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A Sweet or Sour Development? EPA's Reduction of Sulfur Content in Gasoline Under the Tier 3 Program

April 8, 2014

Gasoline sulfur levels have already been reduced by up to 90 percent as a result of the United States Environmental Protection Agency's (EPA's) Tier 2 Gasoline Sulfur Program. On March 3, 2014, EPA issued a pre-publication notice finalizing its newest fuels program (the Tier 3 Program) intended to further reduce gasoline sulfur content, as well as exhaust and evaporative emissions from vehicle engines. This Client Alert focuses on the sulfur content reduction component of the Tier 3 Program and the impact that it will have on crude oil refiners. Specifically, on January 1, 2017, the majority of refineries will need to produce gasoline and/or ethanol-gasoline blends that contain, on annual average, no more than 10 parts per million (ppm) sulfur. The impact of the new Tier 3 Program may not be as onerous for those refiners working primarily with low-sulfur (or sweet) crude oil, as sulfur levels in sweet crude are markedly lower than "sour" crude (of which sulfur content is generally greater than 0.5 percent).