[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
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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.
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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.
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[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
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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.
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\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.
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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
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\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.
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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.
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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:
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\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
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\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.
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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