[Federal Register: May 13, 1999 (Volume 64, Number 92)] [Proposed Rules] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr13my99-28] _______________________________________________________________________ Part III Environmental Protection Agency _______________________________________________________________________ 40 CFR Parts 80, 85 and 86 Air Pollution; Tier 2 Motor Vehicle Emission Standards and Gasoline Sulphur Control Requirements; Diesel Fuel Quality Controls; Proposed Rules [[Page 26004]] ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 80, 85 and 86 [AMS-FRL-6337-3] RIN 2060-AI23 Control of Air Pollution From New Motor Vehicles: Proposed Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: Today's document proposes a major program designed to significantly reduce the emissions from new passenger cars and light trucks, including pickup trucks, minivans, and sport-utility vehicles. These reductions would provide for cleaner air and greater public health protection, by reducing ozone and PM pollution. The proposed 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 proposed program appears at the beginning of SUPPLEMENTARY INFORMATION. For the first time, through a phase-in, we propose to apply a single average exhaust emission standard that would cover both passenger cars and all light trucks operated on any fuel. The proposed emission levels (``Tier 2 standards'') are feasible for both types of vehicles and are appropriate since the miles traveled in light trucks are increasing and the emissions from these vehicles are thus an increasing problem. This approach will 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. To enable the vehicle technology and generate emission reductions from current vehicles we propose to significantly reduce average gasoline sulfur levels nationwide. Refiners would generally install refining equipment to remove sulfur in their refining processes, while importers would be required to market only gasoline meeting the proposed sulfur standards. The proposal outlines an averaging, banking, and trading program to provide flexibility for refiners and ease implementation. This 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 from these vehicles will represent 30-40 percent of nitrogen oxides and volatile organic compound emissions in some cities, and almost 20 percent nationwide, by the year 2020. Our proposal would bring about major reductions in annual emissions of these pollutants and also reduce the emissions of sulfur compounds coming from the sulfur in gasoline. For example, we project a reduction in oxides of nitrogen emissions of nearly 800,000 tons per year by 2007 and 1,200,000 by 2010, the time frame when many states will have to demonstrate compliance with air quality standards. Emission reductions would continue increasing for many years, reaching almost 2,200,000 tons per year in 2020. In addition, the proposed program would reduce the contribution of vehicles to other serious public health and environmental problems, including regional visibility problems, toxic air pollutants, acid rain, and nitrogen loading of estuaries. Furthermore, we project that these reductions, and their resulting environmental benefits, would come at an average cost increase of less than $100 per passenger car, less than $200 per light truck, and an increase of less than 2 cents per gallon of gasoline (or about $100 over the life of an average vehicle). DATES: Comments: We must receive your comments by August 2, 1999. Hearings: We will hold four public hearings, on June 9-10, June 11, June 15, and June 17, 1999. EPA requests that parties who want to testify notify the contact person listed in the ADDRESSES section of this document two weeks before the date of the hearing. ADDRESSES: Comments: You may send written comments in paper form or by E-mail. We must receive them by the date indicated under ``DATES'' above (August 2, 1999). Send paper copies of written comments (in duplicate if possible) to 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, SW, Washington, DC 20460. If possible, we also encourage you to send an electronic copy of your comments (in ASCII format) to the docket by e-mail to A-and-R-Docket@epa.gov or on a 3.5 inch diskette accompanying your paper copy. If you wish, you may send your comments by E-mail to the docket at the address listed above without the submission of a paper copy, but a paper copy will ensure the clarity of your comments. Please also send a separate paper copy to the contact person listed below. If you send comments by E-mail alone, we ask that you send a copy of the E-mail message that contains the comments to the contact person listed below. 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. Hearings: We will hold four public hearings at the following locations: June 9-10, 1999, Top of the Tower, 1717 Arch Street, 51st Floor, Philadelphia, PA 19103, telephone: 215-567-8787, fax: 215-557-5171 June 11, 1999, Renaissance Atlanta Hotel, 590 West Peachtree Street, Atlanta, GA, 30308, telephone: 404-881-6000, fax: 404-815-5010 June 15, 1999, Doubletree Hotel, 3203 Quebec Street, Denver, CO, 80207, telephone: 303-321-3333, fax: 303-329-5233 June 17, 1999, Holiday Inn Lakeside City Center, 1111 Lakeside Avenue, Cleveland, OH 44144, telephone: 216-241-5100, fax: 216-241-7437 Additional information on the comment procedure and public hearings can be found in SUPPLEMENTARY INFORMATION under Section VII, ``Public Participation.'' 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 Tier 2/ Gasoline Sulfur Proposal For cars and light trucks, the proposed program would: <bullet> Through a phase-in, apply for the first time a single average exhaust emission standard that would cover both passenger cars and all light trucks. The proposed emission levels (``Tier 2 standards'') are feasible for both types of vehicles and are appropriate since the miles traveled in light trucks is increasing and the emissions from these vehicles are thus an increasing problem. <bullet> During the phase-in, apply interim standards that match or are more [[Page 26005]] stringent than current federal and California ``LEV I'' (Low-Emission Vehicle, Phase I) standards. <bullet> Apply the same standards to vehicles operated on any fuel. <bullet> Allow auto manufacturers to comply with the very stringent proposed new standards in a flexible way while ensuring that the expected environmental benefits occur. <bullet> 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. <bullet> Set more stringent particulate matter standards, primarily affecting diesel powered vehicles. <bullet> Set more stringent evaporative emission standards. For commercial gasoline, the proposed program would: <bullet> Significantly reduce average gasoline sulfur levels nationwide. Refiners would generally install refining equipment to remove sulfur in their refining processes. Importers of gasoline would be required to import and market only gasoline meeting the proposed sulfur limits. <bullet> Provide for flexible implementation by refiners through an averaging, banking, and trading program. <bullet> Apply temporary, less stringent gasoline sulfur standards to certain small refiners. <bullet> Enable the new Tier 2 vehicles to meet the proposed emission standards, since sulfur in gasoline degrades a vehicle's emission control performance. Lower sulfur gasoline is also important in order to enable the introduction of advanced technologies that promise higher fuel economy but are very susceptible to sulfur poisoning (for example, gasoline direct injection engines). <bullet> Reduce emissions from NLEV vehicles and other vehicles already on the road. Regulated Entities This proposed action would 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 would also affect you if you produce, distribute, or sell gasoline motor fuel. The table below gives some examples of entities that may have to follow the proposed regulations. But because these are only examples, you should carefully examine the proposed and existing regulations in 40 CFR parts 80, 85 and 86. If you have questions, call the person listed in the FOR FURTHER INFORMATION CONTACT section above. ---------------------------------------------------------------------------------------------------------------- Examples of potentially regulated Category NAICS Codes <SUP>a</SUP> SIC Codes <SUP>b</SUP> 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 ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> North American Industry Classification System (NAICS). <SUP>b</SUP> Standard Industrial Classification (SIC) system code. Access to Rulemaking Documents Through the Internet Today's document is available electronically on the day of publication from the Environmental Protection Agency Internet Web site listed below. Electronic copies of the preamble, regulatory language, Draft Regulatory Impact Analysis, and other documents associated with today's proposal 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. Environomental Protection Agency 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/omswww/ (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 Today's Proposal? 1. Vehicle Emission Standards 2. Gasoline Sulfur Standards B. What Is EPA's Statutory Authority for Proposing Today's Action? 1. Light-Duty Vehicles and Trucks 2. Gasoline Sulfur Controls C. The Tier 2 Study and the Sulfur Staff Paper II. Proposed 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 Proposal A. Americans Face Serious Air Quality Problems That Require Further Emission Reductions [[Page 26006]] B. Ozone 1. Ozone Levels Have Declined, but Unhealthy Levels of Ozone Persist 2. Cars and Light-Duty Trucks Are a Big Part of the VOC and NO<INF>X</INF> Inventory, and Today's Proposal Would Reduce This Contribution Substantially 3. Tier 2/Sulfur Ozone Benefits and the Post Tier 2/Sulfur Ozone Problem C. Particulate Matter 1. Particulate Matter Presents Substantial Public Health Risks 2. Reducing Emissions From Cars and Light Trucks Would Reduce Ambient Levels 3. Today's Proposal Would Limit the Potential Health Risks From Increased Diesel Engine Use in Cars and Light Trucks 4. Today's Proposal Would Have Substantial PM Benefits D. Other Criteria Pollutants: Carbon Monoxide, Nitrogen Dioxide, Sulfur Dioxide E. Visibility F. Air Toxics G. Acid Deposition H. Eutrophication/Nitrification I. Conclusion: Cleaner Cars and Light Trucks Are Critically Important to Improving Air Quality IV. What Are We Proposing and Why? 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 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? 3. A Comprehensive Vehicle/Fuel Approach Is Therefore Necessary B. Our Proposed Program for Vehicles 1. Overview of the Proposed Vehicle Program a. Introduction b. Corporate Average NO<INF>X</INF> Standard c. Tier 2 Emission Standard ``Bins'' d. Schedules for Implementation i. Implementation Schedule for LDVs and LLDTs ii. Implementation Schedule for HLDTs e. LDVs and LDTs Not Covered by Tier 2 i. Interim Standards for LDV/LLDTs ii. Interim Standards for HLDTs iii. Interim Programs Would Provide Reductions over Previous Standards iv. Alternative Approach for Interim Standards f. Generating, Banking, and Trading NO<INF>X</INF> Credits 2. Why Are We Proposing the Same Set of Standards for Tier 2 LDVs and LDTs? 3. Why Are We Proposing the Same Standards for Both Gasoline and Diesel Vehicles? 4. Key Elements of the Proposed Vehicle Program a. Basic Exhaust Emission Standards and ``Bin'' Structure i. Why Are We Proposing Extra Bins? b. The Proposed Program Would Phase in the Tier 2 Vehicle Standards over Several Years i. Primary Phase-in Schedule ii. Alternative Phase-in Schedule c. Manufacturers Would Meet a ``Corporate Average'' NO<INF>X</INF> Standard. d. Manufacturers Could Generate, Bank, and Trade NO<INF>X</INF> Credits. i. General Provisions ii. Averaging, Banking and Trading of NO<INF>X</INF> Credits Would Fulfill Several Goals. iii. How Manufacturers Would Generate and Use NO<INF>X</INF> Credits. iv. Manufacturers Could Earn and Bank Credits for Early NO<INF>X</INF> Reductions. v. NO<INF>X</INF> Credits Would Have Unlimited Life. vi. NO<INF>X</INF> Deficits Could Be Carried Forward. e. Interim Standards i. Interim Standards for LDV/LLDTs ii. Interim Standards for HLDTs f. More Stringent Proposed Light-Duty Evaporative Emission Standards C. Our Proposed Program for Controlling Gasoline Sulfur 1. Oil Industry Proposal 2. Why EPA Believes the Gasoline Sulfur Program must Be Nationwide a. Sulfur's Negative Impact on Tier 2 Catalysts Is Irreversible. b. Sulfur Has Negative Impacts on OBD Systems and I/M Programs. c. Sulfur Reductions Would Ensure Lower Emissions of Many Pollutants. d. The Refining Industry Can Control Gasoline Sulfur. e. Other Stakeholders Support National Gasoline Sulfur Control. 3. Proposed Gasoline Sulfur Standards a. Standards for Refiners and Importers i. Why Begin the Program in 2004? ii. How Did We Arrive at the 80 ppm Cap and 30 ppm Average Standards? iii. Should a Near-Zero Gasoline Sulfur Standard Be Considered? iv. Why Are We Proposing Less Stringent Standards for 2004 and 2005? b. Standards for Small Refiners i. What Standards Would Small Refiners Have to Meet Under Today's Proposal? ii. Application for Small Refiner Status iii. Application for a Small Refiner Sulfur Baseline iv. Volume Limitation on Use of a Small Refinery Standard v. Hardship Extensions Beyond 2007 for Small Refiners vi. What Alternative Provisions for Small Refiners Are Possible? 4. Compliance Flexibilities a. Sulfur Averaging, Banking, and Trading (ABT) Program i. Why Are We Proposing a Sulfur Averaging, Banking, and Trading Program? ii. How Would Refiners Establish a Sulfur Baseline? iii. How Would Refiners Generate Credits? iv. How Would Refiners Use Credits? v. Could Small Refiners Participate in the ABT Program? vi. What Alternative Implementation Approaches Are Possible? b. Refinery Air Pollution Permitting Requirements i. New Source Review Program ii. Title V Operating Permit Program iii. EPA Assistance to Explore Permit Streamlining Options and Solicitation of Comment c. Should Hardship Relief Be Available? 5. Consideration of Diesel Fuel Control D. What Are the Economic Impacts, Cost Effectiveness and Monetized Benefits of the Proposal? 1. What Are the Estimated Costs of the Proposed Vehicle Standards? 2. What Are the Estimated Costs of the Proposed Gasoline Sulfur Standards? 3. What Are the Aggregate Costs of the Tier 2/Gasoline Sulfur Proposal? 4. How Does the Cost-Effectiveness of this Program Compare to Other Programs? a. What Is the Cost Effectiveness of this Program? b. How Does the Cost Effectiveness of this Program Compare with Other Means of Obtaining Mobile Source NO<INF>X</INF> + NMHC Reductions? c. How Does the Cost Effectiveness of this Proposed Program Compare with Other Known Non-Mobile Source Technologies for Reducing NO<INF>X</INF> + NMHC? 5. Does the Value of the Benefits Outweigh the Cost of the Proposed 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 Did We Perform the Benefit-Cost Analysis? e. What Were the Results of the Benefit-Cost Analysis? f. What Additional Efforts Will Be Made Following Proposal? E. Other Program Design Options We Have Considered 1. Corporate Average Standards Based on NMOG or NMOG+NO<INF>X</INF> 2. More Stringent Tier 2 NO<INF>X</INF> and Gasoline Sulfur Standards V. Additional Elements of the Proposed Vehicle Program and Areas for Comment A. Other Vehicle-related Elements of the Proposal 1. Proposed Tier 2 CO, HCHO and PM Standards a. Carbon Monoxide (CO) Standards b. Formaldehyde (HCHO) Standards c. Particulate Matter (PM) Standards 2. Useful Life a. Mandatory 120,000 Mile Useful Life b. 150,000 Mile Useful Life Certification Option 3. Light Duty Supplemental Federal Test Procedure (SFTP) Standards 4. LDT Test Weight 5. Test Fuels 6. Changes to Evaporative Certification Procedures to Address Impacts of Alcohol Fuels 7. Other Test Procedure Issues 8. Small Volume Manufacturers 9. Compliance Monitoring and Enforcement a. Application of EPA's Compliance Assurance Program, CAP2000 b. Compliance Monitoring [[Page 26007]] c. Relaxed In-Use Standards for Tier 2 Vehicles Produced During the Phase-in Period d. Enforcement of the Tier 2 and Interim Corporate Average NO<INF>X</INF> Standards. 10. Miscellaneous Provisions B. Other Areas on Which We Are Seeking Comment 1. LDV/LDT Program Options a. Alternatives to Address Stringency of the Standards i. Alternative Standards and Implementation Schedules ii. Use of Family Emission Limits (FELs) Rather than Bins iii. Use of Different Averaging Sets iv. Different Standards for Different Categories of Vehicles v. Consideration of Special Provisions for the Largest LDTs and Advanced Technology vi. Measures to Prevent LDT Migration to Heavy-Duty Vehicle Category vii. Use of Non-conformance Penalties (NCPs) viii. Additional NO<INF>X</INF> Credits for Vehicles Certifying to Low NO<INF>X</INF> Levels ix. Incentives for Manufacturers to Bank Additional Early NO<INF>X</INF> Credits x. Flexibilities for Small Volume Manufacturers and Small Businesses xi. Adverse Effects of System Leaks xii. Consideration of Other Corporate Averaging Approaches 2. Tighter Evaporative Emission Standards 3. Credits for Innovative VOC, NO<INF>X</INF> and Ozone Reduction Technologies Not Appropriately Credited by EPA's Emission Test Procedures 4. Need for Intermediate Useful Life Tier 2 Standards VI. Additional Proposed Elements and Areas for Comment: Gasoline Program A. Other Areas for Comment 1. Would States Be Preempted from Adopting Their Own Sulfur Control Programs? 2. Potential Changes in Gasoline Distillation Properties B. Gasoline Sulfur Program Compliance and Enforcement Provisions 1. Overview 2. What Requirements Is EPA Proposing for Foreign Refiners and Importers? a. What Are the Proposed Requirements for Small Foreign Refiners with Individual Refinery Sulfur Standards? b. What Are the Proposed Requirements for Truck Importers? 3. What Standards Would Apply Downstream? 4. What Are the Proposed Testing and Sampling Methods and Requirements? a. What Is the Primary Test Method for Gasoline? b. What Is the Proposed Test Method for Sulfur in Butane? c. Is EPA Proposing a Requirement to Test Every Batch of Gasoline Produced or Imported? d. What Sampling Methods Are Proposed? e. What Are the Proposed Gasoline Sample Retention Requirements? 5. What Federal Enforcement Provisions Would Exist for California and When Could California Test Methods be Used to Determine Compliance? 6. What Are the Proposed Recordkeeping and Reporting Requirements? a. What Are the Proposed Product Transfer Document Requirements? b. What Are the Proposed Recordkeeping Requirements? c. What Are the Proposed Reporting Requirements? d. What Are the Proposed Attest Requirements? 7. What Are the Proposed Exemptions for Research, Development and Testing? 8. What Are the Proposed Liability and Penalty Provisions for Noncompliance? 9. How Would Compliance with the Sulfur Standards Be Determined? VII. Public Participation A. Comments and the Public Docket B. Public Hearings VIII. Administrative Requirements A. Administrative Designation and Regulatory Analysis B. Regulatory Flexibility Act 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 12875: Enhancing Intergovernmental Partnerships 3. Executive Order 13084: Consultation and Coordination with Indian Tribal Governments E. National Technology Transfer and Advancement Act F. Executive Order 13045: Children's Health Protection IX. Statutory Provisions and Legal Authority I. Introduction Since the passage of the 1990 Clean Air Act Amendments significant progress has been made 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 will continue to help reduce car and truck emissions into the near future. Nonetheless, due to increasing vehicle population and vehicle miles traveled, passenger cars and light trucks will be significant contributors to air pollution inventories into the indefinite future. In fact, the emission contribution of light trucks and sport utility vehicles will likely surpass that of passenger cars within the next year. (This is occurring because of the combination of growth in miles traveled by light trucks and their less stringent emission standards compared to passenger cars). The program we describe below builds on the NLEV and RFG Phase II programs to develop a strong national program to protect public health and the environment well into the next century. The program while reducing VOC emissions focuses especially on NO<INF>X</INF> because that is where the largest air quality gains can be achieved. We have followed several overarching principles in developing this proposal: <bullet> Design a strong national program to assist states in every region of the country in meeting their air quality objectives. <bullet> View vehicles and fuels as an integrated system. Define a program that continues to ensure that car and truck emission reductions are part of the solution to our nation's air quality problems. <bullet> Establish a single set of emission standards that apply regardless of the fuel used and regardless of whether the vehicle is a car or a light truck. <bullet> Provide compliance flexibilities that allow vehicle manufacturers and oil refiners to adjust to future market trends and honor consumer preferences. <bullet> Encourage the development of advanced low emission, fuel efficient technologies such as lean-burn engines. <bullet> 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 proposal. Sections I and II of this preamble will give you a brief overview of our proposal and the basics of our rationale for proposing it. Subsequent sections will expand on the air quality need, the economic impacts, and provide a more detailed description of the specifics of the proposal. The final sections deal with several subjects, including opportunities for public participation that you may wish to take advantage of. You may also want to review our Draft Regulatory Impact Analysis (RIA), found in the docket and on the Internet, where we present more detailed analyses and discussions of many topics raised in this preamble. A. What Are the Basic Components of Today's Proposal? The nation's air quality, while certainly better than in the past, will 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 proposing a major, comprehensive program designed to significantly reduce emissions from passenger cars and light trucks (including sport-utility vehicles, minivans, and pickup trucks) and reduce sulfur in gasoline. Under the proposed program, automakers would produce vehicles designed to have very low emissions when operated on low-sulfur gasoline, and oil refiners would [[Page 26008]] provide that cleaner gasoline nationwide. In this preamble, we refer to the proposed comprehensive program as the ``Tier 2/Gasoline Sulfur Control Program'' or simply as the ``Tier 2 Program.'' 1. Vehicle Emission Standards Today's action proposes new federal emission standards (``Tier 2 standards'') for passenger cars and light trucks. 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 (NO<INF>X</INF>) and non-methane organic gases (NMOG), consisting primarily of hydrocarbons (HC) and contributing to ambient volatile organic compounds (VOC). The program would also, for the first time, apply the same federal standards to passenger cars and all light trucks (``light light-duty trucks'' (or LLDTs), rated at less than 6000 pounds gross vehicle weight and ``heavy light-duty trucks'' (HLDTs), rated at more than 6000 pounds gross vehicle weight). The proposed Tier 2 standards would reduce new vehicle NO<INF>X</INF> levels to an average of 0.07 grams per mile (g/mi). For new passenger cars and light LDTs, these standards would phase in beginning in 2004, with the standards to be fully phased in by 2007.<SUP>1</SUP> For heavy LDTs, the proposed Tier 2 standards would 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 Tier 2 standards would have to meet an interim average standard of 0.30 g/mi NO<INF>X</INF>, equivalent to the current NLEV standards for LDVs.<SUP>2</SUP> During the period 2004-2008, heavy LDTs not certified to Tier 2 standards would phase in an average standard of 0.20 g/mi NO<INF>X</INF>. Those not covered by the phase-in would be required to meet a traditional (non-averaging) standard of 0.60 g/mi NO<INF>X</INF>. --------------------------------------------------------------------------- \1\ By comparison, the NO<INF>X</INF> 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. For further comparison, the standards met by today's Tier 1 vehicles range from 0.60 g/mi to 1.53 g/mi. \2\ 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 NO<INF>X</INF> standard. This ``bin'' approach is described more fully in section IV.B. --------------------------------------------------------------------------- Manufacturers would be allowed to comply with the very stringent proposed new standards in a flexible way, assuring that the average emissions of a company's production met the target emission levels while allowing the manufacturer to choose from several more- and less- stringent emission categories for certification. The proposed requirements also include more stringent PM standards, which primarily affect diesel vehicles, and more stringent hydrocarbon controls (exhaust NMOG and evaporative emissions standards). We are also proposing stringent particulate matter standards that would be especially important if there were substantial future growth in diesel sales. Even under an assumed scenario where diesel sales grew to represent 50 percent of all light-duty trucks by 2010, the PM standards being proposed today would result in a steady decrease in total direct PM <INF>2.5</INF> from cars and light trucks. For this scenario of a 50 percent share for diesel light trucks, direct PM emissions in 2020 with today's proposal would be less than they are at present. Therefore, we believe that today's proposal accommodates environmental concerns about such vehicles in a way that insures positive environmental results. 2. Gasoline Sulfur Standards The other major part of today's proposal would significantly reduce average gasoline sulfur levels nationwide. These reductions could begin to phase in as early as 2000, with full compliance by 2006. Refiners would generally install advanced refining equipment to remove sulfur during the production of gasoline. Importers of gasoline would be required to import and market only gasoline meeting the proposed sulfur limits. Temporary, less stringent standards would apply to a few small refiners. EPA is proposing that gasoline produced by refiners and sold by gasoline importers generally meet an average sulfur standard of 30 ppm and a cap of 80 ppm in 2004. The proposed program builds upon the existing regulations covering gasoline content 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 the proposed 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 to as late as 2006. As proposed, the program would achieve expected environmental benefits while providing substantial flexibility to refiners. The effect of the credit program is that those refiners that participate would have the opportunity for more overall leadtime to reach the final sulfur levels. B. What Is EPA's Statutory Authority for Proposing Today's Action? 1. Light-Duty Vehicles and Trucks We are proposing the 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 <SUP>3</SUP> are appropriate beginning in the 2004 model year. <SUP>4</SUP> 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 standards for these vehicle classes is among those options for new standards that EPA is to consider. --------------------------------------------------------------------------- \3\ LDTs with a loaded vehicle weight less than or equal to 3750 pounds. \4\ Section 202(b)(1)(C) forbids EPA from promulgating mandatory standards more stringent than Tier 1 standards until the 2004 model year. --------------------------------------------------------------------------- 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 proposal considers and proposes affirmative responses to the three questions above (see section II below) and sets forth new proposed standards that are more [[Page 26009]] stringent than the default standards in the Act. EPA is also proposing standards for larger light-duty trucks under the general authority of section 202(a)(1) and under section 202(a)(3) of the Act, which requires that standards applicable to emissions of hydrocarbons, NO<INF>X</INF>, CO and PM from heavy-duty vehicles <SUP>5</SUP> 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. --------------------------------------------------------------------------- \5\ 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. --------------------------------------------------------------------------- 2. Gasoline Sulfur Controls We are proposing gasoline sulfur controls pursuant to our authority under section 211(c)(1) of the Clean Air Act.<SUP>6</SUP> 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 would be in general use were the fuel control to be adopted. --------------------------------------------------------------------------- \6\ 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 directly or indirectly control sulfur levels in gasoline. See the Draft RIA for more details. --------------------------------------------------------------------------- We are proposing to control sulfur levels in gasoline based on both of these criteria. Under the first criterion, we believe that emissions products of sulfur in gasoline used in Tier 1 and LEV technology vehicles contribute to ozone pollution, air toxics, and PM. Under the second criterion, we believe that gasoline sulfur in fuel that will be used in Tier 2 technology vehicles will significantly impair the emissions control systems expected to be used in such vehicles. Please refer to section IV.C. below and to the Draft Regulatory Impact Analysis (RIA) for more details of our analysis and findings. The Draft RIA includes a more detailed discussion of EPA's authority to set gasoline sulfur standards, including a discussion of our proposed 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.<SUP>7</SUP> 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 would become fully effective, a number of areas would still be in nonattainment for ozone and PM even after the implementation of existing emission controls. EPA also found ample evidence that technologies would 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. --------------------------------------------------------------------------- \7\ 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. --------------------------------------------------------------------------- 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 is a catalyst poison and that high sulfur levels in commercial gasoline could affect the ability of future automobiles to meet more stringent standards in use. It also pointed out that sulfur control would provide additional benefits by lowering emissions from the current fleet of vehicles. II. Proposed Tier 2 Determination Based on the statutory requirements described above and the evidence provided in the Tier 2 Study, as updated in this document, EPA proposes its determination that new, more stringent emission standards are indeed needed, technologically feasible, and cost effective. A. There Is a Substantial Need for Further Emission Reductions in Order To Attain and Maintain National Ambient Air Quality Standards We believe 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, our modeling shows that in 2007 approximately 80 million Americans will be living in areas that are in nonattainment for the 8-hour ozone NAAQS, even with all other expected controls in place. Another 49 million people will live in attainment areas that are within 15% of being reclassified as nonattainment areas. This is a total of nearly 130 million people, which represents about 48 percent of the population of the United States. In addition to these ozone concerns, our models indicate that by 2010, 45 areas, with 18 million people, will be in nonattainment for the original PM<INF>10</INF> NAAQS and 11 areas with 10 million people will be in nonattainment for the revised PM<INF>10</INF> NAAQS. While not a specific driving factor in today's findings, our models also project that 102 areas with about 55 million people will be in nonattainment with the new PM<INF>2.5</INF> NAAQS by 2010. We also must 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. Clearly there is a critical need for reductions in the emissions being projected for future years. Furthermore, mobile sources are important contributors to the emission problem. As we will explain more fully later in this preamble, in the year 2007, the cars and light trucks that are the subject of today's proposal are projected to contribute nearly 40 percent of the total NO<INF>X</INF> and VOC inventory in some cities, and 20 percent of nationwide NO<INF>X</INF> and VOC emissions. This situation would have been considerably worse without the NLEV program created by vehicle manufacturers, EPA, the Northeastern states, and others. We therefore believe that reductions in these source categories are an essential part of the reductions needed to attain and maintain the NAAQS. As we explain below, we propose to find that major reductions in future emissions from light- duty vehicles and trucks are both feasible and cost effective compared to available alternatives. [[Page 26010]] B. More Stringent Standards for Light-Duty Vehicles and Trucks Are Technologically Feasible We believe that emission standards more stringent than current Tier 1 and National Low Emission Vehicle (NLEV) levels are technologically feasible. We believe this to be true both for the LDVs and LDTs specifically covered in section 202(i) and for the heavier LDTs also included in today's proposal. 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 and are building durable vehicles and trucks, including heavy light- duty trucks, which have very low emission levels.<SUP>8</SUP> --------------------------------------------------------------------------- \8\ The Draft RIA contains an extended analysis, Section IV.A. below has more discussion of the technological feasibility of our proposed standards including detailed discussions of the various technology options that we believe manufacturers may use to meet these standards. --------------------------------------------------------------------------- For light duty vehicles, certified NO<INF>X</INF> levels for 1999 reveal that NO<INF>X</INF> levels representing full-life, deteriorated emissions in the 0.01 to 0.10 g/mi range are already being seen on some production vehicles. Similarly, light-duty trucks up to 8500 lbs. GVWR, also included in today's proposal, have some very low 1999 certification levels for NO<INF>X</INF>, with NO<INF>X</INF> levels of as low as 0.04 g/mi for some of the largest LDTs. These levels are well below Tier 1 and NLEV standards. Manufacturers have also certified LDVs and LDTs to NMOG and CO levels as much as 80 percent below Tier 1 standards. As discussed in more detail below and in the Draft RIA, we believe that, by the 2004-2009 time frame proposed for the Tier 2 standards, manufacturers would be fully able to comply with the proposed new standard levels. In addition, to facilitate manufacturers' efforts to meet these new standards, the Tier 2 regulations would include a corporate fleet average, which would allow manufacturers to optimize the deployment of technology across their product lines. Our analysis of the available technology improvements and the very low emission levels already being realized on these vehicles leads us to propose a finding that today's proposed standards 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 document, we propose that Tier 2 motor vehicle standards are both necessary and cost effective. We have already described our belief that substantial further reductions in emissions are needed to help reduce the levels of unhealthy air pollution that millions of people are being exposed to. (We describe this further below and in the Draft RIA.) In its analyses supporting the new ozone and PM NAAQS, the Agency identified those methods that were reasonably cost effective, and showed that substantial progress toward attainment could be made. However, we also concluded that methods beyond those that could be identified as cost effective at the time were needed and we assumed they would be identified in the future. We believe that the Tier 2/gasoline sulfur proposal is one of those methods. This proposal would reduce annual NO<INF>X</INF> 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, if all of the controls identified for the NAAQS analysis costing less than $10,000/ton (the limit on cost effectiveness used in that analysis) were implemented nationwide, they would produce NO<INF>X</INF> emission reductions of about 2.9 million tons per year. That is, to achieve significant further reductions using control approaches other than the proposed Tier 2/Gasoline Sulfur program could mean adopting measures costing well beyond $10,000 per ton. Further emission reductions are needed. Without Tier 2 and gasoline sulfur controls, we project that in 2007 at least 8 metropolitan areas and 2 rural counties with a combined population of 39 million will exceed the 1-hour ozone NAAQS and 28 metropolitan areas and 4 rural counties with a combined population of 80 million will exceed the 8- hour ozone NAAQS. We project that cars and light trucks will contribute 17 percent of the nationwide NO<INF>X</INF> inventory by 2007 and 20 to 40 percent in some cities with air quality problems. The NO<INF>X</INF> reductions from today's proposal range from 19 to 48 percent of the reductions we estimate are needed for areas to achieve attainment. We believe that the proposed program, as well as the technologies assumed for the NAAQS analysis mentioned above, are clearly cost effective approaches for attaining and maintaining the NAAQS. The magnitude of emission reductions that can be achieved by a comprehensive national Tier 2/gasoline sulfur program would be difficult to achieve from any other source category. Given the contribution that light-duty mobile source emissions make to the national emissions inventory and the range of control programs ozone- affected areas already have in place or would be expected to implement, we believe it will be very difficult, if not impossible, to attain and maintain the ozone NAAQS in a cost-effective manner without reducing emissions from LDVs and LDTs. In addition, we project that the Tier 2/ gasoline sulfur program would reduce direct and secondary particulate matter coming from LDVs and LDTs by over 70 percent, providing reductions of almost 240,000 tons annually by 2010. We believe, then, that today's proposal is a major and attractive source of ozone and PM precursor emission reductions when compared to other available options. It would represent a degree of emission reduction beyond those programs identified in the NAAQS analysis that we believe is currently unavailable from any other reasonable program. We also believe that it would be a cost effective program, costing approximately $2,000 per ton of NO<INF>X</INF> plus hydrocarbon reduced according to our estimates, which is quite attractive compared to other alternatives. The discussion of cost and cost effectiveness later in this preamble explains the derivation of these numbers and compares them to other alternatives. That discussion indicates that today's proposal would be as cost effective as both the Tier 1 and NLEV standards and cost effective when compared to non-mobile source programs as well. III. Air Quality Need for and Impact of Today's Proposal In the absence of significant new controls on emissions, 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 proposal would significantly reduce emissions from cars and light trucks and hence would significantly reduce the health risks posed by air pollution. This section summarizes the results of the analyses we performed to arrive at our proposed 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 being proposed today would improve air quality and mitigate other environmental problems. [[Page 26011]] 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.<SUP>9</SUP> 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 these continued improvements in air quality, however, tens of millions of Americans are still exposed to unhealthy levels of ozone and PM. 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 so exposed. --------------------------------------------------------------------------- \9\ 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/). --------------------------------------------------------------------------- Ambient ozone is formed in the atmosphere through a complex interaction of VOC and NO<INF>X</INF> 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 NO<INF>X</INF>, sulfur oxides (SO<INF>X</INF>) 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, particles can penetrate deep into the lungs and are linked with premature death, 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. Under EPA's proposed policy for implementing the new 8-hour ozone, revised PM<INF>10</INF>, and new PM<INF>2.5</INF> ambient standards (63 FR 65593, November 27, 1998), states must prepare and submit SIP revisions to demonstrate attainment of the 8-hour ozone standard between 2000 and 2003, depending on ozone classification under the 8- hour standard. The earlier submittal date applies to ``transitional'' areas, which are areas that are in attainment with the 1-hour standard and can attain the 8-hour standard through local measures adopted prior to classification (under the 8-hour standard) and the regional emission reductions to be achieved under the Regional Ozone Transport Rule (63 FR 57356, October 27, 1998). In general, EPA expects these areas to demonstrate attainment by 2007. Other 8-hour nonattainment areas will be classified as ``traditional'' under the 8-hour standard, and we believe that these areas will have attainment dates of 2007, 2009, or 2010 depending on their 1-hour classification status and 1-hour attainment date. Because it takes three ``clean'' years to qualify an area to be redesignated as attainment for the ozone standard, the deadline for each area to achieve the VOC and NO<INF>X</INF> emission reductions needed to meet the ozone standard generally should be two years earlier than its attainment date. For example, 8-hour ozone nonattainment areas for which we would establish an attainment date of 2009 would need to implement emission reductions by the start of the 2007 ozone season in order to have three ``clean'' years by their 8-hour attainment deadline of 2009. The SIP revisions to demonstrate attainment with the revised PM<INF>10</INF> standard must be prepared by 2002, with attainment by 2006, unless this date is not practicable. 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 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 do not 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 affects tens of millions of Americans. Without new standards, steady annual increases in fleet size and miles of travel will outstrip the benefits of current emission controls, and will cause ozone-forming emissions from cars and trucks to grow each year starting about 2014. The contribution of these vehicles to PM exposure and PM nonattainment would also remain significant, and could increase considerably if diesel engines are used in more cars or light trucks. For ozone in particular, the contribution of cars and light trucks--in terms of both local emissions and transported pollution--will be so significant to those areas expected to be in nonattainment in the 2007 to 2010 time frame, and the expected emission reduction shortfall in these areas will be so large, that further reductions from cars and light trucks are an inescapable element of any attainment strategy. The standards we are proposing would cut the contribution of ozone and PM precursors from cars and light trucks greatly. Even with this cut, 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. However, their task would be easier and the economic impact on their industries and citizens would be lighter as a result of the actions proposed today. This would be a critical benefit of today's proposal. Following implementation of the Regional Ozone Transport Rule, states [[Page 26012]] will have already adopted emission reduction requirements for nearly all large sources of VOC and NO<INF>X</INF> for which cost-effective control technologies are known. Those that remain in nonattainment will therefore have to consider their other alternatives. In fact, however, many of the alternatives states will have to consider are very costly, with a small impact from each additional category subjected to new emission controls. The emission reductions from today's proposed standards for gasoline, cars, and light trucks would 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. They would also reduce the need for states to seek even deeper reductions from large and small sources already subject to emission controls. In our meetings and correspondence with state and local officials, they asked us to reduce the emissions from cars and trucks, so that their charge of protecting the public against air pollution is one they can accomplish on schedule and without adverse economic impacts. We heard from the Northeast States for Coordinated Air Use Management, the Ozone Transport Commission, the State and Territorial Air Program Administrators, and the Association of Local Air Pollution Control Officers. They consistently told us that it would be very difficult and costly for the states to obtain comparable reductions from other sources as substitutes for reductions from cars and light trucks, especially on top of the additional reductions needed to reach ozone attainment even with the reductions from today's proposal. We project that today's proposal would also have important benefits for regional visibility, acid rain, and coastal water quality. For these and other reasons discussed in this document, we are proposing to determine 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 can be obtained by reducing emissions from cars and light trucks. We believe that such reductions are in fact necessary (since cars and light trucks are such large contributors to current and projected ozone problems) and reasonable (since these reductions could 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 proposal would help mitigate and the expected health and environmental benefits of this proposal. 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 Draft Regulatory Impact Analysis for today's proposal. B. Ozone 1. Ozone Levels Have Declined, but Unhealthy Levels of Ozone Persist Ground-level ozone is the main harmful ingredient in smog.<SUP>10</SUP> It is produced by complex chemical reactions when its precursors, VOC and NO<INF>X</INF>, react in the presence of sunlight. The chemical reactions that create ozone take place while the wind is carrying the pollutants, which means that ozone can be more severe many miles away from the source of ozone-forming emissions than it is at the source. The movement of ozone and its precursors is called ``ozone transport'' and suggests two complementary approaches to reduce ozone levels in areas affected by ozone transport: --------------------------------------------------------------------------- \10\ Ozone also occurs naturally in the stratosphere and provides a protective layer high above the earth. --------------------------------------------------------------------------- (1) Reduce ozone precursor emissions in the area itself. (2) Reduce ozone precursor emissions in upwind areas to reduce incoming ozone and ozone precursor levels. Within a nonattainment area itself, both VOC and NO<INF>X</INF> reductions are generally beneficial. Especially in the eastern portion of the U.S., the second approach of controlling upwind emissions can play an important part in efforts to reduce ozone levels in nonattainment areas. Because individual states cannot control upwind sources of air pollution that lie outside their borders, EPA has a special role in managing transport impacts. Vehicle and fuel standards should play a part in doing so. Since NO<INF>X</INF> affects downwind ozone levels in the eastern U.S. over greater distances than VOC does, reductions in upwind NO<INF>X</INF> emissions are particularly important in reducing ozone levels downwind. Modeling conducted by the Ozone Transport Assessment Group, discussed below, indicates that VOC reductions substantially upwind from nonattainment areas have little benefit in those nonattainment areas across the eastern region of the U.S. By contrast, VOC reductions in or near nonattainment areas do provide air quality benefits. Since cars and light trucks meeting today's proposed standards would operate everywhere, today's proposal would reduce VOC and NO<INF>X</INF> emissions in both nonattainment areas and in upwind areas. The new standards being proposed today would have their largest effect on NO<INF>X</INF> emissions. Sulfur in gasoline has been found to increase NO<INF>X</INF> emissions more than VOC emissions, and reducing sulfur would therefore yield larger NO<INF>X</INF> reductions than VOC reductions. Similarly, the vehicle standards proposed today represent a greater reduction from current NO<INF>X</INF> standards than is the case for VOC. We have taken this approach because air quality modeling conducted for OTAG, and subsequent modeling we have conducted, indicates that NO<INF>X</INF> reductions would have larger ozone benefits than would VOC reductions. In addition, we believe that individual nonattainment areas have a wider range of alternative control opportunities for VOC than they have for NO<INF>X</INF>. Ozone levels have decreased significantly over the past 20 years as VOC and NO<INF>X</INF> emissions have been reduced. However, ozone levels in much of the country remain a major concern. Outside of California, the 1990 census showed 72 million people living in areas that were formally designated as non-attainment for the 1-hour standard as of August 10, 1998. Measured ozone design values from 1995 to 1997 in the region analyzed by the Ozone Transport Assessment Group (OTAG) <SUP>11</SUP> indicate that in this region alone, 26 metropolitan areas and 8 rural counties together containing 75 million people experienced ozone levels in excess of the 1-hour ozone standard. --------------------------------------------------------------------------- \11\ OTAG evaluated a region that included all or part of the easternmost 37 states. --------------------------------------------------------------------------- The 8-hour ozone standard is more stringent and protective than the 1-hour standard, and more areas have exceeded it in the recent past. In 1995 to 1997, at least one county in each of 81 metropolitan areas and an additional 30 rural counties together containing 110 million people had ozone values in excess of the 8-hour ozone standard. Additional areas in the OTAG region had ozone levels within 15 percent of the 8- hour standard and hence faced potentially significant maintenance challenges: 52 metropolitan areas and 44 rural counties together containing 26 million people. For several reasons, we expect to see substantial additional progress in [[Page 26013]] reducing ozone levels over the next ten years despite continued growth in electric power generation, industrial output, nonroad activity levels, and vehicle miles traveled. NO<INF>X</INF> and VOC emissions from mobile sources will continue to decline as older, higher-emitting vehicles and nonroad engines are retired from service and replaced with newer vehicles and nonroad engines that must meet more stringent federal emission standards. Other federal regulations that will reduce ozone precursor emissions will take effect, such as regulations that will reduce VOC emissions from paints and other architectural coatings. Beginning in 2000, areas of the country participating in the federal reformulated gasoline program will receive lower-emitting Phase 2 reformulated gasoline. States are expected to implement additional measures to reduce NO<INF>X</INF> and VOC emissions in 1-hour ozone nonattainment areas. In addition, the final Regional Ozone Transport Rule (ROTR) (63 FR 57356, October 27, 1998) requires the District of Columbia and 22 states in the eastern U.S. to reduce their NO<INF>X</INF> emissions substantially by 2003 to reduce ozone levels in downwind states. Using the most recent improvements to the OTAG emission inventories and the OTAG ozone model, we project that in the OTAG region, these combined emission reductions will bring 18 of the aforementioned 26 metropolitan areas and 6 of the 8 rural counties, with 36 million residents, into attainment with the 1-hour ozone standard by 2007. The same emission reductions are projected to bring ozone design values below the 8-hour standard in 53 out of 81 metropolitan areas and 26 out of 30 rural counties, with a combined 1990 population of 30 million people.<SUP>12</SUP> --------------------------------------------------------------------------- \12\ The design value is the calculated ozone level, based on ozone measurements in the area, that is compared to the NAAQS to determine compliance with the standard. --------------------------------------------------------------------------- However, we still project many areas in the OTAG region to have ozone design values in 2007 in excess of the 1-hour and 8-hour standards. Eight metropolitan areas and two counties with a combined 1990 population of 39 million are projected to experience ozone design values in excess of the 1-hour ozone standard in 2007.<SUP>13</SUP> Twenty-eight areas and 4 rural counties, with a combined 1990 population of 80 million, are projected to experience ozone design values at levels in excess of the 8-hour standard in 2007. --------------------------------------------------------------------------- \13\ Various states have submitted SIPs to meet a requirement that they demonstrate attainment with the 1-hour ozone standard by 2005 or 2007 (the exact date is state-specific, depending on the severity of their violation of the 1-hour standard). These plans were submitted to EPA in the first half of 1998, and we are still reviewing them for their completeness and approvability. We have not fully evaluated the impact of the measures contained in these plans on future ozone levels. As a result, they are not included in the baseline emission inventory. --------------------------------------------------------------------------- Additional areas outside the OTAG modeling region may also experience high ozone levels, even with the additional emission controls that will be implemented by 2007. The most recent assessment for these areas was made in the Regulatory Impact Analysis for the revised NAAQS (NAAQS RIA).<SUP>14</SUP> That assessment predicted that many areas in California will require substantial additional reductions to attain the 1-hour and 8-hour ozone standards. Although the vehicle and fuel standards being proposed today would not apply to vehicles and fuel sold in California, we project that today's proposals would lead to emission reductions within California. According to the State of California, about 7 to 10 percent of all car and light truck travel in California takes place in vehicles originally sold outside California. These vehicles operate in California during visits and after relocation of households from other states. Today's proposal would cause those vehicles to be cleaner, assisting California's nonattainment areas to meet the ozone standards. In addition, this proposal requires that gasoline in all states (except California, which has its own low-sulfur gasoline program) have a low sulfur content, in order to maintain catalyst effectiveness. This would ensure that vehicles belonging to California residents get clean gasoline when they travel outside of California, so that they return to California with fully functioning catalysts. --------------------------------------------------------------------------- \14\ ``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, NC, July 17, 1997. --------------------------------------------------------------------------- Outside of California and the OTAG region, the NAAQS RIA modeling indicated that all areas would attain the 1-hour standard by 2010. One area (Phoenix, AZ) was projected not to attain the 8-hour standard. Eleven other areas were projected to have ozone levels within 15 percent of the 8-hour standard and hence face potential challenges in maintaining their attainment status. Furthermore, even an area now in attainment or that reaches attainment by 2007 can be at risk of becoming nonattainment in the face of continued growth in its population, economy, vehicle traffic, and nonroad equipment activity levels. Also, an area that we have estimated will reach attainment in 2007 may fail to do so if growth is higher than we project, if emission controls are less effective, or if the modeling is otherwise in error. Our modeling for the OTAG region has estimated that of the 1-hour nonattainment areas projected to reach attainment by 2007 with the benefits of the Regional Ozone Transport Rule (ROTR) and other already committed measures, 17 metropolitan areas and 5 rural counties, with a combined 1990 population of 35 million people, will remain within 15 percent of the 1-hour standard. These areas would benefit from additional reductions to help ensure that they will attain. With respect to the 8-hour standard, we estimate that 80 metropolitan areas and 39 rural counties with a 1990 population of 49 million people will have design values within 15 percent of the 8-hour standard. These areas have some risk of not actually being in attainment in 2007, and will face potentially significant challenges maintaining their attainment status in future years. Today's proposed standards would help ensure these areas do attain, and help these areas accommodate continued population and economic growth while staying in attainment with the 8-hour ozone standard by further reducing levels of ozone precursors. EPA's best ozone projections at the current time for the OTAG region are summarized in Tables III-1 and III-2, where ``ROTR'' refers to the Regional Ozone Transport Rule. It should be noted that the results for the OTAG regions discussed above and summarized in the following tables apply to only a portion of the area that would benefit from today's proposal. Table III-1.--Extent of Potential 1-Hour Ozone Problem Areas in 2007 in the OTAG Region.<SUP>a</SUP> ------------------------------------------------------------------------ 2007 projections with ROTR ------------------------------------------------------------------------ Design values in excess of the 1-Hour NAAQS (<gr-thn-eq>125 ppb) ------------------------------------------------------------------------ Number of Metropolitan Areas............................ 8 Number of Rural Counties................................ 2 1990 Population of Metropolitan Areas and Rural Counties 39 (millions)............................................. ------------------------------------------------------------------------ <SUP>a</SUP> Additional potential problem areas in California. [[Page 26014]] Table III-2.--Extent of Potential 8-Hour Ozone Problem Areas in 2007 in the OTAG Region <SUP>a</SUP> ------------------------------------------------------------------------ 2007 projections with ROTR ------------------------------------------------------------------------ Design values in excess of the 8-Hour NAAQS (<gr-thn-eq>85 ppb) ------------------------------------------------------------------------ Number of Metropolitan Areas............................ 28 Number of Rural Counties................................ 4 1990 Population of Metropolitan Areas and Rural Counties 80 (millions)............................................. ------------------------------------------------------------------------ Design values within 15 percent of the 8-Hour NAAQS (72-84 ppb) ------------------------------------------------------------------------ Number of Metropolitan Areas............................ 80 Number of Rural Counties................................ 39 1990 Population of Metropolitan Areas and Rural Counties 49 (millions)............................................. ------------------------------------------------------------------------ <SUP>a</SUP> Phoenix, Arizona and multiple areas in California are also potential problem areas. It should be noted that the areas included in Table III-2 have not been designated to be in nonattainment with the 8-hour ozone NAAQS. Such designations will not be made by EPA until 2000, and these designations will be based on the data that are most recently available at that time.<SUP>15</SUP> Instead, the areas included in Table III-2 have been projected to have design values that would place them in nonattainment in 2007, using an approach described in the Draft RIA.<SUP>16</SUP> This approach enabled EPA to estimate the extent of the 8-hour nonattainment problem after implementing the reductions set forth in the Regional Ozone Transport Rule and the measures states have adopted or are specifically required by the Clean Air Act to adopt for their existing 1-hour nonattainment areas. (The modeling did not consider the impact of additional measures that may appear in the SIP revisions submitted by some states in the first half of 1998.) --------------------------------------------------------------------------- \15\ It should also be noted that the number and 1990 population of metropolitan areas projected to be near or above the 8-hour ozone standard in Table III-2 are based on the boundaries of ozone nonattainment areas as currently defined under the 1-hour ozone standard. These boundaries will be reevaluated as 8-hour ozone nonattainment areas are designated and may change from those used above, affecting the count and population of the potential problem areas. \16\ The approach uses a combination of ambient monitoring data and regional ozone photochemical grid modeling for specific ozone episodes to develop statistical correlations between modeled ozone levels and projected future monitoring results. The approach does not reflect any further emission reductions that may have been included in revisions to State Implementation Plans (SIPs) for ozone that EPA received from some states in the first half of 1998. These SIP revisions are still under review by EPA for completeness and approvability. --------------------------------------------------------------------------- We believe the large reductions called for in today's action would substantially reduce ozone levels nationwide and would therefore reduce ozone levels and design values in the areas projected to otherwise exceed the 8-hour standard as well as in those areas facing potentially significant maintenance challenges. 2. Cars and Light-Duty Trucks Are a Big Part of the NO<INF>X</INF> and VOC Inventory, and Today's Proposal Would Reduce This Contribution Substantially Emissions of VOCs and NO<INF>X</INF> come from a variety of sources, both natural and from human activity. 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. Human-caused 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. NO<INF>X</INF> emissions are dominated by human 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 NO<INF>X</INF> emissions. In 1996, cars and light trucks comprised 25 percent of the VOC emissions and 21 percent of the NO<INF>X</INF> emissions from human sources in the U.S.<SUP>17</SUP> The contribution in metropolitan areas was generally larger. --------------------------------------------------------------------------- \17\ Emission Trend Report, 1997. --------------------------------------------------------------------------- Motor vehicle emission controls have led to significant improvements in emission levels in the air (the ``emission inventory'') and will continue to do so in the near term. As a result of 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, total emissions from the car and light truck fleet are projected to continue to decline through the next decade, reaching a low point for NO<INF>X</INF> in 2013 (Figure III-1) and for VOC in 2015.<SUP>18</SUP> On a per mile basis, average VOC and NO<INF>X</INF> emissions from cars and light trucks combined will continue to decline well beyond 2015, reflecting the continuing effect of 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 NO<INF>X</INF> and VOC emissions for cars and light trucks will increase starting in 2013 and 2015, respectively, so that by 2030 they will have returned to levels nearly the same as they will be in 2000. In cities experiencing rapid growth, such as Charlotte, North Carolina, the near-term trend toward lower emissions tends to reverse sooner. --------------------------------------------------------------------------- \18\ 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 proposal assumes for the base scenario a continuation of the NLEV program past 2004. It also includes all other control measures assumed to be implemented for the purposes of the proposed state-level NO<INF>X</INF> budgets in the Regional Ozone Transport Rule, such as reformulated gasoline in all required and opt-in areas and enhanced I/M where required. --------------------------------------------------------------------------- Figure III-1 illustrates this expected trend in car and light truck NO<INF>X</INF> emissions in the absence of today's proposed standards for vehicles and gasoline. 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 NO<INF>X</INF> emissions; the decrease in overall light-duty emission levels is due solely to reductions in LDV emissions. In 2000, we project that trucks will produce about 50 percent of combined car and light truck NO<INF>X</INF> emissions. We project that truck emissions will actually increase after 2000, and over the next 30 years, trucks will grow to dominate light-duty NO<INF>X</INF> emissions. By 2007, we project trucks will make up two- thirds of light-duty NO<INF>X</INF> emissions; by 2020, nearly three- quarters of all light-duty NO<INF>X</INF> emissions will be produced by trucks. BILLING CODE 6560-50-P [[Page 26015]] [GRAPHIC] [TIFF OMITTED] TP13MY99.000 BILLING CODE 6560-50-C [[Page 26016]] Today's action would significantly decrease NO<INF>X</INF> and VOC emissions from cars and light trucks, and would delay the date by which NO<INF>X</INF> and VOC emissions would begin to increase due to continued VMT growth. With Tier 2/Sulfur control, light-duty vehicle NO<INF>X</INF> and VOC emissions are projected to continue their downward trend past 2020. Table III-3 shows the annual tons of NO<INF>X</INF> that we project would be reduced if today's proposal were adopted.<SUP>19</SUP> These projections include the benefits of low sulfur fuel and the introduction of Tier 2 car and light truck standards. --------------------------------------------------------------------------- \19\ Today's proposed standards for both vehicles and fuels would apply in 49 states and the U.S. territories, excluding only California. If today's proposal is adopted, there would also be emissions reductions in California from vehicles that relocate or visit from other states. However, much of the emissions inventory analysis for this proposal was made for a 47-state region that excludes California, Alaska, and Hawaii, since these states were not included in the scope of ozone modeling. Table III-3.--NO<INF>X</INF> Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to Tier 2/Sulfur Control <SUP>a</SUP> ---------------------------------------------------------------------------------------------------------------- Light-duty Light-duty percent of Light-duty Year tons without total without tons reduced tier 2 tier 2 by tier 2 <SUP>b</SUP> (percent) ---------------------------------------------------------------------------------------------------------------- 2007............................................................ 3,218,530 17 795,734 2010............................................................ 3,041,639 17 1,182,323 2015............................................................ 3,020,806 17 1,778,881 2020............................................................ 3,221,151 18 2,198,113 ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> Estimates exclude California, Alaska, and Hawaii, although reductions would occur in all three. For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. For the ``Without Tier 2'' case, the estimates reflect continuation of NLEV beyond 2004. <SUP>b</SUP> Does not include emission reductions from heavy-duty gasoline vehicles. The lower sulfur levels proposed today would 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 would be achieved from vehicles that 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 would meet the new sulfur limit and when large numbers of 2004 and newer vehicles meeting the proposed standards would be in use, the combined NO<INF>X</INF> emission reduction from vehicles and fuels would be nearly 800,000 tons per year. After 2007, emissions would be reduced further as the fleet turned over to Tier 2 vehicles operating on low sulfur fuel. By 2020, NO<INF>X</INF> emissions would be reduced by two-thirds from the levels that would occur if today's proposal were not adopted. This reduction equals the NO<INF>X</INF> emissions from over 166 million pre-Tier 2/Sulfur cars and light trucks. This reduction would represent a 12 percent NO<INF>X</INF> reduction in emissions from all manmade sources. VOC emissions would also be reduced by today's proposal, with reductions increasing as the fleet turns over. The reductions as a percent of emissions from cars and light trucks would be 5 percent in 2007 and grow to 16 percent in 2020. As discussed earlier, in California, smaller but still substantial reductions in both NO<INF>X</INF> and VOC would be achieved because vehicles visiting and relocating to California would be designed to meet today's proposed standards. Also, vehicles from California visiting other states would not be exposed to high sulfur fuel. These estimates of emission reductions reflect a mixture of urban, suburban, and rural areas. As we noted in the Tier 2 Study, 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-4. Inventory shares in 2010 are about the same. These results confirm that light-duty vehicles make up a greater share of the NO<INF>X</INF> emission inventories in urban areas than they do in the nationwide inventory. While these vehicles' share of national NO<INF>X</INF> emissions in 2007 is about 17 percent, it is estimated to be about 38 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 33 percent. In metropolitan areas with high car and light truck contributions, today's proposal would represent a larger step toward attainment since it would have a larger effect on total emissions. Table III-4.--Proportion of the Total Urban Area NO<INF>X</INF> and VOC Inventory in 2007 Attributable to Light-Duty Vehicles <SUP>a</SUP> ------------------------------------------------------------------------ NO<INF>X</INF> VOC Region (percent) (percent) ------------------------------------------------------------------------ Nationwide <SUP>a</SUP>...................................... 17 18 New York urban area............................... 29 15 Atlanta urban area................................ 38 33 Charlotte urban area.............................. 18 15 ------------------------------------------------------------------------ <SUP>a</SUP> For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. 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 8-hour ozone standard. For this analysis, we included the implementation of the Regional Ozone Transport Rule but assumed that today's proposal was not implemented. In the previously referenced NAAQS RIA we estimated additional NO<INF>X</INF> emission reductions that, along with specific accompanying VOC reductions, would bring each residual nonattainment area into attainment with the 8-hour ozone [[Page 26017]] standard by 2010. We have used these estimated reductions as the basis for Table III-5, which shows the NO<INF>X</INF> reductions needed to reach attainment in 2007 for six metropolitan areas.<SUP>20</SUP> These are areas for which both the NAAQS RIA and the ozone modeling for this proposal forecasted continued 8-hour nonattainment in that year, even with the emission reductions from the Regional Ozone Transport Rule. --------------------------------------------------------------------------- \20\ We calculated the estimated reductions needed for attainment in 2007 by adding the reductions due to NLEV vehicles entering the fleet between 2007 and 2010 to the estimated reductions needed for attainment in 2010. --------------------------------------------------------------------------- Table III-5 also shows the NO<INF>X</INF> emission reductions in those same six areas that we project would result if today's proposal were implemented. Although the two analyses differ in some emission modeling estimates, the comparison is valid as a general indication of the contribution today's proposal can make to attainment. Cars and light trucks contribute about 20 to 40 percent of the NO<INF>X</INF> inventory in these six areas. The NO<INF>X</INF> reductions estimated for today's proposal range from 19 to 50 percent of the reductions that are estimated to be needed for attainment. 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; as described in the next section, we project that about 20 other areas in the eastern U.S. would also need reductions beyond those of today's proposed program to attain the NAAQS for NO<INF>X</INF>. Table III-5.--Comparison of Tier 2/Sulfur NO<INF>X</INF> Reductions to NO<INF>X</INF> Reductions Estimated to Produce 8-Hour Ozone Attainment in 2007 ---------------------------------------------------------------------------------------------------------------- Tier 2/sulfur NO<INF>X</INF> reductions NO<INF>X</INF> reductions NO<INF>X</INF> reductions estimated to from proposed as percent of Metro area produce tier 2/sulfur reductions to attainment standards produce (tons/year) (tons/year) attainment ---------------------------------------------------------------------------------------------------------------- Atlanta......................................................... 69,802 17,271 25 Dallas.......................................................... 41,283 14,761 36 Memphis......................................................... 7,343 3,683 50 NY-NJ-CT........................................................ 186,880 35,906 19 Philadelphia.................................................... 63,456 19,942 31 Washington, DC-Baltimore........................................ 62,519 22,673 36 ---------------------------------------------------------------------------------------------------------------- 3. Tier 2/Sulfur Ozone Benefits and the Post-Tier 2/Sulfur Ozone Problem By reducing ozone precursor emissions from cars and light trucks in areas where ozone levels are near or above the ozone standard, today's proposal would reduce local ozone levels. And by reducing ozone precursor emissions in upwind areas, today's proposal would reduce ozone and ozone precursor levels in the air flowing into areas where ozone levels are high. EPA's analysis of the ozone impact of today's proposal suggests that it would yield large reductions in ozone, particularly in areas where ozone transport plays a significant role in local nonattainment problems. There are uncertainties associated with the modeling we have used to estimate these reductions, but we are certain that the emission reductions would be large. Ozone levels in a few locations in the centers of large metropolitan areas are VOC-limited; that is, the atmospheric chemistry is such that ozone levels tend to respond to VOC reductions rather than to NO<INF>X</INF> reductions. Some of these areas may experience essentially no change or a slight ozone increase on some days, if one considers only the isolated effect of the emission reductions due to today's proposal. However, it has long been recognized that metropolitan areas containing such locations will need to implement additional VOC reductions from local sources to reach attainment. If these reductions and the reductions from today's proposal were combined, the net effect would be a progressive drop in ozone levels until attainment is reached. To examine the impact of today's proposal on ozone levels, we estimated the ozone effects of the emission reductions that would occur in 2007 and 2010 for the area covered by the OTAG ozone model. The 1- hour ozone reductions in 2007 are relevant to the several 1-hour nonattainment areas required to reach attainment in that year. The 8- hour reductions in 2007 and 2010 are of great relevance to the efforts of states to achieve attainment with the 8-hour ozone standard, since for many areas these dates bracket the three ``clean'' years required to show attainment by their actual deadline. The estimated emission reductions from our proposal in 2007 and 2010 would be substantial due to the effect of low sulfur fuel on the entire in-use fleet of gasoline vehicles and trucks of all sizes, especially those designed to meet NLEV standards, and due to the fact that many cleaner 2004 and newer vehicles would be on the road. Table III-6 provides a summary of the 1-hour ozone results for the OTAG modeling area for 2007. Table III-7 provides a summary of the 2007 and 2010 results for the 8-hour standard. According to our best modeling, the reductions in 2007 would make the difference between nonattainment and attainment for four metropolitan areas with a combined 1990 population of 15 million people. In 2010, we estimate that the Tier2/ Sulfur reductions would be enough by themselves to bring eight metropolitan areas with 13 million people into attainment with the 8- hour standard. Tables III-6 and III-7 indicate that we project that some areas would not attain with only the emission reductions from the Tier 2/ Sulfur proposal. However, we do project that those areas would experience reductions in ozone levels. These reductions would mean that even the areas that are not brought all the way to attainment would not need to reduce emissions from other sources as much as would be required without today's proposal, as previously explained. Of the 18 areas that we projected would not be brought to attainment with the 8- hour standard in 2010, we project that 10 areas would [[Page 26018]] have design values within 5 percent of the standard. Today's proposal would also benefit ozone nonattainment areas outside of the OTAG modeling region, including the one area (Phoenix, Arizona) projected to be in nonattainment for ozone in 2010 in the absence of Tier 2/Sulfur controls. The Tier 2/Sulfur controls being proposed today would help Phoenix attain the ozone standard, particularly since cars and light trucks are a relatively large part of the Phoenix emission inventory. These controls also would help the 11 areas projected to face potential maintenance challenges stay in attainment as their economies and populations grow. And as already mentioned, because about 7 to 10 percent of travel in California is by non-California vehicles, there would be a substantial benefit in that state also. Table III-6.--Projected Tier 2/Sulfur Impact on Potential 1-Hour Ozone Problem Areas in the OTAG Region in 2007 <SUP>a</SUP> ---------------------------------------------------------------------------------------------------------------- 2007 without 2007 with tier Change due to tier 2/sulfur 2/sulfur tier 2/sulfur ---------------------------------------------------------------------------------------------------------------- Design values projected to be in excess of the 1-Hour NAAQS (<gr-thn-eq>125 ppb) ---------------------------------------------------------------------------------------------------------------- Number of Metropolitan Areas.................................... 8 4 -4 Number of Rural Counties........................................ 2 2 0 1990 Population of Metropolitan Areas and Rural Counties 39 24 -15 (millions)..................................................... ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. For the ``Without Tier 2/Sulfur'' case, the estimates reflect continuation of NLEV beyond 2004. Table III-7.--Projected Tier 2/Sulfur Impact on Potential 8-Hour Ozone Problem Areas in the OTAG Region in 2007 and 2010 <SUP>a</SUP> ---------------------------------------------------------------------------------------------------------------- Without tier 2/ With tier 2/ Change due to sulfur sulfur tier 2/sulfur ---------------------------------------------------------------------------------------------------------------- Design values projected to be in excess of the 8-Hour NAAQS (<gr-thn-eq>85 ppb) in 2007 ---------------------------------------------------------------------------------------------------------------- Number of Metropolitan Areas.................................... 28 25 -3 Number of Rural Counties........................................ 4 3 -1 1990 Population of Metropolitan Areas and Rural Counties 80 72 -8 (millions)..................................................... ---------------------------------------------------------------------------------------------------------------- Design values projected to be in excess of the 8-Hour NAAQS (<gr-thn-eq>85 ppb) in 2010 ---------------------------------------------------------------------------------------------------------------- Number of Metropolitan Areas.................................... 26 <SUP>b</SUP> 18 -8 Number of Rural Counties........................................ 3 3 0 1990 Population of Metropolitan Areas and Rural Counties 78 65 -13 (millions)..................................................... ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. For the ``Without Tier 2/Sulfur'' case, the estimates reflect continuation of NLEV beyond 2004. <SUP>b</SUP> Of these 18 areas predicted to remain nonattainment, 10 would be within 5 percent of the 8-hour ozone standard. Much larger VOC and NO<INF>X</INF> emission reductions would occur in 2020, when the vehicle fleet would be almost fully turned over to Tier 2 vehicles. The 2020 scenario is designed to help evaluate the long-term impact of today's proposal on ozone levels, when the majority of the vehicle fleet would consist of vehicles that meet the standards being proposed today. We present three indicators of the benefits of today's proposed program in 2020. First, as shown in Table III-3, that today's proposal would reduce NO<INF>X</INF> emissions in 2020 by over 2,000,000 tons per year, not counting reductions in California, Hawaii, and Alaska. The reduction in each nonattainment area would also be very substantial. Second, we have estimated how much design values in 2020 would change due to today's proposal. For all counties projected to need emission reductions beyond the ROTR, the average reduction in 2020 design value was 6 ppb, or almost 8 percent of the 8-hour standard itself. The range of design value reductions was 3 to 12 ppb. These results included only the region covered by the OTAG ozone model. Third, when we analyzed the 2020 scenario to take into account the duration, severity, and geographic extent of high ozone levels, we found that projected excessive 8-hour ozone levels, defined as grid cell-days above 85 ppm ozone, were reduced by 43 percent. The baseline scenario against which the ozone effects of today's proposed standards in 2020 were compared assumes that no emission control efforts beyond those assumed in the ROTR are implemented. We believe this approximation is reasonable because our inventory modeling shows that in 2020, total human-caused emissions in the absence of today's proposed program change very little from their 2007 levels. We subtracted the emission benefits of today's proposed program in 2020 from those baseline emissions to approximate the emissions that would result in 2020. We expect the requirement to achieve attainment with the 8-hour standard will cause states with residual nonattainment areas to adopt additional controls in pursuit of their attainment obligations. The increasingly large emission reductions from today's proposal that would occur over time would be of great value to those areas since these areas would not need to implement as extensive or stringent additional controls as would otherwise be the case. Furthermore, once an area reaches attainment, it must adopt a SIP revision containing a strategy to maintain the standard thereafter. The reductions from today's proposal would help such areas overcome any loss of reductions due to less-than-expected effectiveness from other controls, provide a safety margin against the chance of new ozone violations, provide room for population and economic growth to cause increases in emissions [[Page 26019]] from other sources with less need for the maintenance plan to increase the stringency of controls on those other sources, and possibly even allow selective relaxation of other control programs. Because the ozone modeling for 2020 did not account for the additional measures that states will adopt to attain and maintain the ozone standard, an attainment vs. nonattainment distinction does not apply in 2020. Instead, the changes that today's proposal would achieve in 2020 precursor emissions and in predicted ozone concentrations are more appropriate indicators of the benefits of the Tier2/Sulfur program than would be a count of the areas that have design values move from above to below the ozone standard. These ozone results for 2007, 2010, and 2020 represent the best modeling currently available to us, but should be considered approximate. The Regulatory Impact Analysis documents all the methods and assumptions used. The results presented are estimates of the future that only apply to the OTAG region rather than the entire area that would be subject to today's proposal. As previously mentioned, there would also be ozone benefits outside this region, particularly for nonattainment areas in California and for Phoenix, Arizona. We expect to revise our ozone effects estimates prior to the final rule to reflect further improvements in estimates of emissions from both mobile and stationary sources. In addition to the emission-reduction and ozone-reduction benefits discussed above that we expect will result from the proposed rule, we have done a separate analysis of economic benefits (and costs) associated with the expected ozone reductions from today's proposed program (see Section IV.D.5. below and the RIA). C. Particulate Matter 1. Particulate Matter Presents Substantial Public Health Risks Particulate matter (PM) is produced as a direct result of human activity and natural processes, and it is also formed through chemical and physical processes in the atmosphere. Natural sources include windblown dust, salt from dried sea spray, fires, and volcanoes, as well as so-called secondary particles formed from the transformation of natural emissions of SO<INF>X</INF>, NO<INF>X</INF>, and VOCs. Human sources include industrial activities, agriculture, road dust, and soot, as well as secondary particles produced from gases such as SO<INF>X</INF>, NO<INF>X</INF>, and VOCs that are emitted primarily from combustion processes. PM includes fine particles with a diameter smaller than 2.5 microns (also called PM<INF>2.5</INF>) and coarse particles with larger diameters. Coarse particles are predominantly from non-combustion sources and are dominated by soil dust and sea salt. They remain in the atmosphere a relatively short period of time. Fine particulate includes carbon-based particles emitted directly from combustion processes but consists predominantly of secondary particles, such as sulfate-based particles (produced from SO<INF>X</INF>), nitrate-based particles (produced from NO<INF>X</INF>), and carbon- based particles created through transformation of VOC emissions. Mobile sources can reasonably be estimated to contribute to ambient secondary nitrate, sulfate and carbonaceous PM in proportion to their contribution to total NO<INF>X</INF>, SO<INF></INF>, and VOC emissions. In 1997, 8 million Americans were living in 13 counties that exceeded the recently revised PM<INF>10</INF> standard, and PM<INF>10</INF> problems are projected to persist in the absence of further actions to control PM<INF>10</INF> levels. Table III-8 presents estimates of the extent of PM<INF>10</INF> and PM<INF>2.5</INF> nonattainment in the future. In the NAAQS RIA, we projected that in 2010, eleven counties with a combined 1990 population of about 10 million people would not be in attainment with the revised PM<INF>10</INF> standards.<SUP>21</SUP> About half of the affected population lives outside of California. In the same analysis, 102 counties were projected to violate the new PM<INF>2.5</INF> NAAQS, with a combined 1990 population of about 55 million people. About 75 percent of the affected population lives outside of California. (More information about this analysis and its uncertainties may be found in the NAAQS RIA and the Tier 2 Report to Congress.) Ambient PM reductions from more stringent motor vehicle or fuel standards would primarily affect areas outside of California, because California has its own motor vehicle emission control program. California areas would also benefit, however, through the temporary travel and permanent migration of out-of-state vehicles into California, as discussed above. --------------------------------------------------------------------------- \21\ The methods used to project PM concentrations in 2010 from 1990 emissions and ambient concentration data introduce several sources of uncertainty. Also, the PM<INF>2.5</INF> values are predicted from a regression model and hence are subject to the uncertainty associated with this model. Other uncertainties exist regarding emission inventory estimates from human and natural sources, monitoring data, and the models used to account for physical and chemical processes in the atmosphere. Even with the anticipated delivery of more comprehensive modeling techniques, the scarcity of speciated ambient PM data in both urban and rural areas to evaluate model behavior will continue to compromise the certainty of the best model-derived conclusions. Table III-8.--Projected 2010 PM<INF>10</INF>/PM<INF>2.5</INF> Nonattainment Counties and Populations ------------------------------------------------------------------------ Outside California California ------------------------------------------------------------------------ Violating Original PM<INF>10</INF> NAAQS ------------------------------------------------------------------------ Number of Counties............................ 33 12 1990 Population (millions).................... 11 7 ------------------------------------------------------------------------ Violating Revised PM<INF>10</INF> NAAQS ------------------------------------------------------------------------ Number of Counties............................ 5 6 1990 Population (millions).................... 5 5 ------------------------------------------------------------------------ Violating New PM<INF>2.5</INF> NAAQS ------------------------------------------------------------------------ Number of Counties............................ 92 10 1990 Population (millions).................... 42 13 ------------------------------------------------------------------------ A significant number of areas are projected to exceed the PM<INF>10</INF> NAAQS in 2010 with existing emission controls, indicating that further PM and PM-precursor emission reductions will be needed. Because the bulk of PM emissions from motor vehicles are fine particles, any reduction in particulate emissions from motor vehicles aimed at reducing PM<INF>10</INF> levels would also reduce ambient levels of PM<INF>2.5</INF>. As mentioned above, the number of counties projected to violate the new PM<INF>2.5</INF> NAAQS is much larger than that for the revised PM<INF>10</INF> standards. Tier 2/Sulfur standards that reduce particulate emissions for the purposes of facilitating attainment with the PM<INF>10</INF> NAAQS could also benefit areas with elevated PM<INF>2.5</INF> levels. 2. Reducing Emissions From Cars and Light Trucks Would Reduce Ambient Levels Today's proposal would reduce PM levels by reducing direct PM emissions from cars and light trucks, and by reducing emissions of sulfur and nitrogen oxides that are converted to PM in the atmosphere. Direct PM emissions would be reduced in two ways. First, reductions in gasoline sulfur levels would reduce PM emissions from gasoline vehicles. Second, the more stringent PM standard included in today's proposal would reduce PM emissions from cars and light trucks equipped with diesel engines. Diesel engines are used in a small fraction of current cars and light trucks, but this [[Page 26020]] fraction could grow as discussed in III.C.3. below. With no growth in diesel sales, we project today's action would reduce direct PM emissions from cars and light trucks mainly due to the introduction of low-sulfur gasoline. Sulfur-based particles account for a substantial portion of the particulate matter emitted by gasoline- powered vehicles. More stringent PM emission standards are not anticipated to alter PM emissions from gasoline vehicles but would result in reductions in diesel PM emissions. The overall effect of today's proposal under this assumption would be to reduce direct exhaust PM emissions from cars and light trucks by 60 percent in 2007 and by 62-63 percent in 2015 and beyond. Tables III-9 and III-10 show the contribution of cars and light trucks to total PM<INF>10</INF> and PM<INF>2.5</INF> emissions, and the reductions that would be obtained from today's proposal. The contribution of cars and light trucks to either PM inventory will generally be higher in urban areas than on a nationwide basis, and will vary from area to area. In 2007, for example, cars and light trucks contribute 1.3 percent to the nationwide PM<INF>10</INF> inventory (excluding natural sources and fugitive dust). For comparison, this percentage is estimated to be 4.4 percent in Atlanta and 1.9 percent in the New York City metropolitan area. Later in this section we discuss the possibility that sales of diesel-powered vehicles might increase from current levels, making the effect of the more stringent PM standard in this proposal larger. Table III-9.--Direct exhaust PM<INF>10</INF> Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to Tier 2/Sulfur Control<SUP>a,b</SUP> ---------------------------------------------------------------------------------------------------------------- Light-duty Light-duty percent of Light-duty Year tons without total without tons reduced tier 2 tier 2 by tier 2 ---------------------------------------------------------------------------------------------------------------- 2007............................................................ 39,209 1.3 23,379 2010............................................................ 41,412 1.4 25,239 2015............................................................ 46,064 1.4 28,674 2020............................................................ 51,102 1.5 32,031 ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> For all cases, this table reflects continuation of current diesel engine usage in the light truck fleet and implementation of ROTR and other measures assumed in the ROTR. <SUP>b</SUP> The emission estimates shown exclude natural sources of PM and fugitive dust. They also do not include California (which has its own vehicle and fuel standards), Alaska, or Hawaii. Today's proposal would have additional emission benefits in these states. Table III-10.--Direct exhaust PM<INF>2.5</INF> Emissions From Cars and Light Trucks As Percent of Total Emissions, and Reductions Due to Tier 2/Sulfur Control <SUP>a,b</SUP> ---------------------------------------------------------------------------------------------------------------- Light-duty Light-duty percent of Light-duty Year tons without total without tons reduced tier 2 tier 2 by tier 2 ---------------------------------------------------------------------------------------------------------------- 2007............................................................ 36,365 1.7 21,687 2010............................................................ 38,409 1.8 23,410 2015............................................................ 42,724 1.9 26,595 2020............................................................ 47,397 2.0 29,707 ---------------------------------------------------------------------------------------------------------------- <SUP>a</SUP> For all cases, this table reflects continuation of current diesel engine usage in the light truck fleet and implementation of ROTR and other measures assumed in the ROTR. <SUP>b</SUP> The emission estimates shown exclude natural sources of PM and fugitive dust. They also do not include California (which has its own vehicle and fuel standards), Alaska, or Hawaii. Today's proposal would have additional emission benefits in these states. Even larger PM reductions would result from the reductions in the sulfur oxides (SO<INF>X</INF>), NO<INF>X</INF>, and VOC emissions that give rise to secondary PM that would result from today's proposal. The reduction in ambient PM levels that would come from the proposed reductions in these precursor emissions is about 6 to 7 times as large as the reduction from lower emissions of direct PM. Essentially all secondary PM is fine PM and hence is included in estimates of both PM<INF>10</INF> and PM<INF>2.5</INF>. We described the effect of today's proposal on VOC and NO<INF>X</INF> emissions above in Section III.B. Today's proposal also would reduce SO<INF>X</INF> emissions from cars and light trucks by dramatically lowering the level of sulfur in gasoline, since gaseous SO<INF>X</INF> emissions are dependent entirely on fuel sulfur level. In the absence of today's proposal, we project that SO<INF>X</INF> emissions from cars and light trucks will increase steadily in conjunction with VMT growth, from approximately 216,000 tons in 2005 to 300,000 tons in 2020--an increase of almost 40 percent (total nationwide SO<INF>X</INF> emissions from all sources was 20,000,000 tons in 1997). Today's proposal would reduce SO<INF>X</INF> emissions from all gasoline-powered engines, including cars, light trucks, heavy- duty gasoline vehicles, and gasoline-powered nonroad engines, in any year by 90 percent, once all gasoline meets the proposed sulfur limit. The same percentage reductions in SO<INF>X</INF> emissions would occur in subsequent years. The absolute emission reduction increases with time, however, due to growth in VMT and nonroad engine use. Table III- 11 shows the impact of today's proposal on SO<INF>X</INF> emissions. [[Page 26021]] Table III-11.--SO<INF>x</INF> Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to Tier 2/Sulfur control <SUP>a</SUP> ---------------------------------------------------------------------------------------------------------------- Light-duty Light-duty percent of Light-duty Year tons without total without tons reduced tier 2 tier 2 by tier 2 ---------------------------------------------------------------------------------------------------------------- 2007..................................................