Actually they have a different excuse for this one. Not CO2 this time.
The Tier 3 standards include new light- and heavy-duty vehicle emission standards for exhaust emissions of VOC (specifically, non-methane organic gases, or NMOG), NOX, and PM, as well as new evaporative emissions standards. The fully phased-in standards for light-duty vehicle, light-duty truck, and medium-duty passenger vehicle tailpipe emissions are an 80 percent reduction in fleet average NMOG+NOX compared to current standards, and a 70 percent reduction in per-vehicle PM standards. The fully phased-in Tier 3 heavy-duty vehicle tailpipe emissions standards for NMOG+NOX and PM are on the order of 60 percent lower than current standards. Finally, the fully phased-in evaporative emissions standards represent a 50 percent reduction from current standards.
http://www.epa.gov/otaq/documents/tier3/tier-3-fr-preamble-regs-3-3-14.pdf
by adding ethanol they lose what they gain in emission reductions from taking out the sulfur.
How does taking sulfur from 30 ppm to 10 ppm affect NOx, PM, and NMOG? I could see a primary impact on sulfur oxides.