United States              Air and Radiation         EPA420-F-99-051
 Environmental Protection                           December 1999
 Agency

 Office of Mobile Sources
Regulatory
Announcement
 EPA's Program for Cleaner Vehicles
 and Cleaner Gasoline
The U.S. Environmental Protection Agency (EPA) is announcing more
protective tailpipe emissions standards for all passenger vehicles,
including sport utility vehicles (SUVs), minivans, vans and pick-up
trucks. This regulation marks the first time that SUVs and other light-
duty trucks—even the largest passenger vehicles—are subject to the
same national pollution standards as cars. And, for the first time, we are
treating vehicles and fuels as a system.

Simultaneously, EPA is announcing lower standards for sulfur in
gasoline, which will ensure the effectiveness of low emission-control
technologies in vehicles and reduce harmful air pollution.  When the new
tailpipe and sulfur standards are implemented, Americans will benefit
from the clean-air equivalent of removing 164 million cars from the road.
These new standards require passenger vehicles to be 77 to 95 percent
cleaner than those on the road today and reduce the sulfur content of
gasoline by up to 90 percent.
Tailpipe Emission Standards
The new tailpipe standards are set at an average standard of 0.07 grams
per mile for nitrogen oxides for all classes of passenger vehicles begin-
ning in 2004. This includes all light-duty trucks, as well as the largest
SUVs. Vehicles weighing less than 6000 pounds will be phased-in to this
standard between 2004 and 2007.
                                         > Printed on Recycled Paper

-------
For the heaviest light-duty trucks, the program provides a three step
approach to reducing emissions. First, in 2004, we will implement stan-
dards not to exceed 0.6 grams per mile (gpm)—a more than 60 percent
reduction from current standards.  Second, to ensure further progress,
these vehicles are required to achieve an interim standard of 0.2 gpm to
be phased-in between 2004-2007, an 80 percent reduction from current
standards. Third, in the final step, half of these vehicles will meet the
0.07 standard in 2008, and the remaining will comply in 2009. Vehicles
weighing between 8,500 and 10,000 pounds will have the option to take
advantage of additional flexibilities during the 2004 to 2008 interim
period.
Beginning in 2004, the nation's refiners and importers of gasoline will
have the flexibility to manufacture gasoline with a range of sulfur levels
as long as all of their production is capped at 300 parts per million (ppm)
and their annual corporate average sulfur levels are 120 ppm. In 2005, the
refinery average will be set at 30 ppm, with a corporate average of 90
ppm and  a cap of 300 ppm. Both of the average standards can be met
with use of credits generated by other refiners who reduce sulfur levels
early. Finally, in 2006, refiners will meet a 30 ppm average sulfur level
with a maximum cap of 80 ppm. Gasoline produced for sale in  parts of
the Western U.S. will be allowed to meet a 150 ppm refinery average and
a 300 ppm cap through 2006 but will have to meet the 30 ppm average/80
ppm cap by 2007.

Small refiners (those who employ no more than 1,500 employees and
have a corporate crude oil capacity of no more than 155,000 barrels per
day) will be able to comply with less stringent interim standards through
2007, when they must meet the final sulfur standards. If necessary, small
refiners that demonstrate a severe  economic hardship can apply for an
additional extension of up to two years.
        and
The significant environmental benefits of this program would come at an
approximate cost to consumers of less than $100 for cars, $200 for light-
duty trucks and less than two cents per gallon of gas.

EPA estimates the program will cost industry about $5.3 billion. In
contrast, health and environmental benefits are estimated to be $25.2
billion.

-------
When fully implemented, this program would be the equivalent of taking
164 million cars off the road. EPA calculates that the final rule will
prevent as many as 4,300 deaths, more than 10,000 cases of chronic and
acute bronchitis, and tens of thousands respiratory problems a year.

As newer, cleaner cars enter the national fleet, the new tailpipe standards
will significantly reduce emissions of nitrogen oxides from vehicles by
about 74 percent by 2030. The standards also will reduce emissions by
more than 2 million tons per year by 2020 and nearly 3 million tons
annually by 2030.
Flexibility to
EPA worked extensively with the auto industry, the petroleum industry,
states, and environmental and health experts in developing this program.
EPA included several measures in the rule that will ensure flexibility and
cost-effectiveness for the automobile and petroleum industries. These
flexibilities include:

   1) establishing a market-based credit system for both the auto and oil
     industries which will reward those companies who lead the way in
     reducing pollution sooner than required;
   2) allowing industries to use an averaging program to meet both the
     car-emission and gasoline-sulfur standards;
   3) allowing auto manufacturers and refiners to meet strong interim
     standards while they work towards full compliance of the new
     standards; and
   4) providing small refiners with extra time to meet  the sulfur standards.
Background
This regulation grows out of a Clean Air Act requirement that EPA
consider the need, feasibility, and cost-effectiveness of stronger tailpipe
emissions standards beginning in 2004.  In 1998, EPA reported to Con-
gress that America faced significant air quality challenges in the future
relating to vehicles,  including:

•  Total vehicle miles traveled yearly grew from one trillion in 1970 to
   2.5 trillion in 1997 and is expected to continue increasing at the rate
   of two to three percent each year.
*  Almost half of the passenger vehicles sold today are higher-polluting
   light-duty trucks, such as SUVs, and continued sales growth is
   expected.

-------
EPA concluded that tighter tailpipe emission standards are necessary to
maintain the nation's progress in providing Americans with cleaner,
healthier air. The Agency also concluded that new emission standards
could be achieved cost-effectively with available technology, and that
current levels of sulfur in gasoline must be reduced, because sulfur
impedes the performance of catalytic converters.

Motor vehicles generate about 30 percent of all emissions of nitrogen
oxides and volatile organic compounds—the pollution that causes smog.
For
Additional documents on the Tier 2 standards are available electronically
on the Office of Mobile Sources' web site at:

    www.epa.gov/oms/tr2home.htm

For further information on this final rule, please contact the Tier 2 Team
at:

    U.S. Environmental Protection Agency
    Office of Mobile Sources
    2000 Traverwood Drive
    Ann Arbor, MI 48105
    (734)214-4349

-------