[Federal Register Volume 64, Number 92 (Thursday, May 13, 1999)]
[Proposed Rules]
[Pages 26142-26158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11383]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80 and 86

[AMS-FRL-6337-4]
RIN 2060-AI32


Control of Diesel Fuel Quality

AGENCY: Environmental Protection Agency.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: Diesel engines used in motor vehicles and nonroad equipment 
are a major source of nitrogen oxides and particulate matter, both of 
which contribute to serious health problems in the United States. We 
are considering setting new quality requirements for fuel used in 
diesel engines, in order to bring about large environmental benefits 
through the enabling of a new generation of diesel emission control 
technologies.
    Because the pursuit of diesel fuel quality changes would be a major 
undertaking for the Agency and affected industries, and because of the 
many unresolved issues involved, we are publishing this advance notice 
to summarize the issues, with the goal of helping you to better inform 
us as we consider how to proceed. To aid this process, we have grouped 
key questions under issue topic headings that are numbered sequentially 
throughout this notice.
    Although this advance notice solicits comment on all potentially 
beneficial diesel fuel quality changes, we believe that the most 
promising change would be fuel desulfurization for the purpose of 
enabling new engine and aftertreatment technologies that, although 
highly effective, are sensitive to sulfur.

DATES: You should submit written comments on this advance notice by 
June 28, 1999.

ADDRESSES: You may submit written comments in paper form and/or by E-
mail. To ensure their consideration, all comments must be submitted to 
us by the date indicated under DATES above. Paper copies of comments 
should be submitted (in duplicate if possible) to Public Docket No. A-
99-06 at the following address: U.S. Environmental Protection Agency, 
Air Docket Section, Room M-1500, 401 M Street, SW, Washington, DC 
20460. We request that you also send a separate copy to the contact 
person listed below. Those submitting a paper copy of their comments 
are also encouraged to submit an electronic copy (in ASCII format) by 
E-mail to ``A-and-R-D[email protected]'', or on a 3.5 inch diskette. You 
may also submit comments by E-mail to the docket at the address listed 
above (with a copy to the contact person listed below) without the 
submission of a paper copy. However, we encourage you to send a paper 
copy as well to ensure the clarity of your submission.
    Materials related to this rulemaking are available for review at 
EPA's Air Docket 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. The telephone number for EPA's Air Docket is (202) 
260-7548, and the facsimile number is (202) 260-4400. A reasonable fee 
may be charged by EPA for copying docket materials, as provided in 40 
CFR part 2.

FOR FURTHER INFORMATION CONTACT: Carol Connell, U.S. EPA, National 
Vehicle and Fuels Emission Laboratory, 2000 Traverwood, Ann Arbor, MI 
48105; Telephone (734) 214-4349, FAX (734) 214-4050, E-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Why Is EPA Considering Diesel Fuel Changes?
II. Diesel Engines and Air Quality

[[Page 26143]]

III. Diesel Emissions Control: Progress and Prospects
IV. What Fuel Changes Might Help?
V. Diesel Fuel Quality in the U.S. and Other Countries
VI. Potential Benefits of Reducing Sulfur
VII. Diesel Sulfur Control and Tier 2
VIII. Heavy-Duty Highway Engines
IX. Nonroad Engines
X. Refinery Impacts and Costs
XI. Prospects For A Phased Approach
XII. Vehicle Operation With Higher Sulfur Fuel
XIII. Stakeholder Positions
XIV. Public Participation
XV. Administrative Designation and Regulatory Analysis
XVI. Statutory Provisions and Legal Authority

I. Why Is EPA Considering Diesel Fuel Changes?

    Diesel engines contribute greatly to a number of serious air 
pollution problems, especially the health and welfare effects of ozone 
and particulate matter (PM).1 Millions of Americans live in 
areas that exceed the national air quality standards for ozone or PM. 
As discussed in detail in the following section, diesel emissions 
account for a large portion of the country's PM and nitrogen oxides 
(NOX), a key precursor to ozone formation. By 2010, we 
estimate that diesel engines will account for more than one-half of 
mobile source NOX emissions, and nearly 70% of mobile source 
PM emissions (not taking into account emission reductions from proposed 
Tier 2 emission standards for light-duty vehicles and trucks, discussed 
below).
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    \1\ In this notice, the term ``diesel engine'' generally refers 
to diesel-fueled engines, rather than to engines operating on the 
diesel combustion cycle, some of which use alternative fuels, such 
as methanol or natural gas, instead of diesel fuel.
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    Diesel emissions in this country come mostly from heavy-duty trucks 
and nonroad equipment, but a potentially large additional source may 
grow out of auto manufacturers' plans to greatly increase the sales of 
diesel-powered light-duty vehicles (LDVs) and especially of light-duty 
trucks (LDTs), a category that includes the fast-selling sport-utility 
vehicles, minivans, and pickup trucks. These plans will be greatly 
affected by our own plans to adopt stringent new emission standards for 
these light-duty highway vehicles (referred to as ``Tier 2'' standards) 
that we have proposed to phase in between 2004 and 2009. A key approach 
taken in developing the Tier 2 standards has been ``fuel-neutrality''--
applying standards equally to diesel- and gasoline-powered vehicles. As 
a result, the proposed Tier 2 NOX and PM standards are far 
more challenging for diesel engine designers than the most stringent 
heavy-duty engine standards promulgated to date.
    We have proposed Tier 2 standards concurrent with a proposal to 
reduce the sulfur content of gasoline, in part because gasoline sulfur 
reduction will enable advanced catalyst technologies needed to achieve 
the new standards. With this advance notice, we are seeking comment on 
the merits of improving the quality of diesel fuel as well, as an 
enabler of advanced technologies for diesel emission control, without 
which diesel vehicles may not be able to meet Tier 2 standards. These 
advanced sulfur-sensitive technologies have the potential to reduce 
diesel engine NOX emissions by up to 75% and PM emissions by 
80% or more.
    Thus this potential action on diesel fuel is, like gasoline sulfur 
control, closely tied to our Tier 2 standard-setting activity. 
Decisions on diesel fuel quality need to be made quickly so that the 
Tier 2 program may be implemented in the most coordinated and cost-
effective manner. We therefore plan to pursue this action on an 
accelerated schedule. If, following this advance notice, we decide that 
a proposal is warranted, we plan to publish a notice of proposed 
rulemaking later this year, and a final rule as soon as possible after 
that.
    Although the impetus for near-term action on diesel fuel quality 
comes from our efforts to set fuel-neutral Tier 2 standards for the 
light-duty market, any emissions control technologies that prove 
effective in light-duty diesel applications are likely to be effective 
with heavy-duty highway engines as well. Thus higher quality diesel 
fuel for heavy-duty applications, combined with more stringent heavy-
duty engine emission standards that effectively introduce the new 
technologies, could provide large environmental benefits, though 
perhaps on a different implementation schedule than that required for 
the light-duty program. This might take the form of a phased in 
program, involving a regulated grade of premium fuel that is initially 
focused on servicing the light-duty diesel fleet, but that gradually 
widens its market penetration to fulfill the expanding need created by 
sales of new heavy-duty vehicles that also employ the advanced 
technologies. Various possibilities and issues associated with such an 
approach are discussed in detail below in this notice. In addition to 
enabling new control technologies, the use of higher quality diesel 
fuel is likely to improve the emissions performance of the existing 
fleet of diesel engines as well, as explained below.
    Eventually these advanced technologies could also find application 
in nonroad equipment, although implementation timing would have to 
consider a number of special challenges in controlling nonroad engine 
emissions, including the fact that current nonroad diesel fuel is 
unregulated and has much higher sulfur levels than highway fuel. It may 
also be necessary to regulate nonroad diesel fuel in an earlier time 
frame, to a quality level similar to that of current highway fuel 
(which has sulfur levels capped at 500 parts per million (ppm)), in 
order to provide for the transfer of advanced highway engine 
technologies already under development for use with that fuel. This 
technology transfer is expected to play an important role in the 
implementation of the recently promulgated Tier 3 nonroad diesel engine 
emission standards, and of the stringent PM standards planned for 
promulgation in 2001. (The 2001 rulemaking will also review the 
feasibility of the recently promulgated Tier 3 standards, and may amend 
them if appropriate.)

II. Diesel Engines and Air Quality

    The diesel engine is increasingly becoming a vital workhorse in the 
United States, moving much of the nation's freight, and carrying out 
much of its farm, construction, and other labor. Every year, about a 
million new diesel engines are put to work in the U.S., and as their 
utility continues to grow, so too does their annual fuel consumption, 
now over 40 billion gallons. However, the societal benefits provided by 
the diesel engine have come at a price--diesels emit millions of tons 
of harmful exhaust pollutants annually.
    Compounding our concerns over emissions from applications in which 
diesels are currently prevalent, we are aware that manufacturers are 
considering the introduction of a new generation of diesel engines for 
use in light-duty highway vehicles. Even at modest projected sales 
ramp-up rates, this introduction could greatly increase the number of 
diesel engines in operation over the next several years.
    Although in the past much of our attention in addressing the diesel 
pollution problem has focused on engine design, the role of fuel 
formulation has been recognized from the beginning. A number of fuel 
properties and constituents can be varied in the refinery process with 
varying effects on emissions. Furthermore, some advanced emission 
control technologies may be degraded by constituents in diesel fuel, 
even to

[[Page 26144]]

the extent of precluding the use of these technologies.
    Diesel engines are large contributors to a number of serious air 
pollution problems, particularly the health and welfare effects caused 
by ozone and particulate matter. The particulate from diesel exhaust 
also is thought to pose a potential cancer risk. These concerns for 
cancer risk and other adverse health effects are discussed in detail 
below, followed by a discussion of diesel contributions to emissions 
inventories.

A. Ozone and Particulate Matter

    Ground-level ozone, the main ingredient in smog, is formed when 
volatile organic compounds (VOC) and NOX react in the 
presence of sunlight, usually during hot summer weather. Motor vehicles 
are significant sources of both VOC and NOX. Diesel engines, 
in particular, are significant sources of NOX emissions. 
Power plants and other combustion sources also are large emitters of 
NOX. VOCs are emitted from a variety of sources, including 
chemical plants, refineries and other industries, consumer and 
commercial products, and natural sources such as vegetation.
    Particulate matter is the term for a mixture of solid particles and 
liquid droplets found in the air. Particulate matter is distinguished 
between ``coarse'' particles (larger than 2.5 microns) and ``fine'' 
particles (smaller than 2.5 microns). Coarse particles generally come 
from vehicles driven on unpaved roads, materials handling, windblown 
dust, and crushing and grinding operations. Fine particles result from 
sources such as fuel combustion (from motor vehicles, power plants and 
industrial facilities), wood stoves and fireplaces. Fine particles also 
are formed in the atmosphere from gases such as sulfur dioxide, 
NOX and VOC. Particles directly emitted from motor vehicles, 
including diesel engines, and those formed by motor vehicle gaseous 
emissions, are in the fine particle range.
    Ozone can cause acute respiratory problems, aggravate asthma, cause 
inflammation in lung tissue, and impair the body's immune system 
defenses. Particulate matter, especially fine particles, has been 
linked with a series of significant health problems, including 
premature death, aggravated asthma, acute respiratory symptoms, chronic 
bronchitis, and shortness of breath. Furthermore, the particulate 
matter from diesel engines is thought to pose a potential cancer risk, 
as discussed in the next section. Fine particles can easily reach the 
deepest recesses of the lungs. Inhalation of ozone and particulate 
matter has been associated with increased hospital admissions and 
emergency room visits. With both ozone and particulate matter, those 
most at risk are children and people with preexisting health problems, 
especially asthmatics. Because children's respiratory systems are still 
developing, they are more susceptible to environmental threats than 
healthy adults. The elderly also are more at risk from exposure to fine 
particles, especially those already suffering from heart or lung 
disease.
    In addition to serious public health problems, ozone and 
particulate matter cause a number of environmental and welfare effects. 
Fine particles are a major cause of visibility impairment in many of 
our most treasured national parks and wilderness areas, and many urban 
areas.2 Particulate matter also can damage plants and 
materials such as monuments and statues. Ozone adversely affects crop 
yield, vegetation and forest growth, and the durability of materials. 
By weakening sensitive vegetation, ozone makes plants more susceptible 
to disease, insect attack, harsh weather and other environmental 
stresses. NOX itself, one of the key precursors to ozone, 
contributes to fish kills and algae blooms in the Chesapeake Bay and 
other sensitive watersheds.
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    \2\ The relative contribution of different particle constituents 
to visibility impairment varies geographically. For example, in most 
areas of the eastern U.S., sulfates account for more than 60 percent 
of annual average light extinction, and nitrates, organic carbon, 
and elemental carbon account for between 10-15 percent of light 
extinction. In the rural West, sulfates typically account for about 
25-40 percent of light extinction, except in certain areas such as 
the Cascades of Oregon, where sulfates account for over 50 percent 
of light extinction. For further discussion of the contribution of 
different particle constituents to visibility impairment, see EPA's 
``National Air Quality and Emissions Trends Report, 1997,'' Chapter 
6 (http://www.epa.gov/oar/aqtrnd97).
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    Despite continued improvements in recent years, ozone remains a 
serious air pollution problem in much of the country. Approximately 48 
million people live in the 77 counties where ozone levels exceeded the 
1-hour National Ambient Air Quality Standard (NAAQS) in 1997. Moreover, 
EPA has established a new and more stringent 8-hour ozone standard to 
better protect Americans from the health and welfare effects associated 
with longer term exposures to ozone. Ozone and its precursors can be 
transported into an area from pollution sources found hundreds of miles 
upwind, resulting in high ozone levels even in areas with relatively 
low NOX and VOC emissions. In one of the most significant 
actions underway to help ensure that many areas of the country are able 
to attain the new 8-hour ozone standard, EPA is requiring 22 eastern 
states and the District of Columbia to significantly reduce 
NOX emissions from power plants.3 Yet, even after 
these significant NOX emission reductions are achieved, we 
project that by 2007 approximately 28 metropolitan areas and four rural 
counties, with a combined population of 80 million people, still will 
not meet the 8-hour ozone standard, and at least eight metropolitan 
areas and two rural counties with a combined population of 39 million 
will exceed the 1-hour ozone standard.4 The extent of 
remaining projected ozone nonattainment emphasizes the persistent 
nature of the ozone air quality problem across much of the country and 
demonstrates the need for further substantial reductions in ozone's 
precursors, NOX and VOC.
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    \3\ See 63 FR 57356, October 27, 1998, ``Finding of Significant 
Contribution and Rulemaking for Certain States in the Ozone 
Transport Assessment Group Region for Purposes of Reducing Regional 
Transport of Ozone''. This action is known as the ``NOX 
SIP Call'.
    \4\ For a full description of this analysis, see ``Draft 
Regulatory Impact Analysis--Control of Air Pollution from New Motor 
Vehicles: Tier 2 Motor Vehicle Emission Standards and Gasoline 
Sulfur Control Requirements;'' Chapter III.B.; (EPA420-R-99-002); 
hereafter referred to as ``Tier 2/Gasoline Sulfur Draft RIA'' (EPA 
Docket A-97-10).
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    In addition to widespread ozone nonattainment, particulate matter 
continues to be a significant air quality problem. In 1997, 8 million 
Americans lived in 13 counties that exceeded the air quality standard 
for particulate matter less than 10 microns in size (PM10). 
We project that by 2010, 11 counties, with a combined population of 
about 10 million people, will be in nonattainment for the revised 
PM10 standard.5 We also have established a new 
air quality standard for fine particles (PM2.5). Monitoring 
data to determine nonattainment of the new PM2.5 standard is 
not yet available. However, we project that by 2010, 102 counties, with 
a combined population of 55 million people, will violate the 
PM2.5 air quality standard.6
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    \5\ 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. EPA, Research Triangle Park, 
N.C., July 16, 1997.
    \6\ More information about this analysis may be found in the 
Tier 2 Notice of Proposed Rulemaking preamble and the Tier 2/
Gasoline Sulfur Draft RIA.
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    With the significant number of areas projected to exceed the 
PM10 NAAQS in 2010, further particulate emission reductions 
appear to be needed. Because most of the particulate matter emissions 
from diesel engines are fine particles, any particulate emission 
reduction aimed at reducing PM10 levels would also reduce 
ambient PM2.5 levels.

[[Page 26145]]

B. Air Toxics

    Diesel exhaust PM typically consists of a solid core, composed 
mainly of elemental carbon, which has a coating of various organic and 
inorganic compounds. The diameter of diesel particles is very small 
with typically 75-95 percent of the particle mass having a diameter 
smaller than 1.0 m. The characteristically small particle size 
increases the likelihood that the particles and the attached compounds 
will reach and lodge in the deepest and more sensitive areas of the 
human lung. Both the diesel particle and the attached compounds may be 
influential in contributing to a potential for human health hazard from 
long term exposure.
    EPA's draft Diesel Health Assessment identifies lung cancer as well 
as several other adverse respiratory health effects, including 
respiratory tract irritation, immunological changes, and changes in 
lung function, as possible concerns for long term exposure to diesel 
exhaust. The evidence in both cases comes from the studies involving 
occupational exposures and/or high exposure animal studies; the Health 
Assessment, when completed, will recommend how the data should be 
interpreted for lower environmental levels of exposure. The draft 
Health Assessment is currently being revised to address comments from a 
peer review panel of the Clean Air Science Advisory Committee.
    The California Air Resources Board has identified diesel exhaust PM 
as a ``toxic air contaminant'' under the state's air toxics program, 
based on the information available on cancer and non-cancer health 
effects.7 California is in the process of determining the 
need for, and appropriate degree of, control measures for diesel 
exhaust PM. Note that California limited its finding to diesel PM, as 
opposed to diesel exhaust. EPA's assessment activities of diesel 
exhaust PM are coincident with, but independent from, California's 
evaluation.
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    \7\ State of California, Air Resources Board, Resolution 98-35, 
August 27, 1998.
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    The concerns for cancer risk and other adverse health effects from 
exposure to diesel PM are heightened by the potential expansion of 
diesels in the light-duty vehicle fleet. Diesel engines are used in a 
relatively small number of cars and light-duty trucks today. By far, 
heavy-duty highway and nonroad diesel engines are the larger sources of 
diesel PM. However, vehicle and engine manufacturers project that 
diesel engines likely will be used in an increasing share of the light-
duty fleet, particularly light-duty trucks. If these projections prove 
accurate, the potential health risks from diesel PM could increase 
substantially. EPA's proposed emission standard for PM under the Tier 2 
program would limit any increase in potential cancer risks associated 
with the potential increase in light-duty diesel sales.

C. Diesel Contribution to Emission Inventories

    The diesel engine pollutants of most concern are NOX and 
PM. Nitrogen and oxygen in the engine's intake air react together in 
the combustion chamber at high temperatures to form NOX. 
Particulate emissions result from incomplete evaporation and burning of 
the fine fuel droplets which are injected into the combustion chamber, 
as well as small amounts of lubricating oil that enter the combustion 
chamber. The VOC emissions from diesel engines are inherently low, 
because the fuel burns in the presence of excess oxygen which tends to 
completely burn hydrocarbons.8 Evaporative emissions also 
are insignificant due to the low evaporative rate of diesel fuel.
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    \8\ Motor vehicles' contribution to the VOC inventory typically 
consists of unburned fuel hydrocarbons in the exhaust and 
evaporative emissions from vehicle fuel systems.
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    Diesel engines make up a significant portion of the NOX 
and PM from mobile sources. Moreover, the contribution of diesel 
engines to air pollutant emission inventories is expected to grow as 
more light-duty diesel vehicles and trucks enter the market. The 
emission inventory discussed below is the same as the ``base case'' 
prepared for the Tier 2 proposed rulemaking.9 This inventory 
accounts for emission standards that have been promulgated already for 
each of the vehicle categories (e.g., light-duty, heavy-duty highway 
and nonroad), but does not include the impact of proposed light-duty 
Tier 2 standards. The Tier 2 standards would tend to decrease the 
relative contribution of light-duty emissions in the inventory, and 
thus increase the heavy-duty and nonroad relative contributions. On the 
other hand, substantial growth in light-duty diesel sales would tend to 
substantially increase the light-duty vehicle PM inventory, because 
diesels emit more PM than the gasoline vehicles they replace. Although 
the fuel-neutral Tier 2 standards would tend to mitigate this impact, 
growth in diesel sales, especially before and during the phase-in years 
of the proposed Tier 2 program, would still tend to increase the light-
duty PM inventories. These considerations are important in assessing 
how the focus for diesel fuel control may shift in the future, beyond 
the 2007-2010 base case view. The inventory is reported in the 2007-
2010 time frame because those dates are important for State 
Implementation Plan purposes in attaining the ozone and PM 
NAAQS.10
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    \9\ For a further description of the emissions inventory, see 
Tier 2/Gasoline Sulfur Draft RIA; Chapter III.A. (EPA Docket A-97-
10). Note that this is a 47-state emissions inventory, which 
excludes California, Alaska, and Hawaii.
    \10\ For further discussion on key ozone/PM State Implementation 
Plan timelines and attainment dates, see Section III.A. of the 
preamble to the Tier 2/Gasoline Sulfur proposed rule.
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    Mobile source emissions account for almost one-half of all 
NOX emissions nationwide. By 2010, mobile source 
NOX emissions will total more than 7.8 million tons. As 
shown in Figure 1, by 2010, we project that all diesel engines combined 
will account for 53% (4.1 million tons) of mobile source NOX 
emissions. Heavy-duty diesels account for 15% of the mobile source 
contribution, and nonroad diesels account for 38%.11 Light-
duty vehicles and trucks account for 40% of mobile source 
NOX emissions. Currently, almost all of the light-duty fleet 
is fueled by gasoline, and less than 1% of the NOX emissions 
come from light-duty diesels. In the 2007 inventory, the proportion of 
NOX emissions from these various vehicle categories is 
similar.
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    \11\ In Figures 1 and 2, the ``Nonroad Diesel'' category 
includes nonroad equipment, locomotives, and commercial marine. The 
``Other Non-Diesel'' category includes aircraft and non-road 
equipment powered by fuels other than diesel.

BILLING CODE 6560-50-P

[[Page 26146]]

[GRAPHIC] [TIFF OMITTED] TP13MY99.012


    Mobile sources account for 20% of direct PM10 emission 
inventories (excluding natural sources and fugitive dust). By 2010, 
mobile source direct PM10 emissions will total almost 
621,000 tons. As shown in Figure 2, by 2010, we project that diesel 
engines will account for nearly 70% (434,000 tons) of all mobile source 
PM10 emissions. Heavy-duty diesels account for 9% of the 
mobile source PM10 contribution, and nonroad diesels account 
for 60%. Light-duty vehicles and trucks account for 16% of mobile 
source PM10 emissions. Currently, almost all of the light-
duty fleet is fueled by gasoline. However, as more diesels enter the 
light-duty market, light-duty diesels could become a significant 
portion of mobile source PM emissions, as discussed above. The 
proportion of PM10 emissions from these various vehicle 
categories in the 2007 inventory is similar.
[GRAPHIC] [TIFF OMITTED] TP13MY99.013


BILLING CODE 6560-50-C

    It is also important to note that mobile source emissions generally 
make up a larger fraction of the emission inventory for urban areas, 
where human population and light-duty vehicle travel is more 
concentrated than in rural areas. We recently conducted a study to 
compare the level and sources of emissions in four U.S. cities 
(Atlanta, New York, Chicago, and Charlotte) versus the nationwide 
inventory.12 For example, in Atlanta by 2010, mobile sources 
are expected to account for 81% of all NOX emissions, while 
nationally they account for 44%. Similarly, in Atlanta by 2010, mobile 
sources will account for nearly 60% of all direct PM10 
emissions 13, while nationally they account for 20%. Highway 
emissions of

[[Page 26147]]

NOX, PM10 and PM2.5 in Atlanta are more than 
double the national inventory. Nonroad PM10 and 
PM2.5 emissions in Atlanta also are more than double the 
national inventory. In the other cities studied, mobile source 
NOX and PM10 emissions also were generally 
considerably higher than the national inventory.
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    \12\ For purposes of this study, the national inventory excludes 
California, Hawaii and Alaska. For a further description of this 
study of four cities, see Tier 2/Gasoline Sulfur Draft RIA, Chapter 
III.A.
    \13\ This is the portion of the PM10 inventory that 
excludes natural sources and fugitive dust.
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    At this stage, we have not yet evaluated the emission reductions 
that could be achieved by introducing higher quality diesel fuel and 
the technologies it may enable, since the effectiveness of these 
technologies remains uncertain. However, as discussed in Section VI.A., 
some people involved in the development of these technologies project 
per vehicle emission reductions of up to 75% for NOX and 
over 80% for PM, and so large inventory reductions may be possible.

III. Diesel Emissions Control: Progress and Prospects

    Since the 1970's, highway diesel engine designers have employed 
numerous strategies to meet the challenge presented by our emissions 
standards, beginning with smoke controls, and focusing in this decade 
on increasingly stringent NOX, hydrocarbon, and PM 
standards. More recently, standards for various categories of nonroad 
diesel engines, such as those used in farm and construction machines, 
locomotives, and marine vessels, have also been pursued by the Agency. 
Our most recent round of standard setting for heavy-duty highway 
diesels occurred in 1997 (62 FR 54693, October 21, 1997), effective 
with the 2004 model year. This action, combined with previous standard-
setting actions, will result in engines that emit only a fraction of 
the NOX, hydrocarbons, and PM produced by their higher-
emitting counterparts manufactured just a decade ago.
    Nevertheless, certain characteristics inherent in the way diesel 
fuel combustion occurs have prevented achievement of emission levels 
comparable to today's gasoline-fueled vehicles. While diesel engines 
provide advantages in terms of fuel efficiency, durability, and 
evaporative emissions, controlling NOX emissions is a 
greater challenge for diesel engines than for gasoline engines, 
primarily because of the ineffectiveness of three-way catalysis in the 
oxygen-rich diesel exhaust environment. Similarly, PM emissions, which 
are inherently low for gasoline engines, are more difficult to control 
in diesel engines, because the diesel combustion process tends to form 
soot and other particles. The challenge is compounded by the fact that 
most diesel NOX control approaches tend to increase PM, and 
vice versa.
    Considering the air quality impacts of diesel engines and the plans 
of manufacturers to increase the market penetration of light-duty 
diesel vehicles, it is imperative that progress in diesel emissions 
control continue. Fortunately, encouraging progress is now being made 
in the design of exhaust aftertreatment devices for diesel 
applications. Aftertreatment devices, such as catalytic converters, 
which have been employed successfully on gasoline engines for decades, 
have had only limited use with diesel engines. This is primarily due to 
the difficulty of making such devices perform well in the diesel's 
oxygen-rich exhaust stream, and to the great success that diesel engine 
designers have had up to now in meeting challenging emission standards 
without aftertreatment. The combination of encouraging progress in 
effective aftertreatment design and the challenge presented by the 
proposed stringent Tier 2 standards is changing this situation. As 
discussed in detail below, promising new technologies may allow a step 
change in diesel emissions control, of a magnitude comparable to that 
ushered in by the automotive catalytic converter in the 1970's. 
However, it appears that changes in diesel fuel quality may be needed 
to bring this step change about.

IV. What Fuel Changes Might Help?

    Debate and research on changing diesel fuel to lower emissions has 
focused on several fuel specifications: cetane level, aromatics 
content, fuel density, distillation characteristics (T90 and T95), 
oxygenates content, and sulfur content. Control of these parameters may 
have the potential to provide direct benefits by incrementally lowering 
emissions when the fuel is burned, although the benefit may vary 
depending on the sophistication of the engine technology involved.
    Much of the available data on the effects of fuel parameter changes 
is for heavy-duty engines. In preparation for the 1999 technology 
review to assess the ability of heavy-duty diesel engines to meet the 
combined NOX and nonmethane hydrocarbon (NMHC) standard in 
2004, an industry/EPA workgroup was tasked with evaluating the 
incremental impact of changes in diesel fuel properties on 
NOX and hydrocarbon emissions. This study employed advanced 
technology heavy-duty diesel engines expected to be used to meet the 
2004 standard. These engines depend on exhaust gas recirculation (EGR) 
and optimization of engine design, but not on advanced aftertreatment. 
The study focused on separately identifying the emissions impacts of 
changes in fuel density, aromatics content (both total and polycyclic 
aromatics), and cetane number (both natural and additive-
enhanced).14
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    \14\ ``EPA HDEWG Program Phase 2'', Presentation of the Heavy-
Duty Engine Work Group at January 13, 1999 meeting of Clean Air Act 
Advisory Committee, Mobile Sources Technical Review Subcommittee, 
Washington, DC.
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    The results of this study showed that state-of-the-art heavy-duty 
engines are mostly insensitive to changes in these parameters. Changes 
in diesel fuel density and aromatics were found to have the greatest 
beneficial effect on emissions. Yet large concurrent changes in these 
fuel parameters reduced NOX emissions by only 10%. Of the 
total effect, approximately 5% was attributed to the reduction in fuel 
density, and 5% to the reduction in aromatics content. Increasing the 
cetane number was found to have no observable emissions benefit, 
although previous studies on older-technology engines showed a benefit. 
Changing other fuel parameters was also found to have either no effect, 
or only a small effect on emissions. Effects on PM emissions were not 
included in this study.
    Another study, documented as the ``EPEFE Report'', examined the 
effects of fuel parameter changes on NOX, PM, hydrocarbon, 
and carbon monoxide emissions in both light- and heavy-duty diesel 
engines.15 This study also found only small effects on NOx 
emissions from changes in density, polycyclic aromatics content, 
cetane, and T95 (less than 5% for any one parameter change, less than 
10% overall). Although the magnitude and even the direction of the 
emissions changes were different for light- and heavy-duty vehicles, 
the small magnitude of the impacts was consistent. The largest impacts 
on PM emissions were from lowering T95 (7% in light-duty testing, no 
effect in heavy-duty testing) and density (19% in light-duty, 2% in 
heavy-duty), although the benefit of the density change was determined 
to be confounded by a physical effect--lower density fuel decreased the 
fueling rate and engine power which in turn affected emissions. Thus 
the need for additional data on how fuel changes affect PM emissions 
appears to be especially pronounced, especially considering the 
possible need for diesel PM reductions in the existing fleet to address 
potential air toxics concerns.
---------------------------------------------------------------------------

    \15\ ``EPEFE Report'', European Programme On Emissions, Fuels, 
and Engine Technologies, ACEA/Europia Auto/Oil Programme.
---------------------------------------------------------------------------

    A lack of emissions sensitivity to changes in diesel fuel cetane 
and

[[Page 26148]]

aromatics content was observed in another recently-published paper, 
which reported on testing conducted with an advanced technology heavy-
duty engine (designed to achieve a 2.5 grams/horsepower-hour (g/hp-hr) 
NOX emissions level).16 A recent literature 
review of diesel emissions studies sought to decouple the incremental 
impact on emissions of changes in one fuel parameter from the impacts 
of changes in other fuel parameters.17 This review also 
found that the incremental effects on emissions (NOX, PM, 
hydrocarbons, and carbon monoxide) of changes in diesel fuel 
composition are small or nonexistent for more advanced engine 
technologies. However, the review noted that any conclusion regarding 
the effect on emissions of adding oxygenates to diesel fuel must be 
considered tentative pending further investigative work. Of particular 
interest may be the impact on PM emissions of the use of oxygenates 
that contain a large fraction of oxygen per unit volume.
---------------------------------------------------------------------------

    \16\ ``The Effects of Fuel Properties on Emissions from a 2.5 gm 
NOX Heavy-Duty Engine'', Thomas Ryan III, Janet 
Buckingham, Lee Dodge, and Cherian Olikara, Society of Automotive 
Engineers Technical Paper No. 982491.
    \17\ Fuel Quality Impact on Heavy-Duty Diesel Emissions: A 
Literature Review, Rob Lee, Joanna Pedley, and Christene Hobbs, 
Society of Automotive Engineers Technical Paper No. 982649.
---------------------------------------------------------------------------

    Reducing the sulfur content of diesel fuel has the potential to 
provide large indirect technology-enabling benefits in addition to some 
amount of direct emission benefits. In fact, sulfur reduction appears 
to be the only fuel change with potential to enable new technologies 
needed to meet Tier 2 light-duty or anticipated future heavy-duty 
standards. Therefore, although other specifications changes are under 
consideration, at this point we believe that sulfur control is the most 
likely means of achieving cost-effective diesel fuel emission 
reductions, as discussed in detail in the remainder of this notice.
    Because we have more complete information on the effects that 
diesel fuel changes have on emissions from heavy-duty engines than from 
light-duty engines, we believe that any preliminary conclusions one 
might draw regarding changes other than sulfur are more tentative for 
light-duty applications. We welcome any information that would help us 
to assess the potential benefits and costs of changes other than sulfur 
in light-duty diesel fuel. Such information may become especially 
relevant if we pursue an implementation plan that treats this fuel 
separately, as discussed in Section XI.

    Issue 1: Fuel Changes Other Than Sulfur.-- Should EPA pursue diesel 
fuel changes other than sulfur control? What costs and emission 
reductions would be involved? Are there additional data on emissions 
impacts of fuel changes, especially for light-duty applications? Should 
a diesel fuel quality program be structured to encourage gas-to-liquid 
or other non-petroleum blends?

V. Diesel Fuel Quality in the U.S. and Other Countries

A. Current Diesel Fuel Requirements in the U.S.

    EPA set standards for diesel fuel quality in 1990 (55 FR 34120, 
August 21, 1990). These standards, effective since 1993, apply only to 
fuel used in highway diesel engines. The standards limit the sulfur 
concentration in fuel to a maximum of 500 ppm, compared to a pre-
regulation average of 2500 ppm. They also protect against a rise in the 
fuel's aromatics level from the then-existing levels by setting a 
minimum cetane index of 40 (or, alternatively, a maximum aromatics 
level of 35%). Aromatics tend to increase the emissions of harmful 
pollutants. These regulations were established in response to a joint 
proposal from members of the diesel engine manufacturing and petroleum 
refining industries to reduce emissions and enable the use of catalysts 
and particulate traps in meeting EPA's PM standards for diesel engines. 
As a result of our diesel fuel regulation, highway diesel fuel sulfur 
levels average about 340 ppm outside of California.18 Alaska 
has an exemption from our existing 500 ppm limitation (permanent in 
some areas, temporary in others) and is currently seeking a permanent 
exemption for all areas of the state, because of special difficulties 
in supplying lower sulfur diesel fuel for that market (63 FR 49459, 
September 16, 1998). Similarly, American Samoa and Guam also have 
permanent exemptions from our existing 500 ppm limitation (July 20, 
1992, 57 FR 32010 and September 21, 1993, 58 FR 48968). We currently do 
not regulate diesel fuels that are not intended for use in highway 
engines. Diesel fuel sold for use in most nonroad applications such as 
construction and farm equipment has sulfur levels on the order of 3300 
ppm.19
---------------------------------------------------------------------------

    \18\ ``A Review of Current and Historical Nonroad Diesel Fuel 
Sulfur Levels'', Memorandum from David J. Korotney, Fuels and Energy 
Division, March 3, 1998, EPA Air Docket A-97-10, Docket Item II-B-
01.
    \19\ ``A Review of Current and Historical Nonroad Diesel Fuel 
Sulfur Levels'', Memorandum from David J. Korotney, Fuels and Energy 
Division, March 3, 1998, EPA Air Docket A-97-10, Docket Item II-B-
01.
---------------------------------------------------------------------------

    California set more stringent standards in 1988 for motor vehicle 
diesel fuels for the South Coast air basin. These standards took effect 
statewide in 1993. They apply to both highway and nonroad fuels 
(excluding marine and locomotive use), and limit sulfur levels to 500 
ppm and aromatics levels to 10%, with some flexibility provisions to 
accommodate small refiners and alternative formulations.

B. Diesel Sulfur Changes in Other Countries

    Progress toward diesel fuel with very low sulfur levels has 
advanced rapidly in some parts of the world. The European Union's 
``Auto Oil Package'' was adopted recently in an effort to improve air 
quality, by establishing an integrated approach to setting requirements 
for fuels in such a way that vehicles can produce their best 
environmental performance.20 As part of the Auto Oil 
Package, the European Union adopted new fuel specifications for diesel 
fuel.21 These specifications contain a diesel fuel sulfur 
limit of 50 ppm by 2005, with an interim limit of 350 ppm by 2000. The 
Member States will be required to monitor fuel quality to ensure 
compliance with the specifications.
---------------------------------------------------------------------------

    \20\ ``Newsletter from Ritt Bjerregaard, the EU's Commissioner 
for the Environment,'' European Commission, September 1998.
    \21\ European Union Directive 98/69/EC published on December 28, 
1998 (OJ L350, Volume 41, page 1).
---------------------------------------------------------------------------

    In the United Kingdom, the entire diesel fuel supply soon will be 
at sulfur levels of 50 ppm, based on recent announcements by major 
refiners.22 The United Kingdom currently offers a two-penny 
tax break for diesel fuel. Finland and Sweden also have tax incentives 
encouraging low sulfur diesel fuel. Finland's tax incentive applies to 
diesel with sulfur levels below 50 ppm, which accounts for 90% of the 
Finnish market.23 Sweden's tax incentive applies to diesel 
with sulfur levels below 10 ppm.24
---------------------------------------------------------------------------

    \22\ Hart's European Fuels News, ``All Change! Standard diesel 
dropped by UK as majors announce phase-out within weeks'', February 
10, 1999.
    \23\ ``International Activities Directed at Reducing Sulphur in 
Gasoline and Diesel, A Discussion Paper,'' Dr. Mark Tushingham, 
Environment Canada, 1997.
    \24\ CONCAWE, Report No. 6/97, ``Motor Vehicle Emission 
Regulations and Fuel Specifications--Part 2--Detailed Information 
and Historic Review (1970-1996).''
---------------------------------------------------------------------------

    Japan recently proposed to limit sulfur in diesel fuel to 50 
ppm.25 The proposal allows a phase-in of about 10 years, to 
give refineries time to invest in new facilities. Japan's Environment

[[Page 26149]]

Agency is expected to decide on the new diesel sulfur limit after 
holding hearings and consulting with the Central Environment Council, 
an advisory panel to the prime minister.
---------------------------------------------------------------------------

    \25\ ``Sulfur Limit for Diesel Fuel May Be Lowered'', Japan 
Times Online, June 2, 1998.
---------------------------------------------------------------------------

    In North America, Mexico and Canada have regulated diesel sulfur 
levels to a maximum of 500 ppm, as in the U.S. Canada recently 
announced a proposal to lower gasoline sulfur, but the proposal does 
not address diesel fuel at this time. However, Canada recognized that a 
lower diesel sulfur level may be necessary to protect public health and 
to support future diesel engine technologies. The Canadian Government 
Working Group recommended that emissions from on-road diesel fuels be 
examined further to determine their impact on public 
health.26

    \26\ ``Final Report of the Government Working Group on Sulphur 
in Gasoline and Diesel Fuel--Setting a Level for Sulphur in Gasoline 
and Diesel Fuel,'' July 14, 1998.
---------------------------------------------------------------------------

    Issue 2: Experience Outside the U.S.--What lessons can we learn 
from the experience of other countries in planning for and producing 
low sulfur diesel fuel?

VI. Potential Benefits of Reducing Sulfur

    We believe that diesel fuel desulfurization should be evaluated 
primarily for its potential to enable new engine and aftertreatment 
technologies with large air quality benefits. However, there may be 
other effects as well, as discussed further below.

A. Technology Enablement

    Sulfur-sensitive technology enablements can be further grouped into 
two categories: those that can be achieved with some success using 
current fuel but which have significantly improved emissions 
performance with low sulfur fuel, and those that must have low sulfur 
fuel. The following discussion provides our current understanding of 
prospective technologies in both categories, built from a review of the 
technical literature and from numerous discussions with the people who 
are developing these concepts.
    Note that we believe the viability and sulfur-sensitivity of these 
technologies are, to varying degrees, still open issues; also, there 
may be other promising technologies not included here. A major goal of 
this advance notice is to establish the degree of confidence warranted 
in claims that robust, cost-effective emission control technologies 
will be made viable or greatly enhanced by fuel desulfurization. 
Another major goal is to ascertain what sulfur levels may be needed. 
Manufacturers have suggested that sulfur should be capped at 30 ppm, 
although the need for even lower levels has also been discussed. Even 
for those technologies that require low-sulfur fuel to function, there 
may be a range of operation in which the technologies may be able to 
tolerate higher sulfur levels but emissions performance may be further 
enhanced by additional reductions in fuel sulfur. We are interested in 
information that will help us understand both the range of sulfur 
levels over which operation of the relevant control technologies is 
possible, and the relationship between emissions performance and fuel 
sulfur levels within this range.

    Issue 3: Sulfur-Tolerant Technologies.--What full useful life 
NOX and PM emission levels may be achievable for diesel 
passenger cars and light-duty trucks, and for heavy-duty engines, 
without a change in diesel fuel? At what costs? When could these levels 
be achieved in production vehicles and engines?

    Issue 4: Sulfur-Sensitive Technologies.--How feasible are the 
sulfur-sensitive technologies (discussed below) for light-duty and 
heavy-duty applications? Are there others? What full useful life PM and 
NOX emission levels could they achieve and when? What sulfur 
levels do they require? Are any of them substantially enhanced by 
additional sulfur reductions beyond the sulfur levels required just for 
proper functioning? What is the relationship between fuel sulfur levels 
and emissions performance associated with these technologies? How 
durable are they? What maintenance is required? What is the potential 
that they could eventually be made sulfur-tolerant? What are the cost 
implications? What is their fuel economy impact, if any? What problems 
might occur due to sulfur derived from lube oil being introduced into 
the combustion chamber, either through intentional mixing of used oil 
with fuel or from vaporization off of the cylinder wall?

    Issue 5: In-Use Emissions.--How well will sulfur-sensitive emission 
control technologies perform over the complete range of operating 
cycles and environmental conditions encountered by vehicles in use? For 
example, will there be functional problems or high emissions during 
periods of sustained high loads or idling, or at extremes of ambient 
temperature and humidity? 
1. Technologies Improved By Sulfur Reduction
    Technologies that may derive benefit from diesel fuel 
desulfurization include cooled EGR, lean-NOX catalysts, PM 
filters, oxidation catalysts, and selective catalytic reduction (SCR). 
None of these technologies appear to have a threshold low sulfur level, 
above which the technology is simply not viable. Rather, every degree 
of sulfur reduction would provide correspondingly greater latitude for 
engine or aftertreatment designers to target their designs for 
aggressive emission reductions. Thus, we need to be able to quantify 
the expected emission reductions in order to assess the effectiveness, 
including incremental cost-effectiveness analysis where appropriate, of 
various levels of control.
    The application of electronically controlled EGR to diesel engines 
is an effective means of controlling NOX emissions. Cooling 
the recirculated exhaust gas before it reenters the combustion chamber 
can greatly increase EGR efficiency. NOX emissions 
reductions of up to 90% are believed possible with cooled EGR systems 
for heavy-duty diesel applications.27 However, manufacturers 
have claimed that one of the primary limiters on how extensively cooled 
EGR can be used is the potential for condensation of sulfuric acid and 
associated corrosion-related durability problems. We have not yet 
received any durability data to support these claims using realistic 
in-use operating conditions and corrosion-resistant materials. Acid 
aerosol formation may also increase the frequency of oil changes due to 
increased acidification of engine lubricating oil. It is not clear at 
this time that removing sulfur from fuel is the only solution to these 
problems, if they indeed exist. Any actual oil acidification problem 
may be addressable by increasing alkaline oil additives, and corrosion-
resistant materials are available for durable EGR cooler construction.
---------------------------------------------------------------------------

    \27\ Dickey, D.W., et al., NOX Control in Heavy-Duty 
Diesel Engines--What is the Limit? SAE Technical Paper Series, No. 
980174, 1998.
---------------------------------------------------------------------------

    Various types of lean-NOX catalysts are either in 
production or under investigation for reduction of NOX 
emissions in lean exhaust environments such as those present in diesel 
exhaust. These catalysts include two types: (1) Active catalysts 
require a post-combustion fuel injection event and (2) passive 
catalysts require no post-injection. Although some active catalyst 
systems have higher NOX removal efficiencies than similar 
passive catalyst systems, NOX removal efficiencies are still 
only in the range of 15 to 35% on average. It is more likely that these 
systems will be used for incremental NOX reduction for 
light-duty applications in combination with other

[[Page 26150]]

technologies, such as cooled EGR. Lean-NOX catalysts are 
prone to long-term efficiency loss due to sulfur-induced deactivation 
or ``poisoning''. They may also produce unwanted sulfate PM. Both of 
these problems can be mitigated by reducing fuel sulfur, though higher 
sulfur fuel can be accommodated by using less effective catalyst 
formulations.
    One method of exhaust aftertreatment for controlling diesel PM 
emissions is to pass diesel exhaust through a ceramic or metallic 
filter (sometimes called a ``soot filter'' or ``PM trap'') to collect 
the PM, and to use some means of burning the collected PM so that the 
filter can be either periodically or continuously regenerated. Filter 
designs have used catalyzed coatings, catalytic fuel additives, 
electrical heating, and fuel burners to assist trap regeneration. 
Failure to consistently regenerate the filter can lead to plugging, 
excessive exhaust back-pressure, and eventually overheating and 
permanent damage to the filter. Inconsistent regeneration due to the 
low frequency of adequately high temperature exhaust transients has 
been a particular problem in applying PM filters to light-duty diesel 
vehicles. Although PM filters have been used with current fuels, some 
designs, especially those that use catalyst materials susceptible to 
sulfate generation, can be made more effective with lower sulfur fuel. 
In addition, some PM filter system concepts may require low sulfur 
fuel, as discussed below.
    Oxidation catalysts are a proven technology already in widespread 
use on diesel engines. They reduce exhaust PM by removing volatile 
organics, some of which are adsorbed onto soot particles. They also 
reduce emissions of gaseous hydrocarbons. Oxidation catalysts have 
utility not only for direct reduction of PM and hydrocarbons, but also 
as a potential clean-up device to preclude hydrocarbon slip downstream 
of NOX catalysts or PM filters that inject diesel fuel. In 
the relatively low-temperature environments characteristic of diesel 
engine exhaust streams, catalyst formulations containing precious 
metals such as platinum are particularly useful, because they function 
at fairly low temperatures. Unfortunately, these metals also promote 
the conversion of SOX to sulfate PM, thus potentially 
increasing PM emissions, so oxidation catalyst designers must work a 
careful balance to succeed with current fuel. Sulfur reduction can 
obviously mitigate this problem and enable more aggressive oxidation 
catalyst formulations.
    SCR for NOX control is currently used on stationary 
diesel engines, and has been proposed for mobile applications. SCR uses 
ammonia as a NOX reducing agent. The ammonia is typically 
supplied by introducing a urea/water mixture into the exhaust upstream 
of the catalyst. The urea/water mixture is stored in a separate tank 
that must be periodically replenished. These systems can be very 
effective, with NOX reductions of 70 to 90%, and appear to 
be tolerant of current U.S. on-highway diesel fuel sulfur levels. 
However, there is concern that applying current SCR technology to 
highway vehicles will require use of catalyst formulations that are 
sensitive to sulfur, such as those employing platinum, to deal with the 
broad range of operating temperatures typical of highway diesel engines 
in use. There is also potential for formation of ammonia sulfate, which 
is undesirable because it is a component of fine PM.28 In 
addition, SCR systems bring some unique concerns. First, precise 
control of the quantity of urea injection into the exhaust, 
particularly during transient operation, is very critical. Injection of 
too large of a quantity of urea leads to a condition of ``ammonia 
slip'', whereby excess ammonia formation can lead to both direct 
ammonia emissions (with accompanying health and odor concerns) and 
oxidation of ammonia to produce (rather than reduce) NOX. 
Second, there are potential hurdles to overcome with respect to the 
need for frequent replenishment of the urea supply. This raises issues 
related to supply infrastructure, tampering, and the possibility of 
operating with the urea tank dry. Third, there may be modes of engine 
operation with substantial NOX generation in which SCR does 
not function well. Finally, there is concern that SCR systems may 
produce N2O, a gas that has been associated with greenhouse-
effect emissions.
---------------------------------------------------------------------------

    \28\ ``The Impact of Sulfur in Diesel Fuel on Catalyst Emission 
Control Technology'', Manufacturers of Emission Controls 
Association, March 15, 1999.

    Issue 6: Selective Catalytic Reduction--How could the discussed 
difficulties with SCR ammonia slip, infrastructure, reductant 
maintenance, robustness, and N2O production be resolved?
2. Technologies Likely To Require Low Sulfur Fuel
    Technologies that are not currently considered feasible with 
current fuel, but which might become feasible if the sulfur content of 
diesel fuel were lowered, include NOX storage catalyst 
systems and continuously regenerable PM filter systems.
    Although still in early stages of development, NOX 
storage catalyst technology shows promise for NOX reductions 
of 50 to 75% in use. Some projections of ultimate efficiency range as 
high as 90%.29 However, these catalysts are also very prone 
to sulfur poisoning due to sulfate buildup. Diesel engines employing 
NOX storage catalyst systems will probably be limited to the 
use of diesel fuels with less than 30 to 50 ppm sulfur. Even at such 
fairly low sulfur levels, frequent sulfate purging cycles may be needed 
to restore catalyst function. Alternatively, even lower fuel sulfur 
levels, on the order of 5 to 10 ppm, may be needed to manage the 
frequency of purging cycles. Manufacturers have suggested that further 
development of NOX catalyst systems could eventually enable 
diesel engines to reach the fuel-neutral Tier 2 fleet average 
NOX standard of 0.07 grams/mile (see discussion below on 
Diesel Sulfur Control and Tier 2).
---------------------------------------------------------------------------

    \29\ ``The Impact of Sulfur in Diesel Fuel on Catalyst Emission 
Control Technology'', Manufacturers of Emission Controls 
Association, March 15, 1999.
---------------------------------------------------------------------------

    The recently developed continuously regenerating PM filter has 
shown considerable promise for light-duty diesel applications due to 
its ability to regenerate even at fairly low exhaust temperatures. This 
filter technology is capable of a large step change in PM emissions, 
with typical PM reductions exceeding 80%.30 However, these 
systems are also fairly intolerant of fuel sulfur, and are effectively 
limited to use with diesel fuel with sulfur levels below 50 ppm. Given 
that these filter designs appear to have similar efficiencies to less 
sulfur-sensitive PM filter concepts, it is important for us to better 
understand potential advantages and disadvantages of the various trap 
concepts in determining whether or not low sulfur fuel is needed for 
effective PM control.
---------------------------------------------------------------------------

    \30\ Hawker, P., et al., SAE Technical Papers 980189 and 970182.
---------------------------------------------------------------------------

B. Other Effects

    In addition to the primary benefits associated with the enablement 
or improved utilization of technologies discussed above, 
desulfurization could have other effects that should be assessed as 
well. Desulfurization will reduce the direct emissions of sulfate PM 
and SOX, both of which are harmful pollutants. Sulfate PM 
emissions contribute to the overall inventory of PM10 and 
PM2.5, both pollutants for which EPA has set National 
Ambient Air Quality Standards. SO2 (one component of 
SOX) is also a criteria pollutant, and some portion of 
emitted

[[Page 26151]]

SOX is chemically transformed in the atmosphere to sulfate 
PM, and is therefore considered a secondary PM source. Although we do 
not directly regulate the emissions of SOX from diesel 
engines, because the overwhelming majority of these emissions are from 
stationary sources like powerplants, diesel SOX reductions 
would nevertheless be of some benefit to the environment.
    The introduction of desulfurized highway diesel fuel would provide 
immediate SOX and PM emission reductions from the large and 
growing population of heavy-duty diesel engines in the United States. 
These emission reductions would even extend to some portion of the 
nonroad equipment fleet because some significant, though undetermined, 
portion of this fleet is fueled with highway diesel fuel rather than 
the generally less expensive nonroad diesel fuel, for reasons of 
convenience. In contrast to technology-enabling benefits, these direct 
emission reductions derive added air quality value from the fact that 
they are realized immediately as existing vehicles are refueled with 
the new fuel, rather than gradually over many years as new technology 
vehicles replace older models in the fleet.
    On the other hand, although this secondary benefit from sulfate and 
SOX reductions in the existing fleet would result whether or 
not we set new engine emission standards, it would not be expected to 
carry over to engines built after new sulfur controls take effect. This 
is because testing of these engines to verify compliance with motor 
vehicle emission standards would be expected to be conducted using a 
low sulfur test fuel, reflective of the in-use fuel. A low sulfur test 
fuel, with no change in emission standards, allows the engine 
manufacturer to back off on emissions controls to optimize engine cost, 
performance, or fuel economy. Thus earlier model year engines designed 
for higher sulfur fuel could actually run cleaner than later engines 
designed to the same standards, once sulfur controls take effect.

    Issue 7: Direct Benefits of Sulfur Reduction--How much direct 
incremental environmental benefit can be achieved by diesel fuel sulfur 
reduction?
    Manufacturers have claimed that lower sulfur fuel will improve the 
durability of engines and emissions controls, and will reduce the need 
for maintenance, including oil changes. These benefits would produce a 
cost savings to vehicle owners. They may also produce an indirect 
emissions benefit because, although manufacturers must take steps to 
ensure durable emissions controls (such as providing warranties and 
assuming liability over a set useful life), many engines may have high 
emissions because they last well beyond the regulatory useful life or 
because they are poorly maintained. Therefore, provisions that 
inherently extend emission controls' life or reduce the need for 
emissions-affecting maintenance can be beneficial. Some manufacturers 
have claimed that this is especially relevant for engines employing an 
extensive degree of cooled EGR, although this is yet to be proven. As 
discussed above, we have not yet received any durability data to 
support these claims using realistic in-use operating conditions and 
corrosive resistant materials. On the other hand, because reduced 
sulfur appears to enhance the durability of the engines, and not just 
that of the emission controls, environmental disbenefits may result 
from diesel fuel sulfur reduction, due to the potential that higher-
quality fuel will make older, higher-emitting engines last longer in 
the field. Furthermore, fuel changes may inadvertently and 
detrimentally alter fuel system components such as o-ring seals, and 
may also reduce the helpful lubricating effect that some sulfur 
compounds have on fuel system components, although it also appears that 
steps can be taken to preclude these effects, such as the use of 
lubricity additives.

    Issue 8: Durability and Maintenance Impacts--Are there quantifiable 
environmental benefits or disbenefits from such secondary effects as 
more durable controls, reduced maintenance needs, or longer-lived high-
emitting trucks? What steps, if any, need to be taken to ensure that 
fuel changes would not degrade fuel system components in the existing 
fleet? Would lubricity additives be required to restore any loss in 
fuel lubricity characteristics compared to current fuel? If so, what 
would the environmental and cost impacts of these additives be?

VII. Diesel Sulfur Control and Tier 2

    Although almost all highway diesel engines used in the United 
States today are in heavy-duty trucks and buses, the impetus for near-
term action on diesel fuel quality arises from our efforts to set 
stringent new Tier 2 emission standards for passenger cars and light 
trucks. These standards will apply to vehicles powered by any fuel--
including both gasoline and diesel. As part of the Tier 2 rulemaking, 
we also are proposing to lower gasoline sulfur levels, in part to 
enable the use of advanced catalytic converters. Manufacturers of 
diesel engines and vehicles have argued that setting Tier 2 standards 
without concurrent diesel fuel changes will be unfair to diesels, 
because diesel fuel quality would be worse than gasoline fuel quality. 
Some argue that, beyond fuel-neutrality considerations, diesel fuel 
quality improvement is needed to combat global warming because it will 
facilitate the marketing of more diesel vehicles and, in their opinion, 
thereby reduce emissions of global warming gases. Others counter that 
diesel vehicles should be discouraged because diesel exhaust is a 
serious health hazard that improvements in diesel fuel quality will do 
little to mitigate. Some also believe that any fuel economy 
improvements from diesels will be offset by manufacturers' sale of more 
large vehicles, resulting in no net improvement in fleetwide fuel 
economy, and thus no net reduction in global warming 
emissions.31
---------------------------------------------------------------------------

    \31\ Fleetwide fuel economy (for light-duty vehicles and light-
duty trucks) is constrained by the Corporate Average Fuel Economy 
(CAFE) standards established by the government.
---------------------------------------------------------------------------

    In establishing the Tier 1 light-duty vehicle standards currently 
in place, the Clean Air Act made special, explicit provision for diesel 
vehicles. However, the framework it provided us for the setting of Tier 
2 standards made no special reference to diesel engines. In our July 
1998 Tier 2 Report to Congress, we therefore concluded that Congress 
did not intend special treatment for diesel engines after 2003.
    Under the Tier 2 proposal's fuel-neutral approach, there are not 
separate emission standards for diesels. However, the proposed Tier 2 
program allows manufacturers to sell some engines with higher 
emissions--in the range achievable by both gasoline and diesel vehicles 
with current fuel quality--during the early phase-in years of the 
program. Table 1 summarizes the proposed Tier 2 emission standards. 
Manufacturers would have to meet a corporate average NOX 
standard for the entire fleet of vehicles sold, but would have the 
flexibility to certify different vehicle models to different sets of 
emission standards (referred to as ``bins''). Some bins have a 
NOX emission standard that is higher, and some lower, than 
the corporate average NOX standard. The proposed Tier 2 
standards would be phased in over time, allowing a portion of a 
manufacturer's vehicle sales to meet the less stringent ``interim'' 
standards. During the phase-in years, the program would establish

[[Page 26152]]

separate interim standards for the following vehicle categories:
     LDVs and light light-duty trucks (LLDTs), less than 6000 
pounds GVWR.
     Heavy light-duty trucks (HLDTs), 6000 pounds GVWR or 
greater.
    Table 2 shows when the interim and Tier 2 standards would be phased 
in, by indicating the percentage of manufacturers' vehicle sales 
required to meet the respective standards each year. Even when the Tier 
2 standards are fully phased in, manufacturers still would be able to 
certify vehicles in the higher-emitting bins. However, sales of 
vehicles in the higher-emitting bins would be limited by a 
manufacturer's ability to comply with the proposed corporate average 
NOX standard.

         Table 1.--Proposed Tier 2 Exhaust Emission Standards 32
------------------------------------------------------------------------
                                                    Highest-emitting
                                    Corporate   certification bin (grams/
                                   average NOX            mile)
                                      (grams/  -------------------------
                                      mile)         NOX           PM
------------------------------------------------------------------------
                                LDV/LLDT
------------------------------------------------------------------------
    Interim......................         0.30         0.60         0.06
    Tier 2.......................         0.07         0.20         0.02
------------------------------------------------------------------------
                                  HLDT
------------------------------------------------------------------------
    Interim......................         0.20         0.60         0.06
    Tier 2.......................         0.07         0.20         0.02
------------------------------------------------------------------------
\32\ This table does not reflect all proposed Tier 2 standards; it shows
  full useful life standards for categories and pollutants relevant to
  the discussion in this notice.


                                Table 2.--Proposed Phase-In for Tier 2 Standards
----------------------------------------------------------------------------------------------------------------
                                                                Model year (percent)
                                   -----------------------------------------------------------------------------
                                                                                                        2009 &
                                        2004         2005         2006         2007         2008        later
----------------------------------------------------------------------------------------------------------------
                                                    LDV/LLDT
----------------------------------------------------------------------------------------------------------------
Interim...........................           75           50           25  ...........  ...........  ...........
Tier 2............................           25           50           75          100          100          100
----------------------------------------------------------------------------------------------------------------
                                                      HLDT
----------------------------------------------------------------------------------------------------------------
Interim*..........................           25           50           75          100           50  ...........
Tier 2............................  ...........  ...........  ...........  ...........           50          100
----------------------------------------------------------------------------------------------------------------
*0.60 grams/mile NOX cap applies to balance of these vehicles during the 2004-2006 phase-in years.

    As shown in Tables 1 and 2, some diesel and gasoline LDV/LLDTs 
could be certified to emission standards of 0.60 grams/mile 
NOX and 0.06 grams/mile PM through the 2006 model year. 
HLDTs, where diesels are most likely to find a large market, could be 
certified to these same emission standards through 2008. We expect that 
these ``highest bin'' emission standards, although challenging, could 
be met by diesel vehicles without fuel changes. In model year 2007 and 
beyond for LDV/LLDTs, and in model year 2009 and beyond for HLDTs, the 
highest emission standards available for vehicle certification would be 
0.20 grams/mile for NOX and 0.02 grams/mile for PM. It is 
likely that diesel fuel sulfur control would be needed to enable 
diesels to achieve these more stringent emission 
standards.33
---------------------------------------------------------------------------

    \33\ It should be noted that the Tier 2 proposal also includes 
elimination of the highest bin after 2007 for LDV/LLDTs and 2009 for 
HLDTs, thus requiring compliance with a NOX standard of 
0.15 grams/mile. This would further reinforce the need for advanced 
technologies.
---------------------------------------------------------------------------

    Furthermore, even though some HLDTs can be marketed in the highest 
bin (0.60 NOX/0.06 PM) through model year 2008, by model 
year 2007, or perhaps even 2006, the phase-in percentage of the more 
stringent interim corporate average NOX standard (0.20 
grams/mile) becomes great enough that it may start to curtail sales of 
vehicles in the highest bin. Thus, diesel fuel changes may be critical 
for continued sales of diesel-powered HLDTs in these earlier model 
years.
    In summary, it appears most likely that the need for diesel 
vehicles to employ technologies dependent on low sulfur diesel fuel 
under the Tier 2 program will occur by the 2006 or 2007 model year, 
implying that low sulfur fuel should be available for these vehicles 
sometime in 2005 or 2006. This presumes of course that the development 
of robust, sulfur-sensitive diesel technologies achieving the Tier 2 
emission levels will be successful. There may also be merit in 
providing for an early introduction of the low sulfur fuel, at least 
perhaps on a limited basis, to allow proveout of technologies that 
require this fuel.

    Issue 9: Diesels In Tier 2--If diesel fuel changes were not 
adopted, when and to what extent would the anticipated diesel market 
growth be curtailed under the proposed phased in approach to Tier 2? 
What is the likelihood that diesels will not be able to meet proposed 
Tier 2 standards even with fuel changes? What is the likelihood that 
advances in sulfur-tolerant control technologies would negate the need 
for low sulfur fuel after a few years? Would an early introduction 
phase of low sulfur fuel to demonstrate technologies be of value? How 
soon and on what scale might this be implemented?

[[Page 26153]]

VIII. Heavy-Duty Highway Engines

    The sulfur-sensitive technologies discussed above show promise in a 
wide range of diesel applications, including light- and heavy-duty 
vehicles and nonroad equipment. Heavy-duty engines typically have 
different operating characteristics than light-duty engines, most 
notably more frequent occurrences of higher temperature exhaust stream 
flows that can facilitate catalysis. These differences may affect 
design decisions, such as what catalyst formulations and devices to 
use, but do not appear to be so great as to rule out technology-
enabling sulfur control for any class of diesel applications. 
Particularly if sulfur-sensitive technologies work well on light-duty 
vehicles, we would expect them also to find application with heavy-duty 
engines.
    Engine designers are now developing engines to meet the 2004 heavy-
duty highway engine NOX + NMHC emission standard that we set 
in 1997. We are currently conducting a technology review, to be 
completed later this year, to re-evaluate the appropriateness of this 
standard. Although low-sulfur fuel would add to the control options 
available for engines designed for this standard, we do not expect it 
to provide corresponding new-engine emissions benefits without changes 
in the engine emissions standards. Manufacturers would be likely to 
design engines to emit at roughly the same NOX levels either 
way--low enough to meet the standards with some compliance margin--and 
take advantage of the higher quality fuel to improve fuel economy or 
other performance parameters. Engine changes that improve fuel economy, 
such as timing advance, may incidentally decrease PM emissions as well, 
but the degree to which this would happen without a change in standards 
is uncertain.
    Although we have not yet performed an assessment of the feasibility 
of more stringent NOX and PM standards for heavy-duty 
highway engines in model years after 2004, the technologies discussed 
above show great promise for large further reductions in these 
emissions. The concurrent need for diesel fuel changes to enable these 
technologies would, of course, be an important part of any Agency 
activity directed toward setting more stringent standards, as would an 
evaluation of the air quality need for further diesel engine emission 
reductions and of the need for adequate leadtime for engine 
manufacturers to implement new standards. The earliest that EPA could 
implement more stringent than current NOX standards that 
might be enabled by low sulfur diesel fuel is the 2007 model year. More 
stringent PM standards based on such fuel could be evaluated for 
implementation as early as model year 2004. The Agency would address 
these issues further in a separate regulatory action.

    Issue 10: Future Heavy-Duty Highway Engine Standards--How do 
emission control challenges and solutions differ for light-and heavy-
duty diesel engines? How might these differences affect fuel quality 
requirements? What heavy-duty NOX and PM emission standards 
may be feasible with low sulfur fuel? When could they be implemented? 
What would be the cost of such heavy-duty emission standards?
    Low sulfur fuel may also bring about a potentially very large 
environmental benefit in the existing fleet of diesel engines. There 
are programs under consideration by some states through which older 
diesel engines would be retrofitted with emission-reducing 
technologies. Some of the sulfur-sensitive technologies discussed above 
may be useful for this purpose. Aftertreatment devices have proven 
especially adaptable to retrofit situations, although some of the more 
sophisticated systems that require careful control of engine parameters 
may not be as suitable. Thus sulfur reduction could potentially enable 
not just incremental emission reductions from the existing fleet, but 
large, step-change reductions in PM and NOX as well, in 
areas where incentives for retrofitting are provided. Note that this 
benefit could be extended to nonroad diesel engines, provided the 
retrofit program ensures fueling with low sulfur fuel as well.

    Issue 11: Retrofit Potential--Can the sulfur-sensitive emission 
control technologies be retrofit to existing engines? At what cost? 
What environmental benefits might be achieved?

IX. Nonroad Engines

    We are interested in improvements in the quality of fuel consumed 
in nonroad diesel engines for several reasons:
     Nonroad diesel engines are a major contributor to air 
quality problems.
     Many of the technologies under development to meet the 
2004 heavy-duty highway NOX + NMHC emission standard are 
transferable to these engines.
     Many of the advanced aftertreatment technologies discussed 
above could be applied to them as well.
     Nonroad diesel fuel currently is unregulated and typically 
has high sulfur levels.34
---------------------------------------------------------------------------

    \34\ Diesel fuel sold in most nonroad applications has sulfur 
levels on the order of 3300 ppm, as discussed in Section V.A.
---------------------------------------------------------------------------

     Refiners may make different plant changes to meet highway 
fuel regulations if action is taken on nonroad fuel quality as well.
    The diesel engine dominates the nonroad equipment market above 50 
horsepower (hp). These engines are used in such applications as farming 
and construction. A large and growing market for diesel engines below 
50 hp also exists. Consistent with the less advanced state of nonroad 
engine emission regulations, we currently do not regulate nonroad 
diesel fuels. However, some sizeable but unknown portion of nonroad 
equipment uses lower sulfur highway fuel for reasons of user 
convenience, and in California nonroad diesel fuel is regulated to the 
same specifications as highway fuel. Locomotives and marine vessels use 
separate diesel fuel stocks, which are unregulated as well.
    Our recent rulemaking setting new nonroad diesel engine standards 
established the feasibility of these standards without requiring 
changes to nonroad diesel fuel (see 63 FR 56968, October 23, 1998). 
That rule set multiple tiers of standards with increasing stringency: 
Tiers 1 and 2 for smaller engines (below 50 hp) and Tiers 2 and 3 for 
larger engines. (Tier 1 standards for larger engines were set in a 
previous rule.) However, due to a lack of available information on PM 
emissions during transient operation, the rule deferred action on Tier 
3 PM standards until another rulemaking, planned for completion in 
2001. That rule will also review the feasibility of the Tier 3 
NOX + NMHC standards and the smaller engine Tier 2 
standards, and will consider moving the Tier 3 standards for engines at 
or above 300 hp forward in time, as discussed in the October 1998 final 
rule. These standards are currently set to be implemented in 2006.
    Our ability to set stringent Tier 3 PM standards while maintaining 
an effective program of NOX control may be limited by the 
high sulfur levels in nonroad diesel fuel. The intended transfer of 
technology developed to meet the heavy-duty highway 2004 standard for 
NOX + NMHC, such as cooled EGR, may be jeopardized, unless 
nonroad fuel sulfur levels, and also perhaps cetane/aromatics levels, 
are controlled to levels similar to those available on-highway--maximum 
500 ppm sulfur and minimum 40 cetane

[[Page 26154]]

index (or, alternatively, maximum 35% aromatics content). Of course, we 
are concerned about the ability of refiners to provide higher quality 
nonroad fuel in Tier 3, which begins in roughly the same time frame in 
which large sulfur reductions for gasoline and highway diesel fuel may 
be implemented. This concern and the potential benefits of a 
coordinated, phased approach, are discussed further in the section on 
refinery impacts below.
    Beyond fuel changes needed for Tier 3 nonroad engines, it is 
reasonable to expect that advanced aftertreatment technologies, should 
they prove effective in highway engines, could be used in many nonroad 
applications as well. If, in the future, we determine that more 
stringent nonroad diesel engine emission standards beyond Tier 3 are 
appropriate, further desulfurization of nonroad diesel fuel would also 
therefore need to be considered. The timing of such standards and fuel 
requirements would need to provide adequate leadtime after the 
implementation of Tier 3 nonroad diesel engine emission standards in 
2006-2008. Retrofit opportunities similar to those discussed above for 
highway engines may also exist, perhaps on an earlier time frame than 
post-Tier 3 nonroad emission standards, making use of highway fuel.

    Issue 12: Future Nonroad Diesel Engine Standards--If EPA were to 
adopt Tier 3 PM standards on the order of the current highway PM 
standard (0.10 g/hp-hr measured over a transient test), would nonroad 
fuel sulfur regulation to 500 ppm or less be needed? Would the highway 
fuel cetane/aromatics specification need to be adopted as well? Are 
there differences between highway and nonroad applications that would 
affect fuel specifications? What nonroad NOX and PM emission 
standards beyond Tier 3 may be feasible with very low sulfur fuel? When 
could they be implemented? What would the cost of these standards be? 
What sulfur levels would be needed? What information is available about 
the relationship between nonroad fuel sulfur levels and nonroad engine 
emissions?
    Even if we do not adopt regulations in the near term to improve the 
quality of nonroad diesel fuel, it may be necessary at least to 
consider capping nonroad diesel fuel sulfur levels as part of any 
highway fuel sulfur reduction program, in order to preclude a shift of 
unwanted sulfur to nonroad fuel in the petroleum refining process. This 
shift could occur either through sulfur dumping or through redirection 
of higher sulfur blendstock streams to nonroad fuel production.

    Issue 13: A Cap On Nonroad Diesel Fuel Sulfur Levels--Will there be 
a tendency for nonroad diesel fuel sulfur levels to increase if highway 
fuel sulfur is reduced? Would we need to cap nonroad fuel sulfur 
levels?

X. Refinery Impacts and Costs

A. Investments and Costs

    Desulfurization of diesel fuel to very low levels is expected to 
involve substantial capital investments and added operating expenses by 
petroleum refiners. Improvements in nonroad fuel to a quality level 
similar to that of current highway diesel fuel would also be a major 
undertaking for refiners. We are interested in any information that 
would help us to assess these costs, both on an industry-wide scale and 
for segments of the industry that might experience special challenges, 
such as small refiners and small refineries. We also welcome 
suggestions on means by which such impacts can be softened, while still 
achieving the intended environmental benefit, such as by delaying 
requirements for small refiners. The following discussion outlines some 
of the issues we are aware of.
    Some refineries, especially those with modern hydrotreating plants, 
may be able to accomplish the needed sulfur removal by upgrading 
existing units. Such upgrades could be accomplished by such means as 
increasing catalyst density, employing more active catalysts, operating 
at higher temperatures, and reducing the level of hydrogen sulfide in 
the recycled hydrogen gas. Other refineries may need to build new 
hydrodesulfurization units and require time for planning, permitting, 
and construction. The degree to which new plants must be built will, of 
course, depend on how much of the diesel fuel pool must be desulfurized 
and to what levels. Both retrofits and new units will require 
additional hydrogen and energy supply, as well as additional processing 
of the sulfur removed in the hydrotreater. The prospect of widescale 
gasoline and diesel fuel desulfurization activity is spurring research 
and development in innovative hydrotreating technologies, such as 
countercurrent processing employed in the SynSat process and catalytic 
distillation being developed by CDTech. Such developments are expected 
to lower the cost of desulfurization.
    One novel technology that shows promise involves the use of 
enhanced biological agents to convert sulfur compounds in the fuel to 
removable and marketable byproducts. This method, though still unproven 
on a large scale, has experienced rapid progress over the last several 
years. Even if it does not prove cost-effective as a primary 
desulfurization solution, it may find utility in partially 
desulfurizing selected blendstocks to an intermediate sulfur level 
before hydrotreating, or in small refineries unable to afford large 
capital outlays. We are interested in information that would help us to 
assess the feasibility and costs of this technology and, considering 
that it appears to be much less energy-intensive than traditional 
methods, its potential for reducing global warming gas emissions.

    Issue 14: Sulfur Reduction Methods--How would refiners accomplish 
diesel fuel sulfur reduction to various maximum sulfur specifications, 
for examples, 5, 10, 30 and 50 ppm? What capital investments would be 
required and how would they be financed? How soon could it be 
accomplished? How would a shift in the relative demand for diesel fuel 
and gasoline affect these decisions? How much additional energy would 
be needed to produce the fuel? What other operating costs would be 
incurred? What would be done with the removed sulfur? How would these 
answers change if only the sulfur levels in light-duty diesel fuel were 
further controlled? Is there value in regulating average sulfur levels 
in a refinery's diesel fuel production, in addition to or instead of 
maximum fuel sulfur levels?
    In addition to requiring changes at the refinery, diesel fuel 
quality improvement may affect the fuel distribution system as well. 
All phases of the distribution process would likely need to maintain 
the quality of the fuel leaving the refinery. This may be particularly 
challenging if a very low sulfur level is required, considering that 
other refinery products carried in the same transportation network may 
continue to have very high sulfur levels. Additional storage tanks 
might also be required.

    Issue 15: Distribution System Quality Control--What if any problems 
(beyond those already experienced in handling multiple fuels in the 
distribution system) arise in ensuring that low sulfur fuel supplies 
leaving the refinery remain low in sulfur in a distribution system that 
may also carry fuels with much higher sulfur levels? Will complete 
separation of supply infrastructures be necessary? Is there a minimum 
practical sulfur level that distributors can comply with, considering 
limitations of available measurement and segregation methods?

[[Page 26155]]

    One element in the assessment of refinery impacts is our recently 
proposed gasoline sulfur reduction program, associated with proposed 
Tier 2 vehicle standards. The proposed gasoline sulfur control 
requirements would cause refiners to undertake substantial investments 
to upgrade their processing facilities in roughly the same time frame 
as that envisioned under a diesel desulfurization program. Gasoline and 
diesel fuel production operations are not independent, and a refiner's 
choice of desulfurization methods or of specific equipment 
configurations may be affected by how desulfurization requirements for 
the two fuels are implemented. Even more significantly, any shift 
toward more diesel fuel demand due to the introduction of new diesels 
into the light-duty market will have a major effect on refiners' 
capital investment plans.
    Sulfur exists naturally in crude oil. The extent to which sulfur 
ends up in gasoline and diesel fuel is dependent on the amount of 
sulfur in the crude and on the refinery processes used. One option to 
reduce sulfur in both gasoline and diesel is to use crude oil with a 
lower sulfur content. However, the availability and cost of low sulfur 
crude substantially limit the ability of refiners to use such an 
approach.
    Regarding refinery processes, refiners would need to decide where 
in the process to perform desulfurization steps. Absent more stringent 
diesel sulfur control, many refiners may choose to add (or upgrade) 
process units that remove sulfur selectively from blendstocks used to 
manufacture gasoline to meet the proposed reduction in gasoline sulfur. 
If a reduction in diesel sulfur is also required, some refiners may 
choose to add (or upgrade) process units that selectively remove sulfur 
from the blendstocks used to manufacture diesel fuel. Although such 
blendstock processing units have no functional overlap, refiners could 
benefit from knowing whether reductions in both diesel and gasoline 
sulfur would be needed before investing in new facilities to remove 
sulfur from gasoline blendstocks. Upgrades in hydrogen production 
facilities, basic utilities, and waste treatment facilities are needed 
to support the addition or expansion of gasoline and diesel fuel 
blendstock desulfurization units. If a refiner knew that reducing 
diesel fuel sulfur was to be required in addition to reducing gasoline 
sulfur, it might save money by building a single support facility to 
supply the hydrogen and other needs of both the diesel and gasoline 
blendstock desulfurization units rather than building separate support 
facilities.
    Other refiners may choose to add (or upgrade existing) process 
units that remove sulfur from the crude oil fractions used to 
manufacture both gasoline and diesel fuel blendstocks. Such units could 
be useful in meeting a refiner's desulfurization needs either in 
addition to, or in place of, units that remove sulfur from diesel or 
gasoline blendstocks. If a reduction in diesel sulfur is required, 
refiners might choose to invest more heavily in processing units that 
remove sulfur upstream in the refinery process rather than in ``end of 
pipe'' units that remove sulfur from diesel or gasoline blendstocks 
separately. It should be noted that, although both gasoline and diesel 
fuel desulfurization may involve large capital investments, aggressive 
desulfurization of diesel fuel tends to improve the cetane of the final 
product by removing aromatics, whereas it tends to lower the octane of 
gasoline, requiring additional steps to restore gasoline fuel quality.

    Issue 16: Impact On Gasoline Sulfur Control and Other Refinery 
Changes--How would the imposition of more stringent controls on diesel 
fuel sulfur affect a refiner's strategies to meet the proposed gasoline 
sulfur requirements? What are the advantages to refiners in being able 
to plan facility changes to meet more stringent gasoline and diesel 
sulfur controls at the same time? How would other planned or likely 
refinery changes relate to diesel fuel sulfur control?

    Issue 17: Costs--What are the total and per-gallon incremental 
costs to produce highway diesel fuel meeting various maximum sulfur 
specifications, for example, 5, 10, 30, and 50 ppm? What are the costs 
to produce nonroad diesel fuel: (1) Meeting a maximum sulfur 
specification of 500 ppm, and (2) meeting all of the current EPA 
highway fuel specifications? How do these costs vary if the sulfur 
reduction projects for diesel and gasoline are implemented together 
compared to if the diesel sulfur reduction is implemented some time 
after gasoline sulfur reduction without regard to economies of 
coordinated planning?

    Issue 18: Small Refiners and Small Refineries--How might 
desulfurization requirements uniquely affect a small refiner? How might 
they affect smaller refinery operations within larger companies? Are 
special provisions, such as a delayed requirement, appropriate?

    Issue 19: Flexible Strategies--Are there program strategies that 
could reduce costs or increase flexibility for refiners? (for example: 
phase-in of requirements, streamlining of the permitting process, 
banking and trading of credits for early or excess compliance, refinery 
averaging with upper limit cap). What limits would need to be placed on 
these flexibilities to ensure that sulfur-sensitive vehicle 
technologies are not degraded?

    Issue 20: Petroleum Imports--Would a requirement for low sulfur 
fuel affect our degree of reliance on foreign sources of petroleum and 
diesel fuel?

    Issue 21: Impacts On Other Refinery Products--How would diesel fuel 
sulfur reductions impact the quality, cost, and availability of other 
products such as jet fuel, kerosene, and heating oil, and how would 
these impacts vary by region?

    Issue 22: Uncertainties--How will major uncertainties facing diesel 
engine use, such as health effects concerns and growing interest in 
nontraditional fuels, affect the demand for diesel fuel? How can these 
issues be factored into Agency action to preclude expensive short-lived 
refinery investments?

B. Refinery Emissions

    The technologies used for diesel desulfurization have the potential 
to increase air pollutants at the refinery. To different degrees, 
desulfurization technologies involve the use of a furnace and, thus, 
potentially could increase pollutants associated with combustion, such 
as NOX, PM, SO2, and carbon monoxide. The 
addition of these technologies also could result in increased process 
vent emissions and equipment leaks of petroleum compounds, which could 
increase emissions of VOCs and hazardous air pollutants (HAPs). 
Increased removal of sulfur from the diesel stream likely will require 
increased throughput for a number of refinery processes, such as the 
sulfur recovery unit, which converts hydrogen sulfide into elemental 
sulfur and is associated with SO2 emissions. Relative to 
gasoline desulfurization, we expect that diesel desulfurization would 
result in higher emissions on a per gallon basis, because of the 
increased temperatures and hydrogen needed to remove sulfur in diesel 
fuel. Any emission increases associated with diesel desulfurization 
will vary from refinery to refinery, depending on a number of source-
specific factors, such as the specific refinery configuration, choice 
of desulfurization technology, amount of diesel production, and type of 
fuel used to fire the furnace.
    From a climate change perspective, we also want to better 
understand the impact on greenhouse gas emissions at the refinery. We 
are interested in how

[[Page 26156]]

diesel desulfurization process changes would affect greenhouse gas 
emissions at refineries.

    Issue 23: Refinery Emissions--What emissions impacts at the 
refinery would be expected from producing low sulfur diesel fuel 
(assuming gasoline sulfur reduction is already taken into account)? 
What are the potential emission increases (or decreases) of regulated 
air pollutants and greenhouse gases?

XI. Prospects for a Phased Approach

    It is possible that higher quality diesel fuel will be needed for 
the light-duty Tier 2 program, but would only be needed to meet future 
heavy-duty engine standards at a later date. This would create a 
dilemma because currently both light- and heavy-duty applications use 
the same fuel, sharing a common fueling infrastructure that is vastly 
dominated by heavy-duty usage. Creation of a separate light-duty diesel 
fuel pool and infrastructure for an interim period would be the obvious 
solution. However, requiring a separate high quality grade of diesel 
fuel for use in vehicles subject to the Tier 2 emissions standards may 
involve investment by refiners, distributors, and retailers in the new 
tankage and other facilities necessary to keep such fuel segregated 
from other on-highway diesel fuel. It also could lead to loss of 
environmental benefits and even engine or aftertreatment device damage 
due to misfueling, although fueling nozzle interface requirements could 
help to mitigate this. Furthermore, the temporary nature of this 
separate fuel pool would depend on a determination that the same 
ultimate fuel specifications are appropriate for both light- and heavy-
duty applications. As discussed in Section IV, more information is 
needed in order to assess this.
    Despite the issues involved in creating a light-duty fuel 
infrastructure, we are interested in evaluating this approach for 
several reasons. First, we would expect it to allow for the 
introduction of low sulfur fuel for the light-duty vehicle market at an 
earlier date. Second, such a limited fuel pool may allow for other fuel 
quality improvements, besides reduced sulfur, if deemed appropriate. 
Third, the availability of this fuel would facilitate the early 
introduction of low-emitting heavy-duty technologies in demonstration, 
credit banking, or retrofit fleets. Finally, the production costs would 
be reduced because refiners could focus desulfurization activities on 
those diesel blendstock streams easiest to desulfurize. This would save 
on operational costs for hydrogen, energy, and byproduct treatment, 
and, more importantly, would allow refiners to phase in major capital 
outlays, if needed, for future heavy-duty fuel programs.
    A phased approach could be carried still further by introducing the 
low sulfur fuel into the heavy-duty fuel pool gradually, as needed to 
support new trucks and buses employing the sulfur-sensitive 
technologies. Eventually, as the fleet turned over, so would the fuel 
pool, in a fashion similar to the turnover to unleaded gasoline. The 
benefit of such phased approaches would be offset somewhat by the need 
for a separate refueling interface, for additional tankage and plumbing 
to segregate product streams, and perhaps by additional dyeing 
requirements.
    A parallel approach could be used to introduce nonroad diesel fuel 
regulated to similar quality levels as current highway fuel, to support 
the nonroad Tier 3 emission standards program, if such fuel is found to 
be needed for this program. With the adoption of a refueling interface 
to avoid misfueling, new Tier 3 engines could use the higher quality 
fuel, while pre-Tier 3 engines could continue to use the unregulated 
fuel, thus allowing a gradual phase-in of the Tier 3 fuel to match the 
growing population of these engines in the fleet. Again, the benefit of 
this approach would need to be evaluated against the disadvantage of 
added complexity.
    Distributors and retailers clearly would take on an additional 
burden to support a light-duty fuel. If light-duty diesel fuel were not 
easily available to consumers, people would be unlikely to buy diesel 
cars and light-trucks. However, we would expect that many urban/
suburban service stations that currently provide diesel fuel would 
simply switch to the low sulfur fuel and not install additional pumps 
because their heavy-duty diesel fuel volume is not large. Some highway 
truck stops already have separate pumps for the convenience of drivers 
of smaller diesel vehicles, though owners of these stations may need to 
make changes in tankage utilization to segregate fuels. Vehicle and 
fuel pump nozzle manufacturers would need to create a new fueling 
interface to preclude misfueling, similar to what was done when 
unleaded gasoline was introduced.

    Issue 24: Phased Approach--What would the challenges be to refiners 
and distributors associated with introducing a separate ``light-duty 
low-sulfur grade'' of diesel? How soon could it be done? How much would 
it cost? How large would the fleet of vehicles using this fuel have to 
be to make it cost-effective? Would the relatively small fraction of a 
refiner's total diesel output needed for this market make it possible 
for refiners to produce it without significant additional facility 
investments? To what extent would additional storage tanks and fuel 
pumps need to be installed to accommodate a separate grade of fuel? 
What pump/vehicle refueling interface changes (or other measures) are 
needed to preclude misfueling? What fuel dyeing requirements would need 
to be adopted? What are the merits of a program in which the sulfur 
level is reduced in two or more steps, especially if very low sulfur 
levels are determined to be needed eventually?

    Issue 25: Coverage--Would widespread geographic coverage have to be 
mandated to ensure success? Based on current light-duty diesel 
experience, are there segments of the retail diesel fuel market that 
could be exempted from providing this fuel without discouraging vehicle 
sales? Could the phased concept be extended to accommodate a gradual 
turnover of the heavy-duty fuel pool? Should requirements during a 
phase-in be focused on sales at retail outlets (thus providing the 
opportunity for smaller businesses to defer implementation), or on 
refiner production?
    Although a phased approach covering all of the diesel fuel pools 
could take many forms, it may be helpful to consider an example of such 
an approach to better understand how it might work. For example, fuel 
desulfurized to technology-enabling levels (30 ppm for the sake of this 
example) might be provided in 2004 at a small number of urban and rural 
locations, to support the limited production and sale of advanced 
technology diesel light-duty (and perhaps heavy-duty) vehicles. This 
would comprise an early introduction program to prove and perfect these 
technologies. In 2005 this offering would expand to supply the light-
duty diesel vehicles requiring it under the Tier 2 program. More 
stations and fuel would be involved to ensure that the fuel is widely 
available to consumers buying these vehicles. Also in 2005, 500 ppm 
nonroad fuel would begin phasing in, with broad nationwide coverage but 
only in quantities needed to meet the demand created by the sales of 
new Tier 3 equipment. Unregulated nonroad diesel fuel also would 
continue to be sold, but would gradually be phased out as demand for it 
declined. In 2006 and 2007, the supply of 30 ppm sulfur fuel

[[Page 26157]]

would continue to expand to support the introduction of heavy-duty 
vehicles equipped with advanced technologies needed to meet new heavy-
duty emission standards. This expansion would increasingly focus on 
truck stops that had not already transitioned to supplying the 30 ppm 
sulfur fuel in the earlier years of the programs. At some point over 
the following years, the demand for higher sulfur highway fuel would 
decline to a point at which it would no longer be cost-effective to 
maintain two highway fuel pools, and its production would cease. 
Throughout the phase-in period, separate high and low sulfur refueling 
interfaces, and perhaps other measures, would need to be maintained to 
avoid misfueling.

    Issue 26: Example Phase In Scenario--Would a comprehensive need-
based phase-in such as the one in the example work? What measures could 
be taken to facilitate it?

XII. Vehicle Operation With Higher Sulfur Fuel

    Many line-haul diesel trucks regularly or occasionally cross our 
borders with Canada and Mexico. Canada recently adopted the 500 ppm 
sulfur limit that has been in effect in the U.S. since 1993. Further 
fuel quality regulation is under consideration but may not take effect 
until well after a desulfurization program begins here, if at all. 
Mexico also has regulations intended to control diesel fuel sulfur to 
the 500 ppm level, but we are not aware of activity there aimed at 
achieving further reductions. In addition to potential cross-border 
differences, Alaska, American Samoa and Guam currently have exemptions 
from our existing 500 ppm limitation because of special difficulties in 
supplying low-sulfur diesel fuel for those markets. A long-term 
decision whether Alaska, American Samoa and Guam should continue to 
have exemptions will need to be made in this rulemaking once a decision 
is made on the appropriate diesel fuel sulfur level.
    Cross border traffic will impact prospects for effective emissions 
control based on low sulfur diesel fuel. If a truck with sulfur-
sensitive emission controls is fueled in Canada or Mexico with higher 
sulfur fuel, the emission controls may be reversibly or irreversibly 
degraded by catalyst poisoning, sulfate PM production, or some other 
mechanism. If the degradation is severe or irreversible enough, that 
truck may actually pollute for long periods at levels higher than 
earlier generation trucks, thus contributing to the air quality 
problems of our neighbors, and to our own problems after the truck's 
return to the U.S. In addition, trucks with sulfur-sensitive emission 
controls that are permanently operated in a state exempt from fuel 
sulfur controls might likewise emit at very high levels, thus either 
resulting in a disbenefit to the local environment or forcing adoption 
of a program that requires the continued marketing of earlier 
generation, non-sulfur sensitive truck engines in that state. A similar 
issue arises in considering whether or not there is a need for a 
complete turnover of the diesel fuel inventory to low sulfur 
formulations before any introduction of low-sulfur technologies can 
occur, thus precluding any economy derived from a gradual phase-in or 
from any sort of regional flexibility in implementing the program.
    These concerns would be greatly mitigated by evidence that sulfur-
sensitive technologies will be robust enough to quickly recover from 
episodes of operation with higher sulfur fuel, and that their 
continuous operation on higher sulfur fuel will not result in more 
emissions than those from comparable engines not equipped sulfur-
sensitive technologies.

    Issue 27: Ability To Accommodate Some Higher Sulfur Fuel--What is 
the potential for irreversible damage to sulfur-sensitive emission 
control hardware due to fueling with higher sulfur fuel? How might this 
vary with the length of exposure and the age of this equipment? What is 
the potential for high sulfate PM production while burning this fuel?

    Issue 28: Alaska Exemption--Should Alaska be exempted from any 
future low sulfur fuel requirements? Why or why not? What provisions 
could be made to ensure that such an exemption does not cause 
unacceptable emissions in and outside Alaska? What about the U.S. 
territories that also currently have an exemption (Guam and American 
Samoa)?

    Issue 29: Cross-Border Traffic--What percentage of U.S. trucks 
refuel in Canada or Mexico and how often? How will this change in the 
future? What are the prospects for diesel fuel desulfurization in these 
countries? Are there reasonable measures that can be taken to avoid 
damage to sulfur-sensitive emissions controls?

XIII. Stakeholder Positions

    Over the past year or so, various interested groups have expressed 
their positions on sulfur levels in diesel fuel. Here, we summarize 
only those positions that have been communicated formally (either to 
EPA or other governmental entities). One goal of this notice is to 
generate discussion that will help us better understand the positions 
of these and other stakeholders.
    Together, the (then existing) American Automobile Manufacturers 
Association, the European Automobile Manufacturers Association, and the 
Japan Automobile Manufacturers Association proposed a World-Wide Fuel 
Charter in June 1998.35 The goal of this global fuels 
harmonization effort is to develop common, worldwide recommendations 
for ``quality fuels'', considering customer requirements and vehicle 
emissions technologies. Three categories of fuel quality are proposed 
for diesel fuel, based on the extent of emission control requirements. 
Category 3 fuel quality is for markets with advanced requirements for 
emission controls (such as California Low and Ultra-Low Emission 
Vehicles). The sulfur content recommended for Category 3 diesel is 30 
ppm.
---------------------------------------------------------------------------

    \35\ ``Proposed World-Wide Fuel Charter'', issued by the 
American Automobile Manufacturers Association, the European 
Automobile Manufacturers Association, and the Japan Automobile 
Manufacturers Association, June 1998.
---------------------------------------------------------------------------

    The Ford Motor Company, Chrysler Corporation (now DaimlerChrysler) 
and General Motors Corporation further urged the Administration to make 
significant progress in bringing about low sulfur diesel and gasoline 
fuels. These companies stressed the importance of low sulfur diesel and 
gasoline fuels in reducing vehicle emissions and enabling the 
successful introduction of advanced engine and emission control 
technologies.36
---------------------------------------------------------------------------

    \36\ Letter from Robert J. Eaton, Chrysler Corporation, Alex 
Trotman, Ford Motor Company and John F. Smith, Jr., General Motors 
Corporation, to Vice President Al Gore, July 16, 1998.
---------------------------------------------------------------------------

    The State and Territorial Air Pollution Program Administrators 
(STAPPA) and the Association of Local Air Pollution Control Officials 
(ALAPCO) adopted a resolution urging us to pursue the most stringent 
highway and nonroad diesel fuel sulfur standards that are 
technologically and economically feasible.37 These 
associations believe that stringent national standards for diesel 
sulfur, combined with stringent standards for low sulfur gasoline and 
vehicle emissions, are essential to address the full range of the 
country's air pollution problems-- including ozone, particulate matter, 
regional haze and toxics. STAPPA/ALAPCO recommended that such diesel 
sulfur standards take effect by 2003. They

[[Page 26158]]

urged us to announce our intention to adopt such standards as soon as 
possible, so that petroleum refiners could consider the least-cost ways 
of complying with both gasoline and diesel sulfur controls. They also 
urged us to consider nonroad diesel fuel changes and to adopt the most 
stringent sulfur standards feasible to enable emerging control 
technologies.
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    \37\ ``STAPPA/ALAPCO Resolution on Sulfur in Diesel Fuel,'' 
October 13, 1998. Letter from S. William Becker, Executive Director 
of STAPPA/ALAPCO, to Carol Browner, Administrator of U.S. EPA, 
October 16, 1998.
---------------------------------------------------------------------------

    The Engine Manufacturers Association (EMA) also urged us to reduce 
the sulfur content of diesel fuel.38 EMA cited the need for 
low sulfur diesel fuel to enable the introduction of new catalytic 
aftertreatment devices, reduce fine particulate emissions, and improve 
engine emissions durability. EMA is involved in a number of activities 
with other organizations to support low sulfur diesel fuel 
requirements. EMA offered to share the data from each of these projects 
with us as they become available. These activities include:
---------------------------------------------------------------------------

    \38\ Letter from Jed R. Mandel, Engine Manufacturers 
Association, to Margo T. Oge, Director, Office of Mobile Sources, 
EPA, November 6, 1998.
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     Requesting the Manufacturers of Emission Control 
Association (MECA) to draft a ``White Paper'' addressing the technical 
need for low sulfur diesel fuel from an aftertreatment 
perspective.39
---------------------------------------------------------------------------

    \39\ This paper is available in Docket A-99-06: ``The Impact of 
Sulfur in Diesel Fuel on Catalyst Emission Control Technology'', 
Manufacturers of Emission Controls Association, March 15, 1999.
---------------------------------------------------------------------------

     Conducting a joint test program with the U.S. Department 
of Energy to evaluate four levels of diesel sulfur (350 ppm, 150 ppm, 
30 ppm and 10 ppm) with five different aftertreatment technologies and 
four different diesel engines.
     Examining the impact of fuel sulfur on engine life, 
particularly the corrosive effects.
     Analyzing the environmental impact of reduced sulfate 
conversion and effects on the particulate matter emissions inventory 
from diesel engines.
     Preparing an economic analysis of the refining costs 
associated with lowering diesel sulfur levels, considering proposed 
changes to gasoline sulfur and potential synergies from reducing sulfur 
in the input stream rather than individual distillate streams.

XIV. Public Participation

    We are committed to a full and open regulatory process with input 
from a wide range of interested parties. If we proceed with a proposed 
rule, opportunities for input will include a formal public comment 
period and a public hearing.
    With today's action, we open a comment period for this advance 
notice (see DATES). We encourage comment on all issues raised here, and 
on any other issues you consider relevant. The most useful comments are 
those supported by appropriate and detailed rationales, data, and 
analyses. All comments, with the exception of proprietary information, 
should be directed to the docket (see ADDRESSES). If you wish to submit 
proprietary information for consideration, you should clearly separate 
such information from other comments by (1) labeling proprietary 
information ``Confidential Business Information'' and (2) sending 
proprietary information directly to the contact person listed (see FOR 
FURTHER INFORMATION CONTACT) and not to the public docket. This will 
help ensure that proprietary information is not inadvertently placed in 
the docket. If you want us to use a submission of confidential 
information as part of the basis for a proposal, then a nonconfidential 
version of the document that summarizes the key data or information 
should be sent to the docket.
    We will disclose information covered by a claim of confidentiality 
only to the extent allowed and in accordance with the procedures set 
forth in 40 CFR part 2. If no claim of confidentiality accompanies the 
submission, it will be made available to the public without further 
notice to the commenter.

XV. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735 (Oct. 4, 1993)), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The order defines 
``significant regulatory action'' as any regulatory action (including 
an advanced notice of proposed rulemaking) that is likely to result in 
a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or,
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This Advance Notice was submitted to OMB for review as required by 
Executive Order 12866. Any written comments from OMB and any EPA 
response to OMB comments are in the public docket for this Notice.

XVI. Statutory Provisions and Legal Authority

    Statutory authority for the fuel controls discussed in this notice 
comes from section 211(c) of the Clean Air Act. Section 211(c) allows 
EPA to regulate fuels where emission products of the fuel cause or 
contribute to air pollution which reasonably may be anticipated to 
endanger public health or welfare or where emission products of the 
fuel will impair to a significant degree emission control equipment.

List of Subjects

40 CFR Part 80

    Environmental protection, Administrative practice and procedure, 
Fuel additives, Gasoline, Imports, Labeling, Motor vehicle pollution, 
Penalties, Reporting and recordkeeping requirements.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Penalties, Reporting and recordkeeping requirements.

    Dated: May 1, 1999.
Carol M. Browner,
Administrator.
[FR Doc. 99-11383 Filed 5-6-99; 11:03 am]
BILLING CODE 6560-50-P