WASHINGTON -- The Obama administration's proposal for low-sulfur gasoline is a boost for automakers trying to comply with stricter emissions standards.
The fuel would enable them to develop lean-burn direct-injection gasoline engines with higher fuel economy than current engines, for instance.
The proposal, released by the EPA on Friday, also is a lobbying triumph over the oil industry, which would have to refit refineries to remove more sulfur.
Several automakers, including Ford Motor Co., BMW AG and Daimler AG, are developing lean-burn direct-injection gasoline engines. But early models sold in Europe have produced more tailpipe emissions than allowed in the United States. Automakers hope low-sulfur fuel will help make such engines a viable option here.
"Knowing that the fuel is going to be there certainly enhances the flexibility of how we beat the standard," said Edward Cohen, vice president of government and industry affairs at American Honda Motor Co., during an interview.
The EPA's proposed rules include cleaner gasoline and stricter limits on pollution from the tailpipes of light vehicles, despite objections from the oil industry.
The rules, known as Tier 3, have been supported by automakers because the rules would align U.S. standards with those of California, where gasoline must have a lower sulfur content to help reduce tailpipe emissions.
Automakers want to be able to sell the same light vehicles in all 50 states, using advanced catalytic converters and other new features that are needed to comply with California rules that take effect in 2017.
Lean-burn engines run with high air-to-fuel ratios. Like diesel engines, they need sophisticated emissions controls. But those controls are sensitive to sulfur, executives from Honda and automaker trade groups told White House officials in March.
The main problem: Sulfur builds up on the catalysts inside catalytic converters. To remove it, automakers must include a regenerating system that heats the catalyst. That adds cost. It also means the vehicle is using more of its fuel for heat rather than mechanical effort, which hurts fuel economy.
"Without the new sulfur limit, we would have a big choice to make," said a senior executive who manages environmental and fuel economy planning for an automaker. "Lean-burn GDI is really expensive. Whether we would decide to go that way would depend on a lot of information that is not really available yet."
Stricter sulfur limits have been staunchly opposed by oil companies, which want to avoid spending tens of millions of dollars retooling refineries for low-sulfur gasoline. They argued the new rules would raise the price of gasoline by as much as 9 cents per gallon.
But the EPA determined that low-sulfur gasoline would add about 1 cent to the cost of a gallon of gasoline. The agency also concluded that for every $1 spent on cleaner fuel and emissions controls in cars, the public would save $7 in health and fuel costs.
Under the proposal, the new sulfur standard would take effect on Jan. 1, 2017. The proposal would reduce the average sulfur content of gasoline from 30 parts per million to 10 parts per million, the same as the gasoline sold in Europe and Japan.
The EPA must now open a public comment period, typically 60 days, for the proposal before deciding whether to make it final.