EPA orders clampdown on tailpipe emissions

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WASHINGTON -- In the Obama administration's latest push to clean up the new-car fleet and deal with America's lingering air pollution problems, the EPA today finalized stricter tailpipe emissions standards that will get ramp up from 2017 to 2025.

The rules, known as Tier 3, would require automakers to cut the smog-forming tailpipe emissions of a new car by 70 to 80 percent, starting in model year 2018. Much of the gains would come from better technology, like improved catalytic converters, but oil refiners would also need to strip sulfur out of gasoline so catalytic converters work better.

As a result, "the next generation of vehicles that fill our roads will be more advanced than ever before," EPA Administrator Gina McCarthy said during a press conference today. "They will be more efficient and cheaper to power."

This cleanup comes at a cost.

EPA economists project that it will cost about $72 per vehicle to design new cars that satisfy the standards in 2025. That is half the cost the EPA projected when it proposed the rules last year, thanks to reduced estimates of the cost of loading catalytic converters with precious metals like platinum and palladium, Christopher Grundler, the director of the EPA's transportation office, told reporters.

Refiners will still need to spend billions of dollars on equipment upgrades to reduce the amount of sulfur in gasoline to about 10 parts per million, similar to the fuel in California, Europe, Japan and South Korea. According to the EPA, customers can expect to pay two-thirds of one cent more per gallon at the pump.

Oil companies had fiercely resisted the EPA's proposed rules, saying the agency underestimated the cost of cleaning up sulfur and that the new requirements could shut down some of their refineries. In an effort to lessen the cost, the EPA decided in the final rule to give 30 of the smallest refineries an extension from 2017 to 2020.

Automakers OK

Automakers embraced the rule, however. Mike Robinson, vice president for sustainability and global regulatory affairs at General Motors, took part in today's press conference, saying GM is glad that the federal emissions requirements will now be aligned with the special "LEV III" emissions standards that California is allowed to set under the federal Clean Air Act.

"The benefit from our standpoint is: you get to [engineer cars] once instead of several times," Robinson said. "We give the EPA a lot of credit for figuring out how to do this in a way that meets their requirements but also does it in a way that's more efficient for us."

Robinson said the cleaner fuel will also make it easier for automakers to introduce new technology to satisfy the Obama administration's stricter corporate average fuel economy standards, which also run through 2025.

A new car's tailpipe emissions of smog-forming nitrogen oxides and organic gases will need to decline by about 80 percent over that time, while its tailpipe emissions of particulate matter -- soot -- would need to decline by 70 percent. A new car's evaporative emissions from the fuel system would need to decline by 50 percent.

$15 billion over 10 years

According to the EPA, the rules will cost automakers $15 billion over the next decade. This is in addition to EPA's fuel economy and greenhouse gas regulations, which will cost $198 billion over a decade.

But the EPA and health groups like the American Lung Association, say the cost of the program will be dwarfed by the benefits, with 770 to 2,000 premature deaths prevented each year. EPA economists put the monetary value of the health benefits and lives saved at $6.7 billion to $19 billion annually -- outweighing the costs by between 4 and 13 to 1.

"By reducing these pollutants and making our air healthier, we will bring relief to those suffering from asthma, other lung diseases and cardiovascular disease, and to the nation as a whole," Albert Rizzo, a Delaware pulmonologist and the outgoing chair of the American Lung Association, said in a statement today.

You can reach Gabe Nelson at gnelson@crain.com.

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