[Federal Register: February 10, 2000 (Volume 65, Number 28)]
[Rules and Regulations]               
[Page 6697-6746]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10fe00-18]                         
 



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Part II





Environmental Protection Agency





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40 CFR Parts 80, 85, and 86



Control of Air Pollution From New Motor Vehicles: Tier 2 Motor Vehicle 
Emissions Standards and Gasoline Sulfur Control Requirements; Final 
Rule


[[Page 6698]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80, 85, and 86

[AMS-FRL-6516-2]
RIN 2060-AI23

 
Control of Air Pollution From New Motor Vehicles: Tier 2 Motor 
Vehicle Emissions Standards and Gasoline Sulfur Control Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today's action finalizes a major program designed to 
significantly reduce the emissions from new passenger cars and light 
trucks, including pickup trucks, vans, minivans, and sport-utility 
vehicles. These reductions will provide for cleaner air and greater 
public health protection, primarily by reducing ozone and PM pollution. 
The program is a comprehensive regulatory initiative that treats 
vehicles and fuels as a system, combining requirements for much cleaner 
vehicles with requirements for much lower levels of sulfur in gasoline. 
A list of major highlights of the program appears at the beginning of 
the SUPPLEMENTARY INFORMATION section of this Federal Register.
    The program we are finalizing today will phase in a single set of 
tailpipe emission standards that will, for the first time, apply to all 
passenger cars, light trucks, and larger passenger vehicles operated on 
any fuel. This set of ``Tier 2 standards'' is feasible and the use of a 
single set of standards is appropriate because of the increased use of 
light trucks for personal transportation. The miles traveled in light 
trucks is increasing and the emissions from these vehicles are thus an 
increasing problem. This approach builds on the recent technology 
improvements resulting from the successful National Low-Emission 
Vehicles (NLEV) program.
    To enable the very clean Tier 2 vehicle emission control technology 
to be introduced and to maintain its effectiveness, we are also 
requiring reduced gasoline sulfur levels nationwide. The reduction in 
sulfur levels will also contribute directly to cleaner air in addition 
to its beneficial effects on vehicle emission control systems. Refiners 
will generally install additional refining equipment to remove sulfur 
in their refining processes. Importers of gasoline will be required to 
import and market only gasoline meeting the sulfur standards. Today's 
action also introduces an averaging, banking, and trading program to 
provide flexibility for refiners and ease implementation of the 
gasoline sulfur control program.
    The overall program focuses on reducing the passenger car and light 
truck emissions most responsible for causing ozone and particulate 
matter problems. Without today's action, we project that emissions of 
nitrogen oxides from these vehicles will represent as much as 40 
percent of this ozone-forming pollutant in some cities, and almost 20 
percent nationwide, by the year 2030.
    Today's program will bring about major reductions in annual 
emissions of these pollutants and also reduce the emissions of sulfur 
compounds resulting from the sulfur in gasoline. For example, we 
project a reduction in oxides of nitrogen emissions of at least 856,000 
tons per year by 2007 and 1,236,000 by 2010, the time frame when many 
states will have to demonstrate compliance with air quality standards. 
Emission reductions will continue increasing for many years, reaching 
at least 2,220,000 tons per year in 2020 and continuing to rise further 
in future years. In addition, the program will reduce the contribution 
of vehicles to other serious public health and environmental problems, 
including VOC, PM, and regional visibility problems, toxic air 
pollutants, acid rain, and nitrogen loading of estuaries.
    Furthermore, we project that these reductions, and their resulting 
environmental benefits, will come at an average cost increase of less 
than $100 per passenger car, an average cost increase of less than $200 
for light trucks, and an average cost increase of about $350 for 
medium-duty passenger vehicles, and an average increase of less than 2 
cents per gallon of gasoline (or about $120 over the life of an average 
vehicle).

DATES: This rule is effective April 10, 2000.
    The incorporation by reference of certain publications contained in 
this rule are approved by the Director of the Federal Register as of 
April 10, 2000.

ADDRESSES: Comments: All comments and materials relevant to today's 
action have been placed in Public Docket No. A-97-10 at the following 
address: U.S. Environmental Protection Agency (EPA), Air Docket (6102), 
Room M-1500, 401 M Street, S.W., Washington, D.C. 20460. EPA's Air 
Docket makes materials related to this rulemaking available for review 
at the above address (on the ground floor in Waterside Mall) from 8:00 
a.m. to 5:30 p.m., Monday through Friday, except on government 
holidays. You can reach the Air Docket by telephone at (202) 260-7548 
and by facsimile at (202) 260-4400. We may charge a reasonable fee for 
copying docket materials, as provided in 40 CFR Part 2.

FOR FURTHER INFORMATION CONTACT: Carol Connell, U.S. EPA, National 
Vehicle and Fuels Emission Laboratory, 2000 Traverwood, Ann Arbor MI 
48105; Telephone (734) 214-4349, FAX (734) 214-4816, E-mail 
connell.carol@epa.gov.

SUPPLEMENTARY INFORMATION:

Highlights of the Tier2/Gasoline Sulfur Program

    For cars, and light trucks, and larger passenger vehicles, the 
program will--

    <bullet> Starting in 2004, through a phase-in, apply for the first 
time the same set of emission standards covering passenger cars, light 
trucks, and large SUVs and passenger vehicles. These emission levels 
(``Tier 2 standards'') are feasible for these vehicles. The Tier 2 
standards are also appropriate because of the increased use of light 
trucks for personal transportation--the miles traveled in light trucks 
is increasing and the emissions from these vehicles are thus an 
increasing problem.
    <bullet> Introduce a new category of vehicles, ``medium-duty 
passenger vehicles,'' thus bringing larger passenger vans and SUVs into 
the Tier 2 program.
    <bullet> During the phase-in, apply interim fleet emission average 
standards that match or are more stringent than current federal and 
California ``LEV I'' (Low-Emission Vehicle, Phase I) standards.
    <bullet> Apply the same standards to vehicles operated on any fuel.
    <bullet> Allow auto manufacturers to comply with the very stringent 
new standards in a flexible way while ensuring that the needed 
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.
    <bullet> Set more stringent evaporative emission standards.
    For commercial gasoline, the program will--

    <bullet> Significantly reduce average gasoline sulfur levels 
nationwide as early as 2000, fully phased in in 2006. Refiners will 
generally add refining equipment to remove sulfur in their refining 
processes. Importers of gasoline will be required to import and market 
only gasoline meeting the sulfur limits.

[[Page 6699]]

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

Regulated Entities

    This action will affect you if you produce new motor vehicles, 
alter individual imported motor vehicles to address U.S. regulation, or 
convert motor vehicles to use alternative fuels. It will also affect 
you if you produce, distribute, or sell gasoline motor fuel.
    The table below gives some examples of entities that may have to 
comply with the regulations. But because these are only examples, you 
should carefully examine these and existing regulations in 40 CFR parts 
80 and 86. If you have questions, call the person listed in the FOR 
FURTHER INFORMATION CONTACT section above.

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                                                                                     Examples of potentially
                   Category                       NAICS codes    SIC Codes \b\         regulated entities
------------------------------------------------------\a\-------------------------------------------------------
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
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

Access to Rulemaking Documents Through the Internet

    Today's action is available electronically on the day of 
publication from the Office of the Federal Register Internet Web site 
listed below. Electronic copies of this preamble and regulatory 
language as well as the Response to Comments document, the Regulatory 
Impact Analysis and other documents associated with today's final rule 
are available from the EPA Office of Mobile Sources Web site listed 
below shortly after the rule is signed by the Administrator. This 
service is free of charge, except any cost that you already incur for 
connecting to the Internet.

Federal Register Web Site: http://www.epa.gov/docs/fedrgstr/epa-air/ 
(Either select a desired date or use the Search feature.)
Office of Mobile Sources (OMS) Web Site: http://www.epa.gov/oms/ (Look 
in ``What's New'' or under the ``Automobiles'' topic.)

    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc., may occur.

Outline of This Preamble

I. Introduction
    A. What Are the Basic Components of the Program?
    1. Vehicle Emission Standards
    2. Gasoline Sulfur Standards
    B. What Is Our Statutory Authority for Today's Action?
    1. Light-Duty Vehicles and Trucks
    2. Gasoline Sulfur Controls
    C. The Tier 2 Study and the Sulfur Staff Paper
    D. Relationship of Diesel Fuel Sulfur Control to the Tier 2/
Gasoline Sulfur Program
II. Tier 2 Determination
    A. There Is a Substantial Need for Further Emission Reductions 
in Order To Attain and Maintain National Ambient Air Quality 
Standards
    B. More Stringent Standards for Light-Duty Vehicles and Trucks 
Are Technologically Feasible
    C. More Stringent Standards for Light-Duty Vehicles and Trucks 
Are Needed and Cost Effective Compared to Available Alternatives
III. Air Quality Need For and Impact of Today's Action
    A. Americans Face Serious Air Quality Problems That Require 
Further Emission Reductions
    B. Ozone
    1. Background on Ozone Air Quality
    2. Additional Emission Reductions Are Needed To Attain and 
Maintain the Ozone NAAQS.
    a. Summary
    b. Ozone Modeling Presented in Our Proposal and Supplemental 
Notice
    c. Updated and Additional Ozone Modeling
    d. Results and Conclusions
    e. Issues and Comments Addressed
    f. 8-Hour Ozone
    3. Cars and Light-Duty Trucks Are a Big Part of the 
NO<INF>X</INF> and VOC Emissions, and Today's Action Will Reduce 
This Contribution Substantially
    4. Ozone Reductions Expected From This Rule
    C. Particulate Matter
    1. Background on PM
    2. Need for Additional Reductions to Attain and Maintain the 
PM<INF>10</INF> NAAQS
    3. PM<INF>25</INF> Discussion
    4. Emission Reductions and Ambient PM Reductions
    D. Other Criteria Pollutants: Carbon Monoxide, Nitrogen Dioxide, 
Sulfur Dioxide
    E. Visibility

[[Page 6700]]

    F. Air Toxics
    G. Acid Deposition
    H. Eutrophication/Nitrification
    I. Cleaner Cars and Light Trucks Are Critically Important to 
Improving Air Quality
IV. What Are the New Requirements for Vehicles and Gasoline?
    A. Why Are We Proposing Vehicle and Fuel Standards Together?
    1. Feasibility of Stringent Standards for Light-Duty Vehicles 
and Light-Duty Trucks a. Gasoline Fueled Vehicles i. LDVs and LDT1s-
LDT4s ii. Medium-Duty Passenger Vehicles (MDPVs) b. Diesel Vehicles
    2. Gasoline Sulfur Control Is Needed To Support the Proposed 
Vehicle Standards a. How Does Gasoline Sulfur Affect Vehicle 
Emission Performance? b. How Large Is Gasoline Sulfur's Effect on 
Emissions? c. Sulfur's Negative Impact on Tier 2 Catalysts d. Sulfur 
Has Negative Impacts on OBD Systems
    B. Our Program for Vehicles
    1. Overview of the Vehicle Program a. Introduction b. Corporate 
Average NOx Standard c. Tier 2 Exhaust Emission Standard ``Bins' d. 
Schedules for Implementation i. Implementation Schedule for Tier 2 
LDVs and LLDTs ii. Implementation Schedule for Tier 2 HLDTs e. 
Interim Standards i. Interim Exhaust Emission Standards for LDV/
LLDTs ii Interim Exhaust Emission Standards for HLDTs iii. Interim 
Programs Will Provide Reductions Over Previous Standards f. 
Generating, Banking, and Trading NOx Credits
    2. Why Are We Finalizing the Same Set of Standards for Tier 2 
LDVs and LDTs?
    3. Why Are We Finalizing the Same Standards for Both Gasoline 
and Diesel Vehicles?
    4. Key Elements of the Vehicle Program a. Basic Exhaust Emission 
Standards and ``Bin'' Structure i. Why Are We Including Extra Bins? 
b. The Program Will Phase In the Tier 2 Vehicle Standards Over 
Several Years i. Primary Phase-in Schedule
    ii. Alternative Phase-in Schedule
    c. Manufacturers Will Meet a ``Corporate Average'' 
NO<INF>X</INF> Standard
    d. Manufacturers Can Generate, Bank, and Trade NO<INF>X</INF> 
Credits
    i. General Provisions
    ii. Averaging, Banking and Trading of NO<INF>X</INF> Credits 
Fulfills Several Goals
    iii. How Manufacturers Can Generate and Use NO<INF>X</INF> 
Credits
    iv. Manufacturers Can Earn and Bank Credits for Early 
NO<INF>X</INF> Reductions
    v. Tier 2 NO<INF>X</INF> Credits Will Have Unlimited Life
    vi. NO<INF>X</INF> Credit Deficits Can Be Carried Forward
    vii. Encouraging the Introduction of Ultra Clean Vehicles
    e. Interim Standards
    i. Interim Exhaust Emission Standards for LDV/LLDTs
    ii. Interim Exhaust Emission Standards for HLDTs
    f. Light-Duty Evaporative Emission Standards
    g. Passenger Vehicles Above 8,500 Pounds GVWR
    C. Our Program for Controlling Gasoline Sulfur
    1. Gasoline Sulfur Standards for Refiners and Importers
    a. Standards and Deadlines That Refiners/Importers Must Meet
    i. What Are the Per-Gallon Caps on Gasoline Sulfur Levels in 
2004 and Beyond?
    ii. What Standards Must Refiners/Importers Meet on a Corporate 
Average Basis?
    iii. What Standards Must Be Met by Individual Refineries/
Importers?
    b. Standards and Deadlines for Refiners/Importers Which Provide 
Gasoline to the Geographic Phase-in Area (GPA)
    i. Justification for Our Geographic Phase-in Approach
    ii. What Is the Geographic Phase-in Area and How Was It 
Established?
    iii. Standards/Deadlines for Gasoline Sold in the Geographic 
Phase-in Area
    iv. What Are the Per-Gallon Caps on Gasoline Sulfur Levels in 
the Phase-in Area?
    v. How Do Refiners/Importers Account for GPA Fuel in Their 
Corporate Average Calculations?
    vi. How Do Refiners/Importers Apply for the Geographic Phase-in 
Area Standards?
    vii. How Will EPA Establish the GPA in Adjacent States?
    c. How Does the Sulfur Averaging, Banking, and Trading Program 
Work?
    i. Generating Allotments Prior to 2004
    ii. Generating Allotments in 2004 and 2005
    iii. Using Allotments in 2004 and 2005
    iv. How Long Do Allotments Last?
    v. Establishing Individual Refinery Sulfur Baselines for Credit 
Generation Purposes
    vi. Generating Sulfur Credits Prior to 2004
    vii. Generating Sulfur Credits in 2004 and Beyond
    viii. Using Sulfur Credits
    ix. How Long Do Credits Last?
    x. Conversion of Allotments Into Credits
    d. How are State Sulfur Programs Affected by EPA's Program?
    2. Hardship Provision for Qualifying Refiners
    a. Hardship Provision for Qualifying Small Refiners
    i. How Are Small Refiners Defined?
    ii. Standards That Small Refiners Must Meet
    iii. How Do Small Refiners Apply for Small Refiner Status?
    iv. How Do Small Refineries Apply for a Sulfur Baseline?
    v. Volume Limitation on Use of a Small Refinery Standard
    vi. Extensions Beyond 2007 for Small Refiners
    vii. Can Small Refiners Participate in the ABT Program?
    b. Temporary Waivers From Low Sulfur Requirements in Extreme 
Unforeseen Circumstances
    c. Temporary Waivers Based on Extreme Hardship Circumstances
    3. Streamlining of Refinery Air Pollution Permitting Process
    a. Brief Summary of Proposal
    b. Significant Comments Received
    c. Today's Action
    i. Major New Source Review
    ii. Environmental Justice
    D. What Are the Economic Impacts, Cost Effectiveness and 
Monetized Benefits of the Tier 2 Program?
    1. What Are the Estimated Costs of the Vehicle Standards?
    2. Estimated Costs of the Gasoline Sulfur Standards
    3. What Are the Aggregate Costs of the Tier 2/Gasoline Sulfur 
Final Rule?
    4. How Does the Cost-Effectiveness of This Program Compare to 
Other Programs?
    a. Cost Effectiveness of this Program
    b. How Does the Cost Effectiveness of This Program Compare With 
Other Means of Obtaining Mobile Source NO<INF>X</INF>+NMHC 
Reductions?
    c. How Does the Cost Effectiveness of This 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 
Standards?
    a. What Is the Purpose of This Benefit-Cost Comparison?
    b. What Was Our Overall Approach to the Benefit-Cost Analysis?
    c. What Are the Significant Limitations of the Benefit-Cost 
Analysis?
    d. How Was the Benefit-Cost Analysis Changed From Proposal?
    e. How Did We Perform the Benefit-Cost Analysis?
    f. What Were the Results of the Benefit-Cost Analysis?
V. Other Vehicle-Related Provisions
    A. Final Tier 2 CO, HCHO and PM Standards
    1. Carbon Monoxide (CO) Standards
    2. Formaldehyde (HCHO) Standards
    3. Use of NMHC Data To Show Compliance With NMOG Standards; 
Alternate Compliance With Formaldehyde Standards.
    4. Particulate Matter (PM) Standards
    B. Useful Life
    1. Mandatory 120,000 Mile Useful Life
    2. 150,000 Mile Useful Life Certification Option
    C. Supplemental Federal Test Procedure (SFTP) Standards
    1. Background
    2. SFTP Under the NLEV Program
    3. SFTP Standards for the Interim and Tier 2 LDVs and LDTs: As 
Proposed
    4. Final SFTP Standards for Interim and Tier 2 LDVs and LDTs
    5. Adding a PM Standard to the SFTP Standards
    6. Future Efforts Relevant to SFTP Standards
    D. LDT Test Weight
    E. Test Fuels
    F. Changes to Evaporative Certification Procedures to Address 
Impacts of Alcohol Fuels
    G. Other Test Procedure Issues
    H. Small Volume Manufacturers
    1. Special Provisions for Independent Commercial Importers 
(ICIs)
    2. Hardship Provision for Small Volume Manufacturers
    I. Compliance Monitoring and Enforcement

[[Page 6701]]

    1. Application of EPA's Compliance Assurance Program, CAP2000
    2. Compliance Monitoring
    3. Relaxed In-Use Standards for Vehicles Produced During the 
Phase-in Period
    4. Enforcement of the Tier 2 and Interim Corporate Average 
NO<INF>X</INF> Standards.
    J. Addressing Environmentally Beneficial Technologies Not 
Recognized by Test Procedures
    K. Adverse Effects of System Leaks
    L. The Future Development of Advanced Technology and the Role of 
Fuels
    M. Miscellaneous Provisions
    VI. Gasoline Sulfur Program Compliance and Enforcement 
Provisions
    A. Overview
    B. Requirements for Foreign Refiners and Importers
    1. Requirements for Foreign Refiners With Individual Refinery 
Sulfur Standards or Credit Generation Baselines
    2. Requirements for Truck Importers
    C. What Standards and Requirements Apply Downstream?
    D. Testing and Sampling Methods and Requirements
    1. Test Method for Sulfur in Gasoline
    2. Test Method for Sulfur in Butane
    3. Quality Assurance Testing
    4. Requirement to Test Every Batch of Gasoline Produced or 
Imported
    5. Exceptions to the Every-Batch Testing Requirement
    6. Sampling Methods
    7. Gasoline Sample Retention Requirements
    E. Federal Enforcement Provisions for California Gasoline and 
for Use of California Test Methods to Determine Compliance
    F. Recordkeeping and Reporting Requirements
    1. Product Transfer Documents
    2. Recordkeeping Requirements
    3. Reporting Requirements
    G. Exemptions for Research, Development, and Testing
    H. Liability and Penalty Provisions for Noncompliance
    I. How Will Compliance With the Sulfur Standards Be Determined?
VII. Public Participation
VIII. Administrative Requirements
    A. Administrative Designation and Regulatory Analysis
    B. Regulatory Flexibility
    1. Potentially Affected Small Businesses
    2. Small Business Advocacy Review Panel and the Evaluation of 
Regulatory Alternatives
    C. Paperwork Reduction Act
    D. Intergovernmental Relations
    1. Unfunded Mandates Reform Act
    2. Executive Order 13084: Consultation and Coordination With 
Indian Tribal Governments
    3. Executive Order 13132 (Federalism)
    E. National Technology Transfer and Advancement Act
    F. Executive Order 13045: Children's Health Protection
    G. Congressional Review Act
IX. Statutory Provisions and Legal Authority

I. Introduction

    Since the passage of the 1990 Clean Air Act Amendments, the U.S. 
has made significant progress in reducing emissions from passenger cars 
and light trucks. The National Low-Emission Vehicle (NLEV) and 
Reformulated Gasoline (RFG) programs are important examples of control 
programs that are in place and will continue to help reduce car and 
light-duty truck emissions into the near future.
    Nonetheless, due to increasing vehicle population and vehicle miles 
traveled, passenger cars and light trucks will continue to be 
significant contributors to air pollution inventories well into the 
future. In fact, the emission contribution of light trucks and sport 
utility vehicles now matches that of passenger cars. (This is occurring 
because of the combination of growth in miles traveled by light trucks 
and the fact that their emission standards are currently less stringent 
than those of passenger cars). The program we describe below builds on 
the NLEV and RFG Phase II programs to develop a strong new national 
program to protect public health and the environment well into the next 
century. The program, while reducing VOC and other emissions, focuses 
especially on 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 
final rule:
    <bullet> Design a strong national program that will assist states 
in every region of the country to meet their air quality objectives and 
that will ensure that cars and trucks continue to contribute a fair 
share to our nation's overall air quality solutions;
    <bullet> View vehicles and fuels as an integrated system, 
recognizing that only by addressing both can the best overall emission 
performance be achieved;
    <bullet> Establish a single set of emission standards that apply 
regardless of the fuel used and whether the vehicle is a car, a light 
truck, or a larger passenger vehicle;
    <bullet> Provide compliance flexibilities that allow vehicle 
manufacturers and oil refiners to adjust to future market trends and 
honor consumer preferences;
    <bullet> Not preclude the development of advanced low emission or 
fuel efficient technologies such as lean-burn engines; and
    <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 program. Sections I and II of this 
preamble will give you a brief overview of our program and our 
rationale for implementing it. Subsequent sections will expand on the 
air quality need, technological feasibility, economic impacts, and 
provide a detailed description of the specifics of the program. A 
public participation section reviews the process we followed in 
soliciting and responding to public comment. The final sections deal 
with several administrative requirements. You may also want to review 
our Final Regulatory Impact Analysis (RIA) and our Response to Comments 
document, both of which are found in the docket and on the Internet. 
They provide additional analyses and discussions of many topics raised 
in this preamble.

A. What Are the Basic Components of the Program?

    The nation's air quality, while certainly better than in the past, 
will nevertheless continue to expose tens of millions of Americans to 
unhealthy levels of air pollution well into the future in the absence 
of significant new controls on emissions from motor vehicles. EPA is 
therefore finalizing a major, comprehensive program designed to reduce 
emission standards for passenger cars, light trucks, and large 
passenger vehicles (including sport-utility vehicles, minivans, vans, 
and pickup trucks) and to reduce the sulfur content of gasoline. Under 
the program, automakers will produce vehicles designed to have very low 
emissions when operated on low-sulfur gasoline, and oil refiners will 
provide that much cleaner gasoline nationwide. In this preamble, we 
refer to the comprehensive program as the ``Tier 2/Gasoline Sulfur 
program.''
1. Vehicle Emission Standards
    Today's action sets new federal emission standards (``Tier 2 
standards'') for passenger cars, light trucks, and larger passenger 
vehicles. The program is designed to focus on reducing the emissions 
most responsible for the ozone and particulate matter (PM) impact from 
these vehicles--nitrogen oxides (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 
will also, for the first time, apply the same set of federal standards 
to all passenger cars, light trucks, and medium-duty passenger 
vehicles. Light trucks include ``light light-duty trucks'' (or LLDTs), 
rated at less than 6000 pounds gross vehicle weight and ``heavy light-
duty trucks'' (or HLDTs), rated at more than 6000

[[Page 6702]]

pounds gross vehicle weight).\1\ ``Medium-duty passenger vehicles'' (or 
MDPVs) form a new class of vehicles introduced by this rule that 
includes SUVs and passenger vans rated at between 8,500 and 10,000 
GVWR. The program thus ensures that essentially all vehicles designed 
for passenger use in the future will be very clean vehicles.
---------------------------------------------------------------------------

    \1\ A vehicle's ``Gross Vehicle Weight Rating,'' or GVWR, is the 
curb weight of the vehicle plus its maximum recommended load of 
passengers and cargo.
---------------------------------------------------------------------------

    The Tier 2 standards finalized today will 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 will phase in 
beginning in 2004, with the standards to be fully phased in by 2007.\2\ 
For heavy LDTs and MDPVs, the Tier 2 standards will be phased in 
beginning in 2008, with full compliance in 2009.
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    \2\ 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 (larger light trucks are not 
covered). For further comparison, the standards met by today's Tier 
1 vehicles range from 0.60 g/mi to 1.53 g/mi.
---------------------------------------------------------------------------

    During the phase-in period from 2004-2007, all passenger cars and 
light LDTs not certified to the primary Tier 2 standards will have to 
meet an interim average standard of 0.30 g/mi NO<INF>X</INF>, 
equivalent to the current NLEV standards for LDVs and more stringent 
than NLEV for LDT2s (e.g., minivans).\3\ During the period 2004-2008, 
heavy LDTs and MDPVs not certified to the final Tier 2 standards will 
phase in to an interim program with an average standard of 0.20 g/mi 
NO<INF>X</INF>, with those not covered by the phase-in meeting a per-
vehicle standard (i.e., an emissions ``cap'') of 0.6 g/mi 
NO<INF>X</INF> (for HLDTs) and 0.9 g/mi NO<INF>X</INF> (for MDPVs). The 
average standards for NO<INF>X</INF> will allow manufacturers to comply 
with the very stringent new standards in a flexible way, assuring that 
the average emissions of a company's production meet the target 
emission levels while allowing the manufacturer to choose from several 
more- and less-stringent emission categories for certification.
---------------------------------------------------------------------------

    \3\ There are also NMOG standards associated with both the 
interim and Tier 2 standards. The NMOG standards vary depending on 
which of various individual sets of emission standards manufacturers 
choose to use in complying with the average NO<INF>X</INF> standard. 
This ``bin'' approach is described more fully in section IV.B. of 
this preamble.
---------------------------------------------------------------------------

    We are also setting stringent particulate matter standards that 
will be especially important if there is substantial future growth in 
the sales of diesel vehicles. Before 2004, we are establishing more 
stringent interim PM standards for most light trucks than exist now 
under NLEV. With higher sales of diesel cars and light trucks, they 
could easily contribute between one-half and two percent of the PM10 
concentration allowed by the NAAQS, with some possibility that the 
contribution could be as high as 5 to 40 percent in some roadside 
situations with heavy traffic. These increases would make attainment 
even more difficult for 8 counties which we already predict to need 
further emission reductions even without an increase in diesel sales, 
and would put at risk another 18 counties which are now within 10 
percent of a NAAQS violation. Thus, by including a more stringent PM 
standard in the program finalized today, we help address environmental 
concerns about the potential growth in the numbers of light-duty 
diesels on the road--even if that growth is substantial. The new 
requirements also include more stringent hydrocarbon controls (exhaust 
NMOG and evaporative emissions standards). We will also monitor the 
progress of the development of advanced technologies and the role of 
fuels.
2. Gasoline Sulfur Standards
    The other major part of today's action will significantly reduce 
average gasoline sulfur levels nationwide. We expect these reductions 
could begin to phase in as early as 2000, with full compliance for most 
refiners occurring by 2006. Refiners will generally install advanced 
refining equipment to remove sulfur during the production of gasoline. 
Importers of gasoline will be required to import and market only 
gasoline meeting the sulfur limits. Temporary, less stringent standards 
will apply to a few small refiners through 2007. In addition, 
temporary, less stringent standards will apply to a limited geographic 
area in the western U.S. for the 2004-2006 period.
    This significant new control of gasoline sulfur content will have 
two important effects. The lower sulfur levels will enable the much-
improved emission control technology necessary to meet the stringent 
vehicle standards of today's rule to operate effectively over the 
useful life of the new vehicles. In addition, as soon as the lower 
sulfur gasoline is available, all gasoline vehicles already on the road 
will have reduced emissions--from less degradation of their catalytic 
converters and from fewer sulfur compounds in the exhaust.
    Today's action will encourage refiners to reduce sulfur in gasoline 
as early as 2000. The program requires that most refiners and importers 
meet a corporate average gasoline sulfur standard of 120 ppm and a cap 
of 300 ppm beginning in 2004. By 2006, the cap will be reduced to 80 
ppm and most refineries must produce gasoline averaging no more than 30 
ppm sulfur. The program builds upon the existing regulations covering 
gasoline composition as it relates to emissions performance. It 
includes provisions for trading of sulfur credits, increasing the 
flexibility available to refiners for complying with the new 
requirements. We intend for the credit program to ease compliance 
uncertainties by providing refiners the flexibility to phase in early 
controls in 2000-2003 and use credits gained in these years to delay 
some control until as late as 2006. As finalized today, the program 
will achieve the needed environmental benefits while providing 
substantial flexibility to refiners.

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

1. Light-Duty Vehicles and Trucks
    We are setting motor vehicle emission standards under the authority 
of section 202 of the Clean Air Act. Sections 202(a) and (b) of the Act 
provide EPA with general authority to prescribe vehicle standards, 
subject to any specific limitations otherwise included in the Act. 
Sections 202(g) and (h) specify the current standards for LDVs and 
LDTs, which became effective beginning in model year 1994 (``Tier 1 
standards'').
    Section 202(i) of the Act provides specific procedures that EPA 
must follow to determine whether standards more stringent than Tier 1 
standards for LDVs and certain LDTs \4\ are appropriate beginning 
between the 2004 and 2006 model years.\5\ Specifically, we are required 
to first issue a study regarding ``whether or not further reductions in 
emissions from light-duty vehicles and light-duty trucks should be 
required * * *'' (the ``Tier 2 Study''). This study ``shall examine the 
need for further reductions in emissions in order to attain or maintain 
the national ambient air quality standards.'' It is also to consider: 
(1) The availability of technology to meet more stringent standards, 
taking cost, lead time, safety, and energy impacts into consideration; 
and (2) the need for, and cost effectiveness of, such standards, 
including consideration of alternative methods of attaining or 
maintaining the national ambient air quality standards. A certain set 
of ``default'' emission

[[Page 6703]]

standards for these vehicle classes is among those options for new 
standards that EPA is to consider.
---------------------------------------------------------------------------

    \4\ LDTs with a loaded vehicle weight less than or equal to 3750 
pounds, called LDT1s and LDT2s.
    \5\ Section 202(b)(1)(C) forbids EPA from promulgating mandatory 
standards more stringent than Tier 1 standards until the 2004 model 
year.
---------------------------------------------------------------------------

    After the study is completed and the results are reported to 
Congress, EPA is required to determine by rulemaking whether: (1) There 
is a need for further emission reductions; (2) the technology for more 
stringent emission standards from the affected classes is available; 
and (3) such standards are needed and cost-effective, taking into 
account alternatives. If EPA answers ``yes'' to these questions, then 
the Agency is to promulgate new, more stringent motor vehicle standards 
(``Tier 2 standards'').
    EPA submitted its report to Congress on July 31, 1998. Today's 
final rule makes affirmative responses to the three questions above 
(see Section II below) and sets new standards that are more stringent 
than the default standards in the Act.
    EPA is also setting standards for larger light-duty trucks and 
MDPVs under the general authority of Section 202(a)(1) and 202(b) and 
under Section 202(a)(3) of the Act, which requires that standards 
applicable to emissions of hydrocarbons, NO<INF>X</INF>, CO and PM from 
heavy-duty vehicles \6\ reflect the greatest degree of emission 
reduction available for the model year to which such standards apply, 
giving appropriate consideration to cost, energy, and safety. We are 
also setting standards for formaldehyde under our authority in sections 
202(a) and (l).
---------------------------------------------------------------------------

    \6\ LDTs that have gross vehicle weight ratings above 6000 
pounds are considered ``heavy-duty vehicles'' under the Act. See 
section 202(b)(3). For regulatory purposes, we refer to these LDTs 
as ``heavy light-duty trucks'' made up of LDT3s and LDT4s.
---------------------------------------------------------------------------

2. Gasoline Sulfur Controls
    We are adopting gasoline sulfur controls pursuant to our authority 
under Section 211(c)(1) of the Clean Air Act.\7\ Under Section 
211(c)(1), EPA may adopt a fuel control if at least one of the 
following two criteria is met: (1) The emission products of the fuel 
cause or contribute to air pollution which may reasonably be 
anticipated to endanger public health or welfare; or (2) the emission 
products of the fuel will significantly impair emissions control 
systems in general use or which will be in general use were the fuel 
control to be adopted.
---------------------------------------------------------------------------

    \7\ We currently have regulatory requirements for conventional 
and reformulated gasoline adopted under Sections 211(c) and 211(k) 
of the Act, in addition to the ``substantially similar'' 
requirements for fuel additives of Section 211(f). These 
requirements have the effect of limiting sulfur levels in gasoline 
to some extent. See the Final RIA for more details.
---------------------------------------------------------------------------

    We are adopting gasoline sulfur controls based on both of these 
criteria. Under the first criterion, we believe that sulfur in gasoline 
used in Tier 1 and LEV technology vehicles contributes to ozone 
pollution, air toxics, and PM. Under the second criterion, we believe 
that gasoline sulfur in fuel will significantly impair the emissions 
control systems expected to be used in Tier 2 technology vehicles, as 
well as emissions control systems currently used in LEVs. Please refer 
to Section IV.C. below and to the Final Regulatory Impact Analysis 
(RIA) for more details of our analysis and findings. The RIA includes a 
more detailed discussion of EPA's authority to set gasoline sulfur 
standards, including a discussion of our conclusions relating to the 
factors required to be considered under Section 211(c).

C. The Tier 2 Study and the Sulfur Staff Paper

    On July 31, 1998, EPA submitted its report to Congress containing 
the results of the Tier 2 study.\8\ The study indicated that in the 
2004 and later time frame, there will be a need for emission reductions 
to aid in meeting and maintaining the National Ambient Air Quality 
Standards (NAAQS) for both ozone and PM. Air quality modeling showed 
that in the 2007-2010 time frame, when Tier 2 standards will become 
fully effective, a number of areas will still be in nonattainment for 
ozone and PM even after the implementation of existing emission 
controls. The study also noted the continued existence of carbon 
monoxide (CO) nonattainment areas. It also found ample evidence that 
technologies will be available to meet more stringent Tier 2 standards. 
In addition, the study provided evidence that such standards could be 
implemented at a similar cost per ton of reduced pollutants as other 
programs aimed at similar air quality problems. Finally, the study 
identified several additional issues in need of further examination, 
including the relative stringency of car and light truck emission 
standards, the appropriateness of identical versus separate standards 
for gasoline and diesel vehicles, and the effects of sulfur in gasoline 
on catalyst efficiency. Section IV of this preamble describes the steps 
we have taken to follow up on the Tier 2 Study.
---------------------------------------------------------------------------

    \8\ On April 28, 1998, EPA published a notice of availability 
announcing the release of a draft of the Tier 2 study and requesting 
comments on the draft. The final report to Congress included a 
summary and analysis of the comments EPA received.
---------------------------------------------------------------------------

    In addition, on May 1, 1998, EPA released a staff paper presenting 
EPA's understanding of the impact of gasoline sulfur on emissions from 
motor vehicles and exploring what gasoline producers and automobile 
manufacturers could do to reduce sulfur's impact on emissions. The 
staff paper noted that gasoline sulfur degrades the effectiveness of 
catalytic converters and that high sulfur levels in commercial gasoline 
could affect the ability of future automobiles--especially those 
designed for very low emissions--to meet more stringent standards in 
use. It also pointed out that sulfur control will provide additional 
benefits by lowering emissions from the current fleet of vehicles.

D. Relationship of Diesel Fuel Sulfur Control to the Tier 2/Gasoline 
Sulfur Program

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

II. Tier 2 Determination

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

[[Page 6704]]

A. There Is a Substantial Need for Further Emission Reductions in Order 
to Attain and Maintain National Ambient Air Quality Standards

    EPA finds that there is a clear air quality need for new emission 
standards, based on the continuing air quality problems predicted to 
exist in future years. As the discussion in Section III.B. illustrates, 
26 metropolitan areas are each certain or highly likely to need 
additional reductions. These areas are distributed across most regions 
of the U.S., and have a combined population of over 86 million. Section 
III.B. also shows that an additional 12 areas each has a moderate to 
significant probability of needing additional reductions, representing 
another 25 million people. This provides ample evidence that further 
emission reductions are needed to meet the 1-hour ozone NAAQS.
    In addition to these ozone concerns, our analysis of 
PM<INF>10</INF> monitoring data and PM<INF>10</INF> projections 
indicates that 15 PM<INF>10</INF> nonattainment counties violated the 
PM<INF>10</INF> NAAQS in recent years, and that 8 of them with a 1996 
population of almost 8 million have a high risk of failing to attain 
and maintain without more emission reductions. Eighteen other counties, 
with a population of 23 million have a significant risk of failing or 
are within 10 percent of violating the PM<INF>10</INF> NAAQS. It is 
also important to recognize that nonattainment areas remain for other 
criteria pollutants (e.g., CO) and that non-criteria pollution (e.g., 
air toxics and regional haze) also contributes to environmental and 
health concerns.

B. More Stringent Standards for Light-Duty Vehicles and Trucks Are 
Technologically Feasible

    We find that emission standards significantly more stringent than 
current Tier 1 and National Low Emission Vehicle (NLEV) levels are 
technologically feasible. This is true both for the LDVs and LDTs 
specifically covered in section 202(i) and for the medium-duty 
passenger vehicles also included in today's final rule. Manufacturers 
are currently producing NLEV vehicles that meet more stringent 
standards than similar Tier 1 models. Our analysis shows that mainly 
through improvements in engine control software and catalytic converter 
technology, manufacturers can build and are building durable vehicles 
and trucks, including heavy light-duty trucks, which have very low 
emission levels.\9\ Section IV.A. below discusses our feasibility 
conclusions in more detail.
---------------------------------------------------------------------------

    \9\ The Final RIA contains a more detailed analysis, and Section 
IV.A. below has further discussion of the technological feasibility 
of our standards including detailed discussions of the various 
technology options that we believe manufacturers may use to meet 
these standards.
---------------------------------------------------------------------------

    Many current production vehicles are already certified at or near 
the Tier 2 standards. For year 2000 certification (although not yet 
complete), over 50 vehicle models have emissions at or below Tier 2 
levels. In addition, we performed a demonstration program at our EPA 
laboratory that showed that even large vehicles, which would be 
expected to face the toughest challenges reaching Tier 2 emission 
levels, can do so with conventional technology. Others, including the 
Manufacturers of Emission Controls Association (MECA) and the State of 
California, have also performed demonstration programs, with similar 
results. Manufacturers have also certified LDVs and LDTs to NMOG and CO 
levels as much as 80 percent below Tier 1 standards. Furthermore, for 
passenger vehicles greater than 8500 lbs GVWR, we believe that by using 
technologies and control strategies similar to what will be used on 
lighter vehicles, manufacturers will be able to meet the Tier 2 
emission standards.
    Thus, we believe that, by the 2004-2009 time frame, manufacturers 
will be fully able to comply with the new Tier 2 emission standard 
levels. In addition, to facilitate manufacturers' efforts to meet these 
new standards, the Tier 2 regulations include a phase-in over several 
years and a corporate fleet average NO<INF>X</INF> standard, which will 
allow manufacturers to optimize the deployment of technology across 
their product lines with no loss of environmental benefit. Our analysis 
of the available technology improvements and the very low emission 
levels already being realized on these vehicles leads us to find that 
the standards adopted today are fully feasible for LDVs and LDTs.

C. More Stringent Standards for Light-Duty Vehicles and Trucks Are 
Needed and Cost Effective Compared to Available Alternatives

    In this action, we also find that more stringent motor vehicle 
standards are both necessary and cost effective. As discussed above, 
substantial further reductions in emissions are needed to help reduce 
the levels of unhealthy air pollution to which millions of people are 
being exposed; in particular, we expect that a number of areas will not 
attain or maintain compliance with the National Ambient Air Quality 
Standards for ozone and PM<INF>10</INF> without such reductions. (We 
describe this further in Section III below and in the RIA.)
    Furthermore, mobile sources are important contributors to the air 
quality problem. As we will explain more fully later in this preamble, 
in the year 2030, the cars and light trucks that are the subject of 
today's final rule are projected to contribute as much as 40 percent of 
the total NO<INF>X</INF> inventory in some cities, and almost 20 
percent of nationwide NO<INF>X</INF> emissions. This situation would 
have been considerably worse without the NLEV program created by 
vehicle manufacturers, EPA, the Northeastern states, and others.
    These emission reductions are clearly necessary to meet and 
maintain the 1-hour ozone NAAQS. We project that while the emission 
reductions of this program will lead to substantial progress in meeting 
and maintaining the NAAQS, many areas will still not come into 
attainment even with this magnitude of reductions.
    We find that the Tier 2/Gasoline Sulfur program is a reasonable, 
cost-effective method of providing substantial progress towards 
attainment and maintenance of the NAAQS, costing about $2000 per ton of 
NO<INF>X</INF> plus hydrocarbon emissions reduced. This program will 
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, when EPA established its 8-
hour NAAQS for ozone, we identified several types of emission control 
programs that were reasonably cost effective. If all of the controls 
identified in that analysis costing less than $10,000/ton were 
implemented nationwide, they would produce NO<INF>X</INF> emission 
reductions of about 2.9 million tons per year. (That is, to achieve 
about the same emission reductions as the Tier 2/Gasoline Sulfur 
program, other alternative measures would have a significantly higher 
cost per ton). These emission reductions are clearly necessary to meet 
and maintain the one-hour ozone NAAQS. We project that while the 
emission reductions of this program will lead to substantial progress 
in meeting and maintaining the NAAQS, many areas will still not come 
into attainment even with this magnitude of reductions.
    In addition, the magnitude of emission reductions that can be 
achieved by a comprehensive national Tier 2/Gasoline Sulfur program 
will be difficult to achieve from any other source category. Given the 
large contribution that light-duty mobile source emissions make to the 
national emissions inventory and the range of control programs ozone-
affected areas

[[Page 6705]]

already have in place or would be expected to implement, we believe it 
will be very difficult, if not impossible, to meet (and maintain) the 
ozone NAAQS in a cost-effective manner without large emission 
reductions from LDVs and LDTs. We expect emissions from MDPVs to also 
play an increasing role.
    Furthermore, we project that the Tier 2/Gasoline Sulfur program 
will significantly reduce direct and secondary particulate matter 
coming from LDVs, LDTs, and MDPVs--by about 36,000 tons per year of 
direct PM alone by 2030; large secondary PM reductions from 
significantly lower NO<INF>X</INF> and SO<INF>X</INF> emissions will 
add to the overall positive impact on airborne particles. These 
reductions will be very cost-effective compared to other measures to 
reduce PM pollution. Because direct PM emissions from gasoline vehicles 
are related the presence of sulfur in gasoline, no new emission control 
devices, beyond what manufacturers are expected to install to meet the 
NO<INF>X</INF> and NMOG standards, will be necessary to provide the 
reductions expected for these pollutants under the program. The 
standards will provide valuable insurance against increases in PM 
emissions from LDVs, LDTs, and MDPVs.
    Finally, the Tier 2/Gasoline Sulfur program will significantly 
reduce CO emissions from LDVs, LDTs, and MDPVs. (See Chapter III of the 
RIA for an analysis of these reductions.) The technical changes needed 
to meet the NMOG standards will also result in CO reductions sufficient 
to meet the CO standards. Thus, these CO reductions will be very cost-
effective since they will not require any new emission control devices 
beyond what manufacturers are expected to install to meet the 
NO<INF>X</INF> and NMOG standards.
    We conclude, then, that today's final rule is a major source of 
ozone precursor, PM, and CO emission reductions when compared to other 
available options. The discussions of cost and cost effectiveness later 
in this preamble and in the RIA explain the derivation of cost 
effectiveness estimates and compares them to the cost effectiveness of 
other alternatives. That discussion indicates that this program will 
have a cost effectiveness comparable to both the Tier 1 and NLEV 
standards and will also be cost effective when compared to non-mobile 
source programs.

III. Air Quality Need For and Impact Of Today's Action

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

A. Americans Face Serious Air Quality Problems That Require Further 
Emission Reductions

    Air quality in the United States continues to improve. Nationally, 
the 1997 air quality levels were the best on record for all six 
criteria pollutants. \10\ In fact, the 1990s have shown a steady trend 
of improvement, due to reductions in emissions from most sources of air 
pollution, from factories to motor vehicles. Despite great progress in 
air quality improvement, in 1997 there were still approximately 107 
million people nationwide who lived in counties with monitored air 
quality levels above the primary national air quality standards. \11\ 
There are also people living in counties outside of the air monitoring 
network where violations of the NAAQS could have also occurred during 
the year. Moreover, unless there are reductions in overall emissions 
beyond those that are scheduled to be achieved by already committed 
controls, many of these Americans will continue to be exposed to 
unhealthy air.
---------------------------------------------------------------------------

    \10\ National Air Quality and Emissions Trend Report, 1997, Air 
Quality Trends Analysis Group, Office of Air Quality Planning and 
Standards, U.S. Environmental Protection Agency, Research Triangle 
Park, N.C., December 1998 (available on the World Wide Web at http:/
/www/epa.gov/oar/aqtrnd97/).
    \11\ U.S. Environmental Protection Agency, Latest Findings on 
National Air Quality: 1997 Status and Trends. December 1998.
---------------------------------------------------------------------------

    Ambient ozone is formed in the lower 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, fine particles can penetrate deep into the 
lungs. Results of studies suggest a likely causal role of ambient PM in 
contributing to reported effects, such as: premature mortality, 
increased hospital admissions, increased respiratory symptoms, and 
changes in lung tissue. When either ozone or PM air quality problems 
are present, those hardest hit tend to be children, the elderly, and 
people who already have health problems.
    The health effects of high ozone and PM levels are not the only 
reason for concern about continuing air pollution. Ozone and PM also 
harm plants and damage materials. PM reduces visibility and contributes 
to significant visibility impairment in our national parks and 
monuments and in many urban areas. In addition, air pollution from 
motor vehicles contributes to cancer and other health risks, 
acidification of lakes and streams, eutrophication of coastal and 
inland waters, and elevated drinking water nitrate levels. These 
problems impose a substantial burden on public health, our economy, and 
our ecosystems.
    In recognition of this burden, Congress has passed and subsequently 
amended the Clean Air Act. The Clean Air Act requires each state to 
have an approved State Implementation Plan (SIP) that shows how an area 
plans to meet its air quality obligations, including achieving and then 
maintaining attainment of all of the National Ambient Air Quality 
Standards (NAAQS), such as those for ozone and PM. The Clean Air Act 
also requires EPA to periodically re-evaluate the NAAQS in light of new 
scientific information. Our most recent re-evaluation of the ozone and 
PM NAAQS led us to revise both standards (62 FR 38856, July 18, 1997 
and 62 FR 38652, July 18, 1997). These revised standards reflected 
additional information that had become available since the previous 
revision of the ozone and PM standards, respectively.
    On May 14, 1999, a panel of the United States Court of Appeals for 
the District of Columbia Circuit reviewed EPA's revisions to the ozone 
and PM NAAQS and found, by a 2-1 vote, that sections 108 and 109 of the 
Clean Air Act, as interpreted by EPA, represent unconstitutional 
delegations of Congressional power. American Trucking Ass'n., Inc. et 
al., v. Environmental Protection Agency, 175 F.3d 1027 (D.C. Cir. 
1999). Among other things the Court remanded the record

[[Page 6706]]

for the 8-hour ozone NAAQS and the PM<INF>2.5</INF> NAAQS to EPA. On 
October 29, 1999, EPA's petition for rehearing by the three judge panel 
was denied, with the exception that the panel modified its prior ruling 
regarding EPA's authority to implement a revised ozone NAAQS under Part 
D subpart 2 of Title I. EPA's petition for rehearing en banc by the 
full Circuit was also denied, although five of the nine judges 
considering the petition agreed to rehear the case.
    As a result of the Court's decision, requirements on the States to 
implement the new 8-hour ozone standard have been suspended although 
the standard itself is still in force and the science behind it has 
generally not been contradicted. The court also did not question EPA's 
findings regarding the health effects of PM<INF>10</INF> and 
PM<INF>2.5</INF>. However, due to the uncertainty regarding the status 
of the new NAAQS, we will rely on the preexisting NAAQS in determining 
air quality need under section 202(i) of the Act.
    Carbon monoxide (CO) can cause serious health effects for those who 
suffer from cardiovascular disease, such as angina pectoris. There has 
been considerable progress in attaining the longstanding NAAQS for 
carbon monoxide, largely through more stringent standards for CO from 
motor vehicles. This progress has been made despite large increases in 
travel by vehicle. In 1997, there were about 9 million people living in 
three counties with CO concentrations above the level of the CO NAAQS. 
In the recent past, this figure has fluctuated up and down. At the 
present time there are 15 counties classified as serious CO 
nonattainment areas, all with a recent history of NAAQS violations. At 
this time, prospects for these areas attaining by the serious CO area 
attainment deadline of December 31, 2000 are uncertain. While 
violations of the NAAQS have not occurred recently in most of the other 
33 counties still classified as nonattainment, even these must 
demonstrate that they will remain safely below the NAAQS for ten years 
despite expected growth in vehicle travel and other sources of CO 
emissions before they can be reclassified to attainment. Because of the 
large role of motor vehicles in causing high ambient CO concentrations, 
where there is reason to be concerned about CO attainment and 
maintenance, local areas look to national emission standards for most 
of the solution.
    As discussed below, EPA has also finalized regulations that regions 
and states implement plans for protecting and improving visibility in 
the 156 mandatory Federal Class I areas as defined in Section 162(a) of 
the Clean Air Act. These areas are primarily national parks and 
wilderness areas.
    To accomplish the goal of full attainment in all areas according to 
the schedules for the various NAAQS, and to achieve the goals of the 
visibility program, the federal government must assist the states by 
reducing emissions from sources that are not as practical to control at 
the state level as at the federal level. Vehicles and fuels move freely 
among the states, and they are produced by national or global scale 
industries. Most individual states are not in a position to regulate 
these industries effectively and efficiently. The Clean Air Act 
therefore gives EPA primary authority to regulate emissions from the 
various types of highway vehicles and their fuels. Our actions to 
reduce emissions from these and other national sources are a crucial 
and essential complement to actions by states to reduce emissions from 
more localized sources.
    If we were not to adopt new standards to reduce emissions from cars 
and light trucks, emissions from these vehicles would remain a large 
portion of the emissions burden that causes elevated ozone and 
continued nonattainment with the ozone NAAQS, which in turn would 
affect tens of millions of Americans. Because the contribution of cars 
and light trucks to both local emissions and transported pollution 
would be so great, and the expected emission reduction shortfall in 
many areas is so large, further reductions from cars and light trucks 
will be an important element of many attainment strategies, especially 
for ozone in the 2007 to 2010 time frame. The contribution of these 
vehicles to PM exposure and PM nonattainment would also remain 
significant, and would increase considerably if diesel engines are used 
in more cars or light trucks. Furthermore, without new standards, 
steady annual increases in fleet size and miles of travel would 
outstrip the benefits of current emission controls, and would cause 
ozone-forming emissions from cars and trucks to grow each year starting 
about 2013.
    The standards being promulgated by today's actions will reduce 
emissions of ozone precursors and PM precursors from cars and light 
trucks greatly. However, even with this decrease, many areas will 
likely still find it necessary to obtain additional reductions from 
other sources in order to fully attain the ozone and PM NAAQS. Their 
task will be easier and the economic impact on their industries and 
citizens will be lighter as a result of the standards promulgated by 
today's actions. Following implementation of the Regional Ozone 
Transport Rule, states will have already adopted emission reduction 
requirements for nearly all large sources of VOC and NO<INF>X</INF> for 
which cost-effective control technologies are known. Those that remain 
in nonattainment therefore will have to consider their remaining 
alternatives. Many of the state and local programs states may consider 
as alternatives are very costly, and the emissions impact from each 
additional emissions source subjected to new emissions controls would 
be considerably smaller than the emissions impact of the standards 
being promulgated today. Therefore, the emission reductions from these 
standards for gasoline, cars, and light trucks will ease the need for 
states to find first-time reductions from the mostly smaller sources 
that have not yet been controlled, including area sources that are 
closely connected with individual and small business activities. The 
emission reductions from the standards being promulgated today will 
also reduce the need for states to seek even deeper reductions from 
large and small sources already subject to emission controls.
    We project that today's actions will also have important benefits 
for carbon monoxide, regional visibility, acid rain, and coastal water 
quality.
    For these and other reasons discussed in this document, we have 
determined that significant emission reductions will still be needed by 
the middle of the next decade and beyond to achieve and maintain 
further improvements in air quality in many, geographically dispersed 
areas. We also believe that a significant portion of these emission 
reductions will be obtained by reducing emissions from cars and light 
trucks as a result of today's actions. We believe that such reductions 
are necessary (since cars and light trucks are such large contributors 
to current and projected ozone problems) and reasonable (since these 
reductions can be achieved at a reasonable cost compared to other 
alternative reductions).
    The remainder of this section describes the health and 
environmental problems that today's actions will help mitigate and the 
expected health and environmental benefits of these actions. Ozone is 
discussed first, followed by PM, other criteria pollutants, visibility, 
air toxics, and other environmental impacts. The emission inventories 
and air quality analyses are explained more fully in the Regulatory 
Impact Analysis for today's actions.

[[Page 6707]]

B. Ozone

1. Background on Ozone Air Quality
    Ground-level ozone is the main harmful ingredient in smog.\12\ 
Ozone is produced by complex chemical reactions when its precursors, 
VOC and NO<INF>X</INF>, react in the presence of sunlight.
---------------------------------------------------------------------------

    \12\ Total column ozone, a large percentage of which occurs in 
the stratosphere and a smaller percentage of which occurs in the 
troposphere, helps to provide a protective layer against ultraviolet 
radiation.
---------------------------------------------------------------------------

    Short-term (1-3 hours) and prolonged (6-8 hours) exposures to 
ambient ozone at levels common in many cities have been linked to a 
number of health effects of concerns. For example, increased hospital 
admissions and emergency room visits for respiratory causes have been 
associated with ambient ozone exposures at such levels. Repeated 
exposures to ozone can make people more susceptible to respiratory 
infection, result in lung inflammation, and aggravate pre-existing 
respiratory diseases such as asthma. Other health effects attributed to 
ozone exposures include significant decreases in lung function and 
increased respiratory symptoms such as chest pain and cough. These 
effects generally occur while individuals are engaged in moderate or 
heavy exertion.
    Children active outdoors during the summer when ozone levels are at 
their highest are most at risk of experiencing such effects. Other at-
risk groups include adults who are active outdoors (e.g., outdoor 
workers), and individuals with pre-existing respiratory disease such as 
asthma and chronic obstructive lung disease. In addition, longer-term 
exposures to moderate levels of ozone present the possibility of 
irreversible changes in the lungs which could lead to premature aging 
of the lungs and/or chronic respiratory illnesses.
    Ozone also affects vegetation and ecosystems, leading to reductions 
in agricultural and commercial forest yields, reduced growth and 
survivability of tree seedlings, and increased plant susceptibility to 
disease, pests, and other environmental stresses (e.g., harsh weather). 
In long-lived species, these effects may become evident only after 
several years or even decades, thus having the potential for long-term 
effects on forest ecosystems. Ground-level ozone damage to the foliage 
of trees and other plants also can decrease the aesthetic value of 
ornamental species as well as the natural beauty of our national parks 
and recreation areas.
    Many areas which were classified as nonattainment when 
classifications were made under the 1990 Clean Air Act Amendments have 
not experienced violations more recently. However, 50 metropolitan 
areas had ozone design values above the NAAQS in either or both of the 
1995-1997 and the 1996-1998 monitoring periods. In many urban areas, 
the downward trend in ozone that prevailed earlier has become less 
strong or stopped in the last few years, even when adjustments are made 
for meteorological conditions. We believe that one factor that has 
worked against ozone improvement in the last few years has been the 
growing use of light trucks with higher emissions than the cars used 
formerly. The predictions of future ozone concentrations used in 
developing today's action take account of this growing use of light 
trucks.
2. Additional Emission Reductions Are Needed To Attain and Maintain the 
Ozone NAAQS
a. Summary
    We have determined that additional emission reductions are needed 
to attain and maintain the 1-hour ozone NAAQS. This overall conclusion 
is based on our prediction that 26 metropolitan areas are each certain 
or highly likely to need additional reductions, and that an additional 
12 areas each have a moderate to significant probability of needing 
them.
    To determine whether additional reductions are needed in order to 
attain and maintain the ozone NAAQS, we used ozone modeling to predict 
what areas would not attain the NAAQS in the future. We accounted for 
the emission reductions that have already been achieved, those that 
will be achieved in the future by actions already underway, and 
increases in emissions expected from increased use of sources of 
pollution.
    In our May 13, 1999 proposal, we presented information from 
photochemical modeling we performed to predict what areas would meet 
the ozone NAAQS in 2007. The year 2007 falls after the expected date of 
most emission reductions which states are required to achieve or have 
otherwise committed to achieve, and near the attainment deadline for 
many ozone nonattainment areas. We presented additional information 
from the same photochemical modeling work in two supplemental notices, 
on June 30, 1999 (to better explain the basis for our proposal in light 
of the Court's ruling on the 8-hour ozone NAAQS), and October 25, 1999 
(to explain the implications for our Tier 2/Gasoline Sulfur proposal 
from our more recent proposal, which we expect to make final shortly, 
to re-instate the 1-hour ozone NAAQS in many areas). In Response to 
Comments on these Federal Register notices, we made revisions to our 
own ozone modeling. We also obtained ozone modeling results from a 
number of state air planning agencies and from members of the 
automobile manufacturing industry. We have considered all of this 
information as part of our determination that the regulations 
promulgated in this rule are needed and appropriate.
    Based on the available ozone modeling and other information, we 
project that there are 26 metropolitan areas which will be unable to 
attain and maintain the NAAQS, in the absence of additional reductions. 
These areas had a combined population of over 86 million in 1996, and 
are distributed across most regions of the U.S. We have concluded that 
each is certain or very likely to require additional reductions to 
attain the NAAQS. Taken together and considering their number, size, 
and geographic distribution, these areas establish the case that 
additional reductions are needed in order to attain and maintain the 1-
hour standard.
    In addition, our analysis suggests there will be other areas that 
will have problems attaining and maintaining compliance with the one-
hour ozone standard in the future. There are 12 additional metropolitan 
areas with a total 1996 population of over 25 million people in this 
category. EPA's ozone modeling for 2007 predicts exceedances for each 
of these areas. However, for six of them local recent monitoring 
information is not indicating nonattainment. Given how close to 
nonattainment these areas are, EPA believes it is likely that at least 
a significant subset of this group of areas will face compliance 
problems by 2007 or beyond if additional actions to lower air emissions 
are not taken. This belief is based on historical experience with areas 
that will undergo economic and population growth over time and that are 
in larger regions that are also experiencing growth. The other six 
areas in this group are nonattainment now, and local modeling shows 
them reaching attainment by 2005 or 2007. Modeling uncertainties and 
growth beyond the attainment date make it likely that at least some of 
these areas will also face compliance problems if additional actions to 
lower air emissions are not taken. This situation further supports our 
determination that additional reductions in mobile source emissions are 
needed for attainment and maintenance.
    We would like to emphasize that the advantages of the Tier 2/
Gasoline Sulfur program will be enjoyed by the whole country. There are 
important advantages for approximately 30 more metropolitan

[[Page 6708]]

areas, with close to 30 million people residing in them, whose ozone 
levels are now within 10 percent of violating the 1-hour NAAQS.\13\ 
Most of these areas have been in nonattainment in the past. We believe 
the emission reductions from the Tier 2/Gasoline Sulfur program are an 
important component of an overall EPA-state approach to enable these 
areas to continue to maintain clean air given expected growth. EPA 
believes that the long term ability of the states to continue to meet 
the NAAQS is extremely important. In the future, EPA will be 
considering additional approaches for assisting in maintenance of the 
NAAQS. Also, we believe that the Tier 2/Gasoline Sulfur program has 
important benefits for other nonattainment areas which our modeling and 
local modeling show to be on a path to come into attainment in the next 
eight years. For these areas, the extra emission reductions from the 
program will take some of the uncertainty out of their plan to attain 
the standard and give them a head start on developing their plan to 
stay in attainment.
---------------------------------------------------------------------------

    \13\ As measured by ozone design value.
---------------------------------------------------------------------------

    In every area of the country, the new standards will give 
transportation planning bodies and industrial development leaders more 
options within the area's overall emissions constraints. This will 
allow local and state officials to better accommodate local needs and 
growth opportunities. With these new standards for vehicles and 
gasoline, unusually adverse weather or strong local economic growth 
will be less likely to cause ozone levels high enough to trigger the 
planning requirements of the Clean Air Act. In addition, by reducing 
emissions and ozone levels across the nation as a whole, there will be 
less transport of ozone between areas, reducing the amount of ozone 
entering downwind areas. This will give the downwind areas a better 
opportunity to maintain and attain the NAAQS through local efforts.
    All of our determinations presented here about the need for the 
Tier 2/Gasoline Sulfur program take into account the prior NO<INF>X</INF> 
reductions we expect from the Regional Ozone Transport Rule. This rule 
is now in litigation. If the outcome of that litigation reduces the 
NO<INF>X</INF> reductions that will be achieved, the need for the Tier 
2/Gasoline Sulfur program will be even greater.
b. Ozone Modeling Presented in Our Proposal and Supplemental Notices
    The ozone modeling we presented in our proposal and the two 
supplemental notices was originally conducted as part of our 
development of the Regional Ozone Transport Rule. The ``revised 
budget'' emission control scenario we modeled for the Regional Ozone 
Transport Rule contained the right set of existing and committed 
emission controls for it to serve as the starting point for making our 
determination on the need for additional emission reductions. We added 
a new ``control case'' to represent the effects of our proposed vehicle 
and gasoline standards.
    This ozone modeling provided predictions of ozone concentrations in 
2007 across the eastern U.S., under certain meteorological conditions. 
Predictions of attainment or nonattainment are based on these predicted 
ozone concentrations. Two approaches to making attainment predictions 
have been used or advocated in the past: a rollback approach and an 
exceedance approach. In the NPRM of May 13, 1999, we presented 
predictions of attainment and nonattainment using a rollback approach. 
For the 1-hour standard, we reported that 8 metropolitan areas and two 
rural counties were predicted to be in nonattainment in 2007 under the 
rollback method. In the first supplemental notice of June 30, 1999 we 
presented a prediction that 17 areas would be nonattainment based on 
the exceedance method, and invited comment on all aspects of the 
modeling and its interpretation. Our second and last notice on October 
27, 1999, presented predictions of violations using the exceedance 
method for additional areas which we had previously excluded because 
the 1-hour standard did not apply to them. This was in anticipation of 
the reinstatement of the 1-hour standard to these areas, which we 
proposed on October 25, 1999 and expect to complete very soon. 64 FR 
57524. We also announced that we were conducting another round of 
modeling, described below. See the Response to Comments document for 
more discussion of the rollback and exceedance approaches.
c. Updated and Additional Ozone Modeling
    We have updated and expanded our ozone modeling. We updated the 
ozone modeling so that it is now based on estimates of vehicle 
emissions that reflect the most recent data and our best understanding 
of several aspects of emissions estimation.\14\ We also changed most of 
the episodes for which we modeled ozone concentrations, with all of our 
final episode days coming from a single calendar year. By selecting 
days from within a single year, we responded to a comment that the 
original episode periods might together contain an atypically high 
number of days favorable to ozone formation for some parts of the 
country. The new episodes are also better at representing conditions 
that lead to high ozone in areas along the Gulf Coast, whose ozone-
forming conditions were not well represented in the episodes used for 
the original modeling.
---------------------------------------------------------------------------

    \14\ While the use of these emissions estimates was new to our 
baseline ozone modeling in the latest ozone modeling, they were not 
new to this rulemaking, having already been used in calculations of 
cost-effectiveness in the draft RIA. We therefore were able to 
consider public comments on these estimates prior to using them in 
the latest ozone modeling
---------------------------------------------------------------------------

    While we considered these improvements necessary and appropriate in 
light of comments and other information available to us, the actual 
results of the two rounds of modeling with regard to the need for 
additional reductions have turned out to be similar. The latest round 
of modeling provided us ozone predictions for 2007 and 2030 in the 
eastern U.S., and for 2030 in the western U.S. There are some 
differences in specific results, where and when the two models can be 
directly compared. However, the same conclusion would be reached from 
either, namely that there is a broad set of areas with predicted ozone 
concentrations in 2007 above 0.124 ppm, in the baseline scenario 
without additional emission reductions.
    We have compared and supplemented our own ozone modeling with other 
modeling studies, either submitted to us as comments to this 
rulemaking, as state implementation plan (SIP) revisions, or brought to 
our attention through our consultations with states on SIP revisions 
that are in development. The ozone modeling in the SIP revisions has 
the advantage of using emission inventories that are more specific to 
the area being modeled, and of using meteorological conditions selected 
specifically for each area. Also, the SIP revisions included other 
evidence and analysis, such as analysis of air quality and emissions 
trends, observation based models that make use of data on 
concentrations of ozone precursors, alternative rollback analyses, and 
information on the responsiveness of the air quality model. For some 
areas, we decided that the predictions of attainment or nonattainment 
from our

[[Page 6709]]

modeling were less reliable than conclusions that could be drawn from 
this additional evidence and analysis. For example, in some areas our 
episodes did not capture the meteorological conditions that have caused 
high ozone, while local modeling did so.
d. Results and Conclusions
    As discussed in detail below, it is clear that the NO<INF>X</INF> 
and VOC reductions to be achieved through the Tier 2/Gasoline Sulfur 
program are needed to attain and maintain compliance with the 1 hour 
ozone NAAQS. Although the general pattern observed in our modeling 
indicates improvements in the near term, growth in overall emissions 
will lead to worsening of air quality over the long term.
    Based on our ozone modeling, we have analyzed ozone predictions for 
52 metropolitan areas for 1996, 2007, and 2030. In addition, we 
reviewed ozone attainment modeling and other evidence covering 15 of 
these areas, from SIP submittals or from modeling underway to support 
SIP revisions. This local modeling addressed only the current or 
requested attainment date in each area. We then made attainment and 
nonattainment predictions from this information.
    The general pattern we observed with the baseline scenario, i.e., 
without new emission reductions, is a broad reduction between 1996 and 
2007 in the geographic extent of ozone concentrations above the NAAQS, 
and in the frequency and severity of exceedances. This is consistent 
with the national emissions inventory trend between these two years. At 
the same time, we also found that peak ozone concentrations and the 
frequency of exceedances in 2030 were generally somewhat higher than in 
2007 for most areas analyzed. This too is consistent with our analysis 
of emission inventory trends, which shows that the total NO<INF>X</INF> 
inventory from all sources will decline from 2007 to about 2015 and 
then begin to increase due to growth in the activity of emission 
sources. In 2030, our analysis predicts that NO<INF>X</INF> emissions 
from all sources will be about one percent higher than in 2007. While 
we did not model ozone concentrations for years between 2007 and 2030, 
we expect that they would track the national emissions trend by showing 
a period of improvement after 2007 and then deterioration, although 
individual areas will vary due to local source mix and growth 
rates.\15\
---------------------------------------------------------------------------

    \15\ EPA's modeling presumed that cars and light trucks will 
continue to meet the emission levels of the National Low Emissions 
Vehicle (NLEV) program after model year 2003, even though the 
program will end in model year 2003 or shortly thereafter. Had our 
modeling not included such levels in its inventory assumptions, 
trends for ozone concentrations would have shown earlier increases 
in ozone concentrations.
---------------------------------------------------------------------------

    Within this general pattern of ozone attainment changes between 
1996 and 2030, we have determined that 26 metropolitan areas are 
certain or highly likely to need additional reductions to attain and 
maintain the 1-hour ozone NAAQS. These 26 areas are those that have 
current violations of the 1-hour ozone NAAQS and are predicted by the 
best ozone modeling we have available to still be in violation without 
a new federal vehicle program in 2007.\16\ Based on the general trends 
described above, without further emissions reductions many of these 
areas may also have violations continuously throughout the period from 
2007 to 2030, while others may briefly attain and then return to 
nonattainment on or before 2030. These 26 metropolitan areas are listed 
in Table III.B-1, along with their 1996 population which totals over 86 
million. The sizes of these areas and their geographical distribution 
strongly support an overall need for additional reductions in order to 
attain and maintain under section 202(i). Because ozone concentration 
patterns causing violations of the 1-hour NAAQS are well established to 
endanger public health or welfare, this determination also supports our 
actions today under the general authority of sections 202(a)(1), 
202(a)(3), and 202(b).
---------------------------------------------------------------------------

    \16\ The date of the predicted violation was 2007 for most 
areas, 2010 in the case of Los Angeles, CA, and 2030 in the case of 
Portland-Salem, OR.
---------------------------------------------------------------------------

    As indicated above, in reaching this conclusion about these 26 
areas, we examined local ozone modeling in SIP submittals. These local 
analyses are considered to be more extensive than our own modeling for 
estimating whether there would be NAAQS nonattainment without further 
emission reductions, when interpreted by a weight of evidence method 
which meets our guidance for such modeling. One of the areas which 
submitted a SIP revision was a special case. We have recently proposed 
to approve the 1-hour ozone attainment demonstration for the 
nonattainment area of Washington, D.C. (but not Baltimore). We have 
nevertheless included this area on the list of 26 that are certain or 
highly likely to require further reductions to attain and maintain, 
because its SIP attainment demonstration assumed emission reductions 
from vehicles meeting the National Low Emissions Vehicle (NLEV) 
standards.
    However, by its own terms, the NLEV standards would not extend 
beyond the 2003 model year if we did not promulgate Tier 2 vehicle 
standards at least as stringent as the NLEV standards. See 40 CFR 
86.1701-99(c). Thus, the emission reductions relied upon from 2004 and 
later model year NLEV vehicles are themselves ``further reductions'' 
for the purposes of CAA section 202(i).\17\ The local modeling 
indicating attainment with these reductions is therefore strong 
evidence that further reductions are needed past 2003, beyond those 
provided by the Tier 1 program. Based on this, and on the fact that our 
own ozone modeling showed the Washington, DC area to violate the NAAQS 
in 2007 even with full NLEV emission reductions, we have concluded that 
it should be included with areas that do require further reductions to 
attain and maintain the 1-hour ozone NAAQS.
---------------------------------------------------------------------------

    \17\ With regard to eventual final action on the 1-hour 
attainment demonstration for Washington, DC, the issue of the 
continuation of the NLEV standards is mooted by the promulgation of 
the Tier 2/Gasoline Sulfur program. A portion of the emission 
reductions from this program will replace the post-2003 model year 
NLEV reductions assumed in the SIP.
---------------------------------------------------------------------------

    The 1-hour ozone NAAQS presently does not apply in 12 of the 26 
areas listed in Table III.B-1, but we have proposed to re-instate it 
and expect to complete that action shortly. These areas are indicated 
in the table. Our decision to include these areas on this list is based 
on the contingency that we will re-instate the 1-hour standard in these 
areas. However, even if we considered only the 14 areas where the 1-
hour standard applies as of the signature date of this notice, we have 
concluded that our determination would be the same.

   Table III.B-1.--Twenty-Six Metropolitan Areas Which Are Certain or
   Highly Likely To Require Additional Emission Reductions in Order To
               Attain and Maintain the 1-Hour Ozone NAAQS
------------------------------------------------------------------------
                                                                 1996
                     Metropolitan area                        Population
                                                              (millions)
------------------------------------------------------------------------
Atlanta, GA MSA............................................          3.5
Barnstable-Yarmouth, MA MSA \a\............................          0.2
Baton Rouge, LA MSA........................................          0.6
Beaumont-Port Arthur, TX MSA...............................          0.4
Birmingham, AL MSA.........................................          0.9
Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA \a\............          5.6
Charlotte-Gastonia-Rock Hill, NC-SC MSA \a\................          1.3

[[Page 6710]]


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

    There are 12 additional metropolitan areas, with another 25.3 
million people in 1996, for which the available ozone modeling suggests 
significant risk of failing to attain and maintain the 1-hour ozone 
NAAQS without additional emission reductions. Table III.B-2 lists the 
areas we put in this second category. Our own ozone modeling predicted 
these 12 areas to need further reductions to avoid violations in 2007. 
For six of these areas, recent air quality monitoring data indicate 
violation, but we have reviewed local ozone modeling and other evidence 
indicating attainment in 2007.\18\ Based on this evidence, we have kept 
these areas separate from the previous set of 26 areas which we 
consider certain or highly likely to need additional reductions. 
However, we still consider there to be a significant risk of failure to 
attain and maintain in these six areas because this local modeling has 
inherent uncertainties, as all ozone modeling does. Moreover, the local 
modeling did not examine the period after initial attainment.
---------------------------------------------------------------------------

    \18\ The SIP revisions for Chicago and Milwaukee demonstrated 
that these two areas as well as Benton Harbor and Grand Rapids areas 
in Michigan (which are maintenance areas but have experienced ozone 
NAAQS violations recently) would not experience NAAQS violations in 
2007, with a strategy that relied only on Tier 1 vehicle emission 
standards. We have also recently proposed to approve the 1-hour 
attainment demonstration for Greater Connecticut, covering the 
Hartford and New London areas, which assumed full NLEV emission 
reductions. However, Connecticut is committed in its SIP to adopt 
California vehicle standards if NLEV does end with the 2003 model 
year if a more stringent federal program is not promulgated. The 
California standards are more stringent than NLEV. The case of one 
additional area whose attainment demonstration we recently proposed 
to approve, Western Massachusetts (Springfield), should be explained 
here to avoid possible confusion. Our own ozone modeling predicted 
that Springfield would attain the NAAQS in 2007. Massachusetts has 
adopted the California vehicle emission standards, so there is no 
issue of the continuation of the NLEV standards.
---------------------------------------------------------------------------

    For the other six of the 12 areas, the air quality monitoring data 
shows current attainment but with less than a 10 percent margin below 
the NAAQS. This suggests these areas may remain without violations for 
some time, but we believe there is still a moderate risk of future 
violation of the NAAQS because meteorological conditions may be more 
severe in the future.
    It is highly likely that at least some of these 12 areas will 
violate the NAAQS without additional reductions, and it is a distinct 
possibility that many of them will do so. We consider the situation in 
these areas to support our determination that, overall, additional 
reductions are needed for attainment and maintenance. However, we 
reiterate that our predictions for the 26 areas listed in Table III.B-
1, and even our predictions for only the 14 of those 26 for which the 
1-hour standard now applies, are a sufficient basis for our 
determination of an overall need for additional reductions and for our 
actions today.

 Table III.B-2.--Twelve Metropolitan Areas With Moderate to Significant
  Risk of Failing To Attain and Maintain the 1-Hour Ozone NAAQS Without
                     Additional Emission Reductions
------------------------------------------------------------------------
                                                                 1996
                     Metropolitan area                        Population
                                                              (millions)
------------------------------------------------------------------------
Benton Harbor, MI MSA \a\..................................          0.2
Biloxi-Gulfport-Pascagoula, MS MSA \a\.....................          0.3
Chicago-Gary-Kenosha, IL-IN-WI CMSA........................          8.6
Cleveland-Akron, OH CMSA \a\...............................          2.9
Detroit-Ann Arbor-Flint, MI CMSA \a\.......................          5.3
Grand Rapids-Muskegon-Holland, MI MSA \a\..................          1.0
Hartford, CT MSA...........................................          1.1
Milwaukee-Racine, WI CMSA..................................          1.6
New London-Norwich, CT-RI MSA \a\..........................          1.3
New Orleans, LA MSA \a\....................................          0.3
Pensacola, FL MSA \a\......................................          0.4
Tampa, FL MSA \a\..........................................          2.2
                                                            ------------
      Total Population.....................................        25.3
------------------------------------------------------------------------
Notes:
\a\ The 1-hour ozone NAAQS does not currently apply, but we have
  proposed and expect to re-instate it shortly.

e. Issues and Comments Addressed
    We received detailed comments from the automobile industry related 
to ozone modeling and the need for additional emission reductions in 
order to attain and maintain. These were of three types.
    Accuracy of modeling ozone concentrations.--The automobile industry 
commenters pointed out that in the modeling presented with our 
proposal, the ozone model and exceedance predicted violations of the 
NAAQS in 1995 in areas where monitoring data indicated no violations. 
They cited these cases as examples of model inaccuracy. We have made 
improvements to our emissions estimates, our episodes, and other 
aspects of the modeling system. These changes have improved the 
accuracy of the predicted ozone concentrations. Also, as stated above, 
our list of 26 areas that support our finding that additional 
reductions are needed does not include any areas where recent 
monitoring data shows no violations. The final RIA addresses issues of 
model accuracy in more depth.
    As explained in the final RIA, our very latest estimates of car and 
light truck emissions without the benefits of our new standards are 
actually somewhat higher than the estimates used in the final round of 
ozone modeling, because the most recent data indicate even more serious 
adverse emissions effects from sulfur in

[[Page 6711]]

gasoline. Thus, we think our predictions of ozone nonattainment using 
emission estimates prepared before this most recent data on sulfur was 
considered, may be conservative. This topic is discussed in more detail 
in section III.B.3.
    Prediction of attainment/nonattainment.--For most areas, we 
predicted 2007 or 2030 attainment or nonattainment based on the 
exceedance method. The exceedance method predicts an area to be in 
attainment only if there are no predicted exceedances of the NAAQS 
during any episode day. However, for the areas for which we have 
received 1-hour attainment demonstrations in SIP revisions, our 
predictions were based on a larger and more robust set of data. When a 
state's modeling shows an exceedance that would otherwise indicate 
nonattainment, we allow the state to submit a variety of other evidence 
and analysis, such as locality specific meteorological conditions, 
analysis of air quality and emissions trends, observational based 
models that make use of data on concentrations of ozone precursors, a 
rollback analysis, and information on the responsiveness of the air 
quality model. We then make a weight-of-evidence determination of 
attainment or nonattainment based on consideration of all this local 
evidence. We did this in forming the set of 26 areas we consider 
certain or highly likely to need additional reductions to attain or 
maintain, in some cases concluding that attainment was demonstrated and 
in others that it was not.
    The auto industry commenters recommended the use of rollback as the 
single method for making attainment and nonattainment predictions from 
predicted ozone concentrations. They stated that the rollback method 
would be more consistent than the exceedance method with the NAAQS's 
allowance of three exceedances in a three year period. They also 
believed that the rollback method would compensate for what they 
considered to be model over predictions of ozone concentrations. We 
believe that the rollback method is not appropriate for use as the 
sole, or even a primary, test of 1-hour ozone attainment or 
nonattainment. A rollback analysis may overlook violations that occur 
away from ozone monitors, and it may inappropriately project the effect 
of a recent period of favorable weather into the prediction of future 
attainment. In determining the attainment and maintenance prospects of 
numerous areas, as here, it is not possible to assemble and consider 
the full set of local evidence that should accompany any consideration 
of a rollback analysis. In such a situation, we believe that the 
exceedance method is the appropriate choice. A fuller explanation of 
our reasons for considering the exceedance method more appropriate than 
rollback is given in our Response to Comments document.
    We have not completely excluded the rollback approach from the 
determinations in this rulemaking. We have considered it for those 
areas for which we had enough information to allow us to consider it in 
its proper context, i.e., for those areas covered by recent 1-hour SIP 
submissions. Of these areas, we concluded that some will not attain 
without additional reductions and some will.
    While we disagree with the use of the rollback method, we have 
conducted a hypothetical analysis of 2007 attainment in all areas based 
only on our own ozone modeling, applying the rollback method 
recommended by the commenters. We calculated in this analysis that 15 
metropolitan areas and three other counties with nearly 56 million in 
population in 1996 would violate the NAAQS in 2007. Moreover, these 15 
metro areas are geographically spread out \19\. We believe that this 
result using the rollback method does not fully capture the likely 
nonattainment that would exist in 2007 in the absence of additional 
emission reductions. However, even if we were to consider the use of 
rollback valid, we consider this set of areas to also be an adequate 
basis for making the same determinations we have made based on the more 
appropriate exceedance-based analysis. The details of our hypothetical 
analysis using the rollback method are given in the final RIA and the 
technical support document for our ozone modeling analyses.
---------------------------------------------------------------------------

    \19\ We did not include the Los Angeles-Riverside-San Bernardino 
area in this analysis, since it was not covered by our 2007 
modeling, but we do believe it is rightly part of the basis for a 
determination on the need for additional reductions.
---------------------------------------------------------------------------

    Ozone modeling and predictions.--Members of the automobile 
manufacturing industry submitted two modeling studies: (1) a repetition 
of our first round of modeling of the 37-state eastern U.S. domain but 
with their recommendations regarding estimates of motor vehicle 
emissions in 2007 and with the rollback method used to predict 2007 
nonattainment, and (2) finer grid modeling for three smaller domains, 
also with their recommended estimates of emissions and with 
nonattainment predicted using a rollback method. Both modeling efforts 
showed less widespread nonattainment than we have determined and 
described here. Taken together, these studies predicted 2007 violations 
by the rollback method in or downwind of New York City, Chicago, 
Milwaukee, western Michigan, Baton-Rouge, and Houston.
    The main difference between the automobile industry's ozone 
modeling and ours is in the emission estimates. We have reviewed the 
emissions estimates used in the industry studies. We concluded that the 
industry's emissions estimates employ inappropriate analytical steps in 
the calculation. Among the problems are that the adjustments for the 
benefits of inspection and maintenance programs were not consistent 
with the base estimate of in-use emissions, and the sales trend towards 
light trucks and SUVs was not properly captured. Also, as stated, we 
disagree with the use of the rollback approach as the sole test of 
attainment. As a consequence, we conclude that the industry's ozone 
modeling is not an appropriate basis for making predictions of future 
attainment or nonattainment. The final RIA explains in detail how we 
have addressed these and other emissions modeling issues in a manner 
which is more technically consistent and correct,\20\ and how we have 
considered the results from rollback analyses but only as part of broad 
weight-of-evidence determinations for areas for which this was possible 
at this time. Our point-by-point review is given in our Response to 
Comments document.
---------------------------------------------------------------------------

    \20\ As explained in the final RIA, our very lastest estimates 
of car and light truck emissions without the benefits of our new 
standards are actually somewhat higher than the estimates used in 
the final round of ozone modeling, because more recent data indicate 
even more serious adverse emissions effects from sulfur in gasoline. 
Thus, we think our predictions of ozone nonattainment may be 
conservative.
---------------------------------------------------------------------------

    The material on ozone modeling submitted by the commenters, having 
been prepared by the rollback method, was difficult to re-interpret 
according to our preferred exceedance method. However, it appears that 
if this modeling were interpreted by the exceedance method, it would 
indicate 2007 nonattainment in Baltimore and Washington, D.C. in 
addition to New York City, Chicago, Milwaukee, western Michigan, Baton-
Rouge, and Houston. Overall, we conclude that the material submitted by 
the automobile industry does not contradict the facts we have used to 
make our determinations or the actions we are taking today.
f. 8-Hour Ozone
    The predictions of ozone concentrations from the ozone modeling

[[Page 6712]]

can be used to make predictions of attainment or nonattainment with the 
8-hour ozone NAAQS. In our draft RIA, we estimated that 28 metropolitan 
areas and 4 rural counties with a combined population of 80 million 
people would violate the 8-hour ozone NAAQS in 2007 without additional 
emission reductions. Commenters noted differences between exact 
rollback procedure we had used in this projection and the steps 
specified in recent draft guidance we have issued on 8-hour ozone 
modeling. We agree with the commenters that the steps specified in our 
guidance are the correct ones to use. However, since we are not basing 
our promulgation of the Tier 2/Gasoline Sulfur Program on the 8-hour 
ozone NAAQS, we have not made any new predictions of 8-hour ozone 
nonattainment areas in 2007. Based on our findings in previous analyses 
of this sort, however, we believe that in the absence of the Tier 2/
Gasoline Sulfur program there would be 8-hour nonattainment areas that 
are not also areas which we have concluded are certain or highly likely 
to violate the 1-hour NAAQS. If we considered it appropriate to proceed 
with implementation of the 8-hour standard, these areas would support 
our determination on the need for emission reductions, and the 
appropriateness and necessity of the vehicle and gasoline standards we 
are establishing.
3. Cars and Light-duty Trucks Are a Big Part of the NO<INF>X</INF> and 
VOC Emissions, and Today's Action Will Reduce This Contribution 
Substantially
    Emissions of VOCs and NO<INF>X</INF> come from a variety of 
sources, both natural and man-made. Natural sources, including 
emissions that have been traced to vegetation, account for a 
substantial portion of total VOC emissions in rural areas. The 
remainder of this section focuses on the contribution of motor vehicles 
to emissions from human sources. Man-made 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 man-made sources, most notably high-
temperature combustion processes such as those occurring in automobiles 
and power plants. Emissions from cars and light trucks are currently, 
and will remain, a major part of nationwide VOC and 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.\21\ The contribution in metropolitan areas was 
generally larger.
---------------------------------------------------------------------------

    \21\ Emission Trend Report, 1997.
---------------------------------------------------------------------------

    We have made significant improvements in the analysis used to 
estimate the emission inventory impacts of this action, including 
improving the emission factor modeling, using more detailed local 
modeling input, and using a more conservative (lower) estimate of VMT 
growth. These changes are detailed in the Regulatory Impact Analysis 
for this rule. The following discussion is based on this improved 
analysis.
    In addition to the improvements which are incorporated in this 
analysis, we also made further improvements in the emission factor 
modeling after analyzing comments which we did not have time to 
incorporate into the detailed inventory analysis described here. The 
most notable change is related to data which indicates that 
NO<INF>X</INF> and NMOG emissions are even more sensitive to gasoline 
sulfur than previously thought. This change and others are described in 
detail in the Response to Comments. Our early analysis of these changes 
indicates that incorporating them into this analysis would provide 
further support for this action because these changes result in both 
increases in the baseline emissions without Tier 2 and in the 
reductions that would result from Tier 2. For example, in the detailed 
inventory analysis we report below, we project nationwide Tier 2/
Gasoline Sulfur control NO<INF>X</INF> reductions from cars and light 
trucks of 856,471 tons per year in 2007. Using the version of the 
emission factor model that incorporates these additional changes 
increases the estimated Tier 2 reductions to approximately 1.0 million 
tons per year in 2007 (estimated baseline emissions without Tier 2 
increase from 3.1 million tons per year in 2007 to approximately 3.7 
million tons per year using the version of the emission factor model 
that incorporates these additional changes). Therefore, the estimates 
of the inventory reductions given here (and used as the basis for the 
ozone air quality analysis) are clearly conservative.
    Motor vehicle emission controls have led to significant 
improvements in emissions released to the air (the ``emission 
inventory'') and will continue to do so in the near term \22\. In the 
current analysis, we continue to find that total emissions from the car 
and light truck fleet would continue to decline for a period, even if 
we were not establishing the Tier 2/Gasoline Sulfur program. This 
decline would result from the introduction of cleaner reformulated 
gasoline in 2000, the introduction of National Low Emission Vehicles 
(NLEVs) and vehicles complying with the Enhanced Evaporative Test 
Procedure and Supplemental Federal Test Procedures, and the continuing 
removal of older, higher-emitting vehicles from the in-use vehicle 
fleet. On a per mile basis, VOC and NO<INF>X</INF> emissions from cars 
and light trucks combined would have continued to decline well beyond 
2015, reflecting the continuing effect of fleet turnover under existing 
emission control programs. However, projected increases in vehicle 
miles traveled (VMT) will cause total emissions from these vehicles to 
increase. With this increase in travel and without additional controls, 
we project that combined NO<INF>X</INF> and VOC emissions for cars and 
light trucks without the Tier 2/Gasoline Sulfur program would increase 
starting in 2013 and 2016, respectively, so that by 2030 they would 
return to levels above or nearly the same as they will be in 2000. In 
cities experiencing rapid growth, such as Charlotte, North Carolina, 
the near-term trend towards lower emissions tends to reverse 
sooner.\23\ With additional improvements in the modeling done in 
Response to Comments, we now estimate that without the Tier 2/Gasoline 
Sulfur program, there will be a constant increase in these emission 
over time.
---------------------------------------------------------------------------

    \22\ The auto manufacturer and northeastern state commitments to 
the NLEV program are scheduled to end in 2004 without further EPA 
action on Tier 2 standards, although continued voluntary compliance 
by automobile manufacturers and the affected states is a 
possibility. Our analysis of emission trends and the emission 
benefits expected from today's action assumes for the base scenario 
a continuation of the NLEV program past 2004. If the NLEV program 
does not continue beyond 2004, the reductions resulting from Tier 2 
would be larger than what is shown here. It also includes all other 
control measures assumed to be implemented in local areas, such as 
reformulated gasoline in all required and opt-in areas and enhanced 
I/M where required.
    \23\ Also, if the NLEV program ends in model year 2004 or 
shortly thereafter, as scheduled, this trend would reverse more 
quickly in all areas.
---------------------------------------------------------------------------

    Figure III-1 illustrates this expected trend in car and light truck 
NO<INF>X</INF> emissions in the absence of today's action. The figure 
also allows the contribution of cars to be distinguished from that of 
light trucks. The figure clearly shows the impact of steady growth in 
light truck sales and travel on overall light-duty 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

[[Page 6713]]

trucks will produce about 50 percent of combined car and light truck 
NO<INF>X</INF> emissions. We project that truck emissions would 
actually increase after 2000, and over the next 30 years, trucks would 
grow to dominate light-duty NO<INF>X</INF> emissions. By 2010, we 
project trucks would 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 would be produced by trucks.

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TR10FE00.000


BILLING CODE 6560-50-C
    Today's action will significantly decrease NO<INF>X</INF> and VOC 
emissions from cars and light trucks, and will delay the date by which 
NO<INF>X</INF> and VOC emissions will begin to increase due to 
continued VMT growth. With Tier 2/Gasoline Sulfur control, light-duty 
vehicle NO<INF>X</INF> and VOC emissions are projected to continue 
their downward trend past 2020. Table III.B-3 shows the annual tons of 
NO<INF>X</INF> that we project will be reduced by today's action.\24\ 
These projections include the benefits of low sulfur fuel and the 
introduction of Tier 2 car and light truck standards.
---------------------------------------------------------------------------

    \24\ Today's action for both vehicles and fuels will apply in 49 
states and the U.S. territories, excluding only California. There 
will also be emissions reductions in California from vehicles that 
relocate or visit from other states. However, much of the emissions 
inventory analysis for this action was made for a 47-state region 
which excludes California, Alasks, and Hawaii. The latter two states 
were not included in the scope of ozone, PM and economic benefits 
modeling.

  Table III.B-3.--NO<INF>X</INF> Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to
                               Tier 2/Gasoline Sulfur Control (tons per year) \a\
----------------------------------------------------------------------------------------------------------------
                                                                                    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> <SUP>c</SUP>
----------------------------------------------------------------------------------------------------------------
2007............................................................       3,095,698              16         856,471
2010............................................................       2,962,093              16       1,235,882
2015............................................................       2,968,707              17       1,816,767
2020............................................................       3,160,155              17       2,220,210

[[Page 6714]]


2030............................................................       3,704,747              19      2,795,551
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Estimates exclude California, Alaska, and Hawaii, although reductions will occur in all three.
\b\ Does not include emission reductions from heavy-duty gasoline vehicles.
\c\ These numbers represent a conservative estimate of the benefits of the Tier 2/Sulfur program. Based on the
  updated emission factor model developed in response to comments, the program will result in significantly
  larger benefits. For example, our new model projects NO<INF>X</INF> reductions of 1,100,000 tons in 2007.

    The lower sulfur levels in today's action will produce large 
emission reductions on pre-Tier 2 vehicles as soon as low-sulfur 
gasoline is introduced, in addition to enabling Tier 2 vehicles to 
achieve lower emission levels. Among the pre-Tier 2 vehicles, the 
largest per vehicle emission reductions from lower sulfur in gasoline 
will be achieved from vehicles which automobile manufacturers will have 
sold under the voluntary National Low Emission Vehicle program. These 
vehicles are capable of substantially lower emissions when operated on 
low sulfur fuel. Older technology vehicles experience a smaller but 
significant effect.
    In 2007, when all gasoline will meet the new sulfur limit and when 
large numbers of 2004 and newer vehicles meeting these standards will 
be in use, the combined NO<INF>X</INF> emission reduction from vehicles 
and fuels will be over 850,000 tons per year. After 2007, emissions 
will be reduced further as the fleet turns over to Tier 2 vehicles 
operating on low sulfur fuel. By 2020, NO<INF>X</INF> emissions will be 
reduced by 70% from the levels that would occur without today's action. 
This reduction equals the NO<INF>X</INF> emissions from over 164 
million pre-Tier 2 cars and light trucks. This reduction represents a 
12 percent reduction in NO<INF>X</INF> emissions from all manmade 
sources.
    VOC emissions will also be reduced by today's action, with 
reductions increasing as the fleet turns over. We estimate that the 
reductions as a percent of emissions from cars and light trucks will be 
7 percent in 2007 and grow to 17 percent in 2020.
    As discussed earlier, in California, smaller but still substantial 
reductions in both NO<INF>X</INF> and VOC will be achieved because 
vehicles visiting and relocating to California will be designed to meet 
these standards. Also, vehicles from California visiting other states 
will not be exposed to high sulfur fuel. California Air Resources Board 
staff have estimated that Tier 2/Sulfur will reduce NO<INF>X</INF> 
emissions in the South Coast Air Quality Management District by 
approximately 4 tons per day in 2007.\25\ CARB staff plan to 
incorporate these reductions in their revised attainment plan for this 
district, which includes most of the Los Angeles-Long Beach region.
---------------------------------------------------------------------------

    \25\ California Air Resources Board, Executive Order G-99-037, 
May 20, 1999, Attachment A, 6-7, 10. These NO<INF>X</INF> reductions 
represent a small fraction of the emission reductions needed in the 
South Coast to attain the NAAQS.
---------------------------------------------------------------------------

    These estimates of emission reductions reflect a mixture of urban, 
suburban, and rural areas. However, cars and light trucks generally 
make up a larger fraction of the emission inventory for urban and 
suburban areas, where human population and personal vehicle travel is 
more concentrated than emissions from other sources such as heavy-duty 
highway vehicles, power plants, and industrial boilers. We have 
estimated emission inventories for three cities using the same methods 
as were used to project the nationwide inventories, and we present the 
results for 2007 below in Table III.B-4.
    These results confirm that light-duty vehicles make up a greater 
share of the 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 16 percent, it is 
estimated to be about 34 percent in the Atlanta area. There is also a 
range in VOC contributions, with Atlanta again being the area with the 
largest car and light truck contribution at 17 percent. In metropolitan 
areas with high car and light truck contributions, today's action will 
represent a larger step towards attainment since it will have a larger 
effect on total emissions.

 Table III.B-4--Proportion of the Total Urban Area 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....................................           16           13
New York urban area...........................           18            6
Atlanta urban area............................           34           17
Charlotte urban area..........................           24          15
------------------------------------------------------------------------
Notes:
<SUP>a</SUP> The estimates reflect continuation of NLEV beyond 2004.

    Another useful perspective from which to view the magnitude of the 
emission reductions from today's proposal is in terms of the additional 
emission reductions from all human sources that areas will need to 
attain the 1-hour ozone standard. For this analysis, we reviewed our 
proposals for action on the 1-hour attainment demonstrations submitted 
by the states. With these proposals, EPA identified estimates of 
additional emission reductions (measures in addition to those submitted 
by the state in their plans) necessary for attainment for some

[[Page 6715]]

of the areas. These estimates of additional emission reductions are 
documented in the individual Federal Register Notices. Using these 
estimates and the estimates of Tier 2 reductions developed for today's 
action, we have determined what portion of these additional emission 
reductions would be accounted for by today's action. These estimates 
are reported in Table III.B-5, which shows the contribution of Tier 2/
Sulfur NO<INF>X</INF> reductions to the additional emission reduction 
necessary for attainment for three metropolitan areas. For example, for 
the New York nonattainment area, 89% of the additional NO<INF>X</INF> 
emission reductions needed for attainment are provided for with today's 
action. This leaves 11% of the additional NO<INF>X</INF> emission 
reductions to be addressed by the State through other local sources.
    EPA and the States already have significant efforts underway to 
lower ozone precursor emissions through national regulations and State 
Implementation Plans. Table III.B-5 shows the contribution of Tier 2 to 
the substantial State-led efforts to provide attainment with the ozone 
NAAQS. Since the Tier 2 program has evolved in the past year after much 
of the States' efforts were completed, many of the States were unable 
to estimate the benefits of Tier 2 in their areas. EPA's proposal 
actions on these SIPs for the ozone NAAQS addresses the need for Tier 2 
in many areas. More specifically, Tier 2 is bein