EPA’s Tier 3 Motor Vehicle Emission and Fuel Standard rule is designed to reduce air pollution from passenger cars and trucks. When fully implemented with new fuel technology and more advanced, cleaner automobiles, the program will be an important piece of the puzzle and step forward in Utah’s efforts to clean and maintain our air quality.
The new rule targets both new automobile technologies and fuel sulfur levels. Tier 2 standards, implemented over the past several years, significantly reduced fuel sulfur levels from 300 ppm to 30 ppm. The Tier 3 rule will further reduce sulfur on average from 30 ppm to 10 ppm. The Tier 3 rule will be phased in over several years, and Utah's small refineries are required to implement changes by 2020.
Utah’s petroleum industry cares deeply about air quality and is committed to doing our part to maintain and improve clean air in the State. Utah’s 5 petroleum refineries have not only dramatically reduced emissions from our point source facilities over the past decade but continue to produce cleaner burning fuels that significantly reduce vehicle emissions. According to the Utah Division of Air Quality (DAQ), vehicles contribute approximately half of the air emissions generated along the Wasatch Front and are the largest source of pollution during winter inversions and summer ozone season.
EPA’s Tier 3 Motor Vehicle Emission and Fuel Standards rule was finalized in April 2014. Tier 3 is an integrated system of national vehicle and fuel standards established by EPA that requires cleaner vehicles to be phased in from model year 2017 through 2025. It also requires petroleum refiners to reduce the sulfur content of gasoline from an average of 30 parts per million (ppm) to 10 ppm. Large refiners producing 75,000 barrels per pay (bbl/day) or more must meet the sulfur requirement by 2017 while smaller refiners below 75,000 bbl/day have until 2020 to meet the new standard.
Sulfur is a natural component in crude oil that is present in gasoline and diesel unless removed. Sulfur in gasoline impairs the effectiveness of emission control systems and contributes to air pollution. Reducing the sulfur content in gasoline enables advanced emission controls and reduces air pollution.
Implementation of Tier 3 fuels will significantly impact air quality in Utah. DAQ estimates that Tier 3 fuel will reduce vehicle emissions in our existing fleet by approximately 7% to 11%. EPA projects that once fully implemented, the Tier 3 vehicle and fuel standards will reduce volatile organic compounds (VOC) and nitrogen oxides (NOx) emissions by 80% on a fleet average basis and direct particulate emissions by 70% on a per vehicle basis. This is equivalent to taking four of every five cars off the road.
EPA’s Tier 3 rule allows refiners options on how best to comply with the standard. The rule establishes an Averaging, Banking and Trading (ABT) program that allows refiners to meet the 10ppm sulfur standard by averaging across their fleet of refineries or by purchasing credits from other refiners that have reduced sulfur below 10ppm. Recognizing this, Utah’s Governor, Legislature and Department of Environmental Quality (DEQ) have worked closely with the refining industry to encourage and support the manufacture of 10ppm fuel in Utah. To incentivize 10ppm fuel, the Legislature passed and Governor signed legislation to exempt the sales tax on refining equipment used in the manufacture of Tier 3 fuels.
Other challenges also complicate the transition for Utah refiners to make Tier 3 fuels in Utah. The cost of equipment upgrades and retrofits necessary to produce 10 ppm fuel is significant. On a national scale, Utah’s refineries are small and securing capital to move to Tier 3 is challenging. Additionally, manufacturing Tier 3 fuel is energy intensive and will likely necessitate marginally increased emissions from Utah’s point source refineries. While the potential point source emission increases are relatively small in comparison to the emission benefits of Tier 3 fuel in vehicles statewide, it still poses a significant hurdle considering Utah’s State Implementation Plan (SIP) does not allow for additional emission increases from point sources. DEQ is working with both refiners and EPA to develop a suitable solution to this problem.
Some Utah refiners have already committed to producing Tier 3 fuels in Utah while others are still evaluating the technical and economic feasibility for their plants. Tier 3 fuels will not solve all the Wasatch Front’s air quality problems but will be a major contributing factor in controlling vehicle emissions and maintaining Utah’s air quality as the State grows and population and vehicles continue to increase. Tier 3 follows closely on the heels of the full implementation of the Tier 2 gasoline sulfur program finalized in 2000 that reduced sulfur content in gasoline by up to 90%. It is a continuing demonstration of the commitment of Utah’s refining industry to be good corporate citizens and partners in protecting and maintaining Utah’s environment.