The U.S. Environmental Protection Agency (EPA) released a final rule on March 3, 2014, that establishes stricter standards for motor vehicle exhaust emissions and the sulfur content of gasoline. The new “Tier 3” standards represent a holistic approach to reducing motor vehicle emissions: they require auto manufacturers to cut tailpipe emissions of volatile organic compounds, nitrogen oxides, and particulate matter, while simultaneously requiring refineries to reduce the sulfur levels in gasoline by more than 60 percent. EPA asserts that, by addressing vehicles and fuel as a single system, the Tier 3 standards achieve emissions reductions “beyond what would be possible looking at vehicle and fuel standards in isolation.”

Tier 3 Standards Get a Mixed Response

The Tier 3 standards have received a mixed response from industry. Auto manufacturers have generally welcomed the rule because it harmonizes federal standards with California’s standards. Under the old Tier 2 standards, manufacturers had to build one type of car for California and another for the rest of the country. The new Tier 3 standards mean that manufacturers can design and sell a single fleet of vehicles in all 50 states. Moreover, the new gasoline sulfur standard will make catalytic converters more efficient, which will improve both air quality and the performance of motor vehicle emissions control systems. The petroleum industry has been less receptive to the new standards. The American Petroleum Institute argues that the new low-sulfur fuel rules will impose billions of dollars of compliance costs on refineries, which could increase gasoline prices by six to nine cents per gallon.

The Tier 3 tailpipe exhaust standards will be phased in between 2017 and 2025, depending on the class of the vehicle. The low-sulfur rule for gasoline takes effect in 2017.