Tier 3 Vehicle and Fuel Standards:Proposal Overview

May 13, 2013

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Overview

• Background on Tier 3• Vehicle Standards• Fuel Standards• Emissions and Air Quality Impacts• Benefits and Costs• Comment Period and Hearings

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What is Tier 3?

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• Systems approach to reducing motor vehicle pollution: more stringent vehicle standards enabled by gasoline sulfur control

• Creates a harmonized vehicle program– Coordinated with California LEV III and Light-duty GHG

standards finalized last year for model years (MY) 2017-2025

– Enables auto industry to produce and sell one vehicle nationwide

• Part of comprehensive approach to create cleaner, more efficient vehicles

– Begins phasing in with model year 2017– To allow coordinated compliance with LEV III and LD GHG

Why Tier 3: Air Quality and Public Health

• Tier 3 standards would have immediate health and air quality benefits

• Will help attain and maintain ozone and PM NAAQS– Provides cost-effective national reductions that avoid

more expensive local controls

• Reduces pollution near roads– More than 50 million people live, work, or go to school

near major roads 4

Why Tier 3: Harmonized Vehicle Program

• California finalized LEV III standards last year– EPA issued a waiver under CAA in December 2012

• The auto industry supports Tier 3 because they want to produce and sell one vehicle nationwide

• Tier 3 is harmonized with LEV III– Would begin in 2017 to allow coordinated compliance

with GHG and LEV III

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Tier 3 Vehicle Standards

• Phase in between 2017 and 2025• Tighter VOC and NOx tailpipe standards

– 80% reduction from today’s fleet average

• Tighter PM tailpipe standard– 70% reduction in per-vehicle standard

• Evaporative emissions standards– Reduced fuel vapor emissions and improved system

durability

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Vehicle Standards

• Vehicles we propose to address– Light-Duty Vehicles (LDVs –passenger cars and very

small trucks)– Light-Duty Trucks (LDTs – larger pickups and minivans)– Medium-Duty Passenger Vehicles (MDPVs)

• Heavy duty vehicles between 8,500 and 10,000 lbs GVW, designed for passenger transport

– Heavy-duty (HD) pickups and vans• “Class 2b and 3” vehicles -- 8,500 to 14,000 lbs

GVW

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Vehicle Tailpipe Standards: NMOG and NOx FTP

• FTP=Federal Test Procedure– Standard test procedure designed to capture cold start

and average drive cycle emissions.

• Proposed Emission Standards– Fleet average standards in the form of NMOG+NOx

• Provides flexibility to the manufacturers to certify to a lower fleet average with no compromise in environmental benefits

– Standards would decline from a fleet average today of 160 mg/mi to 30 mg/mi by 2025

– Propose declining fleet average starting MY 2017 for <6000 lb GVW and 2018 for > 6000 lb GVW

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NMOG+NOx Fleet Average Standards

• Phase-in and credits:– Program will allow vehicle manufacturers to earn credits in 2015 and 2016

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Final Tier 3 Standard 30 mg/mi

Vehicle Tailpipe Standards: NMOG and NOx SFTP

• SFTP=Supplemental Federal Test Procedure– Introduced in late 1990’s to address operation not captured in

historic test cycles– Two SFTP specific test cycles

• US06 – Rapid accelerations and high speeds• SC03 – Air conditioning usage at hot summer temperatures

– SFTP standards are composite of FTP, SC03, and US06• Proposed Tailpipe Emission Standards

– Tier 3 composite SFTP standards for NMOG+NOx would focus on preventing excess fuel enrichment and lubricating oil consumption

• Declining from a fleet average of about 100 mg/mi to 50 mg/mi• Fleet average decreases between 2017 to 2025 (consistent w/FTP)

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Vehicle Tailpipe Standards: PM

• Existing Tier 2 PM standards– Tier 2: FTP – 10 mg/mi, SFTP – 70 mg/mi (weighted)

• Proposed Tier 3 PM per-vehicle standards– FTP standard of 3 mg/mi– SFTP: US06-only standard of 10 mg/mi for

LDVs~LDT2s and 20 mg/mi for LDT3s and LDT4s– Cap standards: Intended to bring all vehicles to typical

levels already being achieved• To encourage optimization of fuel controls, oil consumption

controls, and combustion chamber design

– Phase in from 10% to 100% of an OEM’s fleet from MY 2017 to MY 2022 11

Standards for Heavy-Duty Pickups and Vans

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Vehicle Standards: Evaporative Emissions

• Key elements– Lower the existing standards to bring nationwide the

evap control technology used in California– Incentivize improved in-use system durability through

system design improvements, extended useful life– Introduce a new leak emission standard– Bring nationwide the Onboard Diagnostic

requirements used in California (helping to also facilitate the new leak standard)

• Standards cover all gasoline powered highway vehicles 13

Certification Fuel Changes• Updating vehicle certification test fuel specifications

used for vehicle testing• Key highlights

– 10 ppm sulfur– 15 vol% ethanol

• Forward looking with respect to ethanol content• Ensures new vehicles are designed for the fuels they may see in

the future– 87 octane

• Also proposing certification test fuel specifications for E85 to provide greater consistency and stability in FFV testing

• Provisions to allow for testing on other fuels for vehicles that require their use (e.g., premium)

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Why Lower Sulfur Gasoline?

• Both Tier 3 and LEV III vehicle standards depend upon lower sulfur gasoline– Sulfur at current levels degrades the performance of vehicle catalytic

converters the primary emission control system on vehicles

• Tier 3 vehicle standards not achievable without lower sulfur

• Lower sulfur also provides immediate reductions in NOx and VOC emissions from the existing fleet

• California already has lower sulfur gasoline (as do Europe, Japan, S. Korea, and several other countries)– Other states prohibited from controlling gasoline sulfur on their own

• Enables some lower-cost technologies for complying with vehicle greenhouse gas standards

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Tier 3 Fuel Standards

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Fuel Flexibilities

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Refinery-by-Refinery Results

• Of the total 111 refineries regulated:– 29 No capital changes (no or minimal cost),– 66 Revamp existing unit (moderate costs), – 16 Add new grassroots posttreater (higher costs)

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Revamp New - Grassroots

Tier 3 Emission Impacts

• Emission reductions will continue to grow beyond 2030 as more of the fleet continues to turn over to Tier 3 vehicles 19

National Onroad Inventory Reductions

2017 2030Tons Percent Tons Percent

NOx 284,000 8 525,000 28

VOC 45,000 3 226,000 23

PM 2.5 NA NA 7,500 10

CO 747,000 4 5,765,000 30

Benzene 1,625 4 8,581 36

Total air toxics 15,000 3 90,000 23

Ozone Reductions in 2017

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Ozone Reductions in 2030

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PM2.5 Reductions in 2030

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Benefits of Tier 3

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Total Ozone and PM-related Premature Mortality Avoided: 820-2,400 in 2030 (based on range of ozone and PM mortality studies)

Other PM- and ozone-related health impacts avoided in 2030: Hospital admissions and asthma-related ER visits: 3,200 Asthma exacerbations: 22,000 Upper and lower respiratory symptoms in children: 23,000 Lost school days, work days, and minor restricted activity days: 1.8 million

Total Monetized Benefits in 2030 (2010$): $8 to $23 Billion

Summary of Costs and Benefits

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RIA Table of Contents• Executive Summary• Chapter 1: Vehicle Program Technological Feasibility• Chapter 2: Vehicle Program Cost and Effectiveness• Chapter 3: Establishing New Emissions Test Fuel Parameters• Chapter 4: Fuel Program Feasibility• Chapter 5: Fuel Program Costs• Chapter 6: Health and Environmental Effects Associated with

Exposure to Criteria and Toxic Pollutants• Chapter 7: Impacts of the Proposed Rule on Emissions and Air

Quality• Chapter 8: Comparison of Costs to Emission Reductions and Air

Quality Benefits• Chapter 9: Economic Impact Analysis• Chapter 10: Initial Regulatory Flexibility Analysis

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Public Participation

• Comment period closes June 13

• Hearings held April 24 and 29– Philadelphia and Chicago– Broad spectrum of stakeholders, including citizens– All testifiers supported Tier 3 except oil industry

• American Petroleum Institute, American Fuel and Petrochemical Manufacturers, Marathon

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