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

SUMMARY: Today's document proposes a major program designed to

significantly reduce the emissions from new passenger cars and light

trucks, including pickup trucks, minivans, and sport-utility vehicles.

These reductions would provide for cleaner air and greater public

health protection, by reducing ozone and PM pollution. The proposed

program is a comprehensive regulatory initiative that treats vehicles

and fuels as a system, combining requirements for much cleaner vehicles

with requirements for much lower levels of sulfur in gasoline. A list

of major highlights of the proposed program appears at the beginning of

SUPPLEMENTARY INFORMATION.

For the first time, through a phase-in, we propose to apply a

single average exhaust emission standard that would cover both

passenger cars and all light trucks operated on any fuel. The proposed

emission levels (``Tier 2 standards'') are feasible for both types of

vehicles and are appropriate since the miles traveled in light trucks

are increasing and the emissions from these vehicles are thus an

increasing problem. This approach will build on the recent technology

improvements resulting from the successful National Low-Emission

Vehicles (NLEV) program and improve the performance of these vehicles

through lower sulfur gasoline.

To enable the vehicle technology and generate emission reductions

from current vehicles we propose to significantly reduce average

gasoline sulfur levels nationwide. Refiners would generally install

refining equipment to remove sulfur in their refining processes, while

importers would be required to market only gasoline meeting the

proposed sulfur standards. The proposal outlines an averaging, banking,

and trading program to provide flexibility for refiners and ease

implementation.

This program focuses on reducing the passenger car and light truck

emissions most responsible for causing ozone and particulate matter

problems. Without today's action, we project that emissions from these

vehicles will represent 30-40 percent of nitrogen oxides and volatile

organic compound emissions in some cities, and almost 20 percent

nationwide, by the year 2020.

Our proposal would bring about major reductions in annual emissions

of these pollutants and also reduce the emissions of sulfur compounds

coming from the sulfur in gasoline. For example, we project a reduction

in oxides of nitrogen emissions of nearly 800,000 tons per year by 2007

and 1,200,000 by 2010, the time frame when many states will have to

demonstrate compliance with air quality standards. Emission reductions

would continue increasing for many years, reaching almost 2,200,000

tons per year in 2020. In addition, the proposed program would reduce

the contribution of vehicles to other serious public health and

environmental problems, including regional visibility problems, toxic

air pollutants, acid rain, and nitrogen loading of estuaries.

Furthermore, we project that these reductions, and their resulting

environmental benefits, would come at an average cost increase of less

than $100 per passenger car, less than $200 per light truck, and an

increase of less than 2 cents per gallon of gasoline (or about $100

over the life of an average vehicle).

DATES: Comments: We must receive your comments by August 2, 1999.

Hearings: We will hold four public hearings, on June 9-10, June 11,

June 15, and June 17, 1999. EPA requests that parties who want to

testify notify the contact person listed in the ADDRESSES section of

this document two weeks before the date of the hearing.

ADDRESSES: Comments: You may send written comments in paper form or by

E-mail. We must receive them by the date indicated under ``DATES''

above (August 2, 1999). Send paper copies of written comments (in

duplicate if possible) to Public Docket No. A-97-10 at the following

address: U.S. Environmental Protection Agency (EPA), Air Docket (6102),

Room M-1500, 401 M Street, SW, Washington, DC 20460. If possible, we

also encourage you to send an electronic copy of your comments (in

ASCII format) to the docket by e-mail to A-and-R-D[email protected] or on a

3.5 inch diskette accompanying your paper copy. If you wish, you may

send your comments by E-mail to the docket at the address listed above

without the submission of a paper copy, but a paper copy will ensure

the clarity of your comments.

Please also send a separate paper copy to the contact person listed

below. If you send comments by E-mail alone, we ask that you send a

copy of the E-mail message that contains the comments to the contact

person listed below.

EPA's Air Docket makes materials related to this rulemaking

available for review at the above address (on the ground floor in

Waterside Mall) from 8:00 a.m. to 5:30 p.m., Monday through Friday,

except on government holidays. You can reach the Air Docket by

telephone at (202) 260-7548 and by facsimile at (202) 260-4400. We may

charge a reasonable fee for copying docket materials, as provided in 40

CFR part 2.

Hearings: We will hold four public hearings at the following

locations:

June 9-10, 1999, Top of the Tower, 1717 Arch Street, 51st Floor,

Philadelphia, PA 19103, telephone: 215-567-8787, fax: 215-557-5171

June 11, 1999, Renaissance Atlanta Hotel, 590 West Peachtree Street,

Atlanta, GA, 30308, telephone: 404-881-6000, fax: 404-815-5010

June 15, 1999, Doubletree Hotel, 3203 Quebec Street, Denver, CO, 80207,

telephone: 303-321-3333, fax: 303-329-5233

June 17, 1999, Holiday Inn Lakeside City Center, 1111 Lakeside Avenue,

Cleveland, OH 44144, telephone: 216-241-5100, fax: 216-241-7437

Additional information on the comment procedure and public hearings

can be found in SUPPLEMENTARY INFORMATION under Section VII, ``Public

Participation.''

FOR FURTHER INFORMATION CONTACT: Carol Connell, U.S. EPA, National

Vehicle and Fuels Emission Laboratory, 2000 Traverwood, Ann Arbor MI

48105; Telephone (734) 214-4349, FAX (734) 214-4816, E-mail

[email protected].

SUPPLEMENTARY INFORMATION:

Highlights of the Tier 2/ Gasoline Sulfur Proposal

For cars and light trucks, the proposed program would:

Through a phase-in, apply for the first time a single

average exhaust emission standard that would cover both passenger cars

and all light trucks. The proposed emission levels (``Tier 2

standards'') are feasible for both types of vehicles and are

appropriate since the miles traveled in light trucks is increasing and

the emissions from these vehicles are thus an increasing problem.

During the phase-in, apply interim standards that match or

are more

[[Page 26005]]

stringent than current federal and California ``LEV I'' (Low-Emission

Vehicle, Phase I) standards.

Apply the same standards to vehicles operated on any fuel.

Allow auto manufacturers to comply with the very stringent

proposed new standards in a flexible way while ensuring that the

expected environmental benefits occur.

Build on the recent technology improvements resulting from

the successful National Low-Emission Vehicles (NLEV) program and

improve the performance of these vehicles through lower sulfur

gasoline.

Set more stringent particulate matter standards, primarily

affecting diesel powered vehicles.

Set more stringent evaporative emission standards.

For commercial gasoline, the proposed program would:

Significantly reduce average gasoline sulfur levels

nationwide. Refiners would generally install refining equipment to

remove sulfur in their refining processes. Importers of gasoline would

be required to import and market only gasoline meeting the proposed

sulfur limits.

Provide for flexible implementation by refiners through an

averaging, banking, and trading program.

Apply temporary, less stringent gasoline sulfur standards

to certain small refiners.

Enable the new Tier 2 vehicles to meet the proposed

emission standards, since sulfur in gasoline degrades a vehicle's

emission control performance. Lower sulfur gasoline is also important

in order to enable the introduction of advanced technologies that

promise higher fuel economy but are very susceptible to sulfur

poisoning (for example, gasoline direct injection engines).

Reduce emissions from NLEV vehicles and other vehicles

already on the road.

Regulated Entities

This proposed action would affect you if you produce new motor

vehicles, alter individual imported motor vehicles to address U.S.

regulation, or convert motor vehicles to use alternative fuels. It

would also affect you if you produce, distribute, or sell gasoline

motor fuel.

The table below gives some examples of entities that may have to

follow the proposed regulations. But because these are only examples,

you should carefully examine the proposed and existing regulations in

40 CFR parts 80, 85 and 86. If you have questions, call the person

listed in the FOR FURTHER INFORMATION CONTACT section above.

----------------------------------------------------------------------------------------------------------------

Examples of potentially regulated

Category NAICS Codes a SIC Codes b entities

----------------------------------------------------------------------------------------------------------------

Industry................................... 336111 3711 Motor Vehicle Manufacturers.

336112 .............. ...................................

336120 .............. ...................................

Industry................................... 336311 3592 Alternative fuel vehicle

converters.

336312 3714 ...................................

422720 5172 ...................................

454312 5984 ...................................

811198 7549 ...................................

541514 8742 ...................................

541690 8931 ...................................

Industry................................... 811112 7533 Commercial Importers of Vehicles

and Vehicle Components.

811198 7549 ...................................

541514 8742 ...................................

Industry................................... 324110 2911 Petroleum Refiners.

Industry................................... 422710 5171 Gasoline Marketers and

Distributors.

422720 5172 ...................................

Industry................................... 484220 4212 Gasoline Carriers.

484230 4213

----------------------------------------------------------------------------------------------------------------

a North American Industry Classification System (NAICS).

b Standard Industrial Classification (SIC) system code.

Access to Rulemaking Documents Through the Internet

Today's document is available electronically on the day of

publication from the Environmental Protection Agency Internet Web site

listed below. Electronic copies of the preamble, regulatory language,

Draft Regulatory Impact Analysis, and other documents associated with

today's proposal are available from the EPA Office of Mobile Sources

Web site listed below shortly after the rule is signed by the

Administrator. This service is free of charge, except any cost that you

already incur for connecting to the Internet.

Environomental Protection Agency Web Site:

http://www.epa.gov/docs/fedrgstr/epa-air/

(Either select a desired date or use the Search feature.)

Office of Mobile Sources (OMS) Web Site:

http://www.epa.gov/omswww/

(Look in ``What's New'' or under the ``Automobiles'' topic.)

Please note that due to differences between the software used to

develop the document and the software into which the document may be

downloaded, changes in format, page length, etc. may occur.

Outline of This Preamble

I. Introduction

A. What Are the Basic Components of Today's Proposal?

1. Vehicle Emission Standards

2. Gasoline Sulfur Standards

B. What Is EPA's Statutory Authority for Proposing Today's

Action?

1. Light-Duty Vehicles and Trucks

2. Gasoline Sulfur Controls

C. The Tier 2 Study and the Sulfur Staff Paper

II. Proposed Tier 2 Determination

A. There Is a Substantial Need for Further Emission Reductions

in Order to Attain and Maintain National Ambient Air Quality

Standards

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

Are Technologically Feasible

C. More Stringent Standards for Light-Duty Vehicles and Trucks

Are Needed and Cost Effective Compared to Available Alternatives

III. Air Quality Need for and Impact of Today's Proposal

A. Americans Face Serious Air Quality Problems That Require

Further Emission Reductions

[[Page 26006]]

B. Ozone

1. Ozone Levels Have Declined, but Unhealthy Levels of Ozone

Persist

2. Cars and Light-Duty Trucks Are a Big Part of the VOC and

NOX Inventory, and Today's Proposal Would Reduce This

Contribution Substantially

3. Tier 2/Sulfur Ozone Benefits and the Post Tier 2/Sulfur Ozone

Problem

C. Particulate Matter

1. Particulate Matter Presents Substantial Public Health Risks

2. Reducing Emissions From Cars and Light Trucks Would Reduce

Ambient Levels

3. Today's Proposal Would Limit the Potential Health Risks From

Increased Diesel Engine Use in Cars and Light Trucks

4. Today's Proposal Would Have Substantial PM Benefits

D. Other Criteria Pollutants: Carbon Monoxide, Nitrogen Dioxide,

Sulfur Dioxide

E. Visibility

F. Air Toxics

G. Acid Deposition

H. Eutrophication/Nitrification

I. Conclusion: Cleaner Cars and Light Trucks Are Critically

Important to Improving Air Quality

IV. What Are We Proposing and Why?

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

1. Feasibility of Stringent Standards for Light-Duty Vehicles

and Light-Duty Trucks

a. Gasoline Fueled Vehicles

b. Diesel Vehicles

2. Gasoline Sulfur Control Is Needed to Support the Proposed

Vehicle Standards

a. How Does Gasoline Sulfur Affect Vehicle Emission Performance?

b. How Large Is Gasoline Sulfur's Effect on Emissions?

3. A Comprehensive Vehicle/Fuel Approach Is Therefore Necessary

B. Our Proposed Program for Vehicles

1. Overview of the Proposed Vehicle Program

a. Introduction

b. Corporate Average NOX Standard

c. Tier 2 Emission Standard ``Bins''

d. Schedules for Implementation

i. Implementation Schedule for LDVs and LLDTs

ii. Implementation Schedule for HLDTs

e. LDVs and LDTs Not Covered by Tier 2

i. Interim Standards for LDV/LLDTs

ii. Interim Standards for HLDTs

iii. Interim Programs Would Provide Reductions over Previous

Standards

iv. Alternative Approach for Interim Standards

f. Generating, Banking, and Trading NOX Credits

2. Why Are We Proposing the Same Set of Standards for Tier 2

LDVs and LDTs?

3. Why Are We Proposing the Same Standards for Both Gasoline and

Diesel Vehicles?

4. Key Elements of the Proposed Vehicle Program

a. Basic Exhaust Emission Standards and ``Bin'' Structure

i. Why Are We Proposing Extra Bins?

b. The Proposed Program Would Phase in the Tier 2 Vehicle

Standards over Several Years

i. Primary Phase-in Schedule

ii. Alternative Phase-in Schedule

c. Manufacturers Would Meet a ``Corporate Average''

NOX Standard.

d. Manufacturers Could Generate, Bank, and Trade NOX

Credits.

i. General Provisions

ii. Averaging, Banking and Trading of NOX Credits

Would Fulfill Several Goals.

iii. How Manufacturers Would Generate and Use NOX

Credits.

iv. Manufacturers Could Earn and Bank Credits for Early

NOX Reductions.

v. NOX Credits Would Have Unlimited Life.

vi. NOX Deficits Could Be Carried Forward.

e. Interim Standards

i. Interim Standards for LDV/LLDTs

ii. Interim Standards for HLDTs

f. More Stringent Proposed Light-Duty Evaporative Emission

Standards

C. Our Proposed Program for Controlling Gasoline Sulfur

1. Oil Industry Proposal

2. Why EPA Believes the Gasoline Sulfur Program must Be

Nationwide

a. Sulfur's Negative Impact on Tier 2 Catalysts Is Irreversible.

b. Sulfur Has Negative Impacts on OBD Systems and I/M Programs.

c. Sulfur Reductions Would Ensure Lower Emissions of Many

Pollutants.

d. The Refining Industry Can Control Gasoline Sulfur.

e. Other Stakeholders Support National Gasoline Sulfur Control.

3. Proposed Gasoline Sulfur Standards

a. Standards for Refiners and Importers

i. Why Begin the Program in 2004?

ii. How Did We Arrive at the 80 ppm Cap and 30 ppm Average

Standards?

iii. Should a Near-Zero Gasoline Sulfur Standard Be Considered?

iv. Why Are We Proposing Less Stringent Standards for 2004 and

2005?

b. Standards for Small Refiners

i. What Standards Would Small Refiners Have to Meet Under

Today's Proposal?

ii. Application for Small Refiner Status

iii. Application for a Small Refiner Sulfur Baseline

iv. Volume Limitation on Use of a Small Refinery Standard

v. Hardship Extensions Beyond 2007 for Small Refiners

vi. What Alternative Provisions for Small Refiners Are Possible?

4. Compliance Flexibilities

a. Sulfur Averaging, Banking, and Trading (ABT) Program

i. Why Are We Proposing a Sulfur Averaging, Banking, and Trading

Program?

ii. How Would Refiners Establish a Sulfur Baseline?

iii. How Would Refiners Generate Credits?

iv. How Would Refiners Use Credits?

v. Could Small Refiners Participate in the ABT Program?

vi. What Alternative Implementation Approaches Are Possible?

b. Refinery Air Pollution Permitting Requirements

i. New Source Review Program

ii. Title V Operating Permit Program

iii. EPA Assistance to Explore Permit Streamlining Options and

Solicitation of Comment

c. Should Hardship Relief Be Available?

5. Consideration of Diesel Fuel Control

D. What Are the Economic Impacts, Cost Effectiveness and

Monetized Benefits of the Proposal?

1. What Are the Estimated Costs of the Proposed Vehicle

Standards?

2. What Are the Estimated Costs of the Proposed Gasoline Sulfur

Standards?

3. What Are the Aggregate Costs of the Tier 2/Gasoline Sulfur

Proposal?

4. How Does the Cost-Effectiveness of this Program Compare to

Other Programs?

a. What Is the Cost Effectiveness of this Program?

b. How Does the Cost Effectiveness of this Program Compare with

Other Means of Obtaining Mobile Source NOX + NMHC

Reductions?

c. How Does the Cost Effectiveness of this Proposed Program

Compare with Other Known Non-Mobile Source Technologies for Reducing

NOX + NMHC?

5. Does the Value of the Benefits Outweigh the Cost of the

Proposed Standards?

a. What Is the Purpose of this Benefit-Cost Comparison?

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

c. What Are the Significant Limitations of the Benefit-Cost

Analysis?

d. How Did We Perform the Benefit-Cost Analysis?

e. What Were the Results of the Benefit-Cost Analysis?

f. What Additional Efforts Will Be Made Following Proposal?

E. Other Program Design Options We Have Considered

1. Corporate Average Standards Based on NMOG or

NMOG+NOX

2. More Stringent Tier 2 NOX and Gasoline Sulfur

Standards

V. Additional Elements of the Proposed Vehicle Program and Areas for

Comment

A. Other Vehicle-related Elements of the Proposal

1. Proposed Tier 2 CO, HCHO and PM Standards

a. Carbon Monoxide (CO) Standards

b. Formaldehyde (HCHO) Standards

c. Particulate Matter (PM) Standards

2. Useful Life

a. Mandatory 120,000 Mile Useful Life

b. 150,000 Mile Useful Life Certification Option

3. Light Duty Supplemental Federal Test Procedure (SFTP)

Standards

4. LDT Test Weight

5. Test Fuels

6. Changes to Evaporative Certification Procedures to Address

Impacts of Alcohol Fuels

7. Other Test Procedure Issues

8. Small Volume Manufacturers

9. Compliance Monitoring and Enforcement

a. Application of EPA's Compliance Assurance Program, CAP2000

b. Compliance Monitoring

[[Page 26007]]

c. Relaxed In-Use Standards for Tier 2 Vehicles Produced During

the Phase-in Period

d. Enforcement of the Tier 2 and Interim Corporate Average

NOX Standards.

10. Miscellaneous Provisions

B. Other Areas on Which We Are Seeking Comment

1. LDV/LDT Program Options

a. Alternatives to Address Stringency of the Standards

i. Alternative Standards and Implementation Schedules

ii. Use of Family Emission Limits (FELs) Rather than Bins

iii. Use of Different Averaging Sets

iv. Different Standards for Different Categories of Vehicles

v. Consideration of Special Provisions for the Largest LDTs and

Advanced Technology

vi. Measures to Prevent LDT Migration to Heavy-Duty Vehicle

Category

vii. Use of Non-conformance Penalties (NCPs)

viii. Additional NOX Credits for Vehicles Certifying

to Low NOX Levels

ix. Incentives for Manufacturers to Bank Additional Early

NOX Credits

x. Flexibilities for Small Volume Manufacturers and Small

Businesses

xi. Adverse Effects of System Leaks

xii. Consideration of Other Corporate Averaging Approaches

2. Tighter Evaporative Emission Standards

3. Credits for Innovative VOC, NOX and Ozone

Reduction Technologies Not Appropriately Credited by EPA's Emission

Test Procedures

4. Need for Intermediate Useful Life Tier 2 Standards

VI. Additional Proposed Elements and Areas for Comment: Gasoline

Program

A. Other Areas for Comment

1. Would States Be Preempted from Adopting Their Own Sulfur

Control Programs?

2. Potential Changes in Gasoline Distillation Properties

B. Gasoline Sulfur Program Compliance and Enforcement Provisions

1. Overview

2. What Requirements Is EPA Proposing for Foreign Refiners and

Importers?

a. What Are the Proposed Requirements for Small Foreign Refiners

with Individual Refinery Sulfur Standards?

b. What Are the Proposed Requirements for Truck Importers?

3. What Standards Would Apply Downstream?

4. What Are the Proposed Testing and Sampling Methods and

Requirements?

a. What Is the Primary Test Method for Gasoline?

b. What Is the Proposed Test Method for Sulfur in Butane?

c. Is EPA Proposing a Requirement to Test Every Batch of

Gasoline Produced or Imported?

d. What Sampling Methods Are Proposed?

e. What Are the Proposed Gasoline Sample Retention Requirements?

5. What Federal Enforcement Provisions Would Exist for

California and When Could California Test Methods be Used to

Determine Compliance?

6. What Are the Proposed Recordkeeping and Reporting

Requirements?

a. What Are the Proposed Product Transfer Document Requirements?

b. What Are the Proposed Recordkeeping Requirements?

c. What Are the Proposed Reporting Requirements?

d. What Are the Proposed Attest Requirements?

7. What Are the Proposed Exemptions for Research, Development

and Testing?

8. What Are the Proposed Liability and Penalty Provisions for

Noncompliance?

9. How Would Compliance with the Sulfur Standards Be Determined?

VII. Public Participation

A. Comments and the Public Docket

B. Public Hearings

VIII. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

B. Regulatory Flexibility Act

1. Potentially Affected Small Businesses

2. Small Business Advocacy Review Panel and the Evaluation of

Regulatory Alternatives

C. Paperwork Reduction Act

D. Intergovernmental Relations

1. Unfunded Mandates Reform Act

2. Executive Order 12875: Enhancing Intergovernmental

Partnerships

3. Executive Order 13084: Consultation and Coordination with

Indian Tribal Governments

E. National Technology Transfer and Advancement Act

F. Executive Order 13045: Children's Health Protection

IX. Statutory Provisions and Legal Authority

I. Introduction

Since the passage of the 1990 Clean Air Act Amendments significant

progress has been made in reducing emissions from passenger cars and

light trucks. The National Low-Emission Vehicle (NLEV) and Reformulated

Gasoline (RFG) programs are important examples of control programs that

will continue to help reduce car and truck emissions into the near

future.

Nonetheless, due to increasing vehicle population and vehicle miles

traveled, passenger cars and light trucks will be significant

contributors to air pollution inventories into the indefinite future.

In fact, the emission contribution of light trucks and sport utility

vehicles will likely surpass that of passenger cars within the next

year. (This is occurring because of the combination of growth in miles

traveled by light trucks and their less stringent emission standards

compared to passenger cars). The program we describe below builds on

the NLEV and RFG Phase II programs to develop a strong national program

to protect public health and the environment well into the next

century. The program while reducing VOC emissions focuses especially on

NOX because that is where the largest air quality gains can

be achieved.

We have followed several overarching principles in developing this

proposal:

Design a strong national program to assist states in every

region of the country in meeting their air quality objectives.

View vehicles and fuels as an integrated system. Define a

program that continues to ensure that car and truck emission reductions

are part of the solution to our nation's air quality problems.

Establish a single set of emission standards that apply

regardless of the fuel used and regardless of whether the vehicle is a

car or a light truck.

Provide compliance flexibilities that allow vehicle

manufacturers and oil refiners to adjust to future market trends and

honor consumer preferences.

Encourage the development of advanced low emission, fuel

efficient technologies such as lean-burn engines.

Ensure sufficient leadtime for phase-in of the Tier 2 and

gasoline sulfur program.

With these principles as background, we turn now to an overview of

the vehicle and fuel aspects of the proposal. Sections I and II of this

preamble will give you a brief overview of our proposal and the basics

of our rationale for proposing it. Subsequent sections will expand on

the air quality need, the economic impacts, and provide a more detailed

description of the specifics of the proposal. The final sections deal

with several subjects, including opportunities for public participation

that you may wish to take advantage of. You may also want to review our

Draft Regulatory Impact Analysis (RIA), found in the docket and on the

Internet, where we present more detailed analyses and discussions of

many topics raised in this preamble.

A. What Are the Basic Components of Today's Proposal?

The nation's air quality, while certainly better than in the past,

will continue to expose tens of millions of Americans to unhealthy

levels of air pollution well into the future in the absence of

significant new controls on emissions from motor vehicles. EPA is

therefore proposing a major, comprehensive program designed to

significantly reduce emissions from passenger cars and light trucks

(including sport-utility vehicles, minivans, and pickup trucks) and

reduce sulfur in gasoline. Under the proposed program, automakers would

produce vehicles designed to have very low emissions when operated on

low-sulfur gasoline, and oil refiners would

[[Page 26008]]

provide that cleaner gasoline nationwide. In this preamble, we refer to

the proposed comprehensive program as the ``Tier 2/Gasoline Sulfur

Control Program'' or simply as the ``Tier 2 Program.''

1. Vehicle Emission Standards

Today's action proposes new federal emission standards (``Tier 2

standards'') for passenger cars and light trucks. The program is

designed to focus on reducing the emissions most responsible for the

ozone and particulate matter (PM) impact from these vehicles--nitrogen

oxides (NOX) and non-methane organic gases (NMOG),

consisting primarily of hydrocarbons (HC) and contributing to ambient

volatile organic compounds (VOC). The program would also, for the first

time, apply the same federal standards to passenger cars and all light

trucks (``light light-duty trucks'' (or LLDTs), rated at less than 6000

pounds gross vehicle weight and ``heavy light-duty trucks'' (HLDTs),

rated at more than 6000 pounds gross vehicle weight).

The proposed Tier 2 standards would reduce new vehicle

NOX levels to an average of 0.07 grams per mile (g/mi). For

new passenger cars and light LDTs, these standards would phase in

beginning in 2004, with the standards to be fully phased in by

2007.1 For heavy LDTs, the proposed Tier 2 standards would

be phased in beginning in 2008, with full compliance in 2009. During

the phase-in period from 2004-2007, all passenger cars and light LDTs

not certified to Tier 2 standards would have to meet an interim average

standard of 0.30 g/mi NOX, equivalent to the current NLEV

standards for LDVs.2 During the period 2004-2008, heavy LDTs

not certified to Tier 2 standards would phase in an average standard of

0.20

g/mi NOX. Those not covered by the phase-in would be

required to meet a traditional (non-averaging) standard of 0.60 g/mi

NOX.

---------------------------------------------------------------------------

\1\ By comparison, the NOX standards for the National

Low Emission Vehicle (NLEV) program, which will be in place

nationally in 2001, range from 0.30 g/mi for passenger cars to 0.50

g/mi for medium-sized light trucks. For further comparison, the

standards met by today's Tier 1 vehicles range from 0.60 g/mi to

1.53 g/mi.

\2\ There are also NMOG standards associated with both the

interim and Tier 2 standards. The NMOG standards vary depending on

which of various individual sets of emission standards manufacturers

choose to use in complying with the average NOX standard.

This ``bin'' approach is described more fully in section IV.B.

---------------------------------------------------------------------------

Manufacturers would be allowed to comply with the very stringent

proposed new standards in a flexible way, assuring that the average

emissions of a company's production met the target emission levels

while allowing the manufacturer to choose from several more- and less-

stringent emission categories for certification. The proposed

requirements also include more stringent PM standards, which primarily

affect diesel vehicles, and more stringent hydrocarbon controls

(exhaust NMOG and evaporative emissions standards).

We are also proposing stringent particulate matter standards that

would be especially important if there were substantial future growth

in diesel sales. Even under an assumed scenario where diesel sales grew

to represent 50 percent of all light-duty trucks by 2010, the PM

standards being proposed today would result in a steady decrease in

total direct PM 2.5 from cars and light trucks. For this

scenario of a 50 percent share for diesel light trucks, direct PM

emissions in 2020 with today's proposal would be less than they are at

present. Therefore, we believe that today's proposal accommodates

environmental concerns about such vehicles in a way that insures

positive environmental results.

2. Gasoline Sulfur Standards

The other major part of today's proposal would significantly reduce

average gasoline sulfur levels nationwide. These reductions could begin

to phase in as early as 2000, with full compliance by 2006. Refiners

would generally install advanced refining equipment to remove sulfur

during the production of gasoline. Importers of gasoline would be

required to import and market only gasoline meeting the proposed sulfur

limits. Temporary, less stringent standards would apply to a few small

refiners.

EPA is proposing that gasoline produced by refiners and sold by

gasoline importers generally meet an average sulfur standard of 30 ppm

and a cap of 80 ppm in 2004. The proposed program builds upon the

existing regulations covering gasoline content as it relates to

emissions performance. It includes provisions for trading of sulfur

credits, increasing the flexibility available to refiners for complying

with the new requirements. We intend the proposed credit program to

ease compliance uncertainties by providing refiners the flexibility to

phase in early controls in 2000-2003 and use credits gained in these

years to delay some control to as late as 2006. As proposed, the

program would achieve expected environmental benefits while providing

substantial flexibility to refiners. The effect of the credit program

is that those refiners that participate would have the opportunity for

more overall leadtime to reach the final sulfur levels.

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

1. Light-Duty Vehicles and Trucks

We are proposing the motor vehicle emission standards under the

authority of section 202 of the Clean Air Act. Sections 202(a) and (b)

of the Act provide EPA with general authority to prescribe vehicle

standards, subject to any specific limitations otherwise included in

the Act. Sections 202(g) and (h) specify the current standards for LDVs

and LDTs, which became effective beginning in model year 1994 (``Tier 1

standards'').

Section 202(i) of the Act provides specific procedures that EPA

must follow to determine whether standards more stringent than Tier 1

standards for LDVs and certain LDTs 3 are appropriate

beginning in the 2004 model year. 4 Specifically, we are

required to first issue a study regarding ``whether or not further

reductions in emissions from light-duty vehicles and light-duty trucks

should be required * * *'' (the ``Tier 2 study''). This study ``shall

examine the need for further reductions in emissions in order to attain

or maintain the national ambient air quality standards.'' It is also to

consider (1) the availability of technology to meet more stringent

standards, taking cost, lead time, safety, and energy impacts into

consideration, and, (2) the need for, and cost effectiveness of, such

standards, including consideration of alternative methods of attaining

or maintaining the national ambient air quality standards. A certain

set of ``default'' emission standards for these vehicle classes is

among those options for new standards that EPA is to consider.

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\3\ LDTs with a loaded vehicle weight less than or equal to 3750

pounds.

\4\ Section 202(b)(1)(C) forbids EPA from promulgating mandatory

standards more stringent than Tier 1 standards until the 2004 model

year.

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After the study is completed and the results are reported to

Congress, EPA is required to determine by rulemaking whether (1) there

is a need for further emission reductions; (2) the technology for more

stringent emission standards from the affected classes is available;

and (3) such standards are needed and cost-effective, taking into

account alternatives. If EPA answers ``yes'' to these questions, then

the Agency is to promulgate new, more stringent motor vehicle standards

(``Tier 2 standards'').

EPA submitted its report to Congress on July 31, 1998. Today's

proposal considers and proposes affirmative responses to the three

questions above (see section II below) and sets forth new proposed

standards that are more

[[Page 26009]]

stringent than the default standards in the Act.

EPA is also proposing standards for larger light-duty trucks under

the general authority of section 202(a)(1) and under section 202(a)(3)

of the Act, which requires that standards applicable to emissions of

hydrocarbons, NOX, CO and PM from heavy-duty vehicles

5 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.

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\5\ LDTs that have gross vehicle weight ratings above 6000

pounds are considered heavy-duty vehicles under the Act. See section

202(b)(3). For regulatory purposes, we refer to these LDTs as

``heavy light-duty trucks'' made up of LDT3s and LDT4s.

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2. Gasoline Sulfur Controls

We are proposing gasoline sulfur controls pursuant to our authority

under section 211(c)(1) of the Clean Air Act.6 Under section

211(c)(1), EPA may adopt a fuel control if at least one of the

following two criteria is met: (1) the emission products of the fuel

cause or contribute to air pollution which may reasonably be

anticipated to endanger public health or welfare, or (2) the emission

products of the fuel will significantly impair emissions control

systems in general use or which would be in general use were the fuel

control to be adopted.

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\6\ We currently have regulatory requirements for conventional

and reformulated gasoline adopted under sections 211(c) and 211(k)

of the Act, in addition to the ``substantially similar''

requirements for fuel additives of section 211(f). These

requirements directly or indirectly control sulfur levels in

gasoline. See the Draft RIA for more details.

---------------------------------------------------------------------------

We are proposing to control sulfur levels in gasoline based on both

of these criteria. Under the first criterion, we believe that emissions

products of sulfur in gasoline used in Tier 1 and LEV technology

vehicles contribute to ozone pollution, air toxics, and PM. Under the

second criterion, we believe that gasoline sulfur in fuel that will be

used in Tier 2 technology vehicles will significantly impair the

emissions control systems expected to be used in such vehicles. Please

refer to section IV.C. below and to the Draft Regulatory Impact

Analysis (RIA) for more details of our analysis and findings. The Draft

RIA includes a more detailed discussion of EPA's authority to set

gasoline sulfur standards, including a discussion of our proposed

conclusions relating to the factors required to be considered under

section 211(c).

C. The Tier 2 Study and the Sulfur Staff Paper

On July 31, 1998, EPA submitted its report to Congress containing

the results of the Tier 2 study.7 The study indicated that

in the 2004 and later time frame, there will be a need for emission

reductions to aid in meeting and maintaining the National Ambient Air

Quality Standards (NAAQS) for both ozone and PM. Air quality modeling

showed that in the 2007-2010 time frame, when Tier 2 standards would

become fully effective, a number of areas would still be in

nonattainment for ozone and PM even after the implementation of

existing emission controls. EPA also found ample evidence that

technologies would be available to meet more stringent Tier 2

standards. In addition, the study provided evidence that such standards

could be implemented at a similar cost per ton of reduced pollutants as

other programs aimed at similar air quality problems. Finally, the

study identified several additional issues in need of further

examination, including the relative stringency of car and light truck

emission standards, the appropriateness of identical versus separate

standards for gasoline and diesel vehicles, and the effects of sulfur

in gasoline on catalyst efficiency.

---------------------------------------------------------------------------

\7\ On April 28, 1998, EPA published a notice of availability

announcing the release of a draft of the Tier 2 study and requesting

comments on the draft. The final report to Congress included a

summary and analysis of the comments EPA received.

---------------------------------------------------------------------------

In addition, on May 1, 1998, EPA released a staff paper presenting

EPA's understanding of the impact of gasoline sulfur on emissions from

motor vehicles and exploring what gasoline producers and automobile

manufacturers could do to reduce sulfur's impact on emissions. The

staff paper noted that gasoline sulfur is a catalyst poison and that

high sulfur levels in commercial gasoline could affect the ability of

future automobiles to meet more stringent standards in use. It also

pointed out that sulfur control would provide additional benefits by

lowering emissions from the current fleet of vehicles.

II. Proposed Tier 2 Determination

Based on the statutory requirements described above and the

evidence provided in the Tier 2 Study, as updated in this document, EPA

proposes its determination that new, more stringent emission standards

are indeed needed, technologically feasible, and cost effective.

A. There Is a Substantial Need for Further Emission Reductions in Order

To Attain and Maintain National Ambient Air Quality Standards

We believe that there is a clear air quality need for new emission

standards, based on the continuing air quality problems predicted to

exist in future years. As the discussion in section III.B. illustrates,

our modeling shows that in 2007 approximately 80 million Americans will

be living in areas that are in nonattainment for the 8-hour ozone

NAAQS, even with all other expected controls in place. Another 49

million people will live in attainment areas that are within 15% of

being reclassified as nonattainment areas. This is a total of nearly

130 million people, which represents about 48 percent of the population

of the United States.

In addition to these ozone concerns, our models indicate that by

2010, 45 areas, with 18 million people, will be in nonattainment for

the original PM10 NAAQS and 11 areas with 10 million people

will be in nonattainment for the revised PM10 NAAQS. While

not a specific driving factor in today's findings, our models also

project that 102 areas with about 55 million people will be in

nonattainment with the new PM2.5 NAAQS by 2010. We also must

recognize that nonattainment areas remain for other criteria pollutants

(e.g., CO) and that non-criteria pollution (e.g., air toxics and

regional haze) also contributes to environmental and health concerns.

Clearly there is a critical need for reductions in the emissions

being projected for future years. Furthermore, mobile sources are

important contributors to the emission problem. As we will explain more

fully later in this preamble, in the year 2007, the cars and light

trucks that are the subject of today's proposal are projected to

contribute nearly 40 percent of the total NOX and VOC

inventory in some cities, and 20 percent of nationwide NOX

and VOC emissions. This situation would have been considerably worse

without the NLEV program created by vehicle manufacturers, EPA, the

Northeastern states, and others. We therefore believe that reductions

in these source categories are an essential part of the reductions

needed to attain and maintain the NAAQS. As we explain below, we

propose to find that major reductions in future emissions from light-

duty vehicles and trucks are both feasible and cost effective compared

to available alternatives.

[[Page 26010]]

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

Technologically Feasible

We believe that emission standards more stringent than current Tier

1 and National Low Emission Vehicle (NLEV) levels are technologically

feasible. We believe this to be true both for the LDVs and LDTs

specifically covered in section 202(i) and for the heavier LDTs also

included in today's proposal. Manufacturers are currently producing

NLEV vehicles that meet more stringent standards than similar Tier 1

models. Our analysis shows that mainly through improvements in engine

control software and catalytic converter technology, manufacturers can

and are building durable vehicles and trucks, including heavy light-

duty trucks, which have very low emission levels.8

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\8\ The Draft RIA contains an extended analysis, Section IV.A.

below has more discussion of the technological feasibility of our

proposed standards including detailed discussions of the various

technology options that we believe manufacturers may use to meet

these standards.

---------------------------------------------------------------------------

For light duty vehicles, certified NOX levels for 1999

reveal that NOX levels representing full-life, deteriorated

emissions in the 0.01 to 0.10 g/mi range are already being seen on some

production vehicles. Similarly, light-duty trucks up to 8500 lbs. GVWR,

also included in today's proposal, have some very low 1999

certification levels for NOX, with NOX levels of

as low as 0.04 g/mi for some of the largest LDTs. These levels are well

below Tier 1 and NLEV standards. Manufacturers have also certified LDVs

and LDTs to NMOG and CO levels as much as 80 percent below Tier 1

standards.

As discussed in more detail below and in the Draft RIA, we believe

that, by the 2004-2009 time frame proposed for the Tier 2 standards,

manufacturers would be fully able to comply with the proposed new

standard levels. In addition, to facilitate manufacturers' efforts to

meet these new standards, the Tier 2 regulations would include a

corporate fleet average, which would allow manufacturers to optimize

the deployment of technology across their product lines. Our analysis

of the available technology improvements and the very low emission

levels already being realized on these vehicles leads us to propose a

finding that today's proposed standards are fully feasible for LDVs and

LDTs.

C. More Stringent Standards for Light-Duty Vehicles and Trucks Are

Needed and Cost Effective Compared to Available Alternatives

In this document, we propose that Tier 2 motor vehicle standards

are both necessary and cost effective. We have already described our

belief that substantial further reductions in emissions are needed to

help reduce the levels of unhealthy air pollution that millions of

people are being exposed to. (We describe this further below and in the

Draft RIA.) In its analyses supporting the new ozone and PM NAAQS, the

Agency identified those methods that were reasonably cost effective,

and showed that substantial progress toward attainment could be made.

However, we also concluded that methods beyond those that could be

identified as cost effective at the time were needed and we assumed

they would be identified in the future.

We believe that the Tier 2/gasoline sulfur proposal is one of those

methods. This proposal would reduce annual NOX emissions by

about 2.2 million tons per year in 2020 and 2.8 million tons per year

in 2030 after the program is fully implemented. By way of comparison,

if all of the controls identified for the NAAQS analysis costing less

than $10,000/ton (the limit on cost effectiveness used in that

analysis) were implemented nationwide, they would produce

NOX emission reductions of about 2.9 million tons per year.

That is, to achieve significant further reductions using control

approaches other than the proposed Tier 2/Gasoline Sulfur program could

mean adopting measures costing well beyond $10,000 per ton.

Further emission reductions are needed. Without Tier 2 and gasoline

sulfur controls, we project that in 2007 at least 8 metropolitan areas

and 2 rural counties with a combined population of 39 million will

exceed the 1-hour ozone NAAQS and 28 metropolitan areas and 4 rural

counties with a combined population of 80 million will exceed the 8-

hour ozone NAAQS. We project that cars and light trucks will contribute

17 percent of the nationwide NOX inventory by 2007 and 20 to

40 percent in some cities with air quality problems. The NOX

reductions from today's proposal range from 19 to 48 percent of the

reductions we estimate are needed for areas to achieve attainment. We

believe that the proposed program, as well as the technologies assumed

for the NAAQS analysis mentioned above, are clearly cost effective

approaches for attaining and maintaining the NAAQS.

The magnitude of emission reductions that can be achieved by a

comprehensive national Tier 2/gasoline sulfur program would be

difficult to achieve from any other source category. Given the

contribution that light-duty mobile source emissions make to the

national emissions inventory and the range of control programs ozone-

affected areas already have in place or would be expected to implement,

we believe it will be very difficult, if not impossible, to attain and

maintain the ozone NAAQS in a cost-effective manner without reducing

emissions from LDVs and LDTs. In addition, we project that the Tier 2/

gasoline sulfur program would reduce direct and secondary particulate

matter coming from LDVs and LDTs by over 70 percent, providing

reductions of almost 240,000 tons annually by 2010.

We believe, then, that today's proposal is a major and attractive

source of ozone and PM precursor emission reductions when compared to

other available options. It would represent a degree of emission

reduction beyond those programs identified in the NAAQS analysis that

we believe is currently unavailable from any other reasonable program.

We also believe that it would be a cost effective program, costing

approximately $2,000 per ton of NOX plus hydrocarbon reduced

according to our estimates, which is quite attractive compared to other

alternatives. The discussion of cost and cost effectiveness later in

this preamble explains the derivation of these numbers and compares

them to other alternatives. That discussion indicates that today's

proposal would be as cost effective as both the Tier 1 and NLEV

standards and cost effective when compared to non-mobile source

programs as well.

III. Air Quality Need for and Impact of Today's Proposal

In the absence of significant new controls on emissions, tens of

millions of Americans would continue to be exposed to unhealthy levels

of air pollution. Emissions from passenger cars and light trucks are a

significant contributor to a number of air pollution problems. Today's

proposal would significantly reduce emissions from cars and light

trucks and hence would significantly reduce the health risks posed by

air pollution. This section summarizes the results of the analyses we

performed to arrive at our proposed determination that continuing air

quality problems are likely to exist, that these air quality problems

would be in part due to emissions from cars and light trucks, and that

the new standards being proposed today would improve air quality and

mitigate other environmental problems.

[[Page 26011]]

A. Americans Face Serious Air Quality Problems That Require Further

Emission Reductions

Air quality in the United States continues to improve. Nationally,

the 1997 air quality levels were the best on record for all six

criteria pollutants.9 In fact, the 1990s have shown a steady

trend of improvement, due to reductions in emissions from most sources

of air pollution, from factories to motor vehicles. Despite these

continued improvements in air quality, however, tens of millions of

Americans are still exposed to unhealthy levels of ozone and PM.

Moreover, unless there are reductions in overall emissions beyond those

that are scheduled to be achieved by already committed controls, many

of these Americans will continue to be so exposed.

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\9\ National Air Quality and Emissions Trend Report, 1997, Air

Quality Trends Analysis Group, Office of Air Quality Planning and

Standards, U.S. Environmental Protection Agency, Research Triangle

Park, N.C., December 1998 (available on the World Wide Web at http:/

/www.epa.gov/oar/aqtrnd97/).

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Ambient ozone is formed in the atmosphere through a complex

interaction of VOC and NOX emissions. Cars and light trucks

emit a substantial fraction of these emissions. Ambient PM is emitted

directly from cars and light trucks; it also forms in the atmosphere

from NOX, sulfur oxides (SOX) and VOC, all of

which are emitted by motor vehicles. When ozone exceeds the air quality

standards, otherwise healthy people often have reduced lung function

and chest pain, and hospital admissions for people with respiratory

ailments like asthma increase; for longer exposures, permanent lung

damage can occur. Similarly, particles can penetrate deep into the

lungs and are linked with premature death, increased hospital

admissions, increased respiratory symptoms, and changes in lung tissue.

When either ozone or PM air quality problems are present, those hardest

hit tend to be children, the elderly, and people who already have

health problems.

The health effects of high ozone and PM levels are not the only

reason for concern about continuing air pollution. Ozone and PM also

harm plants and damage materials. PM reduces visibility and contributes

to significant visibility impairment in our national parks and

monuments and in many urban areas. In addition, air pollution from

motor vehicles contributes to cancer and other health risks,

acidification of lakes and streams, eutrophication of coastal and

inland waters, and elevated drinking water nitrate levels. These

problems impose a substantial burden on public health, our economy, and

our ecosystems.

In recognition of this burden, Congress has passed and subsequently

amended the Clean Air Act. The Clean Air Act requires each state to

have an approved State Implementation Plan (SIP) that shows how an area

plans to meet its air quality obligations, including achieving and then

maintaining attainment of all of the National Ambient Air Quality

Standards (NAAQS), such as those for ozone and PM.

Under EPA's proposed policy for implementing the new 8-hour ozone,

revised PM10, and new PM2.5 ambient standards (63

FR 65593, November 27, 1998), states must prepare and submit SIP

revisions to demonstrate attainment of the 8-hour ozone standard

between 2000 and 2003, depending on ozone classification under the 8-

hour standard. The earlier submittal date applies to ``transitional''

areas, which are areas that are in attainment with the 1-hour standard

and can attain the 8-hour standard through local measures adopted prior

to classification (under the 8-hour standard) and the regional emission

reductions to be achieved under the Regional Ozone Transport Rule (63

FR 57356, October 27, 1998). In general, EPA expects these areas to

demonstrate attainment by 2007. Other 8-hour nonattainment areas will

be classified as ``traditional'' under the 8-hour standard, and we

believe that these areas will have attainment dates of 2007, 2009, or

2010 depending on their 1-hour classification status and 1-hour

attainment date.

Because it takes three ``clean'' years to qualify an area to be

redesignated as attainment for the ozone standard, the deadline for

each area to achieve the VOC and NOX emission reductions

needed to meet the ozone standard generally should be two years earlier

than its attainment date. For example, 8-hour ozone nonattainment areas

for which we would establish an attainment date of 2009 would need to

implement emission reductions by the start of the 2007 ozone season in

order to have three ``clean'' years by their 8-hour attainment deadline

of 2009.

The SIP revisions to demonstrate attainment with the revised

PM10 standard must be prepared by 2002, with attainment by

2006, unless this date is not practicable. As discussed below, EPA has

also finalized regulations that regions and states implement plans for

protecting and improving visibility in the 156 mandatory Federal Class

I areas as defined in section 162(a) of the Clean Air Act. These areas

are primarily national parks and wilderness areas.

To accomplish the goal of full attainment in all areas according to

the schedules for the various NAAQS and the visibility program, the

federal government must assist the states by reducing emissions from

sources that are not as practical to control at the state level as at

the federal level. Vehicles and fuels move freely among the states, and

they are produced by national or global scale industries. Most

individual states are not in a position to regulate these industries

effectively and efficiently. The Clean Air Act therefore gives EPA

primary authority to regulate emissions from the various types of

highway vehicles and their fuels. Our actions to reduce emissions from

these and other national sources are a crucial and essential complement

to actions by states to reduce emissions from more localized sources.

If we do not adopt new standards to reduce emissions from cars and

light trucks, emissions from these vehicles would remain a large

portion of the emissions burden that causes elevated ozone and

continued nonattainment with the ozone NAAQS, which in turn affects

tens of millions of Americans. Without new standards, steady annual

increases in fleet size and miles of travel will outstrip the benefits

of current emission controls, and will cause ozone-forming emissions

from cars and trucks to grow each year starting about 2014. The

contribution of these vehicles to PM exposure and PM nonattainment

would also remain significant, and could increase considerably if

diesel engines are used in more cars or light trucks. For ozone in

particular, the contribution of cars and light trucks--in terms of both

local emissions and transported pollution--will be so significant to

those areas expected to be in nonattainment in the 2007 to 2010 time

frame, and the expected emission reduction shortfall in these areas

will be so large, that further reductions from cars and light trucks

are an inescapable element of any attainment strategy.

The standards we are proposing would cut the contribution of ozone

and PM precursors from cars and light trucks greatly. Even with this

cut, many areas will likely still find it necessary to obtain

additional reductions from other sources in order to fully attain the

ozone and PM NAAQS. However, their task would be easier and the

economic impact on their industries and citizens would be lighter as a

result of the actions proposed today. This would be a critical benefit

of today's proposal. Following implementation of the Regional Ozone

Transport Rule, states

[[Page 26012]]

will have already adopted emission reduction requirements for nearly

all large sources of VOC and NOX for which cost-effective

control technologies are known. Those that remain in nonattainment will

therefore have to consider their other alternatives. In fact, however,

many of the alternatives states will have to consider are very costly,

with a small impact from each additional category subjected to new

emission controls. The emission reductions from today's proposed

standards for gasoline, cars, and light trucks would ease the need for

states to find first-time reductions from the mostly smaller sources

that have not yet been controlled, including area sources that are

closely connected with individual and small business activities. They

would also reduce the need for states to seek even deeper reductions

from large and small sources already subject to emission controls.

In our meetings and correspondence with state and local officials,

they asked us to reduce the emissions from cars and trucks, so that

their charge of protecting the public against air pollution is one they

can accomplish on schedule and without adverse economic impacts. We

heard from the Northeast States for Coordinated Air Use Management, the

Ozone Transport Commission, the State and Territorial Air Program

Administrators, and the Association of Local Air Pollution Control

Officers. They consistently told us that it would be very difficult and

costly for the states to obtain comparable reductions from other

sources as substitutes for reductions from cars and light trucks,

especially on top of the additional reductions needed to reach ozone

attainment even with the reductions from today's proposal.

We project that today's proposal would also have important benefits

for regional visibility, acid rain, and coastal water quality.

For these and other reasons discussed in this document, we are

proposing to determine that significant emission reductions will still

be needed by the middle of the next decade and beyond to achieve and

maintain further improvements in air quality in many, geographically

dispersed areas. We also believe that a significant portion of these

emission reductions can be obtained by reducing emissions from cars and

light trucks. We believe that such reductions are in fact necessary

(since cars and light trucks are such large contributors to current and

projected ozone problems) and reasonable (since these reductions could

be achieved at a reasonable cost compared to other alternative

reductions).

The remainder of this section describes the health and

environmental problems that today's proposal would help mitigate and

the expected health and environmental benefits of this proposal. Ozone

is discussed first, followed by PM, other criteria pollutants,

visibility, air toxics, and other environmental impacts. The emission

inventories and air quality analyses are explained more fully in the

Draft Regulatory Impact Analysis for today's proposal.

B. Ozone

1. Ozone Levels Have Declined, but Unhealthy Levels of Ozone Persist

Ground-level ozone is the main harmful ingredient in

smog.10 It is produced by complex chemical reactions when

its precursors, VOC and NOX, react in the presence of

sunlight. The chemical reactions that create ozone take place while the

wind is carrying the pollutants, which means that ozone can be more

severe many miles away from the source of ozone-forming emissions than

it is at the source. The movement of ozone and its precursors is called

``ozone transport'' and suggests two complementary approaches to reduce

ozone levels in areas affected by ozone transport:

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\10\ Ozone also occurs naturally in the stratosphere and

provides a protective layer high above the earth.

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(1) Reduce ozone precursor emissions in the area itself.

(2) Reduce ozone precursor emissions in upwind areas to reduce

incoming ozone and ozone precursor levels.

Within a nonattainment area itself, both VOC and NOX

reductions are generally beneficial. Especially in the eastern portion

of the U.S., the second approach of controlling upwind emissions can

play an important part in efforts to reduce ozone levels in

nonattainment areas. Because individual states cannot control upwind

sources of air pollution that lie outside their borders, EPA has a

special role in managing transport impacts. Vehicle and fuel standards

should play a part in doing so.

Since NOX affects downwind ozone levels in the eastern

U.S. over greater distances than VOC does, reductions in upwind

NOX emissions are particularly important in reducing ozone

levels downwind. Modeling conducted by the Ozone Transport Assessment

Group, discussed below, indicates that VOC reductions substantially

upwind from nonattainment areas have little benefit in those

nonattainment areas across the eastern region of the U.S. By contrast,

VOC reductions in or near nonattainment areas do provide air quality

benefits. Since cars and light trucks meeting today's proposed

standards would operate everywhere, today's proposal would reduce VOC

and NOX emissions in both nonattainment areas and in upwind

areas.

The new standards being proposed today would have their largest

effect on NOX emissions. Sulfur in gasoline has been found

to increase NOX emissions more than VOC emissions, and

reducing sulfur would therefore yield larger NOX reductions

than VOC reductions. Similarly, the vehicle standards proposed today

represent a greater reduction from current NOX standards

than is the case for VOC. We have taken this approach because air

quality modeling conducted for OTAG, and subsequent modeling we have

conducted, indicates that NOX reductions would have larger

ozone benefits than would VOC reductions. In addition, we believe that

individual nonattainment areas have a wider range of alternative

control opportunities for VOC than they have for NOX.

Ozone levels have decreased significantly over the past 20 years as

VOC and NOX emissions have been reduced. However, ozone

levels in much of the country remain a major concern. Outside of

California, the 1990 census showed 72 million people living in areas

that were formally designated as non-attainment for the 1-hour standard

as of August 10, 1998. Measured ozone design values from 1995 to 1997

in the region analyzed by the Ozone Transport Assessment Group (OTAG)

11 indicate that in this region alone, 26 metropolitan areas

and 8 rural counties together containing 75 million people experienced

ozone levels in excess of the 1-hour ozone standard.

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\11\ OTAG evaluated a region that included all or part of the

easternmost 37 states.

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The 8-hour ozone standard is more stringent and protective than the

1-hour standard, and more areas have exceeded it in the recent past. In

1995 to 1997, at least one county in each of 81 metropolitan areas and

an additional 30 rural counties together containing 110 million people

had ozone values in excess of the 8-hour ozone standard. Additional

areas in the OTAG region had ozone levels within 15 percent of the 8-

hour standard and hence faced potentially significant maintenance

challenges: 52 metropolitan areas and 44 rural counties together

containing 26 million people.

For several reasons, we expect to see substantial additional

progress in

[[Page 26013]]

reducing ozone levels over the next ten years despite continued growth

in electric power generation, industrial output, nonroad activity

levels, and vehicle miles traveled. NOX and VOC emissions

from mobile sources will continue to decline as older, higher-emitting

vehicles and nonroad engines are retired from service and replaced with

newer vehicles and nonroad engines that must meet more stringent

federal emission standards. Other federal regulations that will reduce

ozone precursor emissions will take effect, such as regulations that

will reduce VOC emissions from paints and other architectural coatings.

Beginning in 2000, areas of the country participating in the federal

reformulated gasoline program will receive lower-emitting Phase 2

reformulated gasoline. States are expected to implement additional

measures to reduce NOX and VOC emissions in 1-hour ozone

nonattainment areas. In addition, the final Regional Ozone Transport

Rule (ROTR) (63 FR 57356, October 27, 1998) requires the District of

Columbia and 22 states in the eastern U.S. to reduce their

NOX emissions substantially by 2003 to reduce ozone levels

in downwind states.

Using the most recent improvements to the OTAG emission inventories

and the OTAG ozone model, we project that in the OTAG region, these

combined emission reductions will bring 18 of the aforementioned 26

metropolitan areas and 6 of the 8 rural counties, with 36 million

residents, into attainment with the 1-hour ozone standard by 2007. The

same emission reductions are projected to bring ozone design values

below the 8-hour standard in 53 out of 81 metropolitan areas and 26 out

of 30 rural counties, with a combined 1990 population of 30 million

people.12

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\12\ The design value is the calculated ozone level, based on

ozone measurements in the area, that is compared to the NAAQS to

determine compliance with the standard.

---------------------------------------------------------------------------

However, we still project many areas in the OTAG region to have

ozone design values in 2007 in excess of the 1-hour and 8-hour

standards. Eight metropolitan areas and two counties with a combined

1990 population of 39 million are projected to experience ozone design

values in excess of the 1-hour ozone standard in 2007.13

Twenty-eight areas and 4 rural counties, with a combined 1990

population of 80 million, are projected to experience ozone design

values at levels in excess of the 8-hour standard in 2007.

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\13\ Various states have submitted SIPs to meet a requirement

that they demonstrate attainment with the 1-hour ozone standard by

2005 or 2007 (the exact date is state-specific, depending on the

severity of their violation of the 1-hour standard). These plans

were submitted to EPA in the first half of 1998, and we are still

reviewing them for their completeness and approvability. We have not

fully evaluated the impact of the measures contained in these plans

on future ozone levels. As a result, they are not included in the

baseline emission inventory.

---------------------------------------------------------------------------

Additional areas outside the OTAG modeling region may also

experience high ozone levels, even with the additional emission

controls that will be implemented by 2007. The most recent assessment

for these areas was made in the Regulatory Impact Analysis for the

revised NAAQS (NAAQS RIA).14 That assessment predicted that

many areas in California will require substantial additional reductions

to attain the 1-hour and 8-hour ozone standards. Although the vehicle

and fuel standards being proposed today would not apply to vehicles and

fuel sold in California, we project that today's proposals would lead

to emission reductions within California. According to the State of

California, about 7 to 10 percent of all car and light truck travel in

California takes place in vehicles originally sold outside California.

These vehicles operate in California during visits and after relocation

of households from other states. Today's proposal would cause those

vehicles to be cleaner, assisting California's nonattainment areas to

meet the ozone standards. In addition, this proposal requires that

gasoline in all states (except California, which has its own low-sulfur

gasoline program) have a low sulfur content, in order to maintain

catalyst effectiveness. This would ensure that vehicles belonging to

California residents get clean gasoline when they travel outside of

California, so that they return to California with fully functioning

catalysts.

---------------------------------------------------------------------------

\14\ ``Regulatory Impact Analyses for the Particulate Matter and

Ozone National Ambient Air Quality Standards and Proposed Regional

Haze Rule,'' Innovative Strategies and Economics Group, Office of

Air Quality Planning and Standards, U.S. Environmental Protection

Agency, Research Triangle Park, NC, July 17, 1997.

---------------------------------------------------------------------------

Outside of California and the OTAG region, the NAAQS RIA modeling

indicated that all areas would attain the 1-hour standard by 2010. One

area (Phoenix, AZ) was projected not to attain the 8-hour standard.

Eleven other areas were projected to have ozone levels within 15

percent of the 8-hour standard and hence face potential challenges in

maintaining their attainment status.

Furthermore, even an area now in attainment or that reaches

attainment by 2007 can be at risk of becoming nonattainment in the face

of continued growth in its population, economy, vehicle traffic, and

nonroad equipment activity levels. Also, an area that we have estimated

will reach attainment in 2007 may fail to do so if growth is higher

than we project, if emission controls are less effective, or if the

modeling is otherwise in error. Our modeling for the OTAG region has

estimated that of the 1-hour nonattainment areas projected to reach

attainment by 2007 with the benefits of the Regional Ozone Transport

Rule (ROTR) and other already committed measures, 17 metropolitan areas

and 5 rural counties, with a combined 1990 population of 35 million

people, will remain within 15 percent of the 1-hour standard. These

areas would benefit from additional reductions to help ensure that they

will attain.

With respect to the 8-hour standard, we estimate that 80

metropolitan areas and 39 rural counties with a 1990 population of 49

million people will have design values within 15 percent of the 8-hour

standard. These areas have some risk of not actually being in

attainment in 2007, and will face potentially significant challenges

maintaining their attainment status in future years. Today's proposed

standards would help ensure these areas do attain, and help these areas

accommodate continued population and economic growth while staying in

attainment with the 8-hour ozone standard by further reducing levels of

ozone precursors.

EPA's best ozone projections at the current time for the OTAG

region are summarized in Tables III-1 and III-2, where ``ROTR'' refers

to the Regional Ozone Transport Rule. It should be noted that the

results for the OTAG regions discussed above and summarized in the

following tables apply to only a portion of the area that would benefit

from today's proposal.

Table III-1.--Extent of Potential 1-Hour Ozone Problem Areas in 2007 in

the OTAG Region.a

------------------------------------------------------------------------

2007

projections

with ROTR

------------------------------------------------------------------------

Design values in excess of the 1-Hour NAAQS (125 ppb)

------------------------------------------------------------------------

Number of Metropolitan Areas............................ 8

Number of Rural Counties................................ 2

1990 Population of Metropolitan Areas and Rural Counties 39

(millions).............................................

------------------------------------------------------------------------

a Additional potential problem areas in California.

[[Page 26014]]

Table III-2.--Extent of Potential 8-Hour Ozone Problem Areas in 2007 in

the OTAG Region a

------------------------------------------------------------------------

2007

projections

with ROTR

------------------------------------------------------------------------

Design values in excess of the 8-Hour NAAQS (85 ppb)

------------------------------------------------------------------------

Number of Metropolitan Areas............................ 28

Number of Rural Counties................................ 4

1990 Population of Metropolitan Areas and Rural Counties 80

(millions).............................................

------------------------------------------------------------------------

Design values within 15 percent of the 8-Hour NAAQS (72-84 ppb)

------------------------------------------------------------------------

Number of Metropolitan Areas............................ 80

Number of Rural Counties................................ 39

1990 Population of Metropolitan Areas and Rural Counties 49

(millions).............................................

------------------------------------------------------------------------

a Phoenix, Arizona and multiple areas in California are also potential

problem areas.

It should be noted that the areas included in Table III-2 have not

been designated to be in nonattainment with the 8-hour ozone NAAQS.

Such designations will not be made by EPA until 2000, and these

designations will be based on the data that are most recently available

at that time.15 Instead, the areas included in Table III-2

have been projected to have design values that would place them in

nonattainment in 2007, using an approach described in the Draft

RIA.16 This approach enabled EPA to estimate the extent of

the 8-hour nonattainment problem after implementing the reductions set

forth in the Regional Ozone Transport Rule and the measures states have

adopted or are specifically required by the Clean Air Act to adopt for

their existing 1-hour nonattainment areas. (The modeling did not

consider the impact of additional measures that may appear in the SIP

revisions submitted by some states in the first half of 1998.)

---------------------------------------------------------------------------

\15\ It should also be noted that the number and 1990 population

of metropolitan areas projected to be near or above the 8-hour ozone

standard in Table III-2 are based on the boundaries of ozone

nonattainment areas as currently defined under the 1-hour ozone

standard. These boundaries will be reevaluated as 8-hour ozone

nonattainment areas are designated and may change from those used

above, affecting the count and population of the potential problem

areas.

\16\ The approach uses a combination of ambient monitoring data

and regional ozone photochemical grid modeling for specific ozone

episodes to develop statistical correlations between modeled ozone

levels and projected future monitoring results. The approach does

not reflect any further emission reductions that may have been

included in revisions to State Implementation Plans (SIPs) for ozone

that EPA received from some states in the first half of 1998. These

SIP revisions are still under review by EPA for completeness and

approvability.

---------------------------------------------------------------------------

We believe the large reductions called for in today's action would

substantially reduce ozone levels nationwide and would therefore reduce

ozone levels and design values in the areas projected to otherwise

exceed the 8-hour standard as well as in those areas facing potentially

significant maintenance challenges.

2. Cars and Light-Duty Trucks Are a Big Part of the NOX and

VOC Inventory, and Today's Proposal Would Reduce This Contribution

Substantially

Emissions of VOCs and NOX come from a variety of

sources, both natural and from human activity. Natural sources,

including emissions that have been traced to vegetation, account for a

substantial portion of total VOC emissions in rural areas. The

remainder of this section focuses on the contribution of motor vehicles

to emissions from human sources. Human-caused VOCs are released as

byproducts of incomplete combustion as well as evaporation of solvents

and fuels. For gasoline-fueled cars and light trucks, approximately

half of the VOC emissions come from the vehicle exhaust and half come

from the evaporation of gasoline from the fuel system. NOX

emissions are dominated by human sources, most notably high-temperature

combustion processes such as those occurring in automobiles and power

plants. Emissions from cars and light trucks are currently, and will

remain, a major part of nationwide VOC and NOX emissions. In

1996, cars and light trucks comprised 25 percent of the VOC emissions

and 21 percent of the NOX emissions from human sources in

the U.S.17 The contribution in metropolitan areas was

generally larger.

---------------------------------------------------------------------------

\17\ Emission Trend Report, 1997.

---------------------------------------------------------------------------

Motor vehicle emission controls have led to significant

improvements in emission levels in the air (the ``emission inventory'')

and will continue to do so in the near term. As a result of the

introduction of cleaner reformulated gasoline in 2000, the introduction

of National Low Emission Vehicles (NLEVs) and vehicles complying with

the Enhanced Evaporative Test Procedure and Supplemental Federal Test

Procedures, and the continuing removal of older, higher-emitting

vehicles from the in-use vehicle fleet, total emissions from the car

and light truck fleet are projected to continue to decline through the

next decade, reaching a low point for NOX in 2013 (Figure

III-1) and for VOC in 2015.18 On a per mile basis, average

VOC and NOX emissions from cars and light trucks combined

will continue to decline well beyond 2015, reflecting the continuing

effect of existing emission control programs. However, projected

increases in vehicle miles traveled (VMT) will cause total emissions

from these vehicles to increase. With this increase in travel and

without additional controls, we project that combined NOX

and VOC emissions for cars and light trucks will increase starting in

2013 and 2015, respectively, so that by 2030 they will have returned to

levels nearly the same as they will be in 2000. In cities experiencing

rapid growth, such as Charlotte, North Carolina, the near-term trend

toward lower emissions tends to reverse sooner.

---------------------------------------------------------------------------

\18\ The auto manufacturer and northeastern state commitments to

the NLEV program are scheduled to end in 2004 without further EPA

action on Tier 2 standards, although continued voluntary compliance

by automobile manufacturers and the affected states is a

possibility. Our analysis of emission trends and the emission

benefits expected from today's proposal assumes for the base

scenario a continuation of the NLEV program past 2004. It also

includes all other control measures assumed to be implemented for

the purposes of the proposed state-level NOX budgets in

the Regional Ozone Transport Rule, such as reformulated gasoline in

all required and opt-in areas and enhanced I/M where required.

---------------------------------------------------------------------------

Figure III-1 illustrates this expected trend in car and light truck

NOX emissions in the absence of today's proposed standards

for vehicles and gasoline. The figure also allows the contribution of

cars to be distinguished from that of light trucks. The figure clearly

shows the impact of steady growth in light truck sales and travel on

overall light-duty NOX emissions; the decrease in overall

light-duty emission levels is due solely to reductions in LDV

emissions. In 2000, we project that trucks will produce about 50

percent of combined car and light truck NOX emissions. We

project that truck emissions will actually increase after 2000, and

over the next 30 years, trucks will grow to dominate light-duty

NOX emissions. By 2007, we project trucks will make up two-

thirds of light-duty NOX emissions; by 2020, nearly three-

quarters of all light-duty NOX emissions will be produced by

trucks.

BILLING CODE 6560-50-P

[[Page 26015]]

[GRAPHIC] [TIFF OMITTED] TP13MY99.000

BILLING CODE 6560-50-C

[[Page 26016]]

Today's action would significantly decrease NOX and VOC

emissions from cars and light trucks, and would delay the date by which

NOX and VOC emissions would begin to increase due to

continued VMT growth. With Tier 2/Sulfur control, light-duty vehicle

NOX and VOC emissions are projected to continue their

downward trend past 2020. Table III-3 shows the annual tons of

NOX that we project would be reduced if today's proposal

were adopted.19 These projections include the benefits of

low sulfur fuel and the introduction of Tier 2 car and light truck

standards.

---------------------------------------------------------------------------

\19\ Today's proposed standards for both vehicles and fuels

would apply in 49 states and the U.S. territories, excluding only

California. If today's proposal is adopted, there would also be

emissions reductions in California from vehicles that relocate or

visit from other states. However, much of the emissions inventory

analysis for this proposal was made for a 47-state region that

excludes California, Alaska, and Hawaii, since these states were not

included in the scope of ozone modeling.

Table III-3.--NOX Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to Tier

2/Sulfur Control a

----------------------------------------------------------------------------------------------------------------

Light-duty

Light-duty percent of Light-duty

Year tons without total without tons reduced

tier 2 tier 2 by tier 2 b

(percent)

----------------------------------------------------------------------------------------------------------------

2007............................................................ 3,218,530 17 795,734

2010............................................................ 3,041,639 17 1,182,323

2015............................................................ 3,020,806 17 1,778,881

2020............................................................ 3,221,151 18 2,198,113

----------------------------------------------------------------------------------------------------------------

a Estimates exclude California, Alaska, and Hawaii, although reductions would occur in all three. For all cases,

this table reflects implementation of ROTR and other measures assumed in the ROTR. For the ``Without Tier 2''

case, the estimates reflect continuation of NLEV beyond 2004.

b Does not include emission reductions from heavy-duty gasoline vehicles.

The lower sulfur levels proposed today would produce large emission

reductions on pre-Tier 2 vehicles as soon as low-sulfur gasoline is

introduced, in addition to enabling Tier 2 vehicles to achieve lower

emission levels. Among the pre-Tier 2 vehicles, the largest per vehicle

emission reductions from lower sulfur in gasoline would be achieved

from vehicles that automobile manufacturers will have sold under the

voluntary National Low Emission Vehicle program. These vehicles are

capable of substantially lower emissions when operated on low sulfur

fuel. Older technology vehicles experience a smaller but significant

effect.

In 2007, when all gasoline would meet the new sulfur limit and when

large numbers of 2004 and newer vehicles meeting the proposed standards

would be in use, the combined NOX emission reduction from

vehicles and fuels would be nearly 800,000 tons per year. After 2007,

emissions would be reduced further as the fleet turned over to Tier 2

vehicles operating on low sulfur fuel. By 2020, NOX

emissions would be reduced by two-thirds from the levels that would

occur if today's proposal were not adopted. This reduction equals the

NOX emissions from over 166 million pre-Tier 2/Sulfur cars

and light trucks. This reduction would represent a 12 percent

NOX reduction in emissions from all manmade sources.

VOC emissions would also be reduced by today's proposal, with

reductions increasing as the fleet turns over. The reductions as a

percent of emissions from cars and light trucks would be 5 percent in

2007 and grow to 16 percent in 2020.

As discussed earlier, in California, smaller but still substantial

reductions in both NOX and VOC would be achieved because

vehicles visiting and relocating to California would be designed to

meet today's proposed standards. Also, vehicles from California

visiting other states would not be exposed to high sulfur fuel.

These estimates of emission reductions reflect a mixture of urban,

suburban, and rural areas. As we noted in the Tier 2 Study, however,

cars and light trucks generally make up a larger fraction of the

emission inventory for urban and suburban areas, where human population

and personal vehicle travel is more concentrated than emissions from

other sources such as heavy-duty highway vehicles, power plants, and

industrial boilers. We have estimated emission inventories for three

cities using the same methods as were used to project the nationwide

inventories, and we present the results for 2007 below in Table III-4.

Inventory shares in 2010 are about the same.

These results confirm that light-duty vehicles make up a greater

share of the NOX emission inventories in urban areas than

they do in the nationwide inventory. While these vehicles' share of

national NOX emissions in 2007 is about 17 percent, it is

estimated to be about 38 percent in the Atlanta area. There is also a

range in VOC contributions, with Atlanta again being the area with the

largest car and light truck contribution at 33 percent. In metropolitan

areas with high car and light truck contributions, today's proposal

would represent a larger step toward attainment since it would have a

larger effect on total emissions.

Table III-4.--Proportion of the Total Urban Area NOX and VOC Inventory

in 2007 Attributable to Light-Duty Vehicles a

------------------------------------------------------------------------

NOX VOC

Region (percent) (percent)

------------------------------------------------------------------------

Nationwide a...................................... 17 18

New York urban area............................... 29 15

Atlanta urban area................................ 38 33

Charlotte urban area.............................. 18 15

------------------------------------------------------------------------

a For all cases, this table reflects implementation of ROTR and other

measures assumed in the ROTR. The estimates reflect continuation of

NLEV beyond 2004.

Another useful perspective from which to view the magnitude of the

emission reductions from today's proposal is in terms of the additional

emission reductions from all human sources that areas will need to

attain the 8-hour ozone standard. For this analysis, we included the

implementation of the Regional Ozone Transport Rule but assumed that

today's proposal was not implemented. In the previously referenced

NAAQS RIA we estimated additional NOX emission reductions

that, along with specific accompanying VOC reductions, would bring each

residual nonattainment area into attainment with the 8-hour ozone

[[Page 26017]]

standard by 2010. We have used these estimated reductions as the basis

for Table III-5, which shows the NOX reductions needed to

reach attainment in 2007 for six metropolitan areas.20 These

are areas for which both the NAAQS RIA and the ozone modeling for this

proposal forecasted continued 8-hour nonattainment in that year, even

with the emission reductions from the Regional Ozone Transport Rule.

---------------------------------------------------------------------------

\20\ We calculated the estimated reductions needed for

attainment in 2007 by adding the reductions due to NLEV vehicles

entering the fleet between 2007 and 2010 to the estimated reductions

needed for attainment in 2010.

---------------------------------------------------------------------------

Table III-5 also shows the NOX emission reductions in

those same six areas that we project would result if today's proposal

were implemented. Although the two analyses differ in some emission

modeling estimates, the comparison is valid as a general indication of

the contribution today's proposal can make to attainment. Cars and

light trucks contribute about 20 to 40 percent of the NOX

inventory in these six areas. The NOX reductions estimated

for today's proposal range from 19 to 50 percent of the reductions that

are estimated to be needed for attainment. These figures show that

today's proposal would make a very substantial contribution to these

cities' attainment programs, but that there will still be a need for

additional reductions from other sources. The emission reductions from

today's proposal would clearly not exceed the reductions needed from an

air quality perspective for these areas; as described in the next

section, we project that about 20 other areas in the eastern U.S. would

also need reductions beyond those of today's proposed program to attain

the NAAQS for NOX.

Table III-5.--Comparison of Tier 2/Sulfur NOX Reductions to NOX Reductions Estimated to Produce 8-Hour Ozone

Attainment in 2007

----------------------------------------------------------------------------------------------------------------

Tier 2/sulfur

NOX reductions NOX reductions NOX reductions

estimated to from proposed as percent of

Metro area produce tier 2/sulfur reductions to

attainment standards produce

(tons/year) (tons/year) attainment

----------------------------------------------------------------------------------------------------------------

Atlanta......................................................... 69,802 17,271 25

Dallas.......................................................... 41,283 14,761 36

Memphis......................................................... 7,343 3,683 50

NY-NJ-CT........................................................ 186,880 35,906 19

Philadelphia.................................................... 63,456 19,942 31

Washington, DC-Baltimore........................................ 62,519 22,673 36

----------------------------------------------------------------------------------------------------------------

3. Tier 2/Sulfur Ozone Benefits and the Post-Tier 2/Sulfur Ozone

Problem

By reducing ozone precursor emissions from cars and light trucks in

areas where ozone levels are near or above the ozone standard, today's

proposal would reduce local ozone levels. And by reducing ozone

precursor emissions in upwind areas, today's proposal would reduce

ozone and ozone precursor levels in the air flowing into areas where

ozone levels are high. EPA's analysis of the ozone impact of today's

proposal suggests that it would yield large reductions in ozone,

particularly in areas where ozone transport plays a significant role in

local nonattainment problems. There are uncertainties associated with

the modeling we have used to estimate these reductions, but we are

certain that the emission reductions would be large.

Ozone levels in a few locations in the centers of large

metropolitan areas are VOC-limited; that is, the atmospheric chemistry

is such that ozone levels tend to respond to VOC reductions rather than

to NOX reductions. Some of these areas may experience

essentially no change or a slight ozone increase on some days, if one

considers only the isolated effect of the emission reductions due to

today's proposal. However, it has long been recognized that

metropolitan areas containing such locations will need to implement

additional VOC reductions from local sources to reach attainment. If

these reductions and the reductions from today's proposal were

combined, the net effect would be a progressive drop in ozone levels

until attainment is reached.

To examine the impact of today's proposal on ozone levels, we

estimated the ozone effects of the emission reductions that would occur

in 2007 and 2010 for the area covered by the OTAG ozone model. The 1-

hour ozone reductions in 2007 are relevant to the several 1-hour

nonattainment areas required to reach attainment in that year. The 8-

hour reductions in 2007 and 2010 are of great relevance to the efforts

of states to achieve attainment with the 8-hour ozone standard, since

for many areas these dates bracket the three ``clean'' years required

to show attainment by their actual deadline.

The estimated emission reductions from our proposal in 2007 and

2010 would be substantial due to the effect of low sulfur fuel on the

entire in-use fleet of gasoline vehicles and trucks of all sizes,

especially those designed to meet NLEV standards, and due to the fact

that many cleaner 2004 and newer vehicles would be on the road. Table

III-6 provides a summary of the 1-hour ozone results for the OTAG

modeling area for 2007. Table III-7 provides a summary of the 2007 and

2010 results for the 8-hour standard. According to our best modeling,

the reductions in 2007 would make the difference between nonattainment

and attainment for four metropolitan areas with a combined 1990

population of 15 million people. In 2010, we estimate that the Tier2/

Sulfur reductions would be enough by themselves to bring eight

metropolitan areas with 13 million people into attainment with the 8-

hour standard.

Tables III-6 and III-7 indicate that we project that some areas

would not attain with only the emission reductions from the Tier 2/

Sulfur proposal. However, we do project that those areas would

experience reductions in ozone levels. These reductions would mean that

even the areas that are not brought all the way to attainment would not

need to reduce emissions from other sources as much as would be

required without today's proposal, as previously explained. Of the 18

areas that we projected would not be brought to attainment with the 8-

hour standard in 2010, we project that 10 areas would

[[Page 26018]]

have design values within 5 percent of the standard.

Today's proposal would also benefit ozone nonattainment areas

outside of the OTAG modeling region, including the one area (Phoenix,

Arizona) projected to be in nonattainment for ozone in 2010 in the

absence of Tier 2/Sulfur controls. The Tier 2/Sulfur controls being

proposed today would help Phoenix attain the ozone standard,

particularly since cars and light trucks are a relatively large part of

the Phoenix emission inventory. These controls also would help the 11

areas projected to face potential maintenance challenges stay in

attainment as their economies and populations grow. And as already

mentioned, because about 7 to 10 percent of travel in California is by

non-California vehicles, there would be a substantial benefit in that

state also.

Table III-6.--Projected Tier 2/Sulfur Impact on Potential 1-Hour Ozone Problem Areas in the OTAG Region in 2007

a

----------------------------------------------------------------------------------------------------------------

2007 without 2007 with tier Change due to

tier 2/sulfur 2/sulfur tier 2/sulfur

----------------------------------------------------------------------------------------------------------------

Design values projected to be in excess of the 1-Hour NAAQS (125 ppb)

----------------------------------------------------------------------------------------------------------------

Number of Metropolitan Areas.................................... 8 4 -4

Number of Rural Counties........................................ 2 2 0

1990 Population of Metropolitan Areas and Rural Counties 39 24 -15

(millions).....................................................

----------------------------------------------------------------------------------------------------------------

a For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. For the

``Without Tier 2/Sulfur'' case, the estimates reflect continuation of NLEV beyond 2004.

Table III-7.--Projected Tier 2/Sulfur Impact on Potential 8-Hour Ozone Problem Areas in the OTAG Region in 2007

and 2010 a

----------------------------------------------------------------------------------------------------------------

Without tier 2/ With tier 2/ Change due to

sulfur sulfur tier 2/sulfur

----------------------------------------------------------------------------------------------------------------

Design values projected to be in excess of the 8-Hour NAAQS (85 ppb) in 2007

----------------------------------------------------------------------------------------------------------------

Number of Metropolitan Areas.................................... 28 25 -3

Number of Rural Counties........................................ 4 3 -1

1990 Population of Metropolitan Areas and Rural Counties 80 72 -8

(millions).....................................................

----------------------------------------------------------------------------------------------------------------

Design values projected to be in excess of the 8-Hour NAAQS (85 ppb) in 2010

----------------------------------------------------------------------------------------------------------------

Number of Metropolitan Areas.................................... 26 b 18 -8

Number of Rural Counties........................................ 3 3 0

1990 Population of Metropolitan Areas and Rural Counties 78 65 -13

(millions).....................................................

----------------------------------------------------------------------------------------------------------------

a For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR. For the

``Without Tier 2/Sulfur'' case, the estimates reflect continuation of NLEV beyond 2004.

b Of these 18 areas predicted to remain nonattainment, 10 would be within 5 percent of the 8-hour ozone

standard.

Much larger VOC and NOX emission reductions would occur

in 2020, when the vehicle fleet would be almost fully turned over to

Tier 2 vehicles. The 2020 scenario is designed to help evaluate the

long-term impact of today's proposal on ozone levels, when the majority

of the vehicle fleet would consist of vehicles that meet the standards

being proposed today.

We present three indicators of the benefits of today's proposed

program in 2020. First, as shown in Table III-3, that today's proposal

would reduce NOX emissions in 2020 by over 2,000,000 tons

per year, not counting reductions in California, Hawaii, and Alaska.

The reduction in each nonattainment area would also be very

substantial. Second, we have estimated how much design values in 2020

would change due to today's proposal. For all counties projected to

need emission reductions beyond the ROTR, the average reduction in 2020

design value was 6 ppb, or almost 8 percent of the 8-hour standard

itself. The range of design value reductions was 3 to 12 ppb. These

results included only the region covered by the OTAG ozone model.

Third, when we analyzed the 2020 scenario to take into account the

duration, severity, and geographic extent of high ozone levels, we

found that projected excessive 8-hour ozone levels, defined as grid

cell-days above 85 ppm ozone, were reduced by 43 percent.

The baseline scenario against which the ozone effects of today's

proposed standards in 2020 were compared assumes that no emission

control efforts beyond those assumed in the ROTR are implemented. We

believe this approximation is reasonable because our inventory modeling

shows that in 2020, total human-caused emissions in the absence of

today's proposed program change very little from their 2007 levels. We

subtracted the emission benefits of today's proposed program in 2020

from those baseline emissions to approximate the emissions that would

result in 2020.

We expect the requirement to achieve attainment with the 8-hour

standard will cause states with residual nonattainment areas to adopt

additional controls in pursuit of their attainment obligations. The

increasingly large emission reductions from today's proposal that would

occur over time would be of great value to those areas since these

areas would not need to implement as extensive or stringent additional

controls as would otherwise be the case. Furthermore, once an area

reaches attainment, it must adopt a SIP revision containing a strategy

to maintain the standard thereafter. The reductions from today's

proposal would help such areas overcome any loss of reductions due to

less-than-expected effectiveness from other controls, provide a safety

margin against the chance of new ozone violations, provide room for

population and economic growth to cause increases in emissions

[[Page 26019]]

from other sources with less need for the maintenance plan to increase

the stringency of controls on those other sources, and possibly even

allow selective relaxation of other control programs.

Because the ozone modeling for 2020 did not account for the

additional measures that states will adopt to attain and maintain the

ozone standard, an attainment vs. nonattainment distinction does not

apply in 2020. Instead, the changes that today's proposal would achieve

in 2020 precursor emissions and in predicted ozone concentrations are

more appropriate indicators of the benefits of the Tier2/Sulfur program

than would be a count of the areas that have design values move from

above to below the ozone standard.

These ozone results for 2007, 2010, and 2020 represent the best

modeling currently available to us, but should be considered

approximate. The Regulatory Impact Analysis documents all the methods

and assumptions used. The results presented are estimates of the future

that only apply to the OTAG region rather than the entire area that

would be subject to today's proposal. As previously mentioned, there

would also be ozone benefits outside this region, particularly for

nonattainment areas in California and for Phoenix, Arizona. We expect

to revise our ozone effects estimates prior to the final rule to

reflect further improvements in estimates of emissions from both mobile

and stationary sources.

In addition to the emission-reduction and ozone-reduction benefits

discussed above that we expect will result from the proposed rule, we

have done a separate analysis of economic benefits (and costs)

associated with the expected ozone reductions from today's proposed

program (see Section IV.D.5. below and the RIA).

C. Particulate Matter

1. Particulate Matter Presents Substantial Public Health Risks

Particulate matter (PM) is produced as a direct result of human

activity and natural processes, and it is also formed through chemical

and physical processes in the atmosphere. Natural sources include

windblown dust, salt from dried sea spray, fires, and volcanoes, as

well as so-called secondary particles formed from the transformation of

natural emissions of SOX, NOX, and VOCs. Human

sources include industrial activities, agriculture, road dust, and

soot, as well as secondary particles produced from gases such as

SOX, NOX, and VOCs that are emitted primarily

from combustion processes. PM includes fine particles with a diameter

smaller than 2.5 microns (also called PM2.5) and coarse

particles with larger diameters. Coarse particles are predominantly

from non-combustion sources and are dominated by soil dust and sea

salt. They remain in the atmosphere a relatively short period of time.

Fine particulate includes carbon-based particles emitted directly from

combustion processes but consists predominantly of secondary particles,

such as sulfate-based particles (produced from SOX),

nitrate-based particles (produced from NOX), and carbon-

based particles created through transformation of VOC emissions. Mobile

sources can reasonably be estimated to contribute to ambient secondary

nitrate, sulfate and carbonaceous PM in proportion to their

contribution to total NOX, SO, and VOC emissions.

In 1997, 8 million Americans were living in 13 counties that

exceeded the recently revised PM10 standard, and

PM10 problems are projected to persist in the absence of

further actions to control PM10 levels. Table III-8 presents

estimates of the extent of PM10 and PM2.5

nonattainment in the future. In the NAAQS RIA, we projected that in

2010, eleven counties with a combined 1990 population of about 10

million people would not be in attainment with the revised

PM10 standards.21 About half of the affected

population lives outside of California. In the same analysis, 102

counties were projected to violate the new PM2.5 NAAQS, with

a combined 1990 population of about 55 million people. About 75 percent

of the affected population lives outside of California. (More

information about this analysis and its uncertainties may be found in

the NAAQS RIA and the Tier 2 Report to Congress.) Ambient PM reductions

from more stringent motor vehicle or fuel standards would primarily

affect areas outside of California, because California has its own

motor vehicle emission control program. California areas would also

benefit, however, through the temporary travel and permanent migration

of out-of-state vehicles into California, as discussed above.

---------------------------------------------------------------------------

\21\ The methods used to project PM concentrations in 2010 from

1990 emissions and ambient concentration data introduce several

sources of uncertainty. Also, the PM2.5 values are

predicted from a regression model and hence are subject to the

uncertainty associated with this model. Other uncertainties exist

regarding emission inventory estimates from human and natural

sources, monitoring data, and the models used to account for

physical and chemical processes in the atmosphere. Even with the

anticipated delivery of more comprehensive modeling techniques, the

scarcity of speciated ambient PM data in both urban and rural areas

to evaluate model behavior will continue to compromise the certainty

of the best model-derived conclusions.

Table III-8.--Projected 2010 PM10/PM2.5 Nonattainment Counties and

Populations

------------------------------------------------------------------------

Outside

California California

------------------------------------------------------------------------

Violating Original PM10 NAAQS

------------------------------------------------------------------------

Number of Counties............................ 33 12

1990 Population (millions).................... 11 7

------------------------------------------------------------------------

Violating Revised PM10 NAAQS

------------------------------------------------------------------------

Number of Counties............................ 5 6

1990 Population (millions).................... 5 5

------------------------------------------------------------------------

Violating New PM2.5 NAAQS

------------------------------------------------------------------------

Number of Counties............................ 92 10

1990 Population (millions).................... 42 13

------------------------------------------------------------------------

A significant number of areas are projected to exceed the

PM10 NAAQS in 2010 with existing emission controls,

indicating that further PM and PM-precursor emission reductions will be

needed. Because the bulk of PM emissions from motor vehicles are fine

particles, any reduction in particulate emissions from motor vehicles

aimed at reducing PM10 levels would also reduce ambient

levels of PM2.5. As mentioned above, the number of counties

projected to violate the new PM2.5 NAAQS is much larger than

that for the revised PM10 standards. Tier 2/Sulfur standards

that reduce particulate emissions for the purposes of facilitating

attainment with the PM10 NAAQS could also benefit areas with

elevated PM2.5 levels.

2. Reducing Emissions From Cars and Light Trucks Would Reduce Ambient

Levels

Today's proposal would reduce PM levels by reducing direct PM

emissions from cars and light trucks, and by reducing emissions of

sulfur and nitrogen oxides that are converted to PM in the atmosphere.

Direct PM emissions would be reduced in two ways. First, reductions in

gasoline sulfur levels would reduce PM emissions from gasoline

vehicles. Second, the more stringent PM standard included in today's

proposal would reduce PM emissions from cars and light trucks equipped

with diesel engines. Diesel engines are used in a small fraction of

current cars and light trucks, but this

[[Page 26020]]

fraction could grow as discussed in III.C.3. below.

With no growth in diesel sales, we project today's action would

reduce direct PM emissions from cars and light trucks mainly due to the

introduction of low-sulfur gasoline. Sulfur-based particles account for

a substantial portion of the particulate matter emitted by gasoline-

powered vehicles. More stringent PM emission standards are not

anticipated to alter PM emissions from gasoline vehicles but would

result in reductions in diesel PM emissions. The overall effect of

today's proposal under this assumption would be to reduce direct

exhaust PM emissions from cars and light trucks by 60 percent in 2007

and by 62-63 percent in 2015 and beyond. Tables III-9 and III-10 show

the contribution of cars and light trucks to total PM10 and

PM2.5 emissions, and the reductions that would be obtained

from today's proposal. The contribution of cars and light trucks to

either PM inventory will generally be higher in urban areas than on a

nationwide basis, and will vary from area to area. In 2007, for

example, cars and light trucks contribute 1.3 percent to the nationwide

PM10 inventory (excluding natural sources and fugitive

dust). For comparison, this percentage is estimated to be 4.4 percent

in Atlanta and 1.9 percent in the New York City metropolitan area.

Later in this section we discuss the possibility that sales of

diesel-powered vehicles might increase from current levels, making the

effect of the more stringent PM standard in this proposal larger.

Table III-9.--Direct exhaust PM10 Emissions From Cars and Light Trucks as Percent of Total Emissions, and

Reductions Due to Tier 2/Sulfur Controla,b

----------------------------------------------------------------------------------------------------------------

Light-duty

Light-duty percent of Light-duty

Year tons without total without tons reduced

tier 2 tier 2 by tier 2

----------------------------------------------------------------------------------------------------------------

2007............................................................ 39,209 1.3 23,379

2010............................................................ 41,412 1.4 25,239

2015............................................................ 46,064 1.4 28,674

2020............................................................ 51,102 1.5 32,031

----------------------------------------------------------------------------------------------------------------

a For all cases, this table reflects continuation of current diesel engine usage in the light truck fleet and

implementation of ROTR and other measures assumed in the ROTR.

b The emission estimates shown exclude natural sources of PM and fugitive dust. They also do not include

California (which has its own vehicle and fuel standards), Alaska, or Hawaii. Today's proposal would have

additional emission benefits in these states.

Table III-10.--Direct exhaust PM2.5 Emissions From Cars and Light Trucks As Percent of Total Emissions, and

Reductions Due to Tier 2/Sulfur Control a,b

----------------------------------------------------------------------------------------------------------------

Light-duty

Light-duty percent of Light-duty

Year tons without total without tons reduced

tier 2 tier 2 by tier 2

----------------------------------------------------------------------------------------------------------------

2007............................................................ 36,365 1.7 21,687

2010............................................................ 38,409 1.8 23,410

2015............................................................ 42,724 1.9 26,595

2020............................................................ 47,397 2.0 29,707

----------------------------------------------------------------------------------------------------------------

a For all cases, this table reflects continuation of current diesel engine usage in the light truck fleet and

implementation of ROTR and other measures assumed in the ROTR.

b The emission estimates shown exclude natural sources of PM and fugitive dust. They also do not include

California (which has its own vehicle and fuel standards), Alaska, or Hawaii. Today's proposal would have

additional emission benefits in these states.

Even larger PM reductions would result from the reductions in the

sulfur oxides (SOX), NOX, and VOC emissions that

give rise to secondary PM that would result from today's proposal. The

reduction in ambient PM levels that would come from the proposed

reductions in these precursor emissions is about 6 to 7 times as large

as the reduction from lower emissions of direct PM. Essentially all

secondary PM is fine PM and hence is included in estimates of both

PM10 and PM2.5.

We described the effect of today's proposal on VOC and

NOX emissions above in Section III.B. Today's proposal also

would reduce SOX emissions from cars and light trucks by

dramatically lowering the level of sulfur in gasoline, since gaseous

SOX emissions are dependent entirely on fuel sulfur level.

In the absence of today's proposal, we project that SOX

emissions from cars and light trucks will increase steadily in

conjunction with VMT growth, from approximately 216,000 tons in 2005 to

300,000 tons in 2020--an increase of almost 40 percent (total

nationwide SOX emissions from all sources was 20,000,000

tons in 1997). Today's proposal would reduce SOX emissions

from all gasoline-powered engines, including cars, light trucks, heavy-

duty gasoline vehicles, and gasoline-powered nonroad engines, in any

year by 90 percent, once all gasoline meets the proposed sulfur limit.

The same percentage reductions in SOX emissions would occur

in subsequent years. The absolute emission reduction increases with

time, however, due to growth in VMT and nonroad engine use. Table III-

11 shows the impact of today's proposal on SOX emissions.

[[Page 26021]]

Table III-11.--SOx Emissions From Cars and Light Trucks as Percent of Total Emissions, and Reductions Due to

Tier 2/Sulfur control a

----------------------------------------------------------------------------------------------------------------

Light-duty

Light-duty percent of Light-duty

Year tons without total without tons reduced

tier 2 tier 2 by tier 2

----------------------------------------------------------------------------------------------------------------

2007............................................................ 225,673 1.2 202,748

2010............................................................ 240,694 1.3 216,437

2015............................................................ 270,174 1.4 242,964

2020............................................................ 299,959 1.6 269,756

----------------------------------------------------------------------------------------------------------------

a The emission estimates shown do not include California (which has its own vehicle and fuel standards), Alaska,

or Hawaii. Today's proposal would have additional emission benefits in these states.

3. Today's Proposal Would Limit the Potential Health Risks From

Increased Diesel Engine Use in Cars and Light Trucks

Of particular concern from a PM perspective is the possibility that

diesels will become more prevalent in the light-duty truck fleet. This

development is a reasonable possibility since vehicle and engine

manufacturers have indicated their intent to sell more diesel-powered

light-duty trucks and in some cases have made capital investments to

implement these plans. The Partnership for a New Generation of Vehicles

(PNGV), a public-private research and development effort that has been

pursuing several promising technologies for greatly improved vehicle

fuel economy combined with low emissions, has identified improved

diesel engines as a technology likely to be able to deliver large fuel

economy improvements in the near future, by about 2004. In order to

assess the potential impact of increased diesel sales penetration on

PM2.5 emissions, we analyzed benefits from our proposed Tier

2 PM standards under a scenario in which the use of diesel engines in

light trucks increases rapidly, by five percentage points per year from

2001 through 2010, when diesels would account for 50 percent of light-

duty truck sales; beyond 2010, diesel sales were assumed to be stable

at 50 percent of the light-truck market. Table III-12 presents the

results of our analysis of this scenario.

This scenario of increased diesels would result in dramatic

increases in direct PM2.5 emissions from cars and light

trucks, if there is no change in the PM standards for light trucks. The

increase in diesel exhaust PM2.5 emissions would more than

overcome the reduction in direct PM2.5 attributable to the

sulfur reduction in gasoline. Assuming no change in the existing PM

standards for light trucks, our analysis of this scenario shows that

direct PM2.5 emissions in 2020 would be approximately

140,000 tons, nearly three times the 47,000 tons projected in the base

diesel sales case from Table III-10. The portion of the

PM2.5 inventory attributable to cars and light trucks would

climb steadily, reaching almost 6 percent in 2020 instead of the 2

percent shown in Table III-10 for a scenario where diesel engines do

not increase their presence in the light truck fleet. In some cities

with relatively high vehicle use and lower industrial emissions, the

car and truck contribution would be even higher.

This increase would be accompanied by increases in the mortality

and morbidity associated with PM2.5 exposure. Fortunately,

the standards being proposed today would result in a steady decrease in

total direct PM2.5 from cars and light trucks despite a

possible increase in diesel engines in light trucks. Direct PM

emissions in 2020 with today's proposal would be about 25,000 tons per

year, less than at present.

If this scenario for increased diesel engines in light trucks were

to occur, today's proposal would reduce diesel PM2.5 by over

90 percent in 2020. Stated differently, by 2020 today's proposal would

reduce over 113,000 tons of the potential increase in PM emissions from

passenger cars and light trucks. The result would be less direct

PM2.5 than is emitted today, because the increase in diesel

PM would be more than offset by the reduction in gasoline PM.

Table III-12.--Direct Exhaust PM2.5 Emissions From Light Duty Vehicles and Reductions Due to Tier 2/Sulfur

Control, With Greater Diesel Engine Sales a,b

----------------------------------------------------------------------------------------------------------------

Light-duty Light-duty

Year exhaust tons exhaust tons Light-duty

without tier 2 with tier 2 tons reduced

----------------------------------------------------------------------------------------------------------------

2007............................................................ 52,907 22,478 30,429

2010............................................................ 72,626 22,542 50,084

2015............................................................ 109,622 23,275 86,347

2020............................................................ 138,177 24,754 113,424

----------------------------------------------------------------------------------------------------------------

a For all cases, this table reflects implementation of ROTR and other measures assumed in the ROTR and an

increase in diesel-powered light truck market share from 5 percent of light truck sales in 2001 to 50 percent

in 2010 and beyond.

b The emission estimates shown exclude natural sources of PM and fugitive dust. They also do not include

California (which has its own vehicle and fuel standards), Alaska, or Hawaii. Today's proposal would have

additional emission benefits in these states.

4. Today's Proposal Would Have Substantial PM Benefits

In general, we project that today's proposal would reduce both

direct and secondary PM from cars and light trucks substantially,

regardless of the future market share for diesel engines in the light-

duty fleet. The larger part of the reduction is due to large reductions

in VOC, NOX, and SOX emissions, with

corresponding reductions in secondary PM formation.

Low sulfur fuel would greatly reduce direct PM emissions and

sulfate-based secondary PM formation from SOX emissions from

gasoline vehicles, while tailpipe PM standards are projected to

mitigate excess PM emissions from diesel vehicles, even at very

aggressive rates of diesel vehicle sales growth. Substantial reductions

in NOX

[[Page 26022]]

emissions would carry over to reductions in indirect PM. These

reductions would help reduce the number of areas with PM10

and PM2.5 levels in excess of national standards, reduce the

severity of PM nonattainment in other areas, and help areas facing PM

maintenance challenges stay in attainment.

The magnitude of the PM reductions from today's proposal in a given

area depends on conditions such as the contribution of light-duty

vehicles to the local PM, SOX, NOX, and VOC

inventory; the contribution of light-duty vehicles to the PM,

SOX, NOX, and VOC inventories in upwind areas;

local and upwind ammonia inventories (involved in secondary PM

formation); control measures being implemented on both local and upwind

sources of PM and its precursors, and local meteorology. We have

incorporated these factors into the air quality modeling used to

develop the benefit/cost analysis presented in Section IV.D.5., which

includes the economic benefits of the direct and secondary PM

reductions expected to result from today's proposal.

The PM modeling results from that analysis suggest that if all cars

and trucks used in 2010 met the emission standards being proposed

today, significant PM reductions would result in urban and substantial

PM reductions would result in much of the continental U.S. The annual

average level of both PM10 and PM2.5 was

projected to decline by 0.25 to 0.64 micrograms per cubic meter

(/m3) in many cities; average levels were projected

to decline by 0.1 to 0.25 /m3 throughout most of

the country east of the Great Plains, Nebraska, and parts of Colorado,

Arizona, and other western states. Similarly, daily maximum PM levels

22 were projected to decline substantially, with many cities

projected to see declines of 0.75 to 4.5 /m3 and

over half the continental U.S. projected to experience declines of 0.25

to 0.75 /m3. Note that this analysis assumed no

growth in sales of diesel-powered light trucks. It also did not account

for the direct PM reductions that would be achieved when the small

number of diesel-powered trucks already being sold now will reduce

their PM emissions to meet the lower proposed PM standard.

---------------------------------------------------------------------------

\22\ Daily maximum PM levels are the PM levels (averaged over 24

hours) for days that are projected to be in the 98th or 99th

percentile when ranked by their PM2.5 and PM10

levels, respectively.

---------------------------------------------------------------------------

D. Other Criteria Pollutants: Carbon Monoxide, Nitrogen Dioxide, Sulfur

Dioxide

This proposal would help reduce levels of three other pollutants

for which NAAQS have been established: carbon monoxide (CO), nitrogen

dioxide (NO2), and sulfur dioxide (SO2). The

extent of nonattainment for these three pollutants is small, so the

primary effect of today's proposal would be to provide areas concerned

with maintaining their attainment status a greater margin of safety. As

of 1998, every area in the United States has been designated to be in

attainment with the NO2 NAAQS. As of 1997, only one area

(Buchanan County, Missouri) did not meet the primary SO2

short-term standard, due to emissions from the local power plant. In

1997, only 6 of 537 monitoring sites reported ambient CO levels in

excess of the CO NAAQS; all six sites were located in California, which

has established its own vehicle and fuel emission standards.

The reductions in SO2 precursor emissions from today's

proposal are essentially equal to the SOX reductions

described in Section III.B. and III.C., respectively. The impact of

today's proposal on NO2 emissions depends on the specific

emission control technologies used to meet the standards being proposed

today. However, essentially all of the NOX emitted by cars

and light trucks converts to NO2 in the atmosphere;

therefore, it is reasonable to assume that today's proposal would

substantially reduce ambient NO2 levels by the same

proportion. Today's proposal also would require light trucks to meet

more stringent CO standards; we will evaluate the impact of these

standards more fully before publishing our final rule. The analysis of

economic benefits and costs found in Section IV.D.-5. does not account

for the economic benefits of the CO reductions expected to result from

today's proposal.

E. Visibility

Visibility impairment occurs as a result of the scattering and

absorption of light by particles and gases in the atmosphere. It is

most simply described as the haze that obscures the clarity, color,

texture, and form of what we see. The principal cause of visibility

reduction is fine particles between 0.1 and 1 m in size. Of

the pollutant gases, only NO2 absorbs significant amounts of

light; it is partly responsible for the brownish cast of polluted

skies. While the contribution of NO2 to visibility

impairment varies from area to area, it is generally responsible for

less than ten percent of visibility reduction.

The CAA requires EPA to protect visibility, or visual air quality,

through a number of programs. These programs include the national

visibility program under Sections 169a and 169b of the Act, the

Prevention of Significant Deterioration program for the review of

potential impacts from new and modified sources, and the secondary

NAAQS for PM10 and PM2.5. The national visibility

program established in 1980 requires the protection of visibility in

156 mandatory federal Class I areas across the country (primarily

national parks and wilderness areas). More than 65 million visitors

travel each year to these parks and wilderness areas. The CAA

established as a national visibility goal, ``the prevention of any

future, and the remedying of any existing, impairment of visibility in

mandatory federal Class I areas in which impairment results from

manmade air pollution.'' The Act also calls for state programs to make

``reasonable progress'' toward the national goal. In addition, a recent

national opinion poll on the state of the national parks found that

more than 80 percent of Americans believe air pollution affecting these

parks should be cleaned up for the benefit of future

generations.23

---------------------------------------------------------------------------

\23\ ``National Parks and the American Public: A National Pubic

Opinion Survey on the National Park System,'' Summary Report,

National Parks and Conservation Association, June 1998.

---------------------------------------------------------------------------

There has been improvement in visibility in the western part of the

country over the last ten years. However, visibility impairment remains

a serious problem in Class I areas. Visibility in the East does not

seem to have improved. As one part of addressing this national problem,

EPA has proposed that states be required to adopt and implement

effective plans for protecting and improving visibility in Class I

federal areas (including 156 major national parks and wilderness

areas), integrated with plans to achieve the revised ozone and PM

standards.

Today's proposal should result in visibility improvements due to

the reduction in local and upwind PM and PM precursor emissions. Since

mobile source emissions contribute to the formation of visibility-

reducing PM, control programs that reduce the mobile source emissions

of direct and secondary PM would have the effect of improving

visibility. The Grand Canyon Visibility Transport Commission's final

recommendations report 24 found that

[[Page 26023]]

reducing total mobile source emissions is an essential part of any

program to protect visibility in the Western U.S. The Commission found

that motor vehicle exhaust is responsible for about 14 percent of

human-caused visibility reduction (excluding road dust). A substantial

portion of motor vehicle exhaust comes from cars and light trucks. In

light of that impact, the Commission's recommendations in 1996

supported federal Tier 2/Sulfur standards, as EPA is proposing today.

More recently, a number of Western Governors noted the importance of

controlling mobile sources as part of efforts to improve visibility in

their comments on the Regional Haze Rule and on the need to protect the

16 Class I areas on the Colorado Plateau. In their joint letter dated

June 29, 1998, they stated that, ``* * * the federal government must do

its part in regulating emissions from mobile sources that contribute to

regional haze in these areas. * * *'' and called on EPA to make a

``binding commitment * * * to fully consider the Commission's

recommendations related to the * * * federal national mobile source

emission control strategies.'' These recommendations included Tier 2

vehicle standards and reductions in gasoline sulfur levels.

---------------------------------------------------------------------------

\24\ ``Recommendations for Improving Western Vistas,'' Report of

the Grand Canyon Visibility Transport Commission to the United

States Environmental Protection Agency, June 10, 1996.

---------------------------------------------------------------------------

As an indication of how important car and light truck emissions can

be to fine PM and visibility, the recent Northern Front Range Air

Quality Study has reported findings that indicate that cars and light

trucks are responsible for 39 percent of fine PM at a site within the

metropolitan Denver area, and for 40 percent at a downwind rural site.

This contribution includes both direct PM and indirect PM formed from

sulfur dioxide and NOX from these vehicles.

The analysis of economic benefits and costs found in Section

IV.D.5. accounts for the economic benefits of the visibility

improvements expected to result from today's proposal.

F. Air Toxics

Emissions from cars and light trucks include a number of air

pollutants that are known or suspected human or animal carcinogens such

as benzene, formaldehyde, acetaldehyde, 1,3-butadiene, and diesel

particulate matter, or that are known or suspected to have other, non-

cancer health impacts. For several of these pollutants, motor vehicle

emissions are believed to account for a significant proportion of total

nation-wide emissions. All of these compounds are present in exhaust

emissions; benzene is also found in evaporative emissions from

gasoline-fueled vehicles.

The health effects of diesel particulate are of particular

relevance to this rulemaking, because of the possibility for increased

diesel-powered truck sales and our proposal for a more stringent PM

standard that would apply to these trucks. While we have not finalized

our decision about the carcinogenicity of diesel exhaust particulate,

we are in the process of addressing this question. Several other

agencies and international organizations have already made such a

determination, including the California Air Resources Board (ARB). Our

own quantitative risk assessment for diesel particulate is still in

draft form,25 and is presently being revised to address the

comments of a peer review panel of the Clean Air Science Advisory

Committee.

---------------------------------------------------------------------------

\25\ EPA's diesel health assessment (Health Assessment Document

for Diesel Emissions, SAB Review Draft, U.S. Environmental

Protection Agency, Washington, DC. EPA/600/8-90/057C, February

1998.) can be found at the following EPA website: http://

www.epa.gov/ncea/diesel.htm. The Clean Air Science Advisory

Committee's review of that assessment (CASAC Review of the Draft

Diesel Health Assessment Document, U.S. Environmental Protection

Agency Science Advisory Board, Washington, DC EPA-SAB-CASC-99-001.)

can be found at the following SAB website: http://www.epa.gov/sab/.

---------------------------------------------------------------------------

Because our assessment for diesel particulate is not complete, we

are not presenting absolute estimates of how potential cancer risks

from diesel particular could be affected by today's proposal. However,

we can give a qualitative or relative discussion. Diesel engines are

used in a very small portion of the cars and light-duty trucks in

service today. By far, heavy duty highway and nonroad diesel engines

are the larger source of diesel PM. Engine and vehicle manufacturers

have projected that diesel engines are likely to be used in an

increasing share of light trucks, and some manufacturers have announced

capital investments to build such engines.

If these projections are valid and the proportion of light-duty

trucks powered by diesel engines increases, the potential health risks

from diesel PM could increase substantially. Light trucks could become

a larger source of diesel PM than heavy-duty diesel trucks. We estimate

that if the percentage of light duty diesel truck sales were to

increase to 50 percent of light-duty truck sales by 2010, the increased

presence of light duty diesel trucks on the nation's roads could

increase the potential cancer risks associated with PM emissions from

all diesel-powered highway vehicles (including heavy-duty diesel

trucks, diesel buses, and light-duty diesel vehicles) by approximately

130 percent as of 2020, under the current light-duty diesel PM

standards. Though the actual levels of diesel engine use may be

considerably different than the projections used in both analyses, the

analyses are useful in illustrating the potential impact of increased

diesel engine use in light trucks.

Today's proposal would limit the increase in the potential cancer

risks from cars and light trucks associated with any potential increase

in light-duty diesel sales. We have estimated that in 2020, today's

proposal would limit the increase in total highway diesel PM emissions

due to growth in light truck diesels to 24 percent, in contrast to the

more than doubling that would occur without our proposal for a tighter

PM standard for light trucks. The comparison in terms of potential

cancer risk from car and light truck diesel PM likely would closely

follow this emissions comparison.

The VOC emission reductions resulting from today's proposal would

further reduce the potential cancer risk posed by air pollutants other

than diesel PM emitted by cars and light trucks, since many of these

pollutants are themselves VOCs. The analysis of economic benefits and

costs found in Section IV.D.5. does not account for the economic

benefits of the reduction in cancer risk from air toxics that could

result from today's proposal, because we have not yet completed our

study of this issue or engaged in a peer-reviewed assessment of the

baseline air toxics risks (including a final quantitative risk

assessment of the diesel particulate risks) or of the reductions that

would be achieved by today's proposal. Therefore, the estimates

included in the Draft RIA should be considered preliminary. A peer-

reviewed assessment is planned and may be completed in time to be

available for incorporation into the impact analysis for the final

rule. EPA will place this document in the docket as soon as it is

available for public review.

Section 202(l)(2) of the Clean Air Act requires EPA to establish

regulations for the control of hazardous air pollutants, or air toxics,

from motor vehicles. The regulations may address vehicle emissions or

fuel properties that influence emissions, or both. We will issue a

proposal to address this requirement in September of this year, and a

final rule in July 2000.

G. Acid Deposition 26

Acid deposition, or acid rain as it is commonly known, occurs when

SO2

[[Page 26024]]

and NOX react in the atmosphere with water, oxygen, and

oxidants to form various acidic compounds that later fall to earth in

the form of precipitation or dry deposition of acidic particles. It

contributes to damage of trees at high elevations and in extreme cases

may cause lakes and streams to become so acidic that they cannot

support aquatic life. In addition, acid deposition accelerates the

decay of building materials and paints, including irreplaceable

buildings, statues, and sculptures that are part of our nation's

cultural heritage. To reduce damage to automotive paint caused by acid

rain and acidic dry deposition, some manufacturers use acid-resistant

paints, at an average cost of $5 per vehicle--a total of $61 million

per year if applied to all new cars and trucks sold in the U.S. The

general economic and environmental effects of acid rain are discussed

at length in the Draft RIA.

---------------------------------------------------------------------------

\26\ Much of the information in this section was excerpted from

the EPA document, Human Health Benefits from Sulfate Reduction,

written under Title IV of the 1990 Clean Air Act. Amendments, U.S.

EPA, Office of Air and Radiation, Acid Rain Division, Washington, DC

20460, November 1995.

---------------------------------------------------------------------------

Acid deposition primarily affects bodies of water that rest atop

soil with a limited ability to neutralize acidic compounds. The

National Surface Water Survey (NSWS) investigated the effects of acidic

deposition in over 1,000 lakes larger than 10 acres and in thousands of

miles of streams. It found that acid deposition was the primary cause

of acidity in 75 percent of the acidic lakes and about 50 percent of

the acidic streams, and that the areas most sensitive to acid rain were

the Adirondacks, the mid-Appalachian highlands, the upper Midwest and

the high elevation West. The NSWS found that approximately 580 streams

in the Mid-Atlantic Coastal Plain are acidic primarily due to acidic

deposition. Hundreds of the lakes in the Adirondacks surveyed in the

NSWS have acidity levels incompatible with the survival of sensitive

fish species. Many of the over 1,350 acidic streams in the Mid-Atlantic

Highlands (mid-Appalachia) region have already experienced trout losses

due to increased stream acidity. Emissions from U.S. sources contribute

to acidic deposition in eastern Canada, where the Canadian government

has estimated that 14,000 lakes are acidic. Acid deposition also has

been implicated in contributing to degradation of high-elevation spruce

forests that populate the ridges of the Appalachian Mountains from

Maine to Georgia. This area includes national parks such as the

Shenandoah and Great Smoky Mountain National Parks.

The SOX and NOX reductions from today's

proposal would help reduce acid rain and acid deposition, thereby

helping to reduce acidity levels in lakes and streams throughout the

U.S. These reductions would help accelerate the recovery of acidified

lakes and streams and the revival of ecosystems adversely affected by

acid deposition. Reduced acid deposition levels would also help reduce

stress on forests, thereby accelerating reforestation efforts and

improving timber production. Deterioration of our historic buildings

and monuments, and of buildings, vehicles, and other structures exposed

to acid rain and dry acid deposition, also would be reduced, and the

costs borne to prevent acid-related damage may also decline.

While the reduction in sulfur and nitrogen acid deposition would be

roughly proportional to the reduction in SOX and

NOX emissions, respectively, the precise impact of today's

proposal would differ across different areas. Each area is affected by

emissions from different source regions, and the mobile source

contribution to the total SOX and NOX emission

inventory will differ across different source regions. Nonetheless, the

projected impact of today's proposal on SOX and

NOX emission inventories provides a rough indicator of the

likely effect of today's proposal on acid deposition. As discussed in

Section III.D. above, today's proposal would reduce SOx emissions by

1.6 percent and NOX emissions by 12.5 percent in 2020.

The analysis of economic benefits and costs found in Section

IV.D.5. was not able to account for the economic benefits of the

reduction in acid deposition expected to result from today's proposal.

H. Eutrophication/Nitrification

Nitrogen deposition into bodies of water can cause problems beyond

those associated with acid rain. Elevated levels of nitrate in drinking

water pose significant health risks, especially to infants. The

Ecological Society of America has included discussion of the

contribution of air emissions to increasing nitrogen levels in surface

waters in a recent major review of causes and consequences of human

alteration of the global nitrogen cycle in its Issues in Ecology

series.27 Long-term monitoring in the United States, Europe,

and other developed regions of the world shows a substantial rise of

nitrogen levels in surface waters, which are highly correlated with

human-generated inputs of nitrogen to their watersheds. These nitrogen

inputs are dominated by fertilizers and atmospheric deposition.

---------------------------------------------------------------------------

\27\ Vitousek, Peter M., John Aber, Robert W. Howarth, Gene E.

Likens, et al. 1997. Human Alteration of Global Nitrogen Cycle:

Causes and Consequences. Issues in Ecology. Published by Ecological

Society of America, Number 1, Spring 1997.

---------------------------------------------------------------------------

Human activity can increase the flow of nutrients into those waters

and result in excess algae and plant growth. This increased growth can

cause numerous adverse ecological effects and economic impacts,

including nuisance algal blooms, dieback of underwater plants due to

reduced light penetration, and toxic plankton blooms. Algal and

plankton blooms can also reduce the level of dissolved oxygen, which

can also adversely affect fish and shellfish populations. This problem

is of particular concern in coastal areas with poor or stratified

circulation patterns, such as the Chesapeake Bay, Long Island Sound, or

the Gulf of Mexico. In such areas, the ``overproduced'' algae tends to

sink to the bottom and decay, using all or most of the available oxygen

and thereby reducing or eliminating populations of bottom-feeder fish

and shellfish, distorting the normal population balance between

different aquatic organisms, and in extreme cases causing dramatic fish

kills.

Collectively, these effects are referred to as eutrophication,

which the National Research Council recently identified as the most

serious pollution problem facing the estuarine waters of the United

States (NRC, 1993). Nitrogen is the primary cause of eutrophication in

most coastal waters and estuaries.28 On the New England

coast, for example, the number of red and brown tides and shellfish

problems from nuisance and toxic plankton blooms have increased over

the past two decades, a development thought to be linked to increased

nitrogen loadings in coastal waters. Airborne NOX

contributes from 12 to 44 percent of the total nitrogen loadings to

United States coastal water bodies. For example, approximately one-

quarter of the nitrogen in the Chesapeake Bay comes from atmospheric

deposition.

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\28\ Much of this information was taken from the following EPA

document: Deposition of Air Pollutants to the Great Waters-Second

Report to Congress, Office of Air Quality Planning and Standards,

June 1997, EPA-453/R-97-011.

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Excessive fertilization with nitrogen-containing compounds can also

affect terrestrial ecosystems. 29 Research suggests that

nitrogen fertilization can alter growth patterns and change the balance

of species in an ecosystem. In

[[Page 26025]]

extreme cases, this process can result in nitrogen saturation when

additions of nitrogen to soil over time exceed the capacity of the

plants and microorganisms to utilize and retain the nitrogen. This

phenomenon has already occurred in some areas of the U.S.

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\29\ Terrestrial nitrogen deposition can act as a fertilizer. In

some agricultural area, this effect can be beneficial.

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Deposition of nitrogen from cars and light trucks contributes to

these problems. As discussed in Section III.B. above, today's proposal

would reduce total NOX emissions by 12.5 percent in 2020.

These reductions should reduce drinking water nitrate levels by

reducing the amount of nitrate deposited from the atmosphere onto

drinking water sources or onto the watersheds of drinking water sources

by similar amounts. The NOX reductions would also reduce the

eutrophication problems associated with atmospheric deposition of

nitrogen into watersheds and onto bodies of water, particularly in

aquatic systems where atmospheric deposition of nitrogen represents a

significant portion of total nitrogen loadings. Since air deposition

accounts for 12-44 percent of total nitrogen loadings in coastal

waters, the 12.5 percent reduction in NOX from today's

proposal are projected to reduce nitrogen loadings by 1.5-5.5 percent.

To put these reductions in perspective, the reductions expected in the

Chesapeake Bay area would amount to about 6 percent of the total

reduction in nitrogen loading needed to maintain the reduction in

nutrient loads agreed to by the signatory states in the Chesapeake Bay

Agreement (40 percent of ``controllable by the year 2000).

The analysis of economic benefits and costs found in Section

IV.D.5. does not account for the economic benefits of reduced drinking

water nitrate levels and reduced terrestrial nitrogen deposition

expected to result from today's proposal, if implemented. The analysis

does, however, account for the economic benefits of reduced

eutrophication.

I. Conclusion: Cleaner Cars and Light Trucks Are Critically Important

to Improving Air Quality

Despite continued progress in reducing emissions from cars and

light trucks, these vehicles will continue to contribute a substantial

share of the ozone and PM precursors in current and projected

nonattainment areas, and in upwind areas whose emissions contribute to

downwind nonattainment, unless additional measures are taken to reduce

their emissions. These vehicles will also continue to contribute to the

ambient PM that affects visibility in Class I federal areas and some

urban areas. Emissions from cars and light trucks also play a

significant role in a wide range of health and environmental problems,

including known and potential cancer risks from inhalation of air

pollutants (a problem that could become more significant if sales of

diesel-powered cars and light trucks were to increase), health risks

from elevated drinking water nitrate levels, acidification of lakes and

streams, and eutrophication of inland and coastal waters.

Today's proposal would reduce NOX, VOC, CO, PM, and

SOX emissions from these vehicles substantially. These

reductions would help reduce ozone levels nationwide and reduce the

extent and severity of violations of both the 1-hour and 8-hour ozone

standards. These reductions would also help reduce PM levels, both by

reducing direct PM emissions and by reducing emissions that give rise

to secondary PM. The NOX and SOX reductions would

help reduce acidification problems, and the NOX reductions

would help reduce eutrophication problems and drinking water nitrate

levels. The PM standards proposed today would help improve visibility

and would help mitigate the adverse health effects due to possible

increases in light-duty diesel engine sales.

Section IV.D.5. of this preamble describes the comprehensive

analysis EPA has made of the net economic benefit of the requirements

we are proposing today. In that analysis, we have quantified many of

the public health and environmental benefits of the actions on an

annual, national scale. Estimates of the economic value of these

effects have been made for as many of the effects as possible, and

compared to the cost of compliance. This rulemaking is the first

instance in which EPA has conducted such a cost-benefit analysis for a

set of proposed vehicle emission standards.

IV. What Are We Proposing and Why?

In the previous section, we showed why many states need as much

emission reduction as is reasonably possible from LDVs and LDTs--plus

reductions from other sources--if they are to reach and maintain

compliance with the 1-hour and 8-hour ozone NAAQS. We also pointed out

that these reductions would also be important in addressing PM and

other air quality and environmental problems in every major region of

the country.

In this section, we describe the comprehensive vehicle/fuel program

we are proposing to respond to these serious air quality needs.

Specifically, we discuss:

Our reasons for proposing a comprehensive vehicle and fuel

program, including why stringent LDV and LDT standards are feasible in

conjunction with low sulfur gasoline.

Our proposed vehicle-related requirements and our

rationales for proposing them.

Our proposed fuel-related requirements and our rationales.

Our projections of the economic impacts, cost

effectiveness, and monetized environmental and health benefits of the

proposed program.

Other program design options we have considered.

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

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

Light-Duty Trucks.

a. Gasoline Fueled Vehicles. We believe that the standards being

proposed today for gasoline-fueled vehicles are well within the reach

of existing control technology. Our proposed determination of

feasibility is based on the use of catalyst-based strategies that are

already in use and are well proven on the existing fleet of vehicles.

In fact, as you will see below, many current engine families are

already certified to levels at or below the proposed new Tier 2

requirements. All of the certification and research testing discussed

below was performed on low-sulfur test fuel (nominally 30 ppm).

Certainly, larger vehicles and trucks, which are heavier and have

larger frontal areas

This text is long and has been trimmed here. Open the source document for the complete record.