
all
gasoline
produced
or
imported
averages
below
30
ppm,
and
only
for
the
difference
between
the
standard
and
the
actual
annual
sulfur
average.
(
For
example,
a
refinery
producing
gasoline
in
2005
that
averages
25
ppm
can
generate
30
 
25=
5
ppm
sulfur
credits
on
the
total
volume
of
gasoline
produced
at
that
refinery.)
However,
since
in
2004
and
beyond
importers
are
the
regulated
party
responsible
for
ensuring
that
imported
gasoline
meets
the
sulfur
standards,
foreign
gasoline
would
in
effect
generate
sulfur
credits
through
the
importer
beginning
in
2004.
Foreign
refineries
which
want
to
send
gasoline
containing
less
than
30
ppm
sulfur
to
the
U.
S.
would
still
benefit
from
doing
so
by
making
appropriate
arrangements
with
importers,
which
are
subject
to
all
of
our
standards.

viii.
Using
Sulfur
Credits
Refineries,
blenders,
and
importers
can
use
sulfur
credits
to
demonstrate
compliance
with
the
30
ppm
annual
average
refinery
standard
in
2005
and
beyond,
if
they
are
unable
to
meet
the
standard
with
actual
gasoline
production.
During
2005
and
2006
only,
refineries
may
use
credits
banked
by
that
refinery
in
2000
 
2003
as
a
result
of
early
sulfur
reductions,
or
credits
purchased
from
other
refineries
which
have
banked
early
sulfur
credits.
Blenders
and
importers
can
purchase
credits
from
refiners
(
including
any
foreign
refiners
which
generated
early
credits),
or
use
credits
they
generated
in
2004
and
beyond.
All
transactions
will
have
to
be
concluded
by
the
last
day
of
February
after
the
close
of
the
annual
compliance
period
(
2005,
2006,
etc.).
As
discussed
above,
2005
is
the
only
year
when
averaging
and
trading
against
the
corporate
average
and
averaging,
banking,
and
trading
against
the
refinery
average
are
both
allowed.
In
that
year,
sulfur
credits
may
only
be
used
against
the
30
ppm
standard
for
each
refinery
once
the
refiner
has
demonstrated
compliance
with
the
corporate
pool
average
standard.
The
refiner
must
meet
his
corporate
average
based
on
actual
sulfur
levels
or
through
a
trade
for
sulfur
allotments
if
it
falls
short
of
the
90
ppm
corporate
average
standard.
At
that
point,
each
of
his
refineries
is
evaluated
for
compliance
with
the
30
ppm
refinery
average
standard.
Those
refineries
that
are
not
producing
gasoline
averaging
30
ppm
sulfur
must
obtain
sulfur
credits
generated
in
2005
or
earlier
and/
or
sulfur
allotments
to
bring
the
refinery's
sulfur
average
from
the
actual
level
(
a
maximum
of
90
ppm
for
each
refinery,
since
by
meeting
the
corporate
average,
even
if
in
part
through
the
use
of
allotments,
each
refinery
in
the
company
will
be
considered
to
average
no
more
than
90
ppm)
down
to
30
ppm.
Refineries
or
importers
which
sell
some
or
all
of
their
gasoline
in
the
GPA
(
and
which
have
elected
to
participate
in
the
phase­
in)
may
also
use
sulfur
credits
to
meet
their
refinery
averages
in
2004
 
2006.
However,
because
this
gasoline
must
be
designated
for
sale
in
the
GPA,
they
must
account
separately
for
compliance
with
the
150
ppm
refinery
average
for
gasoline
sold
in
the
phase­
in
area
and
with
the
30
ppm
refinery
average
for
gasoline
sold
outside
of
that
area.
Thus,
in
2004,
such
refiners/
importers
may
use
sulfur
credits
to
establish
compliance
with
the
150
ppm
standard
for
gasoline
sold
in
the
phase­
in
area,
if
required.
In
2005
and
2006,
they
may
use
credits
to
meet
the
150
ppm
standard
for
gasoline
sold
in
the
area
and/
or
use
credits
to
meet
the
30
ppm
standard
for
gasoline
sold
outside
of
the
area.
As
explained
in
section
IV.
C.
1.
b.,
some
of
the
refiners
participating
in
the
GPA
are
exempt
from
the
corporate
average
standards,
but
may
use
either
sulfur
credits
or
sulfur
allotments
in
2004
 
2006
to
establish
compliance
with
the
150
ppm
refinery
average
standard.
Those
that
are
not
exempt
from
the
corporate
average
standards
may
use
sulfur
allotments
only
to
meet
the
corporate
average
standards.
For
such
refiners,
compliance
with
the
corporate
average
standard
will
be
measured
first
(
using
allotments
if
needed),
then
compliance
with
the
refinery
average
standard
(
using
credits
and/
or
allotments
as
needed)
in
the
same
manner
as
described
above
for
refiners
who
sell
all
of
their
gasoline
outside
of
the
GPA.
Foreign
refineries
are
not
required
to
comply
with
the
30
ppm
refinery
standard
in
2005
and
beyond;
instead,
compliance
for
foreign
gasoline
is
required
by
the
importer.
Sulfur
credits
generated
by
foreign
refineries
prior
to
2004
will
still
have
value,
since
these
refineries
can
sell
sulfur
credits
to
U.
S.
refineries,
blenders,
or
importers
who
need
credits
to
meet
the
standard
in
2005
or
beyond.
In
fact,
foreign
refiner's
credits
could
simply
be
transferred
to
the
importer
which
is
importing
that
refinery's
gasoline
into
the
U.
S.
For
example,
a
foreign
refiner
could
send
gasoline
exceeding
30
ppm
on
average
to
an
importer
and
transfer
the
appropriate
amount
of
sulfur
credits
it
generated
prior
to
2004
to
allow
the
importer
to
meet
the
30
ppm
standard.
Similarly,
after
2004
a
foreign
refiner
may
send
gasoline
containing
less
than
30
ppm
to
the
U.
S.
through
an
importer,
and
the
importer
would
benefit
from
generating
credits
(
and
presumably
would
include
the
value
of
these
credits
in
the
financial
transaction
with
the
foreign
refinery).
As
explained
in
Section
IV.
C.
3.
b.
above,
in
2005
no
batch
of
domestically
produced
or
imported
gasoline
can
exceed
300
ppm,
and
a
refiner's/
importer's
annual
corporate
pool
average
sulfur
level
cannot
exceed
90
ppm,
except
for
gasoline
sold
in
the
GPA
or
by
small
refiners
complying
with
the
standards
in
Table
IV.
C.
 
3.
In
2006
and
beyond,
sulfur
is
capped
at
80
ppm
and
there
is
no
longer
a
corporate
pool
average
standard.
These
standards
(
as
well
as
the
300
ppm
cap
and
corporate
pool
averages)
cannot
be
met
through
the
use
of
credits
generated
under
the
ABT
program.
As
described
above,
credits
may
only
be
applied
to
demonstrate
compliance
with
the
30
ppm
refinery
standard,
not
to
the
corporate
pool
average
or
the
cap.
Given
the
limitations
that
the
80
ppm
cap
places
on
sulfur
levels
in
2006
and
beyond,
we
do
not
expect
many
sulfur
credits
to
be
used
in
future
years
of
this
program
(
since,
even
with
the
use
of
credits,
no
gasoline
may
exceed
80
ppm
in
these
years).
We
allow
an
individual
refinery
that
does
not
meet
the
30
ppm
standard
in
a
particular
year
to
carry
forward
the
credit
debt
one
year.
Under
this
provision,
the
refinery
will
have
to
make
up
the
credit
deficit
and
come
into
compliance
with
the
30
ppm
standard
the
next
calendar
year,
or
face
penalties.
This
provision
will
in
no
way
absolve
the
refiner
from
having
to
meet
the
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
applicable
per­
gallon
cap
standard
or,
when
applicable,
the
corporate
average
standard.
This
provision
will
provide
some
relief
for
refiners
faced
with
an
unexpected
shutdown
or
that
otherwise
were
unable
to
obtain
sufficient
credits
to
meet
the
30
ppm
standard.
This
provision
is
only
available
through
2010.
After
that
time,
we
expect
many
refineries
to
be
able
to
consistently
operate
below
30
ppm,
generating
a
pool
of
credits
which
other
refineries
could
purchase
in
the
event
of
an
unforeseen
upset.
However,
in
no
circumstances
after
2005
can
the
refinery
produce
gasoline
exceeding
the
80
ppm
pergallon
cap
standard
(
with
the
exception
of
small
refiners,
as
discussed
in
Section
IV.
C.
2
below).
The
carry­
forward
provision
does
not
apply
to
compliance
with
the
150
ppm
refinery
average
standard
applicable
in
the
GPA.
We
have
some
concern
that
the
potential
exists
for
credits
to
be
generated
by
one
party
and
subsequently
purchased
or
used
in
good
faith
by
another,
and
later
found
to
have
been
calculated
or
created
improperly
or
otherwise
determined
to
be
invalid.
For
this
reason,
we
proposed
that
both
the
seller
and
purchaser
would
have
to
adjust
their
sulfur
calculations
to
reflect
the
proper
credits
and
either
party
(
or
both)
could
be
deemed
in
violation
of
the
standards
and
other
requirements
if
the
adjusted
calculations
demonstrate
noncompliance
with
an
applicable
standard.
One
commenter,
representing
a
number
of
refiners,
objected
to
this
approach.
Nevertheless,
our
strong
preference
is
to
hold
the
credit
or
allotment
seller
liable
for
the
violation,
as
opposed
to
the
credit
or
allotment
purchaser.
As
a
general
matter
we
would
expect
to
enforce
a
shortfall
in
compliance
calculations
(
caused
by
the
good
faith
purchase
of
invalid
credits)
against
a
good
faith
purchaser
only
in
cases
where
we
are
unable
to
recover
valid
credits
from
the
seller
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.
Under
the
deficit
provisions
of
section
80.205(
e),
for
compliance
periods
through
2010,
a
credit
shortfall
may
be
corrected
if
the
conditions
of
that
section
are
met.
EPA
will
consider
covering
a
credit
deficit
through
the
purchase
of
valid
credits
a
very
important
factor
in
mitigation
of
any
case
against
a
good
faith
purchaser,
whether
the
purchase
of
valid
credits
is
made
by
the
seller
or
by
the
purchaser.
Some
commenters
stated
that
sulfur
credits
should
be
transferred
directly
from
the
refiner
or
importer
that
generated
them
to
the
party
that
will
use
them,
as
we
had
proposed.
We
believe
that
this
helps
to
ensure
that
parties
purchasing
credits
will
be
better
able
to
assess
the
likelihood
that
the
credits
will
be
valid,
and
aids
compliance
monitoring.
Therefore,
the
final
rule
adopts
this
provision,
with
the
exception
that
where
a
credit
generator
transfers
credits
to
a
refiner
or
importer
who
cannot
use
all
the
credits,
that
transferee
may
transfer
the
credits
to
another
refiner
or
importer.
That
second
transferee
cannot
again
transfer
the
credits;
they
must
either
be
used
or
terminated
by
the
second
transferee.
Nevertheless,
there
is
nothing
in
the
final
rule
that
would
prevent
a
person
who
is
not
a
refiner
or
importer
from
facilitating
the
transfer
of
credits
from
parties
that
have
generated
them
to
parties
who
need
them
for
compliance,
e.
g.,
a
broker
who
would
act
like
a
real
estate
broker.
Therefore,
under
today's
rule,
any
person
may
act
as
a
credit
or
allotment
broker,
whether
or
not
such
person
is
a
refiner
or
importer,
so
long
as
the
title
to
the
credits
or
allotments
are
transferred
directly
from
the
generator
to
the
user.
Furthermore,
any
party
(
e.
g.,
refiner,
importer,
or
blender)
who
can
generate
and
hold
credits
may
also
resell
them.

ix.
How
Long
Do
Credits
Last?
The
ABT
program
is
designed
to
encourage
sulfur
reductions
earlier
than
the
standards
require,
by
providing
a
market
for
credit
generation.
The
emissions
benefits
of
these
early
reductions
are
most
valuable
in
the
early
years
of
the
ABT
program
when
national
average
levels
remain
substantially
higher
than
the
final
30
ppm
average
standard.
At
the
same
time,
these
emissions
reductions
are
offset
in
time
by
higher
emissions
incurred
by
later
vehicles
which
use
gasoline
with
a
higher
sulfur
level.
Because
the
overall
intention
of
the
gasoline
sulfur
program
is
to
enable
and
protect
Tier
2
vehicles
and
provide
time
for
refiners
to
select
and
construct
desulfurization
equipment,
sulfur
credits
should
have
a
limited
life
to
limit
the
degree
to
which
later
Tier
2
vehicles
are
exposed
to
higher
sulfur
levels.
The
ABT
program
is
also
designed
to
ease
implementation
of
the
new
standards,
particularly
the
refinery
average
standard,
and
the
credits
will
be
of
their
greatest
value
to
refineries
during
the
first
few
years
of
the
program.
ABT
is
not
intended
to
permit
a
refinery
to
operate
substantially
above
the
standard
for
a
protracted
time
period.
While
limiting
credit
life
may
reduce
the
incentive
to
generate
credits
for
some
refineries,
the
credit
program
will
be
of
relatively
small
value
to
any
refinery/
importer
that
held
credits
for
a
protracted
period
of
time
and
did
not
need
to
use
them.
This
is
particularly
true
in
2006
and
beyond,
when
the
80
ppm
cap
limits
the
need
for
and
value
of
any
credits
the
refinery
may
possess.
Hence,
we
are
finalizing
limitations
on
the
life
of
credits
which
differ
somewhat
from
our
proposal.
Credits
generated
prior
to
2004
must
be
used
for
compliance
purposes
and
calculations
with
respect
to
gasoline
produced
on
or
before
December
31,
2006.
These
credits
can
be
used
to
meet
the
30
ppm
standard
in
2005
or
2006.
This
expiration
date
applies
to
credits
used
by
the
refinery
which
generated
the
credits,
as
well
as
credits
transferred
to
another
refinery.
While
the
proposal
presented
a
life
through
2007
for
credits
generated
early,
we
have
shortened
this
life
span
one
year
to
reflect
the
fact
that
early
credits
are
intended
to
enable
and
ease
compliance
with
the
30
ppm
standard
in
the
first
years
of
the
program,
allowing
refiners
to
spread
out
investments
without
compromising
the
environmental
benefits
of
the
program.
At
the
beginning
of
2006,
all
gasoline
(
except
that
produced
by
small
refiners
and
that
marketed
in
the
GPA)
will
be
capped
at
80
ppm,
and
by
the
end
of
2006,
every
refinery
should
be
capable
of
producing
gasoline
that
meets
the
30
ppm
standard.
Hence,
the
value
of
the
early
credits
diminishes
greatly.
It
should
be
noted
that
early
credits
can
be
used
for
GPA
certified
gasoline
through
2006
and
for
small
refiner
gasoline
through
2007.
Credits
generated
in
2004
and
beyond
will
have
to
be
used
within
five
years
of
the
year
in
which
they
were
generated.
If
these
credits
are
traded
to
another
party
during
that
five
year
period,
they
will
have
to
be
used
by
the
new
owner
within
that
same
five
years,
regardless
of
when
the
transfer
occurs.
This
is
a
change
from
our
proposal,
which
provided
for
a
potential
maximum
ten­
year
life
for
credits
that
were
generated
and
then
traded
in
the
fifth
year
to
another
party.
However,
we
believe
this
approach
is
more
consistent
with
our
environmental
goals
of
keeping
sulfur
levels
averaging
30
ppm
in
2006
and
beyond.
With
the
80
ppm
cap,
refiners
will
be
able
to
use
only
very
few
credits
if
they
are
unable
to
meet
the
30
ppm
average
in
2006
or
beyond.
Therefore,
limiting
credit
life
to
five
years
will
likely
have
minimal
impact
on
the
actual
use
of
credits.
A
longer
credit
life
will
make
tracking
and
enforcement
difficult,
and
could
have
negative
environmental
consequences.
Hence,
we
have
limited
credit
life
to
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
89
The
term
``
state''
or
``
states''
includes
political
subdivisions
thereof.
90
In
evaluating
whether
a
state
fuel
prohibition
or
control
is
``
identical''
to
a
prohibition
or
control
adopted
by
EPA,
EPA
might
consider
but
is
not
limited
to
the
following
factors
in
comparing
the
measures:
(
1)
The
level
of
an
emission
reduction
or
pollution
control
standard;
(
2)
the
use
of
``
per
gallon''
or
``
averaged''
amounts
in
setting
that
level;
(
3)
the
effect
on
that
level
(
if
averaged)
of
the
use
of
different
averaging
pools;
(
4)
the
lead
time
allowed
to
the
affected
industry
for
compliance;
and
(
5)
the
test
method(
s)
and
sampling
requirements
used
in
determining
compliance.
91
In
addition,
EPA
notes
that
there
are
existing
federal
NOX
performance
standards
which
apply
to
RFG
and
conventional
gasoline
and
that
state
controls
respecting
NOX
performance
are
also
preempted
under
211(
c)(
4)(
A).
five
years.
Consistent
with
our
other
recordkeeping
and
reporting
requirements,
the
five­
year
expiration
date
will
be
assessed
as
of
the
last
day
of
February
after
the
five
year
deadline.
Hence,
for
example,
credits
generated
in
2005
will
expire
as
of
the
last
day
of
February,
2011.
Again,
no
third­
party
transfers
are
allowed.

x.
Conversion
of
Allotments
Into
Credits
A
refiner
or
importer
may
convert
allotments
into
credits
for
compliance
with
the
refinery
average
standards
in
2005
and
beyond.
Allotments
that
are
generated
by
reducing
gasoline
sulfur
levels
to
30
ppm
or
higher
(
defined
as
Type
``
A''
allotments)
are
equivalent
to
credits
generated
in
2000
 
2003.
These
allotments
may
be
(
1)
used
as
allotments
by
a
refiner
for
compliance
with
the
corporate
average
standard
in
2004
and
2005
or
(
2)
converted
into
credits
to
be
used
by
the
refiner's
refineries
for
compliance
with
the
refinery
average
standard
in
2005
and
2006.
Allotments
that
are
generated
by
reducing
gasoline
sulfur
levels
to
lower
than
30
ppm
(
defined
as
Type
``
B''
allotments)
are
equivalent
to
credits
generated
in
2004
and
beyond
(
by
producing
gasoline
with
less
than
30
ppm
sulfur).
Similar
to
Type
``
A''
allotments,
these
allotments
may
be
(
1)
used
as
allotments
by
a
refiner
for
compliance
with
the
corporate
average
standard
in
2004
and
2005
or
(
2)
converted
into
credits
to
be
used
by
the
refiner's
refineries
for
compliance
with
the
refinery
average
standard
in
2005
and
beyond.
Allotments
or
credits
that
are
used
by
refiners
for
compliance
with
the
GPA
gasoline
standards
must
be
used
by
the
last
day
of
February
2007.
Allotments
or
credits
used
by
small
refiners
for
compliance
with
the
small
refiner
standards
must
be
used
by
the
last
day
of
February
2008.
Any
allotments,
whether
Type
``
A''
or
``
B'',
that
are
carried
over
for
compliance
with
the
corporate
and
refinery
average
standards
for
2005
must
be
discounted
by
50
percent
as
discussed
in
above.
Any
allotments
that
are
converted
to
credits
(
e.
g.,
in
2004)
and
then
carried
over
to
2005
are
not
discounted.
However,
once
the
conversion
and
carry­
over
has
taken
place
(
such
that
the
allotments
have
become
credits),
the
conversion
cannot
be
reversed
without
applying
the
discount
factor.
That
is
to
say,
once
a
2003
or
2004
allotment
is
converted
to
a
credit
and
carried
over
to
2005,
the
credit
can
only
be
re­
converted
into
an
allotment
that
is
discounted
50
percent.
d.
How
Are
State
Sulfur
Programs
Affected
by
EPA's
Program?
Section
211(
c)(
4)(
A)
of
the
CAA
prohibits
states
89
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).
This
preemption
applies
to
all
states
except
California,
as
explained
in
section
211(
c)(
4)(
B).
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
state
prohibitions
or
controls
that
are
identical
90
to
the
prohibition
or
control
adopted
by
EPA.
Second,
states
may
seek
EPA
approval
of
SIP
revisions
containing
fuel
control
measures,
as
described
in
section
211(
c)(
4)(
C).
EPA
may
approve
such
SIP
revisions,
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.''
We
are
adopting
the
sulfur
standards
pursuant
to
our
authority
under
section
211(
c)(
1).
Thus,
we
believe
that
today's
action
results
in
the
clear
preemption
of
future
state
actions
to
prescribe
or
enforce
fuel
sulfur
controls.
91
States
with
fuel
sulfur
control
programs
not
already
approved
into
their
SIPs
will
therefore
need
to
obtain
a
waiver
from
us
under
the
provisions
described
in
section
211(
c)(
4)(
C)
for
all
state
fuel
sulfur
control
measures,
unless
the
state
standard
is
identical
to
our
sulfur
standard.
Section
211(
c)(
4)(
A)
preempts
state
fuel
controls
if
EPA
has
``
prescribed''
federal
controls.
We
read
this
language
to
preempt
non­
identical
state
standards
on
the
date
of
promulgation
of
the
standards,
as
opposed
to
the
date
the
standards
become
enforceable.
Thus,
today's
action
preempts
state
actions
as
of
December
21,
1999,
even
though
the
standards
will
not
require
sulfur
reductions
until
2004.
This
interpretation
is
consistent
with
EPA
actions
applying
other
federal
fuel
measures.
See
54
Fed.
Reg.
19173
(
May
4,
1989)
(
noting
preemption
of
Massachusetts
state
RVP
measure
before
start
of
first
control
period
for
federal
RVP).
We
also
believe
this
interpretation
is
consistent
with
the
intent
behind
section
211(
c)(
4)(
A).
Though
the
standards
are
not
immediately
enforceable,
they
will
have
an
immediate
impact
on
refiners'
investment
decisions.
We
believe,
by
adopting
211(
c)(
4)(
A),
Congress
intended
to
limit
state
fuel
controls
that
differ
from
the
federal
programs,
for
example,
in
the
judgments
as
to
level
of
the
standard
or
its
stringency.
The
lead
time
to
implement
a
standard
should
be
treated
the
same
way.
Aside
from
the
explicit
preemption
in
Section
211(
c)(
4)(
A),
a
court
could
also
consider
whether
a
state
sulfur
control
is
implicitly
preempted
under
the
Supremacy
Clause
of
the
U.
S.
Constitution.
Courts
have
determined
that
a
state
law
is
preempted
by
federal
law
where
the
state
requirement
actually
conflicts
with
federal
law
by
preventing
compliance
with
both
federal
and
state
requirements,
or
by
standing
as
an
obstacle
to
accomplishment
of
Congressional
objectives.
A
court
could
thus
consider
whether
a
given
state
sulfur
control
is
preempted,
notwithstanding
waiver
of
preemption
under
211(
c)(
4)(
C),
if
it
places
such
significant
cost
and
investment
burdens
on
refiners
that
refiners
cannot
meet
both
state
and
federal
requirements
in
time,
or
if
the
state
control
would
otherwise
meet
the
criteria
for
conflict
preemption.

2.
Hardship
Provision
for
Qualifying
Refiners
This
section
describes
various
provisions
for
certain
qualifying
refiners
who
may
face
hardship
circumstances.

a.
Hardship
Provision
for
Qualifying
Small
Refiners
In
developing
our
gasoline
sulfur
program,
we
evaluated
the
need
and
the
ability
of
refiners
to
meet
the
30/
80
standards
as
expeditiously
as
possible.
This
analysis
is
described
in
detail
in
the
RIA.
As
a
part
of
this
analysis,
we
found
that
while
the
majority
of
refiners
would
be
able
to
meet
the
needed
air
quality
goals
in
the
2004
 
2006
time
frame,
there
would
be
some
refiners
who
would
face
particularly
difficult
circumstances
which
would
cause
them
to
have
more
difficulty,
in
comparison
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10,
2000
/
Rules
and
Regulations
to
the
industry
as
a
whole,
in
meeting
the
standards.
In
order
to
ensure
that
the
vast
majority
of
the
program
could
be
implemented
reasonably
quickly
in
order
to
achieve
the
air
quality
benefits
sooner,
rather
than
basing
the
time
frame
on
the
lowest
common
denominator
we
have
provided
an
extended
phase­
in
for
a
small
group
of
refiners
that
represents
less
than
four
percent
of
the
overall
gasoline
volume,
and
a
much
smaller
percentage
in
the
areas
of
greatest
environmental
need.
As
described
in
more
detail
below,
and
in
Chapter
VIII
of
the
RIA,
we
concluded
that
refineries
owned
by
small
businesses
face
unique
hardship
circumstances,
compared
to
larger
companies.
The
primary
reason
for
this
consideration
is
that
small
businesses
lack
the
resources
available
to
large
companies
which
enable
the
large
companies
(
including
those
large
companies
that
own
small
volume
refineries)
to
raise
capital
for
investing
in
desulfurization
equipment.
The
small
businesses
are
also
likely
to
have
insufficient
time
to
secure
loans,
compete
for
engineering
resources,
and
complete
construction
of
the
needed
desulfurization
equipment
in
time
to
meet
the
standards
adopted
today
which
begin
in
2004.
The
emissions
benefits
of
low
sulfur
gasoline
are
needed
as
soon
as
possible,
for
two
primary
reasons:
(
1)
To
reduce
ozone
and
other
harmful
air
pollutants,
and
(
2)
to
enable
vehicle
emissions
control
technology
for
Tier
2
vehicles.
Since
our
analysis
showed
that
small
businesses
in
particular
face
hardship
circumstances,
we
are
adopting
temporary,
interim
standards
that
will
provide
refineries
owned
by
small
businesses
additional
time
to
meet
the
ultimate
30
ppm
refinery
average
and
80
ppm
per
gallon
cap
standards.
This
approach
allows
us
to
achieve
the
needed
emission
reductions
in
the
2004
 
2007
time
frame
because
hardship
circumstances
are
expected
to
be
faced
by
only
a
small
portion
of
the
refining
industry.
We
believe
that
these
temporary,
interim
standards
are
an
effective
way
to
phase
in
the
low
sulfur
standards
as
expeditiously
as
is
feasible
thereby
achieving
significant
air
quality
benefits
in
an
expeditious
manner.
This
section
describes
the
special
provisions
we
are
offering
small
businesses
to
mitigate
the
impacts
of
our
program
on
them
and
generally
explains
the
process
we
undertook
to
analyze
those
impacts.
Please
refer
to
the
RTC
document
for
a
detailed
discussion
of
comments
received
on
these
provisions,
and
to
the
RIA
for
a
more
detailed
discussion
of
our
analysis
of
small
refiner
circumstances.
As
explained
in
the
regulatory
flexibility
analysis
in
Section
VIII.
B.
of
this
document
and
in
Chapter
8
of
the
RIA,
we
considered
the
impacts
of
our
proposed
regulations
on
small
businesses.
We
have
historically,
as
a
matter
of
practice,
considered
the
potential
impacts
of
our
regulations
on
small
businesses,
as
discussed
in
more
detail
in
Section
IV.
C.
2.
a.
ii.,
below.
The
analysis
of
small
business
impacts
conducted
for
this
rulemaking
was
performed
in
conjunction
with
a
Small
Business
Advocacy
Review
(
SBAR)
Panel
we
convened,
pursuant
to
the
Regulatory
Flexibility
Act
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996
(
SBREFA).
We
believe
that
the
temporary,
interim
standards
we
are
adopting
for
small
refiners
contributed
to
our
development
of
a
framework
to
achieve
significant
environmental
benefits
from
lower
sulfur
gasoline
in
the
most
expeditious
manner
that
is
reasonably
practicable.
In
the
SBREFA
amendments,
Congress
stated
that
``
uniform
Federal
regulatory
*
*
*
requirements
have
in
numerous
instances
imposed
unnecessary
and
disproportionately
burdensome
demands
including
legal,
accounting,
and
consulting
costs
upon
small
businesses
*
*
*
with
limited
resources[,]''
and
directed
agencies
to
consider
the
impacts
of
certain
actions
on
small
entities.
The
final
report
of
the
Panel
is
available
in
the
docket.
Through
the
SBREFA
process,
the
Panel
provided
information
and
recommendations
regarding:
·
The
significant
economic
impact
of
the
proposed
rule
on
small
entities;
·
Any
significant
alternatives
to
the
proposed
rule
which
would
ensure
that
the
objectives
of
the
proposal
were
accomplished
while
minimizing
the
economic
impact
of
the
proposed
rule
on
small
entities;
·
The
projected
reporting,
recordkeeping,
and
other
compliance
requirements
of
the
proposed
rule;
and,
·
Other
relevant
federal
rules
that
may
duplicate,
overlap,
or
conflict
with
the
proposed
rule.
In
addition
to
our
participation
in
the
SBREFA
process,
we
conducted
our
own
outreach,
fact­
finding,
and
analysis
of
the
potential
impacts
of
our
regulations
on
small
businesses.
Many
of
the
small
refiners
with
whom
we
and
the
Panel
met
indicated
their
belief
that
their
businesses
may
close
due
to
the
substantial
costs,
capital
and
other,
of
meeting
the
30/
80
standard
without
additional
time.
Based
on
these
discussions
and
our
data
analysis,
the
Panel
and
we
agree
that
small
refiners
would
likely
experience
a
significant
and
disproportionate
economic
hardship
in
reaching
the
objectives
of
our
gasoline
sulfur
reduction
program.
However,
the
Panel
also
noted
that
the
undue
burden
imposed
upon
the
small
refiners
by
our
sulfur
requirements
could
be
alleviated
with
additional
time
for
compliance.
We
agree
with
the
Panel
on
both
of
these
points.
For
today's
action,
we
have
structured
a
temporary,
interim
compliance
flexibility
for
qualifying
small
refiners,
both
domestic
and
foreign,
based
on
the
factors
described
below.
Specifically,
we
structured
this
provision
to
address
small
refiner
hardship
while
achieving
air
quality
benefits
expeditiously
and
ensuring
that
the
reductions
needed
in
gasoline
sulfur
coincide
with
the
introduction
of
Tier
2
vehicles.
First,
the
compliance
deadlines
in
the
program,
combined
with
flexibility
for
small
refiners,
will
achieve
the
air
quality
benefits
of
the
program
quickly,
while
ensuring
that
small
refiners
will
have
adequate
time
to
raise
capital
for
infrastructure
changes.
Many,
if
not
most,
small
refiners
have
limited,
if
any,
additional
sources
of
income
beyond
their
refinery
for
financing
the
equipment
necessary
to
produce
low
sulfur
gasoline.
Because
these
small
refiners
typically
do
not
have
the
financial
backing
that
larger
and
generally
more
integrated
companies
have,
they
need
additional
time
to
secure
capital
financing
from
their
lenders.
Second,
we
believe
that
allowing
time
for
sulfur­
reduction
technologies
to
be
proven­
out
by
larger
refiners
before
small
refiners
have
to
put
them
in
place
would
reduce
the
risks
incurred
by
small
refiners
who
utilize
these
technologies
to
meet
the
standards.
The
added
time
would
likely
allow
for
costs
of
these
desulfurization
units
to
decrease,
thereby
limiting
the
economic
consequences
for
small
refiners.
Small
refiners
are
disadvantaged
by
the
economies
of
scale
that
exist
for
the
larger
refining
companies
 
capital
costs
and
per­
barrel
fixed
operating
costs
are
generally
higher
for
them.
Finally,
providing
small
refiners
more
time
to
comply
would
ensure
that
adequate
engineering
and
construction
resources
would
be
available.
Since
most
large
and
small
refiners
will
need
to
install
additional
processing
equipment
to
meet
the
sulfur
requirements,
there
will
be
a
tremendous
amount
of
competition
for
technology
services,
engineering
manpower,
and
construction
management
and
labor.
Our
analysis
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Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
shows
that
there
are
limitations
to
the
elasticity
of
these
resources.
In
addition,
vendors
will
be
more
likely
to
contract
their
services
with
the
major
companies
first,
as
their
projects
will
offer
larger
profits
for
the
vendors.
Providing
this
flexibility
to
allow
small
refiners
to
deal
with
hardship
circumstances
enables
us
to
go
forward
with
the
phase­
in
of
the
30
ppm
sulfur
standard
beginning
in
2004.
Without
this
flexibility,
it
is
possible
that
the
benefits
of
the
30
ppm
standard
would
not
be
achieved
as
quickly.
By
providing
temporary
relief
to
those
refiners
that
need
additional
time,
we
are
able
to
adopt
a
program
that
reduces
gasoline
sulfur
levels
expeditiously
and
in
a
way
that
is
feasible
for
the
industry
as
a
whole.
In
addition,
we
believe
the
volume
of
gasoline
that
will
be
eligible
for
the
interim
standards
is
small.
We
estimate
that
small
refiners
produce
approximately
four
percent
of
all
gasoline
used
in
the
U.
S.,
excluding
California.
In
most
cases,
gasoline
produced
by
refiners
is
mixed
with
substantial
amounts
of
other
gasoline
prior
to
retail
distribution
(
due
to
the
nature
of
the
gasoline
distribution
system).
This
mixing
generally
results
in
only
marginal
increases
in
overall
sulfur
levels.
Thus,
the
sulfur
level
of
gasoline
actually
used
by
Tier
2
vehicles
should
generally
be
much
lower
than
that
produced
by
individual
small
refineries
under
this
provision.

i.
How
Are
Small
Refiners
Defined?

How
We
Defined
``
Small''
Refiner
in
the
Proposal
In
identifying
the
small
refiners
most
susceptible
to
the
economic
challenge
of
meeting
the
low­
sulfur
requirements,
we
closely
examined
the
Small
Business
Administration's
(
SBA)
definition
of
small
refiner
for
the
purposes
of
regulation.
In
that
assessment
we
concluded
that
the
SBA
definition
provided
a
reasonable
metric
for
identifying
small
refiners
that
would
be
significantly
impacted
by
the
sulfur
program
requirements.
By
adopting
the
SBA
definition
we
could
expeditiously
provide
certainty
of
small
refiner
status
to
refiners
who
applied
for
the
temporary
compliance
flexibility.
Specifically,
we
proposed
a
definition
where
any
petroleum
refining
company
having
no
more
than
1,500
employees
throughout
the
corporation
as
of
January
1,
1999
could
apply
for
the
temporary
compliance
flexibilities.
This
proposed
employee
limit
included
any
subsidiaries,
regardless
of
the
number
of
individual
gasoline­
producing
refineries
owned
by
the
company
or
the
number
of
employees
at
any
given
refinery.
While
we
proposed
a
definition
based
on
corporate
employment,
in
light
of
the
SBA
definition
and
the
SBAR
Panel's
recommendations,
we
also
sought
comment
on
alternative
definitions
of
a
small
refiner.
Such
alternatives
included
definitions
based
on
volume
of
crude
oil
processed
(
at
a
given
refinery
and/
or
corporate­
wide)
or
volume
of
gasoline
produced,
with
the
understanding
that
any
relief
offered
to
refiners
must
not
substantially
reduce
the
program's
environmental
benefits.

Our
Revised
Small
Refiner
Definition
Based
on
comments
received
on
the
proposal,
we
are
making
two
changes
to
our
definition
of
a
small
refiner:
we
are
(
1)
revising
the
employee
number
criterion;
and,
(
2)
adopting
a
cap
on
the
corporate
crude
oil
capacity
for
a
refining
company
to
qualify
as
a
small
business
under
today's
regulations.
In
regard
to
the
employee
number
criterion,
we
are
modifying
how
the
employee
number
is
determined,
based
on
comments
received
from
SBA.
As
mentioned
above,
our
proposed
definition
applied
to
any
petroleum
refining
company
having
no
more
than
1,500
employees
throughout
the
corporation
as
of
January
1,
1999.
We
selected
that
date
to
prevent
companies
from
``
gaming''
the
system.
However,
as
SBA
pointed
out
in
its
comments,
the
Small
Business
Act
regulations
specify
that,
where
the
number
of
employees
is
used
as
a
size
standard,
as
we
proposed
for
small
refiners,
size
determination
is
based
on
the
average
number
of
employees
for
all
pay
periods
during
the
preceding
12
months.
Since
we
intended
to
use
SBA's
size
standard
in
our
proposal,
we
are
incorporating
that
definition
correctly
in
today's
action.
It
is
also
worth
mentioning
that
SBA
shares
our
concerns
about
preventing
companies
from
gaming
the
system
and
that
it
solved
this
problem
specifically
by
using
the
average
employment
over
12
months.
In
effect,
this
approach
helps
to
prevent
companies
from
applying
for
and
receiving
small
refiner
status
in
bad
faith.
An
example
of
an
inappropriate
application
for
small
refiner
status
would
be
a
refiner
that
temporarily
reduced
its
workforce
from
1600
employees
to
1495
employees
immediately
before
January
1,
1999
and
then
immediately
rehired
those
employees
after
that
cutoff
date.
Furthermore,
the
averaging
concept
was
designed
to
properly
address
firms
with
seasonal
fluctuations,
according
to
SBA.
Second,
we're
amending
the
small
refiner
definition
to
include
a
corporate
crude
oil
capacity
cap.
We
believe
such
a
corporate
volume
limitation
is
necessary
to
ensure
that
only
truly
small
businesses
benefit
from
the
relaxed
interim
standards.
Refineries
that
process
large
amounts
of
crude
are
likely
to
be
better
able
to
install
desulfurization
equipment
to
meet
the
national
standards
in
2004.
In
addition
to
ensuring
that
the
interim
standards
target
the
appropriate
group
of
refiners
that
need
additional
time,
the
volume
limit
also
serves
to
ensure
that
the
volume
of
gasoline
subject
to
such
standards
is
not
significant.
In
addition,
we
received
many
comments
that
we
should
adopt
a
threshold
based
on
crude
capacity
as
specified
in
the
Clean
Air
Act
and
used
in
past
EPA
fuel
programs.
In
the
lead
phase­
down
program
for
gasoline,
we
used
a
definition
of
``
small
refinery''
that
Congress
adopted
in
1977
specifically
for
the
lead
phase­
down
program.
The
definition
was
based
on
crude
oil
or
feedstock
capacity
at
a
particular
refinery
(
less
than
or
equal
to
50,000
barrels
per
calendar
day
(
bpcd)),
combined
with
total
crude
oil
or
feed
stock
capacity
of
the
refiner
that
owned
the
refinery
(
less
than
or
equal
to
137,500
bpcd).
In
1990,
the
lead
phasedown
program
was
complete
and
Congress
removed
this
provision
from
the
Act.
Shortly
before
the
Act
was
amended
in
1990,
we
set
standards
for
sulfur
content
in
diesel
fuel,
including
a
twoyear
delay
for
small
refineries.
We
used
the
same
definition
of
small
refinery
as
we
used
in
the
lead
phase­
down
program.
This
two­
year
delay,
like
many
of
the
small
business
flexibilities
in
our
gasoline
sulfur
proposal,
was
aimed
at
problems
that
small
refineries
faced
in
raising
capital
and
in
arranging
for
refinery
construction.
In
the
1990
amendments
to
the
Clean
Air
Act,
Congress
rejected
this
small
refinery
provision,
and
instead
allocated
allowances
to
small
diesel
refineries
under
the
Title
IV
Acid
Rain
program.
(
See
CAA
Section
410(
h).)
This
approach
was
also
aimed
at
helping
small
refineries
solve
the
problem
of
raising
the
capital
needed
to
make
investments
to
reduce
diesel
sulfur.
Congress
provided
allowances
to
small
refineries
that
met
criteria
similar
to
that
used
in
the
lead
phase­
down
provision
 
based
on
the
crude
oil
throughput
at
a
particular
refinery,
combined
with
the
total
crude
oil
throughput
of
the
refiner
that
owned
the
refinery.
As
mentioned
above,
the
CAA
definition
was
based
on
crude
oil
or
feedstock
capacity
at
a
particular
refinery,
combined
with
total
crude
oil
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and
Regulations
92
Company
means
the
business
structure
of
the
refinery
whether
privately
or
publicly
owned.
or
feed
stock
capacity
of
the
refiner
that
owned
the
refinery
(
less
than
or
equal
to
137,500
bpcd).
However,
given
the
mergers,
acquisitions,
and
other
changes
that
have
transpired
throughout
the
refining
industry
in
the
past
few
years,
we
believe
the
appropriate
boundary
today
is
a
corresponding
corporate
crude
capacity
less
than
or
equal
to
155,000
bpcd.
Therefore,
in
consideration
of
the
above,
a
refiner
must
meet
both
of
the
following
criteria
to
qualify
for
the
special
small
refiner
provisions
described
in
the
next
section:
·
No
more
than
1500
employees
corporate­
wide,
based
on
the
average
number
of
employees
for
all
pay
periods
from
January
1,
1998
to
January
1,
1999;
and
·
A
corporate
crude
capacity
less
than
or
equal
to
155,000
bpcd
for
1998.

ii.
Standards
That
Small
Refiners
Must
Meet
Upon
careful
review
of
the
comments
received
on
the
proposal
as
well
as
the
recommendations
of
the
SBAR
Panel,
we
have
determined
that
regulatory
relief
in
the
form
of
delayed
compliance
dates
is
appropriate
to
allow
small
refiners,
both
foreign
and
domestic,
to
comply
with
our
regulations
without
disproportionate
burdens.
From
2004
to
2007,
when
U.
S.
refiners
must
meet
the
30/
80
standard
or
the
standards
listed
in
Table
IV.
C
 
1
if
they
are
participating
in
our
ABT
program,
refiners
meeting
the
corporate
employee
and
capacity
limits
prescribed
above
are
allowed
to
comply
with
somewhat
less
stringent
requirements.
These
interim
annualaverage
standards
for
qualifying
small
refiners
are
shown
in
Table
IV.
C
 
3
below.

TABLE
IV.
C
 
3.
 
TEMPORARY
GASOLINE
SULFUR
REQUIREMENTS
FOR
SMALL
REFINERS
IN
2004
 
2007
Refinery
baseline
sulfur
level
(
ppm)
Temporary
Sulfur
Standards
(
ppm)

Average
Cap
0
to
30
................................................................
30
ppm
.............................................................
300
ppm.
31
to
200
............................................................
Baseline
Level
..................................................
300
ppm.
201
to
400
..........................................................
200
ppm
...........................................................
300
ppm.
401
to
600
..........................................................
50%
of
baseline
...............................................
Factor
of
1.5
times
the
average
standard.
601
and
above
...................................................
300
...................................................................
450.

The
cap
standards
for
the
first
two
``
bins''
of
refineries
(
that
is
those
with
baseline
sulfur
levels
from
zero
to
30
and
31
to
200)
have
been
relaxed
somewhat
from
the
proposal
based
on
comments
that
the
proposed
standards
for
these
two
bins
were
more
stringent
than
the
options
under
discussion
for
all
other
refiners.
We
believe
that
these
small
refiners
should
be
able
to
meet
the
average
standards
without
much,
if
any,
change
to
their
operations
but
the
more
lenient
cap
will
give
them
some
flexibility
for
turnarounds
or
unexpected
equipment
``
upsets''.
Compliance
with
the
standards
in
Table
IV.
C
 
3
is
based
on
a
refiner's
demonstration
that
it
meets
our
specific
small
refiner
criteria.
Refiners
who
qualify
as
a
small
refiner
under
our
definition
must
establish
a
sulfur
baseline
for
each
of
their
participating
refineries.
The
following
sections
explain
these
requirements
in
more
detail
to
supplement
the
information
presented
above.
We
also
explain
how
small
refiners
can
apply
for
an
extension
of
up
to
two
additional
years
of
the
applicable
small
refiner
standards,
based
on
a
variety
of
factors
such
as
technology
availability
or
financial
hardship.

iii.
How
Do
Small
Refiners
Apply
for
Small
Refiner
Status?

Refiners
seeking
small
refiner
status
under
our
gasoline
sulfur
program
must
apply
to
us
in
writing
no
later
than
December
31,
2000,
requesting
this
status.
This
application
for
small
refiner
status
must
contain
the
information
described
below.
Companies
92
seeking
small
refiner
status
must
provide
us
with
the
following
information:

Employment
Information
·
A
listing
of
the
name
and
address
of
each
location
where
any
employee
of
the
company
worked
during
the
12
months
preceding
January
1,
1999.
·
The
average
number
of
employees
at
each
location
based
upon
the
number
of
employees
for
each
of
the
company's
pay
periods
for
the
12
months
preceding
January
1,
1999.
·
The
type
of
business
activities
carried
out
at
each
location.

Crude
Capacity
Information
·
The
total
corporate
crude
oil
capacity
of
the
refiner
as
reported
to
the
Energy
Information
Administration
(
EIA)
of
the
U.
S.
Department
of
Energy
(
DOE).
For
refineries
owned
by
joint
ventures,
the
total
employment
of
both
(
all)
companies
must
be
considered
in
determining
whether
the
1,500
employee
limit
is
met.
In
addition,
a
refiner
who
reactivates
a
refinery
that
was
shut
down
or
non­
operational
between
January
1,
1998
and
January
1,
1999,
may
apply
for
small
refiner
status
no
later
than
June
1,
2002.
In
this
case,
we
will
consider
the
information
provided
to
determine
the
correct
period
for
judging
compliance
with
the
1500
threshold.
Where
appropriate
we
will
look
at
the
most
recent
12
months
of
employment
information.
Refiners
seeking
small
refiner
status
must
also
provide
us
with
the
total
crude
capacity
of
their
corporation
(
the
sum
of
all
individual
refinery
capacities
for
multiple­
refinery
companies,
including
any
and
all
subsidiaries)
as
reported
to
EIA
for
1998
(
published
by
EIA
in
1999).
The
information
submitted
to
EIA
is
presumed
to
be
correct.
However,
in
cases
where
a
company
disputes
this
information,
we
will
allow
60
days
after
the
company
submits
its
application
for
small
refiner
status
for
that
company
to
petition
the
Agency
with
the
appropriate
data
to
correct
the
record.
For
reactivated
refineries
owned
by
a
small
refiner,
we
will
consider
the
information
provided
to
determine
the
correct
period
for
judging
compliance
with
the
corporate
capacity
threshold.
Where
appropriate,
we
will
look
at
the
most
recent
year
of
crude
capacity
information.
If
a
refiner
with
approved
small
refiner
status
later
exceeds
the
1,500
employee
threshold
without
merger
or
acquisition
or
the
corporate
capacity
of
155,000
bpcd,
its
refineries
could
keep
their
individual
refinery
standards.
This
is
to
avoid
stifling
normal
company
growth
and
is
subject
to
our
finding
that
the
company
did
not
apply
for
and
receive
the
small
refiner
status
in
bad
faith.

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93
Includes
batch
number,
volume,
and
sulfur
content
for
each
batch
of
gasoline
produced
in
1997
and
1998.
94
In
addition
to
gasoline
produced
from
crude
oil,
a
small
refinery's
baseline
volume
would
include
gasoline
produced
from
purchased
blendstocks
where
the
blendstocks
are
substantially
transformed
using
a
refinery
processing
unit.
iv.
How
Do
Small
Refineries
Apply
for
a
Sulfur
Baseline?
A
qualifying
small
refiner,
domestic
or
foreign,
may
apply
for
an
individual
sulfur
baseline
by
December
31,
2000
for
any
refinery
owned
by
the
company
by
providing
the
following
information:
·
A
calculation
of
the
refinery's
sulfur
baseline
using
its
average
gasoline
sulfur
level
based
on
1997
and
1998
production
data,
93
and
·
The
average
volume
of
gasoline
(
including
conventional
and
reformulated)
produced
in
these
two
years.
As
we
proposed,
baseline
sulfur
levels
and
gasoline
volumes
are
averaged
over
two
years
(
1997
and
1998)
to
account
for
any
production­
related
anomalies
that
may
have
occurred
in
1997
or
1998.
For
the
overall
program,
however,
we
are
only
using
1997
and
1998
data
for
the
reasons
described
in
Section
IV.
C.
1,
above.
For
any
refiner
who
reactivates
a
refinery
that
was
shut
down
or
nonoperational
between
January
1,
1998
and
January
1,
1999,
we
will
use
the
most
recent
information
available
for
baseline
establishment
purposes.
The
regulations
specify
the
information
to
be
submitted
to
support
the
baseline
application.
The
baseline
calculations
should
include
any
oxygen
added
to
the
gasoline
at
the
refinery.
This
application
would
be
submitted
at
the
same
time
the
refiner
applies
for
small
business
status;
confirmation
of
small
business
status
would
not
be
required
to
apply
for
an
individual
sulfur
baseline.
Pending
refinery
baseline
approval,
we
will
assign
standards
to
each
of
the
company's
refineries
in
accordance
with
Table
IV.
C.
 
3.
Oxygenate
blenders,
regardless
of
their
size,
are
not
eligible
for
the
small
refiner
individual
baselines
and
standards
because
they
would
not
experience
circumstances
similar
to
those
of
small
refining
companies.
That
is,
oxygenate
blenders
do
not
have
the
burden
of
capital
costs
to
install
desulfurization
equipment,
which
is
the
primary
reason
for
allowing
small
refiners
to
have
a
relaxed
compliance
schedule.

v.
Volume
Limitation
on
Use
of
a
Small
Refinery
Standard
Except
as
noted
below,
the
volume
of
gasoline
subject
to
a
small
refinery's
individual
standards
is
limited
to
the
average
volume
of
gasoline
the
refinery
produced
from
crude
oil
during
the
baseline
years
(
1997
and
1998),
excluding
the
volume
of
gasoline
produced
using
blendstocks
produced
at
another
refinery
and
exports.
94
Under
this
approach,
the
baseline
volume
for
a
small
refinery
would
reflect
only
the
volume
of
gasoline
produced
from
crude
oil
during
the
1997
and
1998
baseline
years.
However,
to
ensure
that
the
overall
sulfur
in
gasoline
from
small
refiners
does
not
greatly
increase
under
the
terms
of
the
small
refiner
extension
and
result
in
overall
gasoline
pool
sulfur
levels
higher
than
anticipated,
the
volume
would
be
limited
beginning
in
2004
to
the
volume
of
gasoline
that
is
the
lesser
of:
(
1)
105
percent
of
the
baseline
volume,
or
(
2)
the
volume
of
gasoline
produced
during
the
year
from
crude
oil.
Any
volume
of
gasoline
produced
during
an
averaging
period
in
excess
of
this
limitation
is
subject
to
the
corporate
average
standards
that
apply
to
all
other
refiners
(
i.
e.,
the
corporate
average
standards
listed
in
Table
IV.
C.
 
1).
In
2006
and
2007,
the
refinery
averages
of
Table
IV.
C.
 
1
will
apply.
In
this
case,
the
small
refinery's
annual
average
standard
will
be
adjusted
based
on
the
excess
volume
in
a
manner
similar
to
the
compliance
baseline
equation
for
conventional
gasoline
under
Section
80.101(
f)
of
Part
40
of
the
Code
of
Federal
Regulations.
However,
the
small
refinery's
per­
gallon
cap
standard
will
not
be
adjusted.
This
limitation
assures
that
small
refineries
receive
relief
only
for
gasoline
produced
from
crude
oil,
that
is
the
portion
of
the
refinery
operation
requiring
capital
investment
to
meet
lower
sulfur
standards.

vi.
Extensions
Beyond
2007
for
Small
Refiners
Beginning
January
1,
2008,
all
small
companies'
refineries
must
meet
the
national
sulfur
standard
of
30
ppm
on
average
and
the
80
ppm
cap,
except
small
refineries
under
IV.
C.
2.
i.
that
apply
for
and
receive
an
extension
of
their
small
refiner
status
and
unique
standards.
An
extension
will
provide
a
given
small
refinery
up
to
an
additional
two
years
to
comply
with
the
national
standards.
An
extension
must
be
requested
in
writing
and
must
specify
the
factors
that
demonstrate
a
significant
economic
hardship
to
qualify
the
refinery
for
such
an
extension.
Factors
considered
for
an
extension
could
include,
but
are
not
limited
to,
the
refinery's
financial
position;
its
efforts
to
procure
necessary
equipment
and
to
obtain
design
and
engineering
services
and
construction
contractors;
the
availability
of
desulfurization
equipment,
and
any
other
relevant
factors.
In
order
for
us
to
consider
an
extension,
a
refiner
must
submit
a
detailed
request
for
an
extension
by
January
1,
2007,
demonstrating
that
it
has
made
best
efforts
to
obtain
necessary
financing,
and
must
provide
detailed
information
regarding
any
lack
of
success
in
obtaining
financing.
This
information
shall
include,
but
may
not
be
limited
to
copies
of
loan
applications
for
the
necessary
financing
for
the
construction
of
appropriate
sulfur
reduction
technology
as
well
as
the
application
of
financing
for
other
equipment
procurements
or
improvements
in
this
time
frame.
If
financing
has
been
disapproved
or
is
otherwise
unsuccessful,
the
refiner
shall
provide
documents
supporting
the
basis
for
that
disapproval
and
evidence
of
efforts
to
pursue
other
means
of
financing.
If
we
determine
that
the
refiner
has
made
the
best
efforts
possible
to
achieve
compliance
with
the
national
standards
by
January
1,
2008,
but
has
been
unsuccessful
for
reasons
beyond
its
control,
we
will
consider
granting
the
hardship
extension
initially
for
the
2008
averaging
period.
If
further
relief
is
appropriate
for
good
reasons,
we
will
consider
a
further
extension
through
the
2009
averaging
period
but
in
no
case
will
this
relief
be
provided
unless
the
refiner
can
demonstrate
conclusively
that
it
has
financing
in
place
and
that
it
will
be
able
to
complete
construction
and
meet
the
national
gasoline
sulfur
standards
no
later
than
December
31,
2009.

Compliance
Plans
for
Demonstrating
a
Commitment
To
Produce
Low
Sulfur
Gasoline
This
final
rule
includes
a
compliance
plan
provision
for
those
refiners
who
may
seek
a
hardship
extension
of
their
approved
interim
standards.
This
provision
requires
that
those
refiners
with
approved
interim
standards
who
seek
a
hardship
extension
must
submit
a
series
of
reports
to
EPA
discussing
and
describing
their
progress
toward
producing
gasoline
that
meets
the
30/
80
ppm
standards
by
January
1,
2008.
We
expect
that
small
refiners
will
need
to
begin
preparations
to
meet
the
national
standards
in
2008
by
2004.
However,
we
understand
that
the
potential
exists
for
some
small
refiners
to
face
additional
hardship
circumstances
that
will
warrant
more
time
to
meet
the
standards.
For
this
reason,
we
have
adopted
provisions
(
see
above)
allowing
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/
Rules
and
Regulations
95
If
a
refinery
has
a
baseline
sulfur
level
higher
than
120
ppm
(
as
described
below
in
IV.
C.
1.
c.
v.),
then
credits
are
generated
from
the
baseline
to
120
ppm
and
allotments
from
120
ppm
to
the
new
sulfur
level
(
and
discounted
20
percent
if
applicable).
refiners
subject
to
the
interim
standards
to
petition
us
and
make
a
showing
that
additional
time
is
needed
to
meet
the
national
standards.
To
properly
evaluate
these
hardship
applications,
we
are
requiring
demonstrations
of
good
faith
efforts
towards
assessing
the
economic
feasibility,
along
with
the
business
and
technical
practicality
of
ultimately
producing
low
sulfur
gasoline.
Such
progress
reports
must
be
submitted
for
a
refiner
to
receive
consideration
in
any
future
determinations
regarding
hardship
extensions.
However,
these
reports
are
not
required
from
refiners
who
will
not
be
seeking
a
hardship
extension.
By
June
1,
2004,
such
refiners
would
need
to
submit
preliminary
information
in
the
form
of
a
report
outlining
its
time
line
for
compliance
and
a
project
plan
discussing
areas
such
as
permits,
engineering
plans
(
e.
g.,
design
and
construction),
and
capital
commitments
for
making
the
necessary
modifications
to
produce
low
sulfur
gasoline.
Documents
showing
activities
and
progress
in
these
areas
should
be
provided
if
available.
By
no
later
than
June
1,
2005,
these
small
refiners
would
need
to
submit
a
report
to
us
stating
in
detail
progress
to
date
based
on
their
time
line
and
project
plan.
This
should
include
copies
of
approved
permits
for
construction
of
the
equipment,
contracts
for
design
and
construction,
and
any
available
evidence
of
having
secured
the
necessary
financing
to
complete
the
required
construction.
If
any
difficulties
in
meeting
this
requirement
are
anticipated,
the
refiner
must
submit
a
detailed
report
of
all
efforts
to
date
and
the
factors
that
may
cause
delay,
including
costs,
specification
of
engineering
or
other
design
work
still
needed
and
reasons
for
delay,
specification
of
equipment
needed
and
any
reasons
for
delay,
potential
equipment
suppliers
and
history
of
negotiations,
and
any
other
relevant
information.
If
unavailability
of
equipment
is
a
factor,
the
report
must
include
a
discussion
of
other
options
considered,
and
the
reasons
these
other
options
are
not
feasible.
In
addition,
the
small
refiner
would
need
to
provide
evidence
by
June
1,
2006,
that
on­
site
construction
has
begun
at
its
refinery(
s)
and
that
absent
unforeseen
circumstances
or
problems,
they
will
be
producing
complying
gasoline
(
30/
80
ppm)
by
January
1,
2008.
While
the
submission
of
these
progress
reports
is
evidence
of
a
refiner's
good
faith
efforts
to
comply
by
2008,
it
does
not
bind
the
refiner
to
make
gasoline
in
2008.
There
are
several
reasons
why
a
refiner
may
choose
to
exit
the
gasoline­
production
business
in
2008
that
go
beyond
the
low
sulfur
gasoline
requirement.
As
a
result
of
a
refiner's
efforts
in
moving
toward
compliance
with
the
2008
standards,
for
market,
economic,
business,
or
technical
reasons,
the
company
could
choose
not
to
make
gasoline
in
2008.
Although
we
do
not
believe
this
will
be
the
likely
outcome
for
small
refiners,
we
cannot
preclude
it.
Any
refiner
that
makes
such
a
determination
in
its
progress
reports
will
have
until
2008
to
transition
out
of
gasoline
production,
but
will
not
be
considered
for
a
extension
of
hardship
relief.

vii.
Can
Small
Refiners
Participate
in
the
ABT
Program?
As
described
in
IV.
C.
1.
c.
i
above,
any
refinery
(
including
those
owned
by
small
refiners)
can
generate
sulfur
allotments
(
in
ppm­
gallons)
in
2003
by
producing
gasoline
containing
less
than
60
ppm
sulfur
on
an
annual­
average
basis.
Once
this
60
ppm
trigger
is
reached,
allotments
will
be
calculated
based
on
the
amount
of
reduction
from
120
ppm
95.
However,
these
allotments
may
be
discounted
depending
on
the
actual
sulfur
level.
If
a
refinery
fully
demonstrates
compliance
by
producing
gasoline
with
an
annual
average
sulfur
level
of
0
to
30
ppm,
the
allotments
retain
their
full
value
 
they
are
not
discounted
at
all.
For
actual
sulfur
levels
of
31
 
60
ppm,
which
are
indicative
of
a
partial
demonstration,
the
allotments
are
discounted
20
percent.
During
the
period
2000
 
2003,
refineries
owned
by
small
refiners
can
also
generate
credits
by
producing
gasoline
averaging
at
least
10
percent
lower
than
that
refinery's
baseline
sulfur
level.
In
other
words,
to
generate
credits,
the
refinery's
annual
average
sulfur
level
for
all
of
its
gasoline
on
average
must
be
0.9
´
 
(
baseline
sulfur
level).
Once
this
``
trigger''
is
reached,
credits
will
be
calculated
based
on
the
amount
of
reduction
from
the
refinery's
sulfur
baseline.
For
example,
if
in
2002
a
refinery
reduced
its
annual
average
sulfur
level
from
a
baseline
of
450
ppm
to
150
ppm
(
well
below
the
trigger
of
0.9
´
 
450
=
405
ppm),
its
sulfur
credits
would
be
determined
based
on
the
difference
in
annual
sulfur
level
(
450
 
150
=
300
ppm)
multiplied
by
the
volume
of
gasoline
produced
in
2002.
Similarly,
small
foreign
refiner­
owned
refineries
with
an
individual
sulfur
baseline
can
generate
credits
in
these
years
as
long
as
the
annual
average
sulfur
level
of
the
gasoline
exported
to
the
U.
S.
from
that
refinery
is
lower
than
90
percent
of
the
baseline
sulfur
level.
During
the
period
2004
 
2007,
refineries
owned
by
small
refiners
will
be
permitted
to
generate
credits
but
only
if
their
actual
annual
sulfur
level
of
all
gasoline
produced
or
imported
averages
below
their
refinery
standard,
and
only
for
the
difference
between
the
standard
and
the
actual
annual
sulfur
average.
A
refinery
(
owned
by
a
small
refiner)
wishing
to
participate
in
the
ABT
program
can
sell
credits
beginning
as
soon
as
January
1,
2000
but
may
wait
until
December
31,
2000
to
apply
for
small
refiner
status.
However,
the
standards
assigned
to
that
refinery
(
as
presented
in
Table
IV.
C
 
3
above)
will
be
based
on
the
sulfur
level
from
which
credits
were
generated,
not
the
baseline
sulfur
level,
since
the
refiner
would
have
already
demonstrated
the
ability
to
meet
the
lower
sulfur
level.
For
compliance
purposes
and
to
give
refineries
certainty
regarding
the
gasoline
sulfur
standards
to
which
they
will
be
held
during
2004
 
2007,
the
standards
for
a
small
refiner
refinery
participating
in
ABT
will
be
set
based
on
the
refinery's
lowest
sulfur
average
for
any
year
between
1999
and
2003.
Using
the
example
above,
a
refinery
(
owned
by
a
refiner
with
small
refiner
status)
with
a
1997
 
98
baseline
sulfur
level
of
450
ppm
would
have
an
interim
average
standard
of
450/
2
=
225
ppm
and
a
cap
of
225
´
 
1.5
=
338
ppm.
If
that
refinery
generated
300
sulfur
credits
in
2002
by
producing
gasoline
with
150
ppm
sulfur,
then
that
refinery's
average
sulfur
standard
for
2004
 
2007
would
be
ratcheted
down
to
150
ppm
with
a
cap
of
300
ppm.
However,
that
refinery
would
still
be
able
to
use
the
300
credits
that
it
had
generated
and
banked
in
2002
for
compliance
with
its
150
ppm
standard.
Based
on
the
comments
received
on
our
proposal,
we
are
allowing
small
refineries
to
use
credits
and/
or
allotments
that
they
generated
and/
or
to
purchase
credits
and/
or
allotments
from
another
refinery
to
meet
their
average
standard
during
2004
 
2007.
We
solicited
comment
on
whether
small
refiners
subject
to
the
interim
standards
should
be
permitted
to
use
credits
towards
meeting
those
standards,
and
several
small
refiners
who
already
produce
very
clean
gasoline
commented
that
the
special
small
refiner
standards
do
not
benefit
them
in
any
way.
These
refiners
argued
that
if
they
could
generate
sufficient
sulfur
credits
in
2000
 
2003,
or
could
obtain
such
credits
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
through
purchases
from
other
refiners,
they
would
not
participate
in
the
small
refiner
program
but
would
instead
participate
in
the
sulfur
ABT
program.
But
since
they
are
not
positioned
to
generate
credits
(
due
to
their
already
low
sulfur
levels),
and
have
little
certainty
of
being
able
to
purchase
credits,
they
need
the
relief
provided
by
the
small
refiner
provisions.
We
concur
with
these
concerns
and
thus
permit
small
refiners
to
use
ABT
credits
and
allotments.
Small
refiners
may
only
use
ABT
credits
and/
or
allotments
to
comply
with
their
refinery
average
standard,
not
the
per­
gallon
caps
applied
to
their
gasoline.
At
any
time,
a
small
refiner
can
choose
to
``
opt
out''
of
the
small
refiner
program
and,
beginning
the
next
calendar
year,
comply
with
the
standards
in
Table
IV.
C
 
2.
The
refiner
would
have
to
notify
us
of
this
change
in
its
compliance
program.
Once
a
small
refiner
leaves
the
small
refiner
program,
however,
it
would
not
be
eligible
to
reenter
the
small
refiner
program.

b.
Temporary
Waivers
From
Low
Sulfur
Requirements
in
Extreme
Unforeseen
Circumstances
In
the
final
rule,
EPA
is
adopting
a
provision
permitting
refiners
to
seek
a
temporary
waiver
from
the
sulfur
standards
in
certain
circumstances.
Such
waivers
will
be
granted
at
EPA's
discretion.
Under
this
provision
a
refiner
may
seek
permission
to
distribute
gasoline
that
does
not
meet
the
applicable
low
sulfur
standards
for
a
brief
time
period,
based
on
the
refiner's
inability
to
produce
complying
gasoline
because
of
extreme
and
unusual
circumstances
outside
the
refiner's
control
that
could
not
have
been
avoided
through
the
exercise
of
due
diligence.
This
provision
is
similar
to
a
provision
in
EPA's
RFG
regulations,
and
is
intended
to
provide
refiners
short­
term
relief
in
unanticipated
circumstances
such
as
an
accidental
refinery
fire
or
a
natural
disaster.
The
short­
term
waiver
provision
is
intended
to
address
unanticipated
circumstances
that
cannot
be
reasonably
foreseen
at
this
time
or
in
the
near
future
The
conditions
for
obtaining
such
a
waiver
that
are
similar
to
those
in
the
RFG
regulations.
These
conditions
are
necessary
and
appropriate
to
ensure
that
any
waivers
that
are
granted
are
limited
in
scope,
and
that
refiners
do
not
gain
economic
benefits
from
a
waiver.
Therefore,
refiners
seeking
a
waiver
must
show
that
the
waiver
is
in
the
public
interest,
that
the
refiner
was
not
able
to
avoid
the
nonconformity,
that
it
will
make
up
the
air
quality
detriment
associated
with
the
waiver,
as
well
as
any
economic
benefit
from
the
waiver,
and
that
it
will
meet
the
applicable
sulfur
standards
as
expeditiously
as
possible.

c.
Temporary
Waivers
Based
on
Extreme
Hardship
Circumstances
In
addition
to
the
provision
for
shortterm
relief
in
unanticipated
circumstances,
we
are
adopting
a
provision
for
relief
based
on
extreme
hardship
circumstances.
In
developing
our
sulfur
program,
we
considered
whether
any
refiners
would
face
particular
difficulty
in
complying
with
the
standards
in
the
lead
time
provided.
As
described
in
Section
IV.
C.
2.
a.,
we
concluded
that
refineries
owned
by
small
businesses
would
experience
more
difficulty
in
complying
with
the
standards
on
time
because,
as
a
group,
they
have
less
ability
to
raise
capital
necessary
for
refinery
investments,
face
proportionately
higher
costs
because
of
economies
of
scale,
and
are
less
able
to
successfully
compete
for
limited
engineering
and
construction
resources.
However,
it
is
possible
that
other
refiners
who
do
not
meet
our
criteria
for
the
interim
standards
also
face
particular
difficulty
in
complying
with
the
sulfur
standards
on
time.
Therefore,
we
are
including
in
the
final
rule
a
provision
allowing
us,
at
our
discretion,
to
grant
temporary
waivers
from
the
sulfur
standards
based
on
a
showing
of
extreme
hardship
circumstances.
We
do
not
anticipate,
nor
do
we
expect
there
is
a
need
for,
granting
temporary
waivers
that
apply
to
more
than
approximately
one
percent
of
the
national
gasoline
pool
in
any
given
year.
This
provision
would
allow
refiners
(
domestic
and
foreign)
to
request
a
waiver
from
the
sulfur
standards
based
on
a
showing
of
unusual
circumstances
that
result
in
extreme
hardship
and
significantly
affect
the
ability
to
comply
by
the
applicable
date.
As
with
the
small
refiner
interim
standards,
this
provision
furthers
our
overall
environmental
goals
of
achieving
low
sulfur
gasoline
nationwide
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
gasoline
sulfur
beginning
in
2004
for
the
majority
of
the
industry
that
can
comply
by
then.
As
described
above,
EPA
understands
that
this
program
will
require
significant
economic
investments
by
the
refining
industry.
We
have
adopted
a
program
with
sufficient
flexibilities
(
including
an
ABT
program,
allotment
trading,
a
geographic
phase­
in,
and
interim
standards
for
qualifying
small
refiners)
to
make
these
investments
reasonable
and
feasible
over
the
time
frame
in
which
the
standards
are
phased
in.
Because
the
refining
industry
encompasses
a
wide
variety
of
individual
circumstances,
and
our
program
phases
in
based
on
the
lead
time
we
believe
is
reasonable
for
the
industry
as
a
whole,
there
may
be
unusual
circumstances
that
impose
extreme
hardship
and
significantly
affect
an
individual
refinery's
ability
to
comply
in
the
lead
time
provided.
However,
we
do
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.
In
addition,
we
want
to
limit
the
environmental
impact
of
any
hardship
waivers
from
compliance
with
the
standards.
Thus,
we
anticipate
that
hardship
waivers
will
only
be
granted
in
rare
circumstances.
Because
of
the
significant
environmental
benefits
of
lowering
sulfur
in
gasoline,
we
will
administer
this
provision
in
a
manner
consistent
with
continuing
to
ensure
the
environmental
objectives
of
the
regulation.
In
our
analysis
of
the
interim
small
refiner
standards,
we
concluded
that
only
a
minimal
portion
of
the
national
gasoline
pool
would
potentially
be
impacted
by
the
less
stringent
interim
standards,
due
to
the
relatively
small
production
volume
of
these
facilities.
To
limit
the
potential
environmental
impact
of
this
hardship
provision,
we
reserve
the
discretion
to
deny
applications
where
we
find
that
granting
a
waiver
would
result
in
an
unacceptable
environmental
impact.
While
this
determination
will
be
made
on
a
case­
by­
case
basis,
we
do
not
expect
there
is
a
need
for,
nor
do
we
anticipate,
granting
waivers
that
apply
to
more
than
approximately
one
percent
of
the
total
national
pool
of
gasoline
in
any
given
year,
or
to
more
than
a
minimal
percentage
of
the
gasoline
supply
of
an
area
known
to
have
significant
air
quality
problems.
There
are
several
factors
we
will
consider
in
evaluating
a
petition
for
additional
time
to
comply.
This
could
include
refinery
configuration,
severe
economic
limitations,
and
other
factors
that
prevent
compliance
in
the
lead
time
provided.
Applications
for
a
waiver
must
include
information
that
will
allow
us
to
evaluate
all
appropriate
factors.
EPA
will
consider
whether
the
refinery
configuration
or
operation
is
unique
or
atypical,
how
much
of
a
refinery's
gasoline
is
produced
using
an
FCC
unit,
its
hydrotreating
capacity
relative
to
its
total
crude
capacity,
total
reformer
unit
throughput
capacity
relative
to
total
production,
gasoline
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10,
2000
/
Rules
and
Regulations
production
in
proportion
to
other
refinery
products,
and
other
relevant
factors.
A
refiner
may
also
face
severe
economic
limitations
that
result
in
a
demonstrated
inability
to
raise
capital
to
make
necessary
investments
to
comply
in
time,
which
can
be
shown
by
an
unfavorable
bond
rating,
inadequate
resources
of
the
refiner
and
its
parent
and/
or
subsidiaries,
or
other
relevant
factors.
In
addition,
we
will
look
at
the
total
crude
capacity
of
the
refinery
and
its
parent
corporation.
Finally,
we
will
consider
where
the
gasoline
will
be
sold
in
evaluating
the
environmental
impacts
of
granting
a
waiver.
This
provision
is
intended
to
address
unusual
circumstances
that
we
expect
will
be
foreseeable
now
or
in
the
immediate
future,
such
as
unique
and
atypical
gasoline
refinery
operations
or
a
demonstrated
inability
to
raise
capital.
These
kinds
of
circumstances
should
be
apparent
at
this
time
or
in
the
near
future,
so
refiners
seeking
additional
time
under
this
provision
must
apply
for
relief
by
September
1,
2000.
A
refiner
seeking
a
waiver
must
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,
including
efforts
to
obtain
credits
and/
or
allotments
towards
compliance.
Applicants
for
a
hardship
waiver
must
also
submit
a
plan
demonstrating
how
the
standards
will
be
achieved
as
expeditiously
as
possible.
In
submitting
the
plan,
it
must
include
a
timetable
for
obtaining
the
necessary
capital,
contracting
for
engineering
and
construction
resources,
and
obtaining
permits.
EPA
will
review
and
act
on
applications,
and,
if
a
waiver
is
granted,
will
specify
a
time
period,
not
to
extend
beyond
January
1,
2008
(
the
date
by
which
all
gasoline
is
expected
to
meet
the
30
ppm
refinery
average
and
80
ppm
per
gallon
cap
standards),
for
the
waiver.
If
a
waiver
is
granted,
EPA
will
impose
as
a
condition
of
the
waiver
other
reasonable
requirements,
including
antibacksliding
requirements
to
ensure
no
deterioration
in
the
sulfur
level
of
gasoline
and
interim
sulfur
standards
that
the
refiner
must
meet.
This
is
appropriate
since
some
refiners
who
may
qualify
for
a
waiver
can
achieve
some
sulfur
reductions,
and
even
reductions
to
levels
above
30
ppm
will
result
in
some
environmental
benefits.
While
this
provision
allows
EPA
to
waive
the
per
gallon
standards
as
well
as
the
average
standards,
EPA
would
not
allow
gasoline
sulfur
to
exceed
the
highest
per
gallon
cap
applicable
to
a
refiner
under
the
interim
small
refiner
standards
described
in
Section
IV.
C.
2.
Once
all
applications
have
been
received,
EPA
will
consider
the
appropriate
process
to
follow
in
reviewing
and
acting
on
applications,
including
whether
to
conduct
a
notice
and
comment
decision­
making
process.

3.
Streamlining
of
Refinery
Air
Pollution
Permitting
Process
a.
Brief
Summary
of
Proposal
Industry
commenters
expressed
concern
over
the
ability
to
obtain
permits
to
construct
and
operate
the
facility
modifications
needed
to
meet
the
Tier
2
rule
requirements
by
the
end
of
2004.
As
part
of
the
preamble
to
the
proposed
rule,
we
outlined
possible
approaches
to
provide
greater
certainty
and
to
expedite
potentially
applicable
permit
processes.
In
general,
we
solicited
comments
on
whether
and
how
policy
options
might
be
designed
so
as
to
exempt
Tier
2
projects
from
major
New
Source
Review
(
NSR)
and/
or
to
expedite
the
processing
of
permits
where
such
requirements
would
apply.
In
particular,
we
solicited
comment
on
whether
the
major
NSR
process
could
be
expedited
if:
(
1)
EPA
provided
guidance
on
Lowest
Achievable
Emission
Rate
(
LAER)
requirements
or
Best
Available
Control
Technology
(
BACT)
determinations;
(
2)
emissions
reductions
could
be
made
available
or
designated
for
offsetting
Tier
2
activities;
(
3)
EPA
developed
model
permits,
or
(
4)
EPA
assisted
the
States
in
resolving
source­
specific
permitting
issues
as
they
would
arise.
The
Agency
also
solicited
comments
on
how
the
title
V
operating
permit
requirements,
where
applicable,
might
need
to
be
integrated
with
the
relevant
NSR
process.
In
proposing
various
mechanisms
to
expedite
the
permitting
of
Tier
2
projects,
we
recognized
that
a
combination
of
measures
might
be
needed,
since
the
situations
could
vary
widely
among
individual
refineries
due
to
differences
in
such
factors
as
available
equipment
capacity,
amount
of
sulfur
in
the
crude
oil,
and
applicable
State
regulations.
Source­
specific
analyses
are
also
necessary
to
establish
what
sulfur
reduction
techniques
can
be
applied,
to
determine
the
applicable
permitting
requirements,
and
to
evaluate
what
controls
will
be
necessary
as
a
result
of
these
requirements.
We
indicated
our
intent
to
offer
assistance
where
needed.

b.
Significant
Comments
Received
The
most
significant
comments
received
on
the
proposal
concerning
the
timing
impacts
due
to
air
permit
requirements
are
presented
below.
These
commenters
focused
exclusively
on
the
requirements
to
obtain
a
preconstruction
permit
under
the
NSR
program.
Generally,
commenters
only
concerns
regarding
the
title
V
operating
permit
program
were
that
the
States'
ongoing
efforts
to
issue
these
permits
might
create
a
backlog
which
could
delay
the
issuance
of
NSR
permits
for
Tier
2
projects.
A
more
detailed
discussion
of
comments
received
on
the
proposal
and
EPA's
response
are
contained
in
the
Response
To
Comments
document
and
is
filed
in
the
Docket
for
this
action.
We
received
written
and
oral
comments
from
refineries
about
the
permit
requirements
associated
with
Tier
2
projects.
Refiners
emphasized
the
need
for
certainty.
They
pointed
out
the
need
to
secure
preconstruction
permits
within
18
months
(
e.
g.,
6
months
to
prepare
and
file
NSR
applications
and
another
12
months
to
issue
the
permit)
and
the
need
for
permitting
authorities
to
commit
appropriate
resources
to
meet
this
time
frame.
State
and
local
air
pollution
control
agencies
did
not
support
providing
exemptions
from
emissions
control
and
permitting
requirements.
Rather,
agency
commenters
stated
that
they
could
accomplish
the
permitting
requirements
in
the
necessary
time
frames,
provided
that
complete
permit
applications
were
received
in
a
timely
manner
and
refiners
conferred
with
their
regulatory
agencies
soon
after
the
Tier
2
requirements
are
promulgated.
They
also
indicated
that
the
major
NSR
process
could
be
expedited
and
have
more
certainty
(
i.
e.,
permits
could
be
processed
in
6
to
9
months)
if
EPA
would
provide
guidance
on
emissions
controls,
emissions
monitoring,
and
offsets.
In
general,
environmental
and
community
groups
pointed
out
that
the
remedies
under
traditional
permitting
practices
should
be
exhausted
before
additional
flexibility
is
granted
for
Tier
2
projects.

c.
Today's
Action
Based
on
the
comments
and
other
information
received
in
response
to
the
proposal,
EPA
believes
that
it
is
not
necessary
or
appropriate
to
explore
further
the
development
of
possible
options
which
would
exempt
Tier
2
projects
from
the
normally
applicable
preconstruction
review
process.
This
position
is
supported
by:
(
1)
The
comments
of
States
that
industry
can,
in
general,
apply
and
receive
NSR
permits
in
time
to
comply
with
Tier
2;
and
(
2)
the
recognition
of
industry's
potential
ability
to
use
emissions
reductions
to
net
Tier
2
projects
out
of
major
NSR
which
would
otherwise
be
applicable.
Nonetheless,
we
believe
that
actions
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
should
be
taken
to
facilitate
early
compliance,
to
add
certainty
to
the
anticipated
permitting
actions
and
schedules,
and
to
minimize
the
possibility
of
delay.
Accordingly,
EPA
is
taking
two
types
of
actions
to
promote
these
objectives.
First,
as
previously
discussed,
we
have
structured
the
final
gasoline
sulfur
program
to
allow
additional
lead
time
for
many
refiners
(
i.
e.,
certain
refineries
would
be
able
to
make
desulfurization
changes
later
than
the
proposed
2004
compliance
date
to
meet
Tier
2
requirements).
This
approach
will
help
address
the
concerns
over
the
availability
of
necessary
new
equipment
and
permitting
backlogs
caused
by
many
refineries
acting
to
obtain
permits
and
order
equipment
within
relatively
the
same
time
period.
Second,
we
intend
to
take
several
actions
(
described
in
more
detail
below)
to
expedite
and
impart
greater
certainty
in
obtaining
necessary
major
NSR
permits.
As
a
result
of
comments
received
on
the
proposal,
and
the
lead
time
provided
in
the
final
gasoline
sulfur
program,
we
believe
that
the
vast
majority
of
permits
can
be
issued
within
the
necessary
time
frames,
provided
that
refineries
submit
their
preconstruction
applications
in
a
timely
manner
and
regulatory
authorities
prioritize
the
issuance
of
these
permits.
We
also
intend
to
assist
States
and
refiners
on
a
case­
by­
case
basis
in
their
efforts
to
address
any
unique
permitting
problems
that
might
arise
and,
thus,
remedy
potential
problems
that
could
cause
unanticipated
delays.
In
the
unlikely
event
permitting
delays
occur,
EPA
will
work
with
refiners
and
the
state/
local
permitting
agencies
on
a
case­
by­
case
basis,
where
a
refinery
has
unique
circumstances
that
necessitate
unique
treatment.
While
today's
strategy
will
help
expedite
the
permitting
process,
refineries
that
trigger
major
NSR
as
a
result
of
producing
low
sulfur
gasoline
will
still
have
to
install
the
stringent
level
of
emissions
control
technology
required
by
the
Act.
However,
we
intend
to
issue
guidance
to
assist
states
in
making
decisions
about
the
levels
of
control
technology,
as
described
more
below.
In
addition,
the
Agency
wishes
to
clarify
that,
in
our
efforts
to
provide
greater
certainty
and
to
facilitate
more
expeditious
permitting,
we
are
in
no
way
shortcutting
existing
opportunities
for
public
participation.
We
recognize
the
importance
of
public
participation
in
making
permitting
decisions
and
intend
that
the
measures
adopted
to
address
permitting
concerns
will
not
diminish
the
opportunities
for
public
participation.
i.
Major
New
Source
Review
The
major
NSR
program,
as
it
applies
to
existing
major
stationary
sources
of
air
pollution,
requires
that
a
preconstruction
permit
be
issued
before
a
source
makes
a
physical
change
or
change
in
its
method
of
operation
of
any
project
that
would
result
in
a
significant
net
emissions
increase.
As
described
in
the
proposal,
the
steps
taken
by
certain
refineries
to
implement
gasoline
sulfur
reductions
to
meet
today's
rule
could
result
in
emissions
increases
in
one
or
more
pollutants
which
may
trigger
the
requirements
for
this
type
of
preconstruction
permit.
A
number
of
the
refineries
are
located
in
areas
designated
as
nonattainment
for
at
least
one
pollutant.
The
nonattainment
NSR
requirements
pursuant
to
part
D
of
the
Act
would
apply
to
any
such
refinery
undergoing
a
major
modification.
For
those
refineries
located
in
attainment
or
unclassifiable
areas,
permit
requirements
for
the
prevention
of
significant
deterioration
(
PSD)
of
air
quality
must
be
met
for
major
modifications.
The
EPA
recognizes
the
importance
of
timely
major
NSR
(
as
applicable)
permit
actions
for
refineries
to
proceed
with
necessary
changes
to
meet
the
new
low
sulfur
gasoline
standard.
We
encourage
refineries
to
begin
discussions
with
permitting
authorities
and
to
submit
permit
applications
 
as
early
as
possible.
In
addition,
based
on
comments
received,
we
believe
that
there
are
a
few
key
areas
in
which
assistance
would
be
useful
toward
helping
States
issue
timely
permits
to
the
applicable
refineries:
·
Federal
guidance
on
emissions
control
technology
requirements.
Refineries
subject
to
major
NSR
review
will
be
required
to
undergo
a
source­
specific
evaluation
to
apply
either
BACT
or
LAER,
depending
upon
the
applicable
program
requirements.
For
example,
the
evaluation
for
BACT
is
case­
by­
case
and
takes
into
account
the
alternative
technologies
available
to
control
pollution
from
a
particular
emissions
unit
or
process,
and
considers
the
energy,
environmental,
economic
and
other
costs
associated
with
each
technology.
We
intend
to
issue
guidance
setting
out
a
level
of
emissions
that,
in
our
view,
would
be
expected
to
satisfy
the
requirements
for
BACT
for
certain
emissions
units
associated
with
refinery
desulfurization
projects.
While
States
would
not
be
required
to
use
the
results
to
establish
BACT
for
a
particular
refinery
subject
to
review
and
EPA's
guidance
on
a
control
technology
may
not
be
appropriate
where
there
exists
unusual
site­
specific
circumstances,
such
guidance
would
add
the
certainty
of
EPA's
expectations.
Since
negotiation
of
an
appropriate
BACT
level
often
is
one
of
the
most
time
consuming
aspects
of
permitting,
we
believe
this
EPA
guidance
will
significantly
expedite
the
process.
The
federal
guidance
on
BACT,
by
including
an
evaluation
of
the
most
stringent
control
levels
currently
being
achieved
or
required,
will
also
provide
federal
guidance
on
LAER.
The
EPA
plans
to
make
a
draft
of
this
guidance
available
for
public
review
and
comment
in
January
2000.
Final
guidance
would
then
be
prepared,
after
relevant
comments
are
considered,
in
time
for
States,
refiners,
and
the
public
to
consider
in
preparing
and
reviewing
permit
applications
and
proposed
permits.
·
Availability
of
offsets.
Refineries
located
in
nonattainment
areas
must
offset
any
proposed
significant
emissions
increases
with
an
equal
or
greater
amount
of
emissions
reductions
from
other
sources,
usually
coming
from
within
the
same
nonattainment
area.
We
believe
that
vehicle
emissions
reductions
resulting
from
the
use
of
low
sulfur
gasoline
can
be
used
as
offsets
for
the
refineries,
as
long
as
the
statutory
and
regulatory
criteria
for
creditable
offsets
are
satisfied
and
States
decide
to
provide
for
this
opportunity
in
their
SIP
attainment
demonstration.
We
believe
generally
that
this
option
should
be
available
to
States
since
only
a
small
fraction
of
the
total
vehicle
emissions
reductions
in
any
county
would
be
needed
to
offset
refinery
emissions
increases
resulting
from
implementation
of
gasoline
desulfurization
projects.
Generally,
the
reductions
must
also
occur
in
the
same
nonattainment
area
as
the
location
of
the
refinery
for
which
the
offsets
are
required.
The
EPA
plans
to
issue
the
appropriate
guidance
early
in
the
year
2000
to
help
a
State
to
determine
whether
and
to
what
extent
it
may
wish
to
use
vehicle
emissions
reductions
as
offsets
for
Tier
2
projects.
·
EPA
refinery
permitting
teams.
We
intend
to
assemble
special
EPA
teams,
comprised
of
Headquarters
and
Regional
Office
experts,
that
will
track
the
overall
progress
in
permit
issuance
and
will
be
available
to
assist
State
and
local
permitting
authorities,
refineries,
and
the
public
upon
request
to
resolve
site­
specific
permitting
issues.
These
teams
will
be
comprised
of
persons
who
are
knowledgeable
about
permitting
programs
and
refinery
operations
and
can
provide
expert
assistance
to
troubleshoot
permitting
issues
that
may
arise.
As
appropriate,
the
teams
will
work
with
stakeholders
on
a
case­
by­

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10,
2000
/
Rules
and
Regulations
96
The
NEJAC
was
chartered
in
1993
expressly
to
give
the
EPA
Administrator
independent
advice,
consultation,
and
recommendations
on
environmental
justice
matters.
NEJAC
members
come
from
state,
tribal,
and
local
governments;
tribal
and
indigenous
citizen's
organizations;
business
and
industry;
academia;
and
environmental
advocacy
and
grassroots
community
groups.
case
basis
to
evaluate
site­
specific
approaches
to
regulatory
compliance
within
existing
policy
and
regulations.

ii.
Environmental
Justice
The
Tier
2/
gasoline
sulfur
rule
will
help
achieve
significant
nationwide
reductions
in
the
emissions
of
nitrogen
oxides
(
NOx),
volatile
organic
compounds
(
VOC),
particulate
matter
(
PM),
and
sulfur
dioxide
(
SO2).
These
reductions
will
improve
air
quality
across
the
country
and
will
provide
increased
protection
to
the
public
against
a
wide
range
of
health
effects,
including
chronic
bronchitis,
respiratory
illnesses,
and
aggravation
of
asthma
symptoms.
Furthermore,
the
Tier
2/
gasoline
sulfur
rule
will
achieve
environmental
benefits
in
the
local
areas
where
refineries
are
located,
due
to
reductions
in
tail
pipe
emissions
from
vehicles
driven
in
those
areas.
Although
we
expect
residual
emissions
increases
at
some
refineries
even
after
installing
the
stringent
level
of
emissions
controls
required
under
the
Act,
for
the
vast
majority
of
areas,
we
believe
that
these
potential
refinery
emissions
increases
will
be
very
small
compared
to
the
Tier
2
benefits
in
those
same
local
areas.
We
believe
it
is
important
to
understand
and
address
concerns
relating
to
potential
localized
emissions
increases
from
refineries
that
make
significant
process
changes
to
meet
the
requirements
of
the
Tier
2
rule.
We
believe
that,
among
other
things,
the
keys
to
addressing
any
potential
concerns
are
as
follows:
·
Providing
meaningful
community
involvement
early
and
throughout
the
process;
·
Determining
what
information
and
actions
would
eliminate
concerns;
and
·
Determining
what
EPA,
States,
and
industry
can
do
to
make
the
permitting
process
smoother
by
ensuring
ongoing
community
involvement
in
the
decision
making
process
and
by
building
trust
among
stakeholders.
To
this
end,
the
Agency
has
already
taken
some
actions
to
try
to
mitigate
potential
environmental
justice
concerns.
First,
EPA's
Office
of
Air
and
Radiation
and
the
Alternative
Dispute
Resolution
Team
within
EPA's
Office
of
the
Administrator
implemented
a
national
convening
process
which
was
designed
to
bring
together
a
broad
spectrum
of
stakeholders
to
explore
with
them
their
perceptions
and
views
of
issues
associated
with
Tier
2
permitting
and
to
assess
the
potential
for
a
collaborative
process
to
address
specific
implementation
issues
at
some
time
in
the
future.
The
convening
was
carried
out
by
an
outside
neutral
party
who
conducted
interviews
with
representatives
from
selected
EPA
offices,
States,
industry,
environmental
groups,
and
environmental
justice
organizations.
Second,
EPA
held
informational
briefings
and
provided
background
materials
to
the
National
Environmental
Justice
Advisory
Council's
(
NEJAC)
96
Air
and
Water
Subcommittee
and
Enforcement
Subcommittee
to
provide
an
opportunity
for
them
to
provide
feedback
and
recommendations
to
the
Agency.
Finally,
in
October
1999,
we
met
with
both
national
environmental
groups
and
environmental
justice
advocacy
representatives,
to
discuss
their
views
on
the
permitting
aspects
of
the
proposed
rule.
The
EPA
is
committed
to
continue
working
with
all
stakeholders
to
resolve
specific
Environmental
Justice
issues
if
and
when
they
arise.
To
fulfill
this
commitment,
we
plan
to
undertake
additional
actions
in
the
future,
including
providing
education
and
outreach
about
the
rule
and
its
impacts
in
local
communities,
developing
permitting
guidance
through
a
public
process
and
addressing
Title
VI
petitions
if
they
arise.

D.
What
Are
the
Economic
Impacts,
Cost
Effectiveness
and
Monetized
Benefits
of
the
Tier
2
Program?
Consideration
of
the
economic
impacts
of
new
standards
for
vehicles
and
fuels
has
been
an
important
part
of
our
decision
making
process
for
this
final
rule.
The
following
sections
describe
first
the
costs
associated
with
meeting
the
new
vehicle
standards
and
the
new
fuel
standards.
This
will
be
followed
with
a
discussion
of
the
cost
effectiveness
of
the
rule.
Lastly,
we
will
discuss
the
results
of
a
benefit­
cost
assessment
that
we
have
prepared.
Full
details
of
our
cost
analyses,
including
information
not
presented
here,
can
be
found
in
the
RIA
associated
with
this
rule.
Also,
our
response
to
comments
on
the
cost,
cost
effectiveness,
and
monetized
benefits
analyses
are
contained
in
the
Response
to
Comments
document
for
this
rule.

1.
What
Are
the
Estimated
Costs
of
the
Vehicle
Standards?
To
perform
a
cost
analysis
for
the
standards,
we
first
determined
a
package
of
likely
technologies
that
manufacturers
could
use
to
meet
the
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
the
Tier
2
standards
will
be
met
through
refinements
of
current
emissions
control
components
and
systems
rather
than
through
the
widespread
use
of
new
technology.
Furthermore,
smaller
lighter­
weight
vehicles
and
trucks
will
generally
require
less
extensive
improvements
than
larger
vehicles
and
trucks.
More
specifically,
we
anticipate
a
combination
of
technology
upgrades
such
as
the
following:
·
Improvements
to
the
catalyst
system
design,
structure,
and
formulation
plus
in
some
cases
an
increase
in
average
catalyst
size
and
loading;
·
Air
and
fuel
system
modifications
including
changes
such
as
improved
microprocessors,
improved
oxygen
sensors,
leak
free
exhaust
systems,
air
assisted
fuel
injection,
and
calibration
changes
including
improved
precision
fuel
control
and
individual
cylinder
fuel
control;
·
Engine
modifications,
possibly
including
an
additional
spark
plug
per
cylinder,
an
additional
swirl
control
valve,
or
other
hardware
changes
needed
to
achieve
cold
combustion
stability;
·
Increased
use
of
fully
electronic
exhaust
gas
recirculation
(
EGR);
and
·
Increased
use
of
secondary
air
injection
for
6
cylinder
and
larger
engines.
The
costs
for
MDPVs
have
been
included
here
with
the
LDT4
cost
estimates.
We
expect
that
the
technologies
needed
to
meet
the
Tier
2
standards
for
the
MDPVs
will
be
very
similar
to
those
for
LDT4s.
However,
the
MDPVs
cost
estimates
are
somewhat
higher
than
for
LDT4s.
Vehicles
over
8,500
pounds
GVWR
are
currently
certified
to
heavy­
duty
engine
emissions
standards
using
the
heavy­
duty
test
procedures.
This,
at
least
in
part,
has
led
to
differences
in
baseline
technologies
compared
to
current
LDT4s.
Vehicles
above
8,500
pounds,
for
example,
are
currently
equipped
with
technologies
such
as
close
coupled
catalysts
and
secondary
air
injection
to
a
lesser
extent.
Therefore,
we
expect
higher
incremental
costs
for
the
MDPVs
compared
to
LDT4s.
There
is
further
information
on
the
costs
for
MDPVs
in
the
RIA.

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97
``
Learning
Curves
in
Manufacturing,''
Linda
Argote
and
Dennis
Epple,
Science,
February
23,
1990,
Vol.
247,
pp.
920
 
924.
98
Even
though
the
NLEV
program
ends
in
the
Tier
2
timeframe,
we
have
not
included
the
NLEV
program
costs
or
benefits
in
our
analysis,
since
EPA
analyzed
and
adopted
NLEV
previously.
Using
a
typical
mix
of
changes
for
each
group,
we
projected
costs
separately
for
LDVs,
the
different
LDT
classes,
and
for
different
engine
sizes
(
4,
6,
8,
10­
cylinder)
within
each
class.
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
will
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.
97
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
the
variable
costs
of
producing
the
Tier
2
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
have
prepared
our
cost
estimates
for
meeting
the
Tier
2
standards
using
a
baseline
of
NLEV
technologies
for
LDVs,
LDT1s,
and
LDT2s,
and
Tier
1,
or
current
technologies
for
LDT3s,
LDT4s
and
MDPVs.
These
are
the
standards
that
vehicles
would
be
meeting
in
2003.98
We
have
not
specifically
analyzed
smaller
incremental
changes
to
technologies
that
might
occur
due
to
the
interim
standards
between
the
baseline
and
Tier
2.
In
most
cases,
we
believe
these
changes
will
not
be
significant
based
on
current
certification
levels
and
manufacturers
will
maximize
carryover
For
others,
manufacturers
can
use
averaging
and
other
program
flexibilities
to
avoid
redesigning
vehicles
twice
within
a
relatively
short
period
of
time.
We
believe
this
is
likely
to
be
an
attractive
approach
for
manufacturers
due
to
the
savings
in
R&
D
and
other
resources.
For
the
total
annual
cost
estimates,
we
projected
that
manufacturers
will
start
the
phase­
in
of
Tier
2
vehicles
with
LDVs
in
2004
and
progress
to
heavier
vehicles
until
all
LDT2s
meet
Tier
2
standards
in
2007.
For
LDT3s
and
LDT4s,
we
projected
some
sales
of
Tier
2
LDT3s
prior
to
2008
for
purposes
of
averaging
in
the
interim
program
and
that
the
phase­
in
of
Tier
2
vehicles
would
end
with
LDT4s
and
MDPVs
in
2009.
Finally,
we
have
incorporated
what
we
believe
to
be
a
conservatively
high
level
of
R&
D
spending
at
$
5,000,000
per
vehicle
line
(
with
annual
sales
of
100,000
units
per
line).
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
Tier
2
standards.
However,
we
believe
that
the
R&
D
costs
may
be
generous
because
the
projection
ignores
the
carryover
of
knowledge
from
the
first
vehicle
lines
designed
to
meet
the
standard
to
others
phased­
in
later.
The
evaporative
emissions
standards
we
are
finalizing
today
for
LDVs,
LDTs
and
MDPVs
are
feasible
with
relatively
small
cost
impacts.
We
estimate
the
cost
of
system
improvements
to
be
about
$
4
per
vehicle,
for
all
vehicle
classes.
This
incremental
cost
reflects
the
cost
of
moving
to
low
permeability
materials,
improved
designs
or
low­
loss
connectors.
R&
D
for
the
evaporative
emissions
standard
is
included
in
the
R&
D
estimates
given
above
for
the
tailpipe
standards.
We
have
included
no
projections
of
learning
curve
reductions
for
the
evaporative
standard.
Table
IV.
D.
 
1
provides
our
estimates
of
the
per
vehicle
increase
in
purchase
price
for
LDVs,
LDTs,
and
MDPVs.
The
near­
term
cost
estimates
in
Table
IV.
D.
 
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
have
sales
weighted
the
cost
differences
for
the
various
engine
sizes
(
4­,
6­,
8­,
10­
cylinder)
within
each
category.

TABLE
IV.
D.
 
1.
 
ESTIMATED
PURCHASE
PRICE
INCREASES
DUE
TO
TIER
2
TAILPIPE
STANDARDS
LDV
LDT1
LDT2
LDT3
LDT4/
MDPVsa
Tailpipe
standards:
Near­
term
(
year
1)
............................................................................
$
78
$
70
$
125
$
245
$
258
Long­
term
(
year
6
and
beyond)
........................................................
49
45
97
199
208
Evaporative
Standard
..............................................................................
4
4
4
4
4
Notes:
a
Weighted
average.

We
did
not
receive
comments
disagreeing
with
the
technology
projections
or
technology
cost
estimates
contained
in
the
proposal.
We
have,
however,
revised
our
cost
estimates
somewhat
based
on
new
information
available
since
the
proposal.
We
moderately
lowered
our
cost
estimates
due
to
adjustments
we
have
made
in
our
technology
projections.
Based
on
the
results
of
our
vehicle
testing
program
described
above
in
section
IV.
A.
1.,
we
now
believe
that
a
few
of
the
hardware
changes
we
had
anticipated
are
not
likely
to
be
needed
to
meet
the
standards.
Albeit
there
is
always
fluctuation,
the
spot
prices
of
precious
metals
have
increased
somewhat
since
the
proposal
and
we
have
adjusted
our
analysis
to
reflect
those
changes.
Overall,
the
cost
estimates
are
within
5
percent
of
those
in
the
proposal
for
LDVs
and
LLDTs.
The
changes
noted
above
moderately
lowered
the
costs
for
HLDTs
compared
to
the
proposal.
The
cost
increase
due
to
the
inclusion
of
MDPVs
offsets
most
of
the
lowered
costs
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/
Rules
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Regulations
for
the
LDT4
category.
The
resulting
cost
estimate
for
the
LDT4/
MDPVs
tailpipe
standards
is
also
within
5
percent
of
the
cost
estimates
for
LDT4s
contained
in
the
proposal.
The
detailed
technology
and
cost
analyses
are
available
in
the
RIA.
We
are
also
finalizing
OBD
II
requirements
and
onboard
vapor
recovery
(
ORVR)
requirements
for
MDPVs.
We
have
estimated
that
OBD
II
will
cost
about
$
80,
which
includes
the
costs
of
additional
sensors
and
system
improvements.
We
have
estimated
ORVR
system
costs
to
be
about
$
10.
The
$
10
cost
for
ORVR
does
not
include
any
fuel
cost
savings
over
the
life
of
the
vehicles
due
the
recover
of
fuel
vapor
during
refueling.
ORVR
provides
a
fuel
cost
savings
because
the
vapors
are
captured,
and
burned
in
the
engine,
rather
than
escaping
to
the
atmosphere.
We
estimate
the
savings
over
the
life
of
the
vehicle
to
be
about
$
6.
These
costs
are
not
reflected
in
Table
IV.
D.
 
1.

2.
Estimated
Costs
of
the
Gasoline
Sulfur
Standards
As
we
explained
at
the
beginning
of
Section
IV.
C,
we
expect
that
most
refiners
will
have
to
install
capital
equipment
to
meet
the
gasoline
sulfur
standard.
Presuming
that
refiners
will
want
to
minimize
the
cost
involved,
the
majority
of
refiners
are
expected
to
desulfurize
the
gasoline
blendstock
produced
by
the
fluidized
catalytic
cracker
(
FCC)
unit,
although
a
few
may
choose
to
desulfurize
the
feed
to
the
FCC
unit.
Recent
advances
have
led
to
significant
improvements
in
the
hydrotreating
technologies
used
for
FCC
gasoline
desulfurization.
Since
these
improved
technologies
represent
the
lowest
cost
options
and
are
expected
to
be
used
by
most
refiners
needing
to
install
desulfurization
equipment,
we
have
based
our
cost
estimates
primarily
on
their
use.
However,
in
acknowledgment
that
some
refiners,
particularly
those
which
make
investment
decisions
in
the
near
term,
are
likely
to
select
more
traditional
approaches
using
proven
technologies,
we
have
included
the
costs
for
currently
proven
desulfurization
technologies
in
our
analysis,
as
well.
This
is
different
from
the
analysis
we
did
in
support
of
our
proposal,
where
we
assumed
that
all
refiners
would
take
advantage
of
the
most
improved
technologies
we
were
aware
of
at
that
time.
For
our
analysis
of
the
costs
of
controlling
gasoline
sulfur,
we
estimated
the
costs
in
five
different
regions
of
the
country
(
Petroleum
Administration
Districts
for
Defense,
or
PADDs)
for
reductions
from
the
current
PADD
average
gasoline
sulfur
level
down
to
a
30
ppm
average.
We
then
combined
the
regional
costs
to
develop
an
average
national
individual
refinery
cost,
and
used
this
figure
to
calculate
national
aggregate
capital
and
operating
costs.
In
our
proposal
we
estimated
a
single
cost
for
desulfurizing
gasoline,
using
as
an
assumption
for
the
purpose
of
analysis
that
all
refiners
would
upgrade
their
refineries
by
2004
and
that
all
would
choose
one
of
two
improved
technologies
we
knew
of
at
the
time.
We
then
reduced
this
cost
over
time
to
reflect
expected
cost
reductions
due
to
further
technology
advancements
and
reduced
operating
costs
due
to
improved
understanding
of
the
technologies
and
refinery
debottlenecking.
Based
on
improved
information
about
the
availability
of
technologies,
we
have
now
analyzed
the
costs
of
controlling
sulfur
on
a
year­
byyear
basis
beginning
with
2004,
to
be
consistent
with
our
analysis
of
the
rate
at
which
the
industry
would
invest
in
desulfurization
technologies
over
the
first
years
of
the
program
and
the
changing
technology
selections
(
and
costs)
that
would
accompany
this
phasein
(
discussed
in
Section
IV.
C.
1
above).
A
detailed
description
of
our
calculations
can
be
found
in
the
Regulatory
Impact
Analysis;
the
reader
can
refer
to
the
draft
RIA
released
with
the
proposed
rule
for
more
information
on
our
prior
analysis.
We
estimate
that,
on
average,
refineries
which
install
equipment
to
meet
the
30
ppm
average
standard
will
invest
about
$
44
million
for
capital
equipment
and
spend
about
$
16
million
per
year
for
each
refinery
to
cover
the
operating
costs
associated
with
these
desulfurization
units.
Since
this
average
represents
many
refineries
diverse
in
size
and
gasoline
sulfur
level
as
well
as
a
mix
of
desulfurization
technologies,
some
refineries
will
pay
more
and
others
less
than
the
average
costs.
When
the
average
per­
refinery
cost
is
aggregated
for
all
the
gasoline
expected
to
be
produced
in
this
country
in
2008
(
the
first
year
that
all
refiners
will
be
required
to
meet
the
30
ppm
standard,
unless
any
small
refiners
are
granted
a
extension
of
hardship
relief),
the
total
investment
for
desulfurization
processing
units
(
spread
between
2003
and
2007)
is
estimated
to
be
about
$
4.3
billion,
and
operating
costs
for
these
units
is
expected
to
be
about
$
1.3
billion
per
year.
Using
our
estimated
capital
and
operating
costs
for
domestic
refineries,
we
calculated
the
average
per­
gallon
cost
of
reducing
gasoline
sulfur
down
to
30
ppm
for
each
year
as
the
program
is
implemented.
Using
a
capital
cost
amortization
factor
(
based
on
a
seven
percent
rate
of
return
on
investment)
and
including
no
taxes,
we
estimated
the
average
national
cost
for
desulfurizing
gasoline
to
be
about
1.7
 
1.9
cents
per
gallon
as
the
program
is
phased
in.
This
cost
is
the
cost
to
society
of
reducing
gasoline
sulfur
down
to
30
ppm
that
we
used
for
estimating
cost
effectiveness.
Table
IV.
D.
 
2
below
summarizes
our
estimates
of
per­
gallon
gasoline
cost
increases
for
select
years.

TABLE
IV.
D.
 
2.
 
ESTIMATED
PERGALLON
COST
FOR
DESULFURIZING
GASOLINE
IN
FUTURE
YEARS
Year
Cost
(
cents/
gallon)

2004
..........................................
1.9
2005
..........................................
1.9
2006
..........................................
1.7
2007
..........................................
1.7
2008
 
2018
................................
1.7
2019+
........................................
1.3
Although
the
costs
shown
here
are
slightly
higher
than
we
projected
in
the
proposal,
overall,
we
believe
our
revised
costs
are
consistent
with
those
in
the
proposal
and
that
our
improved
methodology
and
information
are
the
source
of
the
differences.
As
stated
earlier
in
this
section,
we
believe
this
analysis
more
accurately
reflects
the
actual
investment
decisions
of
individual
refiners
over
the
years
in
which
the
industry
is
phasing
down
sulfur
levels.
Furthermore,
we
have
also
made
a
number
of
other
adjustments
to
our
analysis
of
capital
and
operating
costs
for
each
individual
technology
based
on
new
information
received
from
the
technology
vendors
and
information
we
obtained
during
the
comment
period.
For
example,
we
now
include
eight
different
technologies
in
our
analysis,
including
some
more
traditional
approaches,
whereas
in
the
proposal
we
only
considered
two
new
technologies.
Hence,
the
range
of
costs
is
broader.
In
addition,
as
explained
in
the
RIA,
we
now
believe
we
underestimated
the
capital
costs
of
desulfurization
slightly
in
the
proposal
based
on
our
calculation
of
the
costs
of
providing
hydrogen
to
the
processes.
We
believe
our
analysis
now
reflects
the
most
up­
to­
date
information
about
the
costs
of
installing
and
operating
the
various
desulfurization
technologies
included
in
our
analysis.
These
adjustments
are
explained
in
detail
in
the
Regulatory
Impact
Analysis.
We
still
believe
that
over
time,
particularly
in
2006
 
8
when
the
last
refineries
will
be
making
investments,
the
costs
of
gasoline
desulfurization
equipment
will
be
significantly
lower
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Regulations
99
For
a
sensitivity
analysis
of
our
cost
estimates
using
alternative
assumptions,
please
see
Chapter
V
of
the
RIA.
100
Figure
IV.
D.
 
1
is
based
on
the
amortized
costs
from
Tables
IV.
D.
 
1
and
IV.
D.
 
2.
Actual
capital
investments,
particularly
important
for
fuels,
would
occur
prior
to
and
during
the
initial
years
of
the
program,
as
described
above
in
section
IV.
D.
2.
than
it
is
today.
Some
of
the
technologies
expected
to
be
selected
in
this
time
frame
(
specifically,
the
new
adsorption
technologies
which
we
didn't
know
about
when
we
proposed
these
requirements)
are
projected
to
cost
about
half
of
what
the
older
technologies
cost.
Furthermore,
with
time
refiners
will
have
to
replace
existing
desulfurization
equipment
(
as
equipment
ages),
and
by
then
they
will
have
a
number
of
low
cost
alternatives
to
choose
from.
Thus,
as
Table
IV.
D.
 
2
shows,
the
long
term
estimated
costs
for
gasoline
desulfurization
are
lower
than
those
we
projected
in
our
proposal.
99
3.
What
Are
the
Aggregate
Costs
of
the
Tier
2/
Gasoline
Sulfur
Final
Rule?
Using
current
data
for
the
size
and
characteristics
of
the
vehicle
fleet
and
making
projections
for
the
future,
the
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
IV.
D.
 
1
portrays
the
results
of
these
projections.
100
BILLING
CODE
6560
 
50
 
P
BILLING
CODE
6560
 
50
 
C
As
can
be
seen
from
the
figure,
the
annual
cost
starts
out
at
about
$
1.9
billion
per
year
and
increases
over
the
phase­
in
period
to
about
$
4.1
billion
in
2008.
Total
annualized
costs
are
projected
to
remain
at
about
$
4
billion
through
2018.
After
2018,
annualized
fuel
costs
are
projected
to
decrease
somewhat
due
to
the
use
of
new
technologies
which
would
enable
refiners
to
produce
low
sulfur
fuel
at
a
lower
cost.
The
gradual
rise
in
costs
long
term
is
due
to
the
effects
of
projected
growth
in
vehicle
sales
and
fuel
consumption.
The
RIA
provides
further
detail
regarding
these
cost
projections.
4.
How
Does
the
Cost­
effectiveness
of
This
Program
Compare
to
Other
Programs?

This
section
summarizes
the
costeffectiveness
analysis
conducted
by
EPA
and
its
results.
The
purpose
of
this
analysis
is
to
show
that
the
reductions
from
the
vehicle
and
fuel
controls
being
finalized
today
are
cost­
effective
in
comparison
to
alternative
means
of
attaining
or
maintaining
the
NAAQS.
This
analysis
involves
a
comparison
of
our
program
not
only
to
past
measures,
but
also
to
other
potential
future
measures
that
might
be
employed
to
attain
and
maintain
the
NAAQS.
Both
EPA
and
states
have
already
adopted
numerous
control
measures,
and
remaining
measures
tend
to
be
more
expensive
than
those
previously
employed.
As
we
employ
the
most
costeffective
available
measures
first,
more
expensive
ones
tend
to
become
necessary
over
time.
The
emission
reductions
used
to
calculate
the
cost­
effectiveness
levels
reported
here
are
based
on
those
reductions
used
for
our
air
quality
analysis
modeling
and
benefits
analysis.
This
was
done
to
maintain
consistency
in
the
analyses.
As
noted
in
Section
III.
B.
above,
we
have
updated
our
inventory
model
since
the
air
quality
modeling
inventories
were
calculated.
In
Chapter
III
of
our
RIA,
Table
III.
A.
 
3
compares
the
updated
Tier
2
model
with
the
air
quality
analysis
modeling
and
shows
that
the
emission
reductions
expected
from
Tier
2/
gasoline
sulfur
will
be
substantially
greater
than
the
amounts
originally
calculated.
If
the
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updated
numbers
were
incorporated
into
our
cost­
effectiveness
we
would
expect
the
results
to
be
improved
over
those
shown
in
this
section.
We
received
a
number
of
comments
on
our
cost­
effectiveness
analysis
in
response
to
our
NPRM.
Our
responses
to
these
comments
can
be
found
in
the
Response
To
Comments
document.

a.
Cost­
Effectiveness
of
This
Program
We
have
calculated
the
costeffectiveness
of
the
exhaust
emission/
gasoline
sulfur
standards
and
the
evaporative
emission
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
an
average
Tier
2
vehicle.
This
per­
vehicle
approach
focuses
on
the
cost­
effectiveness
of
the
program
from
the
point
of
view
of
the
Tier
2
vehicles
which
will
be
used
to
meet
the
new
requirements,
and
is
the
method
used
in
our
proposal.
However,
the
per­
vehicle
approach
does
not
capture
all
of
the
costs
or
emission
reductions
from
the
Tier
2/
gasoline
sulfur
program
since
it
does
not
account
for
the
use
of
low
sulfur
gasoline
in
pre­
Tier
2
vehicles.
Therefore,
we
have
also
calculated
an
aggregate
costeffectiveness
using
the
net
present
value
of
costs
and
emission
reductions
for
all
in­
use
vehicles
over
a
30­
year
time
frame.
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.
Vehicle
cost
is
constant
from
year
six
onward.
Fuel
costs
per
gallon
continue
to
decline
slowly
in
the
years
past
year
six;
however,
the
overall
impact
of
this
decline
is
small
and
we
have
decided
to
use
year
six
results
for
our
long
term
cost­
effectiveness.
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
aggregate
approach
to
calculating
the
cost­
effectiveness
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
program
in
2004.
This
timeframe
captures
both
the
early
period
of
the
program
when
very
few
Tier
2
vehicles
will
be
in
the
fleet,
and
the
later
period
when
essentially
all
vehicles
in
the
fleet
will
meet
Tier
2
standards.
We
have
calculated
the
aggregate
cost­
effectiveness
using
the
net
present
value
of
the
nationwide
emission
reductions
and
costs
for
each
calendar
year.
These
emission
reductions
and
costs
are
summarized
in
Sections
III.
B,
III.
C,
and
IV.
D.
3,
and
are
given
for
every
calendar
year
in
the
RIA.
For
more
information
on
how
the
aggregate
cost­
effectiveness
was
calculated
please
refer
to
the
RIA.
Our
per­
vehicle
and
aggregate
costeffectiveness
values
are
given
in
Tables
IV.
D.
 
3
and
IV.
D.
 
4.
Table
IV.
D.
 
3
summarizes
the
per­
vehicle,
net
present
value
lifetime
costs,
NMHC+
NOX
emission
reductions,
and
resulting
costeffectiveness
results
for
our
Tier
2/
gasoline
sulfur
program
using
sales
weighted
averages
of
the
costs
(
both
near
term
and
long
term)
and
emission
reductions
of
the
various
vehicle
classes
affected.
Table
IV.
D.
 
4
provides
the
same
information
from
the
program
aggregate
perspective.
It
includes
the
net
present
value
of
the
30­
year
stream
of
vehicle
and
fuel
costs,
NMHC+
NOX
emission
reductions,
and
the
resulting
aggregate
cost­
effectiveness.
For
simplicity,
we
have
used
the
midpoint
of
our
estimated
range
of
20
to
65
percent
for
the
irreversibility
effect.
The
full
range
of
irreversibility
would
only
cause
the
cost­
effectiveness
values
to
differ
from
those
in
Table
IV.
D
 
3,
for
example,
by
$
60/
ton
to
$
100/
ton.
Note
that,
even
though
we
are
setting
new
standards
for
PM,
those
standards
are
already
being
met,
so
there
is
no
cost
associated
with
the
new
PM
standard
and
therefore
no
separate
costeffectiveness
analysis
for
PM.
Tables
IV.
D.
 
3
and
IV.
D.
 
4
also
display
cost­
effectiveness
values
based
on
two
approaches
to
account
for
the
reductions
in
SO2
and
tailpipe
emitted
sulfate
particulate
matter
(
PM)
associated
with
the
reduction
in
gasoline
sulfur.
While
these
reductions
are
not
central
to
the
program
and
are
therefore
not
displayed
with
their
own
cost­
effectiveness,
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
NMHC+
NOX
reductions
from
Tier
2/
gasoline
sulfur.
The
second
set
accounts
for
these
ancillary
reductions
by
crediting
some
of
the
cost
of
the
program
to
SO2
and
PM
reduction.
The
amount
of
cost
allocated
to
SO2
and
PM
is
based
on
the
cost­
effectiveness
of
SO2
and
PM
emission
reductions
that
could
be
obtained
from
alternative,
potential
future
EPA
programs.

TABLE
IV.
D
 
3.
 
PER­
VEHICLE
COST­
EFFECTIVENESS
OF
THE
STANDARDS
Cost
basis
Discounted
lifetime
vehicle
&
fuel
costs
Discounted
lifetime
NMHC
+
NOX
reduction
(
tons)
Discounted
lifetime
cost­
effectiveness
per
ton
Discounted
lifetime
cost­
effectiveness
per
ton
with
SO2
and
direct
PM
credit
a
Near
term
cost
(
production
year
1)
.................................................................................
$
243
0.110
$
2,211
$
1,717
Long
term
cost
(
production
year
6)
.................................................................................
205
0.110
1,863
1,368
Notes:
a
$
51
credited
to
SO2
($
4,800/
ton),
$
4
to
direct
PM
($
10,000/
ton).

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Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
101
This
rulemaking
was
remanded
by
the
D.
C.
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.
102
``
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
IV.
D
 
4.
 
AGGREGATE
COST­
EFFECTIVENESS
OF
THE
STANDARDS
Discounted
aggregate
vehicle
&
fuel
costs
Discounted
aggregate
NMHC
+
NOX
reduction
(
tons)
(
millions)
Discounted
aggregate
cost­
effectiveness
per
ton
Discounted
aggregate
cost­
effectiveness
per
ton
with
SO2
and
direct
PM
credit
a
$
48.1
billion
23.5
$
2,047
$
1,311
Notes:
a
$
13.8
billion
credited
to
SO2
($
4,800/
ton),
$
3.5
billion
to
direct
PM
($
10,000/
ton).

b.
How
Does
the
Cost­
Effectiveness
of
This
Program
Compare
With
Other
Means
of
Obtaining
Mobile
Source
NOX
+
NMHC
Reductions?
In
comparison
with
other
mobile
source
control
programs,
we
believe
that
our
program
represents
the
most
costeffective
new
mobile
source
control
strategy
currently
available
that
is
capable
of
generating
substantial
NOX
+
NMHC
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
recent
years.
Table
IV.
D.
 
5
summarizes
the
cost­
effectiveness
of
several
recent
EPA
actions.

TABLE
IV.
D.
 
5.
 
COST­
EFFECTIVENESS
OF
PREVIOUSLY
IMPLEMENTED
MOBILE
SOURCE
PROGRAMS
Program
$/
ton
a
NOX+
NMHC
2004
Highway
HD
Diesel
stds
....................................
204
 
399
Nonroad
Diesel
engine
stds
410
 
650
Tier
1
vehicle
controls
..........
1,980
 
2,690
NLEV
....................................
1,859
Marine
SI
engines
................
1,128
 
1,778
On­
board
diagnostics
...........
2,228
Notes:
a
Costs
adjusted
to
1997
dollars.

We
can
see
from
the
table
that
the
cost­
effectiveness
of
the
Tier
2/
gasoline
sulfur
standards
falls
within
the
range
of
these
other
programs.
Engine­
based
standards
(
the
2004
highway
heavy­
duty
diesel
standards,
the
nonroad
diesel
engine
standards
and
the
marine
sparkignited
engine
standards)
have
generally
been
less
costly
than
Tier
2/
gasoline
sulfur.
Vehicle
standards,
most
similar
to
today's
program,
have
values
comparable
to
or
higher
than
Tier
2/
gasoline
sulfur.
The
values
in
Table
IV.
D.
 
5
might
imply
that
further
reductions
in
NOX
and
VOC
from
heavy­
duty
engines
could
be
more
cost­
effective
than
the
reductions
that
will
be
produced
from
our
Tier
2/
gasoline
sulfur
program.
However,
we
do
not
believe
that
to
be
the
case.
While
we
are
indeed
developing
a
proposal
for
further
control
from
heavy­
duty
engines,
we
expect
that
substantial
further
emission
reductions
will
require
advanced
aftertreatment
devices.
These
devices
will
be
more
costly
than
methods
used
to
meet
our
past
standards,
and
will
have
difficulty
functioning
properly
without
changes
to
diesel
fuel.
We
therefore
expect
that
the
cost
effectiveness
of
future
heavy­
duty
standards
is
not
likely
to
be
significantly
less
than
the
cost
effectiveness
of
today's
rule.
On
the
light­
duty
vehicle
side,
the
last
two
sets
of
standards
were
Tier
1
and
NLEV,
which
had
cost­
effectiveness
comparable
to
or
higher
than
Tier
2/
gasoline
sulfur.
Compared
to
engines,
these
levels
reflect
the
advanced
(
and
more
expensive)
state
of
vehicle
control
technology,
where
standards
have
been
in
effect
for
a
much
longer
period
than
for
engines.
Considering
the
increased
stringency
of
the
Tier
2
standards,
it
is
noteworthy
that
the
cost­
effectiveness
of
Tier
2/
gasoline
sulfur
is
in
the
same
range
as
these
actions.
Based
on
these
results,
Tier
2/
gasoline
sulfur
is
a
logical
and
consistent
next
step
in
vehicle
control.
In
conclusion,
we
believe
that
the
Tier
2/
Gasoline
Sulfur
program
is
a
costeffective
program
for
mobile
source
NOX
+
NMHC
control.
We
are
unable
to
identify
another
mobile
source
control
program
that
would
be
more
costeffective
than
Tier
2/
gasoline
sulfur
while
also
producing
equivalent
reductions
in
NOX
and
NMHC
emissions
in
the
same
timeframe
as
our
program.

c.
How
Does
the
Cost­
Effectiveness
of
This
Program
Compare
With
Other
Known
Non­
Mobile
Source
Technologies
for
Reducing
NOX
+
NMHC?

In
evaluating
the
cost­
effectiveness
of
the
Tier
2/
Gasoline
Sulfur
program,
we
also
considered
whether
our
program
is
cost­
effective
in
comparison
with
alternative
means
of
attaining
or
maintaining
the
NAAQS
other
than
mobile
source
programs.
As
described
below,
we
have
concluded
that
Tier
2/
Gasoline
Sulfur
is
cost­
effective
considering
the
anticipated
cost
of
other
technologies
that
will
be
needed
to
help
attain
and
maintain
the
NAAQS.
In
the
context
of
the
Agency's
rulemaking
to
revise
the
ozone
and
PM
NAAQS,
101
the
Agency
compiled
a
list
of
additional
known
technologies
that
could
be
considered
in
devising
new
emission
reductions
strategies.
102
Through
this
broad
review,
over
50
technologies
were
identified
that
could
reduce
NOX
or
VOC.
The
costeffectiveness
of
these
technologies
averaged
approximately
$
5,000/
ton
for
VOC
and
$
13,000/
ton
for
NOX.
These
values
clearly
indicate
that
not
only
are
future
emission
control
strategies
likely
to
be
more
expensive
(
less
costeffective
than
past
strategies,
but
the
cost­
effectiveness
of
our
Tier
2/
Gasoline
Sulfur
program
falls
at
the
lower
end
of
the
range
for
potential
future
strategies.
In
addition,
our
Tier
2/
Gasoline
Sulfur
program
will
deliver
critical
further
reductions
that
are
not
readily
obtainable
by
any
other
means
known
to
the
Agency.
If
all
of
the
technologies
modeled
in
the
NAAQS
analysis
costing
less
than
$
10,000/
ton
were
implemented
nationwide,
they
would
produce
NOX
emission
reductions
of
about
2.9
million
tons
per
year.
The
Tier
2/
Gasoline
Sulfur
program
by
itself
will
generate
about
2.8
million
tons
per
year
once
fully
implemented.
Given
the
continuing
need
for
further
emission
reductions,
we
believe
that
Tier
2/
Gasoline
Sulfur
control
is
clearly
a
costeffective
approach
for
attaining
and
maintaining
the
NAAQS.
We
recognize
that
the
costeffectiveness
calculated
for
Tier
2/
Gasoline
Sulfur
is
not
strictly
comparable
to
a
figure
for
measures
targeted
at
nonattainment
areas,
since
Tier
2/
Gasoline
Sulfur
is
a
nationwide
program.
However,
there
are
several
additional
considerations
that
have
led
us
to
conclude
that
Tier
2/
Gasoline
Sulfur
is
cost­
effective
considering
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
103
Final
Regulatory
Impact
Analysis:
Control
of
Emissions
of
Air
Pollution
from
Highway
Heavy­
Duty
Engines,
September
16,
1997.
104
The
``
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).
alternative
means
of
attaining
and
maintaining
the
NAAQS.
First
of
all
is
the
fact
that
the
cost
effectiveness
of
Tier
2/
Gasoline
Sulfur
is
so
much
better
than
the
numbers
developed
for
the
NAAQS
analysis.
It
is
only
20
percent
as
costly
per
ton
as
the
$
10,000
per
ton
upper
limit
employed
in
that
analysis
for
selecting
suitable
strategies
even
though,
as
noted
above,
Tier
2/
Gasoline
Sulfur
will
produce
almost
the
same
level
of
emission
reduction.
Furthermore,
as
a
national
program,
Tier
2/
Gasoline
Sulfur
can
be
implemented
as
a
single
unified
rule
without
the
need
for
individual
action
by
each
of
the
states.
In
dealing
with
the
question
of
comparing
local
and
national
programs,
it
is
also
relevant
to
point
out
that,
because
of
air
transport,
the
need
for
NOX
control
is
a
broad
regional
issue
not
confined
to
non­
attainment
areas
only.
To
reach
attainment,
future
controls
will
need
to
be
applied
over
widespread
areas
of
the
country.
In
the
analyses
supporting
the
recent
NOX
standards
for
highway
diesel
engines,
103
we
looked
at
this
question
in
some
detail
and
concluded
that
the
regions
expected
to
impact
ozone
levels
in
ozone
nonattainment
areas
accounted
for
over
85%
of
total
NOX
emissions
from
a
national
heavy­
duty
engine
control
program.
Similarly,
NOX
emissions
in
attainment
areas
also
contribute
to
particulate
matter
nonattainment
problems
in
downwind
areas.
Thus,
the
distinction
between
local
and
national
control
programs
for
NOX
is
less
important
than
it
might
appear.
Finally,
the
statute
indicates
that
in
considering
the
cost­
effectiveness
of
Tier
2/
Gasoline
Sulfur
EPA
should
consider
not
only
attainment,
but
also
maintenance
of
the
standards.
Tier
2/
Gasoline
Sulfur
 
unlike
nonattainment
area
measures
 
will
achieve
attainment
area
reductions
that,
among
other
effects,
will
help
to
maintain
air
quality
that
meets
the
NAAQS.
These
reductions
relate
not
only
to
the
ozone
and
PM
NAAQS,
but
also
to
SO2
and
NO2,
and
to
CO.
In
summary,
given
the
array
of
controls
that
will
have
to
be
implemented
to
make
progress
toward
attaining
and
maintaining
the
NAAQS,
we
believe
that
the
weight
of
the
evidence
from
alternative
means
of
providing
substantial
NOX
+
NMHC
emission
reductions
indicates
that
the
Tier
2/
Gasoline
Sulfur
program
is
costeffective
This
is
true
from
the
perspective
of
other
mobile
source
control
programs
or
from
the
perspective
of
other
stationary
source
technologies
that
might
be
considered.

5.
Does
the
Value
of
the
Benefits
Outweigh
the
Cost
of
the
Standards?
While
relative
cost­
effectiveness
is
the
principal
economic
policy
criterion
established
for
these
standards
in
the
Clean
Air
Act
(
see
CAA
§
202(
i)),
further
insight
regarding
the
merits
of
the
standards
can
be
provided
by
benefitcost
analysis.
The
purpose
of
this
section
is
to
summarize
the
methods
we
used
and
results
we
obtained
in
conducting
an
analysis
of
the
economic
benefits
of
the
Tier
2
program,
and
to
compare
these
economic
benefits
with
the
estimated
costs
of
the
rule.
In
summary,
the
results
of
our
analysis
using
the
EPAs
preferred
approach
to
valuing
premature
mortality
indicate
that
the
economic
benefits
of
the
Tier
2/
gasoline
sulfur
standards
will
likely
exceed
the
costs
of
meeting
the
standards
by
about
$
20
billion
(
1997$).

a.
What
Is
the
Purpose
of
This
Benefit­
Cost
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
narrow,
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
rule.
Despite
the
limitations
inherent
in
BCA
of
environmental
programs,
we
consider
it
useful
to
estimate
the
potential
benefits
of
today's
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.

b.
What
Was
Our
Overall
Approach
to
the
Benefit­
Cost
Analysis?

The
basic
question
we
sought
to
answer
in
the
BCA
was:
``
What
are
the
net
yearly
economic
benefits
to
society
of
the
reduction
in
mobile
source
emissions
likely
to
be
achieved
by
the
final
Tier
2
program?''
In
designing
an
analysis
to
answer
this
question,
we
selected
a
future
year
for
analysis
(
2030)
that
is
representative
of
fullimplementation
of
the
program
(
i.
e.,
when
the
U.
S.
car
and
light
truck
population
is
virtually
only
Tier
2
vehicles).
We
also
adopted
an
analytical
structure
and
sequence
similar
to
that
used
in
the
``
section
812
studies''
104
to
estimate
the
total
benefits
and
costs
of
the
entire
Clean
Air
Act.
Moreover,
we
used
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
have
largely
relied
on
methods
which
have
already
received
extensive
review
by
the
independent
Science
Advisory
Board,
by
the
public,
and
by
other
federal
agencies.

c.
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
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Register
/
Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
105
Full
documentation
of
the
SAB
recommendations
can
be
found
at
their
website
(
www.
epa.
gov/
sab)
under
the
following
references:
EPA
 
SAB
 
COUNCIL
 
ADV
 
98
 
003,
1998;
EPA
 
SAB
 
COUNCIL
 
ADV
 
99
 
05,
1999;
EPA
 
SAB
 
COUNCIL
 
ADV
 
99
 
012,
1999;
EPA
 
SAB
 
COUNCIL
 
ADV
 
00
 
001,
1999;
and
EPA
 
SAB
 
COUNCIL
 
ADV
 
00
 
002,
1999.
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
are
discussed
in
detail
in
the
RIA
and
its
supporting
documents
and
references,
the
key
uncertainties
which
have
a
bearing
on
the
results
of
the
BCA
of
today's
action
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
the
BCA
of
today's
action.
Though
we
used
the
best
data
and
models
currently
available,
we
were
required
to
adopt
a
number
of
simplifying
assumptions
and
to
use
data
sets
which,
while
reasonably
close,
did
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
projected
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,
although
the
emissions
data
sets
used
for
this
analysis
have
been
updated
from
those
used
in
the
proposal,
they
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
Tier
2/
gasoline
sulfur
standards
will
not
be
the
governing
vehicle
emissions
standards
in
2030.
In
the
years
before
2030,
the
benefits
from
the
Tier
2
program
will
be
less
than
those
estimated
here
(
significantly
less
in
the
early
years),
because
the
Tier
2
fleet
will
not
be
fully
phased
in.
Finally,
the
implementation
period
for
phasing­
in
the
rule
requirements
is
a
critical
period
that
deserves
careful
evaluation.
The
benefit­
cost
analysis
for
2030
is
not
significantly
affected
by
alternative
phase­
in
decisions,
the
primary
impact
of
which
will
occur
in
the
2005
 
2015
time
frame.
As
a
result,
the
analysis
of
phase­
in
alternatives
must
rely
on
other
types
of
analysis
(
e.
g.,
cost­
effectiveness
analysis).
The
key
limitations
and
uncertainties
unique
to
the
BCA
of
the
final
rule,
therefore,
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,
which
are
discussed
in
more
detail
or
referenced
in
the
RIA,
we
believe
the
BCA
provide
a
reasonable
indication
of
the
expected
economic
benefits
of
the
Tier
2
program
in
2030
under
one
set
of
assumptions.
This
is
because
the
analysis
focuses
on
estimating
the
economic
effects
of
the
changes
in
air
quality
conditions
expected
to
result
from
today's
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
rule.

d.
How
Has
the
Benefit­
Cost
Analysis
Changed
From
Proposal?

We
significantly
improved
the
analysis
that
was
presented
at
proposal.
For
the
final
rule,
EPA
updated
the
emissions
inventory
from
1990
to
1996
using
updated
models,
refined
the
projections
of
the
effects
of
the
rule
when
it
is
fully
implemented,
and
updated
our
air
quality
modeling
to
reflect
new
programs
issued
since
1990.
In
addition,
we
also
updated
our
assumptions
for
estimating
physical
effects
and
monetary
benefits
based
on
recommendations
from
the
EPA's
Science
Advisory
Board
(
SAB)
during
the
summer
of
1999.
Details
on
these
recommendations
can
be
found
in
the
advisory
statements
published
by
the
SAB.
105
All
of
the
changes
made
since
the
analysis
at
proposal
serve
to
update
and
improve
the
analysis.

e.
How
Did
We
Perform
the
Benefit­
Cost
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
Tier
2
program
has
various
cost
and
emission
related
components,
as
described
earlier
in
this
section.
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
fuel
cost
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
Tier
2
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
Tier
2
program,
this
stability
would
not
occur
until
well
into
the
future.
For
this
analysis,
we
selected
the
year
2030.
The
resulting
analysis
represents
a
snapshot
of
benefits
and
costs
in
a
future
year
in
which
the
light­
duty
fleet
consists
almost
entirely
of
Tier
2
vehicles.
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
designed
the
cost
estimate
to
reflect
conditions
in
the
same
year
as
the
benefit
valuation.
Costs
are,
therefore,
developed
for
the
year
2030
fleet.
For
this
purpose
we
used
the
long
term
cost
once
the
capital
costs
have
been
recovered
and
the
manufacturing
learning
curve
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Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
106
Though
California
is
included
based
on
the
expectation
that
reductions
in
surrounding
states
will
achieve
some
benefits
in
California,
this
analysis
does
not
assume
additional
reductions
in
California
emissions
beyond
those
already
achieved
by
prevailing
standards.
reductions
have
been
realized,
since
this
will
be
the
case
in
2030.
We
also
made
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
resolved
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
are
somewhat
greater
than
the
expected
actual
annual
cost
of
the
program,
reflecting
the
time
value
adjustment.
Thus,
the
costs
presented
in
this
section
do
not
represent
expected
actual
annual
costs
for
2030.
Rather,
they
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
developed
two
separate,
year
2030
emissions
inventories
to
be
used
as
inputs
to
the
air
quality
models.
The
first,
baseline
inventory,
reflects
the
best
available
approximation
of
the
countyby
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
first
estimated
the
change
in
vehicle
emissions,
by
pollutant
and
by
county,
expected
to
be
achieved
by
the
2030
control
scenario
described
above.
We
then
took
the
baseline
emissions
inventory
and
subtracted
the
estimated
reduction
for
each
countypollutant
combination
to
generate
the
second,
control
case
emissions
inventory.
Taken
together,
the
two
resulting
emissions
inventories
reflect
two
alternative
states
of
the
world
and
the
differences
between
them
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
was
to
``
map''
the
county­
by­
county
and
pollutant­
bypollutant
emission
estimates
to
the
input
grid
cells
of
two
air
quality
models
and
one
deposition
model.
The
first
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.
The
second
model,
called
the
Climatological
Regional
Dispersion
Model
Source­
Receptor
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
particulate
matter
and
secondary
particulate
matter
precursors,
such
as
SO2,
NOX,
and
NMHC.
Also,
nitrogen
loadings
to
watersheds
were
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
these
models,
we
were
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
Tier
2
program.
After
developing
these
two
sets
of
year
2030
air
quality
profiles,
we
used
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
used
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
were
estimated
using
slightly
modified
versions
of
the
methods
used
in
the
section
812
studies.
Several
air
qualityrelated
health
and
environmental
benefits,
however,
could
not
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
could
not
be
included.
In
addition,
some
health
and
environmental
benefits
from
changes
in
ozone
and
PM
could
not
be
included
in
our
analysis
(
i.
e.,
commercial
forestry
benefits).
To
characterize
the
total
economic
value
of
the
reductions
in
adverse
effects
achieved
across
the
lower
48
states,
106
we
used
the
same
set
of
economic
valuation
coefficients
and
models
used
in
the
section
812
studies,
as
approved
by
the
SAB.
The
net
monetary
benefits
of
the
Tier
2
program
were
then
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
is
to
characterize
the
uncertainty
surrounding
our
estimate
of
benefits.
Again,
we
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.
At
proposal,
our
characterization
of
uncertainty
was
based
on
an
estimated
range
of
benefits
which
might
occur
if
important
but
uncertain
underlying
factors
were
allowed
to
vary.
This
approach,
however,
is
criticized
by
the
SAB
because
while
the
low­
or
high­
end
estimates
provided
for
individual
endpoints
was
``
plausible,''
the
probability
of
all
of
the
assumptions
in
these
estimates
occurring
simultaneously
was
likely
to
be
small.
Therefore,
for
the
final
Tier
2/
gasoline
sulfur
rule,
the
benefit
analysis
adopts
an
approach
similar
to
the
section
812
study.
Our
analysis
first
presents
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
provide
estimates
reflecting
two
alternative
approaches
for
mortality
benefits:
the
EPAs
preferred
approach
using
the
value
of
a
statistical
life,
and
an
alternative
approach
using
the
value
of
a
statistical
life
years.
These
are
discussed
further
in
section
f.
of
this
presentation.
The
presentation
of
the
alternative
calculations
for
certain
endpoints
seeks
to
demonstrate
how
much
the
overall
benefit
estimate
might
vary
based
on
the
value
EPA
has
given
to
a
parameter
(
which
has
some
uncertainty
associated
with
it)
underlying
the
estimates
for
human
health
and
environmental
effect
incidence
and
the
economic
valuation
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/
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10,
2000
/
Rules
and
Regulations
of
those
effects.
These
alternative
calculations
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
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
study
by
Dockery,
et
al.
estimates
of
the
relationship
between
PM
exposure
and
premature
mortality
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
associated
with
the
final
Tier
2/
gasoline
sulfur
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
is
better
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
also
presents
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
are
presented
for
premature
mortality
associated
with
short­
term
exposures
to
PM
and
ozone,
asthma
attacks,
occurrences
of
moderate
or
worse
asthma
symptoms,
and
an
estimate
of
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
approach,
as
implemented
in
this
BCA,
does
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
Tier
2/
gasoline
sulfur
standards,
due
to
data
or
methodological
limitations.
Therefore,
the
uncertainty
range
is
only
representative
of
those
benefits
that
we
were
able
to
quantify
and
monetize.

f.
What
Were
the
Results
of
the
Benefit­
Cost
Analysis?
The
BCA
for
the
Tier
2
program
reflects
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
Tier
2­
compliant
vehicles
to
fully
displace
older,
more
polluting
vehicles.
However,
as
described
earlier,
we
have
adjusted
the
cost
estimates
upward
to
compensate
for
some
of
this
discrepancy
in
the
timing
of
benefits
and
costs
and
to
ensure
that
the
longterm
benefits
and
costs
are
calculated
on
a
consistent
basis.
The
resulting
adjusted
long­
term
cost
value
is
given
in
Table
IV.
D.
 
5a.
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
in
Section
IV.
D.
3.

TABLE
IV.
D.
 
5A.
 
ADJUSTED
COST
OF
THE
TIER
2/
GASOLINE
SULFUR
RULE
FOR
COMPARISON
TO
BENEFITS
Cost
basis
Adjusted
cost
(
billions
of
dollars)

Long
term
a
...............................
5.3
Notes:
a
Note
that
this
estimate
of
cost
is
only
for
purposes
of
comparing
with
our
2030
benefits
estimate.
See
Figure
IV.
D.
 
1
for
our
portrayal
of
total
annualized
cost
of
the
rule.

With
respect
to
the
benefits,
several
different
measures
of
benefits
can
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.
The
cost­
effectiveness
analysis
presented
earlier
in
this
preamble
provides
such
calculations
on
a
per­
vehicle
basis.
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
rule
as
well
as
the
magnitude
of
the
total
public
health
and
environmental
gains
potentially
achieved
by
the
rule.
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
are
able
to
monetize.
Table
IV.
D.
 
6
presents
the
EPAs
preferred
approach
to
estimate
the
benefits
of
both
the
estimated
reductions
in
adverse
effect
incidences
and
the
estimated
economic
value
of
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28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
107
Specifically,
the
VSLY
estimate
is
calculated
by
amortizing
the
$
5.9
million
mean
VSL
estimate
over
the
35
years
of
life
expectancy
associated
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.
those
incidence
reductions.
Specifically,
the
table
lists
the
avoided
incidences
of
individual
health
and
environmental
effects,
the
pollutant
associated
with
each
of
these
endpoints,
and
the
estimated
economic
value
of
those
avoided
incidences.
For
several
effects,
particularly
environmental
effects,
direct
calculation
of
economic
value
in
response
to
air
quality
conditions
is
performed,
eliminating
the
intermediate
step
of
calculating
incidences.
As
the
table
indicates,
we
estimate
that
the
Tier
2
program
will
produce
2300
fewer
cases
of
chronic
bronchitis,
and
we
also
see
significant
improvements
in
minor
restricted
activity
days
(
with
an
estimated
6,255,500
fewer
cases).
Our
estimate
also
incorporates
significant
reductions
in
impacts
on
children's
health,
showing
reductions
of
7,900
cases
of
acute
bronchitis,
87,200
fewer
cases
of
lower
respiratory
symptoms,
and
86,600
fewer
cases
of
upper
respiratory
symptoms
in
asthmatic
children.
Total
monetized
benefits,
however,
are
driven
primarily
by
the
estimated
4300
fewer
premature
fatalities.
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
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.
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.
107
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
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.
In
addition
to
the
presentation
of
mortality
valuation,
this
table
also
indicates
with
a
``
B''
those
additional
health
and
environmental
benefits
which
could
not
be
expressed
in
quantitative
incidence
and/
or
economic
value
terms.
A
full
listing
of
the
benefit
categories
that
could
not
be
quantified
or
monetized
in
our
estimate
are
provided
in
Table
IV.
D.
 
8.
For
instance,
visibility
is
expected
to
improve
in
all
areas
of
the
country,
with
the
largest
improvements
occurring
in
heavily
populated
residential
areas
(
e.
g.,
21%
of
the
metropolitan
areas
show
an
improvement
of
0.5
deciviews
or
more).
However,
due
to
limitations
on
sources
to
value
these
effects,
we
include
a
``
B''
in
the
primary
estimate
table
for
this
category.
Likewise,
the
Tier
2/
gasoline
sulfur
rule
will
also
provide
progress
for
some
estuaries
to
meet
their
goals
for
reducing
nitrogen
deposition
(
e.
g.,
nitrogen
loadings
for
the
Albemarle/
Pamlico
Sound
are
reduced
by
27%
of
their
reductions
goal),
however,
this
endpoint
is
also
displayed
with
a
``
B''
in
the
table.
A
full
appreciation
of
the
overall
economic
consequences
of
the
Tier
2/
gasoline
sulfur
standards
requires
consideration
of
all
benefits
and
costs
expected
to
result
from
the
new
standards,
not
just
those
benefits
and
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costs
which
could
be
expressed
here
in
dollar
terms.
In
summary,
the
VSL
approach
 
the
approach
EPA
prefers
 
yields
a
monetized
benefit
estimate
of
$
25.2
billion
in
2030.
The
alternative,
ageadjusted
VSLY
approach
(
presented
in
Table
IV.
D.
7)
yields
monetary
benefits
of
approximately
$
13.8
billion
in
2030.

TABLE
IV.
D.
 
6.
 
EPA
PREFERRED
ESTIMATE
OF
THE
ANNUAL
QUANTIFIED
AND
MONETIZED
BENEFITS
ASSOCIATED
WITH
IMPROVED
AIR
QUALITY
RESULTING
FROM
THE
TIER
2/
GASOLINE
SULFUR
RULE
IN
2030
Endpoint
Pollutant
Avoided
incidencec
(
cases/
year)
Monetary
benefitsd
(
millions
1997$)

Premature
mortality
a,
b
(
adults,
30
and
over)
..............................................
PMb
.......................................
4,300
................
$
23,380
Chronic
asthma
(
adult
males,
27
and
over)
................................................
Ozone
...................................
400
...................
10
Chronic
bronchitis
........................................................................................
PM
.........................................
2,300
................
730
Hospital
Admissions
from
Respiratory
Causes
...........................................
Ozone
and
PM
......................
2,200
................
20
Hospital
Admissions
from
Cardiovascular
Causes
......................................
Ozone
and
PM
......................
800
...................
10
Emergency
Room
Visits
for
Asthma
............................................................
Ozone
and
PM
......................
1,200
................
<
1
Acute
bronchitis
(
children,
8
 
12)
.................................................................
PM
.........................................
7,900
................
<
1
Lower
respiratory
symptoms
(
LRS)
(
children,
7
 
14)
...................................
PM
.........................................
87,100
..............
<
5
Upper
respiratory
symptoms
(
URS)
(
asthmatic
children,
9
 
11)
..................
PM
.........................................
86,500
..............
<
5
Shortness
of
breath
(
African
American
asthmatics,
7
 
12)
..........................
PM
.........................................
17,400
..............
<
1
Work
loss
days
(
WLD)
(
adults,
18
 
65)
........................................................
PM
.........................................
682,900
............
70
Minor
restricted
activity
days
(
MRAD)/
Acute
respiratory
symptoms
...........
Ozone
and
PM
......................
5,855,000
.........
270
Other
health
effects
c
....................................................................................
Ozone,
PM,
CO,
HAPS
........
U1+
U2+
U3+
U4
...
B1+
B2+
B3+
B4
Decreased
worker
productivity
.....................................................................
Ozone
...................................
...........................
140
Recreational
visibility
(
86
Class
I
Areas)
.....................................................
PM
.........................................
...........................
370
Residential
visibility
......................................................................................
PM
.........................................
...........................
B5
Household
soiling
damage
...........................................................................
PM
.........................................
...........................
B6
Materials
damage
.........................................................................................
PM
.........................................
...........................
B7
Nitrogen
Deposition
to
Estuaries
.................................................................
Nitrogen
................................
...........................
B8
Agricultural
crop
damage
(
6
crops)
.............................................................
Ozone
...................................
...........................
220
Commercial
forest
damage
..........................................................................
Ozone
...................................
...........................
B9
Other
welfare
effects
e
..................................................................................
Ozone,
PM,
CO,
HAPS
........
...........................
B10+
B11+
B12+
B13
Monetized
Total
f,
g
............................................................................
...............................................
...........................
$
25,220+
B
Notes:
a
Premature
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.
Also
note
that
the
valuation
assumes
the
5
year
distributed
lag
structure
described
earlier.
b
PM
reductions
are
due
to
reductions
in
NOX
and
SO2
resulting
from
the
Tier
2/
Gasoline
Sulfur
rule.
c
Incidences
are
rounded
to
the
nearest
100.
d
Dollar
values
are
rounded
to
the
nearest
10
million.
e
The
Ui
are
the
incidences
and
the
Bi
are
the
values
for
the
unquantified
category
i.
A
detailed
listing
of
unquantified
PM,
ozone,
CO,
and
HAPS
related
health
and
welfare
effects
is
provided
in
Table
IV.
D.
 
8.
f
B
is
equal
to
the
sum
of
all
unmonetized
categories,
i.
e.
B1+
B2+
*
*
*
+
B13.
g
These
estimates
are
based
on
the
EPA
preferred
approach
for
valuing
reductions
in
premature
mortality,
the
VSL
approach.
This
approach
and
an
alternative,
age­
adjusted
approach
 
the
VSLY
approach
 
are
discussed
more
fully
in
section
f
above.

TABLE
IV.
D.
 
7.
 
TIER
2/
GASOLINE
SULFUR
RULE:
2030
MONETIZED
BENEFITS
ESTIMATES
FOR
ALTERNATIVE
PREMATURE
MORTALITY
VALUATION
APPROACHES
[
Millions
of
1997
dollars]

Premature
mortality
valuation
approach
PM
mortality
benefits
Total
benefits
Value
of
statistical
life
(
VSL)
($
5.9
million
per
life
saved)
a
.......................................................................................
$
23,380
$
25,220
+
B
Value
of
statistical
life­
years
(
VSLY)
($
360,000
per
life­
year
saved,
which
implies
$
3.6
million
per
life
saved,
based
on
the
mean
of
14
life
years
saved)
a,
b.
11,900
13,790
+
B
Notes:

a
Premature
mortality
estimates
are
determined
assuming
a
5
year
distributed
lag,
which
applies
25
percent
of
the
incidence
in
year
1
and
2,
and
then
16.7
percent
of
the
incidence
in
years
3,
4,
and
5.

b
The
VSLY
estimate
is
calculated
by
amortizing
the
$
5.9
million
mean
VSL
estimate
over
the
35
years
of
life
expectancy
associated
with
subjects
in
the
labor
market
studies
used
to
obtain
the
VSL
estimate.
The
resulting
estimate,
using
a
5
percent
discount
rate,
is
$
360,000
per
lifeyear
saved
in
1997
dollars.
This
approach
is
discussed
more
fully
in
section
f
above.

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Regulations
TABLE
IV.
D.
 
8.
 
ADDITIONAL,
NON­
MONETIZED
BENEFITS
OF
THE
TIER
2/
GASOLINE
SULFUR
STANDARDS
Pollutant
Unquantified
effects
Ozone
Health
.........................................................
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
Reductions
in
screening
of
UV
 
b
radiation
Ozone
Welfare
.......................................................
Decreased
yields
for
commercial
forests
Decreased
yields
for
fruits
and
vegetables
Decreased
yields
for
non­
commercial
crops
Damage
to
urban
ornamental
plants
Impacts
on
recreational
demand
from
damaged
forest
aesthetics
Damage
to
ecosystem
functions
PM
Health
..............................................................
Infant
mortality
Low
birth
weight
Changes
in
pulmonary
function
Chronic
respiratory
diseases
other
than
chronic
bronchitis
Morphological
changes
Altered
host
defense
mechanisms
Nitrogen
and
Sulfate
Deposition
Welfare
..............
Impacts
of
acidic
sulfate
and
nitrate
deposition
on
commercial
forests
Impacts
of
acidic
deposition
to
commercial
freshwater
fishing
Impacts
of
acidic
deposition
to
recreation
in
terrestrial
ecosystems
Reduced
existence
values
for
currently
healthy
ecosystems
Impacts
of
nitrogen
deposition
on
commercial
fishing,
agriculture,
and
forests
Impacts
of
nitrogen
deposition
on
recreation
in
estuarine
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
Non­
asthma
respiratory
ER
visits
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)
Asthma­
like
symptoms
in
non­
asthmatics
(
formaldehyde)
Irritation
of
the
eyes,
skin,
and
respiratory
tract
(
acetaldehyde)
HAPS
Welfare
........................................................
Direct
toxic
effects
to
animals
Bioaccumlation
in
the
food
chain
a
Premature
mortality
associated
with
ozone
and
carbon
monoxide
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.

In
addition,
in
analyzing
the
present
rule,
we
recognized
that
the
benefits
estimates
were
subject
to
a
number
of
uncertainties
with
other
parameters.
In
Table
IV
D
 
9,
we
present
alternative
calculations
representing
the
effect
of
different
assumptions
on
individual
elements
of
the
benefits
analysis
and
on
the
total
benefits
estimate.
For
example,
this
table
can
be
used
to
answer
questions
like
``
What
would
total
benefits
be
if
we
were
to
use
the
Dockery,
et
al.
C
 
R
function
to
estimate
avoided
premature
mortality?''
This
table
also
displays
some
assumptions
that
can
be
made
to
value
some
of
the
categories
that
are
indicated
with
a
``
B''
in
the
primary
estimate.
Overall,
this
table
provides
alternative
calculations
both
for
valuation
issues
(
e.
g.,
the
correct
value
for
a
statistical
life
saved)
and
for
physical
effects
issues
(
e.
g.,
how
reversals
in
chronic
illnesses
are
treated).
We
show
how
the
alternative
assumption
being
valued
would
change
the
resulting
total
primary
estimate,
and
the
percentage
change
from
the
primary
estimate
associated
with
the
alternative
calculation.
This
table
is
not
meant
to
be
comprehensive.
Rather,
it
reflects
some
of
the
key
issues
identified
by
EPA
or
commenters
as
likely
to
have
a
significant
impact
on
total
benefits.

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Regulations
108
Generally
the
provisions
of
this
section
V
that
apply
to
HLDTs
also
apply
to
MDPVs.
See
section
IV.
B.
4.
g
for
a
thorough
discussion
of
the
main
program
elements
and
how
they
impact
MDPVs.
TABLE
IV.
D.
 
9.
 
ALTERNATIVE
BENEFITS
CALCULATIONS
FOR
THE
TIER
2
GASOLINE
SULFUR
RULE
IN
2030
Alternative
calculation
Impact
on
primary
benefit
estimate
(
million
1997$)

5th
percentile
of
``
measurement''
uncertainty
distribution
..........................................................................................
¥
$
20,300
(
¥
81%)
95th
percentile
of
``
measurement''
uncertainty
distribution
........................................................................................
+
33,900
(+
134%)
PM­
related
premature
mortality
based
on
Dockery
et
al.
..........................................................................................
+
30,200
(+
120%)
Value
of
avoided
premature
mortality
incidences
based
on
statistical
life
years.
.....................................................
¥
11,500
(
¥
46%)
Reversals
in
chronic
bronchitis
treated
as
lowest
severity
cases
.............................................................................
+
280
(+
1%)
Value
of
visibility
changes
in
all
class
I
areas
...........................................................................................................
+
180
(+
1%)
Value
of
visibility
changes
in
eastern
U.
S.
residential
areas
.....................................................................................
+
420
(+
2%)
Value
of
visibility
changes
in
western
U.
S.
residential
areas
....................................................................................
+
130
(+
1%)
Household
soiling
damage
.........................................................................................................................................
+
110
(+
1%)
Avoided
costs
of
reducing
nitrogen
loadings
in
east
coast
estuaries
.......................................................................
+
160
(+
1%)

The
estimated
adjusted
cost
of
implementing
the
final
Tier
2
program
is
$
5.3
billion
(
1997$),
while
the
estimate
of
monetized
benefits
using
EPA's
preferred
approach
for
monetizing
reductions
in
PM­
related
premature
mortality
 
the
VSL
approach
 
are
$
25.2
billion
(
1997$).
Monetized
net
benefits
using
EPA's
preferred
method
for
valuing
avoided
incidences
of
premature
mortality
are
approximately
$
19.9
billion
(
1997$).
Using
the
alternative,
age­
adjusted
approach
 
the
VSLY
approach
 
total
monetized
benefits
are
projected
to
be
around
$
13.8
billion
(
1997$).
Monetized
net
benefits
using
this
approach
are
approximately
$
8.5
billion
(
1997$).
Therefore,
implementation
of
the
Tier
2
program
will
provide
society
with
a
net
gain
in
social
welfare.
Tables
VI.
D.
 
10a
and
IV.
D.
 
10b
summarize
the
costs,
benefits,
and
net
benefits
for
the
two
alternative
valuation
approaches.

TABLE
IV.
D.
 
10A.
 
2030
ANNUAL
MONETIZED
COSTS,
BENEFITS,
AND
NET
BENEFITS
FOR
THE
FINAL
TIER
2/
GASOLINE
SULFUR
RULE:
EPA
PREFERRED
ESTIMATE
USING
THE
VALUE
OF
STATISTICAL
LIVES
SAVED
APPROACH
TO
VALUE
REDUCTIONS
IN
PREMATURE
MORTALITY
a
Billion
1997
(
dollars)

Adjusted
compliance
costs
.....
$
5.3
Monetized
PM­
related
benefits
b.
24.7+
BPM
Monetized
Ozone­
related
benefitsb
0.5+
BOzone
Monetized
net
benefits
c,
d
........
19.9+
B
Notes:
a
For
this
section
,
all
costs
and
benefits
are
rounded
to
the
nearest
100
million.
Thus,
figures
presented
in
this
chapter
may
not
exactly
equal
benefit
and
cost
numbers
presented
in
earlier
sections
of
the
chapter.
b
Not
all
possible
benefits
or
disbenefits
are
quantified
and
monetized
in
this
analysis.
Potential
benefit
categories
that
have
not
been
quantified
and
monetized
are
listed
in
Table
IV.
D.
 
8.
Unmonetized
PM­
and
ozone­
related
benefits
are
indicated
by
BPM.
And
BOzone,
respectively
c
B
is
equal
to
the
sum
of
all
unmonetized
benefits,
including
those
associated
with
PM,
ozone,
CO,
and
HAPS.
d
These
estimates
are
based
on
the
EPA
preferred
approach
for
valuing
reductions
in
premature
morality,
the
VSL
approach.
This
approach
and
an
alternative,
age­
adjusted
approach
 
the
VSLY
approach
 
are
discussed
more
fully
in
section
f
above.

Table
IV.
D.
 
10b.
 
2030
Annual
Monetized
Costs,
Benefits,
and
Net
Benefits
for
the
Final
Tier
2/
Gasoline
Sulfur
Rule:
Alternative
Estimates
Using
the
Value
of
Statistical
Life
Years
Saved
Approach
to
Value
Reductions
in
Premature
Mortality
a
Billion
1997
(
dollars)

Adjusted
compliance
costs
.....
$
5.3
Monetized
PM­
related
benefits
b.
$
13.3+
BPM
Monetized
Ozone­
related
benefits
b.
$
0.5+
BOzone
Monetized
net
benefits
c,
d
.......
$
8.5+
B
Notes:
a
For
this
section,
all
costs
and
benefits
are
rounded
to
the
nearest
100
million.
Thus,
figures
presented
in
this
chapter
may
not
exactly
equal
benefit
and
cost
numbers
presented
in
earlier
sections
of
the
chapter.
b
Not
all
possible
benefits
or
disbenefits
are
quantified
and
monetized
in
this
analysis.
Potential
benefit
categories
that
have
not
been
quantified
and
monetized
are
listed
in
Table
IV.
D.
 
8.
Unmonetized
PM­
and
ozone­
related
benefits
are
indicated
by
BPM.
And
BOzone,
respectively
c
B
is
equal
to
the
sum
of
all
unmonetized
benefits,
including
those
associated
with
PM,
ozone,
CO,
and
HAPS.
d
The
VSLY
estimate
is
calculated
by
amortizing
the
$
5.9
million
mean
VSL
estimate
over
the
35
years
of
life
expectancy
associated
with
subjects
in
the
labor
market
studies
used
to
obtain
the
VSL
estimate.
The
resulting
estimate
using
a
5
percent
discount
rate,
is
$
360,000
per
life­
year
saved
in
1997
dollars.
This
approach
is
discussed
more
fully
in
section
f
above.

V.
Other
Vehicle­
Related
Provisions
The
section
describes
several
additional
provisions
of
today's
final
rule
that
were
not
previously
discussed
in
this
preamble.
108
A.
Final
Tier
2
CO,
HCHO
and
PM
Standards
Tables
IV.
B.
 
4
and
 
5
in
Section
IV.
B.
4.
a.
above
presented
the
Tier
2
standards
for
carbon
monoxide
(
CO),
formaldehyde
(
HCHO),
and
particulate
matter
(
PM).
The
following
paragraphs
discuss
our
selection
of
these
specific
standards.

1.
Carbon
Monoxide
(
CO)
Standards
Beyond
aligning
carbon
monoxide
(
CO)
standards
for
all
LDVs
and
LDTs,
and
harmonizing
with
California
vehicle
technology,
reduction
in
CO
emissions
is
not
a
primary
goal
of
the
Tier
2
program.
However,
we
note
that
more
than
three­
fourths
of
CO
emissions
in
1997
came
from
mobile
sources
and
that
there
are
currently
20
officially
designated
CO
nonattainment
areas
in
the
U.
S.
These
areas
include
47
counties
with
a
combined
population
of
34
million.
In
addition,
there
are
23
officially
designated
maintenance
areas
also
with
a
combined
population
of
34
million.
Further,
CO
is
a
deadly
gas
that
leads
to
accidental
poisoning
fatalities
and
injuries.
Also,
CO
may
play
a
role
in
ozone
formation
by
increasing
the
reactivities
of
VOCs
in
the
atmosphere.
Although
there
remain
many
areas
of
nonattainment
and
maintenance
for
the
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Regulations
109
We
recognize
that
the
standards
we
are
finalizing
for
interim
LDT4s
are
more
stringent
than
for
equivalent
vehicles
(
MDV3s)
under
Cal
LEV
I.
Still
our
interim
HLDT
standards
harmonize
with
Cal
LEV
I
standards
applicable
to
MDV2s.
110
Ibid.
CO
NAAQS,
and
those
areas
include
large
populations,
the
broad
trends
indicate
that
ambient
levels
are
being
reduced
and
the
amount
of
further
reductions
needed
to
meet
the
CO
NAAQS
will
not
be
as
substantial
as
for
the
ozone
NAAQS.
The
reductions
in
this
program
will
help
ensure
that
emissions
and
ambient
levels
of
CO
continue
to
decline,
which
will
contribute
to
the
attainment
and
maintenance
of
the
CO
NAAQS
in
current
nonattainment
areas.
These
standards
will
also
ensure
that
CO
levels
do
not
increase
in
the
future,
which
could
exacerbate
any
CO
attainment
and
maintenance
concerns.
Our
analysis
estimating
of
the
tons
of
CO
reduction
due
to
the
Tier
2/
Gasoline
Sulfur
program
is
found
in
Chapter
III
of
the
RIA.
Thus
the
CO
standards
we
are
finalizing
for
all
Tier
2
LDVs
and
LDTs
are
essentially
the
same
as
those
from
the
NLEV
program
for
LDV/
LLDTs.
These
standards
will
harmonize
with
CalLEV
II
CO
standards
except
at
California's
SULEV
level
(
EPA
Bin
2).
This
lone
divergence
will
not
pose
additional
burden
to
manufacturers
because
the
federal
Tier
2
CO
standards
for
these
vehicles
will
be
less
stringent
than
California's.
Bins
applicable
during
the
interim
programs
will
include
CO
values
from
the
NLEV
program
for
LDV/
LLDTs
and
from
the
Cal
LEV
I
program
for
HLDTs.
109
In
our
NPRM,
we
proposed
tighter
CO
standards
than
California
for
certain
higher
bins.
Based
upon
comment,
we
are
aligning
our
CO
standards
with
those
of
California
to
help
ensure
that
carry
over
between
the
two
programs
can
occur.
110
This
alignment
is
consistent
with
our
goal
of
bringing
all
LDVs
and
all
categories
of
LDTs
under
common
standards
that
allow
for
technology
to
be
harmonized
to
the
extent
possible
with
California.
Despite
these
minor
changes,
we
still
expect
the
standards
in
today's
rule
to
lead
to
CO
reductions.

2.
Formaldehyde
(
HCHO)
Standards
Similar
to
our
approach
to
CO
standards,
we
are
aligning
all
Tier
2
LDVs
and
LDTs
under
the
formaldehyde
standards
from
the
NLEV
program
or
CalLEV
II
program.
HLDTs,
which
are
not
subject
to
the
NLEV
program,
will
become
subject
to
federal
formaldehyde
standards
for
the
first
time
under
the
provisions
of
this
rulemaking.
Formaldehyde
is
a
hazardous
air
pollutant
and
EPA
is
required
to
regulate
motor
vehicle
formaldehyde
under
section
202(
l)
of
the
Act.
The
standards
finalized
today
are
primarily
of
concern
for
methanol
and
methane
(
compressed
natural
gas
or
CNG)­
fueled
vehicles,
because
formaldehyde
is
chemically
similar
to
methanol
and
methane
and
is
likely
to
be
produced
when
methanol
or
methane
are
not
completely
burned
in
the
engine.
HLDTs
are
not
included
under
the
NLEV
program
and
will
therefore
not
face
formaldehyde
standards
as
LDVs
and
LLDTs
will
in
2001
(
1999
in
the
northeast
states).
We
believe
it
is
appropriate
to
bring
HLDTs
under
HCHO
standards
in
this
rulemaking.
Applying
formaldehyde
standards
to
HLDTs
will
be
consistent
with
our
goals
of
aligning
standards
for
all
LDVs
and
LDTs
regardless
of
fuel
type
and
harmonizing
technologically
with
California
standards
wherever
possible
and
reasonable
and
the
burden
will
be
minimal.
Consequently,
we
are
including
formaldehyde
standards
for
HLDTs
under
the
Tier
2
program
as
well
as
under
the
interim
programs.

3.
Use
of
NMHC
Data
To
Show
Compliance
with
NMOG
Standards;
Alternate
Compliance
With
Formaldehyde
Standards
In
response
to
comments,
we
are
finalizing
a
provision
to
allow
manufacturers
to
demonstrate
compliance
with
the
interim
and
Tier
2
NMOG
standards
using
NMHC
data
(
non­
methane
hydrocarbons)
for
gasoline
and
diesel
vehicles.
For
these
vehicles,
NMOG
and
NMHC
emissions
are
very
similar
and
testing
for
NMHC
is
considerably
simpler
and
cheaper
than
measuring
NMOG.
Data
available
to
us
show
that
NMHC
emissions
at
levels
expected
from
interim
and
Tier
2
LDVs
and
LDTs
can
be
adjusted
to
represent
NMOG
emissions
by
a
small
multiplicative
factor.
We
are
finalizing
to
accept
NMHC
test
results
to
demonstrate
compliance
with
the
NMOG
standards,
but
are
requiring
that
the
NMHC
results
be
multiplied
by
1.04.
We
will
permit
the
use
of
other
adjustment
factors
based
upon
comparative
testing.
A
drawback
to
NMHC
testing
is
that
NMHC
testing
does
not
yield
formaldehyde
results
as
NMOG
testing
does.
We
noted
in
the
NPRM
that
HCHO
is
actually
a
component
of
NMOG
and
that
we
expect
that
all
vehicles
able
to
meet
the
proposed
Tier
2
or
interim
standards
(
including
methanol
and
CNG­
fueled
vehicles)
will
readily
comply
with
the
HCHO
standards.
In
fact,
based
upon
a
review
of
certification
data,
we
believe
that
gasoline
and
diesel
vehicles
will
be
far
below
the
HCHO
standards,
perhaps
by
as
much
as
90%.
(
See
the
Response
to
Comments
document
for
details)
To
reduce
testing
costs
while
harmonizing
with
the
CalLEV
II
standards
we
are
finalizing
a
provision
that
will
permit
manufacturers
of
gasoline
and
diesel
vehicles
to
demonstrate
compliance
with
the
formaldehyde
standards
based
on
engineering
judgement.
This
provision
will
apply
only
to
diesel
and
gasoline
fueled
vehicles
and
will
require
manufacturers
to
make
a
demonstration
in
their
certification
application
that
vehicles
having
similar
engine
and
vehicle
size
and
engine
and
aftertreatment
technologies
have
been
shown
to
exhibit
compliance
with
the
applicable
formaldehyde
standard
for
their
full
useful
life.
This
demonstration
will
be
similar
to
that
currently
required
for
gasoline
vehicles
to
demonstrate
compliance
with
the
particulate
matter
standard
(
see
40
CFR
86.1829(
b)(
1)),
and
should
be
readily
available
from
California
vehicles
where
NMOG
testing
is
required
and
formaldehyde
data
is
routinely
generated.

4.
Particulate
Matter
(
PM)
Standards
We
proposed
to
adopt
tighter
PM
standards.
For
Tier
2
vehicles,
we
proposed
PM
bin
values
such
that
PM
would
consistently
be
0.01
g/
mi
or
less.
To
provide
manufacturers
with
flexibility,
we
proposed
a
0.02
g/
mi
PM
standard
for
vehicles
that
certify
to
the
highest
Tier
2
bins.
As
we
have
indicated
elsewhere
in
this
preamble,
we
anticipate
that
low
sulfur
diesel
fuel
will
be
available
by
2007
to
enable
diesel
vehicles
to
utilize
advanced
diesel
technologies
and
meet
these
PM
standards.
For
the
interim
standards
we
proposed
a
PM
standard
of
0.06
g/
mi
for
the
highest
bins.
We
received
considerable
comment
from
manufacturers
and
others
about
the
PM
standards
we
proposed.
In
the
final
rule,
we
are
raising
the
PM
standard
to
0.08
g/
mi
for
bin
10.
For
HLDTs,
manufacturers
would
likely
have
had
to
use
advanced
diesel
technologies
to
attain
our
proposed
interim
standards
and
these
technologies
require
low
sulfur
diesel
fuel.
Since
we
do
not
expect
that
fuel
to
be
widely
available
until
the
2006
 
2007
timeframe,
we
are
raising
the
PM
standard
so
that
diesels
are
not
barred
from
the
interim
program
by
a
fuel
situation
beyond
their
manufacturers'
control.
PM
standards
are
primarily
a
concern
for
diesel­
cycle
vehicles,
but
they
also
apply
to
gasoline
and
other
otto­
cycle
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
111
SFTP
requirements
do
not
apply
to
MDPVs.
We
plan
to
address
the
applicability
of
SFTP
standards
and
test
procedures
to
MDPVs
in
a
future
rulemaking.
112
For
vehicles
included
in
the
NLEV
program,
this
phase­
in
becomes
a
four
year
phase­
in
beginning
in
2001.
vehicles.
We
will
continue
to
permit
otto­
cycle
vehicles
to
certify
to
PM
standards
based
on
representative
test
data
from
similar
technology
vehicles.

B.
Useful
Life
The
``
useful
life''
of
a
vehicle
is
the
period
of
time,
in
terms
of
years
and
miles,
during
which
a
manufacturer
is
formally
responsible
for
the
vehicle's
emissions
performance.
For
LDVs
and
LDTs,
there
have
historically
been
both
``
full
useful
life''
values,
approximating
the
average
life
of
the
vehicle
on
the
road,
and
``
intermediate
useful
life''
values,
representing
about
half
of
the
vehicle's
life.
We
proposed
and
are
finalizing
several
changes
to
the
current
useful
life
provisions
for
LDVs
and
LDTs.

1.
Mandatory
120,000
Mile
Useful
Life
We
are
finalizing
our
proposal
to
equalize
full
useful
life
values
for
all
Tier
2
LDVs
and
LDTs
at
120,000
miles.
Congress,
in
directing
EPA
to
perform
the
Tier
2
study,
also
directed
EPA
to
consider
changing
the
useful
lives
of
LDVs
and
LDTs.
Manufacturers
have
made
numerous
advances
in
quality,
materials
and
engineering
that
have
led
to
longer
actual
vehicle
lives
and
data
show
that
each
year
of
a
vehicle's
life,
people
are
driving
more
miles.
Current
data
indicate
that
passenger
cars
are
driven
approximately
120,000
miles
in
their
first
ten
years
of
life.
Trucks
are
driven
further.
Current
regulatory
useful
lives
are
10
years/
100,000
miles
for
LDV/
LLDTs
and
11
years/
120,000
miles
for
HLDTs.
We
project,
based
on
our
Tier
2
model,
that
approximately
13
percent
of
light­
duty
NOX
and
11
percent
of
light­
duty
VOCs
is
produced
between
100,000
and
120,000
miles.
Given
the
trend
toward
longer
actual
vehicle
lives
and
increases
in
annual
mileage,
we
believe
that
it
is
reasonable
to
extend
the
regulatory
useful
life
requirements
California,
in
its
LEV
II
program,
has
adopted
full
useful
life
standards
for
all
LDVs
and
LDTs
of
10
years
or
120,000
miles,
whichever
occurs
first.
The
time
period
for
federal
LDV/
LLDTs
will
be
10
years,
but
will
remain
at
11
years
for
HLDTs
consistent
with
the
Clean
Air
Act.
Intermediate
useful
life
values,
where
applicable,
will
remain
at
5
years
or
50,000
miles,
whichever
occurs
first.
Where
manufacturers
elect
to
certify
Tier
2
vehicles
for
150,000
miles
to
gain
additional
NOX
credits,
as
discussed
below,
the
useful
life
of
those
vehicles
will
be
15
years
and
150,000
miles.
We
are
not
harmonizing
with
California
on
the
mandatory
useful
life
for
evaporative
emissions
of
15
years
and
150,000
miles,
but
rather
this
useful
life
will
be
mandatory
for
evaporative
emissions
only
when
a
manufacturer
elects
optional
150,000
mile
exhaust
emission
certification.
We
proposed
to
extend
the
useful
life
of
interim
LDV/
LLDTs
to
10
years/
120,000
miles
beginning
in
2004.
Based
upon
extensive
comment,
we
are
not
finalizing
that
provision
and
the
useful
lives
of
interim
LDV/
LLDTs
will
remain
unchanged
to
help
facilitate
their
carryover
from
the
NLEV
program
into
the
interim
program.
Commenters
provided
persuasive
argument
that
the
proposed
provision,
along
with
others,
would
impose
a
large
workload
burden
on
manufacturers
because
they
would
be
unable
to
carry
over
certification
data
from
2003
and
would
have
to
recertify
virtually
all
of
their
LDV/
LLDTs
in
2004.
Manufacturers
stressed
that
this
would
be
an
especially
unproductive
use
of
their
resources
because
these
vehicles
would
all
have
to
be
recertified
again
as
they
were
phased
into
the
Tier
2
standards
between
2005
and
2007.
This
change
in
the
final
rule
will
have
only
minimal
impact
on
the
benefits
of
our
program.

2.
150,000
Mile
Useful
Life
Certification
Option
We
are
adopting
as
proposed
a
provision
to
provide
additional
NOX
credit
in
the
fleet
average
calculation
for
vehicles
certified
to
a
useful
life
of
150,000
miles.
A
manufacturer
certifying
a
test
group
to
a
150,000
mile
useful
life
will
incorporate
those
vehicles
into
its
corporate
NOX
average
as
if
they
were
certified
to
a
full
useful
life
standard
0.85
times
the
applicable
120,000
mile
NOX
standard.
To
use
this
option,
the
manufacturer
will
have
to
agree
to
(
1)
certify
the
engine
family
to
the
applicable
120,000
mile
exhaust
and
evaporative
standards
at
150,000
miles
for
all
pollutants;
and
(
2)
increase
the
mileage
on
the
single
extra­
high
mileage
in­
use
test
vehicle
from
a
minimum
of
90,000
miles
to
a
minimum
of
105,000
miles.
Today's
vehicles
are
lasting
longer
and
being
driven
farther
than
those
built
in
past
years
and
we
believe
it
is
reasonable
to
encourage
the
development
of
more
durable
emission
control
systems.
Consequently
we
believe
it
is
appropriate
to
provide
incentives
to
manufacturers
to
certify
their
vehicles
to
extended
useful
lives
beyond
120,000
miles.
This
is
why
we
proposed
and
are
today
finalizing
additional
NOX
credits
for
Tier
2
vehicles
certified
to
a
useful
life
of
150,000
miles.
In
the
final
rule
we
are
adding
an
option
that,
for
a
test
group
certified
to
a
150,000
mile
useful
life,
the
manufacturer
may
choose
between
the
additional
credits
or
a
waiver
of
intermediate
life
standards.
Commenters
suggested
that
some
vehicles
would
be
discriminated
against
by
our
intermediate
life
standards,
because
they
might
have
flat
deterioration
curves,
and
could
meet
our
full
life
standards,
but
not
the
lower
intermediate
life
standards.
We
are
reluctant
to
give
up
our
intermediate
life
standards,
because
we
believe
they
provide
an
additional
measure
of
certainty
that
vehicles
will
meet
standards.
Nonetheless,
we
believe
that
certification
to
a
longer
useful
life
is
an
important
goal
and
that
manufacturers
who
do
so
will
likely
use
technologies
that
have
very
flat
deterioration
curves.
This
option
provides
manufacturers
with
the
flexibility
to
certify
vehicles
without
having
to
comply
with
intermediate
life
standards.
In
exchange
they
must
comply
with
full
life
standards
for
considerably
longer
mileage.

C.
Supplemental
Federal
Test
Procedure
(
SFTP)
Standards
111
1.
Background
Supplemental
Federal
Test
Procedure
(
SFTP)
standards
require
manufacturers
to
control
emissions
from
vehicles
when
operated
at
high
rates
of
speed
and
acceleration
(
the
US06
test
cycle)
and
when
operated
under
high
ambient
temperatures
with
air
conditioning
loads
(
the
SC03
test
cycle).
The
existing
light
duty
SFTP
requirements
begin
a
three
year
phase­
in
in
model
year
2000
for
Tier
1
LDV/
LLDTs.
112
For
HLDTs,
SFTP
requirements
begin
a
similar
phase­
in
in
2002.
Intermediate
and
full
useful
life
SFTP
standards
exist
for
all
categories
of
Tier
1
vehicles
except
that
SFTP
standards
do
not
apply
to
diesel
fueled
LDT2s
and
HLDTs.
Table
V.
A.
 
1
shows
the
full
useful
life
federal
SFTP
requirements
applicable
to
Tier
1
vehicles.

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113
This
disparity
arose
because
neither
EPA
nor
CARB
had
full
useful
life
SFTP
standards
for
LEVs
or
ULEVs
when
the
NLEV
program
was
adopted.
Since
a
major
requirement
of
the
NLEV
program
was
harmony
with
California
standards,
EPA
adopted
the
California
SFTP
standards
in
place
for
the
NLEV
time
frame
(
2001
and
later).
114
Except
that,
we
proposed
to
permit
TLEV
vehicles
(
EPA
interim
Bin
10
in
Table
IV.
B.
 
4),
which
are
not
subject
to
new
SFTP
standards
under
NLEV,
to
continue
to
meet
Tier
1
SFTP
standards,
and
to
permit
HLDTs
under
the
interim
programs
to
continue
to
meet
Tier
1
SFTP
standards
that
do
not
fully
phase
in
until
the
2004
model
year.
TABLE
V.
A.
 
1.
 
FULL
USEFUL
LIFE
FEDERAL
SFTP
STANDARDS
APPLICABLE
TO
TIER
1
VEHICLES
Vehicle
category
NMHC
+
NOX
(
weighted
g/
mi)
a
CO
(
g/
mi)
b
US06
SC03
Weighted
LDV/
LDT1
(
gasoline)
.......................................................................................
0.91
11.1
3.7
4.2
LDV/
LDT1
(
diesel)
...........................................................................................
2.07
11.1
 
4.2
LDT2
................................................................................................................
1.37
14.6
5.6
5.5
LDT3
................................................................................................................
1.44
16.9
6.4
6.4
LDT4
................................................................................................................
2.09
19.3
7.3
7.3
Notes:
a
Weighting
for
NMHC+
NOX
and
optional
weighting
for
CO
is
0.35x(
FTP)+
0.28x(
US06)+
0.37x(
SC03).
b
CO
standards
are
stand
alone
for
US06
and
SC03
with
option
for
a
weighted
standard.

2.
SFTP
Under
the
NLEV
Program
The
NLEV
program
includes
SFTP
requirements
for
LDVs,
LDT1s
and
LDT2s.
These
requirements
impose
the
Tier
1
intermediate
and
full
useful
life
SFTP
standards
on
Tier
1
and
TLEV
vehicles,
but
impose
only
4000
mile
standards
adopted
from
California
LEV
I
program
on
LEVs
and
ULEVs.
113
NLEV
SFTP
standards
for
LEVs
and
ULEVs
are
shown
in
Table
V.
A.
 
2.
Table
V.
A.
 
2
also
includes
the
California
LEV
I
SFTP
standards
for
LDT3s
and
4s.
The
standards
in
that
table
do
not
provide
for
a
weighted
standard
for
NMHC+
NOX
or
for
CO,
but
rather
employ
separate
sets
of
standards
for
the
US06
and
SC03
tests.
Also,
while
the
NLEV
and
CAL
LEV
I
SFTP
standards
apply
to
gasoline
and
diesel
vehicles,
they
do
not
include
a
standard
for
diesel
particulates
(
PM).

TABLE
V.
A.
 
2.
 
SFTP
STANDARDS
FOR
LEVS
AND
ULEVS
IN
THE
NLEV/
CAL
LEV
I
PROGRAM
[
4000
Mile
Standards]

US06
SC03
NMHC+
NOX
(
g/
mi)
CO
(
g/
mi)
NMHC+
NOX
(
g/
mi)
CO
(
g/
mi)

LDV/
LDT1
......................................................................................................
0.14
8.0
0.20
2.7
LDT2
..............................................................................................................
0.25
10.5
0.27
3.5
LDT
3
(
Calif
MDV
2)
......................................................................................
0.4
10.5
0.31
3.5
LDT
4
(
Calif
MDV
3)
......................................................................................
0.6
11.8
0.44
4.0
3.
SFTP
Standards
for
Interim
and
Tier
2
LDVs
and
LDTs:
As
Proposed
Since
no
significant
numbers
of
vehicles
certified
to
SFTP
standards
will
enter
the
fleet
until
2001,
manufacturers
raised
concerns
during
the
development
of
the
NPRM
regarding
significant
changes
to
the
SFTP
program
before
its
implementation.
We
stated
in
the
NPRM
that
it
was
reasonable
not
to
increase
SFTP
stringency
beyond
NLEV/
CalLEV
I
levels
for
the
Tier
2
program,
but
we
proposed
to
include
SFTP
standards
adjusted
for
intermediate
and
full
useful
life
deterioration
where
there
are
currently
only
4000
mile
standards.
Full
useful
life
standards
for
Tier
2
vehicles
are
consistent
with
our
mandate
under
the
Clean
Air
Act.
We
derived
the
full
and
intermediate
useful
life
standards
in
the
NPRM
by
applying
deterioration
allowances
from
our
draft
MOBILE
6
model
to
the
existing
4000
mile
standards
for
LDVs
and
LLDTs.
For
HLDTs
we
applied
similarly
derived
deterioration
allowances
to
California's
LEV
I
SFTP
standards
for
MDV2s
and
MDV3s,
which
are
the
corresponding
categories
to
LDT3s
and
LDT4s
in
the
California
LEV
I
program.
The
full
and
intermediate
useful
life
SFTP
standards
we
proposed
would
have
applied
to
all
Tier
2
vehicles
including
Tier
2
LDT3s
and
LDT4s.
Further,
since
our
interim
standards
are
derived
from
NLEV
and
Cal
LEV
I
standards,
we
proposed
that
our
full
life
SFTP
standards
would
apply
to
all
interim
LDV/
LLDTs
beginning
in
2004.114
4.
Final
SFTP
Standards
for
Interim
and
Tier
2
LDVs
and
LDTs
Based
upon
extensive
comment
from
manufacturers,
we
are
persuaded
that
our
proposed
intermediate
and
full
life
SFTP
standards
need
more
review
and
should
possibly
be
reexamined
in
a
separate
rulemaking.
Manufacturers
were
quite
concerned
that
the
technique
we
used
to
obtain
the
intermediate
and
full
life
SFTP
standards
led
to
standards
that
were
overly
stringent.
They
argued
that
they
have
little
experience
with
SFTP
compliant
vehicles
given
the
current
infancy
of
the
program
and
they
do
not
know
whether
SFTP
emissions
can
be
reasonably
be
expected
to
deteriorate
like
FTP
emissions.
Consequently,
in
today's
notice,
we
are
finalizing
a
program
that
will
adopt
the
existing
NLEV/
Cal
LEV
I
4000
mile
standards
and
utilize
adjusted
full
life
standards
from
the
Tier
1
program,
instead
of
values
derived
by
applying
the
draft
MOBILE
6
model.
These
standards
will
apply
to
all
Tier
2
vehicles
and
to
all
interim
LDV/
LLDTs.
We
proposed
and
are
finalizing
that
interim
HLDTs
meet
Tier
1
SFTP
standards
which
do
not
finish
their
phase­
in
until
the
2004
model
year.
With
regard
to
intermediate
and
full
life
SFTP
standards,
the
preamble
to
the
final
rule
implementing
the
SFTP
program
for
the
Tier
1
SFTP
emission
standards
(
61
FR
54856)
provided
a
formula
for
computing
SFTP
standards
to
apply
under
more
stringent
future
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and
Regulations
115
The
4,000
mile
standards
under
NLEV
are
phased­
in
in
such
a
way
that
diesels
would
not
likely
be
subject
to
them
until
the
2004
model
year,
given
their
very
small
market
share.
Today's
rulemaking
effectively
supercedes
the
NLEV
program
beginning
with
the
2004
model
year.
In
other
words,
while
NLEV
contains
4,000
mile
SFTP
standards
for
diesels,
they
are
not
likely
to
ever
impact
diesel
LDV/
LLDTs.
FTP
standards.
In
the
Tier
1
program,
SFTP
standards
represent
a
weighted
average
of
FTP,
US06
and
SC03
standards.
The
three
components
are
weighted
by
factors
of
0.35,
0.28,
and
0.37
respectively.
The
formula
simply
adjusts
the
Tier
1
SFTP
weighted
average
standards
downward
to
reflect
the
decrease
in
the
component
FTP
standards.
The
weighting
factors
remain
the
same
and
the
US06
and
SC03
standards
remain
the
same,
but
the
SFTP
standard
becomes
tighter
because
the
FTP
component
becomes
smaller.
These
standards
will
take
effect
for
all
LDV/
LLDTs
beginning
in
2004
and
will
phase
in
with
the
Tier
2
standards
for
HLDTs
in
2008
and
2009.
The
formula
is
as
follows:
New
SFTP
Standard
=
Old
SFTP
Standard
¥
[
0.35
´
 
(
Tier
1
FTP
standard
¥
New
FTP
Standard)]

In
today's
final
rule,
we
will
employ
this
formula
to
compute
full
useful
life
SFTP
standards
for
all
Tier
2
vehicles
and
for
interim
LDV/
LLDTs.
Because
we
are
also
adopting
the
California
4000
mile
SFTP
standards
for
these
vehicles,
we
are
not
adopting
intermediate
life
SFTP
standards,
so
as
to
avoid
the
burden
of
three
sets
of
SFTP
standards.
LDT3
and
LDT4
SFTP
standards
do
not
currently
apply
to
diesels.
Further,
the
standards
applicable
to
Tier
1
diesel
LDVs
and
LDT1s
are
less
stringent
than
gasoline
standards
and
do
not
apply
to
the
SC03
cycle.
There
are
no
SFTP
standards
under
Tier
1
for
diesel
LDT2s.
In
this
final
rule,
we
are
applying
the
same
approach
we
are
using
with
other
standards
in
this
document
to
the
Tier
2
and
interim
SFTP
standards.
Consequently,
we
are
finalizing
that
Tier
2
vehicles
and
interim
LDV/
LLDTs
with
diesel
or
gasoline
engines
must
comply
with
the
same
NMHC+
NOX
and
CO
SFTP
limits.
Thus,
in
computing
Tier
2
SFTP
full
life
standards
for
diesel
LDVs
and
LDT1s
from
Tier
1
values,
the
values
for
diesels
must
be
determined
from
the
standards
applicable
to
gasoline
vehicles
of
the
same
category.
Because
we
lack
certainty
as
to
whether
diesel
vehicles
can
comply
with
the
4,000
mile
SFTP
standards
for
gasoline
vehicles
that
we
are
adopting
from
the
NLEV
and
Cal
LEV
I
programs,
we
are
providing
an
option
that
diesel
LDV/
LLDTs
may
comply
with
intermediate
life
SFTP
standards
instead.
115
Manufacturers
must
calculate
intermediate
life
standards
using
the
same
approach
described
for
full
life
standards,
but
must
substitute
appropriate
intermediate
life
values
in
the
equation
above.
This
provision
will
only
apply
through
model
year
2006,
and
thus
will
likely
only
impact
interim
non­
Tier
2
vehicles,
given
the
very
small
market
share
that
diesels
occupy
and
given
our
expectation
that
they
will
be
the
last
LDV/
LLDTs
phased
into
Tier
2
standards.
We
noted
above
that
interim
non­
Tier
2
HLDTs
will
have
the
option
of
meeting
Tier
1
SFTP
standards.
Thus
diesel
HLDTs
will
not
have
to
comply
with
the
4,000
mile
standards
in
the
interim
years
and
the
option
we
are
providing
for
LDV/
LLDTs
is
not
needed
for
HLDTs.

5.
Adding
a
PM
Standard
to
the
SFTP
Standards
We
requested
comment
on
the
appropriate
SFTP
PM
standards
for
diesel
vehicles.
We
suggested
it
would
be
appropriate
to
establish
a
margin
above
the
applicable
FTP
PM
standard
to
serve
as
the
SFTP
standard.
EPA
has
implemented
such
margins
in
recent
consent
decrees,
under
which
heavyduty
engine
manufacturers
have
agreed
not
to
exceed
emission
levels
1.25
times
the
applicable
exhaust
standards
(
including
PM
standards)
when
engines
are
operated
over
a
wide
range
of
operating
conditions.
We
received
comments
in
favor
of
an
SFTP
PM
standard
of
1.25
times
the
FTP
standard
and
we
received
many
comments
from
manufacturers
against
setting
any
SFTP
PM
standard
until
more
data
become
available.
We
believe
it
is
reasonable
to
include
an
SFTP
standard
for
PM.
However,
we
are
uncertain
as
to
the
technical
appropriateness
of
the
1.25
value
for
passenger
vehicles.
Further,
the
1.25
value
would
lead
to
an
SFTP
standard
for
PM
that
would
not
match
the
stringency
of
the
other
SFTP
standards
we
are
finalizing.
Consequently,
we
are
finalizing
a
procedure
for
computing
diesel
PM
standards
that
is
nearly
identical
to
the
procedure
for
computing
weighted
SFTP
standards
for
NMHC+
NOX
and
CO
described
above.
We
believe
standards
computed
in
this
way
will
be
readily
feasible
for
both
gasoline
and
diesel
vehicles.
To
compute
the
SFTP
PM
standards,
manufacturers
will
use
the
same
formula
described
above
for
NMHC+
NOX
and
CO.
Where
that
formula
calls
for
the
Tier
1
SFTP
standard
to
be
inserted,
manufacturers
must
insert
the
Tier
1
FTP
standard.
This
is
because,
under
Tier
1
standards,
there
is
no
SFTP
standard
for
PM.
However,
the
Tier
1
weighted
SFTP
standards
are
equal
to
the
Tier
1
FTP
standards
(
or
the
sum
of
the
Tier
1
FTP
standards
in
the
case
of
NMHC+
NOX).
Using
the
Tier
1
FTP
PM
standards
in
this
way
will
lead
to
a
Tier
2
SFTP
PM
standard
whose
stringency
is
appropriately
matched
to
the
other
pollutants.
For
HLDTs
,
we
proposed
and
are
finalizing
that
Tier
1
SFTP
standards
would
apply
through
the
interim
program.
because
of
the
late
start
of
SFTP
phase­
in
for
Tier
1
vehicles.
We
see
no
reason
to
impose
SFTP
PM
standards
on
these
vehicles
during
the
interim
period
when
their
manufacturers
will
be
under
pressure
to
develop
diesel
vehicles
to
comply
with
the
Tier
2
standards.
Also,
if
we
were
to
impose
an
FTP
PM
standard
on
the
interim
vehicles,
it
would
likely
be
matched
to
the
interim
phase
in
for
HLDTs
and
manufacturers
would
simply
defer
compliance
for
diesels
until
the
last
phase­
in
year
(
2007).
The
manufacturers
would
then
have
to
recertify
to
the
Tier
2
standards
by
2009.
Given
the
relatively
small
number
of
diesel
vehicles,
we
believe
the
most
reasonable
approach
is
to
defer
SFTP
PM
standards
for
HLDTs
until
the
Tier
2
phase­
in.
Consequently,
we
are
finalizing
that
Tier
2
HLDTs
will
have
to
comply
with
an
SFTP
PM
standard
computed
as
described
above.
For
LDV/
LLDTs
we
are
also
including
the
SFTP
PM
standard
for
the
Tier
2
vehicles.
There
are
only
a
few
diesel
LDV/
LLDTs
currently
produced
and
no
large
increase
in
their
numbers
is
expected.
We
see
little
environmental
benefit
in
imposing
the
SFTP
PM
standard
on
interim
vehicles.

6.
Future
Efforts
Relevant
to
SFTP
Standards
We
are
very
concerned
about
``
off
cycle''
emissions,
i.
e.
those
emissions
that
occur
under
vehicle
operational
modes
that
are
not
captured
in
the
FTP.
SFTP
standards
help
to
address
our
concerns
and
we
believe
that
they
should
apply
to
all
vehicles,
regardless
of
fuel.
Our
final
rule
essentially
promulgates
Tier
1
SFTP
standards
that
are
reduced
to
represent
the
reduction
in
the
FTP
component
standards.
As
we
indicate
under
our
discussion
of
SFTP
for
medium
duty
passenger
vehicles
(
see
section
IV.
B.
4.
g)
we
expect
to
conduct
a
rulemaking
to
establish
appropriate
``
Tier
2''
SFTP
standards
for
all
Tier
2
vehicles.
In
that
rule,
we
expect
to
reexamine
the
US06
and
SC03
test
cycles
and
their
applicability
to
vehicles
using
different
fuels
and
technologies,

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No.
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/
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February
10,
2000
/
Rules
and
Regulations
116
The
Compliance
Assurance
Program,
(
64
FR
23906)
takes
effect
in
the
2000
model
year.
including
whether
these
cycles
are
the
most
appropriate
ones
for
diesels.
We
will
also
examine
whether
it
is
necessary
to
have
different
sets
of
standards
for
different
vehicle
sizes
or
whether
it
is
possible
to
establish
one
set
of
standards
for
all
vehicles.

D.
LDT
Test
Weight
Historically,
HLDTs
(
LDT3s
and
LDT4s)
have
been
emission
tested
at
their
adjusted
loaded
vehicle
weight
(
ALVW),
while
LDVs,
LDT1s,
and
LDT2s
have
been
tested
at
their
loaded
vehicle
weight
(
LVW).
ALVW
is
equivalent
to
the
curb
weight
of
the
truck
plus
half
its
maximum
payload,
while
LVW
is
equivalent
to
the
curb
weight
of
the
truck
plus
a
driver
and
one
adult
passenger
(
300
pounds).
As
we
are
equalizing
standards
and
useful
lives
across
LDVs
and
all
categories
of
LDTs,
we
believe
it
is
appropriate
to
test
all
the
vehicles
under
the
same
conditions.
Therefore,
we
are
finalizing
as
proposed
to
test
HLDTs
at
their
loaded
vehicle
weight.
We
believe
this
is
appropriate
because
the
standards
we
are
imposing
on
HLDTs
under
Tier
2
are
considerably
more
stringent
than
the
Tier
1
standards.
Further,
one
of
our
reasons
for
bringing
HLDTs
under
the
same
standards
as
passenger
cars
is
that
these
trucks
include
many
vans
and
sport
utility
vehicles
that
are
often
used
as
passenger
cars
with
just
one
or
two
passengers.
Lastly,
we
note
that
testing
HLDTs
at
LVW
is
consistent
with
the
way
they
have
been
tested
for
fuel
economy
purposes
for
many
years.
Consequently,
we
believe
it
is
appropriate
to
test
them
at
LVW.
The
NPRM
proposed
that
all
HLDTs
would
certify
using
LVW
beginning
in
the
2004
model
year.
Based
upon
comments,
the
final
rule
will
allow
the
certification
of
HLDTs
based
on
ALVW
until
those
vehicles
are
phased
into
the
Tier
2
standards
in
2008
and
2009
at
which
time
they
must
be
tested
at
LVW.
This
will
enhance
carryover
of
California
vehicles
to
the
Federal
interim
program
in
cases
where
the
California
vehicles
meet
our
interim
standards.

E.
Test
Fuels
As
discussed
elsewhere
in
this
preamble,
the
NLEV
program
was
adopted
virtually
in
its
entirety
from
California's
program.
Because
California's
standards
were
developed
around
the
use
of
California
Phase
II
reformulated
gasoline
(
RFG)
as
the
exhaust
emission
test
fuel,
we
adopted
California
Phase
II
test
fuel
as
the
exhaust
emission
test
fuel
for
gasolinefueled
vehicles
in
the
federal
NLEV
program,
although
we
recognized
at
the
time
that
vehicles
outside
of
California
would
be
unlikely
to
operate
on
that
fuel
in
use.
In
the
NPRM
we
proposed
interim
programs
that
were
derived
from
NLEV
(
for
LDV/
LLDTs)
and
the
CAL
LEVI
program
(
for
HLDTs),
and
we
proposed
to
accept
certification
test
results
generated
on
California
fuel,
but
indicated
that
we
might
test
or
require
in­
use
testing
on
federal
fuel.
Based
upon
comment
we
are
finalizing
provisions
to
permit,
for
interim
vehicles,
that
if
a
test
group
has
been
certified
to
the
exhaust
emission
standards
using
California
fuel
and
is
being
carried
into
the
interim
program
from
NLEV
or
is
being
carried
across
from
California
LEV
I
certification,
then
we
will
not
test
or
require
in­
use
exhaust
testing
on
federal
fuel.
This
change
is
intended
to
help
address
recertification
workload
concerns
raised
by
manufacturers.
For
new
certification
not
carried
across
from
California
LEV
I
or
carried
over
from
NLEV,
and
for
any
Tier
2
vehicles,
we
will
accept
exhaust
certification
test
results
based
on
California
fuel
for
50
state
vehicles
only,
but
we
will
reserve
the
right
to
perform
or
require
certification
confirmatory
testing
and
in­
use
testing
on
federal
test
fuel.
We
recognize
that
manufacturers
may
want
to
perform
calibration
changes
on
vehicles
carried
across
from
the
California
LEV
I
program
or
carried
over
from
NLEV
program.
These
calibration
changes
will
likely
be
aimed
at
certifying
the
test
group
to
the
lowest
possible
NOX
value.
We
believe
that
these
calibration
changes
would
be
appropriate,
provided
they
can
still
be
covered
by
the
existing
worst
case
durability
data
vehicle.
We
will
perform
or
require
certification
confirmatory
testing
and
in­
use
emission
testing
on
these
vehicles
using
California
fuel.
Because
differences
exist
between
the
California
and
federal
evaporative
emission
testing
procedures,
we
proposed
to
continue
to
require
the
use
of
federal
certification
fuel
as
the
test
fuel
in
evaporative
emission
testing.
Under
current
programs,
where
California
and
federal
evaporative
emission
standards
are
essentially
the
same,
California
accepts
evaporative
results
generated
on
the
federal
procedure
(
using
federal
test
fuel),
because
available
data
indicates
the
federal
procedure
to
be
a
``
worst
case''
procedure.
The
evaporative
standards
California
has
adopted
for
their
LEV
II
program
are
more
stringent
than
those
we
are
finalizing
in
this
document.
In
the
NPRM,
we
requested
comment
and
supporting
emission
test
data
on
whether
vehicles
certified
to
CalLEV
II
evaporative
standards
using
California
fuels
will
necessarily
comply
with
the
federal
Tier
2
evaporative
standards,
including
ORVR
standards,
when
tested
with
federal
test
fuel.
While
we
got
comments
from
manufacturers
advocating
that
we
accept
the
results
of
California
evaporative
testing
to
demonstrate
compliance
with
the
federal
evaporative
standards,
we
received
no
supporting
data.
Still,
given
the
fairly
large
difference
between
California
and
federal
evaporative
standards,
it
seems
reasonable
that
a
vehicle
meeting
the
California
standards
under
California
fuels
and
test
conditions
might
also
meet
federal
standards
under
federal
fuels
and
conditions.
We
believe
it
may
be
possible
for
manufacturers
to
establish
a
relationship
between
the
two
sets
of
standards,
fuels
and
conditions
that
would
enable
us
to
grant
federal
certification
based
upon
data
showing
conformity
with
the
California
standards
under
California
fuels
and
conditions.
Consequently,
we
are
including
a
provision
in
the
certification
regulations
to
enable
manufacturers
to
obtain
federal
evaporative
certification
based
upon
California
results,
if
they
obtain
advance
approval
from
EPA.
EPA
will
review
test
data
from
manufacturers
to
establish
whether
it
is
appropriate
to
accept
California
data
to
demonstrate
compliance
with
federal
standards.

F.
Changes
to
Evaporative
Certification
Procedures
To
Address
Impacts
of
Alcohol
Fuels
Current
certification
procedures,
including
regulations
under
the
new
CAP2000
program,
116
allow
manufacturers
to
develop
their
own
durability
process
for
calculating
deterioration
factors
for
evaporative
emissions.
The
regulations
(
§
86.1824
 
01)
permit
manufacturers
to
develop
service
accumulation
(
aging)
methods
based
on
``
good
engineering
judgement''.
The
manufacturer's
durability
process
must
be
designed
to
predict
the
expected
evaporative
emission
deterioration
of
in­
use
vehicles
over
their
full
useful
lives.
We
proposed
and
are
finalizing
requirements
that
these
aging
methods
include
the
use
of
alcohol
fuels
to
address
concerns
that
alcohol
fuels
increase
the
permeability
and
thus
the
evaporative
losses
from
hoses
and
other
evaporative
components.
Based
upon
comment,
we
are
also
finalizing
an
option
to
the
requirement
that
the
manufacturer
use
the
alcohol
fuel.
Under
this
option,
the
manufacturer
may
demonstrate
to
EPA
using
good
engineering
judgement
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Vol.
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No.
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/
Thursday,
February
10,
2000
/
Rules
and
Regulations
117
Numerous
SAE
papers
examine
the
permeability
of
fuel
and
evaporative
system
materials
as
well
as
the
influence
of
alcohols
on
permeability.
See,
for
example
SAE
Paper
#
s
910104,
920163,
930992,
970307,
970309,
930992,
and
981360,
copies
of
which
are
in
the
docket
for
this
rulemaking.
118
Ibid.
119
California
Exhaust
Emission
Standards
and
Test
Procedures
for
2003
and
Subsequent
Model
Zero­
Emission
Vehicles,
and
2001
and
Subsequent
Model
Hybrid
Electric
Vehicles.
In
the
Passenger
Car,
Light­
Duty
Truck
and
Medium­
Duty
Vehicle
Classes;
adopted
August
5,
1999.
acceptable
to
EPA
that
its
durability
process
for
calculating
evaporative
emission
deterioration
factors
accurately
predicts
deterioration
under
prolonged
exposure
to
alcohol
fuels.
We
have
reviewed
data
indicating
that
the
permeability,
and
therefore
the
evaporative
losses,
of
hoses
and
other
evaporative
components
can
be
greatly
increased
by
exposure
to
fuels
containing
alcohols.
117
Alcohols
have
been
shown
to
promote
the
passage
of
hydrocarbons
through
a
variety
of
different
materials
commonly
used
in
evaporative
emission
systems.
Data
from
component
and
fuel
line
suppliers
indicate
that
alcohols
cause
many
elastomeric
materials
to
swell,
which
opens
up
pathways
for
hydrocarbon
permeation
and
also
can
lead
to
distortion
and
tearing
of
components
like
``
O''
ring
seals.
Ethers
such
as
MTBE
and
ETBE
have
a
much
smaller
effect.
Alcohol­
resistant
materials
such
as
fluoroelastomers
are
available
and
are
currently
used
by
manufacturers
to
varying
extents.
Alcohols
do
not
impact
evaporative
components
and
hoses
immediately,
but
rather
it
may
take
as
long
as
one
year
of
exposure
to
alcohol
fuels
for
permeation
rates
to
stabilize.
The
end
result
is
higher
permeation
and
increased
in­
use
evaporative
emissions.
118
Today,
roughly
10%
of
fuel
sold
in
the
U.
S.
contains
alcohol,
mainly
in
the
form
of
ethanol,
and
such
fuels
are
often
offered
in
ozone
nonattainment
areas.
We
believe
it
is
appropriate
to
ensure
that
evaporative
certification
processes
expose
evaporative
components
to
alcohols
and
do
so
long
enough
to
stabilize
their
permeability.
Therefore,
we
are
finalizing
our
proposal
to
the
evaporative
certification
requirements
to
require
manufacturers
to
develop
their
deterioration
factors
using
a
fuel
that
contains
the
highest
legal
quantity
of
ethanol
available
in
the
U.
S.
To
implement
this
change,
we
are
modifying
the
Durability
Demonstration
Procedures
for
Evaporative
Emissions
found
at
§
86.1824
 
01.
The
amendments
will
require
manufacturers
not
using
an
approved
option,
to
age
their
systems
using
a
fuel
containing
the
maximum
concentration
of
alcohols
allowed
by
EPA
in
the
fuel
on
which
the
vehicle
is
intended
to
operate,
i.
e.,
a
``
worst
case''
test
fuel.
(
Under
current
requirements,
this
fuel
would
be
about
10%
ethanol,
by
volume.)
We
are
also
modifying
the
Durability
Demonstration
Procedures
to
require
manufacturers
to
ensure
that
their
aging
procedures
are
of
sufficient
duration
to
stabilize
the
permeability
of
the
fuel
and
evaporative
system
materials.
These
modifications
will
take
place
as
vehicles
are
phased
into
the
evaporative
emission
standards
contained
in
this
final
rule.
We
requested
comment
on
alternative
ways
by
which
manufacturers
could
document
or
demonstrate
that
their
components
are
made
of
materials
whose
permeability
is
not
significantly
affected
by
alcohols.
We
received
no
comments
responsive
to
this
request,
but
we
did
receive
comments
that
EPA
should
not
change
the
CAP2000
provision
allowing
manufacturers
to
develop
their
own
durability
process
for
calculating
evaporative
emission
deterioration
factors
``
using
good
engineering
judgement''.
We
do
not
wish
to
foreclose
the
possibility
that
an
alternative
method
may
exist
or
may
arise
in
the
future.
Consequently,
in
the
final
rule
we
will
permit
manufacturers
to
use
an
optional
method
based
on
good
engineering
judgement
acceptable
to
EPA.
As
an
example,
one
method
would
be
for
the
manufacturer
to
show
that
it
is
exclusively
using
materials
documented
in
the
technical
literature
to
have
low
permeability
in
the
presence
of
alcohols.

G.
Other
Test
Procedure
Issues
California's
LEV
II
program
implements
a
number
of
minor
changes
to
exhaust
emissions
test
procedures.
We
have
evaluated
these
changes
and
found
that,
for
tailpipe
emissions,
the
California
test
procedures
fall
within
ranges
and
specifications
permitted
under
the
Federal
Test
Procedure.
With
regard
to
hybrid
electric
vehicles
(
HEVs)
and
zero
emission
vehicles
(
ZEVs),
we
believe
that
these
vehicles
will
be
predominantly
available
in
California,
or
that
they
will
typically
be
first
offered
for
sale
in
California,
because
of
California's
ZEV
requirement,
which
promotes
the
sale
of
HEVs
and
ZEVs.
Where
manufacturers
market
HEVs
or
ZEVs
outside
of
California,
it
is
likely
that
they
will
market
the
same
vehicles
in
California.
Consequently,
we
are
finalizing
our
proposal
to
incorporate
by
reference
California's
exhaust
emission
test
procedures
for
HEVs
and
ZEVs.
119
In
the
NLEV
program,
we
provided
a
specific
formula
used
by
California
that
could
be
used
to
compute
an
HEV
contribution
factor
to
NMOG
emissions.
This
formula
took
into
consideration
the
range
without
engine
operation
of
various
types
of
HEVs
and
had
the
effect
of
reducing
the
NMOG
emission
standard
for
a
given
emission
bin
(
for
HEV
vehicles
only).
This
would
have
obvious
beneficial
effects
on
a
manufacturer's
calculation
of
its
corporate
NMOG
average.
The
technology
of
HEVs
is
under
rapid
change
and
we
do
not
believe
that
we
can
design
a
formula
now
that
will
accurately
predict
the
impact
of
HEVs
on
corporate
average
NOX
emissions
in
the
Tier
2
time
frame.
Consequently,
we
are
finalizing
the
proposed
provision
by
which
manufacturers
could
propose
HEV
contribution
factors
for
NOX
to
EPA.
If
approved,
these
factors
can
be
used
in
the
calculation
of
a
manufacturer's
fleet
average
NOx
emissions
and
will
provide
a
mechanism
to
credit
an
HEV
for
operating
with
no
emissions
over
some
portion
of
its
life.
These
factors
will
be
based
on
good
engineering
judgement
and
will
consider
such
vehicle
parameters
as
vehicle
weight,
the
portion
of
the
time
during
the
test
procedure
that
the
vehicle
operates
with
zero
emissions,
the
zero
emission
range
of
the
vehicle,
NOX
emissions
from
fuel­
fired
heaters
and
any
measurable
NOX
emissions
from
on­
board
electricity
production
and
storage.
The
final
NLEV
rule
(
See
62
FR
pg
31219,
June
6,
1997)
incorporated
by
reference
California's
NMOG
measurement
procedure
and
adopts
California's
approach
of
using
Reactivity
Adjustment
Factors
(
RAFs)
to
adjust
vehicle
emission
test
results
to
reflect
differences
in
the
impact
on
ozone
formation
between
an
alternative­
fueled
vehicle
and
a
vehicle
fueled
with
conventional
gasoline.
As
has
been
discussed
elsewhere
in
this
preamble,
the
NLEV
program
is
a
special
case
in
which
California
standards
and
provisions
were
adopted
virtually
in
their
entirety.
In
the
preamble
to
the
final
NLEV
rule
(
See
62
FR
31203),
we
expressed
our
reservations
about
the
use
of
RAFs.
We
also
addressed
our
reservations
about
the
use
of
reactivity
factors
developed
in
California
in
a
program
that
spans
a
range
of
climates
and
geographic
locations
across
the
United
States
in
the
final
rule
on
reformulated
gasoline
(
RFG)
(
see
59
FR
7220).
We
continue
to
be
concerned
about
the
validity
of
RAFs
to
predict
ozone
formation
nationwide
and
asked
the
National
Academy
of
Sciences
to
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2000
/
Rules
and
Regulations
120
Ozone­
Forming
Potential
of
Reformulated
Gasoline,
May
1999.
National
Academy
of
Sciences;
National
Academy
Press.
Available
from
the
NAS
web
site:
http://
www.
nap.
edu.
121
California
Evaporative
Emission
Standards
and
Test
Procedures
for
2001
and
Subsequent
Model
Motor
Vehicles.
Adopted
August
5,
1999.
122
We
define
small
volume
manufacturers
to
be
those
with
total
U.
S.
sales
of
less
than
15,000
highway
units
per
year.
Independent
commercial
importers
(
ICIs)
with
sales
under
15,000
per
year
are
included
under
this
term.
123
For
a
graphical
illustration
of
the
phase­
ins
through
time,
see
Table
IV.
B.
 
2.
124
2005
 
2006
for
vehicles
where
the
small
volume
manufacturer
commences
its
2004
model
year
for
all
its
2004
vehicles
before
the
fourth
anniversary
date
of
the
signature
of
this
rule.
look
at
the
scientific
evidence
in
support
of
the
use
of
these
factors
nationwide.
While
we
have
recently
received
a
report
from
NAS,
120
we
have
not
yet
developed
a
final
position
on
how
RAFs
should
be
treated
in
federal
regulations.
We
are
finalizing
as
proposed
not
to
permit
the
use
of
RAFs
in
the
Tier
2
program.
The
issue
of
RAFs
is
relevant
primarily
to
alcohol
and
CNG­
fueled
vehicles.
RAFs
are
not
relevant
at
all
if
a
manufacturer
elects
to
use
NMHC
data
to
show
compliance
with
the
NMOG
standards.
While,
in
our
final
rule,
alcohol
and
CNG
vehicles
will
have
to
comply
with
NMOG
standards
beginning
in
2004
and
while
we
desire
to
harmonize
with
California
when
practical
and
reasonable,
we
will
not
permit
the
use
of
RAFs
for
Tier
2
vehicles
and
interim
non­
Tier
2
vehicles.
We
note
that
we
are
finalizing
a
provision
from
the
NPRM
that
permits
dual
fueled
and
flexible
fueled
vehicles
to
elect
an
NMOG
value
from
the
next
higher
bin
when
they
are
tested
on
an
alternative
fuel.
This
provides
flexibility
in
compliance
with
applicable
NMOG
standards
for
these
vehicles.
We
do
not
believe
that
dedicated
alcohol
or
CNG
vehicles
should
have
any
problems
complying
with
the
NMOG
standards
we
are
finalizing
and
consequently
the
relief
these
vehicles
might
get
when
RAFs
are
employed
is
unnecessary.
In
its
LEV
II
program,
California
is
also
implementing
a
number
of
changes
to
evaporative
emission
test
procedures.
121
Many
of
these
changes
address
the
evaporative
emission
testing
of
hybrid
electric
vehicles.
We
proposed
not
to
adopt
California's
changes,
because
California
uses
different
test
temperatures
and
different
test
fuel
in
its
evaporative
emission
testing
of
gasoline
vehicles
than
we
use
in
the
federal
program.
The
preamble
to
the
final
NLEV
rule
(
See
62
FR
31227)
explains
that
California
and
EPA
are
reviewing
an
industry
proposal
to
streamline
and
reconcile
the
California
and
federal
procedures.
That
work
has
not
been
completed.
However,
where
California
adopts
procedures
specific
to
HEVs
and
ZEVs,
we
are
adopting
those
procedures,
except
that
our
testing
will
occur
at
lower
temperatures,
and
use
a
fuel
determined
by
EPA
to
be
representative
of
federal
usage
(
for
HEVs
only).
H.
Small
Volume
Manufacturers
Our
final
rule
includes
the
following
flexibilities
intended
to
assist
all
manufacturers
in
complying
with
the
stringent
proposed
standards
without
harm
to
the
program's
environmental
goals
as
presented
in
the
NPRM:
·
A
four
year
phase­
in
of
the
standards
for
LDV/
LLDTs;
·
A
delayed
phase­
in
for
HLDTs;
·
The
freedom
to
select
from
specific
bins
of
standards;
·
A
standard
that
can
be
met
through
averaging,
banking
and
trading
of
NOX
credits;
·
Provisions
for
NOX
credit
deficit
carryover;
and,
·
Provisions
for
alternative
phase­
in
schedules.
These
flexibilities
apply
to
all
manufacturers,
regardless
of
size,
and
in
general
we
believe
they
eliminate
the
need
for
more
specific
provisions
for
small
volume
manufacturers.
122
However,
we
proposed
and
are
finalizing
one
additional
flexibility
for
small
volume
manufacturers.
Today's
rule
exempts
small
volume
manufacturers
from
the
25%,
50%
and
75%
Tier
2
phase­
in
requirements
applicable
to
the
2004,
2005
and
2006
LDV/
LLDTs
and
the
50%
phase­
in
requirement
applicable
to
2008
HLDTs.
Instead,
small
volume
manufacturers
will
simply
comply
with
the
appropriate
Tier
2
100%
requirement
in
the
2007
and
2009
model
year.
In
the
phase­
in
years,
small
volume
manufacturers
will
simply
comply
with
the
appropriate
interim
standards
for
all
of
their
vehicles,
except
that
we
will
also
exempt
small
volume
manufacturers
from
the
25%,
50%
and
75%
phase­
in
requirements
for
the
0.20
g/
mi
corporate
average
NOX
standard
applicable
to
interim
HLDTs
in
2004
 
2006.
Small
volume
HLDT
manufacturers
must
simply
comply
with
the
interim
standards,
including
the
corporate
average
NOX
standard,
in
2007
for
100%
of
their
vehicles.
During
model
years
2004
 
2006,
these
same
small
volume
manufacturers
must
comply
with
any
of
the
applicable
bins
of
standards
for
100%
of
their
HLDTs.
123,
124
Provisions
to
deal
with
the
leadtime
issue
related
to
HLDTs
and
outlined
in
section
IV.
B.
apply
to
small
volume
manufacturers.
Therefore
unless
the
small
volume
manufacturer
wants
to
use
the
optional
NMOG
standards
for
interim
LDT2s
and
LDT4s,
it
may
optionally
meet
the
Tier
1
standards
for
its
2004
model
year
HLDTs,
provided
it
commences
its
model
year
for
those
vehicles
before
the
fourth
anniversary
date
of
today's
rulemaking.
As
explained
in
the
NPRM,
we
will
continue
to
apply
the
federal
small
volume
manufacturer
provisions,
which
provide
relief
from
emission
data
and
durability
showing
and
reduce
the
amount
of
information
required
to
be
submitted
to
obtain
a
certificate
of
conformity.
In
addition,
the
CAP2000
program
contains
reduced
in­
use
testing
requirements
for
small
volume
manufacturers.
Exempting
small
volume
manufacturers
from
the
Tier
2
and
interim
HLDT
phase­
in
requirements
eliminates
a
dilemma
that
phase­
in
percentages
can
pose
to
a
manufacturer
that
has
a
limited
product
line,
i.
e.,
how
to
address
percentage
phase­
in
requirements
if
the
manufacturer
makes
vehicles
in
only
one
or
two
test
groups.
We
have
implemented
similar
provisions
for
small
entities
in
other
rulemakings.
Approximately
15
 
20
manufacturers
that
currently
certify
vehicles,
many
of
which
are
independent
commercial
importers
(
ICIs),
will
qualify.
These
manufacturers
represent
just
a
fraction
of
one
percent
of
LDVs
and
LDTs
produced.
We
do
not
believe
that
this
provision
will
have
any
measurable
impact
on
air
quality.

1.
Special
Provisions
for
Independent
Commercial
Importers
(
ICIs)
We
requested
comment
in
the
NPRM
as
to
whether
ICIs
should
be
exempted
from
the
interim
and
Tier
2
fleet
average
NOX
standards.
We
explained
that
ICIs
may
not
be
able
to
predict
their
sales
and
control
their
fleet
average
emissions
because
they
may
be
dependent
upon
vehicles
brought
to
them
by
individuals
attempting
to
import
uncertified
vehicles.
We
noted
that
the
NLEV
program
is
optional
for
ICIs
and
that
ICIs
are
specifically
prohibited,
under
existing
regulations,
from
complying
with
the
fleet
average
NMOG
standard
under
the
NLEV
program.
(
See
40
CFR
85.1515(
c)).
Also,
the
existing
regulations
specifically
bar
ICIs
from
participating
in
any
emission
related
averaging,
banking
or
trading
program.
(
See
40
CFR
85.1515(
d)).
We
expressed
our
concern
that
if
we
do
not
amend
this
provision,
ICIs
would
likely
just
pick
the
least
stringent
bin
available
to
certify
their
vehicles.
This
would
create
an
inequity
for
other
manufacturers,

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Vol.
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28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
especially
other
small
volume
manufacturers
that
must
comply
with
the
fleet
average
NOX
standards.
Since
we
do
not
believe
it
is
wise
to
finalize
a
provision
that
could
lead
to
an
inequity
like
this,
and
since
averaging
may
not
be
workable
for
ICIs,
we
are
finalizing
that
ICIs
must
comply
with
the
standards
from
the
bin
that
contains
the
relevant
fleet
average
NOX
standard,
e.
g.,
in
model
years
2007
and
later
an
ICI
would
have
to
use
bin
5
or
below
for
all
of
its
LDV/
LLDTs.
However,
if
an
ICI
is
able
to
purchase
credits
or
to
certify
to
bins
below
the
one
containing
the
fleet
average
NOX
standard,
we
will
permit
the
ICI
to
bank
credits
for
future
use.
Where
an
ICI
desires
to
certify
to
bins
above
the
fleet
average
standard,
we
will
permit
them
to
do
so
if
they
have
adequate
and
appropriate
credits.
Where
an
ICI
desires
to
certify
to
bins
above
the
fleet
average
standard
and
does
not
have
adequate
or
appropriate
credits
to
offset
the
vehicles,
we
will
permit
the
manufacturer
to
obtain
a
certificate
for
vehicles
using
those
bins,
but
will
condition
the
certificate
such
that
the
manufacturer
can
only
produce
vehicles
if
it
first
obtains
credits
from
other
manufacturers
or
from
other
vehicles
certified
to
lower
bins
during
that
model
year.
We
do
not
believe
that
ICIs
can
predict
or
estimate
their
sales
of
various
vehicles
well
enough
to
participate
in
a
program
that
will
allow
them
leeway
to
produce
some
vehicles
to
higher
bins
now,
knowing
that
they
will
sell
vehicles
from
lower
bins
later.
We
also
do
not
believe
that
we
can
reasonably
assume
that
an
ICI
that
certifies
and
produces
vehicles
one
year,
will
certify
or
even
be
in
business
the
next,
consequently,
we
are
also
not
permitting
ICIs
to
utilize
the
deficit
carryforward
provisions
of
the
rule.
Essentially,
ICIs
will
be
allowed
the
major
benefits
of
the
averaging,
banking
and
trading
program,
but
will
be
constrained
from
getting
into
a
situation
where
they
can
ever
produce
vehicles
to
higher
bins
that
they
can
not
cover
with
credits
at
the
time
they
produce
the
vehicles.

2.
Hardship
Provision
for
Small
Volume
Manufacturers
The
panel
convened
under
the
Small
Business
Regulatory
Enforcement
Fairness
Act
recommended
that
we
seek
comment
on
the
inclusion
of
a
hardship
provision.
We
requested
comment
on
whether
we
should
include
such
a
provision
in
the
NPRM.
Based
upon
comment,
we
are
including
a
limited
hardship
provision
in
the
final
rule
that
will
be
applicable
to
small
volume
manufacturers.
Small
volume
manufacturers
include
companies
that
independently
import
motor
vehicles
(
Independent
Commercial
Importers
or
ICIs),
companies
that
modify
vehicles
to
operate
on
alternative
fuels,
companies
that
produce
specialty
vehicles
by
modifying
vehicles
produced
by
others,
and
companies
that
produce
small
quantities
of
their
own
vehicles,
but
rely
on
major
manufacturers
for
engines
and
other
vital
emission
related
components.
In
these
businesses,
predicting
sales
is
difficult
and
it
is
often
necessary
to
rely
on
others
for
technology.
This
provision
will
provide
limited
relief
in
the
case
where
a
small
volume
manufacturer
is
unable
to
comply
with
the
phase­
in
dates
or
average
NOX
standard.
The
manufacturer
will
need
to
provide
evidence
that,
despite
its
best
efforts,
it
cannot
meet
implementation
dates
or
required
NOX
averages.
Appeals
for
hardship
relief
must
be
made
in
writing,
must
be
submitted
before
the
earliest
date
of
noncompliance,
must
include
evidence
that
the
noncompliance
will
occur
despite
the
manufacturer's
best
efforts
to
comply
and
must
include
evidence
that
severe
economic
hardship
will
be
faced
by
the
company
if
the
relief
is
not
granted.
Hardship
relief
will
only
be
granted
for
the
first
year
after
a
new
standard
is
finally
implemented.
For
small
volume
manufacturers,
which
are
already
exempted
from
the
phase­
in
schedules
for
the
interim
and
Tier
2
programs,
this
means
that
relief
would
be
available
for
the
final
phase­
in
year
for
the
LDV/
LLDT
Tier
2
phase­
in
(
2007),
for
the
final
phase­
in
year
for
the
interim
HLDT
phase­
in
(
2007),
and
the
final
phase­
in
year
for
the
Tier
2
HLDT
phase­
in
(
2009).
Relief
will
also
be
available
for
manufacturers
that
did
not
opt
into
NLEV
and
must
meet
our
interim
standards
for
all
their
LDV/
LLDTs
in
2004,
and
relief
will
be
available
for
HLDTs
and
MDPVs
which
must
be
brought
under
our
interim
program
in
the
2004
model
year.
We
will
work
with
the
applicant
to
ensure
that
all
other
remedies
available
under
this
rule,
e.
g.,
use
of
banked
or
purchased
credits,
are
exhausted
before
granting
additional
relief,
and
will
limit
the
period
of
relief
to
one
year.
Note
that
in
our
discussion
of
the
credit
deficit
carryforward
provision
in
section
IV.
B.
4.
d.
vi,
we
indicate
that
we
are
not
permitting
small
volume
manufacturers
to
carry
deficits
forward
until
they
have
demonstrated
compliance
with
the
NOX
averaging
provisions
for
one
year.
This
is
to
prevent
small
volume
manufacturers,
that
have
already
received
additional
time
due
to
the
waiver
of
the
phase­
in
requirements,
from
gaining
even
more
time
to
finally
comply
through
the
credit
deficit
carryforward
provisions.
To
avoid
this
provision
creating
a
selfimplementing
problem,
by
which
the
very
existence
of
the
hardship
provision
prompts
small
volume
manufacturers
to
delay
development,
acquisition
and
application
of
new
technology,
we
want
to
make
clear
that
we
expect
this
provision
to
be
rarely
used.
Our
final
rule
contains
numerous
flexibilities
for
all
manufacturers
and
it
waives
the
phase­
in
steps
for
small
volume
manufacturers,
which
effectively
provides
them
more
time.
We
expect
small
manufacturers,
to
prepare
for
the
applicable
implementation
dates
in
today's
rule.

I.
Compliance
Monitoring
and
Enforcement
1.
Application
of
EPA's
Compliance
Assurance
Program,
CAP2000
The
CAP2000
program
(
64
FR
23905,
May
14,
1999)
streamlines
and
simplifies
the
procedures
for
certification
of
new
vehicles
and
will
also
require
manufacturers
to
test
in­
use
vehicles
to
monitor
compliance
with
emission
standards.
The
CAP2000
program
was
developed
jointly
with
the
State
of
California
and
involved
considerable
input
and
support
from
manufacturers.
As
the
name
implies,
it
can
be
implemented
as
early
as
the
2000
model
year.
We
are
finalizing
our
proposal
that
the
Tier
2
and
the
interim
requirements
will
be
implemented
subject
to
the
requirements
of
the
CAP2000
program.
Certain
CAP2000
requirements
are
being
slightly
modified
to
reflect
changes
to
useful
lives,
standard
structure
and
other
aspects
of
the
Tier
2
program,
but
we
proposed
no
major
changes
to
fundamental
principles
of
the
CAP2000
program,
and
we
are
not
adding
any
major
changes
with
today's
final
rule.
Although
we
proposed
changes
to
useful
lives,
we
did
not
propose
to
amend
the
50,000
mile
minimum
mileage
used
in
manufacturer
in­
use
verification
testing
or
in­
use
confirmatory
testing
under
the
CAP2000
program
at
this
time.
The
CAP2000
inuse
program
is
not
yet
implemented
and
we
believe
it
is
appropriate
to
allow
manufacturers
to
gain
experience
with
procuring
and
testing
vehicles
at
the
50,000
mile
level
before
making
significant
changes.
However,
where
one
vehicle
from
each
in­
use
test
group
would
have
a
minimum
mileage
of
75,000
miles
under
the
CAP2000
program,
we
proposed
and
are
finalizing,
consistent
with
California,
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Rules
and
Regulations
change
that
figure
to
90,000
miles
for
Tier
2
vehicles.
We
may,
in
our
own
in­
use
program,
procure
and
test
vehicles
at
mileages
higher
than
50,000
and
pursue
remedial
actions
(
e.
g.,
recalls)
based
on
that
data.
We
may
also
use
that
data
as
the
basis
to
initiate
a
rulemaking
to
make
changes
in
the
CAP2000
in­
use
requirements,
if
the
data
indicate
significant
nonconformity
at
higher
mileages.
We
are
finalizing
certification
test
fuel
specifications
consistent
with
our
final
fuel
sulfur
requirements.
Given
the
phase­
in
for
low
sulfur
fuel
we
are
finalizing
in
this
rulemaking,
we
recognize
that
2004
to
2007
vehicles
(
and
vehicles
certified
in
earlier
model
years
to
bank
early
NOX
credits)
may
be
exposed
to
higher
sulfur
levels
early
in
their
lives.
Because
of
this
sulfur
exposure,
these
vehicles
could
experience
problems
with
OBD
indicator
light
illuminations.
Consistent
with
our
approach
under
the
NLEV
program,
we
will
consider
requests
from
manufacturers
to
permit
OBD
systems
that
function
properly
on
low
sulfur
fuel,
but
exhibit
sulfurinduced
passes
when
operated
on
higher
sulfur
fuel.
For
OBD
systems
that
exhibit
sulfur­
induced
indicator
light
illumination,
we
will
consider
requests
to
modify
such
vehicles
on
a
case­
bycase
basis.

2.
Compliance
Monitoring
We
plan
no
new
compliance
monitoring
activities
or
programs
for
Tier
2
vehicles.
These
vehicles
will
be
subject
to
the
certification
and
manufacturer
in­
use
testing
provisions
of
the
CAP2000
rule.
Also,
we
expect
to
continue
our
own
in­
use
testing
program
for
exhaust
and
evaporative
emissions.
We
will
pursue
remedial
actions
when
substantial
numbers
of
properly
maintained
and
used
vehicles
fail
any
standard
in
either
in­
use
testing
program.
Consistent
with
our
approach
under
NLEV
we
will
consider
requests,
prior
to
manufacturer
or
EPA
in­
use
testing
to
permit
preconditioning
procedures
designed
solely
to
remove
the
effects
of
high
sulfur
gasoline
on
vehicles
produced
through
the
2007
model
year.
We
retain
the
right
to
conduct
Selective
Enforcement
Auditing
of
new
vehicles
at
manufacturer's
facilities.
In
recent
years,
we
have
discontinued
SEA
testing
of
new
LDVs
and
LDTs,
because
compliance
rates
were
routinely
at
100%.
We
recognize
that
the
need
for
SEA
testing
may
be
reduced
by
the
low
mileage
in­
use
testing
requirements
of
the
CAP2000
program.
However,
we
expect
to
re­
examine
the
need
for
SEA
testing
as
standards
tighten
under
the
NLEV,
interim,
and
Tier
2
programs.
We
have
established
a
data
base
to
record
and
track
manufacturers'
compliance
with
NLEV
requirements
including
the
corporate
average
NMOG
standards.
We
expect
to
monitor
manufacturers'
compliance
with
the
Tier
2
and
interim
corporate
average
NOX
standards
in
a
similar
fashion
and
also
to
monitor
manufacturers'
phase­
in
percentages
for
Tier
2
vehicles.

3.
Relaxed
In­
Use
Standards
for
Vehicles
Produced
During
the
Phase­
in
Period
The
Tier
2
standards
will
be
challenging
for
manufacturers
to
achieve,
and
some
vehicles
will
pose
more
of
a
challenge
than
others.
Not
only
will
manufacturers
be
responsible
for
assuring
that
vehicles
can
meet
the
standards
at
the
time
of
certification,
they
will
also
have
to
ensure
that
the
vehicles
comply
when
self­
tested
in­
use
under
the
provisions
of
the
CAP2000
program,
and
when
tested
by
EPA
under
its
in­
use
(``
Recall'')
test
program.
With
any
new
technology,
or
even
with
new
calibrations
of
existing
technology,
there
are
risks
of
in­
use
compliance
problems
that
may
not
appear
in
the
certification
process.
Inuse
compliance
concerns
may
discourage
manufacturers
from
applying
new
technologies
or
new
calibrations.
Thus,
we
proposed
and
are
finalizing,
relaxed
in­
use
standards
for
those
bins
most
likely
to
require
the
greatest
applications
of
effort,
to
provide
assurance
to
the
manufacturers
that
they
will
not
face
recall
if
they
exceed
standards
by
a
specified
amount.
For
the
first
two
years
after
a
test
group
meeting
a
new
standard
is
introduced,
that
test
group
will
be
subject
to
more
lenient
in­
use
standards.
These
``
in­
use
standards''
will
apply
only
to
bin
5
and
below,
only
for
the
pollutants
indicated,
and
only
for
the
first
two
model
years
that
a
test
group
is
certified
under
that
bin.
The
in­
use
standards
will
not
be
applicable
to
any
test
group
first
certified
to
a
new
standard
after
2007
for
LDV/
LLDTs
or
after
2009
for
HLDTs.
The
temporary
in­
use
standards
are
shown
in
Table
V.
A.
 
3
below.

TABLE
V.
A.
 
3.
 
IN­
USE
COMPLIANCE
STANDARDS
(
G/
MI)
[
Certification
standards
shown
for
reference
purposes]

Bin
Durability
period
(
miles)
NOX
In­
use
NOX
certification
NMOG
in­
use
NMOG
certification
5
..
50,000
0.05
n/
a
0.075
5
..
120,000
0.10
0.07
n/
a
0.090
4
..
120,000
0.06
0.04
n/
a
0.070
3
..
120,000
0.05
0.03
0.09
0.055
2
..
120,000
0.03
0.02
0.02
0.010
Because
we
are
concerned
that
diesel
vehicles
may
require
low
sulfur
fuel
to
comply
with
our
interim
requirements
and
that
such
fuel
may
not
be
widely
available
until
the
2006
 
2007
timeframe,
we
are
providing
in­
use
standards
specifically
for
diesel
vehicles
certified
to
bin
10
standards.
These
standards
will
be
determined
by
multiplying
the
applicable
NOX
and
PM
certification
standards
by
factors
of
1.2
and
1.35,
respectively.
These
multipliers
can
be
used
only
for
years
during
which
bin
10
is
viable,
only
for
diesels
and
only
for
the
pollutants
indicated.
We
believe
manufacturers
should
and
will
strive
to
meet
certification
standards
for
the
full
useful
lives
of
the
vehicles,
but
we
recognize
that
the
existence
of
such
in­
use
standards
poses
some
risk
that
a
manufacturer
might
aim
for
the
in­
use
standard
in
its
design
efforts
rather
than
the
certification
standard,
and
thus
market
less
durable
designs.
We
do
not
believe
that
risk
to
be
significant.
We
believe
that
such
risks
are
more
than
balanced
by
the
gains
that
can
result
from
earlier
application
of
new
technology
or
new
calibration
techniques
that
might
occur
in
a
scenario
where
in­
use
liability
is
slightly
reduced.
Further,
we
believe
that
the
in­
use
standards
will
be
of
short
enough
duration
that
any
risks
are
minimal.

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10,
2000
/
Rules
and
Regulations
4.
Enforcement
of
the
Tier
2
and
Interim
Corporate
Average
NOX
Standards
We
are
finalizing,
as
proposed,
that
manufacturers
can
either
report
that
they
meet
the
relevant
corporate
average
NOX
standard
in
their
annual
reports
to
the
Agency
or
they
can
show
via
the
use
of
NOX
credits
that
they
have
offset
any
exceedance
of
the
corporate
average
NOX
standard.
Manufacturers
will
also
have
to
report
their
NOX
credit
balances
or
deficits.
The
averaging,
banking
and
trading
program
will
be
enforced
through
the
certificate
of
conformity
that
the
manufacturer
must
obtain
in
order
to
introduce
any
regulated
vehicles
into
commerce.
The
certificate
for
each
test
group
will
require
all
vehicles
to
meet
the
applicable
Tier
2
emission
standards
from
the
applicable
bin
of
the
Tier
2
program,
and
will
be
conditioned
upon
the
manufacturer
meeting
the
corporate
average
NOX
standard
within
the
required
time
frame.
If
a
manufacturer
fails
to
meet
this
condition,
the
vehicles
causing
the
corporate
average
NOX
exceedance
will
be
considered
to
be
not
covered
by
the
certificate
of
conformity
for
that
engine
family.
A
manufacturer
will
be
subject
to
penalties
on
an
individual
vehicle
basis
for
sale
of
vehicles
not
covered
by
a
certificate.
These
provisions
will
also
apply
to
the
interim
corporate
average
standards.
As
outlined
in
detail
in
the
preamble
to
the
final
NLEV
rule,
EPA
will
review
the
manufacturer's
sales
to
designate
the
vehicles
that
caused
the
exceedance
of
the
corporate
average
NOX
standard.
We
will
designate
as
nonconforming
those
vehicles
in
those
test
groups
with
the
highest
certification
emission
values
first,
continuing
until
a
number
of
vehicles
equal
to
the
calculated
number
of
noncomplying
vehicles
as
determined
above
is
reached.
In
a
test
group
where
only
a
portion
of
vehicles
are
deemed
nonconforming,
we
will
determine
the
actual
nonconforming
vehicles
by
counting
backwards
from
the
last
vehicle
produced
in
that
test
group.
Manufacturers
will
be
liable
for
penalties
for
each
vehicle
sold
that
is
not
covered
by
a
certificate.
During
phase
in
years,
the
certificates
will
also
require
manufacturers
to
meet
the
applicable
phase­
in
requirements.
Compliance
with
the
phase­
in
requirements
will
be
enforced
in
the
same
manner
as
for
the
corporate
average
NOX
standard.
For
the
optional
phase­
in
requirement
for
HLDTs
for
model
year
2004,
manufacturers
must
declare
in
their
application
for
certification
whether
they
intend
to
comply
with
the
interim
requirements
for
all
of
their
HLDTs
and
initiate
phasein
to
the
interim
corporate
average
NOX
standard
in
2004
and
receive
the
benefits
of
that
phase­
in
(
less
stringent
NMOG
standards
for
certain
LDT2s
and
LDT4s).
Compliance
with
this
phase­
in
requirement
and
the
fleet
average
NOX
standard
will
be
enforced
just
like
compliance
with
any
other
average
NOX
standard
and
phase­
in
requirement
of
today's
program.
We
will
also
condition
certificates
to
enforce
the
requirements
that
manufacturers
not
sell
NOX
credits
that
they
have
not
generated.
A
manufacturer
that
transfers
NOX
credits
it
does
not
have
will
create
an
equivalent
number
of
debits
that
it
must
offset
by
the
reporting
deadline
for
the
same
model
year.
Failure
to
cover
these
debits
with
NOX
credits
by
the
reporting
deadline
will
be
a
violation
of
the
conditions
under
which
EPA
issued
the
certificate
of
conformity,
and
nonconforming
vehicles
will
not
be
covered
by
the
certificate.
EPA
will
identify
the
nonconforming
vehicles
in
the
same
manner
described
above.
In
the
case
of
a
trade
that
results
in
a
negative
credit
balance
that
a
manufacturer
could
not
cover
by
the
reporting
deadline
for
the
model
year
in
which
the
trade
occurred,
we
proposed,
and
are
finalizing,
to
hold
both
the
buyer
and
the
seller
liable.
This
is
consistent
with
other
mobile
source
rules,
except
for
the
NLEV
rule
as
discussed
below.
We
believe
that
holding
both
parties
liable
will
induce
the
buyer
to
exercise
diligence
in
assuring
that
the
seller
has
or
will
be
able
to
generate
appropriate
credits
and
will
help
to
ensure
that
inappropriate
trades
do
not
occur.
In
the
NLEV
program
we
implemented
a
system
in
which
only
the
seller
of
credits
would
be
liable.
In
the
preamble
to
the
final
NLEV
rule
(
See
62
FR
31216),
we
explained
that
a
multiple
liability
approach
would
be
unnecessary
in
the
context
of
the
NLEV
program
given
that
the
main
benefit
to
a
multiparty
liability
approach
would
be
to
``
protect
against
a
situation
where
one
party
sells
invalid
credits
and
then
goes
bankrupt,
leaving
no
one
liable
for
either
penalties
or
compensation
for
the
environmental
harm.''
Our
preamble
stated
further
that
EPA
would
not
necessarily
take
the
same
approach
for
``
other
differently
situated
trading
programs.''
The
NLEV
program
was
implemented
to
be
a
relatively
short
duration
program,
during
which
time
we
could
expect
relative
stability
in
the
industry.
Also,
given
that
NLEV
is
a
voluntary
program
of
lower
than
mandated
standards,
we
did
not
expect
that
the
smallest
manufacturers
would
opt
in.
These
are
the
companies
whose
stability
is
most
in
jeopardy
in
a
dynamic
and
very
competitive
worldwide
business.
We
currently
believe
that
the
Tier
2
program
and
its
framework
will
remain
for
many
years.
We
note
that
the
program
is
not
scheduled
for
complete
phase­
in
for
almost
nine
years
after
the
publication
of
today's
rule.
All
manufacturers,
large
and
small,
will
ultimately
have
to
meet
the
Tier
2
standards.
We
cannot
predict
that
in
the
Tier
2
timeframe
there
will
not
be
companies
that
leave
the
market
or
are
divided
between
other
companies
in
mergers
and
acquisitions.
Thus
we
believe
it
is
prudent
to
implement
a
program
to
provide
inducements
to
the
seller
to
assure
the
validity
of
any
credits
that
it
purchases
or
contracts
for.

J.
Addressing
Environmentally
Beneficial
Technologies
Not
Recognized
by
Test
Procedures
Compliance
with
the
current
and
proposed
EPA
motor
vehicle
emission
standards
is
based
on
the
emission
performance
of
a
vehicle
over
EPA's
prescribed
test
procedure.
While
this
test
procedure
addresses
many
of
the
aspects
of
a
vehicle's
impact
on
air
quality,
it
does
not
address
all
such
impacts.
EPA
is
aware
of
two
developing
technologies
which
have
potential
to
improve
ozone­
related
air
quality,
but
that
would
not
do
so
over
the
current
EPA
test
procedure.
The
first
example
is
a
device
that
removes
ozone
from
the
air
as
the
vehicle
is
driven.
A
major
producer
of
automotive
catalysts,
Englehard,
has
developed
a
catalytic
coating
for
vehicle
radiators
(
called
PremAir)
that
converts
ambient
ozone
to
oxygen.
ARB
has
been
working
with
Englehard
for
some
time
to
develop
a
procedure
which
would
grant
PremAir
and
other
direct
ozone
reducing
technologies
a
NMOG
credit
under
its
LEV
I
and
LEV
II
programs.
ARB
issued
on
December
20,
1999
a
Manufacturers
Advisory
Circular
outlining
procedures
for
establishing
such
a
NMOG
credit.
Englehard
submitted
substantial
comments
to
the
Tier
2
NPRM,
including
ozone
modeling
results
for
five
cities
(
Los
Angeles,
Houston,
Atlanta,
New
York
City,
and
Chicago).
This
ozone
modeling
compared
the
ozone
reductions
from
reduced
exhaust
VOC
and
NOX
emissions
to
that
from
using
PremAir.
As
a
result
of
this
modeling,
Englehard
requested
that
EPA
grant
a
typical
PremAir
system
a
NMOG
or
NOX
emission
credit
of
0.015
g/
mi.
This
credit
would
be
adjusted
based
the
exact
design
and
performance
of
the
system
and
vehicle
being
certified.

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Regulations
The
second
example
is
an
insulated
catalyst.
The
insulation
retains
heat
for
extended
periods
of
time,
increasing
the
catalyst
temperature
when
the
engine
is
started
and
reducing
the
time
required
for
the
catalyst
to
reach
an
operational
temperature.
This
technology
can
reduce
cold
start
emissions
for
engine
off
times
(
called
soaks)
of
24
hours
or
less.
The
vast
majority
of
engine
soaks
in­
use
are
less
than
24
hours.
However,
EPA's
test
procedure
only
tests
emissions
at
two
fairly
extreme
soak
times:
10
minutes
and
12
 
36
hours.
The
10
minute
soak
is
so
short
that
even
an
uninsulated
catalyst
is
warm
enough
to
quickly
begin
working
upon
restart.
The
36
hour
soak
is
beyond
the
practical
limit
of
cost­
effective
insulating
techniques.
As
a
result
of
the
Tier
2
NPRM,
EPA
received
a
number
of
inquiries
from
potential
manufacturers
of
insulated
catalysts,
requesting
further
information
about
emission
credits,
test
procedures
and
certification
requirements.
EPA
believes
that
both
of
these
technologies,
as
well
as
other
potential
technologies,
will
reduce
regulated
emissions
and/
or
ambient
ozone
levels,
as
long
as
they
operate
as
designed
inuse
EPA
will
work
with
the
developers
of
such
technologies
to
establish
regulatory
procedures
to
determine
whether
it
is
appropriate
to
grant
emission
credit
for
particular
technologies.
This
process
will
involve
the
opportunity
for
public
notice
and
comment.
With
regard
to
Englehard's
PremAir
technology,
EPA
specifically
requested
comments
on
ARB's
proposed
approach
to
determining
an
NMOG
credit
and
received
no
adverse
comment
on
granting
this
type
of
technology
a
VOC
emission
credit.
Thus,
EPA
is
promulgating
today
procedures
very
similar
to
ARB's
for
certifying
such
technologies
and
determining
the
appropriate
VOC
emission
credit.
The
only
difference
between
EPA's
and
ARB's
procedures
involve
assessing
the
effectiveness
of
VOC
emission
reductions
and
ozone
reducing
devices
in
areas
outside
of
California.
In
summary,
the
ozone
reductions
associated
by
both
the
ozone
reducing
technology,
such
as
PremAir,
and
exhaust
VOC
emission
reductions
will
be
estimated
using
urban
airshed
modeling,
using
up­
to­
date
chemical
and
meteorological
simulation
techniques.
Four
local
areas
shall
be
modeled:
New
York
City,
Chicago,
Atlanta
and
Houston.
The
ozone
episodes
to
be
modeled
shall
be
those
selected
by
the
states
for
use
in
their
most
recent
ozone
SIPs.
Emissions
shall
be
projected
for
calendar
year
2007.
Baseline
emissions
will
include
the
benefits
of
the
Tier
2
and
sulfur
standards
being
promulgated
today,
as
well
as
all
other
emission
controls
assumed
in
EPA's
ozone
modeling
of
the
benefits
of
the
Tier
2
and
sulfur
standards
described
above.
The
ozone
benefit
of
VOC
emission
reductions
will
be
modeled
by
assuming
that
Tier
2
LDVs
and
LDTs
meet
a
0.055
g/
mi
exhaust
NMOG
standard
instead
of
a
0.09
g/
mi
NMOG
standard.
The
relationship
between
changes
in
exhaust
NMOG
emission
standards
and
in­
use
VOC
emissions
shall
be
determined
by
modeling
LDV+
LDT
emission
in
2030
assuming
that
all
Tier
2
vehicles
meet
a
0.055
g/
mi
exhaust
NMOG
standard
instead
of
a
0.09
g/
mi
NMOG
standard.
All
emission
modeling
shall
utilize
the
updated
Tier
2
emission
model
developed
by
EPA
as
part
of
this
rule,
or
MOBILE6,
once
it
is
available.
The
measure
of
ozone
to
be
used
in
calculating
VOC
emission
equivalency
will
be
the
peak
one­
hour
ozone
level
anywhere
in
the
modeled
region
on
the
day
when
ozone
is
at
its
highest.
The
NMOG
credit
will
be
determined
by
averaging
the
NMOG
credit
determined
in
each
of
the
four
local
areas.
Simulation
of
the
benefits
of
the
direct
ozone
reducing
device
will
assume
that
ozone
levels
immediately
around
the
roadway
will
be
40%
less
than
that
existing
in
the
broader
grid.
The
performance
aspects
of
the
direct
ozone
reducing
device
can
be
simulated
by
any
reasonable
values,
since
the
appropriate
NMOG
credit
for
any
specific
application
of
this
technology
will
be
scaled
to
the
performance
of
the
specific
application.
The
manufacturer
wishing
to
obtain
an
NMOG
credit
for
use
of
this
technology
must
demonstrate
its
effectiveness
to
EPA
as
part
of
the
certification
process.
This
will
involve
demonstrating
the
air
flow
through
the
device,
its
ozone
destruction
capability
under
conditions
analogous
to
those
photochemically
modeled,
the
durability
of
this
capability
over
the
useful
life
of
the
vehicle
and
the
method
to
be
used
to
diagnose
its
effectiveness
in­
use.
Regarding
the
insulated
catalyst
technology,
less
information
has
been
received
to
date
on
its
performance.
We
are
not
promulgating
regulations
for
determining
the
appropriate
credit
for
such
technology
today.
However,
when
we
were
developing
our
SFTP
standards,
EPA
developed
a
methodology
to
assess
the
emission
benefits
of
insulated
catalysts
or
other
techniques
which
reduced
emissions
after
the
vehicle
soaks
between
10
minutes
and
12
 
36
hours.
Thus,
EPA
expects
to
use
this
methodology
as
a
starting
point
in
assessing
the
benefit
of
insulated
catalysts
and
will
continue
to
assess
development
of
options
in
this
area.
Because
an
insulated
catalyst
operates
essentially
like
a
typical
catalyst,
we
do
not
expect
that
the
test
procedures
for
its
certification
would
differ
from
those
applicable
to
typical
Tier
2
vehicles.
The
primary
difference
will
be
an
assessment
of
its
effectiveness
relative
to
conventional
catalyst
technology
over
a
range
of
vehicle
soak
times
between
10
minutes
and
36
hours.
Then,
it
will
be
necessary
to
estimate
the
average
effectiveness
in­
use
relative
to
conventional
technology
using
the
inuse
frequency
of
vehicle
soak
times.

K.
Adverse
Effects
of
System
Leaks
The
standards
set
forth
in
today's
final
rule
are
very
stringent.
They
require
extremely
tight
control
of
air/
fuel
ratios
and
also
tight
control
of
the
inputs
to
the
catalyst(
s).
A
sealed
exhaust
system
is
crucial
to
the
proper
operation
and
emission
control
of
current
vehicles
and
even
more
so
to
the
expected
Tier
2
vehicles.
Because
a
given
point
in
the
exhaust
system
intermittently
sees
negative
pressure,
exhaust
leaks
can
permit
air
to
enter
the
exhaust
system.
Even
tiny
amounts
of
air
entering
this
way
can
have
large
impacts
on
the
output
of
the
oxygen
sensor.
If
the
output
of
the
oxygen
sensor
is
affected,
then
the
exhaust
output
of
the
cylinders
will
be
affected.
Consequently,
an
exhaust
leak
can
lead
to
both
excess
NOX
and
NMOG
emissions.
Air
entering
through
exhaust
leaks
can
also
impact
the
NOX
conversion
efficiency
of
catalysts.
In
the
preamble
to
the
NPRM,
we
expressed
our
concerns
about
the
impact
of
small
exhaust
leaks
and
requested
comment
on
design
or
onboard
monitoring
measures
we
could
finalize
to
ensure
that
exhaust
systems
were
manufactured
and
installed
in
such
a
way
that
leaks
are
prevented.
We
also
asked
for
comment
on
whether
we
should
implement
a
provision
that
would
require
manufacturers
to
demonstrate
through
engineering
analysis
or
design
that
the
possibilities
of
exhaust
leaks
have
been
addressed.
Manufacturers
indicated
in
their
comments
that
they
believe
addressing
exhaust
leaks
is
unnecessary.
We
believe
otherwise.
Data
we
have
seen
suggest
that
very
large
emission
effects
can
occur
due
to
very
small
leaks.
Consequently,
we
are
finalizing
a
provision
in
today's
rule
that
will
require,
as
part
of
the
certification
process,
for
manufacturers
to
indicate
that
they
have
conducted
an
engineering
analysis
of
the
exhaust
system.
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and
Regulations
125
40
CFR
Part
80,
subpart
F.
analysis
must
cover
the
entire
exhaust
system,
including
air
injection
systems,
from
the
engine
block
exhaust
manifold
gasket
surface
to
a
point
beyond
the
last
catalyst
or
oxygen
sensor.
This
analysis
must
determine
whether
the
exhaust
system
has
been
designed
to
facilitate
leak­
free
assembly,
installation,
repair
and
operation
for
the
full
useful
life
of
the
vehicle.
With
regard
to
the
concept
of
``
facilitating
leak­
free
repair'',
we
intend
that
manufacturers
should
ascertain
that
the
exhaust
system
can
be
removed
in
a
dealership
or
repair
shop
for
repairs
to
the
exhaust
system
itself
or
to
other
components
of
the
vehicle
and
be
able
to
be
reassembled
and
reinstalled
in
a
leak
free
manner
using
commonly
available
tools.
It
is
not
our
intention
that
the
concept
of
``
facilitating
leak­
free
repair''
apply
to
situations
of
gross
misuse,
tampering
or
serious
vehicle
damage.

L.
The
Future
Development
of
Advanced
Technology
and
the
Role
of
Fuels
The
EPA
staff
will
continue
to
assess
the
emission
control
potential
of
vehicles
powered
by
technologies
such
as
lean­
burn
and/
or
fuel­
efficient
technologies,
including
diesel
engines
equipped
with
advanced
aftertreatment
systems,
gasoline
direct
injection
engines,
and
other
technologies
that
show
promise
for
significant
advances
in
fuel
economy
and
meeting
the
Tier
2
standards
in
the
post­
2004
time
frame.
In
this
assessment,
we
will
maintain
a
``
systems''
perspective,
considering
the
progress
of
advanced
vehicle
technologies
in
the
context
of
the
role
that
sulfur
in
fuels
plays
in
enabling
the
introduction
of
these
advanced
technologies
or
maximizing
their
effectiveness.

M.
Miscellaneous
Provisions
We
are
finalizing,
as
proposed,
to
continue
existing
emission
standards
from
Tier
1
and
NLEV
that
apply
to
cold
CO,
certification
short
testing,
refueling,
running
loss,
and
highway
NOX.
We
are
discontinuing,
as
proposed,
the
50
degree
(
F)
standards
and
testing
included
in
the
NLEV
program.
The
50
degree
standards
are
a
part
of
the
NLEV
program
because
that
national
program
adopted
California
requirements
virtually
in
their
entirety.
These
standards
had
not
previously
been
part
of
any
federal
program.
We
are
also
discontinuing
idle
CO
standards
for
LDTs,
based
upon
comment.
These
standards
are
adequately
covered
by
the
certification
short
test
standards.
VI.
Gasoline
Sulfur
Program
Compliance
and
Enforcement
Provisions
A.
Overview
The
gasoline
sulfur
program
promulgated
today
has
many
of
the
same
features
as
the
reformulated
gasoline/
conventional
gasoline
(
RFG/
CG)
program,
including
refinery
averaging,
refinery
and
downstream
level
caps,
and
the
generation
and
use
of
credits.
These
features
raise
similar
compliance
issues
for
both
programs.
As
a
result,
the
enforcement
mechanisms
of
the
gasoline
sulfur
rule
generally
track
those
of
the
RFG/
CG
rule,
where
applicable.
Because
low
sulfur
gasoline
is
necessary
to
avoid
significant
impairment
of
Tier
2
motor
vehicle
emissions
technology,
we
believe
measures
are
needed
to
assure
that
gasoline
meets
the
standards
promulgated
in
today's
rule
at
the
time
the
gasoline
leaves
the
refinery
gate
or
is
imported,
and
to
assure
that
the
quality
of
the
gasoline
is
maintained
downstream
of
the
refinery.
More
specifically,
today's
rule
includes
the
following
provisions:
·
Refiners
and
importers
must
test
each
batch
of
gasoline
produced
or
imported
for
sulfur
content
and
maintain
testing
records
and
retain
test
samples;
·
Refiners
and
importers
must
submit
reports
regarding
compliance
with
the
average
standards
and
credit
provisions;
·
Attest
procedures
125
similar
to
those
of
the
RFG/
CG
rule
will
be
applied
to
the
sulfur
standards
and
credit
provisions;
·
Refiners
and
importers
are
prohibited
from
using,
selling
or
purchasing
invalid
sulfur
credits,
and
are
required
to
adjust
compliance
calculations
if
invalid
credits
have
been
used,
sold
or
purchased;
·
Small
foreign
refiners
subject
to
the
small
refiner
standards
described
in
section
IV.
C.
above
must
comply
with
the
rule's
small
refiner
compliance
requirements
and
other
requirements
to
ensure
the
separation
of
such
foreign
gasoline
from
all
other
gasoline
to
the
U.
S.
port
of
entry;
any
foreign
refiners
participating
in
the
early
credit
generation
program
must
also
meet
certain
provisions
concerning
credit
generation,
including
reporting
and
recordkeeping;
·
All
regulated
parties
in
the
gasoline
distribution
system
who
are
downstream
from
the
refiner
or
importer
must
comply
with
downstream
sulfur
cap
standards;
·
Regulated
parties
are
subject
to
presumptive
liability
for
violations
at
a
party's
own
facility
and
for
violations
at
other
facilities
that
could
have
been
caused
by
the
regulated
party;
branded
refiners
are
subject
to
liability
for
violations
occurring
at
branded
facilities.
·
Refiners
and
distributors
may
implement
downstream
quality
assurance
testing
to
assure
compliance
and
to
establish
an
element
of
defense
against
presumptive
liability.
As
in
other
fuels
programs,
the
sulfur
standards
apply
to
all
motor
vehicle
fuel
that
meets
the
definition
of
gasoline,
except
for
aviation
fuel
and
racing
gasoline,
as
was
proposed
in
the
NPRM.
See
40
CFR
80.2(
c).
Gasoline
sulfur
standards
apply,
however,
to
gasoline
that
is
ultimately
used
in
nonroad
equipment
or
marine
engines.
As
we
noted
in
the
NPRM,
we
are
aware
there
are
certain
fuels,
such
as
aviation
fuel
and
racing
fuel,
that
are
generally
segregated
from
gasoline
throughout
the
distribution
system.
Where
such
fuels
are
segregated
from
motor
vehicle
gasoline
and
not
made
available
for
use
in
motor
vehicles,
the
fuel
is
not
subject
to
sulfur
rule
standards.
However,
if
such
fuels
are
not
segregated
throughout
the
distribution
system,
but
are
used
as
motor
vehicle
gasoline
or
are
commingled
with
motor
vehicle
gasoline,
then
any
person
who
introduces
such
fuels
into
the
gasoline
distribution
system
is
a
refiner,
subject
to
all
the
refiner
requirements
of
today's
regulations,
including
registration,
reporting,
testing
and
meeting
the
national
refiner
average
and
cap
standards
for
the
volume
of
gasoline
that
person
added
to
the
distribution
system.
Today's
rule
adopts
the
provisions
concerning
fuel
used
for
racing
vehicles
as
proposed.
One
commenter
suggested
that
racing
gasoline
or
aviation
gas
should
be
allowed
to
be
used
as
motor
vehicle
gasoline
by
downstream
parties
so
long
as
the
racing
gasoline
or
aviation
gas
does
not
exceed
the
applicable
downstream
cap
standard.
We
disagree.
Racing
gas
that
meets
the
applicable
downstream
sulfur
cap
would
nevertheless
not
be
subject
to
the
refinery
gate
cap
or
averaging
standards,
and
may
not
meet
such
standards.
Allowing
such
fuels
to
be
distributed
for
motor
vehicle
use
would
thus
circumvent
the
intent
of
the
rule.
The
rule
promulgated
today
clarifies
the
definition
of
``
refinery''
at
40
CFR
80.2(
h),
as
was
proposed
in
the
NPRM.
We
received
no
comments
on
this
clarifying
change.
Specifically,
section
80.2(
h)
now
provides
that
``
refinery''

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/
Rules
and
Regulations
126
The
term
``
oxygenate
blenders''
includes
``
ethanol
elnders.''
127
Reformulated
Gasoline
and
Anti­
dumping
Questions
and
Answers,
(
11/
12/
96);
Proposed
Rule
for
Modifications
to
Standards
and
Requirements
for
Reformulated
and
Conventional
Gasoline;
62
FR
37337
et
seq.
(
July
11,
1997).
128
62
FR
37337
et
seq.
(
July
11,
1997)
(
proposed
40
CFR
80.84).
means
any
facility,
including
a
plant,
tanker
truck
or
vessel
where
gasoline
or
diesel
fuel
is
produced,
including
any
facility
at
which
blendstocks
are
combined
to
produce
gasoline
or
diesel
fuel,
or
at
which
blendstock
is
added
to
gasoline
or
diesel
fuel.
This
is
consistent
with
all
current
EPA
fuels
rules,
interpretations,
policies
and
question
and
answer
documents.

Oxygenate
Blenders
In
the
NPRM
we
proposed
that
oxygenate
blenders
126
would
not
be
subject
to
the
refiner
sulfur
standard
like
other
blenders,
because
we
felt
it
unlikely
that
oxygenates
will
have
sulfur
levels
that
will
raise
the
sulfur
content
of
the
gasoline.
This
approach
also
was
proposed
because
gasoline
is
the
denaturant
normally
used
to
produce
denatured
ethanol.
However,
we
received
comments
that
denatured
ethanol
may
contain
as
much
as
50
ppm
sulfur,
which
could
result
in
significant
increases
in
sulfur
content
from
ethanol
blending
alone.
While
it
is
true
that
some
of
today's
gasoline
has
a
sulfur
content
as
high
as
1,000
ppm
which
if
used
as
an
ethanol
denaturant
results
in
ethanol
having
a
sulfur
content
of
50
ppm,
the
average
sulfur
content
of
gasoline
is
about
300
ppm
which
if
used
as
an
ethanol
denaturant
results
in
ethanol
with
a
sulfur
content
of
15
ppm.
In
addition,
when
the
gasoline
sulfur
standards
being
promulgated
today
are
in
effect,
the
average
sulfur
levels
of
gasoline
will
be
significantly
reduced,
which
will
further
reduce
the
sulfur
content
of
denatured
ethanol
to
very
low
levels.
For
this
reason,
we
are
finalizing
the
regulation
as
proposed
that
oxygenate
blenders
are
not
subject
to
refiner
sulfur
standards.
However,
if
gasoline
blendstock
instead
of
finished
gasoline
is
used
as
a
denaturant
for
ethanol
the
oxygenate
blender
who
adds
the
ethanol
would
become
a
``
refiner,''
who
is
required
to
demonstrate
compliance
with
the
sulfur
standards
for
the
denatured
ethanol
added
to
gasoline.
This
is
because
the
oxygenate
blender
would
be
adding
a
blendstock
along
with
the
ethanol,
which
subjects
the
blendstock
blender
to
refiner
standards
and
requirements.
Moreover,
if
the
blendstock
has
a
high
sulfur
content
the
denatured
ethanol
could
have
a
sulfur
content
greater
than
30
ppm,
or
even
greater
than
80
ppm,
which
could
make
compliance
by
such
a
``
refiner''
difficult
or
impossible.
In
addition,
as
discussed
above,
in
certain
cases
ethanol
is
included
in
the
refinery
compliance
calculations
of
the
refiner
who
produced
the
gasoline
or
RBOB
with
which
the
ethanol
is
blended.
Refiners
assume
this
ethanol
has
no
sulfur
content,
an
assumption
that
could
be
incorrect
if
high
sulfur
blendstock
is
used
as
the
denaturant.
For
these
reasons
we
believe
it
is
important
that
ethanol
blenders
use
denatured
ethanol
with
a
sulfur
content
of
30
ppm
or
less,
which
would
occur
if
the
current
practice
of
using
finished
gasoline
as
ethanol
denaturant
continues.
In
order
to
ensure
this
result,
the
regulations
include
a
provision
that
prohibits
ethanol
blenders
from
using
denatured
ethanol
with
a
sulfur
content
greater
than
30
ppm.
We
believe
ethanol
blenders
can
comply
with
this
requirement
through
commercial
arrangements
with
their
ethanol
suppliers,
that
specify
the
maximum
sulfur
content
of
denatured
ethanol.
In
addition,
ethanol
blenders
can
assure
compliance
with
this
requirement
by
testing
to
determine
the
sulfur
content
of
denatured
ethanol
received.

Gasoline
Treated
as
Blendstock
(
GTAB)
One
commenter
suggested
that
the
Agency
policy
under
the
RFG/
CG
rule
that
allows
certain
imported
gasoline
to
be
treated
as
a
blendstock
by
importerrefiners
should
be
applied
to
today's
rule.
The
GTAB
policy
was
originally
issued
in
the
RFG
Question
and
Answer
document,
and
was
subsequently
published
as
part
of
a
proposed
RFG
rulemaking
in
1997.127
We
intend
to
address
GTAB
issues
in
that
RFG
rulemaking,
including
issues
regarding
compliance
with
today's
rule.

Transmix
We
are
aware
that
when
gasoline
meeting
the
requirements
finalized
in
today's
rule
is
transported
through
pipelines,
there
will
be
some
situations
where
adjacent
distillate
product
in
the
pipeline
will
mix
with
a
portion
of
the
gasoline
to
create
an
interface
product,
commonly
referred
to
as
transmix.
This
transmix
may
not
be
blended
into
the
diesel
fuel
because
the
gasoline
in
the
transmix
may
result
in
diesel
fuel
performance
problems.
Historically,
this
type
of
transmix
product
has
either
been
blended
into
the
gasoline,
in
limited
concentrations,
or
the
transmix
has
been
separated
into
its
gasoline
and
distillate
components
at
a
reprocessing
plant.
However,
the
practice
of
blending
the
transmix
into
gasoline
may
result
in
violations
of
the
downstream
standards
for
RFG,
and
such
blending
could
violate
the
downstream
sulfur
caps
finalized
in
today's
rule,
because
many
distillates
have
a
very
high
sulfur
content.
Therefore,
we
believe
regulatory
provisions
are
needed
to
resolve
these
issues.
We
have
not
addressed
transmix
issues
in
today's
rule
because
we
have
already
proposed
regulations
regarding
transmix
blending
and
processing
in
another
rulemaking.
128
We
plan
to
address
transmix
issues,
including
issues
regarding
compliance
with
today's
rule,
in
that
rulemaking,
which
we
plan
to
finalize
in
the
near
future.

Inability
To
Produce
Conforming
Gasoline
in
Extraordinary
Circumstances
Several
commenters
suggested
the
rule
should
include
a
provision,
similar
to
the
RFG
rule
provision
at
40
CFR
80.73,
to
address
situations
where,
due
to
extraordinary
circumstances,
a
refiner
or
importer
cannot
produce
or
distribute
conforming
gasoline.
Section
80.73
applies
to
refiners,
importers
and
oxygenate
blenders.
Today's
rule
has
adopted
the
provisions
of
section
80.73
for
RFG
and
CG,
for
importers
and
refiners,
but
not
for
oxygenate
blenders.
This
is
because
the
gasoline
sulfur
program
does
not
include
provisions
that
would
be
expected
to
require
oxygenate
blender
relief.
In
the
remainder
of
this
section
we
discuss
enforcement
issues
regarding
today's
rule
that
are
not
covered
in
this
Overview
or
in
section
IV.
C.,
above.

B.
Requirements
for
Foreign
Refiners
and
Importers
In
the
NPRM
we
proposed
that
standards
for
gasoline
produced
by
foreign
refineries
that
are
not
subject
to
small
refiner
individual
refinery
standards
would
be
met
by
the
importer.
Standards
for
gasoline
produced
by
a
foreign
refinery
subject
to
an
individual
sulfur
rule
standard
would
be
met
by
the
foreign
refinery,
with
certain
limited
exceptions
as
provided
in
the
foreign
refinery
provisions.
The
rule
promulgated
today
adopts
the
provisions
as
proposed,
except
for
several
changes
aimed
at
clarifying
the
proposed
requirements,
changes
relating
to
the
temporary
relief
provision,
and
changes
relating
to
foreign
refiners'
participation
in
the
early
credit
program.
These
provisions
are
very
similar
to
the
foreign
refinery
provisions
of
the
RFG/
CG
rule.

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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
129
40
CFR
80.94.
130
Small
refiner
and
temporary
refiner
hardship
individual
refinery
standards
sunset
January
1,
2008,
except
for
any
small
refineries
that
receive
a
hardship
extension
not
to
exceed
two
years.
1.
Requirements
for
Foreign
Refiners
With
Individual
Refinery
Sulfur
Standards
or
Credit
Generation
Baselines
Under
the
RFG/
CG
rule,
EPA
promulgated
regulations
129
addressing
the
establishment
and
implementation
of
individual
baselines
for
CG
produced
by
certain
foreign
refiners.
The
purpose
of
these
regulations
is
to
ensure
the
compliance
of
gasoline
supplied
from
foreign
refineries
with
individual
compliance
baselines.
It
includes
comprehensive
controls,
requirements
and
enforcement
mechanisms
to
monitor
the
movement
of
gasoline
from
the
foreign
refinery
to
the
U.
S.,
to
monitor
gasoline
quality
and
to
provide
for
enforcement
as
necessary.
In
the
NPRM,
we
proposed
similar
requirements
for
compliance
with
the
applicable
sulfur
standards
that
would
apply
to
any
foreign
refiner
who
demonstrates
that
it
meets
the
sulfur
program's
small
refiner
criteria.
We
proposed
that
foreign
refinery
baselines
would
be
based
on
annual
average
sulfur
levels
and
the
volume
of
gasoline
imported
to
the
U.
S.
during
the
same
baseline
period
as
would
be
applicable
to
domestic
small
refiners.
In
today's
final
rule
we
have
also
adopted
provisions
for
foreign
refiners
to
establish
baselines
to
participate
in
the
early
credit
generation
program,
and
to
request
temporary
relief.
Any
foreign
refiner
who
obtains
a
foreign
refinery
gasoline
sulfur
baseline
would
be
subject
to
the
same
requirements
as
domestic
refiners
with
individual
refinery
baselines
under
today's
rule.
Additionally,
provisions
similar
to
the
provisions
at
40
CFR
80.94
would
apply,
which
include:
·
Segregating
gasoline
produced
at
the
small
refinery
until
it
reaches
the
U.
S.;
·
Refinery
registration;
·
Controls
on
product
designation;
·
Load
port
and
port
of
entry
testing;
·
Attest
requirements;
and
·
Requirements
regarding
bonds
and
sovereign
immunity.
The
rationale
for
these
enforcement
provisions
is
discussed
more
fully
in
the
Agency's
preamble
to
the
final
RFG/
CG
foreign
refineries
rule
(
62
FR
45533
(
Aug.
28,
1997)).
Several
commenters
suggested
that
the
rule
should
have
even
stronger
enforcement
provisions
concerning
foreign
refiners,
including
criminal
provisions
against
foreign
individuals
who
violate
the
requirements
of
the
rule.
While
we
agree
that
the
rule's
enforcement
provisions
pertaining
to
foreign
refiners
must
be
effective,
we
believe
the
proposed
enforcement
provisions
are
sufficient,
and
that
attempts
to
further
strengthen
them
would
not
significantly
increase
their
overall
effectiveness.
Today's
rule
imposes
various
requirements
on
foreign
refiners
not
required
of
domestic
refiners,
as
noted
above,
which
we
believe
are
more
effective
for
ensuring
environmental
compliance
than
criminal
provisions
would
be
for
foreign
individuals,
in
light
of
the
potential
difficulties
of
enforcing
sanctions
against
foreign
individuals.
EPA's
experience
to
date
with
the
similar
RFG/
CG
requirements
under
section
80.94
of
the
RFG/
CG
rule
does
not
indicate
the
provisions
are
inadequate.
Therefore,
today's
rule
generally
retains
these
provisions
as
proposed.
The
final
rule
makes
several
technical
changes,
including
changes
regarding
baselines
for
foreign
refiners,
to
be
consistent
with
the
requirements
for
domestic
small
refiners
and
refiners
generating
early
credits
finalized
in
today's
rule.
The
rule's
foreign
refiner
enforcement
provisions
now
also
apply
to
foreign
refiners
participating
in
the
early
credits
program,
and
to
the
use
of
credits
by
foreign
small
refiners.
One
commenter
stated
that
the
language
of
the
proposed
§
80.410(
n)
would
be
too
broad
in
that
prohibiting
any
``
person''
from
combining
certified
small
foreign
refiner
gasoline
with
noncertified
small
foreign
refiner
gasoline
or
with
certified
small
foreign
refinery
gasoline
produced
at
a
different
refinery
would
prohibit
even
retail
level
commingling
of
such
products.
This
was
not
intended
and
today's
rule
clarifies
that
such
commingling
can
occur
subsequent
to
importation.
Under
the
proposal,
when
the
small
refiner
standards
sunset
(
and
additionally
under
today's
rule,
when
the
temporary
refiner
relief
provisions
sunset),
130
all
gasoline
would
be
subject
to
a
single
national
averaged
standard
and
one
national
refinery
level
cap.
Thereafter,
standards
for
all
imported
gasoline
would
be
met
by
U.
S.
importers.
We
have
retained
this
provision
as
proposed.
With
a
single
national
average
standard
and
cap
standard,
gasoline
sulfur
content
can
most
readily
be
monitored
at
the
U.
S.
importer
level,
since
there
will
no
longer
be
a
special
class
of
gasoline
with
different
standards
that
would
need
to
be
monitored.
2.
Requirements
for
Truck
Importers
Today's
final
rule
adopts
the
proposed
requirement
for
importers
to
sample
and
test
each
batch
of
gasoline
imported.
However,
as
noted
in
the
preamble
to
the
NPRM,
for
parties
that
import
gasoline
into
the
U.
S.
by
truck,
the
every­
batch
testing
requirement
would
include
testing
the
gasoline
in
each
truck
compartment,
or
if
the
gasoline
is
homogeneous,
testing
the
gasoline
in
the
truck.
In
the
NPRM
we
recognized
that
this
every­
batch
testing
requirement
may
not
be
feasible
for
truckers
hauling
many
small
loads
of
gasoline,
and
we
therefore
proposed
a
limited
alternative
approach
for
truck
importers
in
lieu
of
every­
batch
testing.
The
proposed
alternative
approach
is
based
on
the
importer
meeting
the
30
ppm
sulfur
standard
on
a
per­
gallon
basis.
Under
this
alternative
approach,
the
importer
would
be
allowed
to
rely
on
the
sulfur
results
based
on
sampling
and
testing
conducted
by
the
operator
of
the
foreign
truck
loading
terminal.
Because,
in
most
cases,
the
terminal
operator
will
not
be
subject
to
United
States
laws,
we
also
proposed
safeguards
intended
to
ensure
that
the
gasoline
in
fact
meets
the
applicable
standard.
This
includes
the
requirement
that
the
importer
conduct
a
quality
assurance
sampling
and
testing
program
independent
from
the
sampling
and
testing
conducted
by
the
terminal.
Under
this
approach
the
reporting
requirements
would
be
minimized
since
no
averaging
would
be
required.
The
environmental
consequences
of
this
approach
would
be
neutral,
because
by
meeting
the
30
ppm
sulfur
standard
on
an
every­
gallon
basis
the
standard
also
would
be
met
on
average.
One
commenter
stated
that
the
30
ppm
per­
gallon
standard
would
be
difficult
for
truck
importers
to
meet
due
to
the
fact
that
Canadian
terminals
may
not
always
have
gasoline
with
a
sulfur
content
no
greater
than
30
ppm.
The
commenter
suggested
that
truck
importers
be
allowed
to
rely
on
testing
conducted
by
the
foreign
gasoline
terminal,
as
discussed
above,
to
meet
the
average
and
cap
standards
like
other
importers.
We
agree
that
truck
importers
may
have
difficulty
obtaining
gasoline
that
meets
the
30
ppm
sulfur
standard
on
a
per­
gallon
basis.
Under
Canadian
regulations,
Canadian
refiners
will
be
subject
to
a
150
ppm
average
standard
and
a
300
ppm
cap
in
2004,
and
in
2005
Canadian
refiners
will
be
subject
to
a
30
ppm
average
standard
and
an
80
ppm
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/
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10,
2000
/
Rules
and
Regulations
131
Vol.
133
23/
6/
99
C.
Gaz.
II,
23
June
99
(
pp.
1469
et
seq.)
132
In
2004,
a
120
ppm
cap;
In
2005
and
beyond,
a
30
ppm
cap.
See
Table
IV.
C.
 
1.
133
In
2004,
a
120
ppm
average
standard
and
a
300
ppm
cap;
In
2005,
a
30
ppm
average
standard,
a
corporate
pool
average
no
greater
than
90
ppm,
and
a
300
ppm
cap;
In
2006
and
beyond,
a
30
ppm
average
standard
and
a
80
ppm
cap.
See
Table
IV.
C.
 
1.
cap.
131
This
means
that
truck
importers
should
be
able
to
meet
the
standards
applicable
to
other
importers,
including
the
ultimate
average
standard
and
cap
standard
under
today's
rule
(
30
ppm
average
and
80
ppm
cap),
without
great
difficulty.
However,
meeting
a
pergallon
cap
of
30
ppm
might
be
difficult
since
the
sulfur
content
of
gasoline
in
the
storage
tanks
of
Canadian
terminals,
like
those
of
U.
S.
terminals,
will
likely
exceed
30
ppm
at
times,
even
after
the
30/
80
standards
are
implemented.
We
have
concluded
that
we
can
address
this
concern
by
providing
additional
flexibility
to
truck
importers,
and
still
assure
compliance.
While
today's
rule
retains
the
proposed
alternative,
with
some
modifications,
it
also
provides
a
second
alternative
approach.
Under
this
second
approach,
truckers
are
allowed
to
meet
the
national
average
and
cap
applicable
to
other
importers,
and
rely
on
testing
conducted
by
the
foreign
gasoline
terminal
so
long
as
all
the
other
requirements
applicable
to
the
proposed
alternative
approach
are
complied
with.
In
addition,
truckers
using
this
second
alternative
approach
will
be
subject
to
more
extensive
reporting
than
required
for
the
proposed
alternative,
since
the
importer
will
have
to
demonstrate
compliance
with
the
annual
average
sulfur
standard
applicable
to
other
importers.
One
commenter
urged
that
truckers
should
be
subject
only
to
the
national
downstream
cap.
We
cannot
agree
to
this
approach
as
it
is
not
environmentally
neutral
relative
to
the
national
standards
in
effect
for
other
importers
and
refiners.
If
truck
importers
were
required
to
meet
only
the
downstream
cap,
sulfur
levels
for
their
imported
gasoline
could
be
substantially
higher
than
for
other
importers,
which
could
have
a
detrimental
environmental
consequence.
One
commenter
stated
that
the
30
ppm
per­
gallon
standard
for
truck
importers
should
not
go
into
effect
until
the
30
ppm
standard
becomes
the
national
average
standard
for
refineries
and
other
importers.
We
agree.
Under
today's
rule,
the
per­
gallon
standards
applicable
to
truck
importers
under
the
proposed
alternative
will
be
the
same
sulfur
level
as
the
sulfur
average
standard
that
applies
to
other
importers
(
in
2004
there
is
no
average
standard;
however,
truck
importers
using
this
alternative
compliance
approach
must
meet
the
corporate
pool
standard
on
a
per­
gallon
basis).
132
Under
the
second
alternative
approach,
the
truck
importer
will
be
subject
to
the
same
average
standard
and
cap
standard
applicable
to
other
importers.
133
Similar
provisions
as
provided
above
apply
to
truck
importers
for
gasoline
subject
to
the
geographic
phase­
in
area
(
GPA)
standards
(
see
section
IV.
C.
of
this
preamble
for
a
discussion
of
GPA
standards).
However,
because
of
the
small
volumes
of
truck­
imported
gasoline,
and
the
consequent
difficulty
in
meeting
corporate
pool
averages
for
a
trucker
who
imports
gasoline
into
both
the
GPA
and
areas
outside
the
GPA,
today's
rule
requires
that
for
truck
importers
using
the
averaging
option,
the
corporate
pool
average
does
not
have
to
be
met.
The
150
ppm
average
standard
and
the
300
ppm
cap
standard
apply
to
gasoline
imported
by
truck
into
the
GPA
in
2004
through
2006.
For
truck
importers
meeting
the
per­
gallon
standard
option
for
gasoline
imported
into
the
GPA,
the
per­
gallon
standards
are
150
ppm
for
2004
through
2006.

Truck
Import
of
Foreign
Small
Refiner
Gasoline
The
NPRM
addressed
issues
associated
with
gasoline
produced
by
a
foreign
small
refinery
with
an
individual
baseline
and
certified
as
subject
to
the
refinery's
individual
interim
standard
(
S
 
FRGAS),
and
imported
by
truck.
The
proposed
requirements
for
S
 
FRGAS
included
segregating
the
gasoline
from
all
other
gasoline
from
the
refinery
gate
to
the
U.
S.,
so
that
compliance
with
standards
can
be
tracked.
For
ordinary,
non­
truck
importers,
each
batch
of
certified
S
 
FRGAS
must
be
tested
at
the
load
port
and
port
of
entry.
Today's
rule
finalizes
these
proposed
requirements
for
S
 
FRGAS.
However,
in
the
case
of
gasoline
imported
by
truck,
the
NPRM
acknowledged
that
the
testing
and
other
procedures
proposed
for
certified
S
 
FRGAS
may
not
be
feasible.
As
a
result,
we
proposed
an
alternative
to
the
requirement
for
testing
every
truckload
of
imported
certified
S
 
FRGAS,
and
to
other
importer
requirements.
This
alternative
approach
includes
a
requirement
that
small
foreign
refiners
producing
any
S
 
FRGAS
that
will
be
imported
by
truck
submit
a
petition
to
EPA
that
includes
a
plan
which
is
designed
to
ensure
that
certified
S
 
FRGAS
remains
segregated
from
all
other
gasoline
from
the
refinery
to
the
U.
S.
Rather
than
specifying
the
precise
requirements
of
such
a
plan
in
the
regulations,
we
proposed
to
allow
the
refiner
to
develop
its
own
procedures
for
ensuring
that
S
 
FRGAS
remains
segregated.
However,
the
plan
must
contain
certain
elements,
such
as
product
transfer
documents
which
identify
the
origin
of
the
gasoline
and
prohibit
its
commingling
with
any
product
other
than
certified
S
 
FRGAS
from
that
refinery.
This
approach
also
requires
the
refiner
of
such
truck­
imported
gasoline
to
receive
and
maintain
all
such
product
shipment
documents,
including
U.
S.
import
documents,
for
five
years
and
review
these
to
ensure
that
segregation
is
maintained
until
reaching
the
U.
S.
To
ensure
that
refiners
conduct
this
review,
we
proposed
to
require
the
refiner's
plan
to
include
attest
audit
procedures
to
be
conducted
annually
by
an
independent
third
party.
We
received
no
comments
on
this
proposal
for
ensuring
the
integrity
of
S
 
FRGAS
imported
by
truck.
Today's
final
rule
adopts
the
petitioning
provision
to
permit
alternative
segregation
procedures
for
S
 
FRGAS
imported
by
truck
as
proposed
since
we
continue
to
believe
that
it
will
provide
flexibility
to
foreign
refiners
and
to
importers
and
will
adequately
assure
enforceability.

C.
What
Standards
and
Requirements
Apply
Downstream?

We
proposed
per­
gallon
cap
standards
that
would
apply
to
all
parties
in
the
distribution
system
downstream
of
the
refinery
and
importer
level,
including
pipelines,
terminals,
oxygenate
blenders,
distributors,
carriers,
retailers
and
wholesale
purchaser­
consumers.
We
believe
that
downstream
cap
standards
and
compliance
monitoring
based
on
downstream
standards
are
needed
to
ensure
that
the
sulfur
level
of
gasoline
remains
below
the
cap
level
when
dispensed
for
use
in
motor
vehicles,
to
avoid
adverse
emissions
consequences
that
would
be
caused
by
the
use
of
gasoline
having
a
sulfur
content
above
the
cap
level.
The
following
discussion
addresses
downstream
standards
generally,
downstream
standards
and
requirements
for
gasoline
produced
by
refineries
subject
to
standards
under
§
80.240
and
80.270,
and
downstream
standards
and
requirements
for
gasoline
produced
or
imported
for
the
geographic
phase­
in
area
(
GPA).

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Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
134
ASTM
standard
method
D
2622
 
98,
entitled
`
Standard
Test
Method
for
Sulfur
in
Petroleum
Products
by
Wavelength
Dispersive
X­
ray
Fluorescence
Spectrometry.''
Determination
of
Downstream
Cap
Standards
We
proposed
that
the
downstream
standards
would
be
more
lenient
than
the
refinery­
level
cap
standards
so
that
refiners
and
importers
can
produce
gasoline
that
equals
the
refinery­
level
cap
standard.
We
did
so
because
it
has
been
EPA's
experience
that
if
a
refiner
produces
gasoline
that
equals,
or
almost
equals
a
standard,
that
gasoline
may
be
shown
to
violate
the
standard
when
subsequently
tested
at
a
location
downstream
of
the
refinery
due
to
testing
variability.
As
a
result,
parties
downstream
of
the
refinery
(
primarily
pipelines)
set
commercial
specifications
for
the
quality
of
the
gasoline
they
will
accept
that
are
more
stringent
than
the
standard
that
applies
to
the
downstream
party.
This,
in
effect,
forces
refiners
to
produce
gasoline
that
is
``
cleaner''
than
the
refinery­
level
standard.
In
other
fuels
programs
(
for
example,
the
benzene
per­
gallon
standard
for
RFG)
we
resolved
this
concern
by
announcing
enforcement
tolerances
for
fuels
standards
that
apply
downstream
of
the
refinery­
level,
thereby
reducing
the
need
for
pipelines
to
set
specifications
more
stringent
than
the
refinery
level
standards.
We
believe
that
having
more
lenient
downstream
standards
will
have
the
same
effect
as
enforcement
tolerances.
In
the
NPRM
we
proposed
that
the
values
of
the
downstream
cap
standards
would
reflect
the
testing
variability
that
could
reasonably
be
expected
when
different
laboratories
test
gasoline
for
sulfur
content;
that
is,
lab­
to­
lab
variability,
or
reproducibility.
Industry
commenters
supported
this
approach,
and
today's
rule
adopts
this
approach.
For
gasoline
subject
to
the
80
ppm
refinery­
level
sulfur
cap,
the
downstream
maximum
standard
is
95
ppm.
This
difference
reflects
the
reproducibility
established
by
the
American
Society
for
Testing
and
Materials
(
ASTM).
134
For
gasoline
subject
to
refinery­
level
sulfur
caps
higher
than
80
ppm,
which
will
be
the
case
for
gasoline
produced
before
2006
and
for
gasoline
produced
by
certain
small
refineries
through
2007,
the
downstream
cap
is
similarly
established
by
using
ASTM
reproducibility
data.
The
national
downstream
cap
is
378
in
2004,
when
the
refinery
level
cap
can
be
as
high
as
350
ppm.
The
national
downstream
cap
in
326
in
2005,
when
the
refinery
level
cap
is
300.
Because
these
downstream
caps
are
based
on
sulfur
test
reproducibility,
we
intend
to
amend
the
rule
in
the
future
if
improvements
in
test
precision
are
made
for
the
designated
method.
We
may
also
consider
amending
the
rule
to
make
some
other
method
the
designated
method
if
a
more
precise
method
is
available
in
the
future.

The
Proposed
Downstream
Standards
Compliance
Scheme
Under
the
proposal,
if
gasoline
produced
by
a
small
refiner
with
a
less
stringent
cap
standard
is
mixed
in
the
distribution
system
with
gasoline
subject
to
the
national
cap
standard,
the
entire
mixture
would
then
be
subject
to
the
higher
cap
standard,
even
though
most
of
the
gasoline,
at
the
refinery
level,
would
be
subject
to
the
more
stringent
national
cap
standard.
We
proposed
that
during
the
period
that
small
refinery
individual
standards
are
in
effect,
for
gasoline
that
is
comprised,
in
whole
or
in
part,
of
small
refiner
gasoline
with
a
higher
sulfur
cap
standard
than
the
national
cap
standard,
product
transfer
documents
(
PTDs)
would
specify
that
the
gasoline
is
small
refiner
gasoline
and
the
level
of
the
downstream
cap
applicable
to
the
gasoline.
The
purpose
of
the
proposed
provisions
was
to
make
it
possible
to
determine
the
standard
that
applies
to
any
gasoline
downstream
of
the
refinery.
If
the
gasoline
contains
no
small
refiner
gasoline,
the
downstream
standard
would
be
based
on
the
national
cap.
If
the
gasoline
is
comprised,
in
whole
or
in
part,
of
small
refiner
gasoline
subject
to
a
less
stringent
cap
standard,
the
downstream
standard
would
be
based
on
this
less
stringent
cap
standard.
As
gasoline
is
mixed
and
remixed
in
the
fungible
distribution
system,
the
percentage
of
gasoline
that
is
small
refinery
gasoline
will
progressively
diminish
until
the
fungibly
mixed
gasoline
meets
the
national
downstream
cap.
Therefore,
we
proposed
in
the
NPRM
that
a
downstream
party
may
no
longer
classify
gasoline
as
containing
small
refiner
gasoline
if
a
test
result
shows
the
sulfur
content
of
the
gasoline
is
below
the
applicable
national
(
i.
e.,
not
small
refiner)
downstream
cap.
Several
commenters
suggested
that
this
tracking
scheme
would
be
unworkable.
Some
of
these
comments
were
based
on
the
belief
that
the
proposal
intended
to
require
segregation
of
the
small
refiner
gasoline
through
the
distribution
system.
The
proposal
was
not
intended
to
require
that
small
refiner
gasoline
must
be
segregated,
and
under
today's
final
rule
there
is
no
requirement
that
small
refiner
gasoline
must
be
segregated
from
gasoline
produced
by
other
refiners.
Some
commenters
also
believed
that
testing
by
downstream
parties
would
be
required
under
the
proposed
rule.
These
commenters
were
concerned
that
a
downstream
testing
requirement
could
be
costly
and
could
delay
distribution
of
gasoline.
This
latter
point
is
addressed
later
in
this
discussion.
Some
commenters
stated
that
the
proposed
PTD
provisions
of
the
downstream
enforcement
scheme
were
too
complex
and
that
some
means
other
than
changing
PTD
designations
should
be
found
to
track
small
refiner
gasoline.
Other
commenters,
including
automobile
manufacturer
trade
associations,
stated
they
believed
that
EPA
enforcement
and
testing
downstream
of
the
refinery
is
necessary
to
assure
that
gasoline
complies
with
standards
at
the
retail
gasoline
pump.
We
have
carefully
considered
the
comments
and
we
have
concluded
that
the
tracking
scheme
as
proposed
would
not
be
effective
because
most
pipeline
shipments
are
expected
to
include
some
small
refiner
gasoline
(
although
the
amount
of
small
refiner
gasoline
may
comprise
less
than
1%
of
the
shipment)
and
therefore,
most
of
the
gasoline
in
the
nation
might
be
classified
as
small
refiner
gasoline,
even
though
only
a
small
fraction
of
the
supply
will
actually
be
small
refiner
gasoline.
Therefore,
a
downstream
cap
much
less
stringent
than
the
national
downstream
cap
would
attach
to
most
gasoline
produced
to
meet
the
national
refinery
standards,
and
the
scheme
would
not
be
effective
in
monitoring
whether
the
quality
of
most
gasoline
is
maintained
after
it
enters
the
gasoline
distribution
system.
The
proposed
scheme
could
lead
to
other
unintended
results.
The
gasolines
contained
in
a
fungible
mixture
in
the
distribution
system
may
not
be
fully
mixed
and
homogenous.
As
a
result,
a
distinct,
unmixed,
portion
of
gasoline
within
a
fungible
mixture
could
be
small
refiner
gasoline
with
a
sulfur
content
above
the
national
downstream
cap,
while
other
parts
of
the
fungible
mixture
would
meet
the
national
downstream
cap.
This
is
especially
true
for
fungible
mixtures
in
pipelines
and
could
also
be
true
for
gasoline
in
storage
tanks.
If
a
test
result
for
a
sample
collected
from
part
of
such
a
fungible
mixture
in
a
pipeline
shows
compliance
with
the
national
downstream
cap,
under
the
proposed
rule
the
entire
mixture
would
become
subject
to
the
national
downstream
cap,
and
the
pipeline
PTDs
could
not
classify
the
gasoline
as
small
refiner
gasoline.
Thus,

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/
Rules
and
Regulations
135
For
example,
most
pipeline
shipments
are
expected
to
contain
small
refiner
gasoline
in
the
two
U.
S.
pipelines
that
carry
the
highest
volume
of
gasoline.
However,
in
most
shipments
the
small
refiner
gasoline
is
expected
to
account
for
substantially
less
than
5%
of
the
total
volume
of
gasoline
in
the
shipment.
136
For
purposes
of
this
discussion,
``
small
refiner
gasolne''
includes
any
gasoline
from
a
refiner
to
whom
EPA
grants
relief
based
on
a
showing
of
extreme
hardship.
137
See
section
IV.
C.
of
this
preamble
for
refiner/
importer
standards
and
the
discussion
below
regarding
downstream
compliance
and
enforcement
provisions.
under
the
proposal,
parties
downstream
of
the
pipeline
could
be
subject
to
liability
because
they
might
receive
small
refiner
gasoline
not
meeting
the
national
standard
even
where
a
pipeline
PTD
does
not
represent
that
the
gasoline
is
small
refiner
gasoline.
That
was
not
intended
by
the
proposal.
Because
of
these
difficulties,
we
concluded
that
the
proposed
scheme
must
be
modified
to
address
these
concerns,
in
order
for
there
to
be
effective
enforcement
of
the
downstream
standards.
We
are
concerned
that
the
quality
of
gasoline
will
be
affected
downstream
of
the
refinery.
Gasoline
may
be
contaminated
with
high
sulfur
blendstocks
or
other
high
sulfur
products
such
as
distillates
after
it
leaves
the
refinery
gate.
There
is
likely
to
be
an
economic
incentive
for
some
downstream
parties
to
sell
or
use
gasoline
or
blendstocks
that
have
a
higher
sulfur
content
than
the
national
downstream
standard.
The
inability
to
monitor
downstream
compliance
would
result
in
environmental
degradation
that
is
not
intended
by
the
rule,
and
in
an
inability
to
assure
a
level
playing
field
for
all
parties
in
the
gasoline
distribution
industry.

Tracking
Gasoline
Downstream
of
the
Refinery
We
believe
that
an
effective
downstream
compliance
and
enforcement
scheme
is
necessary
in
order
to
achieve
the
full
emissions
reduction
benefits
of
the
rule.
Today's
rule
modifies
the
proposed
tracking
scheme
so
that
compliance
with
the
program
can
be
monitored.
Under
today's
rule,
all
gasoline
downstream
of
the
refiner
or
importer
is
subject
to
the
national
downstream
standard
unless
a
different
downstream
standard,
based
on
the
highest
sulfur
content
of
any
small
refiner/
temporary
refiner
relief
gasoline
in
the
gasoline
mixture
(
as
determined
by
the
small
refiners'
batch
testing),
is
supported
by
PTDs
and
a
test
result
confirming
the
presence
of
small
refiner/
temporary
refiner
relief
gasoline.
The
test
result
must
be
for
gasoline
sampled
from
the
downstream
facility
classifying
the
gasoline
as
small
refiner
gasoline,
unless
the
facility
is
a
trucker,
retailer
or
wholesale
purchaser­
consumer.
We
have
concluded
that
this
requirement
is
necessary
to
monitor
compliance
with
the
downstream
standards
during
the
period
that
small
refiner/
temporary
refiner
relief
standards
are
in
effect,
because
the
vast
majority
of
the
gasoline
transported
by
pipelines
will
be
gasoline
produced
to
comply
with
the
national
cap,
135
even
though
most
of
those
pipeline
shipments
will
be
classified
as
small
refiner
gasoline.
136
We
believe
that
the
ability
to
track
small
refiner
gasoline
is
made
even
more
important
due
to
the
geographic
phase­
in
area
(
GPA)
gasoline
provisions
finalized
today.
137
GPA
gasoline
is
subject
to
less
stringent
refiner/
importer
standards
than
gasoline
produced
for
use
in
other
parts
of
the
country.
Therefore,
its
use
is
limited
to
the
GPA
states.
However,
it
may
be
produced
or
imported
at
any
location
in
the
country
before
it
is
transported
for
use
in
the
GPA.
EPA
would
have
little
ability
to
assure
GPA­
designated
gasoline
is
only
being
used
in
the
GPA
if
it
cannot
determine
if
gasoline
at
a
downstream
location
outside
the
GPA
that
exceeds
the
applicable
downstream
cap
for
nonsmall
refiner
gasoline,
is
in
fact
small
refiner
gasoline
or
if
it
may
include
gasoline
that
was
designated
for
use
in
the
GPA
but
has
been
diverted
for
use
elsewhere.
The
tracking
requirements
for
small
refiner
gasoline
will
help
us
to
make
that
determination.
The
only
parties
required
to
perform
testing
in
order
to
demonstrate
that
a
shipment,
or
tank,
of
gasoline
contains
small
refiner
gasoline
are
gasoline
pipelines
and
terminals.
Where
a
terminal
properly
classifies
gasoline
in
its
storage
tank
as
small
refiner
gasoline,
and
subsequently
receives
a
load
of
gasoline
into
that
tank,
it
may
not
continue
to
classify
the
gasoline
as
small
refiner
gasoline
unless
the
tank
is
sampled,
and
a
test
demonstrates
that
the
tank
still
contains
small
refiner
gasoline
and
the
gasoline
sulfur
content
exceeds
the
national
refinery
level
cap.
In
2004
the
test
result
would
have
to
exceed
350
ppm;
in
2005,
300
ppm;
and
starting
with
2006,
80
ppm.
In
the
GPA,
the
test
result
would
have
to
exceed
350
ppm
in
2004,
and
300
ppm
in
2005
and
2006.
We
have
concluded
that
the
pipeline
and
terminal
testing
provisions
are
necessary
for
effective
enforcement.
We
believe
that
terminals
and
pipelines
will
be
able
to
perform
sampling
and
testing
that
will
enable
them
to
identify
the
presence
of
small
refiner
gasoline
in
a
cost­
effective
manner.
These
parties
have
knowledge
regarding
the
mixing
of
gasoline
as
it
moves
from
the
pipeline
and
into
the
terminal
tank,
and
knowledge
of
the
distribution
system,
that
will
enable
them
to
make
judgments
regarding
the
extent
of
testing
that
may
be
needed
to
demonstrate
whether
gasoline
meets
the
national
downstream
cap.
Further,
a
terminal
operator
may
take
additional
tests
if
it
believes
a
tank
may
contain
a
stratified
portion
of
small
refiner
gasoline,
despite
a
test
result
showing
the
tank
complies
with
the
national
downstream
cap.
Many
terminals
may
have
sufficient
reason
to
believe
they
are
receiving
only
gasoline
meeting
the
national
cap
such
that
they
will
not
normally
test
each
receipt
of
gasoline.
Additionally,
even
for
terminals
who
receive
small
refiner
gasoline,
we
do
not
believe
the
sampling
and
testing
will
be
burdensome.
This
is
partly
because
many
terminals
already
conduct
periodic
sampling,
or
even
sampling
after
every
delivery
of
gasoline
into
storage
tanks,
at
least
in
the
summer
VOC
or
RVP
season,
to
test
gasoline
for
various
parameters,
which
may
already
include
sulfur
testing
in
RFG
areas.
Field
test
instruments
already
exist
that
are
adequate
for
this
testing
in
2004
and
2005
when
the
national
downstream
cap
is
378
ppm
and
326
ppm,
respectively.
Moreover,
we
believe
that
because
of
today's
rule,
better
field
test
instruments
for
sulfur
analysis
at
lower
levels
are
likely
to
be
developed
in
the
next
few
years.
Therefore,
it
will
not
be
necessary
for
quality
assurance
samples
to
be
sent
to
a
laboratory
for
testing.
Thus,
we
do
not
believe
shipments
will
be
held
up
while
terminals
await
a
test
result.
We
also
believe
that
it
is
likely
that
these
instruments
will
be
available
for
a
cost
that
will
be
far
less
than
most
laboratory
instruments
available
today.
Under
today's
rule,
retailers
are
not
required
to
conduct
testing.
The
retailer
can
demonstrate
that
the
gasoline
is
properly
designated
small
refiner
gasoline
subject
to
a
less
stringent
downstream
standard
by
maintaining
PTDs
from
its
suppliers
that
demonstrate
a
terminal
classified
gasoline
supplied
to
the
retailer's
storage
tank
as
small
refiner
gasoline.

Downstream
Standards
and
Requirements
for
GPA
Gasoline
Consistent
with
the
way
today's
rule
sets
downstream
sulfur
standards
for
other
gasoline,
the
GPA
program
downstream
standard
is
determined
by
adding
the
ASTM
reproducibility
applicable
to
the
refinery
level
sulfur
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Vol.
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Thursday,
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10,
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/
Rules
and
Regulations
138
As
stated
in
section
IV.
C.
of
this
preamble,
the
GPA
states
are
Alaska,
Idaho,
Montana,
North
Dakota,
Wyoming,
Utah,
Colorado
and
New
Mexico.
139
See
40
CFR
80.46(
a).
Today's
rule
updates
the
former
designated
test
method,
ASTM
D
2622
 
94.
140
See
preamble
discussion
in
section
VI.
E.,
below.
cap
to
that
refinery
level
cap,
which
for
GPA
gasoline
is
as
high
as
350
ppm
in
2004,
and
300
ppm
in
2005
and
2006.
This
results
in
downstream
standards
for
GPA
gasoline
of
378
ppm
in
2004,
and
326
ppm
in
2005
and
2006.
Because
GPA
gasoline
must
be
used
only
within
the
GPA
states,
138
today's
rule
requires
that
refiners
and
importers
producing
or
importing
gasoline
subject
to
the
GPA
standards
must
designate
each
such
batch
of
gasoline
as
GPA
gasoline
and
segregate
such
batches
from
all
other
gasoline.
Product
transfer
documents
must
identify
the
gasoline
as
GPA
gasoline
so
that
all
downstream
parties
will
be
aware
that
it
must
be
sold
or
distributed
for
use
only
in
the
GPA.
Gasoline
produced
for
use
in
all
areas
of
the
country
outside
the
GPA
may
be
sold
for
use
in
the
GPA,
including
gasoline
subject
to
small
refiner
standards
under
section
80.240
of
today's
rule.
Where
GPA
gasoline
is
commingled
with
other
gasoline,
the
commingled
gasoline
must
be
classified
as
GPA
gasoline
and
used
only
in
the
GPA
states.
Where
GPA
gasoline
is
commingled
with
S
 
RGAS,
the
applicable
downstream
sulfur
standard
for
that
gasoline
is
the
greater
of
the
GPA
downstream
standard
or
the
applicable
small
refiner/
temporary
refiner
relief
standard
as
determined
under
section
80.210
of
the
rule.

Lead­
Time
for
Downstream
Compliance
With
New
Standards
Some
commenters
stated
that
there
should
be
a
lead­
time
of
several
months
between
the
implementation
date
of
a
new
refinery
level
sulfur
standard
and
the
implementation
date
of
the
corresponding
downstream
standard.
Based
on
our
experience
with
other
fuels
programs,
we
believe
that
a
onemonth
lead
time
will
be
adequate
for
gasoline
at
the
terminal
level
to
meet
new
standards.
An
additional
one
month
for
retailers
will
give
them
ample
time
to
comply.
Therefore,
under
today's
rule,
the
378
ppm
downstream
sulfur
standard
(
or
any
applicable
small
refiner
downstream
cap
standard)
is
effective
February
1,
2004
at
the
terminal
level
and
March
1,
2004
at
the
retail
level.
The
326
ppm
downstream
sulfur
standard
is
effective
February
1,
2005
at
the
terminal
level
and
March
1,
2005
at
the
retail
level.
The
95
ppm
downstream
standard
is
effective
February
1,
2006
at
the
terminal
level
and
March
1,
2006
at
the
retail
level
(
or
February
1,
2007,
and
March
1,
2007,
respectively,
in
the
case
of
gasoline
at
facilities
in
the
GPA).

Retail
Gasoline
Pump
Labeling
EPA
believes
gasoline
advertised
as
being
``
low
sulfur
gasoline''
when
sold
at
retail
outlets
should
have
a
sulfur
content
of
no
more
than
95
ppm
because
this
is
the
maximum
sulfur
level
of
gasoline
at
retail
outlets
that
would
protect
the
emission
controls
of
Tier
2
vehicles.
We
are
stating
this
to
inform
refiners
and
other
regulated
parties,
when
making
advertisement
decisions
regarding
gasoline,
that
it
is
EPA's
position
that
effective
January
1,
2004,
if
any
retailer
represents
that
gasoline
is
low
sulfur
gasoline,
or
representations
to
the
same
effect,
the
gasoline
sulfur
content
should
be
no
greater
than
95
ppm.

D.
Testing
and
Sampling
Methods
and
Requirements
1.
Test
Method
for
Sulfur
in
Gasoline
We
proposed
ASTM
standard
method
D
2622
 
98,
``
Standard
Test
Method
for
Sulfur
in
Petroleum
Products
by
Wavelength
Dispersive
X­
ray
Fluorescence
Spectrometry,''
as
the
primary
method
for
testing
sulfur
in
gasoline
by
refiners
and
importers.
This
is
the
designated
method
under
the
RFG/
CG
rule.
139
We
also
requested
comment
on
adopting
other
methods
as
the
primary
method,
in
particular,
ASTM
method
D
5453
 
93,
``
Standard
Test
Method
for
Determination
of
Total
Sulfur
in
Light
Hydrocarbons,
Motor
Fuels
and
Oils
by
Ultraviolet
Fluorescence,''
and
ASTM
D
4045,
``
Standard
Test
Method
for
Sulfur
in
Petroleum
Products
by
Hydrogenolysis
and
Rateometric
Colorimetry,''
which
is
used
under
the
California
fuels
program
for
sulfur
levels
below
10
ppm.
We
also
proposed
ASTM
D
5453
as
an
alternative
method
for
determining
the
sulfur
content
of
gasoline
and
we
requested
comment
on
this
proposal.
Most
comments
supported
the
continued
use
of
ASTM
D
2622
as
the
designated
method
for
testing
sulfur
in
gasoline
under
the
various
fuels
rules,
including
today's
rule.
Commenters
indicated
that
most
refineries
outside
of
California
are
currently
using
ASTM
D
2622.
Under
the
California
fuels
regulations,
California
refineries
currently
use
ASTM
D
5453,
as
well
as
ASTM
D
2622
and
ASTM
D
4045.
Comments
were
generally
favorable
to
the
proposed
use
of
ASTM
D
5453
as
an
alternate
method.
However,
one
California
refinery,
an
automobile
manufacturers
association
and
a
manufacturer
of
analytical
equipment
stated
that
ASTM
D
5453
should
be
the
primary
method,
primarily
due
to
its
greater
precision
at
low
sulfur
levels.
Favorable
comments
were
received
to
the
use
of
ASTM
D
4045,
especially
for
gasoline
sulfur
content
of
10
ppm
or
less.
One
commenter
suggested
that
ASTM
D
5623
 
94
should
be
allowed;
one
commenter
suggested
that
ASTM
D
3120
should
be
allowed,
and
one
commenter
suggested
that
ASTM
D
6428
should
be
allowed.
Several
commenters
stated
that
we
should
utilize
a
performance
based
criteria
system
to
determine
what
test
methods
can
be
used.
We
have
considered
the
comments
carefully.
We
believe
there
are
a
number
of
test
methods
for
determining
the
sulfur
content
of
gasoline
that
may
eventually
be
shown
to
be
as
good
as,
or
better
than,
ASTM
D
2622.
We
also
considered
that
the
Agency
is
likely
to
issue
a
proposed
rulemaking
for
a
performance­
based
test
method
approach
that
would
apply
to
motor
vehicle
fuel
parameters.
This
rule,
once
promulgated,
would
set
forth
criteria
for
determining
whether
an
alternative
analytical
test
method
could
be
used
instead
of
the
designated
analytical
test
method
for
a
given
fuel
parameter
and
would
set
forth
criteria
for
correlating
alternative
analytical
test
methods
to
the
designated
analytical
test
method.
We
believe
it
is
appropriate
that
alternate
analytical
methods
should
be
qualified
and
correlated
to
the
regulatory
method
according
to
standardized
criteria.
Today's
rule
therefore
provides
that
ASTM
D
2622,
the
recognized
standard
analytical
method
for
determining
sulfur
in
gasoline,
is
the
sole
regulatory
method,
anticipating
that
a
performance­
based
testing
rule
may
be
issued
before
2004,
and
that
under
its
terms
anyone
will
be
able
to
qualify
and
correlate
additional
testing
methods.
We
do
not
believe
this
will
result
in
undue
hardship
for
several
reasons.
First,
our
current
fuels
rules
already
provide
that
ASTM
D
2622
is
the
sole
regulatory
method
for
determining
the
sulfur
content
of
gasoline.
Second,
California
refiners
currently
using
ASTM
D
5453
or
ASTM
D
4045
will
not
face
any
hardship
because
today's
rule
allows
the
use
of
approved
California
test
methods
by
California
refiners.
140
Third,
today's
rule
allows
continued
use
of
composite
samples
for
sulfur
testing
for
CG
during
the
period
of
early
credit
generation,
and
therefore
refiners
currently
using
outside
labs
to
test
composite
samples,

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Vol.
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10,
2000
/
Rules
and
Regulations
141
ASTM
D
5623,
entitled
``
Standard
Test
Method
for
Sulfur
Compounds
in
Light
Petroleum
Liquids
by
Gas
Chromatography
and
Sulfur
Selective
Detection.''
142
ASTM
D
2784,
entitled
``
Standard
Test
Method
for
Sulfur
in
liquefied
Petroleum
Gases'';
ASTM
D
4468
 
85(
1995),
entitled
``
Standard
Test
Method
for
Total
Sulfur
in
Gaseous
Fuels
by
Hydrogenolysis
and
Rateometric
Colorimetry'';
and
ASTM
D
3246
 
96,
entitled
``
Standard
Test
Method
for
Sulfur
in
Petroleum
Gas
by
Oxidative
Microcoulometry.''
143
ASTM
D
3227,
entitled
``
Mercaptan
sulfur
in
Gasoline,
Kerosine,
Aviation
Turbine,
and
Distillate
Fuels''.
The
commenter
suggested
it
should
be
allowed
with
the
use
of
the
x­
ray
finish.
144
Discussed
in
section
VI.
D.
3.
but
who
may
elect
to
conduct
testing
inhouse
when
the
every­
batch
sulfur
testing
requirement
is
implemented,
will
not
need
to
determine
whether
a
less
expensive
alternative
to
ASTM
D
2622
is
available
for
several
years.
Last,
if
a
performance­
based
test
method
rule
is
not
issued
by
the
Agency
in
the
near
future,
then
we
may
reconsider
this
issue
in
a
subsequent
rulemaking.
We
also
believe
that
a
standardized
approach
for
determining
the
appropriateness
of
alternate
test
methods,
correlation
methodology
and
quality
control
criteria
for
alternate
test
methods
would
be
the
most
fair
approach
to
the
test
equipment
manufacturers
and
to
the
purchasers
of
testing
equipment.
It
should
result
in
a
level
playing
field
for
competition
among
manufacturers
of
test
equipment.
We
already
know
that
ASTM
D
5453
can
be
purchased
for
about
half
the
price
of
ASTM
D
2622
equipment,
and
competition
may
result
in
even
less
expensive
equipment.
Some
commenters
suggested
that
where
a
refiner
or
importer
uses
ASTM
D
2622
to
test
gasoline,
and
where
the
test
result
is
less
than
10
ppm,
the
refiner
or
importer
should
be
able
to
report
a
test
result
of
zero
or
perhaps
use
a
default
value
of
5
ppm.
This
sort
of
approach
has
been
allowed
under
the
RFG
and
Anti­
dumping
Question
and
Answer
Document.
However,
we
disagree
with
the
commenters
that
this
practice
is
appropriate
under
the
sulfur
rule.
Under
the
sulfur
rule,
with
a
refiner
average
standard
of
30
ppm,
it
is
important
whether
a
bias
is
consistently
drawn
in
favor
of
zero
ppm
as
opposed
to
10
ppm.
This
could
artificially
increase
the
number
of
credits
earned
or
could
allow
more
batches
to
be
produced
by
the
refiner
that
are
near
the
80
ppm
cap.
We
believe
that
any
imprecision
of
sulfur
values
derived
from
analysis
using
ASTM
D
2622,
will,
over
the
course
of
numerous
batches,
average
out
to
near
zero.
Further,
we
believe
that
the
precision
of
ASTM
D
2622
is
likely
to
be
improved
by
2004.
Also,
by
2004
there
may
be
other
methods
that
will
be
shown
to
be
precise
at
low
sulfur
levels
that
may
be
made
available
for
use
under
a
performance­
based
test
method
rule.
Under
today's
rule
the
refiner
or
importer
must
report
the
test
result
that
the
test
method
provides,
so
long
as
the
result
is
not
less
than
zero
(
in
which
case
a
result
of
zero
would
be
reported).
If
alternative
methods
are
ultimately
made
available
for
use
under
a
performance
based
rule,
refiners
and
importers
who
are
producing
or
importing
gasoline
with
low
levels
of
sulfur
may
desire
to
use
an
alternative
test
method
for
low
sulfur
levels,
especially
if
ASTM
D
2622
is
less
precise
at
such
levels.
Under
today's
rule,
if
any
approved
alternative
method
is
used
for
this
purpose,
a
party
could
not
choose
to
use
the
test
result
from
ASTM
D
2622
when
its
result
is
lower,
and
the
test
result
from
the
alternative
method
when
its
result
is
lower.
For
any
alternative
test
method
that
is
eventually
approved,
if
the
party
uses
it
for
a
certain
range
of
sulfur
concentrations,
and
ASTM
D
2622
for
another
range,
it
must
be
consistent
in
such
use.
For
example,
if
the
alternate
method
were
used
for
test
results
below
10
ppm,
its
result
would
always
have
to
be
used
for
sulfur
levels
below
10
ppm
and
ASTM
D
2622
would
always
have
to
be
used
for
sulfur
levels
greater
than
10
ppm.

2.
Test
Method
for
Sulfur
in
Butane
We
proposed
the
use
of
ASTM
standard
test
method
D
5623
 
94
141
as
the
designated
method
for
testing
the
sulfur
content
of
butane
and
requested
comment
on
whether
this
method
should
be
the
designated
method.
Although
some
butane
suppliers
or
refiners
currently
use
this
method,
several
commenters
stated
that
many
refiners
do
not
have
ready
access
to
ASTM
D
5623
and
that
it
is
not
necessarily
the
most
precise
method
for
determination
of
low
levels
of
sulfur
in
butane.
Commenters
suggested
at
least
three
other
methods
are
equal
to
ASTM
D
5623.
These
are
ASTM
D
2784,
ASTM
D
4468,
and
ASTM
D
3246.142
One
commenter
also
suggested
that
ASTM
D
3227
 
92,143
should
be
allowed.
Several
commenters
requested
that
EPA
at
least
allow
alternative
test
methods
for
quality
assurance
testing.
We
have
reviewed
the
suitability
of
ASTM
D
5623
and
agree
that
it
is
not
the
best
method
for
testing
for
sulfur
content
in
butane.
ASTM
D
5623
measures
sulfur
compounds
rather
than
total
elemental
sulfur,
and
the
current
ASTM
5623
method
is
specified
for
liquid
fuels,
not
gaseous
fuels.
ASTM
D
2784
does
not
seem
to
be
a
better
method
than
ASTM
D
5623.
Commenters
stated
that
ASTM
D
2784
is
not
the
most
precise
method
and
that
it
is
not
widely
used.
We
believe
there
may
be
some
difficulty
in
even
obtaining
the
apparatus
for
ASTM
D
2784.
ASTM
D
3227
is
not
appropriate
since
it
is
designed
for
measuring
a
single
sulfur
compound,
and
it
is
currently
designated
for
testing
liquid
samples.
We
believe
that
ASTM
D
4468
appears
to
be
a
good
method
for
testing
butane
for
sulfur
levels
below
20
ppm.
However,
dilution
would
be
necessary
to
test
for
sulfur
levels
above
20
ppm.
This
may
be
problematical,
since
it
may
be
difficult
to
dilute
a
gaseous
fuel.
We
expect
that
under
today's
rule,
butane
being
tested
will
frequently
have
sulfur
content
in
excess
of
20
ppm.
Several
other
methods
exist
that
might
work
well
for
testing
for
sulfur
content
of
gaseous
fuels,
but
their
current
scope
does
not
include
determination
of
sulfur
in
gaseous
fuels.
ASTM
D
3246
 
96,
which
was
suggested
by
API
and
NPRA
as
a
suitable
method,
is
an
appropriate
method
for
measuring
gaseous
compounds
and
provides
test
results
for
total
elemental
sulfur.
Its
range
is
1.5
to
100
ppm,
which
is
ideal
for
testing
for
the
alternative
30
ppm
butane
sulfur
standard
applicable
to
butane
blenders
promulgated
in
today's
rule.
144
After
considering
the
strengths
and
weaknesses
of
all
the
available
options
we
believe
ASTM
D
3246
is
the
best
currently­
available
method.
Therefore,
today's
rule
makes
ASTM
D
3246
the
designated
method
for
testing
the
sulfur
content
of
butane
or
other
gaseous
blendstocks.
As
discussed
above,
we
anticipate
that
a
performance­
based
test
method
rule
for
motor
vehicle
fuel
parameters
may
be
promulgated
before
2004,
and
that
the
efficacy
of
other
methods
would
be
demonstrable
under
that
rule.
However,
if
that
is
not
the
case,
the
Agency
may
reconsider
the
issue
of
appropriate
alternate
test
methods
in
a
future
rulemaking.

3.
Quality
Assurance
Testing
Several
commenters
urged
that
alternate
test
methods
be
allowed
for
quality
assurance
test
purposes.
Under
today's
rule,
the
use
of
alternate
test
methods
for
quality
assurance
testing
for
purposes
of
establishing
a
defense
to
liability,
for
butane
quality
assurance
testing
under
section
80.340(
b)(
4),
and
for
determination
of
whether
gasoline
is
small
refiner
gasoline,
is
allowed,
so
long
as
the
alternate
test
method
is
correlated
to
the
regulatory
test
method,
the
method
is
ASTM
approved,
and
the
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Federal
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
145
Except
for
certain
truck
importers,
as
noted
above.
146
As
noted
above,
we
are
not
requiring
every
batch
testing
for
CG
parameters
other
than
sulfur.
protocols
under
the
method
are
followed.
However,
the
regulatory
method
is
required
for
the
truck
importer
quality
assurance
testing
under
section
80.350(
c).

4.
Requirement
To
Test
Every
Batch
of
Gasoline
Produced
or
Imported
We
proposed
in
the
NPRM
that
refiners
and
importers
145
would
be
required
to
sample
each
batch
of
gasoline
produced
or
imported
and
perform
a
test
on
each
sample
to
determine
the
sulfur
content
prior
to
the
gasoline
leaving
the
refinery
gate
or
importer
facility.
We
received
comments
on
several
aspects
of
this
proposed
requirement.
Several
commenters
urged
that
we
continue
to
allow
composite
sampling
and
testing
for
sulfur.
Some
refiners
commented
that
the
requirement
to
test
each
batch
would
raise
testing
costs.
However,
one
refiner
commented
that
every­
batch
testing
for
sulfur
would
not
be
a
substantial
burden
so
long
as
everybatch
testing
for
other
CG
parameters
is
not
required.
146
This
commenter
stated
that
testing
for
sulfur
content
is
much
less
complex
than
testing
for
certain
other
CG
parameters.
We
believe
that
with
a
refinery
gate
sulfur
cap
combined
with
refinery
averaged
standards,
there
is
no
realistic
alternative
to
every­
batch
testing.
The
Agency
has
no
way
to
know
whether
a
composite
sample
that
is
tested
and
found
to
meet
the
applicable
refinery
cap
included
a
sample
from
an
individual
batch
of
gasoline
that
was
introduced
into
commerce
that
exceeded
the
cap
by
a
factor
of
2
or
3.
Further,
we
believe
that
with
averaged
standards
for
refiners
and
importers,
and
with
multiple
cap
standards
in
effect
during
the
phase­
in
period,
monitoring
compliance
without
everybatch
testing
would
be
impossible
even
if
we
could
somehow
be
assured
that
no
individual
batch
significantly
exceeded
the
applicable
refinery
level
cap.
We
realize
that
there
will
be
an
additional
cost
associated
with
testing
every
batch
of
CG
 
for
sulfur
content
(
this
is
already
required
for
RFG).
However,
we
believe
less
expensive
test
methods
for
sulfur
content
already
exist,
and
may
continue
to
be
developed,
that
will
likely
be
acceptable
as
alternative
methods
in
the
future,
as
discussed
above.
Therefore,
today's
rule
retains
the
requirement
for
every­
batch
testing.
Under
today's
final
rule,
the
test
results
for
each
batch
of
gasoline
will
be
used
to
determine
compliance
with
the
applicable
refiner/
importer
cap
standard
and
to
calculate
the
refiner's
or
importer's
annual
average
sulfur
level.
Any
batch
of
gasoline
that
exceeds
the
applicable
sulfur
cap
cannot
be
distributed
or
sold
in
the
U.
S.
(
unless
it
is
exempted
from
the
standards
under
today's
rule,
as
described
in
section
VI.
G.,
below).
Refiners
who
use
computerized
inline
blending
methods
objected
to
the
proposed
requirement
for
a
batch
test
before
the
gasoline
is
released
from
the
refinery.
These
commenters
stated
that
refiners
using
the
sophisticated
in­
line
blending
practice
cannot
produce
a
complete
batch
test
until
a
portion
of
the
batch
is
already
past
the
refinery
gate.
These
commenters
did
not
urge
that
we
eliminate
the
requirement
for
every­
batch
testing,
but
urged
that
the
sulfur
rule
adopt
the
RFG
rule
provisions
for
in­
line
blending
found
at
40
CFR
80.65(
f)(
4),
for
both
RFG
and
CG.
We
believe
that
the
importance
of
assuring
compliance
with
the
refinery
level
cap
is
such
that
the
rule
must
generally
require
that
gasoline
must
be
tested
for
sulfur
content
before
it
leaves
the
refinery.
Based
on
experience
under
the
RFG
rule,
we
do
not
believe
that
the
requirement
to
test
each
batch
before
it
is
released
will
substantially
increase
the
cost
of
testing
or
cause
delays
in
shipments.
However,
today's
rule
recognizes
the
unique
circumstances
involved
in
computerized
in­
line
blending.
We
believe
that
with
appropriate
safeguards,
compliance
with
sulfur
standards
for
gasoline
produced
by
refineries
using
in­
line
blending
can
be
assured.
Therefore,
today's
rule
incorporates
the
RFG
rule
provisions
for
in­
line
blending
at
40
CFR
80.65(
f)(
4).
Such
provisions
will
be
applicable
to
RFG
and
CG.
However,
refineries
presently
having
an
in­
line
blending
waiver
will
be
asked
to
submit
additional
information
under
the
auditing
procedures
included
in
approvals
of
in­
line
blending
petitions
already
in
place.
We
will
contact
individual
holders
of
in­
line
blending
approvals
to
request
information
on
how
sulfur
is
monitored
and
how
streams
of
gasoline
are
distributed
in
the
in­
line
blending
process.
If
we
cannot
conclude
that
the
monitoring
procedures
will
assure
compliance
with
sulfur
standards,
we
will
revoke
the
inline
blending
approval
for
that
purpose.
We
believe
it
is
important
to
ensure
that
the
in­
line
analyzer
technology
and
the
refiner's
methodology
and
procedures
are
sufficient
for
the
gasoline
sulfur
levels
the
refinery
will
have
after
this
rule
is
implemented,
for
both
RFG
and
CG.
Several
commenters
stated
that
the
proposed
rule's
requirement
to
test
every
batch
of
CG
for
sulfur
is
unnecessary
during
the
period
of
early
credit
generation
because
there
is
no
cap
standard
in
effect
during
this
period,
even
for
those
refiners
generating
credits.
We
agree
that
every­
batch
testing
is
not
essential
for
CG
until
the
refinery
gate
per­
gallon
cap
standards
go
into
effect.
Thus,
today's
final
rule
allows
composite
sample
testing
for
CG
to
continue
during
the
period
of
early
credits
generation,
until
January
1,
2004,
when
a
cap
standard
for
sulfur
is
first
imposed
on
gasoline.

5.
Exceptions
to
the
Every­
Batch
Testing
Requirement
Under
the
RFG
rule,
refiners
who
blend
butane
or
other
blendstocks
to
previously
certified
gasoline
(
PCG)
must
determine
the
volume
and
parameter
values
of
the
blendstock,
including
sulfur
content,
by
testing
the
gasoline
before
and
after
blending,
and
calculating
the
properties
of
the
blendstock
by
subtracting
the
volume
and
parameter
values
of
the
PCG.
For
CG
only,
under
certain
conditions,
we
have
allowed
butane
blenders
to
use
the
parameter
specifications
of
butane
as
tested
by
the
butane
producer.
We
have
allowed
this
alternative
to
every­
batch
testing
because
of
the
costs
of
testing
each
load
of
butane.
We
proposed
a
similar
alternative
to
every­
batch
testing
for
butane
blenders
in
the
NPRM,
which
allows
butane
blenders
to
use
the
sulfur
test
result
of
their
suppliers,
if
the
butane
contains
no
more
than
30
ppm
sulfur
and
if
the
butane
blender
undertakes
a
quality
assurance
program
of
periodic
sampling
and
testing
to
ensure
that
the
supplier's
sampling
and
testing
is
accurate.
We
also
proposed
to
allow
refiners
that
blend
other
blendstocks
into
PCG
to
meet
an
alternative
testing
requirement
in
lieu
of
testing
every
batch
of
gasoline.
Provided
that
the
refiner's
test
result
for
the
sulfur
content
of
each
of
the
blendstocks
is
less
than
the
national
refinery
level
per­
gallon
cap
standard,
a
refiner
can
sample
and
test
each
blendstock
when
received
at
the
refinery,
and
treat
each
blendstock
receipt
as
a
separate
batch
for
purposes
of
compliance
calculations
for
the
annual
average
sulfur
standard.
Today's
rule
adopts
these
provisions.
Several
commenters
urged
us
to
delay
the
30
ppm
per­
gallon
cap
standard
until
other
refiners
must
meet
a
30
ppm
average
standard.
The
proposed
30
ppm
per
gallon
standard
was
intended
to
be
environmentally
neutral
in
relation
to
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/
Rules
and
Regulations
147
See
Table
IV.
C.
 
1.
148
See
the
discussion
on
this
subject
in
the
preamble
to
the
reformulated
gasoline
program's
final
rule,
59
FR
7765
(
Feb.
16,
1994).
149
See
40
CFR
80.65(
f)(
3)(
F)(
ii),
and
the
Proposed
Rule
for
Modifications
to
Standards
and
Requirements
for
Reformulated
and
Conventional
Gasoline,
62
FR
37337
et
seq,
proposed
40
CFR
80.101(
i)(
1)(
i)(
C)(
iii).
the
standard
applicable
to
other
refiners.
Therefore,
today's
final
rule
makes
clear
that
for
the
alternative
compliance
approach
for
butane
blenders,
the
30
ppm
per­
gallon
cap
is
not
applicable
until
January
1,
2005.
The
per­
gallon
cap
starting
January
1,
2004
is
120
ppm.
147
For
GPA
gasoline
the
per­
gallon
cap
under
this
alternative
compliance
option
is
150
ppm
in
2004
through
2006.

6.
Sampling
Methods
Sampling
methods
apply
to
all
parties
who
conduct
sampling
and
testing
under
the
rule.
We
proposed
to
require
the
use
of
sampling
methods
that
were
proposed
in
the
July
11,
1997
Federal
Register
notice
for
the
RFG/
CG
rule
(
62
FR
37338,
at
37341
 
37342,
37375
 
37376).
These
sampling
methods
include
ASTM
D
4057
 
95
(
manual
sampling),
ASTM
D
4177
 
95
(
automatic
sampling
from
pipelines/
in­
line
blending),
and
ASTM
D
5842
(
this
sampling
method
is
primarily
concerned
with
sampling
where
gasoline
volatility
is
going
to
be
tested,
but
it
would
also
be
an
appropriate
sampling
method
to
use
when
testing
for
sulfur).
There
were
no
adverse
comments
to
the
proposed
sampling
provisions.
Today's
rule
adopts
the
methods
as
proposed.

7.
Gasoline
Sample
Retention
Requirements
In
the
NPRM,
we
proposed
a
refiner
and
importer
(
collectively
referred
to
in
this
section
as
``
refiner'')
sampling
and
testing
program
to
establish
the
sulfur
compliance
of
each
batch
of
gasoline
produced
or
imported.
We
were
aware
that
there
were
possible
drawbacks
to
a
self­
testing
scheme.
For
example,
a
party
might
sample
or
test
gasoline
in
a
manner
that
is
inconsistent
with
the
required
procedures,
or
employees
might
inaccurately
record
the
test
results
by
mistake
or
otherwise.
Parties
might
also
attempt
to
conceal
a
discovered
violation
or
to
save
money
by
not
correcting
a
violation.
To
address
our
concerns
about
selftesting
we
considered
an
alternative
option
of
requiring
independent
sampling
and
testing
for
all
gasoline,
including
conventional
gasoline.
We
did
not
propose
this
requirement
for
independent
sampling
and
testing
for
all
gasoline
because
of
the
costs
of
such
a
requirement,
148
and
we
are
not
adopting
such
a
program
in
today's
final
rule.
Instead,
we
proposed
in
the
NPRM
a
different
strategy
to
complement
the
self­
testing
program
that
would
help
ensure
refinery
sulfur
compliance.
This
strategy
would
have
required
refiners
to
retain
for
thirty
days
a
representative
sample
from
each
batch
of
gasoline
produced,
and
to
provide
such
samples
to
the
Agency
upon
request.
We
believed
that,
by
means
of
this
option,
EPA
could
verify
the
refiner
test
results.
We
believe
that
this
would
create
an
incentive
for
refiners
to
sample,
test,
and
record
their
sulfur
results
in
an
accurate
and
truthful
manner.
We
also
proposed
that
refiners
be
required
to
certify
annually
that
the
samples
have
been
collected
in
the
manner
required
under
the
sulfur
rule.
In
addition,
we
proposed
that
specific
procedures
be
followed
by
refiners
to
properly
collect,
retain,
and
ship
the
samples
in
a
manner
consistent
with
requirements
already
imposed
or
proposed
under
the
RFG
program.
Under
the
proposal,
a
minimum
representative
sample
of
330
ml
of
each
gasoline
batch
would
need
to
be
retained
(
and
submitted
to
EPA
upon
request).
149
Although
there
were
few
comments
on
this
proposal,
one
commenter,
the
National
Petrochemical
&
Refiners
Association
(``
NPRA''),
did
comment
extensively
on
it,
and
strongly
urged
the
Agency
not
to
finalize
it.
One
of
the
points
raised
by
the
NPRA
was
that
the
RFG
regulations
have
their
own
sample
retention
and
submission
requirements,
(
40
CFR
80.65),
so
that
a
sulfur
rule
provision
for
RFG
batches
was
not
necessary.
The
Agency
continues
to
believe
that
sample
and
retention
requirements
are
useful
to
ensure
compliance
with
the
sulfur
standards,
but
we
agree
with
NPRA
that
the
sample
retention
and
submission
requirements
found
in
the
RFG
rule
will
serve
equally
as
well
for
the
sulfur
rule.
Therefore,
the
final
sulfur
rule
requires
all
refiners,
including
those
producing
RFG,
to
comply
with
the
sulfur
rule's
retention
requirements.
However,
any
refiner
of
RFG
using
an
independent
laboratory
pursuant
to
40
CFR
80.65(
f),
either
under
the
100%
Option
or
the
10%
Option,
will
be
considered
to
be
in
compliance
with
the
sulfur
rule's
retain
requirements
provided
the
refiner
ensures
that
the
independent
laboratory
conducting
the
retain
program
for
the
refiner,
is
in
compliance
with
these
requirements.
In
particular,
the
refiner
must
ensure
that
its
independent
laboratory
sends
the
appropriate
certificate
of
analysis
along
with
any
sample
forwarded
to
EPA.
Under
the
RFG
program's
100%
Option,
the
refiner
must
ensure
that
its
independent
laboratory
sends
the
independent
lab's
certificate
of
analysis;
and
under
the
10%
Option,
the
refiner
must
ensure
that
its
independent
laboratory
sends
the
refiner's
certificate
of
analysis.
In
addition
to
urging
EPA
not
to
finalize
the
sample
retention
and
submission
requirements
for
RFG
gasoline,
NPRA
urged
us
not
to
finalize
these
requirements
for
CG
as
well.
NPRA
argued
that
these
requirements
would
not
prove
useful
in
deterring
non­
compliance
with
the
sulfur
requirements
for
this
product,
primarily
because
false
samples
could
be
forwarded
to
EPA.
The
Agency
disagrees
with
NPRA's
argument.
First,
the
goal
of
these
requirements
is
not
only
to
deter
cheating
but
also
to
reveal
inadequacies
that
exist
in
refiners'
sulfur
testing
procedures.
We
do
not
expect
that
most
non­
compliance
with
the
sulfur
standards
will
occur
through
cheating,
but
rather
through
operational
problems.
Agency
enforcement
experience
under
the
RFG
rule
reveals
that
some
refiners'
testing
procedures
are
not
always
accurate
in
measuring
parameters
and
thus
detecting
noncompliance.
EPA
verification
testing
will
expose
such
testing
inaccuracy,
enabling
the
refiner
to
improve
its
testing
procedures
and
thus
improve
its
ability
to
detect,
and
correct,
its
own
compliance
problems.
To
ensure
the
effectiveness
of
these
sulfur
sample
retention
and
submission
requirements,
the
final
rule
requires
all
refiners
to
provide
EPA
with
the
sulfur
test
result
the
refiner
has
obtained
for
the
sample,
along
with
each
sample
the
refiner
provides
to
the
Agency
under
this
rule.
EPA
will
use
these
retained
samples
in
compliance
determinations.
Gasoline
samples
that
are
forwarded
to
EPA
under
the
sample
retention
requirements
that
are
found
to
be
in
violation
of
a
refinery
cap,
will
be
considered
by
EPA
to
be
evidence
of
violations
of
the
cap
standard,
regardless
of
the
refiner's
own
test
result.
In
addition,
EPA
testing
of
these
samples
may
establish
that
the
refiners'
test
results
are
generally
incorrect,
i.
e.,
are
biased.
EPA
will
evaluate
whether
such
a
bias
constitutes
evidence
of
a
violation
of
the
sulfur
average
standards
applicable
to
the
refiner,
including
whether
the
bias
extends
to
other
sulfur
tests
conducted
by
the
refiner
during
the
current
or
previous
averaging
periods.
Further,
evidence
of
testing
bias
could
constitute
evidence
a
refiner
has
not
met
the
requirement
to
conduct
sulfur
testing
in
accordance
with
specified
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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
150
See
40
CFR
80.81(
g).
procedures,
and
any
reports
submitted
to
EPA
that
reflect
the
bias
could
be
evidence
a
refiner
has
not
met
the
requirement
to
properly
report
the
sulfur
content
of
gasoline
produced.
While
it
is
true
that
a
party
can
submit
false
samples
to
EPA
in
order
to
prevent
the
Agency
from
discovering
what
in
actuality
is
a
non­
compliant
batch
of
gasoline,
we
do
not
believe
that
there
will
be
many
examples
of
such
flagrant
cheating.
Our
enforcement
experience
indicates
that
the
great
majority
of
parties
regulated
under
the
fuels
programs
work
to
comply
with
the
regulatory
requirements.
We
believe
that
the
potential
penalties
for
the
submission
of
false
samples
to
the
government,
and
the
potential
criminal
liability
which
such
conduct
would
subject
parties
to
under
to
section
113
of
the
Clean
Air
Act,
will
act
as
significant
deterrents
to
this
cheating.
Last,
to
further
decrease
perceived
incentives
for
such
cheating,
the
regulation
specifically
requires
that
the
refinery
official
signing
and
submitting
the
refinery's
annual
sulfur
report
must
make
inquiries
to
verify
the
correctness
of
the
sampling
collection
and
retention
procedures
and
include
with
the
annual
sulfur
report
a
personal
certification
of
the
correctness
of
the
procedures
used
to
collect
the
retained
samples.
If
such
certification
cannot
be
made,
then
the
report
cannot
be
timely
filed.
NPRA
further
commented
that
CG
being
counted
to
create
early
credits
under
the
sulfur
rule's
ABT
program
should
not
be
subject
to
the
proposed
sample
retention
and
submission
requirements.
NPRA
argues
that
the
lack
of
a
sulfur
cap
during
the
early
credit
timeframe
makes
such
retention
and
submission
unnecessary.
The
Agency
disagrees.
During
the
early
credit
generation
timeframe,
refiners
participating
in
the
credit
program
must
comply
with
sulfur
averaging
requirements,
even
though
sulfur
caps
are
not
required
to
be
met.
Accurate
determination
of
compliance
with
the
averaging
requirements
necessitates
accurate
sulfur
testing
in
the
early
credit
period,
just
as
it
does
during
implementation
of
the
full
sulfur
program,
even
though
sulfur
testing
of
CG
composite
samples
will
be
permitted.
Hence,
the
sample
retention
and
submission
requirements,
whose
purpose
is
to
ensure
accurate
testing
and
compliance
determination,
continue
to
be
necessary
for
the
early
credit
period.
The
final
rule
retains
the
sample
retention
requirements
for
CG
during
the
early
credit
time
frame.
NPRA
also
suggested
that
in
place
of
the
proposed
30
day
sample
retention
requirement,
EPA
instead
should
require
refiners
to
maintain
samples
only
from
the
last
three
batches
of
gasoline
produced.
NPRA
argued
that
this
alternative
requirement
would
prove
more
economical
for
the
refiners,
yet
would
still
provide
EPA
with
the
ability
to
test
some
samples
itself.
Although
the
Agency
believes
that
the
proposed
30
day
retention
period
would
provide
a
valuable
amount
of
samples
to
be
retained
and
thus
available
for
testing
by
EPA,
the
Agency
agrees
that
a
more
limited
sample
retention
requirement
could
provide
an
acceptable
means
of
confirming
refiner
testing
accuracy
and
sulfur
compliance,
while
being
less
burdensome
to
refiners.
We
do
not
believe,
however,
that
retention
of
samples
from
only
three
batches
of
gasoline
would
be
effective
in
accomplishing
the
goal
of
producing
greater
testing
accuracy.
Three
samples
would
not
be
a
great
enough
number
to
realistically
demonstrate
if
a
pattern
of
testing
irregularities
exists
or
to
demonstrate
that
a
significant
volume
of
the
refiner's
production
is
covered
by
the
testing
verification
process.
Consequently,
instead
of
the
three
batch
sample
retention
requirement
proposed
by
this
commenter,
the
Agency
has
instead
required
in
the
final
rule
that
at
least
the
last
20
samples
be
retained,
and
that
each
sample
be
retained
for
a
minimum
of
21
days.
The
Agency
believes
this
amended
requirement
addresses
NPRA's
concern
that
the
amount
of
days
of
sample
retention
be
reduced
from
thirty
days,
while
also
providing
the
Agency
with
an
effective
means
of
assuring
a
reasonable
number
of
samples,
representing
a
significant
period
of
refining
activity,
will
be
available
for
accuracy
testing.
We
believe
the
retention
requirement
is
not
burdensome
given
the
limited
number
of
samples
that
must
be
retained.
Further,
many
refineries
already
retain
samples.
A
final
comment
by
NPRA
about
the
sample
retention
and
submission
requirements
is
addressed
in
the
final
rule.
NPRA
raised
a
concern
about
the
required
retention
and
submission
of
samples
of
pressurized
blendstock,
particularly
butane,
which
would
require
the
use
of
specialized
highpressure
containers.
The
Agency
agrees
that
there
is
legitimate
concern
about
the
handling,
storing
and
shipping
of
such
samples.
We
also
believe
that
the
final
rule's
quality
assurance
testing
requirements
and
the
testing
requirements
for
blendstock
suppliers
provides
adequate
assurance
of
the
compliance
of
these
blendstocks.
Hence,
the
final
sulfur
rule
does
not
contain
a
requirement
that
samples
of
pressurized
blendstock
must
be
retained.

E.
Federal
Enforcement
Provisions
for
California
Gasoline
and
for
Use
of
California
Test
Methods
To
Determine
Compliance
Requirements
to
Segregate
Gasoline
and
to
Use
Product
Transfer
Documents
for
Certain
California
gasoline;
Definition
of
California
Gasoline
In
the
NPRM,
the
Agency
proposed
to
generally
exempt
from
the
requirements
of
the
federal
sulfur
rule
certain
gasoline
sold
or
intended
for
sale
in
California.
For
the
purpose
of
program
consistency,
the
gasoline
to
be
exempt
in
the
sulfur
rule
would
meet
the
same
definition
of
California
gasoline
as
found
in
the
RFG
rule
(
40
CFR
80.81(
a)(
2)).
The
exempt
gasoline
would
include
all
gasoline
sold,
intended
for
sale,
or
made
available
for
sale
in
California
that
was
also
either:
produced
within
California;
imported
into
California
from
outside
the
U.
S.;
or
imported
into
California
from
another
state,
provided
that
the
out­
of­
state
refinery
did
not
also
produce
federal
RFG.
Although
the
NPRM
proposed
to
exempt
California
gasoline
from
compliance
with
the
proposed
sulfur
standards
(
for
reasons
discussed
elsewhere
in
this
preamble),
we
did
propose
two
requirements
that
would
apply
to
some
exempt
California
gasoline.
The
first
would
require
exempt
gasoline
produced
outside
of
California
but
intended
for
use
in
California,
to
be
segregated
from
non­
exempt
gasoline
at
all
points
in
the
distribution
system.
The
second
would
require
out­
of­
state
producers
of
exempt
gasoline
intended
for
sale
in
California
to
create
PTDs
identifying
the
product
as
California
gasoline,
and
would
require
such
PTDs
to
be
provided
to
all
transferees
of
this
gasoline
in
the
distribution
system.
Requiring
such
documentation
is
intended
to
facilitate
enforcement
and
compliance
by
identifying
gasoline
that
is
not
federally
regulated.
The
same
PTD
requirements
currently
apply
under
the
RFG
program.
150
One
commenter
expressed
a
reservation
about
the
sulfur
rule's
proposed
segregation
requirement.
The
commenter
was
concerned
that
the
segregation
requirement
for
exempt
California
gasoline
might
interfere
with
the
ability
of
California
importers
to
import
into
California,
non­
exempt,
federal
RFG
gasoline
that
happened
to
comply
with
California
Air
Resources
Board
(
ARB)
sulfur
requirements,
but
had
not
been
kept
segregated
by
its
out­

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Register
/
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65,
No.
28
/
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February
10,
2000
/
Rules
and
Regulations
of­
state
refiner
from
the
refiner's
federal
RFG
product.
Out
of
a
concern
about
potential
gasoline
supply
problems
in
California,
the
commenter
asked
for
assurances
from
the
Agency
that
such
gasoline
would
not
be
prohibited
from
sale
in
California
because
of
the
sulfur
rule's
segregation
requirement.
The
Agency
agrees
that
it
would
not
be
beneficial
to
restrict
the
flow
of
complying
gasoline
into
California.
However,
since
the
federal
and
the
ARB
sulfur
control
programs
provide
for
differing
calculations
of
standard
compliance,
and
since
the
standards
themselves
are
not
always
consistent
between
the
two
programs,
EPA
does
not
believe
that
the
compliance
of
gasoline
produced
for
federal
purposes
will
necessarily
assure
its
compliance
with
ARB
program
requirements,
and
vice­
versa.
Therefore,
we
believe
it
is
necessary
to
require
the
physical
segregation
of
the
gasolines
produced
for
the
different
programs
in
order
to
best
ensure
compliance
with
our
uniquely
determined
federal
sulfur
standards.
To
ensure
segregation,
it
is
necessary
that
refiners
and
importers
designate
gasoline
batches
destined
for
California
as
California
gasoline
and
that
PTDs
identify
the
gasoline
as
being
for
use
only
in
California.
Further,
one
of
the
purposes
of
creating
the
California
exemption
in
the
federal
sulfur
rule
is
to
ensure
the
exclusion
of
California
gasoline
from
the
refiner's
compliance
calculations
under
the
federal
rule.
This
exclusion
is
necessary
to
prevent
gasoline
that
is
produced
to
comply
with
the
strict
California
standards
from
unfairly
effecting
the
refiner's
compliance
with
the
federal
requirements,
thereby
facilitating
the
production
of
higher
sulfur
gasoline
for
use
in
a
federal
market
supplied
by
the
refiner.
EPA
believes
that
segregation
of
the
two
gasolines
is
necessary
because
it
facilitates
accurate
identification
of
the
product
to
be
included
solely
in
the
federal
compliance
calculations.
EPA
does
not
believe
that
requiring
the
segregation
of
California
gasoline
from
gasoline
produced
for
the
federal
market
should
create
a
significant
restriction
in
the
flow
of
gasoline
to
California.
The
Agency
believes
that
if
a
California
marketer
needs
to
acquire
ARB­
complying
gasoline
from
out­
ofstate
the
marketer
should
generally
be
able
to
satisfy
that
need
by
ordering
a
batch
of
California
gasoline
to
be
created
for
it
by
out­
of­
state
producers.
Under
this
circumstance
of
the
creation
of
a
unique
batch
of
California
gasoline,
segregation
of
the
gasoline
will
typically
be
assured.
In
analyzing
the
above
comment
on
segregation
of
California
gasoline,
the
Agency
realized
that
the
sulfur
rule's
proposed
definition
of
exempted
California
gasoline,
which
paralleled
the
definition
existing
in
the
RFG
rule,
was
not
as
complete
as
it
should
be
to
properly
address
the
unique
needs
of
the
sulfur
program.
Specifically,
the
exclusion
from
the
sulfur
rule's
exemption
of
out­
of­
state
gasoline
sold
or
intended
for
sale
in
California
solely
because
it
happens
to
be
produced
at
a
refinery
that
produces
federal
RFG
gasoline,
is
not
appropriate.
Basing
an
exemption
on
whether
or
not
an
out­
ofstate
refinery
produces
federal
RFG
is
relevant
to
the
RFG
program,
but
it
has
no
relevance
to
the
sulfur
control
program.
To
ensure
effective
determination
of
compliance
with
federal
sulfur
standards,
the
final
sulfur
rule
deletes
any
reference
to
RFG
production
in
the
rule's
definition
of
exempt
California
gasoline.
Hence,
the
example
presented
in
the
comment,
in
which
out­
of­
state
gasoline
for
sale
in
California
could
be
considered
nonexempt
gasoline,
would
not
arise
under
the
expanded
definition
of
California
gasoline.

Use
of
California
Test
Methods
and
Off­
Site
Sampling
Procedures
for
49
State
Gasoline
Under
the
NPRM
and
the
final
rule,
refineries
and
importers
located
in
California
would
be
required
to
meet
the
federal
sulfur
standards
and
other
requirements
with
regard
to
their
``
federal''
gasoline
to
be
used
outside
of
California.
However,
we
proposed
that
gasoline
produced
in
California
for
sale
outside
of
California
could
be
tested
for
compliance
under
the
federal
sulfur
rule
using
the
methodologies
approved
by
the
ARB,
provided
that
the
producer
complies
with
the
procedures
for
such
testing
as
already
required
under
40
CFR
80.81(
h),
which
permits
California
test
methods
not
identical
to
federal
test
methods
to
be
used
for
conventional
gasoline.
Today's
rule
adopts
this
provision,
as
well
as
the
corollary
proposed
provision
that
gasoline
produced
by
California
refiners
for
use
out­
of­
state
may
be
tested
at
off­
site
testing
as
already
permitted
pursuant
to
40
CFR
80.81(
h)
for
CG
purposes.
Both
provisions
in
today's
rule
should
alleviate
duplicate
testing
burdens
on
California
refiners
subject
to
both
the
federal
and
California
programs,
since
the
test
methods
acceptable
under
these
alternative
provisions
in
today's
rule
are
also
currently
used
to
comply
with
California
requirements.
No
comments
were
received
on
these
provisions.
F.
Recordkeeping
and
Reporting
Requirements
1.
Product
Transfer
Documents
Small
Refiner
Gasoline
Transfers
The
NPRM
proposed
that
the
business
practice
PTDs
that
accompany
each
transfer
of
custody
or
title
of
gasoline
that
includes
gasoline
produced
by
any
small
refiner
subject
to
sulfur
rule
individual
refinery
standards
would
be
required
to
identify
the
gasoline
as
such,
including
the
applicable
downstream
cap,
as
an
aid
to
enforcing
the
national
downstream
cap.
Today's
rule
adopts
the
proposed
PTD
requirement,
with
modifications
regarding
how
the
PTD
requirement
relates
to
testing,
as
described
in
section
VI.
C.
The
requirement
for
printing
information
on
PTDs
has
been
simplified
in
the
final
rule.
All
parties
may
use
brief
codes
to
identify
the
small
refiner
status
of
the
gasoline
and
to
identify
the
small
refiner
downstream
standard
it
is
subject
to.
This
small
refiner
gasoline
PTD
provision
is
also
applied
to
gasoline
subject
to
individual
refinery
standards
under
the
temporary
refiner
relief
provision
of
today's
rule.

GPA
Gasoline
Transfers
Under
the
geographic
phase­
in
program
finalized
today,
gasoline
produced
or
imported
for
use
in
the
GPA
may
be
used
only
in
the
GPA
states.
Therefore,
it
is
necessary
for
PTDs
for
gasoline
that
is
comprised
in
whole,
or
in
part,
of
GPA
gasoline,
to
identify
the
gasoline
as
such
and
state
that
the
gasoline
may
not
be
distributed
or
sold
for
use
outside
the
GPA.
Product
codes
may
be
used
to
provide
this
information,
except
in
the
case
of
transfers
to
truck
carriers,
retailers
and
wholesale
purchaser­
consumers.

2.
Recordkeeping
Requirements
Under
today's
rule,
refiners
and
importers
will
be
required
to
keep
and
make
available
to
EPA
certain
records
that
demonstrate
compliance
with
the
sulfur
program
standards
and
requirements.
This
includes
records
pertaining
to
the
generation,
use
and
transfer
of
credits
and
allotments.
The
RFG/
CG
regulations
currently
require
refiners
and
importers
to
retain
records
that
include
much
of
the
information
required
in
the
sulfur
rule.
Where
this
is
the
case,
there
is
no
requirement
for
duplication
of
records
or
information.
Under
the
final
rule,
all
parties
in
the
gasoline
distribution
system,
including
refiners,
importers,
oxygenate
blenders,
retailers,
and
all
types
of
distributors
will
be
required
to
retain
PTDs
and
records
of
quality
assurance
programs
(
including,
where
applicable,
sulfur
test
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Federal
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/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
151
Five
years
is
the
applicable
statute
of
limitations
for
the
RFG
and
other
fuels
programs.
See
28
U.
S.
C.
2462.
results)
that
parties
conduct
to
establish
a
defense
to
downstream
violations.
All
parties
in
the
gasoline
distribution
system
currently
are
required
to
keep
PTDs
for
RFG.
However,
since
there
are
no
downstream
CG
standards
under
the
anti­
dumping
regulations,
only
refiners
and
importers
are
required
to
retain
PTDs
for
conventional
gasoline
under
the
current
regulations.
Because
the
sulfur
rule,
like
the
RFG
rule,
includes
downstream
standards,
we
believe
that
a
requirement
to
retain
PTDs
for
all
parties
in
the
gasoline
distribution
system
is
appropriate
under
the
sulfur
rule.
The
PTD
information
will
help
us
identify
the
source
of
any
gasoline
found
to
be
in
violation
of
the
sulfur
standards,
and
will
provide
downstream
parties
with
information
regarding
the
applicable
downstream
standard.
Parties
are
required
to
keep
records
for
a
period
of
five
years,
151
with
additional
requirements
for
records
pertaining
to
credits
and
allotments.
Records
pertaining
to
credits
or
allotments
that
were
banked
and
never
transferred
to
another
party
are
required
to
be
retained
for
five
years
after
the
credits
or
allotments
are
used
for
compliance
purposes.
Records
pertaining
to
credits
or
allotments
that
were
transferred
are
required
to
be
retained
by
the
transferor
for
five
years
after
the
year
the
credits
or
allotments
were
transferred,
and
by
the
transferee
for
five
years
after
use.
We
received
comment
that
the
regulations
should
allow
records
to
be
maintained
in
non­
hard
copy
formats,
such
as
photographic
or
electronic
means.
We
do
not
believe
that
the
recordkeeping
requirements,
as
proposed,
disallow
the
retention
of
records
in
electronic
or
photographic
form.
However,
parties
that
electronically
generate
and/
or
maintain
records
must
make
available
to
EPA
the
hardware
and
software
necessary
to
review
the
records,
or
if
requested
by
EPA,
electronic
records
shall
be
converted
to
paper
documents.
The
sulfur
rule,
like
the
RFG/
CG
rule,
requires
regulated
parties
to
keep
the
results
of
tests
conducted
on
the
gasoline.
A
number
of
parties
previously
have
asked
EPA
to
clarify
whether,
under
the
RFG/
CG
rule,
this
recordkeeping
requirement
requires
parties
to
keep
copies
of
all
documents
that
contain
test
results.
To
clarify
what
the
recordkeeping
requirements
require
with
regard
to
test
data,
we
proposed
for
the
RFG/
CG
rule
to
add
language
which
specifies
that
the
test
result
as
originally
printed
by
the
testing
apparatus
is
required
to
be
kept,
or,
where
no
printed
result
is
generated
by
the
testing
apparatus,
the
results
as
originally
recorded
by
the
person
who
performed
the
tests.
Today's
action
incorporates
this
clarification
in
the
sulfur
rule.
Under
this
provision,
where
the
test
data
is
initially
recorded
into
a
database
system
and
there
are
no
prior
written
recordings
of
the
data,
the
information
in
the
database
system
may
serve
as
the
original
record
of
the
test
data.
The
final
rule
also
specifies
that
any
record
that
contains
results
for
a
test
that
are
not
identical
to
the
results
as
originally
printed
by
the
testing
apparatus
or
recorded
by
the
person
who
performed
the
test
must
also
be
kept.
Although
this
language
was
not
included
in
the
NPRM,
we
have
concluded
it
is
a
logical
outgrowth
of
the
proposal
regarding
recordkeeping
for
test
data,
and
that
it
will
make
the
regulation
clearer
with
regard
to
this
requirement.
As
a
result,
it
is
appropriate
to
include
this
language
in
the
final
rule.

3.
Reporting
Requirements
Refiners
and
importers
will
be
required
to
submit
an
annual
report
that
demonstrates
compliance
with
the
applicable
sulfur
standards
and
data
on
individual
batches
of
gasoline,
including
batch
volume
and
sulfur
content.
The
rule
requires
that
refiners
and
importers
report
on
the
generation,
use
and
transfer
of
credits
and
allotments.
The
RFG/
CG
programs
contain
similar
reporting
requirements.
Based
on
our
experience
with
these
programs,
we
believe
that
requiring
an
annual
sulfur
report
and
batch
information
will
provide
an
appropriate
and
effective
means
of
monitoring
compliance
with
the
average
standards
under
the
sulfur
program.
The
batch
data
also
will
serve
to
verify
that
each
batch
of
gasoline
met
the
applicable
sulfur
cap
standard
when
it
left
the
refinery
or
import
facility.
The
batch
data
must
also
show
which
batches
were
designated
as
GPA
gasoline,
as
appropriate.
For
the
2004
and
2005
annual
averaging
periods,
refiners
will
be
required
to
submit
a
report
for
the
refiner's
gasoline
production
(
RFG
and
conventional
gasoline)
for
all
refineries
during
the
averaging
period,
which
demonstrates
compliance
with
the
applicable
corporate
average
and
pergallon
cap
standards.
For
the
2005
annual
averaging
period,
refiners
will
also
be
required
to
submit
a
separate
report
for
each
refinery,
which
demonstrates
compliance
with
the
refinery
average
standard.
For
the
2004
and
2005
annual
averaging
periods,
importers
will
be
required
to
submit
a
report
for
all
of
the
gasoline
they
import
during
the
averaging
period,
which
demonstrates
compliance
with
the
applicable
corporate
average
and
pergallon
cap
standards.
The
importer's
report
for
2005
must
also
demonstrate
compliance
with
the
refinery
average
(
30
ppm)
standard.
Any
refiner
who
is
also
an
importer
must
aggregate
the
refining
and
importing
activities
for
the
purpose
of
demonstrating
compliance
with
the
applicable
corporate
average
standards.
Importers
of
gasoline
produced
by
foreign
refiners
with
individual
baselines
have
additional
reporting
requirements.
For
the
2006
averaging
period
and
beyond,
corporate
average
reports
are
no
longer
required
for
either
refiners
or
importers.
Refiners
will
be
required
to
submit
an
annual
report
for
each
refinery
(
importers
for
the
gasoline
they
import),
which
demonstrates
compliance
with
the
refinery
average
and
per­
gallon
cap
standards.
Refiners
or
importers
producing
both
GPA
gasoline
and
gasoline
for
the
remainder
of
the
country,
must
separately
report
compliance
with
the
different
standards.
Annual
reports,
on
forms
provided
by
the
Agency,
must
be
received
by
EPA
by
the
last
day
of
February
for
the
prior
calendar
year.
The
annual
reports
will
also
provide
a
vehicle
for
accounting
for
any
sulfur
allotments
or
credits
created,
sold
or
used
to
achieve
compliance
during
the
averaging
period.
(
See
Section
IV.
C.
for
a
discussion
of
the
sulfur
allotment
and
ABT
credit
programs.)
Each
refiner
or
importer
choosing
to
participate
in
the
ABT
program
will
be
required
to
report
to
the
Agency
on
an
annual
basis
(
refiners
for
each
refinery,
and
importers
for
the
gasoline
they
import)
the
applicable
sulfur
baseline
and
the
annual
average
gasoline
sulfur
level
produced
at
that
refinery
or
by
that
importer
(
in
ppm
sulfur)
during
the
averaging
period.
Credit
calculations
will
be
reported,
along
with
an
accounting
of
credits
banked,
used,
traded,
acquired
or
terminated.
The
credits
will
be
in
units
of
ppm­
gallons.
The
identity
of
the
refiners/
refineries
and
importers
involved
in
these
transactions
will
be
reported,
along
with
the
registration
numbers
assigned
to
them
by
the
Agency
under
the
RFG/
CG
program
(
40
CFR
80,
subparts
D,
E,
and
F).
For
years
2000
through
2003,
parties
who
generate
early
ABT
credits
will
be
required
to
report
information
relating
to
the
generation
of
these
credits.
These
early
credit
reports
will
only
cover
credits
banked
and
traded.
Beginning
in
2004
and
beyond,
refiners
and
importers
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
152
See
section
80.5
(
penalties
for
fuels
violations);
section
80.23
(
liability
for
lead
violations);
section
80.28
(
liability
for
volatility
violations);
section
80.30
(
liability
for
diesel
violations);
section
80.79
(
liability
for
violation
of
RFG
prohibited
acts);
section
80.80
(
penalties
for
RFG/
CG
violations).
153
An
additional
type
of
liability,
vicarious
liability,
is
also
imposed
on
branded
refiners
under
these
fuels
programs.
who
generate
and/
or
use
ABT
credits
will
be
required
to
submit
information
relating
to
the
generation
and
use
of
the
credits
as
part
of
their
annual
compliance
reports,
including
any
credit
debit
that
is
carried
over
to
the
subsequent
year.
For
each
purchase
of
ABT
credits,
as
reported
on
the
buyer's
annual
report,
there
must
be
a
corresponding
entry
on
the
seller's
annual
report.
The
annual
report
must
also
indicate
any
credits
that
are
used
to
achieve
compliance
with
the
refinery
average
standard.
As
discussed
above,
during
the
2004
and
2005
annual
averaging
periods,
refiners
for
the
combined
production
from
all
their
refineries,
and
importers
for
the
gasoline
they
import,
will
also
be
required
to
demonstrate
compliance
with
the
applicable
corporate
average
standard.
In
addition,
refiners
and
importers
must
demonstrate
compliance
with
the
requirements
for
the
generation,
use,
transfer
and
termination
of
allotments.
Refiners
and
importers
who
trade
sulfur
allotments
to
meet
the
corporate
average
standard
will
be
required
to
submit
information
relating
to
these
transactions.
All
sulfur
allotment
transactions
must
be
concluded
by
the
last
day
of
February
of
the
calendar
year
following
the
year
the
allotments
were
used
to
meet
the
corporate
average.
Information
relating
to
such
transactions,
including
the
identity
of
the
refiners
and
importers
involved
in
the
transactions
and
their
EPA
registration
numbers,
must
be
reported
by
both
parties
to
the
transaction
as
part
of
their
annual
compliance
reports.
As
discussed
in
Section
IV.
C.,
above,
parties
that
only
blend
oxygenates
into
gasoline
are
not
treated
as
refiners
under
the
sulfur
rule,
and,
as
a
result,
are
not
subject
to
the
reporting
requirements
under
§
80.370.
Refiners
and
importers
are
also
required
to
arrange
for
a
certified
public
accountant
or
certified
internal
auditor
to
conduct
an
annual
review
of
the
company's
records
that
form
the
basis
of
the
annual
sulfur
compliance
report
(
called
an
``
attest
engagement'').
The
purpose
of
the
attest
engagement
is
to
determine
whether
representations
by
the
company
are
supported
by
the
company's
internal
records.
Attest
engagements
are
already
required
under
the
RFG/
CG
regulations.
The
refiner's
attest
engagement
under
the
RFG/
CG
rule
partially
encompasses
sulfur
rule
compliance
since
the
attest
auditors
are
already
required
to
verify
sulfur
results
for
both
CG
and
RFG.
However,
the
RFG/
CG
attest
engagements
do
not
require
the
attest
auditor
to
review
sulfur
credit
generation,
credit
purchases,
credit
trading
or
small
refiner
issues.
Because
of
the
complexity
of
the
sulfur
credit
program
and
small
refiner
program,
sulfur
attest
engagement
provisions
have
been
adopted
by
today's
rule
that
require
the
attest
auditor
to
review
sulfur
credit
generation,
credit
trading,
credit
purchasing,
credit
selling,
corporate
pool
averaging,
and
small
refiner
issues.
Consistent
with
the
RFG
regulations,
the
attest
reports
for
sulfur
are
to
be
included
in
the
presently
required
attest
engagement
submitted
by
May
31
of
each
year.

G.
Exemptions
for
Research,
Development,
and
Testing
The
final
rule
provides
for
an
exemption
from
the
sulfur
requirements
for
gasoline
used
for
research,
development
and
testing
purposes.
We
recognize
that
there
may
be
legitimate
research
programs
that
require
the
use
of
gasoline
with
higher
sulfur
levels
than
those
allowed
under
the
sulfur
rule.
As
a
result,
the
final
rule
includes
provisions
for
obtaining
an
exemption
from
the
prohibitions
for
persons
distributing,
transporting,
storing,
selling
or
dispensing
gasoline
that
exceeds
the
standards,
where
such
gasoline
is
necessary
to
conduct
a
research,
development
or
testing
program.
Parties
are
required
to
submit
to
EPA
an
application
for
exemption
that
describes
the
purpose
and
scope
of
the
program
and
the
reasons
why
use
of
the
higher
sulfur
gasoline
is
necessary.
In
approving
any
application,
EPA
will
impose
reasonable
conditions
such
as
recordkeeping,
reporting,
volume
limitations
and
possible
requirements
to
repair
vehicles.
We
received
comment
that
the
regulations
should
clarify
that
suppliers
of
gasoline
used
for
R&
D
purposes
are
exempt
from
the
prohibitions
and
penalties
under
the
sulfur
rule.
To
clarify
this
point,
we
have
added
a
provision
which
explicitly
states
that
gasoline
subject
to
an
R&
D
exemption
is
exempt
from
the
provisions
of
subpart
H,
so
long
as
the
gasoline
is
used
in
a
way
that
complies
with
the
terms
of
the
memorandum
of
exemption.
If
the
R&
D
exemption
is
shown
to
be
based
on
false
information
or
is
not
properly
maintained,
parties
will
be
liable
for
violations
of
the
provisions
under
subpart
H
regarding
any
gasoline
covered
under
the
exemption.
We
also
received
comment
that
the
regulations
should
ensure
that
vehicles
which
have
been
used
for
testing
with
high
sulfur
test
fuels
are
not
later
returned
to
the
general
fleet,
or
if
they
are,
the
vehicles
should
be
required
to
be
restored
to
their
original
condition.
EPA
agrees
that
it
would
be
improper
to
permit
such
vehicles
to
be
used
in
general
use
if
their
emission
controls
have
been
rendered
inoperative
through
fueling
with
high
sulfur
gasoline.
This
issue
may
be
effectively
addressed
through
the
anti­
tampering
requirements
of
section
203(
a)(
3)
of
the
Clean
Air
Act,
42
U.
S.
C.
§
7522(
a)(
3),
and
is
also
addressed
in
today's
rule,
which
provides
the
Administrator
with
the
power
to
include
appropriate
conditions
when
granting
R&
D
exemptions.

H.
Liability
and
Penalty
Provisions
for
Noncompliance
The
liability
and
penalty
provisions
under
the
sulfur
rule
are
similar
to
the
liability
and
penalty
provisions
of
the
RFG
and
other
fuels
regulations.
152
Regulated
parties
will
be
liable
for
committing
certain
prohibited
acts,
such
as
selling
or
distributing
gasoline
that
does
not
meet
the
sulfur
standards,
or
causing
others
to
commit
prohibited
acts.
In
addition,
parties
will
be
liable
for
a
failure
to
meet
certain
affirmative
requirements,
such
as
the
recordkeeping
or
PTD
requirements,
or
causing
others
to
fail
to
meet
such
requirements.
The
sulfur
rule,
like
other
EPA
fuels
regulations,
includes
a
presumptive
liability
scheme
for
violations
of
prohibited
acts.
Under
this
approach,
the
party
in
the
gasoline
distribution
system
that
controls
the
facility
where
the
violation
occurred,
and
other
parties
in
that
gasoline's
distribution
system
(
such
as
the
refiner,
reseller,
and
distributor),
are
presumed
liable
for
the
violation.
153
The
sulfur
rule
explicitly
includes
causing
another
person
to
commit
a
prohibited
act
and
causing
the
presence
of
non­
conforming
gasoline
to
be
in
the
distribution
system
as
prohibitions.
The
final
rule
clarifies
that
causing
the
presence
of
non­
conforming
gasoline
to
be
in
the
distribution
system
includes
gasoline
that
does
not
conform
to
the
applicable
average
standard,
as
well
as
gasoline
that
does
not
conform
to
the
cap
standard.
Affirmative
defenses
are
provided
for
each
party
that
is
deemed
presumptively
liable
for
a
violation,
and
all
presumptions
of
liability
are
refutable.
The
defenses
under
the
sulfur
rule
are
similar
to
those
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6813
Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
available
to
parties
for
violations
of
the
RFG
regulations.
The
final
sulfur
rule,
like
the
proposal,
applies
the
provisions
of
section
211(
d)(
1)
of
the
Clean
Air
Act
(
Act)
for
the
collection
of
penalties.
The
penalty
provisions
subject
any
person
who
violates
any
requirement
or
prohibition
of
the
sulfur
rule
to
a
civil
penalty
of
up
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
the
applicable
average
sulfur
standard
constitutes
a
separate
day
of
violation
for
each
day
in
the
averaging
period.
A
violation
of
a
sulfur
cap
standard
constitutes
a
separate
day
of
violation
for
each
day
the
gasoline
giving
rise
to
the
violation
remained
in
the
gasoline
distribution
system.
The
length
of
time
the
gasoline
in
question
remained
in
the
distribution
system
is
deemed
to
be
twenty­
five
days
unless
there
is
evidence
that
the
gasoline
remained
in
the
gasoline
distribution
system
for
fewer
than
or
more
than
twenty­
five
days.
The
penalty
provisions
are
similar
to
the
penalty
provisions
for
violations
of
the
RFG
regulations.
After
consideration
of
the
comments
received,
the
Agency
is
adopting
regulations
that
specify
the
regulated
parties
who
may
be
subject
to
liability
for
causing
a
violation
of
the
sulfur
rule.
As
proposed,
the
regulation
would
have
applied
to
any
person,
not
limited
to
the
parties
in
the
gasoline
distribution
system
whose
actions
could
logically
have
caused
the
nonconformity.
This
provision
would
have
potentially
broadened
the
range
of
liable
parties
under
the
sulfur
rule
beyond
the
range
established
under
other
fuel
programs.
EPA
believes
that
the
presumptive
liability
schemes
of
current
fuels
regulations
have
generally
been
effective
and
finds
no
compelling
reason
to
apply
the
regulatory
provision
at
issue
to
``
any
person''
rather
than
to
specific
parties.
Therefore,
in
the
final
sulfur
rule,
the
liability
sections
for
the
causation
violations
will
specify
the
regulated
parties
subject
to
the
liability,
and
will
not
encompass
unspecified
parties.
The
final
rule
clarifies
that
oxygenate
blenders
are
among
the
specified
parties
potentially
subject
to
liability.
Today's
final
rule
also
clarifies
that
parent
corporations
are
liable
for
violations
of
subsidiaries.
This
is
consistent
with
our
interpretation
of
the
RFG
rule,
as
stated
in
the
RFG
and
Anti­
dumping
Question
and
Answer
document.
Finally,
the
final
rule
clarifies
that
each
partner
to
a
joint
venture
will
be
jointly
and
severally
liable
for
the
violations
at
a
joint
venture
facility
or
by
a
joint
venture
operation.
We
received
several
comments
on
the
proposal.
Some
commenters
believe
that
the
Act
does
not
authorize
EPA
to
establish
prohibitions
against
causing
another
person
to
commit
a
prohibited
act
or
causing
the
presence
of
nonconforming
gasoline
to
be
in
the
distribution
system.
These
commenters
believe
that
these
prohibitions
are
a
departure
from
the
liability
scheme
under
the
existing
fuels
regulations
and
that
they
constitute
double
jeopardy
by
imposing
liability
for
multiple
violations
for
a
single
act.
The
commenters
also
believe
that
imposing
liability
for
causing
another
person
to
commit
a
prohibited
act
extends
the
limits
that
Congress
placed
on
liability
under
section
211
of
the
Act,
since
sections
211(
d)
and
211(
k)(
5)
do
not
expressly
mention
imposing
liability
for
causing
another
person
to
violate
regulations.
The
commenter
also
noted
that,
had
Congress
intended
for
such
actions
to
be
prohibited,
it
could
have
expressly
included
such
a
prohibition
in
section
211.
This
commenter
cites
section
211(
g)
as
an
example
of
a
statutory
provision
with
such
a
prohibition.
One
commenter
said
that,
rather
than
clarify
the
presumptive
liability
scheme,
the
rule
provides
no
guidance
regarding
what
it
means
to
cause
someone
to
violate
a
prohibition
or
cause
non­
conforming
gasoline
to
be
in
the
distribution
system.
A
commenter
also
stated
that
these
proposed
prohibitions
are
unnecessary,
since
EPA
has
issued
violations
to
multiple
parties
under
current
fuels
regulations.
EPA
disagrees
with
the
comment
that
the
sulfur
rule's
proposed
liability
scheme
is
a
marked
departure
from
the
liability
schemes
typically
found
in
the
other
fuels
programs
promulgated
pursuant
to
section
211
of
the
Act
and
with
the
comment
that
the
regulations
constitute
double
jeopardy
(
the
double
jeopardy
issue
is
addressed
in
the
Response
to
Comment
document).
The
majority
of
these
programs,
including
the
proposed
sulfur
rule,
contain
presumptive
liability
enforcement
structures
which
impose
liability
on
parties
who,
through
their
actions,
could
logically
have
caused
the
fuel
nonconformity.
The
sulfur
rule's
presumptive
liability
scheme
is
thus
consistent
with
the
liability
schemes
of
typical
prior
fuels
programs.
While
EPA
has
issued
notices
of
violations
to
multiple
parties
for
violations
under
current
fuels
regulations,
the
Agency
believes
it
is
appropriate
to
clarify
that
the
act
of
causing
another
party
to
violate
the
regulations
is
a
prohibited
act.
Therefore,
the
regulatory
language
in
the
sulfur
regulations
explicitly
addresses
this
issue.
EPA
also
disagrees
with
the
comment
that
this
provision
is
inconsistent
with
Section
211(
d)
of
the
Act
because
Section
211(
d)
does
not
mention
imposing
liability
for
causing
another
person
to
violate
the
regulations
promulgated
under
Section
211(
c).
For
the
reasons
described
above,
EPA
is
adopting
a
provision
in
today's
regulations
that
prohibits
causing
another
entity
to
violate
the
standards.
This
prohibition
is
a
reasonable
exercise
of
EPA's
discretion
under
Section
211(
c),
and
the
penalty
provision
of
Section
211(
d)
apply
to
violations
of
the
prohibition.
The
fact
that
Section
211(
d)
does
not
specifically
mention
causing
another
person
to
violate
the
regulations
is
therefore
irrelevant,
such
action
is
itself
a
violation
of
the
regulations.
Moreover,
Section
211(
d)
does
not
mention
any
specific
violations
for
which
penalties
may
be
assessed,
but
rather
states
generally
that
violations
shall
result
in
penalties.
Thus,
the
absence
of
specific
mention
of
causing
another
entity
to
violate
the
regulations
is
irrelevant,
since
all
other
specific
prohibitions
in
regulations
subject
to
Section
211(
d)
penalties
are
similarly
not
mentioned.
The
Agency
also
disagrees
with
the
comment
that
the
Clean
Air
Act
does
not
give
EPA
the
authority
to
establish
causation
violations
under
the
sulfur
rule.
We
believe
that
the
Act
gives
us
ample
authority
to
categorize
the
sulfur
rule's
causative
acts,
i.
e.,
the
causing
of
another
party
to
commit
a
violation,
and
the
causing
of
nonconforming
gasoline
to
be
present
in
the
distribution
system,
as
prohibited
acts.
Section
211(
c)
of
the
Act
authorizes
the
Agency
to
promulgate
regulations
for
the
purpose
of
prohibiting
or
controlling
the
manufacture,
introduction
into
commerce,
sale,
or
offering
for
sale
of
fuels
or
fuel
additives
where
the
fuel
or
additive
causes
or
contributes
to
air
pollution
which
may
reasonably
be
anticipated
to
endanger
public
health
or
welfare,
or
where
the
fuel
or
additive
will
impair
to
a
significant
degree
the
performance
of
emission
control
devices
that
are
or
will
be
in
general
use.
Today's
gasoline
sulfur
rule
is
promulgated
pursuant
to
this
authority.
Section
211(
c)
gives
EPA
broad
discretion
to
fashion
regulations
to
control
or
prohibit
the
manufacture,
introduction
into
commerce,
sale,
or
offering
for
sale
of
fuels
once
the
Agency
has
made
the
requisite
findings
regarding
contribution
to
harmful
air
pollution
or
impairment
of
vehicle
emissions
control
system
performance.
This
includes
the
discretion
to
adopt
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PsN:
10FER2
6814
Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
reasonable
regulatory
provisions
that
are
necessary
and
appropriate
to
ensure
that
the
controls
or
prohibitions
are
effective.
To
effectively
regulate
sulfur
in
gasoline
under
section
211,
it
is
necessary
for
the
Agency
to
regulate
the
actions
of
those
parties
who
do
the
manufacturing,
introducing
into
commerce,
and
selling
of
gasoline
subject
to
the
sulfur
requirements.
When
one
or
several
of
these
regulated
parties
causes
another
regulated
party
to
violate
the
rule
(
or
causes
nonconforming
gasoline
to
be
present
in
the
system),
such
an
act
could
logically
result
in
the
high
sulfur
gasoline
contributing
to
harmful
air
pollution
or
to
the
impairment
of
vehicle
emission
control
device
performance,
which
are
the
adverse
impacts
that
legislative
authority
under
section
211(
c)
was
created
to
control.
Examples
of
such
upstream
causative
acts
include
the
scenario
where
a
refiner
produces
high
sulfur
gasoline
which
it
sells
to
a
distributor.
That
distributor
then
resells
the
nonconforming
product
to
a
variety
of
retail
outlets
which,
in
their
turn,
also
violate
the
rule
by
selling
the
high
sulfur
gasoline
to
owners
of
motor
vehicles.
Another
example
occurs
where
a
distributor
has
created
high
sulfur
gasoline
by
blending
high
sulfur
blendstock
into
his
gasoline.
This
distributor
then
makes
several
different
sales
of
this
noncomplying
product
to
a
variety
of
retail
outlets,
which,
in
their
turn,
also
violate
the
rule
by
selling
the
product
to
numerous
motor
vehicle
owners.
A
third
upstream
causation
scenario
could
occur
if
several
refiners
happen
to
make
nonconforming
gasoline.
Each
then
sells
its
nonconforming
product
to
a
different
distributor,
and
a
retail
outlet
which
is
a
customer
of
both
distributors,
purchases
some
of
the
noncomplying
gasoline
from
both
distributors.
The
retailer
then
commits
a
violation
by
offering
this
product
for
sale
to
its
customers.
In
some
cases,
an
upstream
action
has
more
severe
environmental
impacts
through
causing
a
downstream
violation
than
would
occur
if
the
violation
was
corrected
upstream.
For
example,
a
refiner
may
violate
the
sulfur
regulations
by
shipping
gasoline
that
exceeds
the
applicable
standards
when
it
leaves
the
refinery.
If
that
violation
is
corrected
before
the
gasoline
reaches
the
retail
outlets,
the
adverse
environmental
impacts
could
be
mitigated
or
avoided.
However,
if
the
refiner's
violation
is
not
corrected
and
ultimately
causes
a
number
of
violations
of
the
standards
at
retail
outlets,
the
environmental
impact
would
be
more
severe,
since
high
sulfur
gasoline
would
be
introduced
into
vehicles
and
impair
catalyst
performance.
Therefore,
it
is
reasonable
to
consider
causing
a
downstream
violation
by
another
party
to
be
a
separate
violation,
since
an
upstream
party's
actions
can
have
more
severe
environmental
consequences
if
they
cause
downstream
parties
to
violate
applicable
requirements.
For
these
reasons,
it
is
reasonable
to
conclude
that
section
211(
c)
authorizes
the
Agency
to
prohibit
and
control
such
causative
acts
in
order
to
ensure
that
gasoline
ultimately
introduced
into
vehicles
meets
the
low
sulfur
standards.
Our
approach
is
also
reasonable
under
section
211(
c)
even
though
section
211(
c)
does
not
expressly
prohibit
causing
another
party
to
violate
standards
adopted
under
this
subsection.
In
fact,
section
211(
c)
itself
does
not
contain
any
express
prohibitions,
but
rather
provides
EPA
authority
to
regulate
fuels
and
fuel
additives,
based
on
certain
findings.
In
contrast,
other
provisions
of
section
211,
such
as
section
211(
g),
do
include
express
prohibitions
against
certain
actions.
Thus,
under
section
211(
g),
the
specified
actions
are
prohibited
even
in
the
absence
of
EPA
adopting
regulations
to
codify
the
prohibitions.
In
section
211(
g),
Congress
indicated
a
clear
intent
to
prohibit
a
specific
action
(
misfueling),
without
requiring
EPA
to
adopt
regulations
to
implement
that
prohibition.
However,
section
211(
c)
authorizes
EPA
to
establish
regulations
with
certain
controls
and
prohibitions,
and,
as
described
above,
EPA
has
the
discretion
to
adopt
reasonable
measures
to
ensure
that
the
requirements
of
such
regulations
are
met.
Moreover,
the
commenters'
assertion
that
this
provision
is
inconsistent
with
other
subsections
of
section
211
of
the
Act
is
misplaced.
First,
while
the
sulfur
standards
do
apply
to
all
gasoline,
including
gasoline
subject
to
the
reformulated
gasoline
requirements,
the
sulfur
standards
are
being
adopted
pursuant
to
EPA's
authority
under
section
211(
c)(
1),
not
under
section
211(
k).
Therefore,
section
211(
k)(
5)'
s
prohibitions,
which
describe
actions
that
are
violations
of
section
211(
k),
are
not
relevant
to
the
sulfur
standards.
In
addition,
the
enumeration
of
specific
prohibitions
in
section
211(
k)
does
not
mean
that
EPA
may
establish
no
other
prohibited
acts
with
respect
to
reformulated
gasoline;
rather,
it
simply
identifies
certain
actions
that
``
shall
be''
violations
of
section
211(
k),
but
does
not
preclude
establishment
of
other
appropriate
prohibited
acts
pursuant
to
EPA's
authority
under
the
Act.
The
Agency
also
disagrees
with
the
argument
that
the
proposed
causation
violations
under
the
sulfur
rule
would
impose
unjustifiable,
multiple
liability
for
the
commission
of
a
single
prohibited
act.
The
Agency
is
generally
not
in
the
best
position
to
know
the
exact
cause
of
a
gasoline
nonconformity
since
so
many
parties
and
actions
are
involved
with
the
sale
and
transfer
of
the
gasoline.
Therefore,
for
effective
enforcement,
we
must
have
the
ability
to
assert
the
liability
of
all
the
parties
in
the
system
who
were
connected
with
the
nonconforming
gasoline
because
they
each
could
have
caused
the
violation.
Similarly,
we
must
also
have
the
ability
to
assert
upstream
liability
for
the
full
number
of
downstream
violations
a
party
may
be
responsible
for
causing,
even
if
the
multiple
downstream
violations
may
all
ultimately
be
found
to
stem
from
one
gasoline
sale
or
transfer
on
the
part
of
the
upstream
party.
The
enforcement
possibility
exists
that
the
separate
downstream
violations
may
each
have
stemmed
from
separate
actions
by
that
party.
Any
party
may
rebut
the
presumption
of
liability
for
each
asserted
violation
by
establishing
through
affirmative
defenses
that
it
did
not
cause
the
violation.
Moreover,
any
party
against
whom
EPA
institutes
an
enforcement
action
may
raise
equitable
factors
about
its
own
conduct
as
part
of
settlement
of
the
violation
enforcement
action.
In
settling
fuels
matters,
the
Agency
typically
takes
into
account
such
matters
as
the
volume
of
nonconforming
product
that
a
party
was
connected
with,
and
the
severity
and
the
amount
of
proscribed
activity
that
the
party
was
actually
involved
with
in
causing
the
violation.
We
do
not
believe
that
either
the
sulfur
rule's
liability
scheme
or
its
future
implementation
will
be
arbitrary
or
unjustified.
To
further
alleviate
commenters'
concern
about
potential
liability
for
multiple
violations
under
the
sulfur
rule,
we
want
to
clarify
that
the
Agency
does
not
ordinarily
attempt
to
collect
separate
penalties
from
an
entity
for
the
array
of
possible
standard
violations
(
e.
g.,
both
for
the
manufacturing
and
the
selling
of
noncomplying
product),
that
a
party
might
be
liable
for
in
respect
to
the
same
gasoline.
In
addition,
we
do
not
intend
to
seek
penalties
from
a
single
party
for
violating
regulatory
standard
requirements
while
also
seeking
penalties
for
that
party's
causing
of
other
entities
to
violate
regulatory
standard
requirements,
where
both
violations
involve
the
same
gasoline,
unless
very
unusual
circumstances
exist
which
would
warrant
such
action,
such
as
egregious
conduct
on
the
part
of
the
party.

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/
Rules
and
Regulations
In
a
similar
fashion,
we
do
not
expect
to
collect
penalties
from
one
party
for
both
types
of
causation
violations
for
the
same
amount
of
gasoline
under
normal
circumstances.
A
primary
Agency
purpose
in
defining
the
causation
violations
as
two
separate
prohibited
acts
(
i.
e.,
causing
another
to
commit
a
violation,
and
causing
the
presence
of
nonconforming
product
in
the
distribution
system),
was
not
to
collect
a
double
penalty,
but
to
address
different
scenarios
of
evidence
collection.
For
example,
if
the
Agency
finds
a
sulfur
rule
standard
violation
in
a
sample
from
a
retail
outlet
supplied
by
a
certain
distributor,
but
we
do
not
have
a
nonconforming
sample
from
the
distributor,
the
evidence
would
most
easily
permit
us
to
assert
that
the
distributor
was
responsible
for
causing
the
retailer
violation
that
we
do
have
evidence
for.
It
is
reasonable
for
us
to
assert
the
causation
violation
against
the
distributor
in
spite
of
our
lack
of
a
sample
from
the
distributor,
because
any
distributor
who
transfers
gasoline
to
a
retailer,
which
gasoline
is
found
to
be
noncompliant,
could
logically
have
caused
the
noncompliance
of
the
gasoline
when
it
was
under
the
distributor's
control,
such
as
by
blending
high
sulfur
blendstock
into
the
gasoline.
On
the
other
hand,
if
we
have
a
violation
sample
from
a
distributor,
but
no
samples
from
its
downstream
customers,
we
may
assert
that
the
distributor
caused
the
presence
of
nonconforming
gasoline
in
the
distribution
system,
rather
than
assert
that
the
distributor
caused
another
party
to
sell
nonconforming
product,
since
we
don't
have
a
nonconforming
sample
from
another
party's
facility.
It
would
be
reasonable
for
us
to
assert
that
the
distributor
caused
the
presence
of
nonconforming
gasoline
in
the
distribution
system
since
we
do
have
a
sample
of
nonconforming
gasoline
from
the
distributor,
and
provided
also
that
there
is
evidence
that
the
distributor
had
sold,
transferred,
etc.
this
product
to
downstream
customers.
In
summary,
the
Agency
intends
to
enforce
the
liability
scheme
of
the
sulfur
rule
in
the
same
reasonable
manner
that
we
have
enforced
the
similar
liability
schemes
in
our
prior
fuels
regulations.
This
does
not
include
attempting
to
penalize
a
party
for
multiple
variations
of
noncompliance
in
regard
to
the
same
gasoline
unless
unusual
circumstances
make
such
action
appropriate.

I.
How
Will
Compliance
With
the
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
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
gasoline'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
gasoline
as
inappropriate
for
the
facility
it
is
being
delivered
to,
or
identifying
parties
having
connection
with
the
noncomplying
gasoline.
EPA
proposed
that
compliance
with
the
sulfur
standards
would
be
determined
based
on
the
sulfur
level
of
the
gasoline,
as
measured
using
the
regulatory
testing
methodologies.
We
further
proposed
that
any
evidence
from
any
source
or
location
could
be
used
to
establish
the
gasoline
sulfur
level,
provided
that
such
evidence
is
relevant
to
whether
the
level
would
have
been
in
compliance
if
the
regulatory
sampling
and
testing
methodology
had
been
correctly
performed.
In
today's
action,
EPA
is
adopting
the
proposed
regulatory
provision.
Several
commenters
interpreted
this
proposed
language
as
evidencing
the
Agency's
intent
to
make
all
evidence,
including
evidence
not
derived
from
regulatory
test
methods,
equal
in
probative
value
to
that
from
the
regulatory
test
methods.
One
commenter
also
stated
that
the
proposed
provision
is
inconsistent
with
other
parts
of
the
proposal
because
it
undercuts
the
benefits
of
having
clearly
defined
regulatory
test
methodologies.
EPA
disagrees
that
the
regulatory
language
indicates
such
an
intent,
or
has
such
an
effect.
The
regulations
provide
that
compliance
with
the
standards
is
to
be
determined
using
specified
test
methodologies.
While
other
information
may
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
applicable
standards
had
compliance
been
properly
measured
using
the
specified
test
methodologies.
Thus,
the
regulation
adopted
today
does
not
result
in
a
situation
where
any
and
all
evidence
carries
equal
weight
in
an
enforcement
action.
In
fact,
the
regulation
establishes
the
regulatory
test
method
as
the
standard
against
which
other
evidence
is
measured.
Moreover,
since
any
evidence
other
than
regulatory
test
results
must
be
relevant
to
compliance
using
the
test
method,
EPA
disagrees
with
the
commenter
who
stated
that
the
validity
of
the
sulfur
standards
can
be
challenged
in
any
enforcement
action
because
neither
EPA
nor
regulated
entities
will
be
able
to
rely
on
measurements
taken
using
the
regulatory
test
methods.
Rather
than
causing
more
confusion
regarding
compliance
with
the
standard,
this
provision
clarifies
that
the
regulatory
test
method
defines
compliance,
since
other
evidence
can
only
be
used
if
it
relates
to
compliance
using
that
test
method.
The
following
is
an
example
of
how
the
Agency
believes
evidence
of
standard
non­
compliance
not
based
on
regulatory
test
results
might
be
used
for
compliance
purposes
under
today's
rule
provisions.
Under
a
first
scenario,
the
Agency
might
not
have
sulfur
results
derived
from
regulatory
test
methods
for
a
certain
amount
of
gasoline
sold
by
a
terminal,
yet
the
terminal's
own
test
results,
based
on
testing
using
methods
other
than
those
specified
in
the
regulations,
show
an
exceedance
of
the
sulfur
standard.
Under
the
requirements
of
today's
rule,
the
evidence
from
the
non­
regulatory
test
method
could
only
be
used
to
establish
noncompliance
if
the
terminal's
test
results
are
relevant
to
the
determination
of
the
gasoline's
sulfur
level
that
would
have
resulted
if
the
regulatory
test
method
had
been
used.
Thus,
the
Agency
would
have
to
present
evidence
to
link
the
results
of
the
alternative
test
method
to
sulfur
levels
as
measured
using
the
regulatory
test
method.
Another
commenter
has
suggested
that,
if
the
Agency
decides
to
finalize
a
``
credible
evidence''
provision,
it
use
the
language
in
the
current
RFG
regulations
which
establishes
a
presumption
that
the
regulatory
testing
methods
prevail,
except
in
exceptional
circumstances.
Other
commenters
also
opposed
the
proposed
provision
in
part
because
it
differs
from
that
in
EPA's
current
fuels
regulations.
As
described
above,
EPA
believes
that
the
provision
adopted
today
does
not
undercut
the
importance
of
the
regulatory
testing
methodologies,
since
other
evidence
may
be
used
only
as
relevant
to
compliance
as
measured
using
the
regulatory
methods.
In
addition,
as
is
consistent
with
the
RFG
scheme,
EPA
believes
it
is
appropriate
to
use
such
other
evidence
even
in
some
circumstances
where
test
results
using
the
regulatory
test
methods
do
exist,
and
the
provision
adopted
today
clarifies
this.
EPA
also
notes
that
it
intends
to
undertake
rulemaking
in
the
near
future
to
revise
the
current
fuels
regulations
to
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Thursday,
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10,
2000
/
Rules
and
Regulations
154
The
commenter
references
section
211(
k)(
5)
as
support
for
its
assertion,
but
quotes
language
from
section
211(
k)(
4).
EPA
assumes
that
the
commenter
intended
to
cite
section
211(
k)(
4)
rather
than
section
211(
k)(
5).
include
the
same
language
for
use
of
other
evidence
as
adopted
today
in
the
final
sulfur
rule.
The
provision
adopted
today
also
clarifies
that
any
probative
evidence
obtained
from
any
source
or
location
may
be
used
to
establish
noncompliance
with
requirements
other
than
the
sulfur
standards,
such
as
recordkeeping
requirements
and
requirements
to
properly
calculate
sulfur
credits
and
averages,
as
well
as
to
establish
which
parties
have
facility
control
or
some
other
basis
for
liability
for
sulfur
rule
non­
compliance.
Since
proof
of
these
elements
is
not
predicated
on
establishing
sulfur
levels,
whether
or
not
regulatory
test
methods
are
used
is
not
significant.
Therefore
commenters'
concern
about
the
use
of
other
evidence
undercutting
the
primacy
of
the
regulatory
test
methods
is
not
germane
to
this
part
of
the
regulation
which
is
not
directed
toward
standards.
This
provision
is
being
included
in
the
final
sulfur
rule
to
clarify
that
this
rule,
as
is
consistent
with
our
interpretation
of
our
other
fuels
rules,
contemplates
the
full
use
of
all
relevant
evidence
to
establish
non­
standard
violations
and
rule
liability.
EPA
disagrees
with
the
commenters
who
stated
that
EPA
lacks
authority
under
the
Clean
Air
Act
to
permit
the
use
of
any
evidence
of
non­
compliance
of
the
sulfur
standards
other
than
test
results
using
the
regulatory
test
methods.
One
commenter
notes
that
the
only
explicit
reference
in
the
Act
to
the
use
of
``
credible
evidence''
is
in
section
113(
e),
which
applies
only
to
stationary
sources,
and
that
neither
section
211
nor
section
205
mention
``
credible
evidence.''
Finally,
the
commenter
states
that
the
proposed
provision
is
inconsistent
with
the
directive
of
section
211(
k)
that
EPA
determine
appropriate
measures
of
and
methods
for
ascertaining
the
emissions
of
air
pollutants.
EPA
disagrees
with
the
comments
asserting
that
the
Agency
lacks
authority
to
promulgate
this
provision.
While
section
113(
e)
does
refer
to
``
credible
evidence,''
that
provision
is
not
relevant
to
EPA's
action
today.
Moreover,
the
absence
of
the
explicit
use
of
the
term
``
credible
evidence''
in
sections
205
and
211
does
not
compel
a
conclusion
that
EPA
lacks
authority
to
allow
the
consideration
of
relevant
evidence
in
determining
compliance
with
the
sulfur
standards.
EPA
believes
that
section
211(
c)
provides
sufficient
authority
to
adopt
such
a
provision.
Section
211(
c)
authorizes
the
Agency
to
promulgate
regulations
for
the
purpose
of
prohibiting
or
controlling
the
manufacture,
introduction
into
commerce,
sale,
or
offering
for
sale
of
fuels
or
fuel
additives
where
the
fuel
or
additive
causes
or
contributes
to
air
pollution
which
may
reasonably
be
anticipated
to
endanger
public
health
or
welfare,
or
where
the
fuel
or
additive
will
impair
to
a
significant
degree
the
performance
of
emission
control
devices
that
are
or
will
be
in
general
use.
As
described
in
other
sections
of
this
preamble
and
in
the
RIA,
today's
regulation
is
promulgated
pursuant
to
this
authority.
Section
211(
c)
gives
EPA
broad
discretion
to
fashion
regulations
to
control
or
prohibit
the
manufacture,
introduction
into
commerce,
sale,
or
offering
for
sale
of
fuels
once
the
Agency
has
made
the
requisite
findings
regarding
contribution
to
harmful
air
pollution
or
impairment
of
vehicle
emissions
control
system
performance.
This
includes
the
discretion
to
adopt
reasonable
regulatory
provisions
that
are
necessary
and
appropriate
to
ensure
that
the
controls
or
prohibitions
are
effective
and
can
be
enforced.
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
gasoline
would
meet
the
standard
if
tested
using
the
regulatory
methods.
This
provision
would
not
permit
the
use
of
other
evidence
that
is
not
relevant
to
such
a
determination,
and
is
therefore
reasonably
limited
to
allow
for
effective
enforcement,
without
creating
uncertainty
about
compliance.
Finally,
EPA
disagrees
with
the
commenter's
assertion
that
this
provision
is
inconsistent
with
section
211(
k).
First,
while
the
sulfur
standards
do
apply
to
all
gasoline,
including
gasoline
subject
to
the
reformulated
gasoline
requirements,
the
sulfur
standards
are
being
adopted
pursuant
to
EPA's
authority
under
section
211(
c)(
1),
not
under
section
211(
k).
In
any
case,
the
directive
of
section
211(
k)(
4)
that
EPA
determine
through
regulation
appropriate
measures
of
and
methods
for
ascertaining
the
emissions
of
air
pollutants
explicitly
applies
only
for
purposes
of
section
211(
k),
and
applies
for
determining
the
emissions
levels
of
VOCs
and
toxic
air
pollutants
from
baseline
vehicles
when
operating
on
baseline
gasoline,
as
defined
by
section
211(
k).
Thus,
the
commenter's
reference
to
section
211(
k)(
4)
as
inconsistent
with
the
provision
adopted
today
is
misplaced,
particularly
in
light
of
the
limited
applicability
of
the
language
in
section
211(
k)(
4).
154
As
described
in
the
NPRM,
the
Agency
frequently
uses
a
variety
of
evidence
to
establish
compliance
with
fuel
programs'
regulatory
requirements
and
liability
for
non­
compliance.
Such
evidence
has
included
test
results
obtained
from
a
variety
of
sources,
including
bills
of
lading,
delivery
records,
manifests,
and
other
commercial
documents.
The
compliance
determination
provisions
included
in
today's
final
rule
are
created
to
provide
the
most
effective
Agency
capability
to
enforce
the
rule's
requirements.

VII.
Public
Participation
A
wide
variety
of
interested
parties
participated
in
the
rulemaking
process
that
culminates
with
this
final
rule.
The
formal
comment
period
and
four
public
hearings
associated
with
the
NPRM
provided
additional
opportunities
for
public
input.
EPA
also
met
with
a
variety
of
stakeholders,
including
environmental
and
public
health
organizations,
oil
company
representatives,
auto
company
representatives,
emission
control
equipment
manufacturers,
and
states
at
various
points
in
the
process.
We
have
prepared
a
detailed
Response
to
Comments
document
that
describes
the
comments
received
on
the
NPRM
and
presents
our
response
to
each
of
these
comments.
The
Response
to
Comments
document
is
available
in
the
docket
for
this
rule
and
on
the
Office
of
Mobile
Sources
internet
home
page.
Comments
and
our
responses
are
also
included
throughout
this
preamble
for
several
key
issues.

VIII.
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:

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Regulations
155
The
Final
RFA
is
contained
in
Chapter
8
of
the
Regulatory
Impact
Analysis.
156
Report
of
the
Small
Business
Advocacy
Panel
on
Tier
2
Light­
Duty
Vehicle
and
Light­
Duty
Truck
Emission
Standards,
Heavy­
Duty
Gasoline
Engine
Standards,
and
Gasoline
Sulfur
Standards,
October
1998.
·
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.
Pursuant
to
the
terms
of
Executive
Order
12866,
EPA
has
determined
that
this
final
rule
is
a
``
significant
regulatory
action''
because
the
vehicle
standards,
gasoline
sulfur
standards,
and
other
regulatory
provisions,
if
implemented,
would
have
an
annual
effect
on
the
economy
in
excess
of
$
100
million.
Accordingly,
we
have
prepared
a
Final
Regulatory
Impact
Analysis
(
RIA)
which
is
available
in
the
docket
for
this
rulemaking
and
at
the
internet
address
listed
under
ADDRESSES
above.
This
action
was
submitted
to
the
Office
of
Management
and
Budget
(
OMB)
for
review
as
required
by
Executive
Order
12866.
Any
written
comments
from
OMB
on
today's
action
and
any
responses
from
EPA
to
OMB
comments
are
in
the
public
docket
for
this
rulemaking.

B.
Regulatory
Flexibility
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.
EPA
has
identified
industries
subject
to
this
rule
and
has
provided
information
to,
and
received
comment
from,
small
entities
and
representatives
of
small
entities
in
these
industries.
We
have
prepared
a
Final
Regulatory
Flexibility
Analysis
(
RFA)
to
evaluate
the
economic
impacts
of
today's
proposal
on
small
entities.
155
The
key
elements
of
the
RFA
include:
·
The
number
of
affected
small
entities;
·
The
projected
reporting,
record
keeping,
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
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
Regulatory
Flexibility
Analysis
under
section
603
of
the
Regulatory
Flexibility
Act.
The
report
of
the
Panel
has
been
placed
in
the
docket
for
this
rulemaking.
156
The
contents
of
today's
final
rule
and
the
Final
Regulatory
Flexibility
Analysis
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.

1.
Potentially
Affected
Small
Businesses
The
Regulatory
Flexibility
Analysis
identifies
small
businesses
from
the
industries
in
the
following
table
as
subject
to
the
provisions
of
today's
rule:

TABLE
VIII.
1.
 
INDUSTRIES
CONTAINING
SMALL
BUSINESSES
POTENTIALLY
AFFECTED
BY
TODAY'S
RULE
Industry
NAICS
a
codes
SIC
b
codes
Defined
by
SBA
as
a
small
business
if:
c
Motor
Vehicle
Manufacturers
.......................................
336111
3711
<
1000
employees.
336112
336120
Alternative
Fuel
Vehicle
Converters
.............................
336311
3592
<
500
employees.
541690
8931
336312
3714
<
750
employees.
422720
5172
<
100
employees.
454312
5984
7549
<
$
5
million
annual
sales.
811198
8742
541514
Independent
Commercial
Importers
of
Vehicles
and
Vehicle
Components.
811112
7533
7549
<
$
5
million
annual
sales.

811198
8742
541514
Petroleum
Refiners
.......................................................
324110
2911
<
1500
employees.
Petroleum
Marketers
and
Distributors
..........................
422710
5171
5172
<
100
employees.
422720
a
North
American
Industry
Classification
System.

b
Standard
Industrial
Classification
system.

c
According
to
SBA's
regulations
(
13
CFR
121),
businesses
with
no
more
than
the
listed
number
of
employees
or
dollars
in
annual
receipts
are
considered
``
small
entities''
for
purposes
of
a
regulatory
flexibility
analysis.

The
Final
RFA
identifies
about
15
small
petroleum
refiners,
several
hundred
small
petroleum
marketers,
and
about
15
small
certifiers
of
covered
vehicles
(
belonging
to
the
other
categories
in
the
above
table)
that
would
be
subject
to
the
rule.

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157
The
information
collection
requirements
associated
with
the
amendments
to
the
requirements
for
vehicle
certification
are
contained
in
the
Information
Collection
Request
entitled
``
Amendments
to
the
Reporting
and
Recordkeeping
Requirements
for
Motor
Vehicle
Certification
Under
the
Tier
2
Rule'',
OMB
No.
2060
 
0114,
EPA
ICR
#
783.40.
2.
Small
Business
Advocacy
Review
Panel
and
the
Evaluation
of
Regulatory
Alternatives
The
Small
Business
Advocacy
Review
Panel
was
convened
by
EPA
on
August
27,
1998.
The
Panel
consisted
of
representatives
of
the
Small
Business
Administration
(
SBA),
the
Office
of
Management
and
Budget
(
OMB),
and
EPA.
During
the
development
of
the
proposal,
EPA
and
the
Panel
were
in
contact
with
representatives
from
the
small
businesses
that
would
be
subject
to
the
provisions
of
the
rule.
In
addition
to
verbal
comments
from
industry
noted
by
the
Panel
at
meetings
and
teleconferences,
we
received
written
comments
from
each
of
the
affected
industry
segments
or
their
representatives.
These
comments,
alternatives
suggested
by
the
Panel
to
mitigate
adverse
impacts
on
small
businesses,
and
issues
the
Panel
requested
EPA
take
additional
comment
on
are
contained
in
the
report
of
the
Panel
and
are
summarized
below.
Today's
final
rule
incorporates
the
major
recommendations
of
the
Panel.

Fuel­
Related
Small
Business
Issues
Most
of
the
small
refiners
stated
that
if
they
were
required
to
achieve
30
ppm
sulfur
levels
on
average
with
an
80
ppm
per­
gallon
cap
without
some
regulatory
relief,
they
would
be
forced
out
of
business.
Thus,
the
Panel
devoted
much
attention
to
regulatory
alternatives
to
address
this
concern.
Most
small
refiners
strongly
supported
delaying
mandatory
compliance
for
their
facilities.
On
the
other
hand,
most
small
refiners
stated
that
a
phase­
in
of
gasoline
sulfur
standards
would
not
be
helpful
because
it
would
be
more
costeffective
for
them
to
install
the
maximum
technology
required
for
the
most
stringent
sulfur
levels
that
would
ultimately
be
imposed.
The
Society
of
Independent
Gasoline
Marketers
of
America
(
SIGMA)
commented
that
EPA
should
consider
giving
relief
not
only
to
refiners
that
meet
the
SBA
definition
of
small
refiner
but
also
to
refineries
with
relatively
small
production
capacity
that
are
owned
by
large
refining
companies.
This
was
because
a
refinery
with
a
small
production
capacity
would
operate
essentially
as
an
SBA­
defined
small
refiner
would.
SIGMA
also
noted
that
small
gasoline
marketers
would
be
affected
by
the
closure
of
any
refinery
with
small
production
capacity,
whether
it
was
owned
by
a
large
company
or
an
SBA­
defined
small
refining
company.
The
Panel
recommended
that
small
refiners
be
given
a
four
to
six
year
period
of
relief
during
which
less
stringent
gasoline
sulfur
requirements
would
apply.
The
Panel
also
advised
that
EPA
specifically
request
comment
on
an
alternative
duration
of
ten
years
for
the
relief
period.
Small
refiners
would
be
assigned
interim
sulfur
standards
during
this
relief
period
based
on
their
current
individual
refinery
sulfur
levels.
Following
this
relief
period,
small
refiners
would
be
required
to
meet
the
industry­
wide
standard,
although
temporary
hardship
relief
would
be
available
on
a
case­
by­
case
basis.
The
Panel
concluded
that
additional
time
provided
to
small
refiners
before
compliance
with
the
industry­
wide
standard
was
required
would
allow
(
1)
new
sulfur­
reduction
technologies
to
be
proven­
out
by
larger
refiners,
(
2)
the
costs
of
advanced
technology
units
to
drop
as
the
volume
of
their
sales
increases,
(
3)
industry
engineering
and
construction
resources
to
be
freed­
up,
and
(
4)
the
acquisition
of
the
necessary
capital
by
small
refiners.
The
Panel
also
concluded
that
adding
gasoline
sulfur
to
the
fuel
parameters
already
being
sampled
and
tested
by
gasoline
marketers
would
likely
result
in
little,
if
any,
additional
burden.
Therefore,
the
Panel
did
not
recommend
any
special
provision
for
gasoline
marketers.
EPA's
final
action
on
this
issue
closely
follows
the
Panel's
recommendations.
You
can
find
a
description
of
the
small
refiner
provisions
of
today's
final
rule
in
Section
IV.
C.
2.
above.
Comments
and
our
responses
on
related
issues
are
collected
in
the
Response
to
Comments
document.

Vehicle­
Related
Small
Business
Issues
Independent
commercial
importers
of
vehicles
(
ICIs)
suggested
that
the
new
emissions
standards
be
phased­
in
with
the
phase­
in
schedule
based
on
the
small
vehicle
manufacturer's
annual
production
volume.
Secondly,
the
ICIs
requested
that
small
testing
laboratories
be
permitted
to
use
older
technology
dynamometers
than
proposed
for
use
by
the
Agency.
Finally,
the
ICIs
commented
that
the
certification
process
should
be
waived
for
certain
foreign
vehicles.
Small­
volume
vehicle
manufacturers
(
SVMs)
stated
that
a
phase­
in
of
Tier­
2
emissions
standards
is
essential.
They
further
stated
that
SVMs
should
not
be
required
to
comply
until
the
end
of
the
phase­
in
period,
which
should
not
be
before
model
year
2007.
The
SVMs
also
stated
that
a
caseby
case
hardship
relief
provision
should
be
provided
for
their
members.
SVMs
requested
that
a
credit
program
be
established
with
incentives
for
larger
manufacturers
to
make
credits
available
to
SVMs
in
meeting
their
compliance
goals.
Based
on
the
above
comments,
the
Panel
advised
that
EPA
consider
several
alternatives,
individually
or
in
combination,
for
the
potential
relief
that
they
might
provide
to
small
certifiers
of
vehicles.
The
Final
Regulatory
Flexibility
Analysis
evaluates
the
financial
impacts
of
the
proposed
vehicle
standards
and
fuel
controls
on
small
entities.
EPA
believes
that
the
regulatory
alternatives
incorporated
in
today's
final
rule
will
provide
substantial
relief
to
small
business
from
the
potential
adverse
economic
impacts
of
complying
with
today's
proposed
rule.

C.
Paperwork
Reduction
Act
The
information
collection
requirements
(
ICRs)
associated
with
today's
rule
belong
to
two
distinct
categories:
(
1)
those
that
pertain
to
amendments
to
the
vehicle
certification
requirements,
and
(
2)
those
that
pertain
to
requirements
for
the
control
of
gasoline
sulfur
content.
These
information
collection
requirements
are
contained
in
two
separate
ICR
documents
according
to
the
category
to
which
they
belong.
The
ICR
in
this
final
rule
that
pertains
to
the
amendments
to
the
vehicle
certification
requirements
has
been
submitted
for
approval
to
the
Office
of
Management
and
Budget
(
OMB)
under
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et
seq.
Copies
of
this
ICR
157
can
be
obtained
from
Sandy
Farmer,
Office
of
Environmental
Information,
Collections
Strategy
Division,
U.
S.
Environmental
Protection
Agency
(
Mail
Code
2822),
401
M
Street,
SW,
Washington,
D.
C.
20460,
or
by
calling
(
202)
260
 
2740.
Please
refer
to
ICR
#
783.40
in
any
correspondence.
Copies
may
also
be
downloaded
from
the
internet
at
http://
www.
epa.
gov/
icr.
The
ICR
in
this
final
rule
that
pertains
to
the
requirements
for
the
control
of
gasoline
sulfur
will
be
submitted
for
approval
to
the
Office
of
Management
and
Budget
(
OMB)
under
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et
seq.
The
submission
to
OMB
of
the
ICR
document
that
contains
this
ICR
and
its
availability
to
the
public
will
be
announced
in
a
subsequent
Federal
Register
notice.

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2000
/
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and
Regulations
158
These
ICRs
will
become
effective
on
the
date
that
model
year
2001
vehicles
are
introduced
into
commerce.
EPA
assumes
that
September
1,
2000
is
the
earliest
date
that
model
year
2001
vehicles
will
be
marketed.
159
Assuming
model
year
2004
vehicles
are
introduced
into
commerce
on
this
date.
160
A
refiner
can
petition
EPA
for
an
extension
of
the
small
refiner
provisions
beyond
January
1,
2008,
based
on
hardship.
161
The
information
collection
requirements
associated
with
the
proposed
gasoline
sulfur
control
program
are
contained
in
the
Information
Collection
Request
that
accompanied
the
Tier
2
NPRM
which
is
entitled
``
Recordkeeping
and
Reporting
Requirements
Regarding
the
Sulfur
Content
of
Motor
Vehicle
Gasoline
Under
the
Tier
2
Proposed
Rule'',
ICR
#
1907.01.
Copies
of
this
ICR
can
be
obtained
as
discussed
earlier
in
this
section.
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
OMB
control
numbers
for
the
information
collection
requirements
in
this
rule
will
be
listed
in
an
amendment
to
40
CFR
part
9
in
a
subsequent
Federal
Register
notice
after
OMB
approves
the
ICRs.
The
Paperwork
Reduction
Act
stipulates
that
ICR
documents
estimate
the
burden
of
activities
required
of
regulated
parties
within
a
three
year
time
period.
Consequently,
the
ICR
documents
associated
with
today's
final
rule
contain
burden
estimates
for
the
activities
that
will
be
required
under
the
first
three
years
of
the
program.
ICRs
Pertaining
to
the
Amendments
to
Vehicle
Certification
Requirements:
The
information
collection
burden
to
vehicle
certifiers
associated
with
the
amendments
to
the
vehicle
certification
requirements
in
today's
notice
pertain
to
the
fleet­
average
NOX
standard
and
emission
credits
provisions.
These
requirements
are
very
similar
to
those
under
the
voluntary
National
Low
Emission
Vehicle
(
NLEV)
program,
which
includes
a
fleet­
average
standard
for
nonmethane
hydrocarbon
organic
gases
(
NMOG)
and
associated
emission
credits
provisions.
The
hours
spent
annually
by
a
given
vehicle
certifier
on
the
information
collection
activities
associated
with
the
these
recordkeeping
and
reporting
requirements
depends
upon
certifier­
specific
variables,
including:
the
scope/
variety
of
their
product
line
as
reflected
in
the
number
of
test
groups
and
strategy
used
to
comply
with
the
fleet­
average
NOX
standard,
the
extent
they
utilize
emissions
credits
provisions,
and
whether
they
opted
into
the
NLEV
program.
Vehicle
certifiers
that
use
the
provisions
for
early
banking
of
emission
credits
will
be
subject
to
the
associated
information
collection
requirements
as
early
as
September
1,
2000.158
All
vehicle
certifiers
will
be
required
to
comply
with
the
information
collection
requirements
associated
with
the
amendments
to
the
vehicle
certification
program
beginning
September
1,
2003.159
The
ICR
document
for
the
amendments
to
the
vehicle
certification
program
in
this
final
rule
provides
burden
estimates
for
all
of
the
associated
information
collection
requirements.
The
total
information
collection
burden
associated
with
the
amendments
to
the
vehicle
certification
requirements
is
estimated
at
8,406
hours
and
$
567,217
annually
for
the
certifiers
of
light­
duty
vehicles,
medium­
duty
passenger
vehicles,
and
light­
duty
trucks.
ICRs
Pertaining
to
the
Requirements
for
Gasoline
Sulfur
Control:
The
information
collection
burden
to
gasoline
refiners,
importers,
marketers,
distributors,
retailers
and
wholesale
purchaser­
consumers
(
WPCs),
and
users
of
research
and
development
(
R&
D)
gasoline
pertain
to
the
gasoline
sulfur
control
program
in
today's
rule.
The
scope
of
the
recordkeeping
and
reporting
requirements
for
each
regulated
party,
and
therefore
the
cost
to
that
party,
reflects
the
party's
opportunity
to
create,
control,
or
alter
the
sulfur
content
of
gasoline.
As
a
result,
refiners
and
importers
have
significant
requirements,
which
are
necessary
both
for
their
own
tracking,
and
that
of
downstream
parties,
and
for
EPA
enforcement.
Parties
downstream
from
the
gasoline
production
or
import
point,
such
as
retailers,
have
minimal
burdens
that
are
primarily
associated
with
the
transfer
and
retention
of
product
transfer
documents.
Many
of
the
reporting
and
recordkeeping
requirements
for
refiners
and
importers
regarding
the
sulfur
content
of
gasoline
currently
exist
under
EPA's
Reformulated
Gasoline
(
RFG)
and
Anti­
Dumping
programs.
The
ICR
for
the
RFG
program
covered
start
up
costs
associated
with
reporting
gasoline
sulfur
content
under
the
RFG
program.
Consequently,
much
of
the
cost
of
the
information
collection
requirements
under
the
gasoline
sulfur
control
program
has
already
been
accounted
for
under
the
RFG
program
ICR.
In
addition,
many
of
the
information
collection
burdens
associated
with
the
sulfur
program
are
the
result
of
provisions
designed
to
provide
refiners
with
flexibility
in
demonstrating
compliance
with
the
sulfur
standards
in
the
early
years
of
the
program,
such
as
the
credit
trading
and
small
refiner
programs.
The
information
collection
requirements
under
the
sulfur
control
program
evolve
over
time
as
the
program
is
phased­
in.
Beginning
July
1,
2000,
certain
requirements
apply
to
parties
that
voluntarily
opt
to
generate
credits
for
early
sulfur
reduction
under
the
average
banking
and
trading
(
ABT)
provisions.
Many
of
the
requirements
do
not
become
applicable
until
the
beginning
of
the
sulfur
control
program
on
October
1,
2003,
when
all
refiners
are
required
to
meet
the
sulfur
standards.
The
information
collection
requirements
under
the
sulfur
control
program
become
stable
after
January
1,
2008,
when
the
optional
small
refiner
provisions
expire.
160
The
ICR
document
for
the
sulfur
control
program
in
this
final
rule
will
provide
burden
estimates
for
the
activities
required
under
the
first
three
years
of
the
program,
from
July
1,
2000,
through
June
30,
2003.
The
burden
associated
with
activities
required
after
June
30,
2003,
will
be
estimated
in
later
ICRs.
The
initial
ICR
for
the
gasoline
sulfur
control
program,
however,
will
provide
a
qualitative
characterization
of
all
of
the
required
activities
and
associated
burdens
for
the
various
regulated
parties
as
they
develop,
and
until
they
become
stable
after
January
1,
2008.
In
the
ICR
associated
with
the
NPRM
for
this
final
rule,
we
estimated
that
the
total
burden
of
the
information
collection
requirements
that
would
be
applicable
during
the
first
three
years
of
the
proposed
gasoline
sulfur
control
program
would
be
42,479
hours
and
$
2,149,865
annually.
161
Annual
burden
estimates
for
the
various
regulated
entities
under
the
initial
three
year
period
of
the
gasoline
sulfur
control
program
were
also
provided
in
the
NPRM
ICR
as
follows:
·
Refiners:
31,231
hours;
$
1,879,822.
·
Importers:
40
hours;
$
2,067.
·
Pipelines:
85
hours;
$
2,785.
·
Terminals:
1,700
hours;
$
55,700.
·
Truckers:
3,333
hours;
$
118,000.
·
Retailers/
WPCs:
6,087
hours;
$
91,298.
·
R&
D
Gasoline
Users:
3
hours;
$
193.
We
received
few
comments
on
the
ICR
burden
estimates
in
the
proposed
sulfur
rule.
Most
regulated
parties
have
been
fulfilling
reporting,
recordkeeping
and
testing
requirements
under
the
reformulated
and
conventional
gasoline
regulations.
The
only
negative
comments
we
received
related
to
the
batch
testing
for
sulfur
content
and
sample
retention
for
conventional
gasoline.
We
believe
the
estimated
cost
of
complying
with
these
requirements
is
somewhat
higher
than
the
actual
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10,
2000
/
Rules
and
Regulations
burdens
industry
will
realize.
The
ICR
for
this
final
rule
will
be
adjusted
accordingly.
We
estimate
that
there
will
be
some
additional
costs
and
hourly
burdens
over
those
estimated
in
the
NPRM
associated
with
certain
changes
made
to
the
sulfur
program
from
the
NPRM
to
this
final
rule.
In
particular,
this
final
rule
includes
a
program
which
provides
for
relaxed
standards
in
the
early
years
of
the
program
for
refiners
and
importers
who
produce
or
import
gasoline
for
use
in
certain
states
in
the
western
U.
S.
This
program
requires
some
additional
reporting
and
recordkeeping
burdens
for
those
refiners
and
importers
who
participate
in
the
program,
since
they
will
be
required
to
submit
an
application
for
the
program,
including
a
baseline
for
purposes
of
establishing
their
sulfur
standard.
This
program
requires
gasoline
intended
for
use
in
the
geographic
area
to
be
identified
on
product
transfer
documents
and
segregated
from
other
gasoline
in
the
distribution
system.
This
final
rule
also
includes
provisions
for
trading
sulfur
allotments
to
provide
refiners
and
importers
additional
flexibility
in
meeting
the
corporate
pool
average
standards.
This
program
requires
additional
reporting
and
recordkeeping
to
track
allotment
trading
activity.
In
addition,
the
final
rule
requires
small
refiners
to
submit
information
regarding
their
crude
oil
capacity
in
order
to
qualify
for
the
small
refiner
standards
under
the
rule.
Small
refiners
are
also
required
to
submit
reports
of
their
progress
toward
compliance
with
the
sulfur
standards.
The
additional
total
annual
cost
and
hourly
burden
over
the
first
three
years
of
the
program,
as
a
result
of
changes
made
to
the
program
in
the
final
rule,
are
estimated
to
add
less
than
one
percent
to
the
overall
burden
estimates
contained
in
the
NPRM
ICR
for
the
sulfur
control
program.
Total
Burden
of
the
ICRs:
In
the
NPRM,
we
estimated
that
the
total
burden
of
the
recordkeeping
and
reporting
requirements
associated
with
the
proposed
vehicle
certification
and
gasoline
sulfur
control
requirements
would
be
50,840
hours
and
$
2,714,037
annually
over
the
first
three
years
that
these
requirements
would
be
in
effect.
In
the
ICR
document
for
this
final
rule
which
covers
the
ICRs
for
the
vehicle
certification
program,
the
burden
estimates
were
increased
by
45
hours
and
$
3,045
over
the
burden
estimates
in
the
NPRM
ICR.
This
increase
reflects
changes
from
the
NPRM
in
the
final
rule
associated
the
inclusion
of
the
mediumduty
passenger
vehicles
(
MDPVs)
under
the
program.
As
discussed
above,
we
anticipate
that
changes
to
the
ICR
document
for
this
final
rule
which
covers
the
ICRs
for
the
sulfur
control
program
will
have
burden
estimates
less
than
one
percent
higher
than
the
estimates
contained
in
the
NPRM.
Adding
these
increased
costs
to
the
burden
estimates
presented
in
the
NPRM,
we
arrive
at
an
estimate
of
the
total
burden
of
the
recordkeeping
and
reporting
requirements
associated
with
the
vehicle
certification
and
gasoline
sulfur
control
requirements
in
this
final
rule
of
less
than
51,350
hours
and
$
2,742,000
annually
over
the
first
three
years
that
these
requirements
will
be
in
effect.
These
burden
estimates
will
be
more
precisely
stated
in
the
forthcoming
Federal
Register
notice
which
announces
the
submission
to
OMB
of
the
ICR
document
for
this
final
rule
that
covers
the
ICRs
for
the
sulfur
control
program
and
the
availability
of
this
ICR
document
to
the
public.

D.
Intergovernmental
Relations
1.
Unfunded
Mandates
Reform
Act
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
UMRA),
P.
L.
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
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
costeffective
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
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
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.
EPA
believes
that
today's
final
rule
represents
the
least
costly,
most
cost­
effective
approach
to
achieve
the
air
quality
goals
of
the
rule.
The
cost­
benefit
analysis
required
by
the
UMRA
is
discussed
in
Section
IV.
D.
above
and
in
the
Draft
RIA.
See
the
``
Administrative
Designation''
and
Regulatory
Analysis'
section
in
today's
preamble
(
VIII.
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
Office
of
Management
and
Budget,
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
motor
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Vol.
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No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
vehicle
emissions,
motor
vehicle
fuel,
and
other
related
requirements
for
private
businesses
in
today's
rule
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
today's
document.
Thus,
EPA's
conclusions
regarding
the
impacts
from
the
implementation
of
today's
rule
discussed
in
the
other
sections
of
this
preamble
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.

3.
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
final
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.
This
rule
adopts
national
emissions
standards
for
certain
categories
of
motor
vehicles
and
national
standards
to
control
gasoline
sulfur.
The
requirements
of
the
rule
will
be
enforced
by
the
federal
government
at
the
national
level.
Thus,
the
requirements
of
section
6
of
the
Executive
Order
do
not
apply
to
this
rule.
Although
section
6
of
Executive
Order
13132
does
not
apply
to
this
rule,
EPA
did
consult
with
State
and
local
officials
in
developing
this
rule.
In
addition,
EPA
provided
state
and
local
officials
an
opportunity
to
comment
on
the
proposed
regulations.
A
summary
of
concerns
raised
by
commenters,
including
state
and
local
commenters,
and
EPA's
response
to
those
concerns,
is
found
in
the
Response
to
Comments
document
for
this
rulemaking.
This
final
rule
preempts
State
and
local
controls
or
prohibitions
respecting
gasoline
sulfur
content,
pursuant
to
Section
211(
c)(
4)
of
the
Clean
Air
Act.
The
basis
and
scope
of
preemption
is
described
in
Section
IV.
C.
1.
d
of
this
notice.
Although
this
rule
was
proposed
before
the
November
2,
1999
effective
date
of
Executive
Order
13132,
EPA
provided
State
and
local
officials
notice
and
an
opportunity
for
appropriate
participation
when
it
published
the
proposed
rule,
as
described
above.
Thus,
EPA
has
complied
with
the
requirements
of
section
4
of
the
Executive
Order.

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
rule
references
technical
standards
adopted
by
the
Agency
through
previous
rulemakings.
No
new
technical
standards
are
established
in
today's
rule.
The
standards
referenced
in
today's
rule
involve
the
measurement
of
gasoline
fuel
parameters
and
motor
vehicle
emissions.
The
measurement
standards
for
gasoline
fuel
parameters
referenced
in
today's
proposal
are
all
voluntary
consensus
standards.
The
motor
vehicle
emissions
measurement
standards
referenced
in
today's
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
motor
vehicle
emissions.
Therefore,
the
Agency
is
using
the
existing
EPA­
developed
standards
found
in
40
CFR
Part
86
for
the
measurement
of
motor
vehicle
emissions
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
rule
is
subject
to
the
Executive
Order
because
it
is
an
economically
significant
regulatory
action
as
defined
by
Executive
Order
12866
and
it
concerns
in
part
an
environmental
health
or
safety
risk
that
we
have
reason
to
believe
may
have
a
disproportionate
effect
on
children.
This
rulemaking
will
achieve
significant
reductions
of
various
emissions
from
passenger
cars
and
light
trucks,
primarily
NOX,
but
also
NMOG
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Federal
Register
/
Vol.
65,
No.
28
/
Thursday,
February
10,
2000
/
Rules
and
Regulations
and
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
III
of
this
preamble
and
the
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
we
are
not
revisiting
those
issues
here.
We
believe,
however,
that
the
emission
reductions
from
the
strategies
established
in
this
rulemaking
will
further
reduce
air
toxics
and
the
related
adverse
impacts
on
children's
health.
We
will
be
addressing
the
issues
raised
by
air
toxics
from
motor
vehicles
and
their
fuels
in
a
separate
rulemaking
that
we
will
initiate
in
the
near
future
under
section
202(
l)
of
the
Act.
That
rulemaking
will
address
the
emissions
of
hazardous
air
pollutants
from
vehicles
and
fuels,
and
the
appropriate
level
of
control
of
HAPs
from
these
sources.
In
this
final
rule,
we
have
evaluated
several
regulatory
strategies
for
reductions
in
emissions
from
passenger
cars
and
light
trucks.
(
See
sections
IV,
V,
and
VI
of
this
preamble
as
well
as
the
RIA.)
For
the
reasons
described
there,
we
believe
that
these
strategies
are
preferable
under
the
Clean
Air
Act
to
other
potentially
effective
and
reasonably
feasible
alternatives
that
we
considered
for
purposes
of
reducing
emissions
from
these
sources
(
as
a
way
of
helping
areas
achieve
and
maintain
the
NAAQS
for
ozone
and
PM).
Moreover,
we
believe
that
we
have
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.
Congressional
Review
Act
The
congressional
review
Act,
5
U.
S.
C.
801
et
seq.,
as
added
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996,
generally
provides
that
before
a
rule
may
take
effect,
the
agency
promulgating
the
rule
must
submit
a
rule
report,
which
includes
a
copy
of
the
rule,
to
each
House
of
the
Congress
and
to
the
comptroller
General
of
the
United
States.
EPA
will
submit
a
report
containing
this
rule
and
other
required
information
to
the
U.
S.
Senate,
the
U.
S.
House
of
representatives,
and
the
Comptroller
General
of
the
United
States
prior
to
publication
of
the
rule
in
the
Federal
Register.
This
rule
is
a
``
major
rule''
as
defined
by
5
U.
S.
C.
804(
2).
IX.
Statutory
Provisions
and
Legal
Authority
Statutory
authority
for
the
vehicle
controls
set
in
today's
final
rule
can
be
found
in
sections
202,
206,
207,
208,
and
301
of
the
Clean
Air
Act
(
CAA),
as
amended,
42
U.
S.
C.
sections
7521,
7525,
7541,
7542
and
7601.
Statutory
authority
for
the
fuel
controls
set
in
today's
final
rule
comes
from
section
211(
c)
of
the
CAA
(
42
U.
S.
C.,
section
7545(
c)),
which
allows
EPA
to
regulate
fuels
that
either
contribute
to
air
pollution
which
endangers
public
health
or
welfare
or
which
impair
emission
control
equipment.
Both
criteria
are
satisfied
for
the
gasoline
sulfur
controls
we
are
establishing
today.
Additional
support
for
the
procedural
and
enforcementrelated
aspects
of
the
fuel's
controls
in
today's
final
rule,
including
the
record
keeping
requirements,
comes
from
sections
114(
a)
and
301(
a)
of
the
CAA.

List
of
Subjects
40
CFR
Part
80
Environmental
protection,
Air
pollution
control,
Fuel
additives,
Gasoline,
Imports,
Incorporation
by
reference,
Labeling,
Motor
vehicle
pollution,
Penalties,
Reporting
and
recordkeeping
requirements.

40
CFR
Part
85
Environmental
protection,
Administrative
practice
and
procedure,
Confidential
business
information,
Imports,
Labeling,
Motor
vehicle
pollution,
Penalties,
Reporting
and
recordkeeping
requirements,
Research,
Warranties.

40
CFR
Part
86
Environmental
protection,
Administrative
practice
and
procedure,
Confidential
business
information,
Incorporation
by
reference,
Labeling,
Motor
vehicle
pollution,
Penalties,
Reporting
and
recordkeeping
requirements.

Dated:
December
21,
1999.
Carol
M.
Browner,
Administrator.

For
the
reasons
set
forth
in
the
preamble,
parts
80,
85
and
86
of
title
40,
of
the
Code
of
Federal
Regulations
are
amended
as
follows:

PART
80
 
REGULATION
OF
FUELS
AND
FUEL
ADDITIVES
1.
The
authority
citation
for
part
80
continues
to
read
as
follows:

Authority:
Secs.
114,
211,
and
301(
a)
of
the
Clean
Air
Act,
as
amended
(
42
U.
S.
C.
7414,
7545
and
7601(
a)).
2.
Section
80.2
is
amended
by
removing
and
reserving
paragraph
(
aa),
adding
paragraph
(
d),
and
revising
paragraphs
(
h),
(
s)
and
(
gg)
to
read
as
follows:

§
80.2
Definitions.

*
*
*
*
*
(
d)
Previously
certified
gasoline
means
gasoline
or
RBOB
that
previously
has
been
included
in
a
batch
for
purposes
of
complying
with
the
standards
for
reformulated
gasoline,
conventional
gasoline
or
gasoline
sulfur,
as
appropriate.
*
*
*
*
*
(
h)
Refinery
means
any
facility,
including
but
not
limited
to,
a
plant,
tanker
truck,
or
vessel
where
gasoline
or
diesel
fuel
is
produced,
including
any
facility
at
which
blendstocks
are
combined
to
produce
gasoline
or
diesel
fuel,
or
at
which
blendstock
is
added
to
gasoline
or
diesel
fuel.
*
*
*
*
*
(
s)
Gasoline
blending
stock,
blendstock,
or
component
means
any
liquid
compound
which
is
blended
with
other
liquid
compounds
to
produce
gasoline.
*
*
*
*
*
(
gg)
Batch
of
gasoline
means
a
quantity
of
gasoline
that
is
homogeneous
with
regard
to
those
properties
that
are
specified
for
conventional
or
reformulated
gasoline.
*
*
*
*
*
3.
Section
80.46
is
amended
by
revising
paragraphs
(
a)
and
(
h)
to
read
as
follows:

§
80.46
Measurement
of
reformulated
gasoline
fuel
parameters.

(
a)
Sulfur.
Sulfur
content
of
gasoline
and
butane
must
be
determined
by
use
of
the
following
methods:
(
1)
The
sulfur
content
of
gasoline
must
be
determined
by
use
of
American
Society
for
Testing
and
Materials
(
ASTM)
standard
method
D
2622
 
98,
entitled
``
Standard
Test
Method
for
Sulfur
in
Petroleum
Products
by
Wavelength
Dispersive
X­
ray
Fluorescence
Spectrometry.''
(
2)
The
sulfur
content
of
butane
must
be
determined
by
the
use
of
ASTM
standard
method
D
3246
 
96,
entitled
``
Standard
Test
Method
for
Sulfur
in
Petroleum
Gas
by
Oxidative
Microcoulometry.''
*
*
*
*
*
(
h)
Incorporations
by
reference.
ASTM
standard
methods
D
2622
 
98,
D
3246
 
96,
D
3606
 
92,
D
1319
 
93,
D
4815
 
93,
and
D
86
 
90
with
the
exception
of
the
degrees
Fahrenheit
figures
in
Table
9
of
D
86
 
90,
are
incorporated
by
reference.
These
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