This report is an analysis of the economic impacts of EPA's Category 3 marine rule on Great Lakes shipping. Category 3 marine engines are diesel engines with per cylinder displacement at or above 30 liters. These engines are used for propulsion power on large vessels, including many Great Lakes cargo vessels, and they emit high levels of pollutants that contribute to unhealthy air in many areas of the United States. EPA's final Category 3 marine rule is part of a Coordinated Strategy to reduce emissions from all Category 3 marine engines that operate in the United States, including those that operate on the U.S. portions of the Great Lakes and St. Lawrence Seaway (75 FR 22896, April 30, 2010). The Coordinated Strategy consists of new national and international requirements that will significantly reduce emissions of particulate matter (PM), sulfur oxides (SOX) and nitrogen oxides (NOX) from Category 3 marine engines and their fuels. The long-term NOX limits for new Category 3 engines will require the use of high-efficiency advanced after treatment technology similar to that already required to be used on diesel trucks, locomotives, and smaller marine engines that are operated in the United States. The long-term fuel sulfur limits are the international limits that apply in specially designated Emission Control Areas (ECAs), including the recently-designated North American ECA, and will dramatically reduce PM and SOX We received many comments from Great Lakes stakeholders about the Coordinated Strategy during our Category 3 rulemaking process, particularly about the fuel sulfur requirements. These commenters said that applying stringent ECA fuel sulfur requirements to Great Lakes Category 3 ships would increase ship fuel costs and could ultimately lead to a transportation mode shift in the Great Lakes region away from ships and toward less efficient ground transportation which, in turn, could increase emissions overall. Some commenters also indicated that increased marine fuel costs could affect the Great Lakes market for crushed stone, by causing users to change their source of stone from quarries in the upper Great Lakes to quarries located closer to their facility that would not require marine transportation. In addition, commenters argued that increased marine fuel costs could lead electricity and steel producers to shift production out of the Great Lakes region. emissions from Category 3 marine engines.