Working Draft--Do Not Quote or Cite

This is a preliminary document prepared by a subgroup of members of the Base Programs Analyses and Policies (BPAP) Work Group as part of the Federal Advisory Committee Act (FACA) Subcommittee process. It is not an EPA document. It is subject to change pending work group discussion. Interested people should forward their comments to a member of the Base Programs Analyses and Policies Work Group or the contact person shown below.

General Mobile Source Measures Paper

Status:	Draft #3. Incorporates comments from General Mobile Source Measures subgroup and, as appropriate, discussion with the BPAP work group.

Contact:	Jim Ralston representing the BPAP work group, telephone: 518/457-0618; fax: 518/457-0794

Date:	July 21, 1997

Summary

This paper examines the implementation of mobile source measures under the revised NAAQS. The measures covered include: national strategies, e.g., Tier 1 vehicle emission standards; prescriptive strategies, like mandated RFG gasoline; and discretionary measures, such as market based incentives and CA LEV vehicles.

Problems exist if EPA is to change any of these programs to a different type of measure. For most existing programs such a change of status would likely fail without a CAA amendment. For example, the CA-LEV program is a CAA mandate only in California. An attempt by the Ozone Transport Commission and EPA to prescribe this measure throughout that region failed a legal challenge by an OTC state. In this case the court held that particular measure was clearly a State decision outside of California.Note the OTC has legal status not currently available to the Regional Air Management Planning (RAMP) areas being considered by this FACA subcommittee.

Relationship to Other Issue Papers and National Activities.

As part of the NAAQS FACA Subcommittee this paper intersects the Control Strategies paper jointly prepared by our BPAP and National & Regional Strategies (N&RS) work groups. Incentives for Reducing Emissions from Area and Mobile Sources and Transportation Conformity from the N&RS workgroup are also relevant developments.

As part of the Mobile Source Technical Review FACA subcommittee EPA is now reviewing their current programs. This paper draws upon that work in progress.

I.	INTRODUCTION

EPA is currently considering potential revisions to the National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter. For ozone, the Agency recently proposed to replace the 1-hour, 0.12 ppm standard with an 8-hour, 0.08 ppm standard. In formulating recommendations to implement the proposed standards, the Federal Advisory Subcommittee is discussing the concept of areas of violations (AOVs) and areas of influence (AOIs) to account for the transport of pollution.

This paper examines the implementation of mobile source measures under the potential revised NAAQS. The main impact of the proposal to revise the NAAQS would be related to the need for further emission reductions in response to any increased stringency of the ozone and PM standards. EPA intends to consider the following potential new measures for engines as national measures supporting attainment of the current or any revised NAAQS:

Tier II LDV standards, including PM;

HD vehicle retrofits and/or voluntary standards;

heavy duty in-use initiative;

long-term heavy-duty emission standard research;

new truck and bus PM standards;

nonroad diesel PM test procedure and standards; and

research into further reductions from locomotives, aircraft, ships, lawnmowers and other small equipment.

Current initiatives and emerging issues related to achieving the existing NAAQS are detailed in Appendix A. The applicability and characteristics of these mobile source emission programs are enumerated within Titles I and II of the CAA.

Mobile Source emission levels result from the use, or "activity levels" of individual engines. Through time, increased use of various mobile sources has tended to increase these emissions. New equipment, fuel improvements, and in-use emission repair programs have generally counteracted these activity related increases.

In some areas, increased use of certain mobile sources has impeded air quality improvements. Vehicle Miles Traveled (VMT) increases associated with highway vehicles are of particular interest in this regard.

The CAAA requires states with areas designated as severe nonattainment for ozone to offset growth in highway vehicle emissions resulting from growth in either vehicle miles traveled or trips. Such increases must be equally offset with specific transportation control measures (TCMs). The strategies to be evaluated in connection with this requirement should include those programs listed in Section 108(f) of the CAA. These measures are to include but are not to be limited to the following:

(i)	programs for improved public transit;

(ii)	restriction of certain roads or lanes to, or construction of such roads or lanes for use by, passenger buses or high occupancy vehicles.

(iii)	employer-based transportation management plans, including incentives;

(iv)	trip-reduction ordinances;

(v)	traffic flow improvement programs that achieve emission reductions;

(vi)	fringe and transportation corridor parking facilities serving multiple occupancy vehicle programs or transit service;

(vii)	programs to limit or restrict vehicle use in downtown areas or other areas of emission concentration particularly during periods of peak use;

(viii)	program for the provision of all forms of high-occupancy, shared-ride services;

(ix)	programs to limit portions of road surfaces or certain sections of the metropolitan area to the use of nonmotorized vehicles or pedestrian use, both as to time and place;

(x)	programs for secure bicycle storage facilities and other facilities, including bicycle lanes, for the convenience and protection of bicyclists, in both public and private areas;

(xi)	programs to control extended idling of vehicles;

(xii)	programs to reduce motor vehicle emissions, consistent with title II, which are caused by extreme cold start conditions;

(xiii)	employer-sponsored programs to permit flexible work schedules;

(xiv)	programs and ordinances to facilitate non-automobile travel, provision and utilization of mass transit, and to generally reduce the need for single-occupant vehicle travel, as part of transportation planning development efforts of a locality, including programs and ordinances applicable to new shopping centers, special events, and other centers of vehicle activity;

(xv)	programs for new construction and major reconstructions of paths, tracks or areas solely for the use by pedestrian or other non-motorized means of transportation when economically feasible and in the public interest. For purposes of this clause, the Administrator shall also consult with the Secretary of the Interior; and

(xvi)	programs to encourage the voluntary removal from use and the marketplace of pre-1980 model year light-duty vehicles and pre-1980 model light-duty trucks.

The 1990 Clean Air Act (CAA) and 1991 Intermodel Surface Transportation and Efficiency Act (ISTEA) require air quality and transportation planning to be coordinated by each state. This Transportation Conformity program is meant to insure each nonattainment area will plan an appropriate mix of highway, transit, and freight modes.

II.	IN-USE EMISSION DETECTION PROGRAMS

Background

Although advances have been made in reducing emissions through emission control technology, trucks and cars still account for a major portion of ozone pollution and nearly all of the CO pollution in the United States. In-use emissions, which are those that are actually occurring when the engines and vehicles are used by consumers, have been a significant contribution to emission inventories in the past.

I/M programs reduce mobile source emissions by identifying in-use vehicles that have poor emissions performance and ensuring their repair. These programs emphasize the automobile owners role in controlling air pollution. These programs consider the actual emissions of the vehicle, not just the emissions that the manufacturer had designed for. These programs require passenger vehicles to undergo periodic testing for malfunctioning emission control systems.

The Environmental Protection Agency (EPA) has had oversight and policy development responsibility for I/M programs since the passage of the CAA in 1970, which included I/M as an option for improving air quality. With the passage of the 1977 amendments to the CAA, I/M was mandated for certain areas with long-term air quality problems.

In the mid-to-late 1970s, several states (i.e., New Jersey, Oregon, Arizona, Nevada) were developing and instituting I/M. A major step toward targeting the important area of in-use emissions was made in 1983, when Congress established I/M programs in 64 cities nationwide. These I/M programs are related to the emission standards due to the efforts of EPA and the manufacturers to design emission control systems that are durable and improve the capability of technology to diagnose malfunctioning emission control systems (e.g., OBD systems), as explained later in this paper.

The 1990 amendments to the CAA set forth standards for implementing I/M programs. The 1990 amendments required areas in violation of the NAAQS to be placed in various classifications depending on air pollution levels, with a more stringent pollution control program required in areas with a higher classification. The classifications--marginal, moderate, serious, severe, and extreme -- dictate the type of inspection and maintenance program to be implemented.

Basic I/M is required in -

Marginal ozone areas with existing programs

Moderate ozone nonattainment areas

CO areas with existing programs

Enhanced I/M is required in -

Serious, severe, and extreme ozone nonattainment areas

CO nonattainment areas with greater than 12.7 ppm design value

Urbanized nonattainment areas of 200,000+ people for areas classified serious or severe

All Metropolitan Statistical Areas (MSAs) with 100,000+ people in the Ozone Transport Region (OTR)

The 1992 I/M rule expanded I/M's role as an attainment strategy and required EPA to develop minimum performance standards for both basic and enhanced programs. These performance standards address a variety of possible program parameters, such as test type, frequency, and vehicle coverage. When these parameters are entered into EPA's MOBILE emission factor model they help to generate emission reduction targets. Assuming national averages for local variables such as vehicle age mix, fuel type, and average temperature, the MOBILE model yields a basic performance standard of approximately 6 percent reduction in VOCs, while the original enhanced performance standard produces a 32 percent reduction in VOCs. These numbers will be relatively higher or lower for individual states which are required to "customize" these input parameters by using local data instead of national averages. The state's specific program must meet or beat the target to be considered in compliance. States are then able to design a "basic" or "enhanced" program that best meets local needs. States may design an I/M program by choosing from several program elements such as, test frequency, test type, or network design. For instance, the basic I/M program might consist of an annual inspection utilizing an idle test, or an area might choose to use a two-speed test with a biennial vehicle inspection. Selected enhanced I/M program design might include a biennial vehicle inspection with a loaded/idle test or a biennial inspection with an IM240 test. Attachment 1 shows the number of cities and states required to implement I/M.

Some states have experienced difficulty with implementing programs that satisfy the performance standard applicable to the area. These same programs in many areas were designed to contribute to Rate of Progress (ROP) plans and in some cases, demonstrations of attainment. The 1995 Inspection and Maintenance Flexibility Amendments allow maximum flexibility for states in designing enhanced auto inspection programs that help achieve air-quality health standards, as does the National Highway System Designation Act of 1995. These include a broad range of inspection program elements such as a hybrid approach (which would consist of a combination of test-only and test-and-repair network designs), using combinations of both older and newer inspection test technologies, biennial testing, and credits for technician training programs. The low enhanced program under the flexibility guidelines will still yield a greater reduction in targeted pollution than a basic program. (OTR-low gets a 2 percent reduction; less than basic.) EPA has worked with states to maximize flexibility in improving air quality with I/M programs while making it more convenient to the public. At the same time, the air quality goals remain the same.

Table 1 represents the various rules and the changes made, and summarizes the intent of each.

Most states pursue I/M programs to help achieve the reductions required by various rate of progress (ROP) and plan obligations. Current requirements for I/M are based upon an area's nonattainment status for CO and/or Ozone, the severity of the pollution problem (e.g., "marginal" through "extreme"), and the area(s) population. Depending on the severity of the problem, either an enhanced or a basic I/M program may be required, and different attainment deadlines are given.

Table 1

Summary of I/M Rules

I/M Rule

11/92 I/M Flex Rule 9/95 OTR Flex Rule 7/96 On-Board Diagnostic Rule

8/96* National Highway System Designation Act

11/95 Requirements for basic & enhanced I/M Created low enhanced performance standard Created even lower enhanced standard = OTR low enhanced Established minimum standards for inspecting vehicles with OBD systems

*delay of one year Removed credit penalty imposed on states using test & repair programs. Allowed states more flexibility in program design.

Inspection and Maintenance provisions of the CAA are applicable to geographic areas based on classifications which are defined in terms of the existing NAAQS. By changing the existing NAAQS and the methods for classifying attainment status, areas subject to I/M are likely to change considerably in terms of applicable geographic area and program requirements. As a result, the basis for mandatory I/M requirements associated with the current classification scheme (severe, serious, moderate, etc.) will also change. Further, changes in the technology of the vehicle fleet and new information about I/M program design suggest a strong need to evaluate the type of in-use emission inspection program most appropriate in the time frame of the new NAAQS.

While the CAA precludes backsliding in the event of a NAAQS revision, and current I/M programs will remain in place on an interim basis until SIP under the new NAAQS are submitted or approved, these same I/M programs ultimately are expected to contribute to the attainment of the new NAAQS.

During the period in which the proposed NAAQS revisions will be finalized and during which states will be implementing and/or operating new I/M programs, several high profile changes will impact I/M as we know it. First, states starting up new I/M programs in the 1997 time frame will be making capital and resource expenditures in order to maintain momentum toward attainment deadlines. Second, beginning with the 1996 model year, OBD that are capable of alerting both drivers and their mechanics to emission control failures will be entering the fleet.

EPA has regulations in place establishing requirements for OBD systems on light-duty vehicles and light-duty trucks which began with the 1994 model year. These regulations are required by section 202(m) of the CAAA, passed by Congress in 1990. The engines in today's vehicles are largely electronically controlled. Sensors and actuators sense the operation of specific components (e.g., the oxygen sensor) and actuate others (e.g., the fuel injectors) to maintain optimal engine control. An on-board computer, known sometimes as a "powertrain control module" or an "engine control unit," controls all of these systems. With proper computer software, the on-board computer is capable of monitoring all of the sensors and actuators to determine whether they are working as intended. It can detect a malfunction or deterioration of the various sensors and actuators, usually well before the driver becomes aware of the problem through a loss in vehicle performance or drive ability. The sensors and actuators, along with the diagnostic computer software in the on-board computer, make up what is called "the OBD system."

The purpose of the OBD system is to assure proper emission control system operation for the vehicle's full useful life by monitoring emissions-related components and systems for deterioration and malfunction. The intent of OBD systems is to assure proper emission system operation of each and every vehicle and light truck for its full useful life by monitoring emission-related components and systems for malfunction and/or deterioration. An important aspect of OBD is its ability to notify the driver of a problem before the vehicle's emissions have increased significantly. If the vehicle is taken to a repair shop in a timely fashion, it can be properly repaired before any significant emissions increases occur. OBD systems will also provide automobile manufacturers with valuable feedback from their customers on vehicles that can be used to improve vehicle and emission control system designs.

OBD is expected to play a growing role in monitoring vehicles for emissions related programs and may eventually replace tailpipe testing for vehicles so equipped. As the in-use fleet turns over, future I/M network capacity requirements could be reduced considerably, allowing current Inspection and Maintenance program capacity to be reduced accordingly. The focus could shift to identifying OBD failures through OBD checks and ensuring driver response to the OBD failures. By the year 2005, nine model years of vehicles equipped with OBD systems will have been produced making the proportion of fleet penetration significant. However, a portion of the older fleet not having OBD capabilities and generating a Range proportion of light duty mobile source emissions will still require some type of emission inspection program.

Also technologies like remote sensing devices may have the potential to assist in identifying in-use emissions. A remote sensing device (RSD) program can be a useful supplement to a state's regular I/M program with vehicles failing RSD undergoing a confirmatory I/M test and obtaining needed repairs. An RSD program by itself could also be used by states that need only a minimal I/M program in which all or a large fraction of vehicles would be screened by RSD (but not receive any other I/M test) and only those few failing RSD would obtain a confirmatory I/M test. The EPA guidance on RSD issued September 1996 gives more details.

In addition, during the time frame in which the NAAQS revisions are implemented, the computer model used to estimate I/M program effectiveness in reducing pollution will also undergo major changes. MOBILE6 is expected to provide more accurate projection of emissions inventories. Among the many changes in credit assessments, MOBILE6 is expected to reflect new data which are expected to show in-use deterioration of tailpipe emissions for LDV to be less than previously projected for newer vehicles. In preparation for MOBILE6, a reevaluation of aspects of the model such as in-use deterioration rates and the effectiveness of existing evaporative emissions control strategies could potentially have significant implications for the efficacy of I/M programs. These and other changes to mobile modeling will influence not only the air quality impact but the cost-effectiveness of I/M programs as well. At this time we expect cost effectiveness, while reduced, will still be advantageous compared to alternative control strategies.

The implementation phase of the National Highway Systems Designation Act currently underway has re-energized some states to move toward implementing improved I/M programs. The flexibility that the NHSDA provided to states in combination with the extremely small margins by which programs are meeting their 15 percent plan obligations has encouraged some states to implement I/M programs and provided others with no alternative but to move forward with I/M programs. The possibility exists that the new NAAQS will reclassify more states as nonattainment at the same time the new revised mobile model will be finalized to show I/M to be somewhat less effective as a control strategy than MOBILE5 predicted.

The large scale evaluation effort of the range of I/M programs will provide data on the effectiveness of various I/M program designs and testing technologies. This information should be available by the time states are developing strategies to reach the new NAAQS.

Issues and Options

1.	Will the concepts of AOV/AOI change the areas in which I/M programs are helpful in meeting our quality goals?

*While the number of AOIs and AOVs is currently unknown, there is a potential for greater or fewer areas than are currently required to be subject to I/M.

2.	What is the appropriate approach to I/M on pre-OBD equipped vehicles?

3.	If I/M is no longer required but thought to be beneficial in terms of air quality benefits, what kind of incentives can we construct to ensure that dirty cars are repaired once they have been identified?

4.	Is OBD a replacement for I/M on the newer fleet, and if it is, how should areas ensure that emission failures are repaired?

5.	Should medium- and heavy-duty I/M be included?

III.	FUEL REQUIREMENTS

Background

Reid Vapor Pressure

The first environmentally driven change to fuels was the introduction of unleaded gasoline in the mid-1970s for use with catalytic converter equipped vehicles. Next came the reduction of the lead content of the leaded grade. Lead content was reduced dramatically in the mid 1980s and by January 1, 1986 was limited to 0.1 gram per gallon. As of January 1, 1996 the addition of lead to automotive gasoline is no longer permitted.

Lead was used in gasoline as an octane enhancer. When added to a gallon of gasoline, lead raised the octane by about six numbers. The need to manufacture more unleaded gasoline and to phase out the use of lead resulted in a variety of actions to maintain the octane quality. For instance, refiners and petroleum industry used more complex manufacturing processes and also the addition of oxygenates to gasoline.

The end result, however, of unleaded gasoline and lead phase-out was gasoline that was more volatile. This increased evaporative emissions of hydrocarbons, which contribute to ground level ozone formation. Between 1980 and 1985, the average Reid vapor pressure (RVP) of summer gasoline increased from 9.8 psi to 10.4 psi.

The CAA section 211(h) establishes requirements for gasoline to have a RVP 9.0 psi or less during the high ozone season (i.e. summer months). EPA has the authority to set a lower RVP requirement in nonattainment areas as necessary to generally achieve comparable evaporative emissions. The RVP for attainment areas is set at 9.0 psi, except EPA may impose lower than 9.0 in former nonattainment areas that are redesignated to attainment. National volatility controls require that gasoline sold at retail between June 1st and September 15th have a vapor pressure of no more than 9.0 psi. "Southern" ozone nonattainment areas are required to sell gasoline with a vapor pressure of no greater than 7.8 psi during this control period, and southern attainment areas generally are required to sell gasoline with no greater than 9.0 psi. States may apply for a waiver of federal preemption for state RVP standards pursuant to § 211(c)(4)(C).

The RVP regulations require each area designated as nonattainment to comply with federal RVP standards (9.0 psi in the northern states and 7.8 psi in the southern states). Thus, each "southern" area designated as nonattainment under the proposed ozone standard would need to have 7.8 psi gasoline rather than the current 9.0 psi.

Low Sulfur Diesel

The CAAA also contained provisions for transportation fuels. Gasoline and diesel fuel are both produced from crude oil. Together, gasoline and diesel fuel power 99 percent of this country's motor vehicle fleet. The CAAA of 1990 explicitly recognizes that changes in fuels as well as in vehicle technology must play a role in reducing air pollution from motor vehicles.

Section 211(i) of the Clean Air Act (CAA) requires, as of October 1, 1993 all fuel sold for use in on-highway diesel motor vehicles or motor vehicle engines meet a sulfur (0.05 ppm or less) and cetane index (minimum of 40) standard. This is commonly referred to as the low sulfur diesel fuel program. The EPA promulgated standards in 1990 regulating the sulfur content in on-highway diesel fuel based on the requirements in the CAA.

These standards were established to help reduce SO2 and sulfate particulate emissions and carbonaceous and organic particulates (PM10). Sulfur reduction reduces particulate emissions, makes it easier to comply with the 1994 diesel engine particulate standards, results in a slight fuel economy increase, hardware and maintenance cost savings, reduced engine wear, and achieves some reductions in HC and CO emissions resulting from changes in after treatment technology strategies. Overall, the low sulfur diesel fuels are important in reducing emissions of particulate matter and other air toxics from diesel-fueled buses and trucks.

Diesel PM consists of a solid core composed mainly of carbon, a soluble organic fraction, sulfates, and trace elements. Light duty diesel engines emit from 30 to 100 times more particles than comparable catalyst-equipped gasoline vehicles. Diesel PM is mainly attributable to the incomplete combustion of fuel hydrocarbons. Lubricating oils also contribute significantly to diesel particulate matter. The particles may also become coated with adsorbed and condensed high molecular weight organic compounds.

Reformulated Gasoline

The CAA stopped short of mandating the sale of alternative fuels. But the Act includes several programs that will require cleaner fuels and will open up the fuel market to nonpetroleum gasoline additives. These include provisions that force modifications in gasoline composition and that establish more stringent emission standards for vehicles in certain polluted areas. There are six major fuel-related provisions of the 1990 CAAA: oxygenated fuels, reformulated gasoline, reduced sulfur content in diesel fuel, California Pilot Program, Clean-Fuel Vehicle Program, and transit bus provisions. Oxygenated fuels and reformulated gasoline are the most prominent provisions.

oxygenated fuels--Since November 1992, gasoline sold in the winter in certain metropolitan areas must contain a minimum of 2.7 percent oxygen. The oxygen helps vehicles burn fuel more completely. This program has reduced vehicle carbon monoxide emissions up to 10 percent.

reformulated gasoline-- must contain a minimum of oxygen content of 2 percent and a maximum 1 percent benzene content. Heavy metals are prohibited. Overall emission performance standards for reformulated gasoline call for at least 15 percent hydrocarbon and toxic emission reductions by 1995 and at least 20 to 25 percent reductions of hydrocarbons and toxic emissions beginning in the year 2000.

Federal RFG, a cleaner burning fuel, has been sold year round since January 1, 1995 in certain areas of the country. RFG is formulated to reduce automotive emissions of ozone-forming pollutants and toxic chemicals (e.g. benzene, a known carcinogen) -- it is estimated to reduce both VOC and toxic emissions by more than 15 percent. As shown in the most recent Air Quality Trends Report, new monitoring data show that toxic air pollutants declined significantly between 1994 and 1995. Our early analysis indicates this progress may be attributable to the use of cleaner-burning reformulated gasoline.

RFG is mandated under the CAA in certain metropolitan areas of the country with the worst ozone problem. Section 211(k)(5) prohibits the sale of non-RFG in "covered areas" beginning on January 1, 1995. Section 211(k)(10)(D) defines "covered areas" as the "nine ozone nonattainment areas having a 1980 population in excess of 250,000 and having the highest ozone design value during the period of 1987 through 1989." These nine areas are: Los Angeles, San Diego, portions of Connecticut, New York, Philadelphia, Chicago, Baltimore, Houston, and Milwaukee. Any area that is reclassified to "severe" under § 181(b) of the CAA is also a covered area under this provision. Sacramento is the only such area.

Section 211(k)(6) of the CAA provides states with the opportunity to voluntarily choose RFG as a control measure in their ozone nonattainment areas under 211(k)(6) of the Act. This opt-in provision specifies that, "[upon the application of the Governor of a state, the Administrator shall apply the prohibition set forth in [§ 211(k)(5)] in any area in the State classified under subpart 2 of part D of title 1 as a Marginal, Moderate, Serious, or Severe Area." To assist in meeting the ozone standard, the following states chose to opt-in for all or a portion of their ozone nonattainment areas classified as Marginal or worse for ozone: Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Texas, and Virginia. EPA recently received a request from the Governor of Arizona to opt into the federal RFG program for the Phoenix area.

Attachment 2 contains lists of mandatory RFG areas and areas that have voluntarily opted into the RFG program.

Under § 211(k)(6), states may opt-in to RFG only for certain ozone nonattainment areas (i.e., those classified as Marginal, Moderate, Serious, or Severe). The Agency expects to propose regulations in the near future to clarify that § 211(k)(6) applies to "former nonattainment areas" or all areas classified as Marginal, Moderate, Serious, or Severe at any time since the enactment of the 1990 amendments to the CAA. There are currently 31 areas previously classified as Marginal or worse that have since been redesignated to attainment which, under this proposed rulemaking, would have the option to opt-in to RFG under the current or revised ozone standard.

The Agency also expects to propose a rulemaking that would require opt-in areas to stay in the program for several years covering the transition from Phase I to Phase II RFG, which begins in the year 2000. The proposal would place certain time limits on the states' ability to leave the program, providing refiners with a degree of market certainty to make necessary investment decisions. This would ensure a smooth transition between the two phases of the program. For states that choose to remain in the program into Phase II, a reduction of NOx, VOC, and toxics by 5%-7%, 25%-29% and 20%-22% respectively will be realized.

Based on 1993-1995 data, 106 counties do not meet the current 1-hour ozone standard. Under the proposed 8-hour standard based on 1993-95 data, an additional 229 counties would likely not meet the ozone standard. These new nonattainment areas most likely would need to implement air quality control measures to attain the proposed 8-hour standard. This could increase the States' interest in RFG as a cost-effective option. Additionally, the establishment of AOIs could also heighten the interest in RFG if these areas will need to implement control measures.

If the proposed ozone standard is adopted, the classification system set forth in Title I, Subpart 2 of Part D would not apply. That is, it would be effectively obsolete since it is tied to the 1-hour standard and does not account for a change in the ozone standard. Even if the current 1-hour standard is retained in the interim, the classification system would not apply to areas designated under the new 8-hour standard. The following are possible impacts on RFG under such a scenario.

Issues and Options

RVP

1.	Should the federal 7.8 psi standard apply to new "southern" nonattainment areas? Should states have additional flexibility to adopt a 7.8 psi state RVP standard for AOIs?

Mandatory RFG Areas

The nine mandatory covered areas as defined by 211(k)(10)(D) constitute a "historical snapshot" and thus would remain mandatory RFG areas. It is highly unlikely that any of these areas would be redesignated to attainment under the proposed 8-hour standard. However, depending on the boundary of the AOVs and AOIs, portions of the mandatory RFG areas could be designated attainment.

1.	Should the status quo regarding mandatory RFG areas be maintained under a revised ozone NAAQS (i.e., current mandatory areas remain as mandatory areas)?

2.	Should additional areas be required to use RFG as a control measure? If so, what mechanisms will be available? Note that such an approach may raise serious legal issues.

3.	If portions of the current mandatory RFG areas are designated as attainment under the new NAAQS, should such areas be able to opt-out of the RFG program?

RFG in New Nonattainment Areas

The CAA only authorizes states to opt-in to RFG for areas classified as Marginal or worse for ozone, and areas designated nonattainment under a revised ozone NAAQS may not have been previously classified as such.

Specifically, new nonattainment areas designated under the proposed 8-hour standard that were never designated as nonattainment under the current NAAQS may not be able to opt into the RFG program as a ozone control measure since the opt-in provision [§ 211(k)(6)] expressly applies only to areas "classified under subpart 2 of part D of title I as Marginal, Moderate, Serious, or Severe." Since new nonattainment areas not previously classified as Marginal or worse under the current NAAQS would not be classified in accordance with subpart 2 of part D of the Act under the proposed NAAQS, the opt-in provision would not apply to such areas.

1.	Should new nonattainment areas have the opportunity to use federal RFG as an ozone control measure? If so, how should this opportunity be made available? The following are possible approaches to consider. Note that these approaches may raise serious legal issues.

Option 1a.	States obtaining a waiver of preemption under § 211(c)(4)(C) of the Act to adopt a state fuel program that achieves emissions reductions that are necessary to achieve the revised NAAQS.

Option 1b.	States adopting controls identical to the federal controls pursuant to § 211(c)(4)(A).

Option 1c.	EPA specifying additional nonattainment areas (e.g. specify the new nonattainment areas) for inclusion in the RFG program.

Option 1d.	The Act could be amended to expressly permit states to opt into the federal RFG program for any ozone nonattainment area.

RFG in Attainment Areas

Under a revised ozone NAAQS, some areas that have always been in attainment may become AOIs, and, as such, would need to adopt ozone control measures. For such areas that have never previously been classified as Marginal or worse for ozone, § 211(k)(6) does not authorize states to opt into federal RFG.

For former nonattainment areas, the Agency expects to propose regulations in the near future to clarify that § 211(k)(6) applies to all areas classified as Marginal, Moderate, Serious, or Severe at any time since the enactment of the 1990 amendments to the CAA. As of October 1996, there are 31 attainment areas that were previously classified as such that have since been redesignated to attainment, including Kansas City, Durham, Miami, Detroit, and Columbus.

1.	Will attainment areas generally have an adequate opportunity to use RFG as an ozone control measure under a revised NAAQS?

2.	Should attainment areas not previously classified as Marginal or worse for ozone have an opportunity to use RFG as an ozone control measure under a revised NAAQS? If so, how should this opportunity be made available? The following are possible approaches to consider. Note that these possible approaches may raise serious legal issues.:

Option 2a.	States could obtain a waiver of preemption under § 211(c)(4)(C) of the Act to adopt a state fuel program, if they can show that such program is necessary to achieve the revised NAAQS.

Option 2b.	States could adopt controls identical to the federal controls pursuant to § 211(c)(4)(A).

RFG in New Mandated Bump-up Areas

The Act requires EPA to apply the RFG program to any area reclassified as a Severe ozone nonattainment area under § 181(b) effective one year after such reclassification. EPA does not expect any additional areas to be reclassified as Severe for ozone prior to final action on the proposed NAAQS revision. Moreover, under a revised NAAQS, areas will not be classified under § 181(b). Sacramento, the only area that has been reclassified as a Severe area since the enactment of the 1990 amendments, will continue to be mandatory RFG areas.

1.	Is a similar approach to the current requirement for reclassified areas desirable under a revised NAAQS for areas where the air quality degrades to a specified level?

Attachment 1

CITIES AND STATES REQUIRED TO IMPLEMENT I/M

Operating Not Operating Total Cities Cities Implementing Basic 45 2 47 Basic Cities Opting Up to Enhanced 13 2 15 Enhanced Required Cities 54 28 82 Total Cities Implementing I/M 112 32 144 States States Implementing Only Basic 9 0 9 States Implementing Low Enhanced 8 2 10 States Opting Up to High Enhanced 7 0 7 States Implementing High Enhanced 10 0 10 Total States Implementing I/M 34 2 36

Attachment 2

List of Federal Reformulated Gasoline Program Areas

July 17 , 1997

Clean Air Act

REQUIRED AREAS

LOS ANGELES - South Coast Air Basin, South East Desert, Ventura, CA

-	Los Angeles County, CA

-	Ventura County, CA

-	Orange County, CA

-	San Bernardino County (partial), CA

-	Riverside County (partial), CA

SAN DIEGO County, CA

-	San Diego County, CA

HARTFORD - New Haven - Waterbury, CT

-	Hartford County (partial), CT

-	Litchfield County (partial), CT

-	Middlesex County (partial), CT

-	New London County (partial), CT

-	New Haven County (partial), CT

-	Tolland County (partial), CT

NEW YORK - Northern New Jersey - Long Island - Connecticut area, NY-NJ-CT

-	Fairfield County, CT

-	Litchfield County, (partial), CT

-	New Haven County (partial), CT

-	Bergen County, NJ

-	Essex County, NJ

-	Hudson County, NJ

-	Hunterdon County, NJ

-	Middlesex County, NJ

-	Monmouth County, NJ

-	Morris County, NJ

-	Ocean County, NJ

-	Passaic County, NJ

-	Somerset County, NJ

-	Sussex County, NJ

-	Union County, NJ

-	Bronx County, NY

-	Kings County, NY

-	Nassau County, NY

-	New York County, NY

-	Orange County, NY

-	Queens County, NY

-	Richmond County, NY

-	Rockland County, NY

-	Suffolk County, NY

-	Westchester County, NY

PHILADELPHIA - Wilmington - Trenton - Cecil County, MD area	PA-NJ-DE-MD

-	New Castle County, DE

-	Kent County, DE

-	Cecil County, MD

-	Burlington County, NJ

-	Camden County, NJ

-	Cumberland County, NJ

-	Gloucester County, NJ

-	Mercer County, NJ

-	Salem County, NJ

-	Bucks County, PA

-	Chester County, PA

-	Delaware County, PA

-	Montgomery County, PA

-	Philadelphia County, PA

CHICAGO - Gary - Lake County, IL - Indiana - Wisconsin area

-	Cook County, IL

-	Du Page County, IL

-	Kane County, IL

-	Lake County, IL

-	McHenry County, IL

-	Will County, IL

-	Grundy County, IL, (partial)

-	Kendall County, IL,( partial)

-	Lake County, IN

-	Porter County, IN

REQUIRED AREAS (continued)

BALTIMORE, MD

-	Anne Arundel County, MD

-	Baltimore County, MD

-	Carroll County, MD

-	Harford County, MD

-	Howard County, MD

-	The City of Baltimore, MD

HOUSTON - Galveston - Brazoria, TX

-	Brazoria County, TX

-	Chambers County, TX

-	Fort Bend County, TX

-	Galveston County, TX

-	Harris County, TX

-	Liberty County, TX

-	Montgomery County, TX

-	Waller County, TX

"OPT-IN" AREAS (Voluntary)

MILWAUKEE - Racine, WI

-	Kenosha County, WI

-	Milwaukee County, WI

-	Ozaukee County, WI

-	Racine County, WI

-	Washington County, WI

-	Waukesha County, WI

SACRAMENTO, CA * (newly required area)	-	El Dorado County (partial), CA

-	Placer County (partial), CA

-	Sacramento County, CA

-	Solano County (partial), CA

-	Sutter County (partial), CA

-	Yolo County, CA

* Reclassification of Sacramento from Serious to Severe was effective June 1, 1995. RFG is required as of June 1, 1996. ARIZONA 1

Phoenix nonattainment area

-	Maricopa County (partial), AZ

CONNECTICUT, The Entire State 2

-	Litchfield County (partial), CT

-	Hartford County (partial), CT

Middlesex County (partial), CT

-	New London County (partial), CT

-	Tolland County (partial), CT

-	Windham County, CT

DELAWARE, The Entire State 2

Sussex nonattainment area

-	Sussex County, DE

DISTRICT OF COLUMBIA

Washington, DC-MD-VA area (DC portion)

-	Entire District of Columbia

KENTUCKY

Cincinnati-Hamilton KY-OH area (KYportion)

-	Boone County, KY

-	Campbell County, KY

-	Kenton County, KY

Louisville, KY-IN area (KY portion)

-	Jefferson County, KY

-	Bullitt County (partial), KY

-	Oldham County (partial), KY

"OPT-IN" AREAS continued

MAINE

Knox & Lincoln nonattainment area

-	Knox County, ME

-	Lincoln County, ME

Lewiston-Auburn nonattainment area

-	Androscoggin County, ME

-	Kennebec County, ME

Portland nonattainment area

-	Cumberland County, ME

-	Sagadahoc County, ME

-	York County, ME

MARYLAND

Washington, DC-MD-VA area (MD portion)

-	Calvert County, MD

-	Charles County, MD

-	Frederick County, MD

-	Montgomery County, MD

-	Prince Georges County, MD

Kent & Queen Anne's nonattainment area

-	Queen Anne's County, MD

-	Kent County, MD

MASSACHUSETTS, The Entire State 2

Boston-Lawrence-Worcester (E. MA)

-	Barnstable County, MA

-	Bristol County, MA

-	Dukes County, MA

-	Essex County, MA

-	Middlesex County, MA

-	Nantucket County, MA

-	Norfolk County, MA

-	Plymouth County, MA

-	Suffolk County, MA

-	Worcester County, MA

Springfield (Western MA) nonattainment areas

-	Berkshire County, MA

-	Franklin County, MA

-	Hampden County, MA

-	Hampshire County, MA

NEW HAMPSHIRE

Boston-Lawrence-Worcester, MA-NH nonattainment area (NH portion)

-	Hillsborough County, NH

-	Rockingham County, NH

-	Merrimack County, NH

-	Strafford County, NH

NEW JERSEY, The Entire State 2

Allentown-Bethlehem-Easton area (NJ portion)

-	Warren County, NJ

Atlantic City nonattainment area

-	Atlantic County, NJ

-	Cape May County, NJ

NEW YORK

Essex nonattainment area

-	Dutchess County, NY

-	Essex County (partial), NY

RHODE ISLAND, The Entire State 2

Providence nonattainment area

-	Bristol County, RI

-	Kent County, RI

-	Newport County, RI

-	Providence County, RI

-	Washington County, RI

TEXAS

Dallas-Fort Worth nonattainment area

-	Collin County, TX

-	Dallas County, TX

-	Denton County, TX

-	Tarrant County, TX

VIRGINIA

Washington DC-MD-VA area (VA portion)

-	Alexandria, VA

-	Arlington County, VA

-	Fairfax, VA

-	Fairfax County, VA

-	Falls Church, VA

-	Loudoun County, VA

-	Manassas, VA

-	Manassas Park, VA

-	Prince William County, VA

-	Stafford County, VA

Richmond, VA nonattainment area

-	Charles City County, VA

-	Chesterfield County, VA

-	Colonial Heights, VA

-	Hanover County, VA

-	Henrico County, VA

-	Hopewell, VA

-	Richmond, VA

Norfolk-Virginia Beach-Newport News area

-	Chesapeake, VA

-	Hampton, VA

-	James City County, VA

-	Newport News, VA

-	Norfolk, VA

-	Poquoson, VA

-	Portsmouth, VA

-	Suffolk, VA

-	Virginia Beach, VA

-	Williamsburg, VA

-	York County, VA

____________________________

1 Phoenix recently opted in the RFG program; retail stations must supply RFG by August 4, 1997.

2 That is, all ozone nonattainment areas in that state not cited in the "Required Areas" list.

APPENDIX A.	VEHICLE AND ENGINE EMISSION STANDARDS

Background

Accomplishments to Date

Air pollution and cars were first linked in the early 1950's by a California researcher who determined that traffic was to blame for the smoggy skies over Los Angeles. At the time, typical new cars were emitting over 10 grams per mile hydrocarbons (HC), 3.6 grams per mile nitrogen oxides (NOx), and 87 grams per mile carbon monoxide (CO). Since then, the federal government has set emission standards to bring down the level of these pollutants, and the auto industry has responded by developing new emission control technologies. The current federal certification standards for exhaust emissions from cars and light duty trucks are given below in Table 2. This paper provides historical information on the series of emission standards that were promulgated leading up to the current levels of emission standards.

In 1970, the groundwork for environmental protection in the United States was developed through several major actions. Congress required minimal emission controls on all 1970 and later vehicles, and adopted the first major Clean Air Act (CAA). The U.S. Environmental Protection Agency (EPA), was created that same year, with broad responsibility for regulating motor vehicle pollution. The clean air law called for 90 percent reductions in automotive emissions. New cars had to meet a 0.41 gram per mile HC standard and a 3.4 grams per mile CO standard by 1975; NOx emissions were to be reduced to 0.4 gram per mile by 1976. The law also directed EPA to set health-based NAAQS for six pollutants, all of which are present in auto emissions to some degree.

In 1971, new vehicles were required to meet evaporative emission standards for the first time. As a result, charcoal canisters to trap gasoline vapors appeared on vehicles. Exhaust gas recirculation (EGR) valves appeared in 1972 as a strategy by automakers to meet NOx standards. In 1974, Congress delayed the HC and CO standards until 1978 and set interim standards. That same year, Congress adopted the Energy Policy Conservation Act, setting the first fuel economy goals. The Corporate Average Fuel Economy (CAFE) program established a phase-in of more stringent fuel economy standards beginning with 1975 models.

The first catalytic converters appeared in 1975, and with them, unleaded gasoline in response to HC and CO standards. In 1977, Congress amended the CAA: the HC standard was delayed until 1980 and the CO standard until 1981. The NOx standard was delayed until 1981 and was relaxed to 1 gram per mile. Progress in clean air improvement was demonstrated when new vehicles met the amended CAA standards for the first time in 1981. Other technological improvements included the appearance of three-way catalysts with on-board computers and oxygen sensors on most new cars.

Table 2

Current 50,000 Mile Emission Standards and 1996 Sales Estimates

for New Light Duty Vehicles and Trucks

NMHC

(g/mile) NOx

(g/mile) CO

(g/mile)

1996 New Sales LDV 0.25 0.4 3.4 60% LDT1 0.25 0.4 3.4 6% LDT2 0.32 0.7 4.4 25% LDT3 0.32 0.7 4.4 2% LDT4 0.39 1.1 5.0 7%

Over the time periods just described, light duty vehicle emission standards decreased from HC levels of 3.4 grams per mile (gpm) down to 0.41 gpm, NOx levels of 3.1 gpm down to 1.0 gpm, and CO levels of 39 gpm down to 3.4 gpm. Evaporative HC was decreased from 6 grams per test down to 2 grams per test. The lower levels remained in effect throughout the 1980's. Light duty truck emission standards decreased from HC levels of 3.4 gpm down to 0.80 gpm, NOx levels of 3.1 gpm down to 1.2 and 1.7 gpm, and CO levels from 39 gpm down to 10 gpm. The lower light duty truck emission standards were not achieved until 1988.

Emission standards for heavy-duty vehicles were first promulgated in the early 1970s. In 1974, both gasoline and diesel fueled heavy-duty vehicles were required to meet a HC plus NOx combined standard of 16 grams per brake horsepower hour (g/bhp-hr) and a CO standard of 40 g/bhp-hr. More stringent emission standards took effect between 1979 and 1984. In 1985, EPA moved from the previous steady state emission test procedure to a transient emission test procedure and promulgated revised standards appropriate for the new transient test. Additionally, evaporative emission standards became effective in 1985. In 1987 lower HC and CO emission standards for gasoline engines took effect. In 1988 through 1994, more stringent NOx emission standards took effect and averaging, banking, and trading of emission credits were allowed for compliance with these national standards. Over these time periods, NOx decreased from 10.7 g/bhp-hr down to 5.0 g/bhp-hr and particulate matter (PM) decreased from 0.60 g/bhp-hr down to 0.10 g/bhp-hr. Smoke opacity standards were also in effect.

A landmark action was taken in 1990 when Congress amended the Clean Air Act to require further reductions in HC, CO, NOx, and particulate emissions. The amendments introduced a comprehensive set of programs aimed at reducing pollution from vehicles. These included the following program areas:

lower tailpipe standards,

more representative emission testing procedures,

expanded I/M programs,

new vehicle technologies and clean fuels programs,

transportation management provisions, and

regulation of emissions from nonroad vehicles.

EPA attempted to implement market-based and flexible strategies to meet Clean Air Act goals to the extent allowable and practicable, and worked to design cost-effective regulations.

EPA promulgated lower HC and CO exhaust (i.e., tailpipe) emission standards in 1991 for new motor vehicles in response to the 1990 Clean Air Act Amendments (CAAA), with these standards taking effect beginning with 1994 models. These exhaust emission standards and procedures that currently apply to new LDVs and LDTs, known as the Tier 1 standards, were promulgated on June 5, 1991 (56 FR 25724). The Tier 1 program includes standards for non-methane hydrocarbon (NMHC), NOx, CO and PM, all measured over the Federal Test Procedure (FTP) and applicable for the full statutory useful life of the vehicle. The phase-in of these standards began with the 1994 model year, and as of the 1997 model year all light-duty vehicles and all categories of light-duty trucks must comply with the full set of Tier 1 standards. The 1990 CAAA also specified that the Tier 1 set of emission standards contained in the statute may not be modified until the 2004 model year at the earliest.

Standards setting emission limits for carbon monoxide at cold temperatures followed in 1992. The CAA provided for the establishment of cold CO standards in two phases. The first phase, completed with an EPA final rule in July of 1992 (57 FR 31888), established emission standards for CO to be measured on a revised FTP at a temperature of 20°F. The phase-in of the these standards commenced with the 1994 model year and became complete with the 1996 model year. The second phase of addressing cold CO emissions as required by the CAA is to consist of an EPA study addressing the need for and feasibility of additional CO reductions. The EPA is currently developing this study, which is required to be complete by June 1, 1997. In addition, the CAA includes a specific set of standards to be implemented starting in the 2002 model year if certain triggering nonattainment conditions are met as of June 1, 1997.

The FTP for exhaust emissions, mentioned here previously, is the vehicle test procedure that is used by EPA to determine the compliance of light-duty vehicles and light-duty trucks with exhaust emission standards. The FTP is used to test vehicle emissions performance on a typical driving schedule, using a dynamometer to simulate actual road conditions. As a result of the requirements of the CAAA of 1990, EPA promulgated revisions to the FTP on October 22, 1996 (61 FR 54852) that revise the FTP to replicate actual driving patterns more accurately. In addition to requiring an equipment change to the existing FTP, the revisions added new "off-cycle" test sequences (the Supplemental Federal Test Procedure, or SFTP) and emission standards to control emissions under driving patterns not tested under the conventional FTP. These new standards and associated test procedures begin a phase-in in the 2000 model year when 40 percent of a manufacturer's fleet must meet the new requirements. This becomes 80 percent in 2001 and reaches 100 percent in model year 2002. In terms of NMHC, CO and NOx reductions, EPA estimates that implementation of the SFTP will result in emission reductions from light-duty vehicles and light-duty trucks of 236 tons per summer day for NMHC, 14,739 tons per summer day for CO, and 1,249 tons per summer day for NOx, in calendar year 2020. This represents reductions of 2.4 percent in NMHC, 11.1 percent in CO, and 9.3 percent in NOx in the annual motor vehicle emission inventory.

EPA expects to finalize the National Low Emission Vehicle (NLEV) program in the near future. The NLEV program is a unique voluntary program that will allow auto manufacturers the option of complying with tailpipe emission standards that are more stringent than the Tier 1 standards. In early 1994 the Ozone Transport Commission (OTC) recommended that EPA require all OTC states to adopt the more stringent California Low Emission Vehicle (CAL LEV) program. The EPA approved this petition in December, 1994, finding that further emission reductions from motor vehicles are required to mitigate the effects of air pollution transport in the region and to bring ozone nonattainment areas in the region into attainment by the dates specified in the CAA. The EPA also stated that a nationwide program was the best method for achieving the desired emission reductions, rather than a state-by-state adoption of the California LEV program limited to the Northeast states.

Discussions between EPA, the OTC states, and the automobile manufacturers resulted in a draft Memorandum of Understanding (MOU) in August of 1995 that outlined such a nationwide program and formed the basis of a Notice of Proposed Rulemaking published on October 10, 1995, detailing the structure of the NLEV program. In general, the NLEV standards and related requirements are patterned after California's more stringent tailpipe standards and fleet average NMOG standards. The requirements would initially apply only to vehicles sold in the Northeast states, but would extend to the rest of the country (except California) in the 2001 model year.

Because much progress has been made in controlling the emissions from on-highway vehicles, EPA has begun turning its attention to nonroad categories of mobile sources which also contribute significantly to air pollution. These nonroad control programs will assist states in complying with the NAAQS. The 1990 CAAA specifically direct EPA to study the contribution of nonroad engines to urban air pollution, and regulate them if warranted. "Nonroad" is a term that covers a diverse collection of engines, equipment, and vehicles. Also referred to as "off-road" or "off-highway," the nonroad category includes outdoor power equipment, recreational equipment, farm equipment, construction equipment, lawn and garden equipment, and marine vessels. Although dealt with separately in the CAA, locomotives and aircraft can also be considered nonroad categories of equipment. Except for aircraft, all categories of nonroad equipment were unregulated by EPA prior to the mid-1990s.

In 1991, EPA released a study that documented higher than expected emission levels across a broad spectrum of nonroad equipment. The EPA study showed that emissions from the various nonroad categories are a significant source of NOx, volatile organic compound (VOC) and PM emissions. In some areas of the country, emissions from nonroad engines represent a third of the total mobile source NOx and VOC inventory and over two-thirds of the mobile source PM inventory. In response, EPA has initiated regulatory programs for several categories of nonroad engines.

Compression-ignition (CI) engines (i.e., diesel-fueled engines) dominate the large nonroad engine market and comprise approximately 20 percent of the current mobile source NOx emissions inventory and 45 percent of the current mobile source PM emissions inventory. Examples of equipment that would fall into this category include agricultural equipment such as tractors, construction equipment such as backhoes, materials handling equipment such as forklifts, and utility equipment such as generators and pumps.

Under EPA regulations, CI engines greater than 50 horsepower (hp) must comply with Tier 1 emissions standards that are being phased in between 1996 and 2000 depending on the size of the engine. The Tier 1 standards apply to all CI engines greater than 50 hp except for those used in underground mining equipment, locomotives, and marine vessels. (The Mining Safety and Health Administration is responsible for setting requirements for underground mining equipment. Locomotives and marine vessels are covered by separate EPA programs, as described below.) Under the Tier 1 standards, EPA projects that NOx emissions from new CI nonroad equipment will be reduced by over 30 percent from the uncontrolled levels of unregulated engines.

Small spark-ignition (SI) engines (e.g., gasoline, natural gas, propane or methanol fueled engines) at or below 25 hp (19 kilowatts) are used primarily in lawn and garden equipment, such as lawnmowers, string trimmers, edgers, chain saws, commercial turf equipment, and lawn and garden tractors. Under Phase 1 of EPA's regulations, new small SI engines must comply with emission standards beginning in 1997. The Phase 1 standards apply to all SI engines at or below 25 hp except for those used in underground mining equipment, aircraft, marine vessels, and recreational equipment. EPA expects that these Phase 1 standards will result in a 32 percent reduction in HC emissions from small SI engines.

Recreational gasoline marine includes outboard engines, personal watercraft engines, jet boat engines, and sterndrive and inboard (SD/I) engines. Recreational gasoline marine engines contribute about 5 percent of the national mobile source VOC inventory. In areas with large boat populations, however, the contribution of recreational marine engines may be in excess of 10 percent of the total HC inventory.

EPA finalized regulations for the control of exhaust emissions from new SI, gasoline-fueled marine engines (the type typically used in recreational marine vessels) in July 1996. The regulations apply to outboards and personal watercraft, including jetboat engines, which typically employ simple 2-stroke technology (that has not changed in over 50 years) and emit very high rates of HC exhaust emissions. EPA is not finalizing emission standards for SD/I engines at this time.

The program requires increasingly stringent HC control over the course of a nine-year phase-in period beginning in model year 1998. By the end of the phase-in, each manufacturer must meet an HC plus NOx emission standard, on a corporate average basis, that represents a 75 percent reduction in HC compared to unregulated levels. The emission standard allows the manufacturers and the market to determine the best approach to achieving the targeted reductions over time by allowing them to phase in the types of control technologies to keep the cost increase as low as possible for boaters. Compliance with a corporate average emission standard gives manufacturers the flexibility to build engines below and above the emission standard, provided the manufacturer's overall corporate average is at or below the new standard.

Considering all mobile source emission controls implemented to date, the following tables and charts show the projected inventory levels assuming only the further controls for on-highway heavy-duty engines (e.g., semi-trucks, buses) described in the "Plans for the Future" section below.

Plans for the Future

The CAAA of 1990 amended section 202 of the CAA by adding subsection 202(I), which required a Phase II Study (hereafter referred to as the Tier 2 Study) to consider, "whether or not further reductions in emissions from light-duty vehicles and light-duty trucks should be required pursuant to this title." The Tier 2 study is to serve as the foundation for potential revisions to the Tier 1 emission standards, and Congress gave explicit instructions on where EPA should start.

"The study shall consider whether to establish with respect to model years commencing after January 1, 2003, the standards and useful life period for gasoline and diesel-fueled light-duty vehicles and light-duty trucks with a loaded vehicle weight (LVW) of 3,750 lbs. or less specified in the following table:

NMHC	0.125 g/mi

NOx	0.2 g/mi

CO	1.7 g/mi

For vehicles and engines subject to this subsection for purposes of section 202(d) and any reference thereto, the useful life of such vehicles and engines shall be a period of 10 years or 100,000 miles (or the equivalent), whichever first occurs.

Such study shall also consider other standards and useful life periods which are more stringent or less stringent than those set forth in table 3 (but more stringent than those referred to in subsections (g) and (h))."

The CAAA also outlined the critical elements which EPA is to consider in the course of the study:

• Air quality need. EPA " shall examine the need for further reductions in emissions in order to attain or maintain the national ambient air quality standards..."

• Technology assessment. EPA is to examine "the availability of technology (including the costs thereof), in the case of light-duty vehicles and light-duty trucks with a loaded vehicle weight (LVW) of 3,750 lbs. or less, for meeting more stringent emission standards than those provided in subsections (g) and (h) for model years commencing not earlier than after January 1, 2003, and not later than model year 2006, including the lead time and safety and energy impacts of meeting more stringent emission standards."

• Cost-effectiveness assessment EPA is to examine "the need for, and cost effectiveness of, obtaining further reductions in emissions from such light-duty vehicles and light-duty trucks, taking into consideration alternative means of attaining or maintaining the national primary ambient air quality standards pursuant to State implementation plans and other requirements of this Act, including their feasibility and cost effectiveness."

In fulfilling the Congressional CAA requirement, EPA intends to involve all interested parties early in the process to insure an informed and representative evaluation. To this end, EPA will publish an issues paper and hold a public workshop in early Spring to frame the issues and to solicit input.

EPA is also currently analyzing the inventory contributions of the various categories of mobile sources and how the relative contributions have changed over time. EPA publishes a technical report that analyzes trends in the light duty automotive fleet. For example, sales of light duty trucks have increased relative to light duty vehicle sales and therefore make up a larger proportion of the in-use vehicle fleet. This results in an increasing proportion of emissions due to light duty trucks (LDTs), especially NOx, as shown in Figure 3. Both scenarios in Figure 3 assume a baseline of California LEV-like vehicles, Federal phase 1 reformulated gasoline, and consider emissions only in areas currently classified as serious or severe nonattainment areas. The scenarios differ in the assumption of the effectiveness of various programs, such as I/M and on-board diagnostics (OBD), in reducing in-use malfunctions and emission deterioration. The first scenario assumes that malfunctions and high-emitting vehicles will be completely eliminated (i.e., the "no deterioration" scenario). The second scenario assumes that current levels of emission deterioration and malfunctions will continue into the future (i.e., the "current deterioration" scenario). In reality, it is very likely that the actual emission deterioration in the future will fall somewhere in the middle of the two scenarios.

EPA is also considering how potential changes in regulation affect different types of technologies and their associated emission characteristics. For example, increased use of current diesel technology increases NOx and PM emissions.

EPA is pursuing other national measures associated with OMS' engine programs. EPA has proposed a new combined emission standard for NOx and HC from heavy-duty engines (HDEs) designed for highway trucks and buses. EPA estimates that the proposed standard would reduce NOx emissions by 50 percent which would significantly assist the States in meeting and maintaining the ozone standard. The consultation and consensus-building activities which EPA undertook in this initiative culminated in the widespread support from the engine and trucking industries, States, and the environmental community.

The proposed standards are in the form of combined NMHC plus NOx and are presented in units of grams emitted per brake horsepower-hour (g/bhp-hr). They would apply to diesel and gasoline engines and would become effective in model year 2004. Manufacturers would have the choice of certifying their engines to either of two optional sets of standards: 2.4 g/bhp-hr NMHC + NOx, or 2.5 g/bhp-hr NMHC + NOx with a limit of 0.5 g/bhp-hr for NMHC. These proposed standards are expected to reduce NOx emissions from highway HDEs by 50 percent over the 1998 standard. In 2020, EPA projects a reduction of 1,215,000 tons per year in ozone precursors and 50,000 tons per year of secondary nitrate PM.

A technology review will be undertaken in 1999 to assess industry progress and propose changes in the standards if necessary. The potential role of fuels in achieving low HDE emissions is being evaluated now as part of a technical working group comprised of representatives from EPA, the engine manufacturers, the oil industry and other stakeholders. The results of these technical evaluations will be considered as a part of the 1999 technology review.

The significant reduction in NOx emissions expected from the proposed standard will assist the states in meeting the current NAAQS for ozone and PM. NOx emission inventories are projected to rise by the early 2000s due to continued industrial growth and expansion of motor vehicle use. This is expected to result in a significant increase in PM and ground-level ozone. Without these controls, within the next 20 years, mobile sources will contribute to about half of all NOx emissions, with highway HDEs representing about a quarter of these mobile source NOx emissions. Therefore, NOx control from HDEs on a regional scale is seen as a cost-effective strategy to control ozone levels, especially where ozone is high over a large region (as in the Midwest and Northeast).

Regarding nonroad HDEs, the EPA, the California Air Resources Board (CARB), and the manufacturers of nonroad diesel engines recently signed a Statement of Principles (SOP) that serves as a blueprint to establish a multi step, long-term control program for nonroad diesel engines. The SOP calls for stringent new NOx, HC, and PM emission standards for land-based nonroad diesel engines and marine diesel engines under 50 horsepower (HP). The signatories agree to pursue new standards that will cut NOx and PM emissions by more than two-thirds from current levels. This historic agreement represents another example of the type of private/public and federal/state partnership approach to environmental regulation that EPA is pursuing.

Engines used in nonroad equipment, such as farm tractors, bulldozers, cranes, and forklifts, are an important part of the agricultural, construction, logging, and material handling industries. The growth and vitality of the nonroad sector, as well as the design and operation characteristics unique to nonroad applications, have increased the contribution of these engines to air pollution. In particular, emissions from nonroad diesel engines covered by the SOP contribute approximately 10 percent of total nationwide emissions of NOx. This percentage is even higher in many U.S. cities with air quality problems. In addition, nonroad diesel engines emit diesel PM. EPA projects that, with existing control programs, over 80 percent of diesel PM will come from nonroad engines by 2010 nationwide.

The SOP is agreement which includes new emission standards and other provisions for nonroad engines that were either unregulated or lightly regulated, relative to other mobile sources. The nonroad engines considered in this agreement are compression-ignition (i.e., diesel-fueled) engines, excluding those engines used in aircraft, underground mining equipment, locomotives, and marine applications over 50 horsepower. Emission standards are in two tiers. Each tier phases in by horsepower (HP) level over a number of years. The emission standard level also varies by HP level. The SOP emission standards are in Table 3. EPA's preliminary analysis shows that nationwide NOx inventories will be reduced by approximately 800,000 tons per year by 2010, with benefits increasing annually as the new, cleaner equipment replaces older machines in the field.

EPA will pursue a joint government/industry effort, coordinated by EPA, to evaluate the adequacy of the current test procedure for nonroad engines to ensure emissions control in use. Further, EPA will conduct a technology review in 2001 to ensure the appropriateness of the Tier 3 (i.e., the "later tier" above ) emission standards in the agreement.

Table 3

SOP Emission Standards

Nonroad Compression-Ignition (i.e., Diesel-fueled) Engines

NOx + HC

(g/bhp-hr) PM

(g/bhp-hr) engines under 50 HP early tier in 1999-2000 7.1 - 7.8 0.6 - 0.75 later tier in 2004 - 2005 5.6 0.45 - 0.6 engines 50 HP and over early tier in 2001 - 2006 4.8 - 5.6 0.15 - 0.3 later tier in 2006 - 2008 3.0 - 3.5 not set

EPA will pursue the development of a separate research agreement which aims to develop technologies that can reduce NOx and PM emissions even more. This cooperative effort will involve many different stakeholders to explore technologies that can achieve very low emission levels while preserving performance, reliability, durability, safety, efficiency, and compatibility with nonroad equipment.

EPA plans to pursue further small gasoline engine emission reductions through Phase 2 regulations. In May 1996, EPA and five other parties signed a Statement of Principles which will form the basis of the Phase 2 proposal for new small SI engines used in handheld applications. In December of 1996, EPA and engine manufacturers signed a Statement of Principles for small SI engines used in nonhandheld applications that will form the basis of the Phase 2 proposal for such engines. EPA's Administrator has recently signed an ANPRM which will contain the text of both small SI engine Statement of Principles for public review and comment in early 1997. EPA will then issue a NPRM covering both handheld and nonhandheld small SI engines in late 1997. EPA expects the Phase 2 program to reduce combined emissions of HC plus NOx from these engines by an additional 30 to 40 percent beyond Phase 1 levels in engines manufactured after 1999 (excluding those engines used in underground mining equipment, locomotives, and marine vessels over 50 hp). This agreement will lead to the first set of standards for CI engines less than 50 hp, and further controls for engines greater than 50 hp.

CI diesel-fueled marine engines are a diverse nonroad category that includes small auxiliary and propulsion medium-sized propulsion engines on coastal and harbor vessels, and very large propulsion engines on ocean-going vessels. The contribution of this source to the average national mobile source NOx inventory is approximately 2.5 percent, although the contribution is much greater in areas with commercial ports. Emissions from diesel marine engines are virtually unregulated at this time. This will change in the near future, as a result of regulatory efforts at international and national levels.

At the international level, emissions from marine vessels will be regulated by Annex VI of the International Convention on the Prevention of Pollution from Ships (MARPOL). The International Maritime Organization has been working on NOx emission standards from these vessels to be finalized in September 1997. The standards will achieve a 30 percent reduction over uncontrolled levels, and will apply beginning January 1, 2000 to all engines on all vessels used in international voyages, as well as large engines used on marine vessels that operate only domestically. On the national level, the smaller domestic vessels not covered by MARPOL will be subject to a new set of CI marine engine regulations currently being developed by EPA.

Currently unregulated by EPA, locomotives are estimated to contribute about 9 percent of the nationwide mobile source NOx emissions inventory, making locomotives one of the largest remaining unregulated sources of NOx emissions. As directed by the CAA, EPA is developing emission standards for locomotives to assist states in complying with the NAAQS for ozone and PM. Because locomotive emissions have not been regulated before, EPA must create a comprehensive program, including not only emission standards, but also test procedures and a full compliance program.

One unique feature expected to be included for locomotives is the regulation of the engine remanufacturing process, including the remanufacture of locomotives originally built prior to the effective date of this rulemaking. Regulation of the remanufacturing process is critical because locomotives are generally remanufactured 5 to 10 times during their total service lives (typically 40 years or more).

EPA has recently published the locomotive NPRM in February 1997 and expects that it would take effect in 2000. When fully phased-in, EPA expects the new standards will achieve a reduction in NOx emissions of more than 60 percent from uncontrolled levels. Standards are also being considered that would reduce PM emissions from locomotives by 50 percent.

Aircraft emissions comprise less than 2 percent of the mobile source NOx emissions inventory, but they are significant contributors to the NOx inventory in some cities. In addition, aircraft emissions are potentially important contributors to global climate change and may also contribute to the depletion of the stratospheric ozone layer.

Emission standards for gas turbine engines that power civil aircraft have been in place for about 20 years. Such engines are used in essentially all commercial aircraft including scheduled and freight airlines. (Two classes of aircraft, military and general aviation, are not covered by standards.)

Controls on engine smoke and prohibitions on fuel venting were instituted in 1974 and have been revised several times since then. Beginning in 1984, limits were placed on the amount of unburned HC gas turbine engines can emit per landing and takeoff cycle. EPA is currently preparing a Direct Final Rulemaking (DFRM) to adopt the existing International Civil Aviation Organization (ICAO) NOx and CO emission standards for gas turbine engines. ICAO is the most appropriate forum for first establishing commercial aircraft engine emission standards due to the international nature of the aviation industry. EPA expects to issue the aircraft DFRM in early 1997.

EPA has also explored other ways to reduce the environmental effects associated with air travel throughout the nation. Along with the Federal Aviation Administration (FAA), EPA is working to encourage continuing progress in reducing emissions from airport ground service equipment and aircraft auxiliary power units. EPA has sponsored compilation of technical data and emission inventory methods which will be used by the FAA to develop an Advisory Circular for airlines and airport authorities interested in reducing emissions from these sources.

One category of nonroad engines not subject to regulation by EPA at this time is recreational nonroad equipment such as go-carts, all-terrain vehicles, and snowmobiles. (As noted earlier, recreational marine engines are included under EPA's gasoline-fueled marine regulations.) In the future, EPA plans to study whether controls for such nonroad equipment are appropriate and proceed as necessary.