[Federal Register Volume 81, Number 221 (Wednesday, November 16, 2016)]
[Proposed Rules]
[Pages 80828-80980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25292]
[[Page 80827]]
Vol. 81
Wednesday,
No. 221
November 16, 2016
Part III
Environmental Protection Agency
-----------------------------------------------------------------------
40 CFR Parts 79 and 80
Renewables Enhancement and Growth Support Rule; Proposed Rule
Federal Register / Vol. 81 , No. 221 / Wednesday, November 16, 2016 /
Proposed Rules
[[Page 80828]]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 79 and 80
[EPA-HQ-OAR-2016-0041; FRL-9953-79-OAR]
RIN 2060-AS66
Renewables Enhancement and Growth Support Rule
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this action, the Environmental Protection Agency (EPA) is
proposing to update both its renewable fuels and other fuels
regulations to reflect changes in the marketplace and to promote the
growing use of both ethanol fuels (conventional and advanced) and non-
ethanol advanced and cellulosic biofuels. The EPA is proposing to make
several changes to the Renewable Fuel Standard (RFS) program
regulations that would align them with recent developments in the
marketplace to increase production of cellulosic and other advanced
biofuels. There are several companies that have developed renewable
fuel production technologies that produce a ``biointermediate'' at one
facility that is then processed into renewable fuel at another
facility, and we are proposing regulatory changes to allow fuels
produced through such methods to qualify under existing approved
renewable fuel production pathways. This action also proposes to update
our fuel regulations by defining fuel blends containing 16 to 83 volume
percent ethanol as ethanol flex fuel (EFF) and to no longer treat fuel
blends containing 16 to 50 volume percent ethanol as gasoline. The EPA
is proposing environmentally protective fuel quality specifications for
EFF that are consistent with those already in place for gasoline. In
this action we are also proposing new pathways for cellulosic biofuel
produced from short-rotation trees and for renewable diesel and
biodiesel produced from non-cellulosic portions of separated food
waste. We are also proposing to add new registration, recordkeeping,
and reporting requirements for facilities using carbon capture and
storage if we were to approve the use of this technology in future
assessments of proposed pathways for producing qualifying renewable
fuel. We are also seeking comment on how best to implement and/or
revise the RFS regulations pertaining to the generation of RINs for
renewable electricity used as transportation fuel. Finally, we are
proposing a number of other regulatory changes, clarifications, and
technical corrections to the RFS program and other fuels regulations.
DATES: Comments. Comments must be received on or before January 17,
2017. Under the Paperwork Reduction Act (PRA), comments on the
information collection provisions are best assured of consideration if
the Office of Management and Budget (OMB) receives a copy of your
comments on or before December 16, 2016. Hearings. The EPA will hold a
public hearing on this proposal. Details will be provided in a separate
announcement.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0041, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or withdrawn from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Assessment and
Standards Division, Office of Transportation and Air Quality,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105; telephone number: (734) 214-4131; email address:
[email protected].
SUPPLEMENTARY INFORMATION:
Preamble Acronyms and Abbreviations. We use multiple acronyms and
terms in this preamble. While this list may not be exhaustive, to ease
the reading of this preamble and for reference purposes, the EPA
defines the following terms and acronyms here:
BOB blendstock for oxygenate blending
CAA Clean Air Act
CBOB conventional blendstock for oxygenate blending
CCS carbon capture and storage
CDX Central Data Exchange
CFR Code of Federal Regulations
CG conventional gasoline
CHONS carbon, hydrogen, oxygen, nitrogen, and sulfur
CNG compressed natural gas
DFE denatured fuel ethanol
EFF ethanol flex fuel
EMTS EPA Moderated Transaction System
EXX gasoline-ethanol blends containing XX percent ethanol
F&FA Fuel and Fuel Additive
FFV Flexible fuel vehicle
GHG greenhouse gas
LNG liquid natural gas
PTD product transfer document
QAP quality assurance plan
RBOB reformulated blendstock for oxygenate blending
RFG reformulated gasoline
RFS Renewable Fuel Standard
RIN Renewable Identification Number
RVO Renewable Volume Obligation
RVP Reid vapor pressure
SRT short-rotation tree
VCSB voluntary consensus standard body
WPC wholesale purchaser consumer
Outline of This Preamble
I. Executive Summary
A. Purpose of the Regulatory Action
B. Summary of the Major Provisions of the Regulatory Action
II. General Information
A. Does this action apply to me?
B. What action is the agency taking?
C. What is the agency's authority for taking this action?
D. What are the incremental costs and benefits of this action?
III. Biointermediates
A. Background
B. Definition of Biointermediate
C. Implications of Using Biointermediates for Lifecycle GHG
Assessments
D. Applicable Pathways Involving Biointermediates and RIN
Generation
E. Number of Parties Allowed To Make a Given Biointermediate,
and Their Potential Liability for Violations
F. Additional Registration, Recordkeeping, and Reporting
Requirements That Apply When a Biointermediate Is Used To Produce
Renewable Fuel
G. Product Transfer Documents
H. Prohibited Activities and Liability in Cases Where a
Biointermediate Is Not a Valid Feedstock
I. Attest Engagements for Biointermediate Producers
J. Quality Assurance Plans for Biointermediates
K. Foreign Biointermediate Producer Requirements
L. Interim Implementation Program
IV. Standards for Ethanol Flex Fuel
A. Current EFF Regulatory Landscape
B. Key Requirements Proposed for EFF and Producers of Gasoline
at Blender Pumps
C. Standards for Ethanol Flex Fuel
D. Certification of Ethanol Flex Fuel
E. Requirements for E15 Gasoline Blender Pump-Refiners
F. Compliance Provisions
G. Simplified EFF Alternatives
[[Page 80829]]
H. Statutory Authority for Proposed EFF Requirements
V. CCS Implementation Under the RFS Program
A. Background
B. Existing Regulatory Frameworks Related to CCS
C. Proposed Requirements for Use of CCS in Renewable Fuel
Production
D. Lifecycle GHG Emissions Analysis of Renewable Fuel Produced
in Conjunction With CCS
VI. Renewable Fuels Produced From Short-Rotation Trees
A. Background and Scope of Analysis
B. Overview of Short-Rotation Tree Systems
C. Analysis of Lifecycle GHG Emissions
D. Proposed Regulations
VII. Generating RINs for Renewable Electricity
A. Background
B. Data Requirements for Generating RINs for Renewable
Electricity
C. Potential Program Structures
D. Equivalence Value and Other Issues Related to Generating RINs
for Renewable Electricity
VIII. Other Revisions to the RFS Program
A. RVO Reporting
B. Oil From Corn Oil Extraction
C. Allowing Production of Biomass-Based Diesel From Separated
Food Waste
D. Registration of New and Expanded Grandfathered Volumes
E. Flexibilities for Renewable Fuel Blending for Military Use
F. Heating Oil Used for Cooling
G. Separated Food Waste Plans
H. RFS Facility Ownership Changes
I. Changes to the Requirements for Independent Third-Party
Professional Engineers and Electronic Submission of Engineering
Reviews
J. Additional Registration Deactivation Justifications
K. Registration of Biogas Producers
L. New RIN Retirement Section
M. New Pathway for Co-Processing Biomass With Petroleum To
Produce Cellulosic Diesel, Jet Fuel, and Heating Oil
N. Vegetable Oil as Feedstock and Renewable Fuel
O. Public Access to Information
P. Grandfathered Facilities
Q. Changes to Bond Requirement for Foreign Producers
R. Redesignation of Renewable Fuel on a PTD for Non-Qualifying
Uses
IX. Other Revisions to the Fuels Program
A. Testing Revisions
B. Oxygenate Added Downstream in Tier 3
C. Technical Corrections and Clarifications
X. Economic Impacts
A. What are the benefits?
B. What are the cost impacts?
XI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR part 51
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations, and Low-Income
Populations
A red-line version of the regulatory language that incorporates the
proposed changes in this action is available in the docket for this
action (Docket ID No. EPA-HQ-OAR-2016-0041).
I. Executive Summary
A. Purpose of the Regulatory Action
The Environmental Protection Agency (EPA) is committed to taking
steps to reduce emissions of greenhouse gases (GHGs). This commitment
is based on several charges given to the EPA, such as the Climate
Action Plan announced by President Obama in June 2013,\1\ the Paris
Agreement reached at the 2015 United Nations Climate Change Conference
in December 2015,\2\ and the Renewable Fuel Standard (RFS) program
required under the Clean Air Act (CAA). Since more than 70 percent of
the fossil oil used in the U.S.\3\ and 28 percent of GHG emissions \4\
come from the transportation sector, the EPA has developed a number of
regulatory programs designed to reduce GHG emissions from vehicles and
engines. These programs have targeted both the efficiency of vehicles
and engines as well as their use of renewable fuels.
---------------------------------------------------------------------------
\1\ The White House, ``The President's Climate Action Plan,''
June 2013, http://www.whitehouse.gov/share/climate-action-plan.
\2\ The White House, ``U.S. Leadership and the Historic Paris
Agreement to Combat Climate Change,'' December 2015, http://www.whitehouse.gov/the-press-office/2015/12/12/us-leadership-and-historic-paris-agreement-combat-climate-change.
\3\ The White House, ``Improving the Fuel Efficiency of American
Trucks--Bolstering Energy Security, Cutting Carbon Pollution, Saving
Money and Supporting Manufacturing Innovation,'' p. 2, February
2014, http://www.whitehouse.gov/sites/default/files/docs/finaltrucksreport.pdf.
\4\ U.S. EPA, ``Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2012,'' EPA 430-R-14-003, April 2014, http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2014-Main-Text.pdf.
---------------------------------------------------------------------------
The fundamental objective of the RFS program under the CAA is to
increase the use of renewable fuels in the U.S. transportation system
every year through at least 2022. These fuels include corn starch
ethanol, the predominant biofuel in use to date, but Congress
envisioned the growth beyond 2015 to come from cellulosic and other
advanced biofuels that are required to have lower GHG emissions on a
lifecycle basis than conventional (non-advanced) biofuels.\5\ Since the
initial promulgation of the RFS regulations in 2007, domestic
production and use of renewable fuel volumes in the U.S. has increased
substantially. According to the Energy Information Administration
(EIA), fuel ethanol production in the U.S. more than doubled in volume
from approximately 6.5 billion gallons in 2007 to about 14.8 billion
gallons in 2015.\6\ Growth in biodiesel and renewable diesel production
in the U.S. has increased more than two and a half times, from
approximately 0.5 billion gallons in 2007 \7\ to 1.43 billion gallons
in 2015.\8\ Currently, nearly all of the approximately 138 billion
gallons of gasoline used for transportation purposes contains 10
percent ethanol (E10).
---------------------------------------------------------------------------
\5\ Conventional biofuels are those that achieve less than a 50
percent reduction in GHG emissions.
\6\ EIA, ``Monthly Energy Review,'' Table 10.3, April 2016,
http://www.eia.gov/totalenergy/data/monthly/pdf/sec10_7.pdf.
\7\ 2007 volume represents biodiesel only. EIA, ``Monthly Energy
Review,'' Table 10.4, April 2016, http://www.eia.gov/totalenergy/data/monthly/pdf/sec10_8.pdf.
\8\ 2014 volume represents biodiesel and renewable diesel
production from EMTS.
---------------------------------------------------------------------------
Nevertheless, real-world limitations, such as the slower than
predicted development of the cellulosic biofuel industry, less growth
in gasoline use than was expected when Congress enacted the RFS
provisions in 2007, and the ``E10 blendwall,'' \9\ have made the
timeline for growth in renewable fuel use laid out by Congress
difficult to achieve. These challenges remain, even as we recognize the
success of the program over the past decade in boosting renewable fuel
use and the recent significant signs of progress towards development of
increasing volumes of advanced, low-emitting GHG fuels, including
cellulosic biofuels.
---------------------------------------------------------------------------
\9\ The ``E10 blendwall'' represents the volume of ethanol that
can be consumed domestically if all gasoline contains 10 percent
ethanol and there are no higher-level ethanol blends consumed such
as E15 or E85.
---------------------------------------------------------------------------
In order to continue the progress made in promoting the use of
renewable fuels in the transportation sector, we believe it is
important to take steps to remove potential barriers to their
production, distribution, and consumption where such actions make
sense. To this end, we have identified a number of areas where
adjustments to
[[Page 80830]]
the regulatory provisions may be warranted. Some of the proposed
regulatory changes would support the increased use of higher-level
ethanol blends such as E85, while others would promote increased
production of cellulosic and other advanced biofuels.
We are also proposing a number of other changes to the RFS
regulations and other fuel regulations to streamline them, provide
clarifications, and make technical corrections.
B. Summary of the Major Provisions of the Regulatory Action
1. Biointermediates
Since the RFS2 program was finalized in 2010, we have been made
increasingly aware of renewable fuel producers that would like to
process fuel at more than one facility. In some cases, it may be
preferable for economic or practical reasons for renewable biomass to
be subjected to substantial pre-processing at one facility before being
sent to a different facility where it is converted into renewable fuel.
For example, renewable biomass may be converted into a proto-renewable
fuel (such as a bio-oil) at one facility that requires some additional
processing at a different facility before it can be used as
transportation fuel. These production methodologies have the potential
to lower the cost of using cellulosic and other feedstocks for the
production of renewable fuels by reducing the storage and
transportation costs associated with feedstock handling--especially for
cellulosic biomass. Thus, we believe that such technologies hold
considerable promise for the future growth in production of the
cellulosic biofuels required under the RFS program. However, we did not
envision significant fuel production operations occurring over multiple
facilities in drafting the existing regulations, and regulatory changes
are necessary to both generally allow such practices, and to provide
the necessary registration, reporting, and recordkeeping requirements
that will facilitate appropriate oversight by the EPA.
We believe that increasing use of these ``biointermediates'' will
likely provide an important component of the growth in renewable fuel
production in the future, particularly for advanced and cellulosic
biofuels. We are proposing changes in the RFS regulations to clearly
specify requirements that apply when renewable fuel is produced through
sequential operations at more than one facility. These changes center
around the production, transfer, and use of biointermediates and the
creation of new regulatory requirements related to registration,
recordkeeping, and reporting for facilities producing or using a
biointermediate for renewable fuel production. The new requirements on
the biointermediate producer would be similar to those already required
for renewable fuel producers.
2. Ethanol Flex Fuel
In the Tier 3 Motor Vehicle Emission and Fuel Standards (``Tier
3'') final rule, the EPA finalized new standards for passenger
vehicles, including flexible fuel vehicles (FFVs), and more stringent
gasoline sulfur standards to enable those standards to be achieved.\10\
In addition, the EPA finalized requirements for test fuels used in
certifying FFVs. At the same time, the EPA deferred finalizing in-use
fuel quality standards for higher-level ethanol blends used in
FFVs.\11\ As discussed in the Tier 3 proposal, the current regulations
and requirements for E51-83 \12\ (historically referred to as E85 \13\)
are inadequate, unclear, and out of date given recent changes to market
practices.\14\ While there are no standards specified in our current
regulations for E51-83, the historically approved practice of blending
E51-83 from just denatured fuel ethanol (DFE) and certified gasoline
and gasoline blendstocks for oxygenate blending (BOBs) virtually
ensured the resulting blend met the gasoline fuel specifications.
However, other less-expensive blendstocks such as natural gasoline are
currently available in the marketplace for which this is not
necessarily true. Allowing the use of natural gasoline blendstock to
produce E85 could lower the cost and increase the use of E85. Also,
E16-50 blends are considered gasoline under the EPA's current
regulations and are subject to all of the EPA regulatory requirements
that apply to gasoline, even though such blends currently may only be
used in FFVs. The gasoline refiner requirements also extend to service
stations when E16-50 is produced at blender pumps. Gasoline refiners
produce gasoline by refining crude oil or by mixing blendstocks of
undefined quality in large volumes.\15\ Hence, they are required to
demonstrate compliance with EPA gasoline quality standards by testing
each batch. However, these sampling, testing, recordkeeping, and
reporting requirements are not suited to fuel retail. The purpose of
this proposal is to ensure the quality of E16-83 blends used in FFVs
and FFV emissions control performance while clearing the path for the
greater use of E16-83 blends by aligning the EPA's fuel regulations
with the current dynamics in the marketplace and making it clear which
marketplace practices are and are not consistent with those
regulations. We are proposing to refer to all higher level ethanol
blends (E16-83) that may only be used in FFVs as ethanol flex fuel
(EFF) and to regulate these blends in the same fashion.\16\ We request
comment on the proposed naming convention for E16-83 blends. This
proposal allows several streamlined processes for certain parties that
produce EFF to demonstrate compliance with the proposed standards.
Parties that use these streamlined approaches would still be liable for
standards violations, unless they could demonstrate that they met the
affirmative defenses set forth in the regulations.
---------------------------------------------------------------------------
\10\ See 79 FR 23529 (April 28, 2014). FFVs are designed to
operate on any gasoline-ethanol blend from 0 volume percent ethanol
(E0) to 83 volume percent ethanol (E83).
\11\ See 79 FR 23414, 23558 (April 28, 2014).
\12\ E51-83 refers to gasoline-ethanol blends that contain from
51 volume percent to 83 volume percent ethanol.
\13\ ``E85'' refers is to the maximum potential concentration of
DFE in an E51-83 blend, assuming a 2 percent denaturant
concentration in the DFE used to make E51-83. Industry consensus
standards for E51-83 are found in ASTM D5798-14, ``Standard
Specification for Ethanol Fuel Blends for Flexible-Fuel Automotive
Spark-Ignition Engines.''
\14\ See 78 FR 29818 (May 21, 2013) and ``Possible Approach to
Fuel Quality Standards for Fuel Used in Flexible-Fuel Automotive
Spark-Ignition Vehicles (FFVs)'' (Docket Item No. EPA-HQ-OAR-2011-
0135-0529).
\15\ The terms ``refinery'' and ``refiner'' are defined in 40
CFR 80.2(h) and (i), respectively.
\16\ We understand that some parties currently refer to E51-83
as EFF. We believe that it will resolve confusion to refer to all
higher level ethanol blends that may only be used in FFVs as EFF. In
2011, the EPA issued a partial waiver to allow 15 volume percent
ethanol to be used in 2001 and later light duty motor vehicles
(i.e., conventional gasoline vehicles). See 76 FR 4662 (January 26,
2011). Should a similar waiver be issued in the future to allow the
use of an ethanol blend greater than E15 (e.g., E20) in conventional
gasoline vehicles, such a blend would no longer be regulated as EFF
and would be subject to the requirements for gasoline.
---------------------------------------------------------------------------
FFVs are vehicles that are designed to operate on any gasoline-
ethanol mixture between pure gasoline (E0) and 85 percent denatured
ethanol (E85). FFVs have been manufactured and introduced into commerce
since 1996, and represent more than 6 percent of the current vehicle
fleet and approximately 25 percent of new light-duty vehicles produced
in 2014. Given that FFVs tend to be newer vehicles that are driven more
than older vehicles, FFVs account for nearly 8 percent of all light-
duty vehicle miles traveled.\17\ However, the vast majority of fuel
used in FFVs is currently gasoline.\18\ Although the
[[Page 80831]]
volume of EFF blends currently used in FFVs is relatively small, it
could increase substantially in the future in response to the EPA's RFS
program. FFVs are equipped with the same type of emission control
systems as are conventional gasoline vehicles.\19\ Hence, whether FFVs
are operating on E0, E85, or any level of ethanol in between, to
maintain emission performance the vehicles still need the fuel to meet
quality specifications consistent with those for gasoline, such as the
10 ppm average sulfur standard in the Tier 3 gasoline sulfur
program,\20\ the 0.62 volume percent average benzene standard in the
gasoline benzene program,\21\ and a Reid vapor pressure (RVP)
consistent with that for which the vehicle was designed. Although FFVs
are equipped with the same type of evaporative emissions control
systems as conventional gasoline vehicles, such systems on FFVs are
designed for higher volatility fuel. Thus, FFVs can tolerate somewhat
higher volatility fuel than gasoline while delivering the same level of
evaporative emissions control compared to conventional gasoline
vehicles.\22\
---------------------------------------------------------------------------
\17\ EIA, ``2015 Annual Energy Outlook,'' http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
\18\ In the RFS annual rulemaking for the 2014-2016 standards,
we estimated that 150 million gallons of EFF was used in FFVs in
2014 compared to the use of approximately 139 billion gallons of
gasoline for transportation purposes. See 80 FR 77420 (December 14,
2015).
\19\ We use the term ``conventional gasoline vehicles'' in this
preamble to refer to conventional vehicles that are designed to
operate on gasoline.
\20\ See 40 CFR part 80, subpart O.
\21\ See 40 CFR part 80, subpart L.
\22\ See 40 CFR part 80, subpart B.
---------------------------------------------------------------------------
By broadening the range of blendstocks that can be used to produce
EFF, and thereby providing the opportunity for the production of lower
cost EFF, this proposal encourages increased use of EFF. We anticipate
that the volume of higher-level ethanol blends used in FFVs will
increase substantially as the volume requirements of the RFS increase,
and this proposal is intended to support this growth. Public and
private initiatives are also currently underway to expand the use of
blender pumps that dispense a variety of gasoline-ethanol blends for
use in FFVs.\23\ Therefore, it is becoming increasingly important that
all fuels used in FFVs, not just gasoline, meet fuel quality standards.
Regulations specifically crafted to regulate fuels used in FFVs should
help to facilitate further expansion of ethanol blended fuels, which is
important in satisfying the requirements of the RFS program. For these
reasons, we believe it is important that clear quality standards apply
to any fuel used in an FFV, including sulfur, benzene, RVP, and
composing only of carbon, hydrogen, oxygen, nitrogen, and sulfur, or
``CHONS.''
---------------------------------------------------------------------------
\23\ Blender pumps make mid-level ethanol blends by mixing two
parent blends stored in different storage tanks. The U.S. Department
of Agriculture (USDA) Biofuel Infrastructure Partnership, with
public and private funding of $210 million, is targeting the
installation of nearly 4,900 EFF retail dispensers during 2016, the
majority of which are anticipated to be blender pumps. Growth Energy
has a ``Blend Your Own Ethanol'' program to encourage the
installation of ethanol blender pumps that dispense a range of
ethanol blend levels for use in FFVs.
---------------------------------------------------------------------------
It is important to note that the focus and application of this
proposal is on the requirements for fuels used in FFVs. However, we are
also separately proposing streamlined compliance provisions regarding
the production of E15 at blender pumps. Apart from these proposed
streamlined provisions for the production of gasoline at blender pumps,
the EPA's existing fuel regulations, including waiver provisions, would
continue to apply for fuels used in gasoline- and diesel-powered
vehicles. For example, the EPA would need to approve a new waiver
request for E16 or other higher-level ethanol blends to be used in
gasoline vehicles.
3. Other Proposed Amendments to the RFS and Fuels Programs
In this action we are also proposing a number of amendments to the
RFS regulations. First, the EPA is proposing registration,
recordkeeping, and reporting requirements that we would use if we were
to allow carbon capture and storage (CCS) as a lifecycle GHG emissions
reduction technology in the context of the RFS program.\24\ The capture
and geologic sequestration of the carbon dioxide (CO2)
produced from ethanol fermentation, for example, could substantially
reduce the lifecycle GHG emissions associated with the production of
the renewable fuel. As discussed in section V of this preamble, this
proposal relies substantially on other relevant EPA regulatory programs
already in place concerning sequestration of CO2.
---------------------------------------------------------------------------
\24\ While we are not proposing to add a generally applicable
CCS technology to an approved pathway in the RFS regulations, we do
believe it is appropriate to propose the necessary registration,
recordkeeping, and reporting requirements that would generally
govern the use of CCS if and when such a pathway is approved.
---------------------------------------------------------------------------
Second, we are proposing to approve new pathways for the production
of cellulosic fuels using short-rotation hybrid poplar and willow trees
as a feedstock. These new pathways would allow for ethanol and naphtha
produced from these feedstocks to qualify for cellulosic biofuel (D-
code 3) RINs, and for diesel, jet fuel, and heating oil produced from
these feedstocks to qualify for cellulosic biomass-based diesel (D-code
7) RINs. As discussed in section VI of this preamble, our analysis
shows that fuel produced from short-rotation hybrid poplar and willow
trees using a variety of processing technologies meets the 60 percent
GHG emissions reduction threshold needed to qualify for cellulosic
biofuel (D-code 3) RINs and cellulosic biomass-based diesel (D-code 7)
RINs.
Third, we are seeking comment on several potential approaches for
the generation of RINs for electricity that is produced from biogas and
used as a transportation fuel. The EPA has received a number of
registration requests for approval under the existing RFS regulations
and these requests envision generation of RINs by different types of
entities in the renewable electricity production, distribution or use
sectors, using different types of information to verify the use of
renewable electricity as transportation fuel. Given the diversity of
the registration requests submitted to date, and the necessity of
avoiding the generation of multiple RINs for the same quantity of
electricity, the approval of any one of these proposed systems may
preclude in whole or in part the approval of others. As discussed in
section VII of this preamble, the EPA seeks input on the approach to
RIN generation for renewable electricity that would best further the
goals of the RFS program, but does not propose a preferred approach.
We are also proposing to make several additional revisions to the
RFS regulations, which include:
New and Revised Provisions Related to Renewable Fuel Production
Pathways
Clarifying what corn oil may be used as a feedstock for
existing renewable fuel production pathways and revising the definition
of ``corn oil extraction.''
Approving new pathways for the production of renewable
diesel and biodiesel from non-cellulosic portions of separated food
waste.
Expanding the current definition of heating oil to include
fuels that are used to cool interior spaces of homes or buildings.
Revising the requirements for separated food waste plans.
Approving a new pathway for the production of cellulosic
diesel, jet fuel, and heating oil from cellulosic biomass that is co-
processed with petroleum.
Revising the requirements for the generation of RINs for
fuel made from vegetable oils.
[[Page 80832]]
Miscellaneous Regulatory Revisions
Requiring obligated parties to report the breakdown of
gasoline, diesel, and heating oil production as part of their annual
compliance reports.
Establishing a cut-off date for the submission of
registration requests related to new or expanded baseline volumes that
are exempt from the GHG reduction thresholds.
Allowing parties that blend renewable fuel to produce
transportation fuel under a national security exemption (NSE) to
delegate to an upstream party the Renewable Identification Number
(RIN)-related responsibilities.
Revising and clarifying the requirements for renewable
fuel producers incident to the transfer of ownership of a registered
renewable fuel production facility.
Modifying the requirements for third-party engineers that
perform engineering reviews for renewable fuel producers.
Adding additional circumstances that may justify action by
EPA to deactivate a company's RFS registration.
Requiring biogas producers whose biogas is used to produce
renewable electricity, compressed natural gas (CNG), or liquid natural
gas (LNG) to register with the EPA.
Consolidating the requirements for RIN retirement into a
new section in the RFS regulations.
Specifying what RIN transactional information and RFS
compliance information that is submitted through EMTS is entitled to
treatment as CBI, and that certain RIN-related information cannot be
claimed as CBI when it is central to describing specified actions by
the EPA (including decisions by the EPA on small refinery and small
refiner hardship petitions), and EPA enforcement-related actions such
as notices of violations and criminal indictments.
Specifying the types of feedstocks that can be used at
grandfathered facilities to produce qualifying renewable fuel that is
exempt from the 20 percent lifecycle GHG reduction requirement.
Removing the option for RIN-generating foreign producers
to pay the required bond amount to the U.S. Treasury instead of
obtaining a bond in the proper amount from a third-party surety agent.
Addressing situations where a party is aware that
renewable fuel it intends to transfer will be used for purposes other
than as transportation fuel, heating oil, or jet fuel.
Making numerous technical corrections that update
addresses, references, and other minor edits.
Finally, we note that we may choose to finalize some or all of the
amendments contained in this proposed rulemaking.
II. General Information
A. Does this action apply to me?
Entities potentially affected by this proposed rule are those
involved with the production, distribution, and sale of transportation
fuels, including gasoline and diesel fuel or renewable fuels such as
ethanol, biodiesel, renewable diesel, and biogas. Potentially regulated
categories include:
----------------------------------------------------------------------------------------------------------------
Category NAICS \1\ code Examples of potentially affected entities
----------------------------------------------------------------------------------------------------------------
Industry............................. 211112...................... Natural gas liquids extraction and
fractionation.
Industry............................. 211112, 324110.............. Ethanol denaturant manufacturers.
Industry............................. 221117...................... Biomass electric power generation.
Industry............................. 221210...................... Manufactured gas production and
distribution.
Industry............................. 324110...................... Petroleum refineries (including importers).
Industry............................. 325110...................... Butane and pentane manufacturers.
Industry............................. 325193...................... Ethyl alcohol manufacturing.
Industry............................. 325199...................... Other basic organic chemical manufacturing.
Industry............................. 325199...................... Manufacturers of gasoline and E85
additives.
Industry............................. 336111, 336112.............. Light-duty vehicle and light-duty truck
manufacturers.
Industry............................. 424690...................... Chemical and allied products merchant
wholesalers.
Industry............................. 424710, 424720.............. Petroleum Bulk Stations and Terminals;
Petroleum and Petroleum Products
Wholesalers.
Industry............................. 447110, 447190.............. Fuel Retailers.
Industry............................. 454310...................... Other fuel dealers.
Industry............................. 486910...................... Natural gas liquids pipelines, refined
petroleum products pipelines.
Industry............................. 493190...................... Other warehousing and storage--bulk
petroleum storage.
----------------------------------------------------------------------------------------------------------------
\1\ 2012 North American Industry Classification System (NAICS).
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that the EPA is now
aware could potentially be regulated by this action. Other types of
entities not listed in the table could also be regulated. To determine
whether your entity is regulated by this action, you should carefully
examine the applicability criteria in the referenced regulations. If
you have any questions regarding the applicability of this action to a
particular entity, consult the person listed in the FOR FURTHER
INFORMATION CONTACT section.
B. What action is the agency taking?
In this action, the EPA is taking steps to bring our RFS and
gasoline regulations more in line with marketplace changes in an effort
to further advance the goals of the RFS program by facilitating the
production and use of renewable fuels in the transportation sector. As
discussed in section III of the preamble, we are proposing changes to
the RFS regulations to generally allow the use of biointermediates in
renewable fuel production, thereby facilitating the increased
production of renewable fuels, including cellulosic and other advanced
biofuels. As discussed in section IV of this preamble, we are proposing
standards that will address the public health and welfare effects of
EFF and its impact on emissions control devices on FFVs and FFV engines
under CAA section 211(c). Our proposed provisions would support the
increased production and use of higher-level ethanol blends by treating
all E16-83 as EFF (instead of continuing to treat E16-50 as gasoline),
implement new environmentally protective fuel quality specifications
for EFF, and allow for the use of lower cost blendstocks in EFF,
thereby advancing the goals of the RFS program by facilitating the
increased use of ethanol in transportation fuel and, in particular, at
levels beyond those associated with the use of E10 alone. Finally, as
discussed in sections V, VI,
[[Page 80833]]
VII, VIII, and IX of this preamble, we are also proposing a number of
other regulatory changes to the RFS program and fuel regulations that
would add new pathways, reduce opportunities for parties to commit RIN
fraud, provide clarification to existing regulations, and make a number
of technical corrections.
C. What is the agency's authority for taking this action?
Statutory authority for this action comes from Clean Air Act
sections 203-205, 208, 211, and 301.
D. What are the incremental costs and benefits of this action?
Through the proposed provisions for EFF, biointermediates, and new
renewable fuel production pathways, this action would provide
significant regulatory flexibility, streamlined compliance provisions,
and the opportunity for increased biofuel production at reduced cost.
As we are primarily providing parties with new flexibilities to produce
EFF or renewable fuel, we expect that parties would only elect to take
advantage of these proposed flexibilities if the potential economic
benefits outweigh the added cost. We expect that, in general, the cost
savings associated with these new provisions would far outweigh any
minor costs for demonstrating compliance. This proposal also contains
minor additional requirements that would apply to some biofuel
producers and distributors; however, the costs associated with these
requirements are expected to be very small. A more detailed discussion
of the economic impacts of this action can be found in section X of
this preamble.
III. Biointermediates
A. Background
One of the goals of the RFS program is to reduce the amount of GHGs
emitted as transportation fuel by increasing the amount of cellulosic
and advanced biofuels consumed by on-road and offroad vehicles and
engines. While the RFS program has had success in promoting the use of
conventional biofuel (primarily corn ethanol) and advanced biofuels
(primarily biodiesel), the production and use of cellulosic biofuels
has noticeably lagged behind. As noted in the preamble to the final
rule establishing RFS standards for 2014, 2015, and 2016,\25\ under the
statute, cellulosic biofuel was intended to fill 4.25 billion gallons
out of the 7.25 billion gallons advanced biofuel applicable volume
target for 2016. In reality, cellulosic biofuel is expected to be only
0.23 billion gallons for 2016. The supply of other advanced biofuels
has increased under the influence of the RFS program, but those
increases were insufficient to reach the statutory volume target. We
expect the gap in advanced biofuels created by the shortfall in
cellulosic biofuel to widen further in the future as the statutory
volume targets quickly increase but the actual supply potential
increases at a slower rate.
---------------------------------------------------------------------------
\25\ See 80 FR 77420 (December 14, 2015).
---------------------------------------------------------------------------
The RFS registration, reporting, recordkeeping, and PTD
requirements were designed with the general expectation that renewable
biomass would be converted into renewable fuel at a single facility
(e.g., a renewable fuel producer purchases corn directly from several
farmers in a region, crushes the corn in a mill, and then ferments the
corn into ethanol, all on the same site). The regulations therefore
impose requirements on renewable fuel producers to provide the EPA with
information necessary to verify that their fuel was made with
qualifying renewable biomass, through production processes
corresponding with approved pathways, and in volumes corresponding to
feedstocks used. Such information submissions render the EPA's
oversight and enforcement roles far more manageable, leading to
increased integrity and confidence in the program as a whole. Since the
RFS2 regulatory program was implemented in 2010, however, the EPA has
received a number of inquiries from companies regarding the possible
use of renewable biomass that has been substantially pre-processed at
one facility to produce feedstock (referred to as a biointermediate)
that is used at a different facility to produce renewable fuel for
which RINs would be generated. For example, Sweetwater Energy and Ensyn
both state they have developed technologies where cellulosic biomass is
pre-processed and concentrated at one facility prior to shipment to
another facility for conversion to renewable fuel. The pre-processed,
concentrated feedstock is a biointermediate.
Sweetwater Energy's technology converts cellulosic biomass
feedstocks to cellulosic sugars using a modular approach. They plan to
build relatively small facilities near the bulk feedstock source and
transport the concentrated sugars they produce to a larger facility
where they will be converted into renewable fuels and chemicals. At
this time, Sweetwater is not able to register to produce cellulosic
biofuel due to their multiple-facility approach to renewable fuel
production.
Ensyn's technology, known as Rapid Thermal Processing, involves the
non-catalytic thermal conversion of woody biomass feedstocks to produce
renewable chemicals, food additives, and heating oil at five commercial
facilities in Wisconsin and Ontario, Canada. Ensyn registered its
Ontario facility under the RFS program in 2014 and has generated
cellulosic biomass-based diesel (D-code 7) RINs related to sales in the
U.S. of its primary fuel product, known as renewable fuel oil (RFO), as
a replacement for heating oil. They also plan to sell the RFO to
petroleum refineries as a feedstock that can be further processed to
produce renewable gasoline and diesel if the use of biointermediates is
approved by the EPA.\26\
---------------------------------------------------------------------------
\26\ As discussed further in section III.B of this preamble, if
a biointermediate producer were to generate RINs on a given batch of
its product for use as heating oil, then the batch would not be
considered a biointermediate and further RINs could not be generated
downstream by a renewable fuel producer (such as a petroleum
refinery).
---------------------------------------------------------------------------
The EPA believes that the use of biointermediates to produce
renewable fuels is a reasonable and positive development in this
developing industry and holds considerable promise for the future
growth in production of the cellulosic and advanced biofuels. While
near-term production may be modest, significant potential for further
growth in the long-term exists, as these technologies can lower the
cost of using cellulosic and other feedstocks for the production of
renewable fuels by reducing the storage and transportation costs
associated with bulky feedstocks and taking advantage of existing
ethanol and petroleum refinery assets to convert the biomass to
renewable fuel. This makes biointermediate production and use an
important component of the growth of the RFS program in the future,
especially the growth of the cellulosic biofuel volumes.
However, scenarios involving the use of biointermediates to produce
renewable fuel pose significant concerns for the EPA in terms of
ensuring that the finished fuel was made with qualifying renewable
biomass, through production processes corresponding with approved RIN-
generating pathways, and in volumes corresponding to feedstocks used.
Companies requesting to be allowed to use a biointermediate have asked
the EPA to approve their production process and allow for RIN
generation by the eventual renewable fuel producer. To address the
EPA's concerns about the potential for RIN fraud, many companies also
offered to be subject to oversight requirements more stringent than
those in the current
[[Page 80834]]
RFS regulations, such as the voluntary RFS QAP.
In response to these requests, the EPA has stated that the existing
RFS provisions are insufficient to generally allow RINs to be generated
in situations wherein multiple facilities are involved in the
conversion of renewable feedstocks into renewable fuel. We also stated
that we believed that the most straightforward approach to address this
issue was through the rulemaking process. This proposed rule begins
that rulemaking process. As described further below, this proposal
provides a set of requirements that will enable the production and use
of biointermediates to make renewable fuel for which RINs can be
generated. The EPA seeks comment on the proposed biointermediate
regulatory program described below. We also seek comment from potential
producers of biointermediates on the current status of operations,
potential production volumes, timelines for production, and any other
information that may help inform the EPA as to the expected use of
biointermediates to produce renewable fuel in the future.
B. Definition of Biointermediate
We are proposing to define a biointermediate as any renewable fuel
feedstock material that meets all of the following criteria:
It is derived from renewable biomass.
It does not meet the definition of renewable fuel and RINs
were not generated for it.
It is produced at a facility that is registered with the
EPA, but which is different than the facility at which it is used to
produce renewable fuel.
It is made from the feedstock and will be used to produce
the renewable fuel in accordance with the process(es) listed in the
approved pathway.
It is processed in such a way that it is substantially
altered from the feedstock listed in the approved pathway.
In addition, we are proposing that any feedstock listed in Table 1
to 40 CFR 80.1426 or in an approved pathway pursuant to 80 CFR 80.1416
is not a biointermediate, and that a mere ``form change'' to renewable
biomass does not create a biointermediate. We note that in many
existing traditional operations, there is some degree of physical pre-
processing of renewable biomass to make feedstocks listed in Table 1 to
40 CFR 80.1426 and in pathways approved pursuant to 40 CFR 80.1416.
Such pre-processing may occur under the existing regulations at a
different facility than the facility producing renewable fuel. For
example, the planted crop soy beans are crushed to make the soy bean
oil feedstock listed in pathways F and H in Table 1 to 40 CFR 80.1426,
and such crushing often occurs at locations other than the renewable
fuel production facility. Since soy oil is a feedstock listed in Table
1, the proposed definition of biointermediate would not include soy
bean oil notwithstanding this crushing activity. For feedstocks listed
in Table 1 to 40 CFR 80.1426, we do not believe that the additional
proposed regulatory requirements for processes using a biointermediate
are necessary to ensure that RINs are only generated for qualifying
fuel. In addition, certain processing of feedstocks would not result in
sufficient alteration to result in a biointermediate. Some examples of
processing involving form changes that would not result in the
production of a biointermediate include the following:
Chopping biomass into small pieces, pressing it, or
grinding it into powder.
Filtering out suspended solids from recycled cooking and
trap grease.
Degumming vegetable oils.
Drying wet biomass.
Adding water to biomass to produce a slurry.
We are proposing that renewable biomass subject to these types of
processing would be excluded from the definition of a biointermediate
and, therefore, that such activities can be conducted at a different
facility than the facility producing renewable fuel without triggering
the need for the additional recordkeeping, reporting, and registration
requirements being proposed for producers of biointermediates.
Similarly, the separation activities described in 40 CFR 80.1426(f)(5)
that are required for yard waste, food waste, or municipal solid waste
(MSW) to be considered renewable biomass would not be viewed as
creating a biointermediate. Finally, as is generally the case for all
feedstocks used in renewable fuel production, the presence of
incidental, de minimis contaminants in a biointermediate that are
impractical to remove and are related to customary feedstock production
and transport may be disregarded in determining whether biofuel is
produced from renewable biomass in accordance with an approved
pathway.\27\
---------------------------------------------------------------------------
\27\ See 40 CFR 80.1426(f)(1).
---------------------------------------------------------------------------
We note that based on our proposed definition of biointermediate,
undenatured ethanol that is subsequently denatured at a separate
facility would be considered a biointermediate. Under the current RFS
provisions, ethanol does not become a renewable fuel until a producer
adds denaturant in accordance with the requirements of the Alcohol and
Tobacco Tax and Trade Bureau of the U.S. Treasury Department at 27 CFR
parts 19-21. Only after a renewable fuel producer has denatured the
ethanol can they generate RINs for it; the domestic producer of the
undenatured ethanol is not currently subject to any RFS requirements.
Under the proposed biointermediate definition, the producer of the
undenatured ethanol would be required to register as a biointermediate
producer and the party that denatured the ethanol would be required to
register as a renewable fuel producer.
Unlike domestic producers, foreign ethanol producers typically do
not denature their ethanol product, but instead rely on importers to
add denaturant and generate RINs for the finished renewable fuel.
Reflecting this practice, the current RFS regulations require that
foreign ethanol producers register with the EPA similar to renewable
fuel producers (i.e., undergo an engineering review and submit similar
registration information). If we finalize the proposed provisions for
producers of biointermediates, then the current special regulatory
requirements for foreign ethanol producers may no longer be necessary,
since such producers would be registered and regulated as
biointermediate producers. Therefore, we are seeking comment on whether
to remove the foreign ethanol producer requirements. If we were to
remove the foreign ethanol producer requirements, we would not,
however, remove other requirements for the importers of such foreign
ethanol (e.g., third-party volume verification under 40 CFR 80.1466).
C. Implications of Using Biointermediates for Lifecycle GHG Assessments
The EPA has evaluated whether any revisions would need to be made
to Table 1 to 40 CFR 80.1426 if biointermediates were generally allowed
to be used. Table 1 lists the generally-applicable pathways for the
production of non-grandfathered renewable fuel. The pathways include D
codes, which correspond to the RFS fuel category for which the finished
renewable fuel qualifies (e.g., cellulosic biofuel, biomass-based
diesel, etc.). These fuel categories have corresponding lifecycle GHG
emissions reduction requirements that the EPA determined were satisfied
when it established the pathways. As discussed below, the EPA is
proposing to maintain the existing pathways in
[[Page 80835]]
Table 1 to 40 CFR 80.1426, with the understanding that the pathways can
be followed through the production and use of a biointermediate.
Under the RFS program, the EPA must assess lifecycle GHG emissions
to determine which fuel pathways meet the GHG reduction thresholds for
the four required renewable fuel categories. For the 2010 RFS2 final
rule, the EPA assessed the lifecycle GHG emissions of multiple
renewable fuel pathways and classified pathways based on these GHG
thresholds, as compared to the 2005 statutory baseline.\28\ In
addition, the EPA has added several pathways since the 2010 rule was
published. Expanding the RFS program to allow for the use of
biointermediates to produce renewable fuel does not affect these prior
analyses.
---------------------------------------------------------------------------
\28\ See Table 1 to 40 CFR 80.1426.
---------------------------------------------------------------------------
The pathways consist of fuel type, feedstock, and production
process requirements. GHG emissions are assessed at all points
throughout the lifecycle pathway. For instance, emissions associated
with sowing and harvesting of feedstocks and in the production,
distribution, and use of the renewable fuel are examples of what are
accounted for in the GHG assessment. A full accounting of emissions is
then compared with the petroleum baseline emissions for the
conventional fuel being replaced. The lifecycle GHG emissions
determination is one factor used to determine compliance with the RFS
regulations.
There are currently over a dozen renewable fuel pathways with
various types of feedstocks and production processes used, qualifying
the pathways as either conventional (D-code 6), biomass-based diesel
(D-code 4), advanced (D-code 5), or cellulosic (D-code 3). The EPA also
created a cellulosic biomass-based diesel (D-code 7) category for fuels
that can qualify as both biomass-based diesel and cellulosic biofuel.
The lifecycle GHG emissions determinations for these different pathways
were based on the assumption that the feedstocks listed would be
converted to renewable fuel at a single facility.
If the EPA were to generally allow the use of biointermediates, one
main difference in GHG emissions would potentially be the additional
emissions associated with transporting the biointermediate from the
biointermediate production facility to the renewable fuel production
facility. However, it is expected that overall transportation emissions
would decrease, since bulk biomass would typically be transported a
shorter distance to the biointermediate production facility. For
example, the lifecycle GHG assessment for existing pathways already
accounts for feedstock and fuel transportation, so if a biointermediate
facility is located close to feedstock production it would reduce
unprocessed feedstock transport emissions. Biointermediate transport
emissions would be added but typically biointermediates are more energy
dense than unprocessed feedstock and would have lower GHG emissions
associated with transport.
Furthermore, lifecycle GHG emissions could also be reduced with a
biointermediate pathway vs. a single facility pathway by allowing
upstream and downstream processing to be better optimized for the
production of the biointermediate and the fuel respectively. Also, the
biointermediate pathway could offer the opportunity to leverage greater
economies of scale for improved efficiency when processing or refining
biointermediates into finished fuel products also reducing lifecycle
GHG emissions.
Based on these considerations, the EPA believes the GHG emissions
associated with producing renewable fuel from a biointermediate will be
the same or less than the GHG emissions associated with producing
renewable fuel from feedstocks listed in Table 1 to 40 CFR 80.1426 at a
single facility. Therefore, the original lifecycle analyses for the
renewable fuel pathways listed in Table 1 to 40 CFR 80.1426 support
allowing a biointermediate to be used to produce renewable fuel for the
existing pathways. Once the regulatory change to allow the use of
biointermediates is final, all of the pathways currently applicable to
renewable fuel under Table 1 to 40 CFR 80.1426 will allow for the use
of biointermediates. This assumes, of course, that the same conversion
processes that are specified for the pathway are used, even if they
occur at more than one facility. Of course, fuel cannot be made from a
biointermediate for a pathway that is not listed in Table 1 to 40 CFR
80.1426 or otherwise approved by the EPA; parties seeking to use a new
pathway (with or without the production and use of a biointermediate)
must petition the EPA for a new pathway approval pursuant to 40 CFR
80.1416.
D. Applicable Pathways Involving Biointermediates and RIN Generation
We are proposing that the approved pathways in Table 1 to 40 CFR
80.1426 (as well as those approved in response to petitions submitted
pursuant to 40 CFR 80.1416) would continue to identify the feedstocks
and processes that are acceptable to make renewable fuel for the
respective pathways; however, if this proposal were finalized, the
processes specified could be conducted in more than one facility. Since
biointermediates would be altered from the feedstocks listed in Table 1
to 40 CFR 80.1426, the renewable fuel producer would require sufficient
information from the biointermediate producer to verify that the
biointermediate is made from the feedstock listed in the approved
pathway being used by the renewable fuel producer.\29\ Similarly, the
biointermediate producer would need sufficient documentation from their
feedstock suppliers to demonstrate that the feedstock used to produce
the biointermediate was renewable biomass. The renewable fuel producer
would have to keep records and report to the EPA who supplied the
biointermediate used to produce the renewable fuel for which RINs were
generated. The biointermediate producer would also have to keep records
and report to the EPA who supplied the feedstocks used to produce the
biointermediate.
---------------------------------------------------------------------------
\29\ The information that the biointermediate producer must
provide to the renewable fuel producer is described in section III.G
of this preamble.
---------------------------------------------------------------------------
In general, we are proposing that from the perspective of a
renewable fuel producer, a qualifying biointermediate would be treated
as being equivalent to the renewable feedstock from which it was
derived for purposes of identifying the appropriate RIN-generating
pathway from Table 1 to 40 CFR 80.1426. However, there are several
cases in which we believe this would be inappropriate. These cases
would be those in which certain non-characteristic portions of a
renewable feedstock were separated or extracted into a concentrated
biointermediate that was inconsistent with the predominant constituents
of the feedstock in the approved pathway. For instance, if oils or
sugars were extracted (physically separated) from cellulosic feedstocks
to produce a concentrated oil or sugar biointermediate, those oils or
sugars would not be viewed as representing a cellulosic feedstock, as
they would not contain cellulose, hemicellulose, or lignin and were not
derived from cellulose, hemicellulose, or lignin.\30\ It would not be
appropriate for those oils or sugars to be used to produce a fuel
[[Page 80836]]
that qualifies as cellulosic biofuel under the RFS program.\31\
---------------------------------------------------------------------------
\30\ CAA section 211(o)(1)(E) states that cellulosic biofuel
(renewable fuel with a D-code of 3 or 7) must be derived from a
feedstock comprised of cellulose, hemicellulose, or lignin.
\31\ Consistent with the approach taken in the Pathways II
rulemaking, we are proposing that a biointermediate that is produced
from the chemical conversion of cellulosic feedstocks would continue
to be treated as an entirely cellulosic feedstock if 75 percent or
more of the resulting biointermediate is of cellulosic origin. See
79 FR 42128 (July 18, 2014).
---------------------------------------------------------------------------
We are not proposing to change the current system in which, with
very few exceptions, only the renewable fuel producer would be
permitted to generate RINs. This means that the party that produces
renewable fuel from a biointermediate would generate RINs, rather than
the producer of the biointermediate. We believe this approach would be
the easiest to both implement and enforce, and would involve no
disruption from current practices. If we were to allow for different
points of RIN generation, it would add unnecessary complexity and
difficulty to the program, and introduce an opportunity for fraudulent
double-generation of RINs for the same volume of renewable fuel. Our
proposal would not preclude renewable fuel producers from entering into
contracts with biointermediate producers that would provide for
transfer of some or all of the RIN value to the biointermediate
producer, but for the purposes of RIN generation and assignment within
the EPA Moderated Transaction System (EMTS), only the renewable fuel
producer would be able to generate and assign the RIN (except to the
extent that the regulations related to a particular pathway
specifically provide otherwise).
We are not proposing to change the current flexibility for RIN
generation for renewable electricity and CNG/LNG made from biogas.
Although we proposed to limit the parties allowed to generate such RINs
in the final Pathways II rule, we deferred finalizing that aspect of
our proposal, pending further consideration.\32\ As a result, it is
currently possible for the EPA to approve, as part of the registration
process, parties in the biogas distribution system other than the
ultimate renewable fuel producer to generate RINs, so long as they
provide documentation (e.g., contracts, affidavits) showing that no
other party in the system relied upon the biogas for the creation of
RINs and that the finished fuel is used as transportation fuel.\33\ The
one party approved to generate RINs for a given volume of renewable
electricity or CNG/LNG from biogas is responsible for providing the EPA
with all the necessary information and supporting documentation in
their registration, reporting, and recordkeeping to track and verify
the production of raw biogas from its original source, and all the
processing steps and distribution in-between, to the last step where
the fuel is actually used for transportation purposes. Under this
proposal, we are not changing the current opportunities related to the
point of RIN generation for biogas used to make renewable electricity
or CNG/LNG for transportation purposes. The EPA continues to evaluate
this matter, and may issue a final rule based on these elements of the
Pathways II NPRM at a future date.
---------------------------------------------------------------------------
\32\ See 79 FR 42128 (July 18, 2014).
\33\ See 40 CFR 80.1426(f)(12).
---------------------------------------------------------------------------
In the 2010 RFS2 final rule, the EPA promulgated requirements for
the generation of RINs for renewable fuel co-processed with petroleum-
based fuels, and provided two methods for determining the renewable
content of co-processed fuels: (1) Mass balance; or (2) Using Methods B
or C of ASTM D6866 C-14 testing.\34\ Some companies that have expressed
interest in producing biointermediates have suggested processes that
would use a biointermediate co-processed with petroleum at a crude oil
refinery to produce a partially renewable fuel for which RINs would be
generated (i.e., partially renewable gasoline and partially renewable
diesel). After reviewing information submitted by these companies, we
are concerned with the ability of the mass balance approach to
accurately and precisely determine the number of RINs that can be
generated for a co-processed partially renewable fuel made from a
biointermediate feedstock. The volume of biointermediate co-processed
with petroleum at a refinery would likely be a small fraction of the
refinery's throughput and would make it difficult to rely on a mass
balance approach for RIN generation and may lead to the generation of
RINs for the non-renewable portion of the co-processed fuel.
Additionally, Method B of ASTM D6866 has greater precision compared
with Method C. Given the challenge of calculating a precise and
accurate number of RINs from co-processed partially renewable fuel
produced from a biointermediate, we are proposing that only Method B of
ASTM D6866 could be used to determine the renewable content of co-
processed fuels when a biointermediate is used.
---------------------------------------------------------------------------
\34\ See 40 CFR 80.1426(f)(4).
---------------------------------------------------------------------------
We recognize that co-processing configurations are highly complex
and varied and that proposing Method B of ASTM D6866 as the only method
to determine renewable content of co-processed fuels produced from
biointermediate feedstocks may place a high cost on parties that
generate RINs from co-processed fuels. One potential option would be to
require Method B of ASTM D6866 as the default method for determining
renewable content of co-processed partially renewable fuel produced
from a biointermediate and allow parties to petition the EPA to use
other methods for determining the renewable content based on the unique
process of the company producing the co-processed fuel. In some cases
an appropriately characterized mass balance approach may provide
reasonable assurance that RINs are not being attributed to non-
qualifying fuels (i.e., the co-processed petroleum-based portion of the
fuel), especially in cases where the biointermediate constitutes a
large portion of the blendstock used to produce the co-processed fuel.
That being said, with the expected small number of parties likely to
generate RINs from this situation, allowing parties to petition the EPA
for alternative methods would most likely result in the EPA being
petitioned by every party that wishes to generate RINs from co-
processed partially-renewable fuel produced from a biointermediate.
Based on experience processing these type of petitions, the review and
approval of such petitions can take a significant amount of time, which
could delay the registration of parties wishing to generate RINs from
co-processed partially-renewable fuel produced from a biointermediate.
We seek comment on whether only allowing Method B of ASTM D6866 for
RIN generation for this situation is appropriate. We also seek comment
on whether other methods should be allowed and if so what methods could
produce similar accuracy and precision to Method B of ASTM D6866 for
purposes of measuring renewable content in co-processed fuels. For any
suggested methods, we request a thorough description of the method and
data that helps establish the relative accuracy and precision of the
method. Lastly, we seek comment on whether the EPA should allow parties
to petition for the use of a company-specific method to determine the
renewable content of co-processed partially-renewable fuel produced
from a biointermediate.
Finally, due to the potential complexity involved in determining
the validity of RINs generated for renewable fuel produced from a
biointermediate, we are proposing that if the EPA determines that any
of the RINs in any batch of renewable fuel produced from
[[Page 80837]]
a biointermediate are invalid, then all such RINs generated for that
batch of renewable fuel would be considered invalid except to the
extent that the EPA, in its sole discretion, determines that some
portions of these RINs would be valid.
E. Number of Parties Allowed To Make a Given Biointermediate, and Their
Potential Liability for Violations
We are proposing that the processing of a feedstock listed in an
approved pathway into a biointermediate may only occur at a single
facility before the biointermediate is transported to a renewable fuel
production facility. Hence, there will only be two parties involved in
the transformation of a feedstock listed in an approved pathway into
renewable fuel, which will make it much more straightforward for the
EPA to track and enforce. While it is possible that the production of
certain biointermediates may require processing at multiple facilities
in the future, most if not all of the inquiries that the EPA has
received so far regarding biointermediates have only involved two
facilities: One to produce the biointermediate and another to turn the
biointermediate into renewable fuel. There are also numerous
implementation and enforcement concerns associated with allowing more
than one facility to be involved in the production of a given
biointermediate, as each extra production step adds another layer of
complexity and potential for fraud to occur. Thus, we are not proposing
to allow for multiple facilities to be involved in the production of a
biointermediate at this time.\35\ However, we may revisit this issue in
the future if new production technologies develop that call for the
sequential processing of an approved feedstock listed in Table 1 to 40
CFR 80.1426 at more than one biointermediate facility prior to its use
at a renewable fuel production facility. We seek comment on whether it
is appropriate at this time to limit biointermediate production to
occur at a single facility, or whether we should allow for multiple
facilities to be involved sequentially in the production of a given
biointermediate and if so, how to limit opportunities for fraud. We
note, however, that under this proposal, a given renewable fuel
production facility could source their biointermediates from more than
one biointermediate production facility.
---------------------------------------------------------------------------
\35\ This limitation would not apply to pre-processing that
occurs upstream of the biointermediate producer and involves only
``form changes'' of a feedstock listed in Table 1 to 40 CFR 80.1426,
such as chopping, grinding, etc.
---------------------------------------------------------------------------
We are proposing registration, reporting, recordkeeping, and PTD
requirements for parties involved in the production of
biointermediates, as well as modified requirements for renewable fuel
producers using biointermediates to make renewable fuel. We are also
proposing that biointermediate and renewable fuel producers would be
liable for violation of these requirements.
F. Additional Registration, Recordkeeping, and Reporting Requirements
That Apply When a Biointermediate Is Used To Produce Renewable Fuel
In general, the renewable fuel producer is responsible for
verifying and demonstrating that the renewable fuel they produce is
derived from renewable biomass and was produced in accordance with an
approved biofuel production pathway.\36\ If the renewable fuel producer
is using a biointermediate, however, the direct link between the
renewable fuel producer and the renewable biomass/feedstock supplier
would be lost. In such cases we are proposing that the biointermediate
producer would verify and provide records (in the form of PTDs) to the
renewable fuel producer that the feedstocks used to make the
biointermediate meet the definition of renewable biomass and are part
of the approved biofuel production pathway that the renewable fuel
producer intends to rely on to generate RINs. Therefore, we are
proposing the following additional registration, recordkeeping, and
reporting requirements associated with biointermediates that would help
provide the renewable fuel producer with the information necessary to
verify that the fuel they produce qualifies as renewable fuel for which
RINs may be generated.
---------------------------------------------------------------------------
\36\ See 40 CFR 80.1454(c) and (d).
---------------------------------------------------------------------------
1. Registration
We are proposing to require that biointermediate producers register
with the EPA by facility in a manner similar to renewable fuel
producers. We are also proposing slight modifications to the
registration requirements for renewable fuel producers that wish to use
a biointermediate to produce renewable fuel. The registration
information submitted by the biointermediate producer would include the
submission of basic company information (e.g., company name, address of
production facility, etc.) required for all EPA fuels program
registrants. In addition, they would need to provide basic operational
information, such as the capacity of their production facility, the
processes utilized, the feedstocks they will use, a description of
their biointermediate product, and the pathway(s) they believe the
biointermediate product could be used in. We are proposing that
biointermediate producers would need an independent third-party
engineering review for each facility, which would include a site visit
and review of the registration submission to independently evaluate the
facility's ability to utilize the specified feedstocks and production
processes that fall under an EPA-approved pathway. As discussed in
section VIII.I of this preamble, we are also proposing modifications to
the third-party engineering review requirements. Those modifications
would apply to renewable fuel producers and biointermediate producers
alike. Biointermediate producers would also need to identify renewable
fuel producers that intend to use their biointermediate product.
Existing renewable fuel producers would also need to update their
registration information with similar information if they wished to
begin using a biointermediate as a feedstock. Renewable fuel producers
would also be required to enter into contracts and keep affidavits with
their biointermediate suppliers. A biointermediate could not be used
for renewable fuel production until the EPA had accepted both the
biointermediate producer's and the renewable fuel producer's
registration materials reflecting the production and use of the
biointermediate. Similar to renewable fuel producer registrations,
biointermediate producers would need to submit updated registration
information every three years, including a new independent third-party
engineering review. In addition, biointermediate producers would need
to update their registration materials between three-year updates if
specified changes in their operations occur. A biointermediate producer
would be required to comply with any other applicable regulatory
requirements related to the renewable feedstock (e.g., submitting
separated food waste plans and requirements related to the use of crop
residue as a feedstock) that a renewable fuel producer that uses these
renewable feedstocks directly (without reliance on a biointermediate)
must submit to the EPA in the context of registration.
The EPA notes that although we intend to conduct a threshold review
of registration materials prior to accepting
[[Page 80838]]
a registration submission, this threshold review is primarily to verify
that the registration materials are complete. Thus, acceptance by the
EPA of a registration submission does not represent a determination by
the EPA of substantive compliance with applicable regulatory
requirements. Biointermediate and renewable fuel producers are
responsible for ensuring on a continuing basis that all regulatory
requirements are satisfied, including the requirement to only use
renewable biomass feedstocks, and to produce renewable fuel in
compliance with approved pathways. Thus, as has been the case since the
inception of the RFS program, parties should not assume that the EPA
approves the use of feedstocks or production processes described in a
registration submission simply because the EPA has accepted a party's
registration application. The EPA intends to review materials submitted
by registered entities to determine substantive compliance with the
program on a priority basis based in part on the availability of time
and resources, and in part on indications of potential compliance
concerns.
We seek comment on whether there are any additional registration
requirements needed for biointermediate producers or renewable fuel
producers to help ensure that the parties themselves and EPA
enforcement personnel have available to them the information necessary
to ensure the appropriate production and use of biointermediates.
2. Reporting Requirements
We are proposing that biointermediate producers would submit
quarterly reports that include feedstock and process information by
batch, volume of the batch, and cellulosic and non-cellulosic content
of the batch, as well as the specific renewable fuel facility where the
batch of biointermediate was intended to be used for the production of
renewable fuel. The biointermediate producer would also be required to
designate each batch that is intended to be used as a renewable fuel
feedstock, so that the biointermediates batches are directly linked to
the renewable fuel batches produced from that biointermediate. The
biointermediate producer would also be required to report the renewable
content and adjusted cellulosic content of each biointermediate batch
and certify that the renewable content of each biointermediate batch
met the renewable biomass requirement. We are also proposing changes to
the periodic reporting requirements for renewable fuel producers that
use a biointermediate to help the EPA track that biointermediates are
being used appropriately. These proposed reporting requirements would
help the EPA monitor compliance concerning the production and use of
biointermediates by directly linking the volume of biointermediate
produced by a biointermediate producer with the volume of renewable
fuel produced by a renewable fuel producer.
We are also proposing modifications to the EMTS reporting
requirements for producers of renewable fuel to help track and ensure
that biointermediates are used appropriately. Currently, feedstocks
used to produce a renewable fuel are tracked on a per-batch basis in
EMTS. Due to the similarity between the ways that biointermediates
would be used and existing feedstocks are already being used, we are
proposing that biointermediate use also be tracked through EMTS. In
addition, aligning batches of RINs generated for renewable fuel with
the biointermediate batches used to produce the fuel would help the EPA
monitor that volumes of biointermediates are appropriately used to
generate valid RINs. Therefore, we are proposing that renewable fuel
producers specify in EMTS both the amount of biointermediate feedstock
used to produce each batch of fuel, as well as the party from whom the
biointermediate was produced, received, purchased, or procured. This is
somewhat analogous to EMTS reporting requirements for RIN-generating
importers of foreign renewable fuel. For example, in order to generate
RINs for a volume of renewable fuel produced at a foreign renewable
fuel facility, renewable fuel importers must identify in EMTS the
foreign renewable fuel facility for each batch of imported renewable
fuel for which they generate RINs, among other batch requirements.
These proposed changes to EMTS, while simple in concept,
nevertheless will constitute a significant modification to the coding
of the existing EMTS system, which will take time to develop and test
to ensure adequate functionality. Therefore, we anticipate that if we
finalize the proposed biointermediate provisions, we will delay the
full tracking of biointermediates in EMTS, but not the periodic
reporting requirements, until January 1, 2018, so that the changes to
EMTS could reasonably be developed and tested. As discussed in more
detail in section III.L of this preamble, biointermediate producers and
renewable fuel producers using biointermediates would be permitted to
meet interim implementation requirements pending EMTS modification.
Parties would still be required to submit periodic reports outside of
EMTS to help the EPA monitor compliance with biointermediate
requirements.
We believe that these reporting requirements and tracking in EMTS
would help the EPA monitor the generation of RINs for renewable fuel
produced from a biointermediate, thereby reducing the potential for
fraud and enhancing the integrity of the program. We seek comment on
whether we should require any additional reporting requirements from
biointermediate producers or renewable fuel producers.
3. Recordkeeping Requirements
We are proposing that biointermediate producers would have
essentially the same feedstock and process-related recordkeeping
requirements as those already in place for renewable fuel producers.
Since the biointermediate producer would be a party between suppliers
of feedstocks listed in Table 1 to 40 CFR 80.1426 and the renewable
fuel producer, the biointermediate producer would need to maintain
records related to the purchase of feedstocks used to produce the
biointermediate. Biointermediate producers would also need to maintain
appropriate records that demonstrate that feedstocks meet the
definition of renewable biomass. Finally, biointermediate producers
would need to keep records of any calculations the biointermediate
producer used to determine the renewable or cellulosic content of the
biointermediate, as applicable. This information would need to be
conveyed to any renewable fuel producer that uses the biointermediate
as part of the required PTDs. Renewable fuel producers would need to
maintain these PTDs in addition to their current recordkeeping
requirements. We seek comment on whether there are any additional
records that should be kept by biointermediate producers or renewable
fuel producers to accommodate the proposed use of biointermediates.
G. Product Transfer Documents
In order to help provide renewable fuel producers using
biointermediates the information they need to ensure the validity of
RINs they generate, we are proposing PTD requirements associated with
the transfer of biointermediates between the biointermediate producer
and the renewable fuel producer. The biointermediate producer would be
required to transfer to the renewable fuel producer a PTD along with
each
[[Page 80839]]
shipment of biointermediate containing information related to the
feedstock, volume, cellulosic and non-cellulosic content of the batch,
and processes used in the production of the biointermediate. The
biointermediate producer would also be required to include a
certification statement regarding these details on the PTD. We are also
proposing that biointermediate producers would designate clearly in the
PTD what renewable fuel(s) should be produced from specific batches of
biointermediate. This information would need to be conveyed on PTDs to
the renewable fuel producer and should match reports submitted to the
EPA by the biointermediate producer.
Additionally, to the extent that any portion of the biointermediate
is not derived from renewable biomass, biointermediate producers would
be required to identify the feedstock energies of the renewable and
non-renewable biomass used to produce the biointermediate and the
proportions of the biointermediate that could and could not be used to
make renewable fuel for which RINs could be generated. If applicable,
biointermediate producers would also need to convey information
regarding the proportion of the biointermediate that is cellulosic
material and non-cellulosic material. This breakdown would need to be
transferred to the renewable fuel producer so they could properly
calculate the RINs to be produced from fuel made with the
biointermediate. Biointermediate producers would also need to certify
to the renewable fuel producer the process used to produce the
biointermediate feedstock. We seek comment on whether any additional
information should be conveyed from the biointermediate producer to the
renewable fuel producer through PTDs.
It should be noted that it would still be the responsibility of the
renewable fuel producer to ensure that any feedstocks used to make
renewable fuel, including biointermediates, meet the definition of
renewable biomass, and that all processes used by the biointermediate
producer in conjunction with the processes used by the renewable fuel
producer fall under an EPA-approved pathway to produce renewable fuel.
Thus, as discussed further in the next section, both the renewable fuel
producer and the biointermediate producer may be held liable when RINs
are generated for fuel that was not derived from renewable biomass, or
where the biointermediate producer used processes that were
inconsistent with the pathway utilized by the renewable fuel producer
as the basis for RIN generation.
H. Prohibited Activities and Liability in Cases Where a Biointermediate
Is Not a Valid Feedstock
We are proposing to amend the regulations to add a new prohibited
activity for the production of a biointermediate from a feedstock or
through a process that is not described in the producer's registration
information. We are also proposing to modify the prohibited acts
regulations to prohibit the use of a biointermediate by a renewable
fuel producer that is not described in the producer's registration
information. Renewable fuel producers are ultimately responsible for
ensuring that any biointermediate is used in compliance with the
regulations, similar to how they are currently responsible for using
appropriate feedstocks and processes to produce renewable fuels and
generate RINs. As noted above, the description of feedstocks and
processes in registration materials accepted by the EPA does not
represent a determination by the EPA that such feedstocks and processes
are consistent with the RFS regulations; the responsibility of ensuring
that they do rests on a continuing basis with the renewable fuel
producer as well as any biointermediate producer.
In order to fulfill the statutory mandate that renewable fuel is
produced from renewable biomass, the renewable fuel producer must be
able to demonstrate that the feedstocks they are using are, or are
derived from, renewable biomass and are consistent with the feedstocks
permitted under the renewable fuel production pathway utilized. When a
biointermediate is being used to produce renewable fuel, the renewable
fuel producer may not have direct access to the information needed to
make these demonstrations. Therefore we are proposing that the
biointermediate producer would be required to make these demonstrations
both to the EPA and to the renewable fuel producer. To ensure
appropriate levels of oversight by renewable fuel producers, we do not
believe that the renewable fuel producer should be held harmless in the
event that the biointermediate is determined to not be derived from
renewable biomass or is determined to be unauthorized under the pathway
utilized by the renewable fuel producer. Therefore we are proposing
that either or both the biointermediate producer and the renewable fuel
producer would potentially be liable for violations involving the
improper production or characterization of a biointermediate used to
produce renewable fuel for which RINs were generated. This would be
true both where any errors could be characterized as having been made
in good faith, and in situations involving deliberate fraud.
This approach has been used extensively in other EPA fuels programs
(e.g., gasoline and diesel programs) where it is presumed that
violations that occur at downstream locations (e.g., a retail station
selling gasoline) were caused by all parties that produced,
distributed, or carried the fuel. In this case, if, for example, a
biointermediate producer were to use feedstocks that do not meet the
definition of a renewable biomass, then both the biointermediate
producer and the renewable fuel producer could be liable for the
violation.
We seek comment on whether the proposed approach to liability in
instances where biointermediates are used is appropriate and whether
the final regulations should include any additional prohibited
activities or liability-related provisions.
I. Attest Engagements for Biointermediate Producers
We are proposing that biointermediate producers undergo annual
attest engagements similar to current annual attest engagement
requirements for renewable fuel producers. The attest engagement for
biointermediate producers would consist of an outside certified public
accountant or certified independent auditor following agreed upon
procedures to determine whether the underlying records for the
biointermediate, the reported items to the EPA, and copies of PTDs to
the renewable fuel producer agree. The auditor would issue a report to
the EPA as to their findings. We are also proposing a slight
modification to the attest engagement for renewable fuel producers to
ensure that attest auditors verify records related to the use of a
biointermediate.
J. Quality Assurance Plans for Biointermediates
In 2014, the EPA finalized requirements for optional QAPs to help
ensure that RINs are valid.\37\ The QAP rule provides for auditing of
renewable fuel production facilities by independent third-party
auditors who review feedstock elements, process elements, and RIN
generation elements to determine if renewable fuel production is
consistent with EPA requirements. Several companies that have contacted
the EPA regarding the potential use of biointermediate feedstocks have
suggested that the EPA
[[Page 80840]]
allow the use of QAPs for biointermediates to help ensure the validity
of RINs produced from renewable fuels that used biointermediates as a
feedstock. We believe that allowing independent third-party auditors to
implement QAPs for biointermediate producers would help provide
assurance to the renewable fuel producer and RIN purchasers that
biointermediate producers are using appropriate feedstocks and
processes consistent with EPA requirements. Therefore, we are proposing
that biointermediate producers may participate in the RFS QAP with
third-party auditors reviewing applicable feedstock and process related
QAP elements. We are also proposing small changes to the QAP
requirements for renewable fuel producers to accommodate their use of
biointermediate feedstocks.
---------------------------------------------------------------------------
\37\ See 79 FR 42128 (July 18, 2014).
---------------------------------------------------------------------------
More significantly, we are proposing that in order for a renewable
fuel producer to generate a Q-RIN, both the biointermediate producer
and the renewable fuel producer must have in place an EPA-approved
pathway-specific QAP. We believe that this is necessary to provide the
level of assurance that is expected from the RFS QAP. If we allowed the
producer to generate Q-RINs without the biointermediate producer's
information being verified, it could undermine the level of compliance
assurance provided by Q-RINs. Additionally, since the focus of the QAP
system is the validity of RINs and both the biointermediate producer
and the renewable fuel producer must follow approved pathway processes
for RINs to be valid, it would not be appropriate to allow the
generation of Q-RINs without a QAP for the biointermediate producer. We
seek comment on whether this approach is appropriate and whether there
are any additional QAP requirements that we should impose upon
biointermediate producers or renewable fuel producers using
biointermediates to maintain the high level of confidence associated
with Q-RIN generation.
As discussed more thoroughly below, in the interest of accelerating
the implementation of the proposed expanded program allowing use of
biointermediates, we are proposing that in the interim between the
effective date of the final rule and January 1, 2018, biointermediate
producers and renewable fuel producers that wish to produce renewable
fuel using biointermediate feedstock must have a pathway-specific QAP
in place. We believe this is necessary because the tracking of
biointermediates in EMTS and the association \38\ of biointermediate
companies with renewable producers tracked in the EPA Central Data
Exchange (CDX) registration system would not be in place until January
1, 2018. After January 1, 2018, we are proposing that biointermediate
and renewable fuel producers may voluntarily participate in the RFS
QAP; however, both parties would still need to participate in the QAP
program to generate Q-RINs. The EPA is also seeking comment on whether
we should maintain the requirement that biointermediate and renewable
fuel producers have a pathway-specific QAP after the interim period
ends, or whether there are any specific situations in which the use of
a QAP should continue to be mandatory, especially where the potential
for fraud to occur may be more likely (e.g., biointermediate production
facilities that produce both a renewable fuel and a biointermediate).
---------------------------------------------------------------------------
\38\ For purposes of this preamble, ``association'' means an
administrative linking of two companies in CDX and does not mean any
contractual or more formal relationship. Under the QAP program,
third-party auditors are required to associate with RIN generators
in CDX so that RIN generators can generate verified RINs in EMTS.
Under the proposed biointermediates program, biointermediate
producers would need to associate in CDX with a renewable fuel
producer in order for that renewable fuel producer to generate RINs.
Additionally, if the biointermediate and renewable fuel producers
participate in the QAP program, each party would need to associate
with each other in CDX.
---------------------------------------------------------------------------
K. Foreign Biointermediate Producer Requirements
We are proposing that foreign biointermediate producers have
similar requirements as foreign renewable fuel producers as described
in 40 CFR 80.1466. In general, foreign biointermediate producers would
be required to comply with requirements related to inspection and
audit, bonding, agent appointment for service of process, and the
application of U.S. substantive and procedural laws to any civil or
criminal enforcement action. These requirements would allow the EPA to
monitor the producers and carry out enforcement actions should a
violation occur outside the U.S.
We are also proposing that foreign biointermediate producers
transfer their biointermediate only to domestic and foreign RIN-
generating renewable fuel producers. This means that foreign
biointermediate producers would not be allowed to transfer their
biointermediate to non-RIN-generating foreign producers. This proposed
limitation serves two purposes. First, RIN-generating renewable fuel
producers are required to provide in EMTS the type and volume of the
biointermediate used and the registration number of the biointermediate
production facility. The existence of foreign biointermediate
producer's information in EMTS allows the EPA to oversee all parties in
the chain of RIN generation. Secondly, RIN-generating renewable fuel
producers have the option to utilize the voluntary RFS QAP. The program
helps ensure that RINs are properly generated through audits of
renewable fuel production conducted by independent third-party
auditors, and makes the RFS program more efficient for buyers of RINs.
Foreign biointermediate producers would be subject to the same
recordkeeping, reporting, registration, and PTD requirements as
domestic biointermediate producers. We seek comment on the proposed
foreign biointermediate producer requirements.
L. Interim Implementation Program
As mentioned above, some of the proposed requirements for
biointermediates involve significant development of EMTS for the
tracking of biointermediates and RINs generated for renewable fuel made
from biointermediates. In addition, significant changes to the CDX
registration system are needed to track the complex network of
associations among biointermediate producers, renewable fuel producers,
and, where relevant, independent third-party auditors. These changes
are necessary to aid in implementing and enforcing the proposed
biointermediate requirements. Additionally, by bringing
biointermediates and biointermediate producers into EMTS and CDX, RFS
regulated parties will be able to take full advantage of the tracking
and transactional functions of the systems instead of having to track
everything outside of the system.
On the other hand, the EPA does not want to delay the introduction
of new renewable fuels that may help further the goals of the RFS
program to significantly increase the production and use of renewable
fuel as a substitute for fossil-based transportation fuel. We
considered proposing a more manual tracking system, but given the
significant investments already made to develop EMTS and the
registration system, plus the benefits to the RFS regulated community
of allowing biointermediates to be tracked with the full capabilities
of EMTS and CDX, we believe it makes sense to require the tracking of
biointermediate producers and biointermediates within the registration
system and EMTS. Given the time needed to modify EMTS and CDX, we are
proposing an interim
[[Page 80841]]
implementation program that would allow the use of biointermediates for
renewable fuel production beginning on the effective date of final
rule, with additional restrictions on the production and use of
biointermediates until full tracking is available through EMTS and the
CDX registration system. As discussed in section III.F.2 of this
preamble, we anticipate that the necessary changes to EMTS will be
completed by January 1, 2018. However, since these modifications to
EMTS and CDX are significant and may take longer than the EPA
anticipates, it is possible that the EPA will be forced to delay
implementation of full biointermediate tracking in EMTS beyond January
1, 2018. Should this occur, the EPA would notify all parties
potentially affected by this decision (both biointermediate producers
and renewable fuel producers) and would continue implementing the
interim requirements until the changes to EMTS are complete.
It should be noted that most of the proposed biointermediate
requirements would go into effect at the start of the program and
remain in place after the interim implementation period, including:
Registration of biointermediate facilities, engineering review as part
of registration, periodic reporting requirements outside of EMTS,\39\
recordkeeping requirements, PTD requirements, and annual attest
requirements. These requirements do not require significant development
of new functionality in EMTS and CDX and can easily be implemented by
the EPA and regulated parties since they are in general consistent with
requirements already in place for renewable fuel producers.
---------------------------------------------------------------------------
\39\ In other EPA fuels programs, parties submit periodic
reports through CDX into a separate reporting database (primarily
DCFUEL). During the interim period, biointermediate producers would
be required to submit their periodic reports in this way. After EMTS
or an EMTS-like system has been developed to track biointermediate
production and transfers, it may no longer be necessary to submit
periodic reports through DCFUEL since that information would be
collected in EMTS or an EMTS-like system.
---------------------------------------------------------------------------
The main difference between the interim implementation program and
the fully implemented program is that for the interim program
biointermediate producers and renewable fuel producers using
biointermediates must have EPA-approved pathway-specific QAPs. After
the interim implementation period, we propose that parties could
continue to voluntarily participate in the RFS QAP. Although the RFS
QAP is otherwise a strictly voluntary program, we believe it is
appropriate to require the participation of biointermediate producers
and renewable fuel producers during the interim implementation period
for two reasons. First, we want to reduce the opportunity for parties
to generate invalid RINs. By allowing additional intermediate parties
to collect and process feedstocks, the complexity of the relationship
between feedstock providers and renewable fuel producers can be
difficult to untangle and may provide opportunity for some parties to
generate invalid RINs. Since RINs generated for renewable fuel produced
from biointermediates would not be fully tracked in EMTS during the
interim implementation period, requiring third-party verification of
the production of biointermediates would provide both the EPA and the
RFS regulated parties an additional increment of assurance that
biointermediates are properly produced.
Second, requiring QAPs for biointermediate producers and renewable
fuel producers during the interim implementation period is appropriate
since this situation differs from the normal renewable fuel production
situation. The use of a biointermediate as a feedstock by a renewable
fuel producer is voluntary (i.e., the renewable fuel producer could use
traditional feedstocks to produce renewable fuels as they have since
the creation of the RFS program), and in this case we are providing new
flexibility for parties to utilize biointermediates that would
otherwise not be allowed under the existing regulations. We believe it
is appropriate to seek the additional assurance regarding RIN validity
that would be provided during the interim period by requiring QAPs for
biointermediate producers and renewable fuel producers using
biointermediates in exchange for the additional flexibility provided by
the expanded program.
We recognize that this required QAP provision may temporarily place
an additional burden on biointermediate producers and renewable fuel
producers using biointermediates. However, we note that several
companies that expressed interest to the EPA in producing or using
biointermediates have mentioned the participation in the RFS QAP as a
way to provide assurance that RINs are properly generated. We
specifically seek comment on whether this interim implementation
approach is appropriate, and whether any of the interim requirements
(such as the mandatory use of a QAP) should be continued after the
expiration of the interim period. We also seek comment on whether
during the interim period there are any other measures that could be
employed to provide the same type of assurance of RIN validity as the
RFS QAP provides. In addition, should the EPA decide to not require the
use of a QAP for all biointermediate producers and renewable fuel
producers using biointermediates after the expiration of the interim
period, we also seek comment on whether there are any specific
situations in which the use of a QAP should continue to be mandatory,
especially where the potential for fraud to occur may be more likely
(e.g., biointermediate production facilities that produce both a
renewable fuel and a biointermediate).
IV. Standards for Ethanol Flex Fuel
This section of the preamble discusses the EPA's proposed approach
for EFF. An overview of the current regulatory provisions that apply to
EFF is provided in section IV.A and an overview of the key proposed
requirements that would apply to producers of EFF is provided in
section IV.B. The proposed standards that would apply to EFF, EFF
blendstocks, and EFF additives are discussed in section IV.C. The three
different certification options for producers of EFF are discussed in
section IV.D and the requirements for producers of E15 at blender pumps
is discussed in section IV.E. The proposed compliance provisions that
would apply to producers of EFF, including the registration,
recordkeeping, reporting, PTD, sampling and testing, attest
engagements, compliance dates, and EFF quality survey program, are
discussed in section IV.F. An alternative approach that would formalize
the current approved practices for producing EFF is discussed in
section IV.G. A discussion of the EPA's statutory authority for these
proposed requirements is provided in section IV.H.
A. Current EFF Regulatory Landscape
FFVs are designed to operate on E0, E85, or any level of ethanol in
between, and, in order to maintain emission performance, these vehicles
need the fuel to meet certain quality specifications. Our various
standards for gasoline apply to any fuel sold for use in motor
vehicles, which is commonly or commercially known or sold as
``gasoline.'' \40\ The Fuel and Fuel Additive (F&FA) program requires
that fuels the EPA has ``designated'' as motor vehicle fuels must be
registered with the EPA prior to being introduced into commerce.\41\ To
date, the EPA has designated gasoline and highway diesel fuel as motor
vehicle fuels for the purposes of the F&FA program.
[[Page 80842]]
Producers of gasoline and highway diesel fuel must comply with the F&FA
program's requirements before introducing gasoline or highway diesel
fuel into commerce.\42\ Currently, the EPA has registered gasoline that
contains up to 15 volume percent ethanol (E15).\43\ Additionally, the
introduction into commerce of fuels and fuel additives that are not
substantially similar to any fuel or fuel additive used in vehicle or
engine emissions certification is prohibited, unless granted a waiver
pursuant to CAA section 211(f)(4). Thus, registered gasoline is well
controlled under our current regulations.
---------------------------------------------------------------------------
\40\ See 40 CFR 79.32(a).
\41\ See 40 CFR 79.4(a)(1).
\42\ The requirements under the F&FA program are contained in 40
CFR part 79.
\43\ ``Conventional gasoline vehicle'' refers to a conventional
vehicle designed to operate using gasoline. Conventional vehicles
had historically been designed to operate on ethanol-gasoline blends
up to 10 volume percent ethanol. In 2011, the EPA issued a partial
waiver to allow 15 volume percent ethanol to be used in 2001 and
later light duty motor vehicles. See 76 FR 4662 (January 26, 2011).
---------------------------------------------------------------------------
Gasoline-ethanol blends greater than 15 volume percent ethanol and
less than 51 volume percent ethanol are relatively new to the
marketplace. Fuels composed of at least 50 volume percent clear
gasoline are included in the gasoline family under the F&FA
program.\44\ Hence, E16-50 blends are currently subject to all of the
requirements that apply to gasoline, despite the fact that such blends
may not be used in conventional gasoline vehicles. Ethanol blends that
contain from 51 to 83 volume percent ethanol for use in FFVs have been
sold for a number of years under the trade name ``E85.'' \45\ Such E51-
83 blends belong to the ethanol family in the F&FA program, and are not
subject to our gasoline regulations.
---------------------------------------------------------------------------
\44\ See 40 CFR 79.56(e)(1)(i).
\45\ Retailers may be moving away from the E85 trade name for
E51-83 blends in part because of the wide variability in ethanol
content encompassed. The Federal Trade Commission (FTC) recently
finalized labeling requirements for higher level ethanol blends
including E51-83. See section IV.F.8.a of this preamble for a
discussion of the labeling provisions for higher-level ethanol
blends.
---------------------------------------------------------------------------
The EPA has two sets of gasoline quality requirements: One set
applies to conventional gasoline (CG) areas and the other to
reformulated gasoline (RFG) areas. The RFG requirements apply in areas
with the greatest air quality need and are based on compliance with an
emissions model that uses a number of gasoline properties to evaluate
emissions control performance.\46\ Since the RFG program was finalized,
changes to the EPA gasoline sulfur and benzene control requirements
have largely supplanted the provisions in the complex model (a fuel
component model used to determine compliance with emission performance
standards) so that the RFG program is essentially a volatility control
program where gasoline RVP is typically limited to about 7.0 pounds per
square inch (psi).\47\ The Tier 3 gasoline sulfur program requires that
all gasoline (RFG and conventional) produced and imported must meet a
10 ppm annual average sulfur standard beginning January 1, 2017.\48\
The gasoline benzene program requires that all gasoline meet a 0.62
volume percent annual average benzene standard.\49\ Conventional
gasoline is subject to either a federal 7.8 psi RVP maximum or a 9.0
psi RVP maximum depending on the climate conditions and air quality
need of a given region in addition to the gasoline sulfur and benzene
requirements. Some states have also adopted more stringent RVP
requirements for gasoline in a federally-approved state implementation
plan (SIP) where additional volatility control is needed to address
local air quality problems. A statutory 1 psi RVP waiver applies to E10
in many CG areas.\50\
---------------------------------------------------------------------------
\46\ The requirements under the RFG complex emissions model are
contained in 40 CFR 80.45.
\47\ See the memorandum titled, ``Volatility of Reformulated
Gasoline,'' available in the docket for this action.
\48\ A 30 ppm average sulfur standard currently applies to all
gasoline under the Tier 2 gasoline sulfur program (40 CFR 80.195).
Under the final Tier 3 program, approved small refiners and small
volume refineries may continue to produce gasoline meeting the Tier
2 30 ppm sulfur standard through December 31, 2019 (40 CFR
80.1603(a)). An 80 ppm refinery-gate per-gallon sulfur cap applies
under both the Tier 2 and Tier 3 gasoline programs. A 95 ppm per-
gallon sulfur cap applies at all facilities downstream of the
refinery.
\49\ See 40 CFR 80.1230.
\50\ States can request that the EPA not apply the 1 psi RVP
waiver to E10. The 1 psi RVP waiver for E10 does not apply in RFG
areas. See CAA sections 211(h)(4) and (h)(5).
---------------------------------------------------------------------------
Under existing EPA regulations, a gasoline refiner must certify
that the gasoline it produces meets the required emission performance
standards by testing each batch.\51\ For CG, the refiner must test each
batch to demonstrate compliance with sulfur, benzene, and RVP
requirements. For RFG, refiners must also sample and test for a broad
range of fuel properties, but the RFG emission performance standards
have largely been supplanted by other EPA fuel programs such as the
gasoline sulfur and benzene programs, and the RVP largely determine
compliance.\52\ All gasoline is also required to be composed solely of
CHONS to prevent potential fuel contaminants from disabling vehicle
emissions control catalysts. The EPA has not required CHONS testing to
certify compliance with EPA gasoline quality requirements because we
concluded that the processes used to produce gasoline remove non-CHONS
elements. Refiners produce gasoline by processing crude oil and to a
more limited extent by blending in blendstocks such as butane into
previously-certified gasoline at refined product terminals. Refiners
that produce gasoline are required to register with the EPA, submit
annual reports, designate where the gasoline they produce may be used
(e.g., RFG, CG 7.8 RVP areas, or CG 9.0 RVP areas) on product transfer
documents (PTDs), and in the case of RFG, participate in a downstream
fuel quality survey at fuel retail facilities.
---------------------------------------------------------------------------
\51\ The definition of a refinery and a refiner is found in 40
CFR 80.2(h) and (i), respectively.
\52\ RFG refiners can still take advantage of other complex
model fuel parameters to demonstrate compliance with the RFG
program.
---------------------------------------------------------------------------
E16-50 gasoline blends are currently produced for use in FFVs using
blender pumps at fuel retailer facilities. The typical current practice
is that a blender pump mixes gasoline (E0 or E10) and E85 parent blends
at different ratios to produce various E16-50 blends. Such E16-50
blender pumps are a recent development.\53\ Because the EPA currently
considers E16-50 to be gasoline and blender pump operators mix E85 (a
non-gasoline) with gasoline to produce E16-50, blender pump operators
are gasoline refiners under our existing regulations.
---------------------------------------------------------------------------
\53\ Blender pumps that produce intermediate octane grades by
mixing premium and regular gasolines have existed for decades. The
EPA considers this to be the commingling of two compliant gasolines
since the EPA currently has no in-use gasoline octane standards.
---------------------------------------------------------------------------
Similarly, E15 is also primarily produced at blender pumps. Fuel
retailers that make E15 at blender pumps using E85 as a parent blend
are currently subject to all of the requirements that apply to refiners
producing gasoline from crude oil, including registration, reporting,
and per-batch testing. This is due to the fact that such blender pump
operators are mixing non-gasoline (E85) with gasoline (E0 or E10) to
produce a new finished gasoline.
The only current fuel quality requirement that applies to E85 is
that it must be substantially similar (sub-sim) to the fuel used for
FFV certification testing. To assure compliance with the sub-sim
requirement, the EPA has required that E85 blenders can use only
certified gasoline, BOBs, and DFE as E85 blendstocks, consistent with
practices used in producing such blends for vehicle certification.
Historically, this has not been an issue, as these were the
[[Page 80843]]
only blendstocks used when E85 was produced at refined product
terminals. However, we understand that ethanol producers may also be
producing E85 by blending DFE with hydrocarbon used as an ethanol
denaturant. The Alcohol Tobacco Tax and Trade Bureau (TTB) specifies a
range of hydrocarbons that can be used as an ethanol denaturant,
including gasoline and natural gasoline.\54\
---------------------------------------------------------------------------
\54\ The TTB requirements for ethanol denaturants are contained
in 27 CFR part 21. Natural gasoline is a byproduct of natural gas
production, as well as a gasoline blendstock produced at crude oil
refineries.
---------------------------------------------------------------------------
B. Key Requirements Proposed for EFF and Producers of Gasoline at
Blender Pumps
The proposed standards for EFF in this proposal will address the
public health and welfare effects of EFF and its impact on emissions
control devices on FFVs and FFV engines while providing new
flexibility. The proposed standards are patterned on the EPA's Federal
gasoline quality regulations and are designed to provide an equivalent
level of emissions control performance when EFF is used in FFVs
compared to the use of gasoline in conventional gasoline vehicles. As
discussed above, the current regulations, as they relate to the
production of E10, E15, and E16-50 at retail blender pumps include
blender pump operators as subject to the requirements applicable to a
gasoline refiner. These requirements include: Compliance with the
health effects testing for the blends produced under the F&FA program;
per-batch testing to demonstrate compliance with the sulfur, benzene,
and RVP standards for gasoline; and registration, reporting, and
recordkeeping requirements associated with demonstrating compliance.
In the Tier 3 proposal, we requested comment on several approaches
for specifying standards that apply to E16-50 blends.\55\ Under one
approach, we sought comment on the need to have E16-50 (and any other
fuel blend that is at least 50 volume percent gasoline) comply with the
applicable gasoline requirements under our regulations and the need for
regulatory amendments to clarify that these requirements apply. This
approach would likely make the production of such blends at blender
pumps impractical since blender pump-refiners would be subject to all
of the requirements applicable to gasoline refiners, including
registration under the F&FA program and per-batch testing. Under
another approach, we sought comment on setting new standards that would
apply to all EFF blends, including E16-50.\56\ This approach would be
consistent with the current limitation that E16-83 may only be used in
FFVs and would facilitate the production of E16-50 at blender pumps.
---------------------------------------------------------------------------
\55\ See 78 FR 29937-29938 (May 21, 2013).
\56\ Under this proposed approach, EFF would be defined as a
gasoline-ethanol blend that has an ethanol content greater than that
covered under a waiver obtained from the Administrator pursuant to
the requirements of CAA section 211(f)(4) to allow its use in
conventional gasoline vehicles, contains no more than 83 volume
percent ethanol, and is suitable for use in FFVs or flex-fuel
engines.
---------------------------------------------------------------------------
A number of comments on the Tier 3 proposal were in support of the
EPA setting new standards for all EFF used in FFVs that would provide
an equivalent level of protection to gasoline used in conventional
gasoline vehicles and allow E16-50 to be made at blender pumps.
However, the American Petroleum Institute (API) and the American Fuel
and Petrochemical Manufacturers (AFPM) stated that the EPA should
continue to treat E16-50 as gasoline to ensure an appropriate level of
protection regarding the environmental quality of these blends.
In this action, we are proposing to adopt provisions to control the
quality of all EFF blends, including E16-50. This proposal would make
minor amendments to the regulations so that gasoline-ethanol blends of
E50 and below that may not be used in conventional gasoline vehicles
(currently E16-50) \57\ are treated in a similar way to other EFF
blends that may only be used in FFVs (e.g., E51-83). Doing so would
align our regulations with E16-50 use restrictions by no longer
treating E16-50 as gasoline when it cannot legally be used in a
conventional gasoline vehicle. We believe that the quality of EFF can
be best assured by regulating in the same manner all gasoline-ethanol
blends that can only be used in FFVs. If in the future, if a fuel
manufacturer were to demonstrate that an ethanol blend greater than E15
is sub-sim to gasoline, or obtain a waiver under CAA section 211(f) to
allow its use in conventional gasoline vehicles and engines, such a
gasoline-ethanol blend would become subject to all of the requirements
that apply to gasoline, including registration under the F&FA program.
---------------------------------------------------------------------------
\57\ Should an ethanol blend above E15 be granted a waiver in
the future to allow its use in conventional gasoline vehicles, such
a blend (e.g., E20) would be grouped with other blends that can be
used in conventional gasoline vehicles (e.g., E10 and E15), and
would subject to the gasoline quality requirements rather than those
for EFF.
---------------------------------------------------------------------------
We are also proposing fuel quality requirements for all EFF that
would provide an equivalent level of emissions control when used in
FFVs compared to the use of gasoline in conventional gasoline vehicles.
As discussed in section IV.C of this preamble, the proposed sulfur and
benzene standards and elemental composition requirements for EFF
directly parallel those for gasoline since levels of these fuel
parameters have the same impact on the emissions performance for FFV
and conventional gasoline vehicles. The proposed RVP requirements for
EFF recognize the greater capability of the evaporative emissions
control equipment on FFVs compared to conventional gasoline vehicles.
As a result of more stringent vehicle certification testing
requirements, FFVs can deliver the same level of evaporative emissions
control as conventional gasoline vehicles when operated on a fuel that
is 1 psi higher than gasoline. We are proposing RVP standards for EFF
produced upstream of blender pumps that parallel those for gasoline
without the 1 psi waiver for E10 that applies in certain areas. When
blended at retail, however, the RVP of the EFF would be expected to
rise. The proposed RVP standards for EFF produced upstream of retail
and existing RVP standards for gasoline would ensure that EFF produced
at blender pumps using EFF and gasoline is expected to be less than 1
psi higher. We believe that the proposed standards for the EFF and
gasoline parent blends used at blender pumps would ensure an equivalent
level of evaporative emissions control for FFVs operated on EFF to that
for conventional gasoline vehicles operated on gasoline (without the 1
psi waiver for E10) without necessitating the implementation of
specific RVP standards for EFF produced at blender pumps.\58\
---------------------------------------------------------------------------
\58\ For example: In conventional gasoline (CG) areas where a
9.0 psi RVP standard applies to gasoline, EFF produced upstream of
the blender pump would also be subject to a 9.0 psi RVP standard.
This proposed RVP standard for EFF and other proposed requirements
for blender pump operators would ensure that the RVP of EFF made at
blender pumps would expected to be less than 10 psi in 9.0 psi CG
areas.
---------------------------------------------------------------------------
The proposed compliance provisions contain two primary elements:
(1) Recordkeeping and reporting; and (2) In-use verification through a
third-party survey.\59\ We believe that in-use verification is critical
feature in the proposed EFF compliance provisions as a check against
potential fraud and abuse. This proposal includes streamlined
compliance provisions for producers of E16-50 EFF blends and E15
gasoline at blender pumps based on the use of specified parent blends
and
[[Page 80844]]
participation in a fuel quality survey.\60\ The proposed compliance
provisions would represent a substantial reduction in the burden of
compliance compared to the current requirements that apply to these
fuels while continuing to ensure an equivalent level of emissions
control performance to that under the current requirements.
---------------------------------------------------------------------------
\59\ The proposed EFF quality survey requirements are discussed
in section IV.F.9 of this preamble.
\60\ E15 blender pump-refiners are currently already required to
participate in an E15 quality survey pursuant to 40 CFR 80.1502.
---------------------------------------------------------------------------
Since the EPA has not yet designated fuels other than gasoline and
highway diesel fuel as motor vehicle fuel, fuels such as E85 (E51-83)
are not yet subject to the EPA's F&FA regulations. By regulating all
E16-83 ethanol blends together in a similar fashion and clarifying that
E16-50 blends are not required to meet the requirements for gasoline
under this proposal, we are resolving the ambiguity of E16-50 blends
with respect to their treatment under both our F&FA program and in-use
fuel quality regulations. We are exempting E16-50 blends that are used
in FFVs from the designation for gasoline and we are not designating
EFF blends (E16-83) as motor vehicle fuels under the F&FA program in
this proposal.\61\ The EFF blends would only become subject to F&FA
regulations at such point in the future when the EPA takes action to
designate them as motor vehicle fuels. Under this proposal, motor-
vehicle gasoline-ethanol blends that have been registered by the EPA
for use in conventional gasoline vehicles such as E15 would continue to
be subject to our existing F&FA regulations. If in the future, a blend
such as E20 that would be subject to the proposed requirements for EFF
under this proposal were to be granted a waiver under CAA section
211(f) to allow its use in conventional gasoline vehicles, it would no
longer be subject to the requirements for EFF and would become subject
to all of the requirements applicable to gasoline, including
registration under the F&FA program.
---------------------------------------------------------------------------
\61\ See the proposed revisions to 40 CFR 70.51 regarding the
requirements for motor vehicle gasoline under the F&FA program.
---------------------------------------------------------------------------
The only current EPA fuel quality requirement for E85 is that it
must be substantially similar (sub-sim) to vehicle certification
fuel.\62\ E85 has historically been produced by blending certified
gasoline or BOBs with DFE. When E85 is made solely from EPA-compliant
gasoline, BOBs, and DFE, the EPA can be assured that the fuel is in
compliance with the requirement that in-use E85 must be sub-sim to FFV
certification fuel. Under this circumstance, the EPA is also assured
that E85 fuel quality meets the same sulfur, benzene, and RVP
requirements that apply to gasoline and is suitable to maintain the in-
use emissions performance of FFVs.
---------------------------------------------------------------------------
\62\ CAA section 211(f) requires that all fuels and fuel
additives introduced into commerce must be substantially similar to
the fuel used to certify vehicles. Vehicle certification fuel must
meet the EPA specifications for use during vehicle emissions testing
to demonstrate compliance with vehicle emissions standards.
---------------------------------------------------------------------------
A number of stakeholders have requested that the EPA promulgate
regulations to allow the use of natural gasoline as a blendstock to
produce EFF due to its lower cost compared to gasoline. Natural
gasoline is an inexpensive and increasingly plentiful byproduct of the
ongoing expansion in domestic natural gas and crude oil production, and
its use to make EFF would decrease EFF production costs. If this
savings were passed along to consumers, it may help increase demand for
EFF. Due to the relative high volatility of natural gasoline and the
low volatility of ethanol, the use of natural gasoline to make E85
could also facilitate the manufacture of E85 in the upper end of its
allowable range in ethanol content (i.e., 70 to 83 volume percent
ethanol) while maintaining compliance with ASTM minimum volatility
specifications.\63\ Hence, the use of natural gasoline as an EFF
blendstock could increase not only the demand for EFF in FFVs, but also
the use of EFF with higher-level ethanol concentrations.
---------------------------------------------------------------------------
\63\ ASTM D5798-14 sets minimum volatility specifications for
E85 to ensure startability and drivability. The low volatility of
ethanol makes it difficult for high level ethanol blends to meet the
minimum RVP specification using gasoline and BOBs. ASTM allows the
ethanol concentration of E85 to be as low as 51 volume percent to
allow sufficient hydrocarbon blendstocks to be used to facilitate
compliance with the minimum volatility specifications.
---------------------------------------------------------------------------
The current industry consensus-based controls on the quality of
natural gasoline for use as an EFF blendstock \64\ are not adequate to
ensure the emissions control performance of FFVs.\65\ Hence, there is
currently no way that E85 blenders can use natural gasoline as a
blendstock without potentially running afoul of the current sub-sim
requirement for E85. Natural gasoline can have high sulfur and benzene
content, potentially resulting in high levels of these harmful
components in EFF. We believe that if natural gasoline used to produce
EFF contains chemical elements other than CHONS (e.g., metals and
salts), either naturally or through addition, it could also quickly
destroy the effectiveness of FFV emissions control catalysts, which
could lead to a substantial increase in emissions from FFVs. Although
the high RVP of natural gasoline can be beneficial in producing EFF
that meets minimum volatility requirements, the use of too much natural
gasoline as an EFF blendstock can also result in EFF that exceeds the
maximum RVP of fuels suitable for use in FFVs, resulting in diminished
evaporative emissions control performance of FFVs. Thus, significant
concern exists about the potential increase in FFV emissions that might
result from the use of natural gasoline of uncontrolled quality as an
EFF blendstock. Therefore, we believe that it is important to hold EFF
to standards that provide an equivalent level of environmental
protection as the current standards for gasoline.
---------------------------------------------------------------------------
\64\ ASTM D8011-16, ``Standard Specification for Natural
Gasoline as a Blendstock in Ethanol Fuel Blends or as a Denaturant
for Fuel Ethanol.''
\65\ See section IV.C.7 in this proposal for a discussion of the
proposed controls on natural gasoline EFF blendstock and the current
industry consensus controls on natural gasoline used as an E51-83
blendstock.
---------------------------------------------------------------------------
This proposal includes standards and compliance provisions that
would allow the use of natural gasoline as a blendstock to produce EFF
while providing an equivalent level of environmental performance to
that for gasoline. Under this proposal, there would be two classes of
natural gasoline that could be used to produce EFF: Certified natural
gasoline EFF blendstock and uncertified natural gasoline EFF
blendstock. Certified natural gasoline EFF blendstock would be
certified by its producer as being compliant with standards for sulfur,
benzene, and CHONS.\66\ EFF producers that use certified natural
gasoline EFF blendstock would have more streamlined requirements
compared to producers that use uncertified natural gasoline EFF
blendstock with respect to demonstrating compliance with the proposed
sulfur, benzene, and CHONS standards. EFF producers that use
uncertified natural gasoline EFF blendstock would have more flexibility
in the natural gasoline that could be used as an EFF blendstock but
would have additional requirements to demonstrate compliance with the
proposed sulfur, benzene, and CHONS standards.
---------------------------------------------------------------------------
\66\ Maximum T90 distillation point, final boiling point, and
RVP standards would also apply.
---------------------------------------------------------------------------
The proposed requirements are designed to assure that EFF produced
with natural gasoline will meet the sub-sim requirements, protect
emissions control systems on FFVs, and assure that FFVs that use EFF
achieve the same or better emissions control performance as
conventional gasoline vehicles. Alternatively, we are requesting
[[Page 80845]]
comment on formalizing the current approved practice that would require
EFF to be produced only with EPA-compliant gasoline, BOBs, and DFE.
This would be a much simpler program to implement and enforce, but
would preclude the use of natural gasoline as an EFF blendstock.
This proposal includes three options that EFF producers could use
to demonstrate compliance with the proposed standards, as discussed in
the following sections. The EFF full-refiner and EFF bulk blender-
refiner certification options are intended for EFF producers upstream
of retail or wholesale purchaser consumer (WPC) facilities (e.g.,
petroleum terminals or ethanol plants).\67\ The EFF blender pump-
refiner option is intended for producers of EFF at retail or WPC
facilities using a blender pump. This proposal also includes
streamlined provisions for producers of gasoline at blender pumps. We
are soliciting comments on all aspects of this proposal, as well as
alternative requirements that would address the public health and
welfare effects of EFF and its impacts on emissions control devices.
---------------------------------------------------------------------------
\67\ Bulk blenders create finished fuel by blending different
fuel components just prior to when the fuel ``breaks bulk'' at
terminals as is dispensed into a tank truck for delivery to fuel
retail.
---------------------------------------------------------------------------
This proposal would provide substantial additional flexibility for
EFF producers that accommodate current market realities while ensuring
that EFF used in FFVs is of sufficient quality to control pollution.
The regulatory burden for the EFF producers who choose to take
advantage of these flexibilities would be modest in comparison to the
economic benefit realized by taking advantage of the flexibility, and
largely consistent with current industry practices.\68\ In addition,
the increased flexibility to produce EFF that would be provided by this
rule, could result in the increased use of ethanol in motor fuels,
thereby furthering the goals for increased use of renewable fuels under
the RFS program. By facilitating the use of plentiful and inexpensive
domestic natural gasoline in EFF, this rule, when finalized, could also
result in reduced fuel costs to consumers and improved energy security.
Absent the amendments contained in this proposal, the EPA would have to
rely on the existing regulatory requirements to prevent a potentially
substantial increase in vehicle emissions from the use of EFF that
failed to meet the fuel quality standards necessary for vehicles to
maintain proper emission performance. Doing so would not provide as
robust and transparent a level of environmental and emissions control
protection as the requirements in this proposal and could be disruptive
to the production of higher-level ethanol blends. In addition to
ensuring the environmental performance of EFF used in FFVs, the
provisions in this proposal could prevent added costs to FFV owners who
might otherwise face premature repairs or replacement of emissions
control equipment (e.g., vehicle catalyst) from the use of poor quality
fuel.
---------------------------------------------------------------------------
\68\ Additional registration, testing, recordkeeping, and
reporting requirements would apply to certain parties.
---------------------------------------------------------------------------
1. EFF Full-Refiner Option
Under the first option for producing EFF (the ``EFF full-refiner
option''), uncertified natural gasoline EFF blendstock could be used to
produce EFF provided that each batch is sampled and tested to
demonstrate compliance with sulfur, benzene, and RVP standards similar
to the requirements for a gasoline refiner. EFF full-refiners could
also use certified gasoline, BOBs, certified natural gasoline EFF
blendstock, DFE, and undenatured ethanol as EFF blendstocks.\69\
---------------------------------------------------------------------------
\69\ In order to use undenatured ethanol as a blendstock, the
EFF full-refiner would be required to be an ethanol producer.
---------------------------------------------------------------------------
Under the EFF full-refiner option, uncertified natural gasoline EFF
blendstock of relatively higher sulfur and benzene content compared to
certified natural gasoline EFF blendstock could be used to produce EFF
as long as the potential impact on the sulfur and benzene levels in the
finished EFF was mitigated by the use of lower sulfur/benzene DFE or
undenatured ethanol. Ethanol producers have stated that allowing for
such ``ethanol dilution'' would be important to broaden the potential
pool of natural gasoline that could be used as EFF blendstock. Similar
to the requirements for gasoline refiners, we are proposing that EFF
full-refiners would be subject to a 0.62 volume percent annual average
benzene standard, a 10 ppm annual average sulfur standard, an 80 ppm
refinery gate per-gallon sulfur cap for the EFF they produce, and that
the EFF they produce must be comprised solely of CHONS. Similar to the
sulfur and benzene standards for gasoline refiners, compliance with the
average sulfur and benzene standards for EFF produced or imported under
the full-refiner option would be evaluated annually on an EFF refinery-
by-refinery basis. However, we are not proposing to include EFF sulfur
or benzene credit banking and trading (BT) provisions because we do not
believe that such provisions are needed to mitigate the burden of
compliance as was the case under the EPA's gasoline sulfur and benzene
programs.
We are proposing that EFF produced by EFF full-refiners and EFF
bulk blender-refiners and EFF sold at retail without further blending
at a blender pump would be subject to a 9.0 psi RVP standard in CG
areas where gasoline is subject to a 9.0 psi RVP standard, a 7.8 psi
RVP standard in conventional gasoline areas where gasoline is subject
to a 7.8 psi RVP standard, and a 7.0 psi RVP standard in reformulated
gasoline (RFG) areas.\70\ Alternatively, for all conventional gasoline
areas we are also requesting comment on setting a uniform 9.0 psi RVP
standard for EFF produced by full-refiners and EFF bulk blender-
refiners. As discussed in section IV.C.3 of this preamble, these
proposed EFF RVP requirements are necessary to ensure that the RVP of
EFF blends produced at blender pumps does not exceed the evaporative
emissions control capabilities of FFVs.\71\
---------------------------------------------------------------------------
\70\ Requiring EFF to meet a 7.0 RVP standard in RFG areas
should provide the same level of evaporative emissions control as
that provided by compliance with the RFG complex emissions model.
\71\ These proposed RVP standards for EFF produced upstream of
blender pumps and other proposed requirements for blender pump-
refiners would ensure that the RVP of EFF made at blender pumps is
expected to be less than 10 psi in 9 psi CG areas, less than 8.8 psi
in 7.8 CG areas, and less than 8.0 psi in RFG areas.
---------------------------------------------------------------------------
We expect that producers of EFF would only take on the additional
compliance burden under the EFF full-refiner option to the extent that
the proposed flexibility to use uncertified natural gasoline EFF
blendstock would be economically advantageous. Producers that do not
wish to take on the additional burden could use the streamlined
compliance provisions under the EFF bulk blender-refiner option. We
anticipate that some ethanol producers and perhaps some crude oil
refineries may use the EFF full-refiner option.
Ethanol producers have stated that the proposed per-batch testing
requirement is not consistent with the current practice of producing
E85 by in-line blending as the fuel is dispensed into a tank truck for
delivery downstream. Therefore, we are also requesting comment on
alternatives to in-tank testing of each batch of finished EFF to
streamline the compliance demonstration process. To demonstrate that
EFF made with natural gasoline contains no non-CHONS elements, EFF
full-refiners would be required to maintain records to document that
the natural gasoline was sourced from a
[[Page 80846]]
natural gas processing facility or petroleum refinery. EFF full-
refiners would be subject to registration, recordkeeping, reporting,
and PTD requirements similar to those for a gasoline refiner. We are
also requesting comment on whether EFF full-refiners should be required
to participate in the proposed EFF quality survey.
2. EFF Bulk Blender-Refiner Option
The EFF full-refiner option would provide parties with the most
blending flexibility, in exchange for taking on the added testing
burden to demonstrate compliance. We anticipate that the majority of
EFF would continue to be made by bulk blenders at petroleum terminals
and ethanol plants where the per-batch testing requirement under the
full-refiner option may not be practicable. Therefore, this proposal
contains a second option for streamlined production of EFF (the ``EFF
bulk blender-refiner option'') for producers that only use blend
components that have been certified upstream as meeting the applicable
sulfur, benzene, and CHONS requirements. The standards and compliance
demonstration requirements under this option are similar to those that
apply to oxygenate blenders under the EPA's gasoline quality
requirements.\72\ EFF bulk blender-refiners could use only certified
natural gasoline EFF blendstock as well as certified gasoline, BOBs,
and DFE that have been certified upstream for compliance with sulfur,
benzene, and CHONS specifications.\73\ We anticipate that all terminals
and most ethanol productions plants would use the EFF bulk blender-
refiner option to demonstrate that the EFF they produce is in
compliance with the proposed requirements.\74\ Because of the reduced
ability for EFF produced by EFF bulk blender-refiners to be high in
sulfur, benzene, or non-CHONS, there would be reduced requirements for
EFF bulk blender-refiners to demonstrate compliance with the proposed
sulfur, benzene, and CHONS requirements. The proposed 10 ppm annual
average sulfur standard, 0.62 volume percent annual average benzene
standard, and CHONS requirement would still apply to EFF bulk blender-
refiners. However, EFF bulk blender-refiners could demonstrate
compliance with these standards and would be excused from most if not
all of the per-batch sampling and testing requirements that apply under
the EFF full-refiner option by maintaining PTDs to demonstrate that
they used only approved EFF blendstocks and by participating in the
proposed EFF quality survey. In parallel with the EPA's gasoline sulfur
program, a 95 ppm per-gallon sulfur cap would also apply to EFF bulk
blender-refiners.
---------------------------------------------------------------------------
\72\ In producing finished gasoline, gasoline oxygenate blenders
must use oxygenates and BOBs that have been certified by their
respective producers as being compliant with applicable sulfur and
benzene standards, and CHONS requirements. The benzene content and
CHONS compliance of the finished gasoline produced by oxygenate
blenders is governed by the blend components used. Hence, oxygenate
blenders are deemed to be in compliance with gasoline benzene and
CHONS requirements if they use only approved blends components.
There is the potential for sulfur addition from contamination during
distribution and the use of sulfur containing additives downstream
of the gasoline refinery. Therefore, gasoline oxygenate blenders and
other parties in the downstream gasoline distribution system are
subject to a downstream sulfur standard that accommodates this
potential increase in fuel sulfur downstream of the refinery during
distribution. The BOBs used by gasoline oxygenate blenders are
formulated to assure compliance with the applicable RVP requirements
when blended at the approved blend ratio with ethanol. Hence,
oxygenate blenders are not required to conduct sampling and testing
to demonstrate compliance with gasoline RVP requirements if they are
using only the approved blend components.
\73\ Ethanol producers could also use undenatured ethanol as an
EFF blendstock.
\74\ Crude oil refineries have a facility that acts as a
terminal for the purposes of distributing finished fuels. We expect
that most such crude oil refiners could also use the EFF bulk
blender-refiner option for the EFF they produce.
---------------------------------------------------------------------------
We are also proposing that EFF bulk blender-refiners would be
subject to the same RVP specifications proposed for EFF full-refiners.
If EFF bulk blender-refiners limited the blendstocks they use to DFE
and certified gasoline or BOBs that do not take advantage of the 1 psi
waiver for E10, the EFF RVP blending characteristics would ensure
compliance with the proposed RVP specifications for EFF. Therefore, we
are proposing that EFF bulk blender-refiners that use only DFE and
certified gasoline or BOBs that do not take advantage of the 1 psi RVP
waiver for E10 could demonstrate compliance with the proposed RVP
requirements for EFF simply by keeping records of the blendstocks they
used and participating in the proposed EFF quality survey. Thus, such
EFF bulk blender-refiners would not be required to conduct RVP testing
on the EFF they produce.
The relatively higher volatility of certified gasoline or BOBs that
take advantage of the 1 psi waiver for E10, and/or certified natural
gasoline EFF blendstock means that EFF blends made using these
blendstocks could potentially result in the finished EFF exceeding the
proposed RVP specifications. Therefore, when EFF bulk blender-refiners
use certified gasoline or BOBs that take advantage of the 1 psi waiver
for E10, and/or certified natural gasoline EFF blendstock, there would
be additional requirements to demonstrate compliance with the proposed
RVP standards for EFF. EFF bulk blender-refiners that use these
blendstocks could demonstrate compliance with the proposed RVP
requirements through per-batch testing. However, since RVP testing of
the small tank truck-sized batches of EFF that we expect EFF bulk
blender-refiners would produce may be impractical, we are proposing
that an RVP compliance tool could be used in lieu of per-batch testing
to demonstrate compliance with the proposed RVP requirements by EFF
bulk blender-refiners that use gasoline or BOBs that take advantage of
the 1 psi waiver and/or certified natural gasoline EFF blendstock to
produce EFF.\75\ The methods that EFF bulk blender-refiners may use to
demonstrate compliance with the proposed RVP requirements for EFF are
summarized in Table IV.B.2-1 below.
---------------------------------------------------------------------------
\75\ The RVP compliance tool would use information on the RVP of
the blendstocks used and the blend ratios to produce EFF to
calculate the RVP of the finished blend. See section IV.F.3 of this
preamble.
Table IV.B.2-1--Methods Available to EFF Bulk Blender-Refiners To Demonstrate Compliance With the Proposed EFF
Requirements
----------------------------------------------------------------------------------------------------------------
Compliance demonstration method
Hydrocarbon blendstocks -------------------------------------------------------------------------
Blendstock PTDs Compliance tool Test
----------------------------------------------------------------------------------------------------------------
--Gasoline & BOBs that do not take Yes.................... Yes.................... Yes.
advantage of the E10 1 psi waiver.
--Gasoline & BOBs that do take No..................... Yes.................... Yes.
advantage of the E10 1 psi RVP waiver.
--Certified natural gasoline EFF
blendstock.
----------------------------------------------------------------------------------------------------------------
[[Page 80847]]
We are also proposing registration, recordkeeping, reporting, and
PTD language requirements for EFF bulk blender-refiners. To ensure
compliance, the producers of certified natural gasoline used by EFF
bulk blender-refiners would be required to demonstrate that their
product is compliant with EPA fuel quality requirements. EFF bulk
blender-refiners would rely on the PTDs from the producers of the
blendstocks they use to produce EFF to demonstrate compliance with the
proposed sulfur, benzene, and CHONS requirements, rather than per-batch
testing. We are proposing new registration, reporting, sampling,
testing, and PTD requirements for producers of certified natural
gasoline EFF blendstock to demonstrate that their product meets the
following proposed standards: 10 ppm per-gallon sulfur cap, 0.62 volume
percent benzene cap, 275 [deg]F T90 distillation cap, 375 [deg]F final
boiling point cap, and 15 psi RVP cap. These sulfur and benzene
standards for certified natural gasoline EFF blendstock are necessary
to ensure that finished EFF has comparable levels of these fuel
parameters to the levels present in gasoline when the potential
dilution of these fuel parameters by ethanol cannot be evaluated as
under the EFF full-refiner option. The T90 and final boiling point
specifications would ensure that an uncharacteristic amount of higher
boiling fraction hydrocarbons are not present. The RVP of EFF made with
certified natural gasoline EFF blendstock would be controlled by the
maximum RVP specifications for EFF discussed above. The proposed 15 psi
RVP cap for certified natural gasoline EFF blendstock would help to
ensure that an inappropriately high concentration of higher boiling
compounds that are not typically native to natural gasoline are not
present in significant quantities.
It is possible that a significant volume of natural gasoline that
meets the proposed specifications for certified natural gasoline EFF
blendstock without further processing could be segregated from the
broader natural gasoline pool. Although there would be additional costs
in segregating such naturally ``sweet'' natural gasoline from the
general natural gasoline pool for use as certified natural gasoline EFF
blendstock, such segregation costs would likely be lower than the
additional processing costs to reduce the sulfur and benzene content of
natural gasoline from the general natural gasoline pool to meet the
proposed specifications. Therefore, segregation of such naturally sweet
natural gasoline may be the initial means used to produce compliant
certified natural gasoline EFF blendstock. Gasoline refiners would also
find natural gasoline meeting the proposed standards for certified
natural gasoline EFF blendstock a desirable gasoline blendstock.\76\
The additional processing costs to produce certified natural gasoline
EFF blendstock meeting the proposed specifications are estimated to be
the same or less than the cost to gasoline refiners to meet the
applicable sulfur and benzene standards for gasoline. We expect that
there would be no additional processing costs associated with natural
gasoline meeting the proposed maximum RVP specification since we
believe that the proposed 15 psi RVP cap is consistent with existing
industry practice. The proposed T90 and final boiling specifications
are consistent with the more stringent industry specifications.\77\
There would be additional costs in transporting certified natural
gasoline EFF blendstock to EFF bulk blender-refiners.
---------------------------------------------------------------------------
\76\ Refiners that use certified natural gasoline EFF blendstock
to produce gasoline would be subject to all of the requirements
applicable to a gasoline refiner, including per-batch testing.
\77\ See section IV.C.7 of this preamble for a discussion of the
proposed controls on natural gasoline EFF blendstock and the current
industry consensus controls on natural gasoline used as an E51-83
blendstock.
---------------------------------------------------------------------------
The use of certified natural gasoline EFF blendstock to produce EFF
would be voluntary. We expect that producers of certified natural
gasoline and EFF bulk blender-refiners would only take on the
additional costs to the extent that the proposed flexibility to use
certified natural gasoline EFF blendstock to produce EFF would be
economically advantageous. However, we expect that the cost savings
from the use of certified natural gasoline EFF blendstock meeting the
proposed standards compared to the use of gasoline or BOBs would far
outweigh the costs of providing natural gasoline that meets the
proposed specifications. EFF bulk blender-refiners that do not wish to
take advantage of the proposed flexibility to use certified natural
gasoline EFF blendstock could continue to blend EFF using gasoline,
BOBs, and DFE as current E85 blenders do.
3. EFF Blender Pump-Refiner Option
Compliance with the existing per-batch testing requirements in a
retail setting is impractical because each vehicle fill-up would be
considered a batch. Therefore, this proposal also includes a third
option for the streamlined production of EFF by EFF blender pump-
refiners at fuel retail and WPC facilities. The proposed EFF blender
pump-refiner option does not have a parallel under current EPA fuels
regulations. Historically, gasoline retailers have not produced or
blended fuel, but only received certified batches of gasoline of like
ethanol content (e.g., E0, E10, or E15) for delivery into segregated
storage tanks. This commingling of certified gasoline did not require
any further demonstration of compliance beyond maintaining product
transfer documents. Gasoline retailers have produced mid-grade octane
gasoline by mixing regular and premium grades at the pump for decades.
However, this is commingling two previously certified gasolines and
mixing of two previously certified gasoline would be expected to always
result in a compliant mixture. The proposed blender pump-refiner
provisions, in combination with the proposed provisions to regulate
E16-50 with E51-83 rather than continuing to treat E16-50 as gasoline,
would allow EFF blender pump-refiners to continue to operate with
minimal additional burden.
To ensure proper fuel quality without placing unworkable testing
requirements on each batch produced by a blender pump, we are proposing
to limit the parent blends that can be used at blender pumps to produce
EFF blends to compliant gasoline (E0, E10 with or without the 1 psi
waiver, and E15) and EFF that satisfies the proposed fuel quality
requirements.\78\ The proposed 10 ppm annual average sulfur standard,
0.62 volume percent annual average benzene standard, and CHONS
requirement for EFF would apply to EFF blender pump-refiners. However,
EFF blender pump-refiners could demonstrate compliance with these
requirements simply by maintaining PTDs to demonstrate that they used
only approved EFF parent blends and by participating in the proposed
EFF quality survey.\79\ Since the parent blends used by EFF blender
pump-refiners would be required to be compliant with the applicable
sulfur, benzene, and CHONS requirements, the linear blending
characteristics of these fuel parameters would ensure that the
resulting intermediate blends are also compliant.\80\ In parallel with
the EPA's
[[Page 80848]]
gasoline sulfur program, a 95 ppm per-gallon sulfur cap would also
apply to EFF blender pump-refiners.
---------------------------------------------------------------------------
\78\ We are also seeking comment on allowing DFE to be used as a
parent blend at blender pumps.
\79\ Dedicated EFF dispensers (e.g., conventional E85
dispensers) would also would be required to participate in the
proposed EFF quality survey.
\80\ Parent blends used at blender pumps would also be required
to be compliant with the applicable RVP requirements.
---------------------------------------------------------------------------
Consistent with the gasoline volatility program, EFF parent blends
at blender pumps and EFF at dedicated EFF dispensers would be required
to be compliant with the proposed RVP requirements annually from June 1
through September 15 of each year. Also consistent with the gasoline
volatility program, we are proposing a May 1 through September 15 RVP
compliance period for all upstream parties to aid in the seasonal
transition to RVP compliant EFF at retail facilities. EFF blender pump-
refiners and operators of dedicated EFF dispensers would primarily rely
on PTDs and participation in the proposed EFF quality survey to
demonstrate compliance with the proposed RVP requirements. However,
such retailers would also need to manage their EFF fuel deliveries to
ensure that wintertime EFF that is not subject to the proposed RVP
requirements is turned over to summertime RVP-compliant EFF by the
proposed June 1 compliance date.\81\ We are requesting comment on
whether the proposed May 1 RVP compliance date for EFF upstream of
retail and WPC facilities provides sufficient opportunity for EFF
retail and WPC tank turnover as is the case for the seasonal tank
turnover of gasoline retail and WPC tanks.
---------------------------------------------------------------------------
\81\ This is analogous to the management of gasoline deliveries
by gasoline retailers to facilitate compliance with the seasonal RVP
requirements for gasoline.
---------------------------------------------------------------------------
We believe that the RVP requirements on the parent blends used at
blender pumps would provide effective control of the RVP of EFF
produced at blender pumps. This is because the certification testing
requirements for FFVs result in FFVs being equipped with evaporative
emissions control equipment that is sized to control emissions when a
10 psi fuel is used. Conventional gasoline vehicles have evaporative
emissions control equipment that is sized to control emissions from a
9.0 psi fuel. The proposed parent blend requirements for blender pump-
refiners would ensure that the RVP of EFF blends made at blender pumps
is expected to be less than 10 psi. This is for the worst case
situation in CG areas where a 9.0 psi gasoline standard and the 1 psi
waiver for E10 applies. In other areas with lower gasoline volatility
requirements the RVP of EFF made at blender pumps would be
correspondingly lower. Therefore, we believe that setting an RVP
standard for E16-50 produced at blender pumps would not be necessary to
prevent an increase in evaporative emissions from FFVs.\82\ The EPA may
reevaluate the need to implement additional controls on the RVP of E16-
50 blends produced at blender pumps in a later action if testing of
such blends indicates that additional controls are needed. We request
comment on whether such additional controls are needed at this
time.\83\ The proposed requirements for parent blends used at blender
pumps and the expected maximum RVP of the EFF produced at blender pumps
that would result from these requirements are summarized in Table
IV.B.3-1 below.
---------------------------------------------------------------------------
\82\ Although EFF blends made at blender pumps would not be
subject to a specific RVP standard, the parent blends used at
blender pumps, including the EFF RVP parent blend, would be subject
to the applicable RVP standard.
\83\ See section IV.C.3 of this preamble for additional
discussion on the proposed RVP provisions for EFF.
Table IV.B.3-1--Proposed Blender Pump Parent Blend Requirements and Expected Maximum RVP of EFF Blends Produced
at Blender Pumps
----------------------------------------------------------------------------------------------------------------
EFF parent blend
Potential gasoline (maximum RVP standard Expected maximum RVP of
Area parent blends (maximum for EFF full-refiners EFF blends made at
RVP) and EFF bulk blender- blender pump **
refiners) *
----------------------------------------------------------------------------------------------------------------
9.0 RVP CG Area with 1 psi E10 Waiver 10.0 psi E10........... 9.0 psi EFF............ 10.0 psi
9.0 psi E0.............
9.0 psi E15............
9.0 RVP CG Area without 1 psi E10 9.0 psi E10............ 9.0 psi EFF............ 10.0 psi
Waiver. 9.0 psi E0.............
9.0 psi E15............
7.8 RVP CG Area with 1 psi E10 Waiver 8.8 psi E10............ 7.8 psi EFF............ 8.8 psi
7.8 psi E0.............
7.8 psi E15............
7.8 RVP CG Area without 1 psi E10 7.8 psi E10............ 7.8 psi EFF............ 8.8 psi
Waiver. 7.8 psi E0.............
7.8 psi E15............
RFG Area............................. 7.0 psi E10............ 7.0 psi EFF............ 8.0 psi
7.0 psi E0.............
7.0 psi E15............
----------------------------------------------------------------------------------------------------------------
* These maximum RVP standards would apply to EFF sold from dedicated EFF dispensers as well as to EFF parent
blends at blender pumps.
4. Requirements for Gasoline Blender Pump-Refiners
Under the current regulations, fuel retailers that produce E10 or
E15 at blender pumps would be subject to the gasoline refiner
provisions that require per-batch sulfur, benzene, and RVP testing.\84\
This proposal includes provisions that would allow gasoline blender
pump-refiners that produce E15 to demonstrate compliance with the
requirements for gasoline refiners from September 16 through May 31 by
using only approved parent blends, analogous to those proposed for EFF
produced at blender pumps. We are also proposing provisions that could
be used by blender pump-refiners that produce E15 from June 1 through
September 15 in some circumstance. We are also requesting comment on
similar provisions that might be used to regulate blender pumps that
produce E10.
---------------------------------------------------------------------------
\84\ RVP testing would apply from June 1 through September 15.
---------------------------------------------------------------------------
5. Requirements for Other Parties in the EFF Distribution System
All parties in the EFF distribution chain downstream of EFF full-
refiners and EFF bulk blender-refiners and upstream of EFF blender
pump-refiners would be subject to the proposed sulfur, benzene, RVP,
and CHONS
[[Page 80849]]
requirements. Compliance with these standards could be demonstrated by
these parties by maintaining records on the EFF batches they handle.
C. Standards for Ethanol Flex Fuel
The goal of these proposed quality standards for EFF is to ensure
that FFVs provide the same level of emissions control performance as
conventional gasoline vehicles. Since FFVs are equipped with the same
catalysts and emissions control systems to control emissions as are
conventional gasoline vehicles, FFV catalyst efficiency and emission
control performance is subject to the same deleterious effects from
fuel sulfur and atypical (non-CHONS) elements. The potential for
benzene emissions from FFVs also correlates to the benzene content of
the fuel used just as for conventional gasoline vehicles. The maximum
RVP of fuels used in FFVs also must not exceed the capacity of the
vehicle evaporative emissions control system, as it could result in
uncontrolled emissions of volatile organic compounds (VOCs).
Similar to the gasoline sulfur program, the proposed standards that
would apply to various parties in the EFF production and distribution
system, and the means to demonstrate compliance with these standards
would vary depending on their ability to affect EFF quality. This
proposal contains three options under which an EFF producer can certify
that their product is compliant with the applicable standards: The
full-refiner option, the bulk blender-refiner option, and the blender
pump-refiner option.\85\ A detailed discussion of the proposed
standards is provided below.
---------------------------------------------------------------------------
\85\ The proposed EFF certification options are discussed in
section IV.D of this preamble.
---------------------------------------------------------------------------
1. EFF Sulfur Standards
Under the Tier 3 gasoline program, the EPA promulgated a 10 ppm
annual average sulfur standard and 80 ppm refinery gate per-gallon
sulfur cap for gasoline in order to allow gasoline refiners flexibility
to accommodate brief excursions from the sulfur average standard during
upsets in the operation of gasoline desulfurization units.\86\
Similarly, we are proposing that a 10 ppm annual average sulfur
standard would apply to all EFF. EFF full-refiners would also be
subject to an 80 ppm refinery gate per-gallon sulfur cap similar to the
requirements for gasoline refiners. Although EFF full-refiners are not
expected to be desulfurizing EFF, but merely choosing which blendstocks
to use to produce EFF, we believe that this approach would provide them
with the flexibility to use an occasional batch of uncertified natural
gasoline blendstock that has a somewhat higher sulfur content provided
that they comply with the proposed 10 ppm annual average sulfur
standard. We believe that this could help facilitate the use of natural
gasoline as an EFF blendstock while maintaining the environmental goals
of the program. EFF full-refiners would be required to test each batch
of EFF to demonstrate compliance with these sulfur standards.
---------------------------------------------------------------------------
\86\ See 79 FR 23414 (April 28, 2014).
---------------------------------------------------------------------------
The 10 ppm annual average sulfur standard would apply to all
parties throughout the EFF distribution system as well as to EFF full-
refiners. However, parties other than the EFF full-refiner, such as
bulk blenders, distributors, and retailers, would be deemed to be in
compliance with the 10 ppm annual average sulfur standard if they
maintain records to demonstrate they did not introduce uncertified
blendstocks into the EFF they produce or distribute. The sulfur content
of EFF produced by bulk blender-refiners and blender pump-refiners
would be governed by the blending restrictions that accompany these
certification options. All of the approved blend components would be
subject to a 10 ppm annual average sulfur standard or a more protective
10 ppm per-gallon sulfur cap standard.\87\ Depending on the sulfur
content of the blend components used, the sulfur content of an
individual batch of EFF could be greater than 10 ppm. However, the
requirements on the blendstocks used by EFF bulk blender-refiners and
EFF blender pump-refiners would ensure compliance with the 10 ppm
annual average sulfur standard.
---------------------------------------------------------------------------
\87\ Gasoline and BOBs are currently subject to a 10 ppm annual
average sulfur standard. We are proposing a 10 ppm per-gallon sulfur
cap for certified natural gasoline EFF blendstock.
---------------------------------------------------------------------------
Consistent with the downstream gasoline sulfur standard under the
current Tier 2 gasoline program and the Tier 3 gasoline program that
will become effective January 1, 2017, we are proposing that EFF would
be subject to a 95 ppm per-gallon sulfur cap standard downstream of EFF
full-refiner facilities. This 95 ppm per-gallon sulfur cap would apply
to EFF bulk blender-refiners, EFF blender pump-refiners and all other
parties in the EFF distribution system downstream of EFF full-refiners.
We believe that this would be sufficient to accommodate the use of
gasoline that meets the 95 ppm per-gallon sulfur cap as an EFF
blendstock by EFF bulk blender-refiners, and sulfur contamination from
the use of downstream sulfur-containing EFF additives. An additional 15
ppm from the 80 ppm refinery gate sulfur cap was provided for gasoline
downstream of the refinery gate under the Tier 3 gasoline program to
allow for the most extreme cases where sulfur might be added to
gasoline as a result of contamination during distribution or through
the use of additives when sulfur is an essential functional component
in the additive (e.g., corrosion control, demulsifiers). Sulfur
contamination during gasoline distribution is typically limited to less
than 2 ppm. High sulfur additives are only used to remedy specific
instances of gasoline quality problems where their treatment rate is
governed by the desire to limit the added cost from their use.
We believe that distributors of EFF should be able to limit sulfur
contamination at least as effectively as distributors of gasoline
because EFF cannot be distributed by pipeline, which is where there is
the highest potential for sulfur contamination of gasoline. The one
link in the EFF production chain where unique concerns may exist
regarding limiting sulfur contamination is in the distribution of
certified natural gasoline EFF blendstock. The procedures necessary to
limit contamination to the level required under this proposal may not
be familiar to distributors of natural gasoline since natural gasoline
is typically subject to broader quality specifications than those
proposed for use as an EFF blendstock. Hence, there may be an increased
chance for sulfur contamination of certified natural gasoline EFF
blendstock during distribution from other higher-sulfur natural
gasoline in the distribution chain during the initial phase-in of the
program. The proposed 10 ppm per-gallon sulfur cap on certified natural
gasoline EFF blendstock would apply throughout the distribution chain,
including at the EFF full-refinery or bulk blender-refinery that uses
certified natural gasoline EFF blendstock to make EFF. Therefore,
sulfur contamination during the distribution of certified natural
gasoline EFF blendstock should not impact the sulfur content of EFF. We
would work with the producers, distributors, and users of certified
natural gasoline EFF blendstock to make them aware of their
responsibility to limit contamination during distribution during the
implementation of the final rule.
Gasoline additives exist that are suitable for use in EFF. To the
extent that additives may be specifically designed for use in EFF, we
believe that such additives would not require higher sulfur content as
an essential functional component to a greater extent than that
[[Page 80850]]
for additives designed solely for use in gasoline. Hence, we believe
that the proposed 95 ppm downstream per-gallon sulfur cap for EFF would
also be sufficient to accommodate even the most extreme cases of where
sulfur contamination is at an unavoidable maximum and the maximum
treatment rate of sulfur-containing additives is needed to address in-
use quality problems. We anticipate that the vast majority of EFF would
be close to the proposed 10 ppm annual average sulfur standard. Under
the current Tier 2 gasoline program that places an average 30 ppm
sulfur specification on refineries, gasoline survey data indicates that
in-use gasoline sulfur average is 21 ppm with only 18 percent of the
samples in the survey above 30 ppm, 2 percent above 50 ppm, and no
samples above 80 ppm.\88\ We intend to review in-use EFF and gasoline
data after the implementation of the EPA's Tier 3 gasoline sulfur
program and evaluate whether it would be possible to reduce the 80 ppm
refinery gate and/or the 95 ppm downstream per-gallon sulfur caps for
EFF and/or gasoline in a later action.\89\ If such reductions are
possible, it would provide improved ability for the EPA to more readily
detect the potential addition of illegal high-sulfur blendstocks to EFF
and/or gasoline.
---------------------------------------------------------------------------
\88\ Based on a review of 2013-2015 U.S. retail gasoline sulfur
data from the proprietary Alliance of Automobile Manufacturers North
American Fuel Survey. These data are available for purchase from the
Alliance of Automobile Manufacturers, 803 7th Street NW., Suite 300,
Washington, DC 20001.
\89\ The gasoline 10 ppm annual average sulfur standard under
the EPA's Tier 3 gasoline sulfur program will become effective on
January 1, 2017.
---------------------------------------------------------------------------
The gasoline sulfur control program includes banking and trading
(BT) provisions for sulfur credits across gasoline production
facilities and companies. These BT provisions were included to address
concerns that it would be difficult and costly for refiners to install
the necessary desulfurization equipment to reduce the sulfur content of
gasoline down to a 10 ppm annual average due to the high levels of
sulfur naturally occurring in crude oil. In comparison, EFF producers
could comply with the proposed sulfur specifications simply by using
existing low sulfur DFE and gasoline as blendstocks as they do
currently. Such EFF producers would have only minimal additional
recordkeeping and PTD requirements as a result of this proposal.\90\
Since EFF full-refiners and importers are not expected to need to
install desulfurization equipment to produce EFF that complies with the
proposed standards, we do not expect that a subset of EFF full-refiners
would face a substantially greater compliance burden compared to others
as was the case for gasoline refiners under the EPA's gasoline sulfur
program. Therefore, credit trading among EFF full-refiners and
importers is not necessary to ease the burden of compliance as it was
under the gasoline sulfur program. Consequently, we are proposing that
compliance with the proposed average standard sulfur standard for EFF
would be evaluated on an EFF refinery-by-refinery basis.
---------------------------------------------------------------------------
\90\ The only current means for a producer of E51-83 to be
assured of compliance with the current requirement that E51-83 must
be substantially similar to the fuel used during FFV vehicle
certification is to limit the blendstocks used to gasoline, BOBs,
and DFE. E16-50 is currently subject to all of the requirements for
gasoline. This proposal would regulate all gasoline-ethanol blends
that may only be used in FFVs (E16-83) as a group.
---------------------------------------------------------------------------
API and AFPM commented on the Tier 3 proposal that BT provisions
should be included for E16-50 producers and that the trading of credits
generated under such provisions should be allowed to be used by
gasoline refiners to demonstrate compliance with the gasoline sulfur
standards. We do not believe that there is a need to allow any
additional source of sulfur credits to enable compliance with the Tier
3 gasoline standards, and given the large volume difference, we believe
allowing gasoline sulfur credits to be used for EFF compliance would
circumvent reducing EFF sulfur levels to 10 ppm. Therefore, we are not
proposing to allow any credit trading between EFF and gasoline.
2. EFF Benzene Standards
We are proposing that EFF would be subject to the same 0.62 volume
percent annual average benzene standard that applies to gasoline. The
Tier 3 proposal requested comment on the potential that EFF might be
able to satisfy more stringent benzene requirements due to a potential
increased benzene dilution effect in higher ethanol content blends.\91\
We agree with the comments received that this would not be practical
because of the uncertain benzene contribution to EFF from gasoline used
as an EFF blendstock that is required to meet a 0.62 volume percent
annual average benzene standard. This would particularly be an issue
for lower-level ethanol content EFF blends such as E30 to the extent
they may be produced upstream of a blender pump by an EFF full-refiner
or bulk blender-refiner in the future rather than at a blender pump. In
addition, holding EFF to a 0.62 volume percent annual average benzene
standard would ensure an equivalent level of environmental protection
as is provided by the requirements for gasoline while providing EFF
full-refiners with greater flexibility in the natural gasoline they
could use as an EFF blendstock. Therefore, while we believe that EFF
produced by EFF full-refiners will typically be below 0.62 volume
percent benzene concentration due to dilution from ethanol, we are
proposing to set the benzene standard at the same 0.62 volume percent
annual average applicable to gasoline.
---------------------------------------------------------------------------
\91\ See 78 FR 29936-29938 (May 21, 2013).
---------------------------------------------------------------------------
EFF full-refiners would be required to test each batch of EFF to
demonstrate compliance with the proposed annual average benzene
standard. The 0.62 volume percent annual average benzene standard would
apply to all parties throughout the EFF distribution system as well as
to EFF full-refiners. However, parties other than EFF full-refiners,
such as bulk blenders, distributors, and retailers, would be deemed to
be in compliance with the 0.62 volume percent annual average benzene
standard if they maintain records to demonstrate that they did not
introduce uncertified blendstocks into the EFF they produce or
distribute. Similar to the discussion above regarding sulfur, we are
proposing that the benzene content of EFF produced by bulk blender-
refiners and blender pump-refiners would be governed by the blending
restrictions that accompany these certification options. All of the
approved blend components would be subject to a 0.62 volume percent
annual average benzene standard or a more protective benzene per-gallon
cap standard.\92\ Depending on the benzene level of any gasoline
blendstock used, the benzene level of an individual batch of EFF could
be greater than 0.62 volume percent. However, the requirements on the
blendstocks used by EFF bulk blender-refiners and EFF blender pump-
refiners would ensure compliance on an annual average basis.
---------------------------------------------------------------------------
\92\ Gasoline and BOBs are subject to a 0.62 volume percent
annual average benzene standard. We are proposing a 0.62 volume
percent benzene per-gallon cap for certified natural gasoline EFF
blendstock.
---------------------------------------------------------------------------
Similar to the proposed EFF sulfur standards, we are also not
proposing a BT program for the EFF benzene standards. We believe that
the same conditions that led the EPA to include provisions under the
gasoline benzene program for BT of benzene credits are not present for
EFF full-refiners and importers. We do not expect that EFF full-
refiners and importers would need to install processing equipment to
remove benzene from EFF to meet the proposed 0.62 volume percent annual
average benzene standard as was the
[[Page 80851]]
case for gasoline refiners. EFF full-refiners and importers could
comply with the proposed benzene specifications simply by using
existing low-benzene DFE and gasoline as blendstocks as they do
currently. Such EFF producers would have only minimal additional
recordkeeping and PTD requirements as a result of this proposal. Hence,
we are proposing that compliance with the proposed 0.62 volume percent
annual average benzene standard would be evaluated annually on an EFF
refinery-by-refinery basis.
3. EFF Volatility Standards
Volatility is a measure of the propensity of a liquid to evaporate.
RVP is a standard measure of fuel volatility at 100[emsp14][deg]F. The
amount of evaporative emissions from a gasoline blend is closely
related to its volatility. The components of gasoline and EFF have
different volatilities because of their unique chemical make-up. The
RVP of a finished gasoline made solely from the various hydrocarbons in
the gasoline boiling range is essentially proportional to the RVP and
blend ratios of the individual hydrocarbon blend components. That is to
say, the RVP of gasoline hydrocarbons blends linearly similar to
gasoline sulfur and benzene content. This is not the case when ethanol
is added to gasoline. The addition of ethanol to gasoline increases the
volatility of the blend until a concentration of approximately 10
volume percent, after which increasing ethanol concentration slowly
decreases blend volatility. For example, for ethanol blends made with a
9 psi RVP gasoline (E0), the RVP increases to approximately 10 psi at
10 volume percent ethanol (E10) then decreases gradually with increased
ethanol concentration to 9 psi at 50 volume percent ethanol (E50), and
continues to decrease at a more pronounced rate to 6 psi at 80 volume
percent ethanol (E80).\93\
---------------------------------------------------------------------------
\93\ SAE technical paper 2007-01-4006, ``A Model for Estimating
Vapor Pressures of Commingled Ethanol Fuels,'' Sam R. Reddy.
---------------------------------------------------------------------------
As previously explained, FFVs are equipped with the same type of
emissions control equipment to limit evaporative VOC emissions as are
conventional gasoline vehicles. Controlling the volatility of EFF is
important to limit the evaporative emissions from FFVs. Higher fuel
volatility levels generates additional fuel vapor in a vehicle or
engine fuel system that can cause ``breakthrough'' emissions from the
evaporative emission control system of a vehicle or engine.\94\
Therefore, consistent with the EPA approach to addressing evaporative
emissions from gasoline, we believe that it is appropriate to set
maximum RVP standards for EFF.
---------------------------------------------------------------------------
\94\ Breakthrough evaporative emissions refers to the condition
where the evaporative emissions control system of a vehicle becomes
saturated, and further gasoline vapor generated is simply purged
into the environment without being combusted in the engine.
---------------------------------------------------------------------------
We believe that the maximum RVP requirements for gasoline are an
appropriate benchmark to consider in determining what RVP standards to
set for EFF. A 9.0 psi RVP maximum applies to gasoline in many CG
areas, while a 7.8 psi RVP applies in certain southern CG areas where
ambient temperatures are warmer, causing fuel volatility to be higher
for a given RVP.\95\ The RVP of RFG is governed by a VOC performance
model that takes into account fuel VOC performance parameters other
than fuel volatility. Hence, there is no set regulatory RVP maximum for
RFG from June 1 through September 15. However, our review of RFG
production data indicates that the RVP of RFG is typically about 7.0
psi from June 1 through September 15.\96\
---------------------------------------------------------------------------
\95\ The EPA maximum RVP requirements for gasoline are
applicable from May 1 through September 15 for parties in the
gasoline production system other than gasoline retailers and WPCs.
These requirements apply to gasoline retailers and WPCs from June 1
through September 15. See 40 CFR 80.27. A 1 psi RVP waiver was
granted by Congress in 1990 to gasoline-ethanol blends of at least 9
volume percent and no greater than 10 volume percent ethanol (i.e.,
E10) in CG areas. With the subsequent spread of E10 nationwide, E10
is now subject to a 10 psi RVP maximum in most CG areas and an 8.8
psi maximum in certain southern CG areas. As a result, much of
conventional gasoline currently has volatility as high as 10 psi.
Since conventional gasoline vehicles are designed for 9 psi, this
leads to breakthrough VOC emissions from vehicle evaporative
emissions control systems in CG areas. The 1 psi waiver for E10 does
not apply to E10 in RFG areas. Hence, there is not the same issue
with breakthrough evaporative emissions from the use of E10 in RFG
areas. The Renewable Fuels Association (RFA) and the Alliance of
Automobile Manufacturers (AAM) sent letters to the EPA requesting
that the EPA effectively eliminate the relevance of the 1 psi RVP
waiver for E10.
\96\ See the memorandum, ``Volatility of Reformulated
Gasoline,'' available in the docket for this action.
---------------------------------------------------------------------------
Although FFVs are equipped with the same type of evaporative
emissions control equipment as conventional gasoline vehicles,
differences in the evaporative emissions testing requirements results
in the evaporative emissions control equipment on FFVs being more
robust than that installed on conventional gasoline vehicles. The
capacity of vehicle evaporative emissions control equipment is driven
by the vehicle evaporative emissions certification testing
requirements. Vehicle evaporative emissions certification testing
includes testing to evaluate both diurnal and refueling evaporative
emissions. A 9.0 psi test fuel is specified for both diurnal and
refueling evaporative emissions certification testing for conventional
gasoline vehicles. Hence, the evaporative emissions control systems of
conventional gasoline vehicles are sized to reliably cope with a
maximum 9.0 psi RVP in-use fuel without breakthrough evaporative
emissions.
Historically, and at present, FFVs are certified for both diurnal
and refueling evaporative emissions compliance on the highest
volatility fuel typically encountered in-use during the May 1 through
September 15 volatility control period (i.e., E10 at 10 psi RVP),
resulting in evaporative emissions control systems that are sized and
designed to handle additional fuel vapor as compared to conventional
gasoline vehicles. Beginning with the Tier 3 vehicle standards, a 9.0
psi test fuel will be required for diurnal evaporative emissions
testing for certification for FFVs as well as for conventional gasoline
vehicles. However, a 10 psi test fuel was retained for FFV refueling
emissions certification testing. The Tier 3 rule concluded that the RVP
of the refueling emissions test is expected to continue to drive the
capacity of evaporative control equipment on FFVs.\97\ Therefore, we
believe that FFVs operated on 10 psi in-use EFF would provide an
equivalent level of evaporative emissions control to conventional
gasoline vehicles operated on 9.0 psi in-use gasoline. Hence, we
believe that in-use EFF should not exceed 10 psi to control the
evaporative emissions from FFVs.
---------------------------------------------------------------------------
\97\ See 79 FR 23509 (April 28, 2014).
---------------------------------------------------------------------------
At the same time, as noted above, the RVP standard for gasoline in
some areas is set below 9.0 psi (at 7.8 psi in certain CG areas or
effectively 7.0 psi in RFG areas) to provide greater protection from
excess emissions, either due to climatic considerations or ambient
pollution concentrations.\98\ We believe that it is appropriate to
reflect these lower limits for EFF as well in these areas for these
reasons.
---------------------------------------------------------------------------
\98\ It should be noted that RFG areas fall into three
categories depending on VOC regions (North vs. South) and whether
the area is part of the VOC adjusted area (see 40 CFR 80.71 and
80.40(c)). Based on an analysis of the distribution of RVP samples,
it is much simpler to have one RVP standard of 7.0 psi versus having
three separate standards for EFF. Creating three different standards
would potentially create fungibility issues with different types of
RFG EFF and make the program much more complex, making it more
burdensome for parties to comply. See the memorandum, ``Volatility
of Reformulated Gasoline,'' available in the docket for this action.
---------------------------------------------------------------------------
[[Page 80852]]
The manufacture of EFF blends at blender pumps presents unique
challenges with respect to ensuring volatility control since the RVP of
such blends is often higher than that of either parent blend. For
example, the RVP of EFF blends made at a blender pump using two parent
blends (E10 and EFF), each less than 9 psi RVP, would be somewhat
higher than 9 psi.\99\ Nevertheless, since the RVP of EFF blends made
at blender pumps is a direct function of the RVP of the parent blends
used (which would be produced by EFF full-refiners and bulk blender-
refiners), the volatility of EFF blends made at blender pumps can be
controlled by setting appropriate RVP standards for the parent blends.
---------------------------------------------------------------------------
\99\ See the memorandum, ``Volatility of Ethanol Blends Made at
Blender Pumps,'' available in the docket for this action.
---------------------------------------------------------------------------
We conducted RVP modeling to evaluate what RVP standards for the
EFF blends used as parent blends at blender pumps would provide
adequate control of the RVP of EFF blends produced at blender
pumps.\100\ The modeling assumed that gasoline compliant with locally
applicable RVP requirements would be used as the other parent
blend.\101\ This modeling indicates that limiting the RVP of EFF
produced by full-refiners, importers, and bulk blender-refiners to 9.0
psi in CG areas subject to a 9.0 psi gasoline RVP standard would ensure
that the RVP of EFF produced at blender pumps is expected to be below
10 psi. Limiting the RVP of EFF produced by full-refiners, importers,
and bulk blender-refiners to 7.8 psi in CG areas where a 7.8 psi RVP
standard applies to gasoline would likewise ensure that EFF blends made
at blender pumps is expected to be below 8.8 psi. Similarly, limiting
the RVP of EFF produced by full-refiners, importers, and bulk blender-
refiners to 7.0 psi in RFG areas would ensure that EFF made at blender
pumps is be expected to be below 8.0 psi. As a result of the greater
capability of FFVs to control evaporative emissions compared to
conventional gasoline vehicles, we believe that controlling the RVP of
EFF to 8.8 psi in CG areas where gasoline is subject to a 7.8 psi RVP
standard and to 8.0 psi in RFG areas would provide a comparable level
of evaporative emissions for FFVs operated on EFF compared to
conventional gasoline vehicles operated on gasoline.
---------------------------------------------------------------------------
\100\ Id.
\101\ See Table IV.B.3-1 in this preamble for a summary of the
proposed blender pump parent blend requirements and expected
resulting maximum RVP of EFF blends produced at blender pumps.
---------------------------------------------------------------------------
As discussed above, we believe that limiting the RVP of EFF
produced at blender pumps to the target levels described above would
provide a comparable level of evaporative emissions for FFVs operated
on EFF compared to conventional gasoline vehicles operated on gasoline.
The RVP modeling results indicate that the RVP of EFF blends made at
blender pumps would exceed the target maximums by only as much as 0.2
psi using worst-case assumptions.\102\ Given the unlikelihood of the
alignment of these worse-case conditions \103\ and the believed
conservative nature of the RVP model,\104\ we do not anticipate such
higher levels to be seen in-use.
---------------------------------------------------------------------------
\102\ The RVP of EFF made at blender pumps would typically be
significantly below the target levels.
\103\ The marginal exceedances of the target RVP for EFF blends
made at retail that are indicated by the RVP modeling primarily are
associated with the use of E0 as a parent blend. The vast majority
of gasoline in the U.S. is E10. There is relatively little E0
available at retail and which is typically sold from dedicated E0
dispensers, rather than at blender pumps, due to marketing
considerations.
\104\ Based on anecdotal information from parties familiar with
the RVP model.
---------------------------------------------------------------------------
Therefore, we are proposing that the RVP requirements for EFF for
full-refiners, importers, and bulk blender-refiners would generally
track those of gasoline, with a maximum RVP of 9.0 or 7.8 psi for CG
areas (depending on the applicable gasoline RVP standard), and an RVP
maximum of 7.0 psi for RFG areas (which is comparable to the average
RVP of RFG). We are soliciting comment on these standards. We also seek
comment on setting a 9.0 RVP standard for EFF produced by full-
refiners, importers, and bulk blender-refiners for use in all CG areas
rather than imposing lower standards commensurate with the lower
gasoline RVP standards that apply in certain areas.
We believe that the proposed parent blend requirements for EFF
blender pump-refiners, including the proposed RVP standards for EFF
produced by EFF full-refiners and bulk blender-refiners discussed above
would provide sufficient control of the RVP of EFF made at blender
pumps. Therefore, we do not believe that an RVP standard for EFF
produced at blender pumps is needed at this time. We are also proposing
an independent survey of the RVP of EFF at blender pumps.\105\ The EPA
would monitor the RVP of EFF produced at blender pumps, and if the
results of this evaluation indicate that additional controls of EFF at
blender pumps are warranted, such controls may be proposed in a later
action. We request comment on whether the EPA should implement
additional measures to control EFF volatility at this time. Such
additional measures might include: (1) Additional limitations on the
gasoline parent blends used, such as prohibiting the use of E0 as a
parent blend; (2) Further restrictions on the amount of natural
gasoline that could be used; and/or (3) A lower RVP maximum for the
natural gasoline EFF blendstock.
---------------------------------------------------------------------------
\105\ The proposed EFF quality survey requirements are discussed
in section IV.F.9 of this preamble.
---------------------------------------------------------------------------
Similar to the gasoline RVP requirements, we are proposing that the
proposed EFF RVP standards would apply to EFF retailers and WPCs from
June 1 through September 15 and to all other parties in the EFF
production and distribution system from May 1 through September 15 of
each year. Thus, a retailer or WPC would be liable for RVP violations
if their EFF parent blends or EFF blends distributed from a dedicated
dispenser exceeded these RVP limits from June 1 through September 15
and upstream parties would be liable for the RVP of the EFF they
produce or distribute from May 1 through September 15. The EPA could
evaluate compliance with these standards by sampling and testing the
EFF parent blends from the underground storage tank. We seek comment on
whether the EPA could evaluate compliance by setting the blender pump
to dispense EFF only, flushing the pump, and collecting a sample from
the blender pump dispenser.
We believe that E51-83 blends produced with the hydrocarbon
blendstocks allowed under the current requirements for E51-83 (gasoline
and BOBs) would necessarily meet the proposed maximum RVP requirements
as a result of the volatility blending characteristics. In fact, at
high ethanol concentrations, E85 is currently challenged to have
sufficiently high RVP to meet the minimum ASTM volatility specification
for proper vehicle cold start and driveability. Therefore, the proposed
RVP requirements would not result in a further constraint to E51-83 RVP
blending practices compared to the current situation. Rather, the
proposed increased flexibility to use natural gasoline as an EFF blend
component would likely allow the RVP of EFF to increase up to the
evaporative control limits of FFVs. This should not only help E51-83
meet the minimum ASTM volatility specification at greater ethanol
concentrations, but also reduce the cost of all EFF and potentially
improve the exhaust emission performance of FFVs. Since the proposed
EFF RVP standards parallel those for gasoline, this would
[[Page 80853]]
not constitute increase in the stringency of the standards for E16-50
EFF blends that are currently subject to all of the requirements
applicable to gasoline, including the gasoline RVP standards.
ASTM has set minimum volatility specifications on E51-83 for safety
reasons and to ensure adequate startability and drivability, which are
critical for exhaust emission performance.\106\ Since rapid engine
start-up, warm-up, and drivability is important for vehicles to comply
with the proposed Tier 3 exhaust emission standards, the Tier 3
proposal requested comment on whether it would be important that the
EPA impose minimum volatility standards for E51-83 consistent with
those in the ASTM standard. The comments indicated that concerns about
E51-83 meeting ASTM minimum volatility standards have essentially been
resolved by the change in the ASTM standard from a minimum 68 volume
percent ethanol specification to a 51 volume percent
specification.\107\ We believe that the increased flexibility that this
proposal would provide by allowing natural gasoline to be used as an
EFF blendstock would also help to resolve any remaining concerns about
EFF not meeting an appropriate RVP minimum, and at the same time enable
the use of higher levels of ethanol to do so. The EPA is not aware of
concerns about instances of excessively low volatility of E16-50
causing startability and driveability problems that could increase FFV
emissions. We believe such concerns do not exist for E16-50 blends
because the effect of increasing ethanol concentrations in higher level
ethanol blends on depressing gasoline blend volatility is most
pronounced for E51-83 blends. Therefore, we are not proposing RVP
minimum specifications for EFF at this time.
---------------------------------------------------------------------------
\106\ ASTM D5798-14, ``Standard Specification for Ethanol Fuel
Blends for Flexible-Fuel Automotive Spark-Ignition Engines.''
\107\ The change by ASTM to a minimum 51 volume percent ethanol
specification was made to allow more hydrocarbons to be used in the
blend to help meet minimum volatility requirements.
---------------------------------------------------------------------------
4. EFF Elemental Composition Requirements
Elements that can poison (deactivate) vehicle emission control
catalysts such as anions or cations (e.g., metals) can exist naturally
in petroleum deposits or can be added in the process of extracting such
deposits. They can also become entrained in either petroleum or ethanol
products through contamination or be purposely added to a fuel. CAA
section 211(f)(1) requires that fuel and fuel additives used in
commerce must be ``substantially similar'' to fuel used in
certification. This requirement applies to all fuels used in motor
vehicles, including the fuels used in FFVs. On July 28, 1981 (46 FR
38582), the EPA finalized an interpretation of the term ``substantially
similar'' in terms of a fuel or fuel additive's elemental content in
motor vehicle gasoline. The fuel or fuel additive elemental content in
this ``substantially similar'' interpretive rule was limited to CHONS.
Refiners are required to limit the elemental composition of the
gasoline they produce to CHONS, except for trace quantities of other
atypical elements.
Emissions certification testing of FFVs is required using both the
test fuel specified for conventional gasoline vehicles and a high
ethanol content FFV test fuel (E83). Regulatory specifications for
conventional gasoline emissions certification test fuel have long
existed to ensure that atypical elements are not present. Regulatory
specifications for the high-ethanol content FFV certification test fuel
were finalized in the Tier 3 final rule and will become mandatory for
model year (MY) 2017 FFVs.\108\ These regulations ensure that FFV
exhaust emissions test fuel is composed of only CHONS. Prior to the FFV
test fuel specifications finalized in the Tier 3 rule, the EPA practice
has been to blend FFV test fuel using indolene (E0) with neat
(undenatured) ethanol. These blendstocks are composed only of CHONS. It
is our understanding that manufacturers of FFVs have followed EPA
practice when blending FFV exhaust emissions certification test fuel.
Thus, FFV certification test fuel has been composed solely of CHONS
prior to the Tier 3 rule that clarified this requirement. Hence, it has
been a long standing EPA policy that in-use EFF fuel must be composed
of only CHONS. We are proposing regulatory specifications to clarify
this requirement for all in-use EFF.
---------------------------------------------------------------------------
\108\ See 79 FR 23414 (April 28, 2014) and 40 CFR 1065.725.
---------------------------------------------------------------------------
Non-CHONS elements are typically removed during the processes used
to produce gasoline compliant with EPA sulfur standards at crude oil
refineries. Hence, the EPA has had good assurance that gasoline
refiners are complying with the CHONS requirement despite the lack of a
testing requirement or specific limit on the quantities of atypical
elements that may be present in gasoline. The main potential source of
atypical elements in gasoline is additives added to gasoline after the
gasoline is produced at a crude oil refinery; however, such additives
are also required to be CHONS.
E51-83 was also assured to be composed of only CHONS when gasoline
and BOBs were the only hydrocarbon blendstocks used in its manufacture.
E16-50 has been assured to be CHONS by the current provisions that
apply the requirements applicable to gasoline to these blends and the
fact that it is typically blended from E51-83 and E10. This proposal
includes provisions to treat all E16-83 as EFF and to allow EFF full-
refiners, importers, and EFF bulk blender-refiners to use natural
gasoline to produce EFF. There is no existing CHONS requirement for
natural gasoline used as an EFF blendstock. Therefore we are proposing
that EFF would be required to be CHONS, and are proposing additional
CHONS requirements on natural gasoline EFF blendstock. We believe that
the proposed provisions for natural gasoline EFF blendstock and the
existing provisions for the other EFF blendstocks would ensure that EFF
would be CHONS.\109\ Therefore, we are not proposing a testing
requirement or specific limit on the quantities of atypical elements
that may be present in finished EFF at this time. The EPA intends to
further evaluate the potential presence of non-CHONS elements in EFF as
well as in gasoline and may propose additional control measures in the
future if warranted. We request comment on whether additional controls
may be needed to prevent the presence of non-CHONS elements in EFF as
well as gasoline, with associated supporting data.
---------------------------------------------------------------------------
\109\ The other proposed EFF blendstocks are finished gasoline,
BOBs, DFE, and undenatured ethanol.
---------------------------------------------------------------------------
5. Additives Used in EFF
Special provisions were provided under the gasoline sulfur program
to accommodate additives that require sulfur in their functional
components. These provisions allowed the continued use of such
important additives while ensuring compliance with the 95 ppm
downstream per-gallon sulfur cap for gasoline. We are proposing that
additives used in EFF would be subject to the same sulfur requirements
that apply to additives used in gasoline.\110\ Under this proposal, an
additive would be required to contribute no more than 3 ppm to the
sulfur content of EFF when used at the maximum recommended treatment
rate. The additive manufacturer would be required to
[[Page 80854]]
maintain records of its additive production quality control activities
that demonstrate that the sulfur content of the additive is compliant
with this requirement. The 3 ppm maximum was determined to be
sufficient to accommodate all gasoline additives, and we believe that
additives used in EFF do not differ from gasoline additives with
respect to the sulfur content necessary to provide the additive's
functionality. These proposed requirements would allow for the
continued use of important EFF additives while ensuring compliance with
the proposed 95 ppm per-gallon sulfur cap for EFF. We are also
proposing that manufacturers of additives for use in EFF certify that
there are no non-CHONS elements present. The use of additives that
contain non-CHONS elements such as metals in EFF would be prohibited
unless the EPA were to determine that the use of such an additive would
not cause or contribute to regulated emissions failures of FFVs, and
was granted a waiver to allow its use in EFF pursuant to the
requirements of CAA section 211. Similar to gasoline additives, which
have no benzene requirements, we believe that benzene requirements for
additives used in EFF are not necessary because benzene is not a
typical additive component and the 1 volume percent cap on additive
concentration would further limit any potential impact on finished
fuels from the limited benzene content of additives.
---------------------------------------------------------------------------
\110\ EFF additives are sold for use at a concentration of less
than 1.0 volume percent in EFF.
---------------------------------------------------------------------------
We believe that there would be no need for the use of additives in
certified natural gasoline EFF blendstock from the point of its
production to its use to produce EFF. Therefore, we are proposing to
prohibit the addition of additives to certified natural gasoline EFF
blendstock. We request comment on whether provisions including sulfur
standards are needed to facilitate the use of additives in certified
natural gasoline EFF blendstock. If we were to finalize provisions to
allow the use of additives in certified natural gasoline EFF
blendstock, the use of additives that contain non-CHONS elements such
as metals would be prohibited unless the EPA were to determine that the
use of such an additive would not cause or contribute to regulated
emissions failures of FFVs, and granted a waiver to allow its use in
EFF pursuant to the requirements of CAA section 211.
We also believe that there would be no need for the use of
additives in uncertified natural gasoline EFF blendstock from the point
of its production to its use to produce EFF. EFF full-refiners that use
uncertified natural gasoline EFF blendstock are required to test each
batch of finished EFF. Therefore the potential impact on the sulfur and
benzene content from the possible addition of additives to uncertified
natural gasoline EFF blendstock would be reflected in the per-batch EFF
testing required of EFF full-refiners, and there would be no need for
sulfur or other standards for such additives. The use of additives that
contain non-CHONS elements such as metals in uncertified natural
gasoline EFF blendstock would be prohibited unless the EPA were to
determine that the use of such an additive would not cause or
contribute to regulated emissions failures of FFVs, and granted a
waiver to allow its use in EFF pursuant to the requirements of CAA
section 211. We are proposing that EFF full-refiners would be required
to secure a PTD from the uncertified natural gasoline EFF blendstock
supplier that demonstrates that it contains no non-CHONS elements.
6. EFF Deposit Control
The current deposit control regulations require that the gasoline
portion of E51-83 must contain a certified deposit control additive at
a concentration at least as great as that used during gasoline deposit
control additive certification testing (referred to as the lowest
additive concentration or LAC).\111\ The addition of ethanol to
gasoline, with deposit control additive at the LAC, to produce E51-83
results in a deposit control additive concentration that is lower than
the LAC due to the increased dilution from the additional ethanol. The
EPA is not aware of data on the deposit control needs of FFVs that
operate on E51-83. It is unclear the extent to which the current
requirements are effective in aiding the control of deposits in FFV
engine and fuel supply systems that result from the use of EFF.
Stakeholders have stated that as additive concentration diminishes due
to dilution with DFE, there is a point where the presence of a deposit
control additive ceases to be beneficial and can actually contribute to
deposit formation. Certain deposit control additives are also not
completely soluble in high ethanol content blends. In light of this,
the Tier 3 proposal requested comment on removing the requirement that
the gasoline portion of E51-83 must contain a deposit control additive
until the specific deposit control needs of these blends can be
evaluated. To the extent that E16-50 would no longer be treated as
gasoline, we also requested comment on not applying gasoline deposit
control standards to these blends pending further study.
---------------------------------------------------------------------------
\111\ See 40 CFR 80.161(a)(3).
---------------------------------------------------------------------------
We continue to believe that the current deposit control requirement
for the gasoline portion of E51-83 is not providing a meaningful
benefit to deposit control in these blends and may actually contribute
to deposits. There is currently insufficient data regarding the
potential effects of deposits on FFV emissions and what regulatory
specifications may be appropriate for deposit control additives used in
EFF. Likewise there are no test procedures that might be used for
regulatory purposes. Therefore, we are proposing to amend the
regulations to remove the requirement that the gasoline portion of E51-
83 must contain a certified deposit control additive.
There are similar concerns regarding using deposit control
additives certified for gasoline use in E16-50. Consequently we are
also proposing to defer setting deposit control requirements for E16-
50. We appreciate the concerns expressed in the comments on the Tier 3
proposal that all spark ignition fuels, including EFF, should be
required to provide a minimum level of deposit control. We may consider
adopting deposit control requirements for EFF in a later action should
appropriate deposit additives and test procedures be developed for use
with EFF and data become available to establish that there is
sufficient environmental need. In the meantime, we believe that the
resolution of this issue is best left to the marketplace.
7. Standards for Blendstocks Used by EFF Full-Refiners and Bulk
Blender-Refiners
EPA-compliant gasoline, BOBs, and DFE can be used to produce E85
under the current regulatory requirements. There are already
regulations in place under the EPA's gasoline program regarding the
sulfur, benzene, and presence of atypical elements in such blendstocks
that assure they are of sufficient quality for use in vehicle fuels
(including all EFF). This proposal would create a new classification of
certified natural gasoline EFF blendstock that could also be used by
EFF bulk blender-refiners. This proposal would also create a new
classification of uncertified natural gasoline EFF blendstock that
could be used by EFF full-refiners. Therefore, new fuel quality
requirements are needed for such natural gasoline EFF blendstocks. We
are proposing that hydrocarbons that are imported for use as an EFF
blendstock must be sourced from a foreign refiner that is registered
with the EPA. We believe that this requirement is
[[Page 80855]]
necessary to provide the EPA with sufficient oversight to ensure that
such hydrocarbon blendstocks meet the proposed quality specifications.
We are also requesting comment on allowing butane and pentane that are
approved for downstream blending into gasoline to be used by EFF full-
refiners and bulk blender-refiners.
a. Certified Natural Gasoline EFF Blendstock
To ensure that the use of certified natural gasoline as an EFF
blendstock by EFF full-refiners and bulk blender-refiners does not
result in increased FFV emissions, we are proposing that producers of
certified natural gasoline EFF blendstock must demonstrate compliance
with proposed quality requirements regarding sulfur and benzene
content. We are also proposing that certified natural gasoline EFF
blendstock be composed solely of CHONS.
The natural gasoline that is typically used to denature ethanol is
likely unsuitably high in sulfur and benzene content to ensure adequate
FFV emission control performance.\112\ The EPA set a 330 ppm per-gallon
sulfur cap on ethanol denaturant effective January 1, 2017, concurrent
with the implementation of the Tier 3 sulfur program. The use of
denaturant with 330 ppm sulfur at the maximum 3 volume percent
denaturant concentration finalized under the Tier 3 program would
result in 10 ppm sulfur content for the resulting DFE, consistent with
the Tier 3 requirements for DFE. The EPA did not finalize a benzene
specification for DFE because it was judged that the presence of the 3
volume percent cap on denaturant concentration finalized under the Tier
3 program would limit benzene concentration in DFE to well below the
0.62 volume percent annual average applicable for gasoline. These
specifications assume dilution of the sulfur and benzene content of the
denaturant with 97 percent neat (undenatured) ethanol that is assumed
to be free of sulfur and benzene.
---------------------------------------------------------------------------
\112\ We have insufficient data on the sulfur and benzene
content of natural gasoline used to denature ethanol to characterize
the extent of this concern.
---------------------------------------------------------------------------
However, if ethanol denaturant is used as a blendstock in EFF, the
concentration of such denaturant relative to the undenatured ethanol
used would be substantially higher than in DFE, resulting in
insufficient dilution of the sulfur and benzene present in the
denaturant. For example, if 30 percent denaturant at 330 ppm sulfur was
used with 70 percent undenatured ethanol to make E70, the resulting
sulfur content of the finished E70 would consistently be close to 100
ppm. Such consistently high sulfur levels in EFF would result in
significant FFV emissions control catalyst performance degradation and
a substantial increase in FFV emissions.
Therefore, to ensure that the emissions control equipment of FFVs
running on EFF are not impaired and that FFVs have the same emissions
performance as conventional gasoline vehicles running on gasoline, we
are proposing that certified natural gasoline EFF blendstock would be
required to meet a 10 ppm per-gallon sulfur cap and a 0.62 volume
percent per-gallon benzene cap. These proposed standards would be
consistent with the average standards applicable for gasoline and would
ensure that the sulfur and benzene content of EFF made by bulk blender-
refiners is equivalent to the levels found in gasoline without the need
to impose a per-batch testing requirement.\113\ Setting cap standards
for blendstocks used by blenders where additional testing is not
required and that are equivalent to the average standards applicable to
refiners (where per-batch testing is required) is consistent with the
established approach for DFE and butane/pentane blended into gasoline
and will help facilitate enforcement by allowing the EPA to evaluate
compliance on a batch-by-batch basis.
---------------------------------------------------------------------------
\113\ The gasoline 10 ppm annual average sulfur standard under
EPA's Tier 3 gasoline program will become effective January 1, 2017
(40 CFR 80.1603(a)). The gasoline 0.62 volume percent annual average
benzene standard became effective January 1, 2011 (40 CFR
80.1230(a)).
---------------------------------------------------------------------------
We are proposing that certified natural gasoline EFF blendstock
would be required to be composed solely of CHONS similar to the
requirement for gasoline producers. To ensure that certified natural
gasoline EFF blendstock is CHONS, we are proposing that it would be
required to be sourced from either a natural gas processing facility or
a crude oil refinery. We are proposing that a natural gas processing
plant means a facility designed to ``clean'' raw natural gas by
separating impurities and various non-methane hydrocarbons and fluids
to produce what is known as ``pipeline quality'' dry natural gas. A gas
processing plant is used to recover natural gas liquids including
natural gasoline and to remove other substances such as sulfur and
benzene from natural gasoline EFF blendstock as needed.\114\ We believe
that the processing steps used to produce certified natural gasoline
EFF blendstock at a natural gas processing plant or crude oil refinery
would provide adequate assurance that non-CHONS elements are not
present or would be removed, as opposed to other potential sources of
similar boiling range materials. To the extent that non-CHONS elements
are present in raw natural gas liquids, they would primarily be present
in the heavier boiling fractions that would be removed at natural gas
processing plants and crude oil refineries in the processes used to
produce natural gasoline. We are also proposing that the natural
gasoline must have received processing at a natural gas processing
plant or crude oil refinery, such as in a distillation tower and/or
desulfurization unit. These provisions would preclude a natural gas
processing plant or crude oil refinery from purchasing natural gasoline
and reselling it for use as certified natural gasoline without the
natural gasoline having been subjected to processing to assure its
quality. The proposed distillation specifications for certified natural
gasoline EFF blendstock discussed below would provide additional
assurance that non-CHONS elements are not present by requiring that
high boiling fraction materials are not present in significant
quantities. Existing provisions for the other EFF blendstocks would
continue to ensure that they are CHONS.\115\ Therefore, we are not
proposing a testing requirement or specific limit on the quantities of
atypical elements that may be present in certified natural gasoline EFF
blendstock at this time. The EPA intends to further evaluate the
potential presence of non-CHONS elements in certified natural gasoline
EFF blendstock and may propose additional control measures in the
future if warranted. We request comment on whether additional controls
may be needed to prevent the presence of non-CHONS elements in natural
gasoline EFF blendstock, with associated supporting data.
---------------------------------------------------------------------------
\114\ The proposed definition of natural gas processing facility
is based on a definition used by the U.S. Department of
Transportation, Pipeline & Hazardous Materials Safety Administration
at https://primis.phmsa.dot.gov/comm/FactSheets/FSNaturalGasProcessingPlants.htm.
\115\ The other proposed EFF blendstocks are finished gasoline,
gasoline BOBs, DFE, and undenatured ethanol.
---------------------------------------------------------------------------
To prevent an inappropriately high concentration of high boiling
point hydrocarbons in natural gasoline, we are proposing 275 [deg]F T90
distillation and 375 [deg]F final boiling point specifications
consistent with a commonly observed
[[Page 80856]]
industry consensus specification.\116\ We believe that most natural
gasoline, and in particular that which is a by-product of natural gas
production, would typically be well below these limits naturally. Since
natural gasoline is typically lighter than gasoline, these standards
would act as a backstop to prevent heavy hydrocarbons that could lead
to increased FFV emissions from being present in natural gasoline. We
understand that some distributors of natural gasoline observe 365
[deg]F T90 distillation and 437 [deg]F final boiling point
specifications for the natural gasoline they handle.\117\ However, we
believe that these specifications would allow for the presence of an
inappropriately high concentration of high boiling point hydrocarbons
in natural gasoline used as an EFF blendstock, which could lead to
elevated exhaust emissions. Additionally these specifications are not
necessary to allow for adequate supply of certified natural gasoline,
and could make enforcement against inappropriate addition of compounds
to EFF more difficult. We request comment on whether the proposed
specifications are appropriate or whether different specifications are
needed to be adequately protective, such as simply establishing a 300
[deg]F final boiling point specification.
---------------------------------------------------------------------------
\116\ Gas Processors Association Standard 3132-84, ``Natural
Gasoline Specifications and Test Methods.''
\117\ ASTM D8011-16, ``Standard Specification for Natural
Gasoline as a Blendstock in Ethanol Fuel Blends or as a Denaturant
for Fuel Ethanol.''
---------------------------------------------------------------------------
We are proposing that certified natural gasoline EFF blendstock
would be subject to a 15 psi RVP maximum specification. This would
provide additional assurance that an abnormally high fraction of higher
boiling compounds are not present that could lead to unexpected vehicle
performance issues that could adversely impact FFV emissions. We
believe that this is consistent with current industry practice that
limits natural gasoline RVP to below atmospheric pressure (14.7 psi) to
avoid the need for more costly storage vessels.
We are also proposing that refiners and importers of certified
natural gasoline EFF blendstock would be required to register with the
EPA, submit batch reports annually, and issue PTDs indicating that
their product is suitable for use by EFF bulk blender-refiners. We are
proposing that the PTD also include the RVP of the natural gasoline to
facilitate use of the proposed RVP tool to demonstrate compliance by
EFF bulk blender-refiners with the proposed maximum RVP specification.
The proposed RVP requirements for EFF would typically limit the
amount of natural gasoline that could be used to make EFF from May 1
through September 15 for parties upstream of retail and WPC facilities
to about 30 volume percent.\118\ However, from September 16 through
April 30 for parties upstream of retail and WPC facilities, it would
technically be possible to use natural gasoline as the sole hydrocarbon
blendstock in EFF while still meeting the ASTM RVP maximum requirement
absent additional controls. In the most extreme case, this might result
in an E16 blend made with 84 percent natural gasoline.
---------------------------------------------------------------------------
\118\ This assumes a 12 psi RVP for the natural gasoline used as
an EFF blendstock. Due to variability in natural gasoline RVP, the
use of more or less natural gasoline to produce EFF could be
possible while maintaining compliance with the proposed EFF RVP
requirements.
---------------------------------------------------------------------------
The industry consensus ASTM standard for E51-83 allows the use of
natural gasoline as a blendstock.\119\ However, there is currently no
ASTM standard for E16-50 blends where natural gasoline could be the
primary hydrocarbon blendstock.\120\ There could be operability issues
that arise from the use of natural gasoline as the primary hydrocarbon
blendstock in E16-50 that have yet to be addressed. Additionally, while
permitted, it is not clear that ASTM envisioned natural gasoline to be
used in E51-83 in concentrations up to 49 volume percent. Given the
wide variability in the composition and distillation range of natural
gasoline and its potential to naturally contain atypical compounds in
concentrations greater than found in refined gasoline, a limit of 30
volume percent may be more appropriate. Therefore, to address concerns
that the potential overuse of natural gasoline to produce EFF might
result in unforeseen vehicle operability and/or emission performance
problems, we are proposing to limit the amount of natural gasoline that
may be used as a blendstock to produce EFF with DFE and other approved
blendstocks to 30 volume percent.\121\ Natural gasoline is often used
as a denaturant in DFE and beginning with the January 1, 2017,
implementation date for the Tier 3 gasoline program, the denaturant
concentration in DFE will be limited to 3 volume percent.\122\ The
proposed 30 volume percent limit on the use of natural gasoline as an
EFF blendstock would not include the amount of natural gasoline used to
denature ethanol. Thus, if 30 volume percent natural gasoline
blendstock was added to 70 volume percent DFE containing natural
gasoline as a denaturant, the concentration of natural gasoline in the
finished EFF blend would be approximately 32 volume percent.
---------------------------------------------------------------------------
\119\ ASTM D5798-15, ``Standard Specification for Ethanol Fuel
Blends for Flexible-Fuel Automotive Spark-Ignition Engines.''
\120\ ASTM D7794-14, ``Standard Practice for Blending Mid-Level
Ethanol Fuel Blends for Flexible-Fuel Vehicles with Automotive
Spark-Ignition Engines,'' specifies procedures for blending mid-
level ethanol blends (E16-50) using E51-83 that conforms to ASTM
D5798-15. Under ASTM D5798-15, E51-83 may be produced using natural
gasoline as a blendstock provided that the finished E51-83 meets all
the specifications including maximum RVP.
\121\ The proposed 30 volume percent limit on natural gasoline
used as an EFF blendstock would apply to the sum of certified
natural gasoline EFF blendstock and uncertified natural gasoline EFF
blendstock used to produce EFF.
\122\ See 40 CFR 80.1610.
---------------------------------------------------------------------------
We believe that these proposed standards are necessary to ensure
that the proposed flexibility to allow natural gasoline use as an EFF
blendstock would not result in increased FFV emissions. ASTM recently
published a standard that for the first time put in place a level of
quality control for natural gasoline used as an E51-83 blendstock.\123\
This ASTM standard noted that it would be appropriate for such
blendstock used in the U.S. outside of California to meet a 30 ppm
sulfur maximum consistent with the current 30 ppm average gasoline
sulfur requirement under the EPA's Tier 2 gasoline program, and a 0.62
volume percent benzene cap consistent with the EPA's gasoline benzene
program.\124\ The ASTM standard also noted that the 30 ppm sulfur
maximum would be adjusted to remain consistent with the gasoline 10 ppm
average sulfur standard when the EPA's Tier 3 gasoline program is
implemented on January 1, 2017. This approach is consistent with our
proposal to match the sulfur and benzene cap standards to the average
standards currently applicable for gasoline. The ASTM standard also
notes the importance of preventing the presence of non-CHONS elements
in natural gasoline and states that work is underway to evaluate this
potential concern. Therefore, the ASTM standard should help to prepare
industry to comply with the EPA's proposed specifications for natural
gasoline EFF blendstock. Some states require compliance with ASTM fuel
standards. Hence, the ASTM standard for natural gasoline may provide
some additional assurance of compliance with the
[[Page 80857]]
proposed requirements in this proposal. However, the ASTM standards are
voluntary industry consensus standards that are not enforceable
nationwide. As discussed above, the proposed requirements for natural
gasoline EFF blendstock also contain a number of provisions and
safeguards, including EPA compliance oversight, that are not present in
the ASTM standard. Therefore, as with many of our other fuel standards,
these proposed provisions would provide substantially greater assurance
that the quality of natural gasoline used as an EFF blendstock is
sufficient to support the EPA's emissions control goals for FFVs
compared the ASTM standard alone.
---------------------------------------------------------------------------
\123\ ASTM D8011-16, Standard Specification for Natural Gasoline
as a Blendstock in Ethanol Fuel Blends or as a Denaturant for Fuel
Ethanol.''
\124\ The Tier 2 program's 30 ppm annual average sulfur standard
in 40 CFR 80.195(a)(1) will be replaced by the Tier 3 program's 10
ppm annual average sulfur standard beginning January 1, 2017 (40 CFR
1603(a)).
---------------------------------------------------------------------------
We believe the economic incentive provided by this new flexibility
would be sufficient for natural gasoline producers to take the
necessary steps to provide certified natural gasoline EFF blendstock to
EFF full-refiners and bulk blender-refiners. For example, E70 could be
produced with approximately 30 volume percent natural gasoline while
meeting the proposed 9 psi maximum RVP standard in CG areas.\125\
Depending on the cost of the blendstocks used, E70 made with natural
gasoline could be approximately 5 percent less costly on an energy
adjusted basis compared to using gasoline as the sole hydrocarbon
blendstock.\126\ EFF could also continue to be manufactured using
gasoline/BOBs as under current regulatory requirements. Hence, a
potential shortage of natural gasoline that meets the proposed
specifications for use an EFF blendstock would not interfere with the
production of EFF compared to the current requirements.
---------------------------------------------------------------------------
\125\ The amount of high-volatility natural gasoline that could
be used as an EFF blendstock would be governed by what regional RVP
specification applied to EFF.
\126\ The cost of ethanol, gasoline, and natural gasoline tend
to vary over time both individually and in relation to one another.
See the memorandum, ``Potential Impact on E85 Cost from the use of
Natural Gasoline as Blendstock,'' available in the docket for this
action. The relationship between the price of E85 compared to the
price of E10 and E85 sales was discussed in the 2014-2016 RFS final
rule (80 FR 77420, December 14, 2015). See Figure II.E.2.iii-1.
---------------------------------------------------------------------------
b. Uncertified Natural Gasoline EFF Blendstock
EFF full-refiners could use uncertified natural gasoline EFF
blendstock provided that they demonstrate that each batch: (1) Was
sourced from a natural gas processing plant or crude oil refinery; (2)
Meets 275 [deg]F T90 distillation and 375 [deg]F final boiling point
specifications; and (3) Meets a maximum 15 psi RVP specification. These
requirements parallel those proposed above for certified natural
gasoline EFF blendstock to ensure that non-CHONS elements are not
present and that an undue fraction of heavy or light boiling fractions
are not present. EFF full-refiners could test each batch of uncertified
natural gasoline EFF blendstock to demonstrate compliance with the
proposed T90, final boiling point, and maximum RVP specifications. EFF
full-refiners would also need to obtain documentation from their
suppliers that demonstrates that uncertified natural gasoline EFF
blendstock was sourced from a processing unit such as a distillation
tower and/or desulfurization unit at natural gas processing plant or
crude oil refinery. Such documentation would need to establish that the
uncertified natural gasoline had received some processing at a natural
gas processing plant or crude oil refinery, such as in a distillation
tower and/or desulfurization unit. We are not proposing sulfur or
benzene specifications for uncertified natural gasoline EFF blendstock
because EFF full-refiners would already be required to test each
finished batch of EFF to demonstrate compliance with the proposed
sulfur and benzene specifications for EFF.\127\
---------------------------------------------------------------------------
\127\ EFF full-refiners would also be required to test each
batch of EFF to demonstrate compliance with the proposed EFF RVP
requirements.
---------------------------------------------------------------------------
c. Butane and Pentane
We request comment on allowing butane and pentane that meets the
requirements for downstream gasoline blending to be used as blendstocks
by EFF full-refiners and bulk blender-refiners.\128\ We further request
comment on whether their use as EFF blendstocks should be limited to
the period from September 16 through April 30. Butane and pentane
blended into gasoline downstream of the refinery are required to meet a
10 ppm per-gallon sulfur cap under the Tier 3 gasoline sulfur program.
Such butane and pentane are also required to meet a 0.03 volume percent
benzene cap. These standards would ensure that butane and pentane are
suitable for use as EFF blendstocks with respect to sulfur and benzene
content. The gasoline program requirements for these blendstocks would
also ensure that atypical elements are not present. However, they are
not typically used currently for producing EFF and their high
volatility could constrain their use. We request comment on whether
allowing the use of butane and pentane as EFF blendstocks could result
in unforeseen distillation issues for the final EFF blend. The
potential existence of adverse impacts on the properties of the
finished EFF blend is the primary reason why we are not proposing to
allow the use of butane and pentane as EFF blendstocks at this time.
Another complicating factor is that the proposed RVP compliance tool
would not adequately cover butane and pentane blending in its current
form.\129\
---------------------------------------------------------------------------
\128\ The requirements for butane blended into gasoline
downstream of the refinery are contained in 40 CFR 80.82. The
requirements for pentane blended into gasoline downstream of the
refinery are contained in 40 CFR 80.85 and 80.86.
\129\ The proposed RVP compliance tool is discussed in section
IV.F.3 of this preamble.
---------------------------------------------------------------------------
d. Potential Additional Grades of DFE and Natural Gasoline
Ethanol producers have requested that the EPA consider a means to
certify a grade of DFE that meets lower sulfur and benzene caps for use
with a grade of certified natural gasoline EFF blendstock that meets
higher sulfur and benzene standards than those proposed above. The
respective sulfur and benzene standards for these grades would be set
to provide equivalent sulfur and benzene levels in the finished EFF
blends produced as would be achieved by using DFE that meets the
existing requirements \130\ and certified natural gasoline EFF
blendstock that meets the proposed sulfur and benzene standards. This
approach would be similar to that outlined in the recent ASTM standard
for natural gasoline used in higher level ethanol blends.\131\
---------------------------------------------------------------------------
\130\ The requirements for DFE are contained in 40 CFR 80.1610.
\131\ ASTM D8011-16, ``Standard Specification for Natural
Gasoline as a Blendstock in Ethanol Fuel Blends or as a Denaturant
for Ethanol Fuel.'' See table X1.2. The use of natural gasoline
grade EFB2 as an E51-83 blendstock in the ASTM standard assumes the
concurrent use of DFE meeting the California's sulfur and benzene
specifications (10 ppm sulfur and 0.06 volume percent benzene). This
would ensure a level of control of EFF sulfur content consistent
with the requirements under the EPA's Tier 2 gasoline sulfur
program.
---------------------------------------------------------------------------
The use of undenatured ethanol as an EFF blendstock rather than DFE
might provide even more opportunity for dilution of the sulfur and
benzene content of natural gasoline used as an EFF blendstock. Hence,
there may also be the potential for yet another grade of certified
natural gasoline EFF blendstock with somewhat higher sulfur and benzene
specifications to be used at ethanol production plants in combination
with undenatured ethanol to make EFF. Under such an approach, the
sulfur and benzene content of the undenatured ethanol could be
considered negligible provided that the producer maintains production
quality control records to demonstrate that
[[Page 80858]]
sulfur was not introduced as a by-product of the production process.
Ethanol producers stated that including such additional grades of
DFE and natural gasoline EFF blendstock would allow access to a larger
volume of natural gasoline for blending into EFF. This approach would
necessitate additional product segregation, PTD, reporting, and
recordkeeping requirements to ensure that the different grades of
certified natural gasoline were used under the appropriate
circumstances. For example, all parties in the production and
distribution system would need to segregate and keep records on the
various grades of certified natural gasoline they handle and maintain
PTD records. We request comment on this approach, including what
standards would be appropriate for the additional grades of DFE and
natural gasoline EFF blendstock discussed above, and the means of
simplifying its implementation while ensuring enforceability.
8. Exemptions From EFF Requirements
The following paragraphs discuss several provisions and exemptions
from the proposed EFF standards in special circumstances.
a. EFF Used in Military Applications
Due to national security considerations, some of the EPA's existing
regulations allow the military to request and receive National Security
Exemptions (NSEs) for vehicles, engines, and equipment from emissions
regulations if the operational requirements for such vehicles, engines,
or equipment warrant such an exemption. In our diesel fuel program and
the Tier 2 and Tier 3 gasoline sulfur programs, we provide an exemption
for fuel used in tactical military vehicles and nonroad engines and
equipment with a NSE from the vehicle and engine emissions standards.
Fuel used in these applications would also be exempt if it is used in
tactical military vehicles, engines, or equipment that are not covered
by an NSE but, for national security reasons (such as the need to be
ready for immediate deployment overseas), need to be fueled on the same
fuel as those with an NSE. We are proposing to extend this exemption to
EFF as well.
b. EFF Used in Research, Development, and Testing
Similar to existing EPA fuels programs, we are proposing to allow
for requests for an exemption from the EFF standards for EFF used for
research, development, and testing purposes (``R&D exemption''). We
recognize that there may be legitimate research programs that require
the use of EFF with benzene, sulfur, or RVP levels greater than those
allowed under the proposed EFF requirements. Thus, we are proposing
provisions for obtaining an exemption from the prohibition against
persons producing, distributing, transporting, storing, selling, or
dispensing EFF that does not meet the EFF standards, where such fuel is
necessary to conduct a research, development, or testing program.
Parties seeking an R&D exemption would be required to submit an
application for exemption to the EPA that describes the purpose and
scope of the program, and the reasons why the noncompliant EFF is
necessary. Upon presentation of the required information, an exemption
could be granted at the discretion of the EPA, with the condition that
the EPA could withdraw the exemption in the event the EPA determines
the exemption is not justified. In addition, an exemption based on
false or inaccurate information would be considered void ab initio. EFF
subject to an exemption would be exempt from certain provisions of this
rule, including the sulfur standards, provided certain requirements are
met. These requirements include the segregation of the exempt EFF from
non-exempt EFF, identification of the exempt EFF on PTDs, and pump
labeling.
c. EFF for Export
EFF produced for export, and that is actually exported for use in a
foreign country, would be considered exempt from the fuel content
standards and other requirements of the proposed EFF program. In order
to exclude exported EFF, refiners would have to retain records to
demonstrate that the EFF was exported. Such EFF would have to be
designated by the EFF refiner for export, and the PTD would have to
state that the EFF is for ``export only;'' otherwise, the EFF would be
considered as intended for use in the U.S. and subject to the proposed
EFF standards. EFF intended for export would be required to be
segregated from all EFF intended for use in the U.S. Distributing or
dispensing such fuel for domestic use would be illegal.
d. California EFF
The current State of California requirements for EFF do not
parallel those we are proposing for EFF.\132\ California defines E85 as
containing a minimum ethanol content of 79 volume percent ethanol as
opposed to the 51 volume percent minimum set by ASTM.\133\ The quality
of E85 in California is controlled by narrow restrictions on the
blendstocks that may be used to blend E85: California compliant
gasoline and DFE. Natural gasoline is not currently allowed as an E85
blendstock in California. Beyond this, California has a maximum 8.7 psi
RVP requirement and a 40 ppm maximum sulfur standard for E85.
California currently does not have specific regulations for E16-78
ethanol blends. Hence, E16-78 blends are currently prohibited for sale
in California.
---------------------------------------------------------------------------
\132\ The California regulations for E85 are contained in 13
Code of California Regulations (CCR) 2292.4.
\133\ ASTM D5798-15 ``Standard Specification for Ethanol Fuel
Blends for Flexible-Fuel Automotive Spark-Ignition Engines.''
---------------------------------------------------------------------------
We are proposing to exempt California EFF from the requirements in
this proposal provided that California EFF is segregated from federally
compliant EFF, and PTD and recordkeeping requirements are observed for
California EFF. These proposed requirements are similar to those
associated with the current exemption from federal sulfur standards for
California diesel fuel that meets California diesel fuel standard. We
believe that it is appropriate to exempt California EFF from the
requirements in this proposal to allow California the latitude to
regulate EFF in a manner that is consistent with the state's unique air
quality needs and the requirements under the state's Low Carbon Fuel
Standard (LCFS) program.\134\ We also understand that California is
considering amending the sulfur and RVP specifications for E85 and
implementing specifications for E16-78 ethanol blends.
---------------------------------------------------------------------------
\134\ The California LCFS regulations are contained in Cal Code
Regs. tit.17, Sec. 95480.
---------------------------------------------------------------------------
e. Other Special Provisions and Potential Exemptions
Additionally, in existing EPA fuels programs we have included
exemptions for racing fuel and for fuel used in the U.S. territories of
Guam, American Samoa, and the Northern Mariana Islands. We have
included these same exemptions for the proposed EFF requirements and
request comment on whether or not such exemptions would be needed for
this program.
D. Certification of Ethanol Flex Fuel
All producers or importers of EFF are considered EFF refiners, and
thus responsible for demonstrating that the EFF blends they produce or
import meet EPA quality requirements. This proposal contains three
options under
[[Page 80859]]
which EFF refiners could demonstrate compliance with the proposed EFF
quality requirements (i.e., ``certify''), which are tailored to the
party's ability to affect fuel quality. Given the potential challenges
associated with batch sampling, testing, and reporting for the
relatively small batches of EFF typically produced, we are proposing
options with compliance demonstration requirements that are
commensurate with the party's ability to affect EFF quality. These
options are further discussed below.
1. EFF Full-Refiner Certification Option
Under the proposed EFF full-refiner option, refiners and importers
of EFF blends could use certified and uncertified natural gasoline
ethanol flex fuel blendstock, certified gasoline, BOBs, DFE, and
undenatured ethanol as EFF blendstocks,\135\ provided that they conduct
per-batch sulfur, benzene, and RVP testing to demonstrate compliance
with the proposed standards. The requirements under this option
parallel those for a gasoline refiner, and we expect that producers
would only take on the regulatory burden under this option if the cost
advantages that accompany the additional blending flexibility justify
the added cost of demonstrating compliance.
---------------------------------------------------------------------------
\135\ Allowing the use of undenatured ethanol as an EFF
blendstock would allow ethanol producers to meet the Alcohol and
Tobacco Tax and Trade Bureau (TTB) ethanol denaturant requirements
in the same blending operation used to produce EFF, rather than
force the ethanol to be denatured in a separate step. This might
also allow for additional flexibility in the quality of the natural
gasoline that might be used as a blendstock.
---------------------------------------------------------------------------
EFF full-refiners would be required to register each facility,
provide annual reports on the EFF produced, issue compliant PTDs for
each EFF batch, and maintain records to demonstrate compliance. As part
of the proposed annual reporting requirement, EFF full-refiners would
be required to certify that the EFF they produced or imported is
compliant with the proposed CHONS requirement in addition to providing
batch test data to demonstrate compliance with the other proposed
quality requirements. EFF full-refiners would have complete
responsibility to demonstrate compliance of the uncertified natural
gasoline they use as an EFF blendstock with the proposed requirements.
To support that the uncertified natural gasoline is CHONS, EFF full-
refiners would be required to maintain records to demonstrate the
uncertified natural gasoline blendstock used was sourced only from
processing units at natural gas processing plants or crude oil
refineries and that no non-CHONS additives were added.\136\ Such
records could be bills of lading from the natural gasoline supplier.
EFF full-refiners would also be required to maintain records to
demonstrate that the natural gasoline used met the proposed maximum
T90, final boiling point, and RVP specifications to ensure that high
boiling point hydrocarbon contaminants and an unrepresentative fraction
of light boiling point hydrocarbons are not present.\137\ Such records
could be from testing of the natural gasoline performed at the EFF
full-refinery, or of test results provided by the natural gasoline
supplier.
---------------------------------------------------------------------------
\136\ The natural gasoline must have received some processing at
a natural gas processing plant or crude oil refinery, such as in a
distillation tower and/or desulfurization unit.
\137\ See section IV.C.7 of this preamble.
---------------------------------------------------------------------------
We are proposing that EFF full-refiners would be the only party
that could designate natural gasoline as uncertified natural gasoline
EFF blendstock and that uncertified natural gasoline blendstock could
not be transferred to another party. EFF full-refiners could use bills
of lading and certificates of analysis from their natural gasoline
supplier to help demonstrate compliance with the requirements for
uncertified natural gasoline EFF blendstock. Therefore, we believe that
there is no practical reason to allow an entity upstream of an EFF
full-refinery to designate natural gasoline as uncertified natural
gasoline EFF blendstock or for natural gasoline designated as
uncertified natural gasoline EFF blendstock to be transferred to
another party.
We are proposing that EFF batch certification testing would be
conducted on a ``certification tank'' of EFF where individual samples
are drawn from the top, middle, and bottom of the tank to ensure that
the test results are representative, consistent with existing gasoline
tank sampling requirements.\138\ We request comment on what additional
requirements might be needed to assure that samples are collected from
a homogenous batch, and to limit stratification in the storage tank
from which EFF is drawn for testing. We are also requesting comment on
whether the calculative RVP compliance tool discussed below for use by
EFF bulk blender-refiners could also be used by EFF full-refiners in
place of RVP testing to demonstrate compliance with the proposed EFF
RVP requirements.
---------------------------------------------------------------------------
\138\ Previously certified EFF could be used as a blend
component to produce new certified batches of EFF provided that the
newly certified batch of EFF was sampled and tested per the proposed
requirements. We anticipate that this would be the typical practice
for complying with the tank heel of previously certified EFF that is
difficult to remove from the certification tank.
---------------------------------------------------------------------------
For EFF full-refiners that are also alcohol fuel plants under the
Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations, the
addition of at least two volume percent uncertified natural gasoline
blendstock would result in distilled spirits that are unfit for
beverage use. As a result, unlike other EFF refiners, EFF full-refiners
have the option to blend in uncertified natural gasoline blendstock to
accomplish EFF blending and denaturing of ethanol in one step. As
prescribed in 26 U.S.C. 5181, when the distilled spirits are produced
under the statutory and regulatory provisions for fuel use and are
being withdrawn exclusively for fuel use the fuel alcohol is withdrawn
free of tax.\139\ For EFF full-refiners that are distilled spirit
plants, they also may withdraw ethanol tax free when it has been
completely denatured for any lawful purpose, including use as fuel
alcohol. Completely denatured alcohol is created by adding 2 gallons or
more of denaturant to each 100 gallons of undenatured ethanol (i.e.,
resulting in a minimum denaturant concentration of approximately 1.96
volume percent).\140\ In consulting with the TTB, we have confirmed
that the addition of more than 1.96 volume percent denaturant, such as
uncertified natural gasoline blendstock at the proposed maximum level
(i.e., 30 volume percent) would still allow the distilled spirit plant
to withdraw fuel alcohol tax free.
---------------------------------------------------------------------------
\139\ See 27 CFR part 19.
\140\ See 27 CFR 19.746.
---------------------------------------------------------------------------
While we anticipate that most current E85 blenders would use the
following EFF bulk blender-refiner option, ethanol producers have
expressed interest in this EFF full-refiner option. We understand that
the proposed EFF certification tank requirements are not well suited to
the existing EFF production methods at ethanol production plants where
the various component blendstocks are mixed at set ratios via in-line
blending to produce EFF as it is pumped into tank trucks or rail cars
for downstream delivery. Therefore, we are requesting comment on
alternatives to the proposed certification tank approach to streamline
compliance for ethanol producers that wish to take advantage of the EFF
full-refiner option, which would still be able to be used to ensure
compliance.
Under one such alternative, a ``hand blend'' option, a
representative sample of EFF at a given blend ratio would be made up
from representative samples of the individual EFF blendstocks. To
create a representative sample of each
[[Page 80860]]
EFF blendstock, individual samples would be drawn from the top, middle,
and bottom of the blendstock tank to ensure that the test results are
representative. Testing would be conducted on the representative EFF
sample to demonstrate compliance. These test results would be valid for
all batches produced at the same blend ratio as long as no new product
was added to the tanks from which the EFF blendstocks are drawn. As an
additional compliance assurance measure we might require that periodic
samples of the blended EFF be retained and later tested for compliance.
One option that we request comment on would have a sample of blended
EFF taken once for every 250,000 gallons of EFF produced or once every
three months, whichever is more frequent. The proposed EFF retail fuel
survey requirements would provide additional assurance that EFF quality
was being maintained.\141\ However, we are not proposing the hand blend
option discussed above due to concerns that it might allow for an
unacceptable variability in EFF composition. Variability in the
composition of EFF production batches compared to such a hand blend
could arise if the blend ratios of the different blendstocks did not
remain constant. We request comment on what additional provisions might
be appropriate to ensure a consistent level of EFF quality while
providing a streamlined means of compliance demonstration under the EFF
full-refiner option.
---------------------------------------------------------------------------
\141\ The proposed EFF quality survey requirements are discussed
in section IV.F.9 of this preamble.
---------------------------------------------------------------------------
2. EFF Bulk Blender-Refiner Certification Option
Much of the E51-83 is currently made at petroleum terminals and
ethanol production facilities by mixing blendstocks in prescribed
ratios via in-line blending as the fuel is delivered into tanker trucks
for delivery to retail stations. We anticipate the vast majority of
E51-83 will continue to be made by such bulk blenders at gasoline
terminals and ethanol plants. The small batch size and timing
constraints when E51-83 is made as the product is dispensed into a tank
truck for delivery to retail and WPCs facilities would likely make the
per-batch EFF sulfur and benzene testing requirements under the EFF
full-refiner option impractical for EFF bulk blender-refiners. There is
also no clear technical path to facilitate per-batch RVP testing under
such circumstances since such testing could introduce unacceptable
delay during tank trucks picking up EFF at product terminals.
Therefore, we are proposing the EFF bulk blender-refiner certification
option under which bulk blenders could avoid per-batch testing by using
only previously certified blendstocks, where much of the compliance
demonstration has been accomplished by the blendstock producer. The
only blend components that such bulk blenders can currently use while
being assured of compliance with the existing sub-sim requirement for
E51-83 are gasoline, BOBs, and DFE. We are proposing to expand this
list of blend components to allow for increased EFF production.
We are proposing that to be treated as an EFF bulk blender-refiner,
bulk blenders would be limited to using the following blendstocks that
had been certified by their producers as meeting EPA quality
requirements to produce EFF: DFE, gasoline, BOBs, and certified natural
gasoline EFF blendstock.\142\ We are proposing that an EFF bulk
blender-refiner that is also an ethanol producer could also use
undenatured ethanol as an EFF blendstock similar to under the EFF full-
refiner option. In other words, they could not use uncertified natural
gasoline EFF blendstock without having to meet the EFF full-refiner
option requirements.
---------------------------------------------------------------------------
\142\ We are also proposing that EFF bulk blender-refiners would
be limited to using a maximum of 30 volume percent of certified
natural gasoline to produce EFF and that the addition of additives
to certified natural gasoline EFF blendstock would be prohibited.
---------------------------------------------------------------------------
EFF bulk blender-refiners that continue to use only DFE and
certified gasoline/BOBs that do not take advantage of the 1 psi waiver
for E10 to make E51-83 would have only minimal additional regulatory
burdens under this proposal associated with registration, annual
reporting, recordkeeping, PTDs, and participation in the proposed EFF
quality survey. EFF bulk blender-refiners that choose to take advantage
of the proposed new blending flexibility to use natural gasoline and
those that use E10/BOBs that take advantage of the 1 psi waiver for E10
would be subject to additional compliance demonstration requirements,
potentially including per-batch RVP testing consistent with their
ability to affect EFF quality. However, bulk blenders would only choose
to accept the additional regulatory burden that accompanies the
increased blending flexibility if there was an economic advantage to do
so. We anticipate that the opportunity to use relatively low cost
natural gasoline as an EFF blendstock could result in a significant
cost savings in the production of EFF, while minimizing the regulatory
burden and ensuring that EFF quality supports the EPA's environmental
goals.
EFF bulk blender-refiners could demonstrate compliance with the
proposed sulfur and benzene specifications and CHONS requirement by
maintaining PTDs showing that they used only the approved blendstocks.
Since the sulfur and benzene content of blended fuels is directly
proportional to the sulfur and benzene content in the blendstocks used
and bulk blenders would be limited to using certified blendstocks to
manufacture EFF that meet applicable average and cap sulfur and benzene
standards, we could be assured of compliance with the sulfur and
benzene specifications for EFF without requiring per-batch testing.
However, the nonlinearity in the RVP of ethanol blended fuels means
that additional provisions would be needed for EFF bulk blender-
refiners to demonstrate compliance with the proposed maximum RVP
standards for EFF from May 1 through September 15 for parties upstream
of retail and WPC facilities. We are proposing several paths that EFF
bulk blender-refiners could use to demonstrate compliance with the
proposed maximum RVP requirements: \143\
---------------------------------------------------------------------------
\143\ In their annual reports to the EPA, EFF bulk blender-
refiners would be required to identify the method used to
demonstrate compliance for each batch with detailed supporting
materials including and provide information on the blendstocks used,
the inputs to the RVP compliance tool if used, and the results of
each RVP test if per-batch testing if conducted.
---------------------------------------------------------------------------
EFF bulk blender-refiners that use only gasoline and BOBs
that are compliant with the applicable regional RVP specifications
without benefit of the 1 psi waiver for E10 could demonstrate
compliance simply by maintaining the PTDs for the blendstocks used.
EFF bulk blender-refiners that use certified natural
gasoline EFF blendstock (in addition to gasoline/BOBs) or those that
use gasoline/BOBs that take advantage of the 1 psi waiver for E10 as
EFF hydrocarbon blendstocks could demonstrate compliance by either:
[cir] Conducting per-batch RVP testing, or
[cir] Using an RVP compliance tool.\144\
---------------------------------------------------------------------------
\144\ The proposed RVP compliance tool is discussed in section
IV.F.3 of this preamble.
---------------------------------------------------------------------------
To the extent per-batch RVP testing is used rather than the RVP
compliance tool, we request comment on the potential to allow for less
frequent testing provided that there was no change in the composition
of the blendstocks or the blending recipe. Some parties may wish to
perform per-
[[Page 80861]]
batch testing because early indications from the EPA's test program to
evaluate the performance of the RVP compliance tool may slightly
overestimate RVP.\145\ Hence, the use of per-batch testing could allow
the use of slightly more natural gasoline while remaining compliant
with the proposed RVP requirements.
---------------------------------------------------------------------------
\145\ The EPA expects to have the results of the test program to
confirm the utility of the RVP compliance tool for EFF blends made
with natural gasoline in time to inform the final rule to follow
this proposal.
---------------------------------------------------------------------------
We are proposing that EFF bulk blender-refiners would be required
to register with the EPA and provide annual reports on the EFF they
produce. We expect that most EFF bulk blender-refiners would already be
registered with the EPA as gasoline oxygenate blenders or ethanol
producers. EFF bulk blender-refiners would also be required to provide
PTDs for each batch of EFF they produce. The issuance of PTDs by fuel
producers is common business practice.
3. EFF Blender Pump-Refiner Certification Option
Blender pumps produce a fuel with a particular ethanol content by
drawing from two ``parent blends'' in different tanks at specified
volume ratios. The blender pump can produce a mixture with an ethanol
content anywhere between that exhibited by the parent blends in the two
tanks. In most current cases, this involves E10 gasoline and E85. This
proposal would replace the current gasoline refiner requirements for
producers of E16-50 at blender pumps with requirements for the parent
blends that may be used, including E51-83.
The properties of the blends produced are determined by those of
the parent blends. Since sulfur, benzene, and non-CHONS elements blend
linearly, compliance of the parent blends with the proposed
specifications for these fuel parameters would ensure the compliance of
blends produced at blender pumps. In the context of the average
standards for benzene and sulfur that apply to gasoline, the benzene
and sulfur concentrations of the EFF produced will vary, but should not
increase on average. However, the nature of blending hydrocarbon fuels
with ethanol is such that the RVP of the blend exhibits a highly
nonlinear response. That is, the RVP of a blend of two fuels with two
different ethanol contents diverges significantly from what one would
predict based on a volume-weighted averaging of the RVPs of the two
fuels. We conducted RVP modeling to evaluate the RVP of blends made at
blender pumps using the parent blends that are commonly used. The
results of this modeling indicate the use of the parent blends commonly
used at blender pumps would result in mid-level ethanol blends that are
expected to be within the evaporative emissions control capacity of
FFVs.\146\ Therefore, we are proposing that EFF blender pump-refiners
could demonstrate compliance with the proposed EFF sulfur, benzene,
RVP, and CHONS requirements by maintaining PTDs to demonstrate that
only certified gasoline and EFF were used as parent blends and
participate in the proposed EFF quality survey. Records of the parent
blends used are already kept as part of common business practice and we
expect that in the vast majority of cases no changes would need to be
made to the type of parent blends used at blender pumps. These
requirements represent a substantial reduction in the burden of
compliance for blender pump operators compared to the current per-batch
testing and reporting requirements for E16-50 gasoline refiners while
continuing to safeguard the environmental performance of E16-50.
---------------------------------------------------------------------------
\146\ A discussion of the proposed volatility requirements for
EFF blends and the underlying RVP modeling is discussed in section
IV.C.3 of this preamble.
---------------------------------------------------------------------------
We expect that E51-83 would be the EFF parent blend of choice at
blender pumps so that it could be made available for sale, although
other EFF blends could be used. We request comment on requiring that
E51-83 be the EFF parent blend used at blender pumps. We believe that
this limitation could provide additional quality control benefits for
blender pumps while not removing any meaningful flexibility since using
E16-50 as a parent blend is not currently a common practice at blender
pumps. The EPA intends to monitor the RVP of blends produced at blender
pumps and may propose additional controls in a later action if
warranted.\147\ EFF blender pump-refiners would also be required to
perform quality assurance practices typical of gasoline retailers to
limit contamination. For example, EFF retailers would also be required
to ensure that their retail tanks are turned over each year from
wintertime EFF (to which RVP requirements do not apply) to summertime
EFF that is compliant with the proposed RVP requirements.
---------------------------------------------------------------------------
\147\ Such monitoring would be accomplished through the proposed
third-party independent survey of the RVP of EFF at blender pumps.
---------------------------------------------------------------------------
Some blender pump operators have expressed interest in using DFE as
a parent blend to produce EFF. Allowing the use of DFE as a parent
blend component at blender pumps would provide additional flexibility
to industry while meeting the EPA's environmental goals. The use of DFE
as a parent blend could facilitate the direct marketing of DFE from
ethanol plants to fuel retailers and allow retailers to separate RINs
from DFE as it is used to create motor vehicle fuel. These practices
could have the potential to reduce the retail cost of EFF. The use of
DFE as a parent blend could also simplify the adjustment of blender
pumps to produce various blend ratios of EFF compared to the use of EFF
that may vary in ethanol content seasonally. When EFF is used as a
parent blend, blender pumps must be readjusted each time a batch of EFF
parent blend is delivered with a different ethanol blend ratio to
ensure accuracy in the ethanol concentration of the blends produced at
the blender pump.\148\ This readjustment should not be necessary when
DFE is used as a parent blend.
---------------------------------------------------------------------------
\148\ We anticipate that blender pump operators may contract
with their supplier to receive a single EFF blend year-round (e.g.,
E70) to avoid the need to recalibrate their blender pumps or arrange
to receive a single summer time blend and a single wintertime blend
to limit the number of recalibrations needed.
---------------------------------------------------------------------------
However, storing DFE at blender pump facilities could result in
increased fire safety concerns.\149\ Therefore, we are not proposing to
allow DFE to be used at as a parent blend at blender pumps. The
headspace in DFE storage tanks is flammable at nearly all ambient
temperatures, whereas there is substantially less likelihood of this
being the case for E83 and lower ethanol content blends. Industry is
developing recommendations on how to mitigate the increased fire safety
concerns associated with storing DFE at retail stations. Such
recommendations may lead to fire safety codes regarding storing DFE at
retail that would ultimately be enforced by local fire marshals. The
EPA may reconsider allowing DFE to be used as a parent blend at blender
pumps when appropriate safety codes regarding storing DFE at retail
have been developed and implemented. At the same time, we understand
that this practice may already be occurring in a limited number of
retail stations. Consequently, we request comment on allowing DFE to be
used as a parent blend at blender pumps.
---------------------------------------------------------------------------
\149\ Coordinating Research Council (CRC), Project No. CM-138-
12-1. ``A Risk Analysis/Hazard Assessment of High Ethanol Content
Fuels at Service Stations.'' June 2014.
---------------------------------------------------------------------------
[[Page 80862]]
4. Summary of the Blendstock Requirements Under the EFF Certification
Options and Other Proposed Provisions for EFF
A summary of the blendstock requirements under the three proposed
EFF certification options is contained in Table IV.D.4-1 below.
Table IV.D.4-1--Summary of Blendstock Requirements Under the Three EFF
Certification Options
------------------------------------------------------------------------
EFF certification option Blendstocks that may be used
------------------------------------------------------------------------
EFF Full-Refiner............. Gasoline, BOBs, Certified Natural
Gasoline EFF Blendstock, Uncertified
Natural Gasoline EFF Blendstock, DFE,
Undenatured Ethanol.*
EFF Bulk Blender-Refiner..... Gasoline, BOBs, Certified Natural
Gasoline EFF Blendstock, DFE,
Undenatured Ethanol.*
EFF Blender Pump-Refiner..... Gasoline, EFF.
------------------------------------------------------------------------
* Must be an ethanol producer to use undenatured ethanol as an EFF
blendstock.
We are proposing that once EFF has been certified as meeting the
proposed requirements, no additional blendstocks could be added
downstream.\150\ For example, natural gasoline could not be added to
previously certified EFF. Allowing the addition of blendstocks to
previously certified EFF would add substantial complexity to the
program and introduce additional opportunities for compliance issues to
arise. We believe that precluding the addition of additional
blendstocks to previously certified EFF would not interfere with the
legitimate production of EFF.
---------------------------------------------------------------------------
\150\ EFF additives could still be added downstream as needed.
---------------------------------------------------------------------------
We are proposing a prohibition on commingling batches of EFF
batches downstream of the production facility except at EFF blender
pump-refiner facilities and retail/WPC facilities that dispense EFF
from dedicated dispensers.\151\ We believe that this would help prevent
the introduction of potential errors in the ethanol content of EFF
reported on the PTD. Accurate information on the ethanol content of EFF
is important to blender pump-refiners in calibrating their dispensers
to produce EFF blends (and E15) of appropriate ethanol content. We
believe that this prohibition would not be a practical constraint on
EFF distributors, since EFF is primarily distributed by tank truck to
retail and WPC facilities without any intervening storage facility. We
request comment on the extent to which EFF may be distributed by rail
car or other means with intervening storage before delivery to retail/
WPC facilities. To the extent that EFF may be distributed in this
manner, the proposed prohibition on commingling of EFF batches
discussed above could complicate the storage of EFF at facilities
between the producer and retail/WPC facility. If this is a concern, we
request comment on alternative means to ensure that error in the
ethanol content of EFF is not introduced by commingling of EFF batches
downstream of the producer.
---------------------------------------------------------------------------
\151\ A dedicated EFF dispenser provides only a single EFF blend
(e.g., ``E85'' or E51-83).
---------------------------------------------------------------------------
E. Requirements for E15 Gasoline Blender Pump-Refiners
Fuel retailers and WPCs that make E15 at blender pumps using E85 as
a parent blend are currently subject to all of the requirements that
apply to refiners producing gasoline from crude oil, including
registration, reporting, and per-batch testing. This is due to the fact
that such blender pump operators are mixing non-gasoline (E85) with
gasoline (E0 or E10). However, the application of these requirements to
fuel retailers and WPCs is impractical. For example, it is infeasible
for fuel retailers and WPCs to conduct laboratory tests on each batch
of E15 produced (i.e., each vehicle fill-up) to demonstrate compliance
with the applicable sulfur, benzene, and RVP requirements. Even if
blender pump operators could test every batch, requiring per-batch
testing is inconsistent with their limited ability to impact the
quality of the gasoline they produce, which is governed by the parent
blends used.
Since the proposed requirements for EFF parallel those for
gasoline, the use of EFF that meets the proposed requirements as a
parent blend with compliant gasoline as the other parent blend would
ensure that E15 made at blender pumps is compliant with the gasoline
sulfur, benzene, and CHONS requirements. This is due to the linear
blending characteristics of fuel sulfur, benzene, and CHONS content.
The situation is analogous to commingling two previously certified
gasolines, which does not entail any additional compliance
demonstration requirements.
However, the non-linear RVP blending characteristics for gasoline-
ethanol blends pose unique issues regarding RVP compliance for E15 made
at blender pumps from June 1 through September 15 when gasoline RVP
requirements apply at retail and WPCs. Blenders of E15 in conventional
gasoline areas (both at blender pumps and at terminals) have typically
not been able to make E15 that is compliant with summertime RVP
requirements due to the unavailability of sub-RVP blendstocks. The
gasoline blendstocks that are available in conventional gasoline areas
are typically formulated to produce E10 with the 1 psi RVP waiver since
it has not been economical for lower RVP gasoline blendstocks to also
be made available that would be suitable to make E15.
We are proposing that from September 16 through May 31, all E15
gasoline blender pump-refiners, regardless of where they are located,
could demonstrate compliance with the gasoline refiner requirements
using the same approach that we are proposing for EFF blender pump-
refiners--by maintaining PTDs that show that the parent blends used to
make E15 (i.e., E0 or E10, and EFF) were certified for sale upstream of
the blender pump-refiner. Such gasoline blender pump-refiners would
also be required to maintain records of their quality control program,
including those from the periodic calibration of the blender pump.
These proposed requirements would be consistent with common business
practices at fuel retail, and would ensure that the E15 produced by a
gasoline blender pump-refiner for use from September 16 through May 31
complies with the sulfur, benzene, and CHONS requirements.
We are proposing that EFF blender pump-refiners could demonstrate
compliance with the proposed RVP requirements for EFF from June 1
through September 15 by maintaining PTDs that show the parent blends
used were certified upstream of the blender pump-refiner as meeting
local RVP
[[Page 80863]]
requirements. We based this proposed approach to EFF production at
blender pumps on RVP modeling showing that the resulting EFF blends
produced at blender pumps would not exceed the evaporative emissions
control capability of FFVs (i.e., 10 psi RVP). Due to the more
stringent vehicle evaporative certification requirements for FFVs, they
can operate on a fuel with volatility 1 psi higher than the maximum
volatility required for conventional gasoline vehicles while
maintaining evaporative emissions control performance equivalent to
that of conventional gasoline vehicles.
A similar approach for E15 can be used in many areas depending on
whether the 1 psi waiver for E10 applies.\152\ In conventional gasoline
areas where the 1 psi waiver for E10 does not apply, E15 made at
blender pumps using EFF that meets the proposed RVP requirements and
E10 as parent blends would be compliant with the applicable gasoline
RVP standard.\153\ In RFG areas, E15 made with EFF that meets the
proposed RVP standard and E10 that meets the RFG VOC performance
standard would also be compliant with the RFG VOC performance standard.
This is because the proposed 7.0 psi RVP standard for EFF in RFG areas
is consistent with the RFG VOC performance standard for gasoline.\154\
Therefore, we are proposing that in conventional gasoline areas where
the 1 psi waiver does not apply and in RFG areas, blender pump-refiners
of E15 could demonstrate compliance with the volatility requirements
for E15 from June 1 through September 15 by keeping PTDs for the E10
and EFF used as parent blends to show that they were certified upstream
of the blender pump-refiner as meeting the local requirements.
---------------------------------------------------------------------------
\152\ The 1 psi waiver is applicable in most conventional
gasoline areas, but does not apply in RFG areas where gasoline
volatility is governed by a VOC performance standard rather than a
per-gallon RVP cap.
\153\ For a discussion of the volatility of E15 and E10 made at
blender pumps, see the memorandum, ``Volatility of Ethanol Blends
Made at Blender Pumps,'' available in the docket for this action.
\154\ See the memorandum, ``Volatility of Reformulated
Gasoline,'' available in the docket for this action.
---------------------------------------------------------------------------
However, in conventional gasoline areas where the 1 psi waiver does
apply, E15 made at blender pumps using E10 and EFF that meets the
proposed RVP requirements would not be compliant with the applicable
RVP requirements for gasoline. Therefore, in conventional gasoline
areas where the 1 psi waiver for E10 applies, we are not proposing to
allow blender pump-refiners of E15 that use E10 as a parent blend to
meet their gasoline refiner requirements using PTDs for the parent
blends used from June 1 through September 15.
In all areas, E15 produced at blender pumps using E0 and EFF
meeting the applicable RVP requirements would not be in compliance with
the applicable RVP requirements for E15. Therefore, we are not
proposing to allow blender pump-refiners of E15 that use E0 as a parent
blend to meet their gasoline refiner requirements from June 1 through
September 15 by using PTDs for the parent blends used. Our proposal
regarding the demonstration of compliance of blender pump-refiners of
E15 with the RVP requirements for E15 is summarized in the Table IV.E-1
below.
Table IV.E-1--Demonstration of Compliance With E15 RVP Requirements at Blender Pumps
----------------------------------------------------------------------------------------------------------------
Demonstrate compliance
Area Parent blends E15 RVP using PTDs for parent
blends?
----------------------------------------------------------------------------------------------------------------
RFG.................................. E10 1 & EFF (7 psi).... Compliant with RFG VOC Yes.
requirements 1.
E0 1 2 & EFF (7 psi)... Not compliant with RFG No.
VOC requirements.
CG Areas without the 1 psi waiver for E10 (9 psi/7.8 psi) 3 & <9 psi/7.8 psi......... Yes.
E10. EFF(9 psi/7.8 psi).
E0 (9 psi/7.8 psi) & >9 psi/7.8 psi......... No.
EFF (9 psi/7.8 psi).
CG Areas with the 1 psi waiver for E10 (10 psi/8.8 psi) 4 >9 psi/7.8 psi......... No.
E10. & EFF (9 psi/7.8 psi).
E0 (9 psi/7.8 psi) & >9 psi/7.8 psi......... No.
EFF (9 psi/7.8 psi).
----------------------------------------------------------------------------------------------------------------
\1\ RFG meets a VOC performance standard as opposed to a per-gallon RVP cap.
\2\ Refiners currently formulate all RFG for the downstream addition of 10 volume percent ethanol.
\3\ Some CG areas have a 9.0 psi standard for gasoline and proposed 9.0 psi standard for EFF produced upstream
of retail/WPCs. Other CG areas have a 7.8 psi standard for gasoline and proposed 7.8 psi standard for EFF
produced upstream of retail/WPCs.
\4\ Reflects 1 psi waiver for E10.
As a result of the difficulty blenders face in locating sub-RVP
blendstocks for use in making E15 that is compliant with the gasoline
RVP requirements in areas where the 1 psi waiver for E10 applies, the
EPA received requests for clarification about whether relabeling E15 as
for use only in FFVs would exempt E15 from gasoline RVP requirements
from June 1 through September 15. All gasoline, including E15, is
subject to all of the requirements applicable to gasoline because of
its formulation, not because of its end use. These requirements cannot
be circumvented by relabeling. Allowing a fuel to be exempted from fuel
quality requirements simply based on a statement of its intended use
would undermine the EPA's ability to assure compliance with fuel
quality requirements. In situations where E15 blenders could not locate
sub-RVP blendstocks to facilitate compliance with the applicable
gasoline RVP requirements, they could adjust the ethanol blend ratio to
produce an EFF blend such as E20 from June 1 through September 15. Such
producers of E20 or other EFF blends would be compliant with the
proposed RVP requirements for EFF if they observed the proposed parent
blend requirements for EFF blender pump-refiners. Such E20 producers
would also be required to comply with the other proposed requirements
for EFF blender pump-refiners and to appropriately label the fuel.
[[Page 80864]]
Some retailers may also be interested in producing E10 using E0 and
EFF as parent blends at blender pumps. We seek comment on the need for,
and means of, facilitating this practice without triggering the batch
sampling testing requirements that apply to a gasoline refiner. The
means of assuring compliance of E10 made at blender pumps using E0 and
EFF with the sulfur, benzene, and CHONS requirements for gasoline
should parallel those proposed above for blender pump-refiners of E15.
However, because of the limited blending accuracy for blender pumps, we
are not confident of the means to assure compliance with the gasoline
volatility requirements for E10, particularly in areas where the 1 psi
waiver for E10 does not apply, as well as in areas where the waiver
does apply.\155\
---------------------------------------------------------------------------
\155\ The ethanol content of E10 must be between 9 and 10 volume
percent for the 1 psi waiver to apply.
---------------------------------------------------------------------------
F. Compliance Provisions
1. Registration, Reporting, and Recordkeeping Requirements
Registration, reporting, and recordkeeping requirements are
necessary components to ensure that any fuels program is effectively
implemented. This proposal includes registration, reporting, and
recordkeeping requirements for each class of party tailored to their
specific activities related to the production of EFF and E15 produced
at blender pumps.
a. Registration Requirements
We are proposing that EFF full-refiners and importers, EFF bulk
blender-refiners, and certified natural gasoline EFF blendstock
refiners and importers register with the EPA prior to the production of
EFF or natural gasoline EFF blendstock. Since downstream parties (e.g.,
EFF bulk blender-refiners and blender pump-refiners) need upstream
parties (e.g., natural gasoline EFF blendstock refiners and EFF full-
refiners) to comply with the proposed EFF quality standards to
practicably comply with their individual requirements, we are proposing
staggered initial registration deadlines to facilitate the cascading
nature of EFF fuel quality standards implementation.
For registration, we are proposing to use the same basic forms that
previous fuels programs have used. These forms are well-known in the
regulated community and are simple to fill out. With the exception of
certified natural gasoline EFF blendstock producers, we anticipate that
most parties will already be registered under our existing fuel
standards. Upon receipt of a completed registration form, the EPA would
issue a unique 4-digit company identification number and a unique 5-
digit facility identification number. As with existing fuels programs,
these numbers would be required for all reports submitted to the EPA
and for applicable PTDs.
Registrations would not expire and would not have to be renewed;
however, we are proposing that registered parties would be responsible
for notifying us of any change to their company or facility
information.
An entity's registration would include a corporate name and address
(including the name, telephone number, and email address of a corporate
contact); and, for each facility operated by the entity:
Type of facility (e.g., EFF full-refinery, EFF bulk
blender-refiner facility, certified natural gasoline EFF blendstock
refinery facility)
[cir] Registrations for certified natural gasoline EFF blendstock
refineries would be limited to natural gas processing plants and crude
oil refineries.
Facility name.
Physical location.
Contact name, telephone number, and email address.
These proposed registration requirements would be similar to those
currently required for gasoline refiners and importers. The EPA has had
success with these requirements and believes that they are appropriate
for parties involved in the manufacture of EFF. However, there may be
some additional registration requirements that would prove useful to
ensure that parties involved in the manufacture of EFF make compliant
fuels. Although we are not proposing any additional registration
requirements on EFF refiners and importers, EFF bulk blender-refiners,
and certified natural gasoline EFF blendstock refiners and importers
compared to what we have historically required of gasoline or diesel
refiners and importers, we seek comment on whether there are any other
registration requirements that we should impose on these parties.
b. Reporting Requirements
We are proposing to require parties involved in the manufacture of
EFF to submit annual reports demonstrating their compliance with the
EFF standards. Based on our experience with existing gasoline programs,
we believe that requiring annual reports containing individual batch
data would provide an effective means of monitoring compliance with the
EFF standards.
Consistent with other fuel program annual reporting requirements,
we are proposing that reports would be due annually on March 31. Since
the EFF requirements are different for the proposed three broad
categories of parties, there would be different reporting requirements
for EFF full-refiners and importers, EFF bulk blender-refiners, and
natural gasoline EFF blendstock refiners and importers.
For EFF full-refiners and importers, we are proposing that they
submit annual batch level reports with sulfur, benzene, and ethanol
content, as well as RVP, consistent with forms and procedures already
used by gasoline refiners and importers. EFF full-refiners and
importers would also have to demonstrate annual compliance with average
sulfur and benzene content standards similar to gasoline refiners and
importers. Although we are not proposing to have other fuel parameters
reported by batch to the EPA that are currently required to be reported
for gasoline (e.g., distillation, aromatics), we seek comment on
whether we should require any additional information to be submitted to
the EPA by EFF full-refiners and importers.
We are proposing that EFF bulk blender-refiners would be required
to submit an annual report that includes the volume, ethanol
concentration, and blendstocks used (e.g., certified natural gasoline,
E10, BOBs) of each EFF batch. One of the benefits for EFF bulk blender-
refiners to utilize certified blendstocks to make EFF versus creating
EFF as an EFF full-refiner is that EFF bulk blender-refiners would not
have to sample and test their batches of EFF for sulfur, benzene, or
RVP. Without this information, it would not make sense to require EFF
bulk blender-refiners to report these values. However, the EPA believes
that based on our experience with implementation and enforcement of
other programs it is still important to have the volumes that are
produced reported to us. We seek comment on whether we should require
additional reporting requirements on EFF bulk blender-refiners.
Finally, for natural gasoline EFF blendstock refiners and
importers, we are proposing similar reporting requirements for those
outlined above for EFF full-refiners and importers. Since natural
gasoline EFF blendstock refiners and importers would be required to
meet per-gallon cap sulfur and benzene requirements, natural gasoline
EFF blendstock refiners and importers would also have to report
additional information to ensure that
[[Page 80865]]
each batch meets the applicable standards. Consistent with other EPA
fuels programs, natural gasoline EFF blendstock refiners would need to
submit annual batch reports and annual compliance reports. Reporting
elements for natural gasoline EFF blendstock refiners' batch reports
would be the sulfur content, benzene content, ethanol content, RVP,
batch volume, and batch identifying information (e.g., date of
production, batch number, etc.) for each batch produced in the
compliance year. Annual compliance reports would contain total volume
production and certification that all batches produced in the
compliance period were compliant with applicable requirements.
Since most of this information is already required of some gasoline
refiners, existing reporting forms and procedures for gasoline refiners
should also be applicable to natural gasoline EFF blendstock refiners
and importers with minor modification. We seek comment on whether we
should require any additional reporting from natural gasoline EFF
blendstock refiners and importers.
Consistent with existing CBI requirements, all refiners and
importers of EFF and natural gasoline EFF blendstock can claim
information submitted to the EPA as CBI. Parties making such a claim
would be required to follow all reporting guidance and clearly mark the
information being claimed as proprietary. The EPA would treat
information covered by such a claim in accordance with the regulations
at 40 CFR part 2, and other EPA procedures for handling proprietary
information.
c. Recordkeeping
Consistent with current EPA fuels programs, we are proposing that
EFF full-refiners and importers, EFF bulk blender-refiners, blender
pump-refiners, and natural gasoline EFF blendstock refiners and
importers would be required to retain all records that demonstrate
compliance with applicable EFF and gasoline requirements. We are
proposing that all of these parties would also be required to keep
records of all bills of lading, PTDs, invoices or other commercial
documents relating to gasoline, ethanol, natural gasoline EFF
blendstock, or any other blendstock used to make EFF, and records of
any quality assurance plans (QAPs). Records would need to be retained
for five years consistent with other EPA fuels programs. We are
proposing that records would be made available to the EPA on request.
We are also proposing that if electronic records are kept, hard copies
should be made available upon request.
Since several parties would be subject to different EFF
requirements, we are proposing some specific requirements on different
individual parties. For blender pump-refiners, we are proposing to
require that records related to the calibration of blender pumps be
kept. Most, if not all, retail stations are already subject to state
weights and measures programs that require the calibration of fuel
dispensers to be tested periodically. These calibrations are important
to determining whether blender pump-refiner requirements are in fact
being met by all gasoline-ethanol blends manufactured through a blender
pump. We are not proposing specific calibration requirements for
blender pumps because we believe that it is most appropriate for such
requirements to be established by state weight and measure programs.
For EFF bulk blender-refiners, the demonstration that a particular
batch of EFF would meet appropriate EFF fuel quality standards is based
primarily on recordkeeping and QAPs. Therefore, it is paramount that
appropriate records be kept and that attest engagement requirements are
in place.\156\ We seek comment on whether there are any additional
recordkeeping requirements that would be appropriate and necessary for
the EPA to require of EFF bulk blender-refiners specifically, and other
parties more generally, to enhance compliance and enforceability of the
EFF requirements.
---------------------------------------------------------------------------
\156\ See section IV.F.5 of this preamble for discussion on
attest engagement requirements.
---------------------------------------------------------------------------
2. Proposed Sampling, Test Method, and Sample Retention Requirements
for Refiners and Importers of EFF and Natural Gasoline EFF Blendstock
We are proposing that refiners and importers utilize the following
sampling and test methods for measuring the fuel parameter properties
of sulfur, benzene, oxygenate, RVP, 90 percent distillation point, and
final boiling point for EFF and natural gasoline EFF blendstock. We are
also proposing sample retention requirements for EFF and natural
gasoline EFF blendstock. Table IV.F.2-1 below lists the ASTM standard
practices that we are proposing.
We are proposing that refiners and importers of EFF and natural
gasoline EFF blendstock utilize the following ASTM standard practices
when sampling EFF and natural gasoline EFF blendstock. We are proposing
that when refiners and importers manually sample EFF and natural
gasoline EFF blendstock, they utilize ASTM D4057. We are proposing that
when refiners and importers sample EFF and natural gasoline EFF
blendstock by an automated sampling method, they utilize ASTM D4177. We
are proposing that when refiners and importers sample EFF and natural
gasoline EFF blendstock for volatility measurements, they utilize ASTM
D5842. Finally, we are proposing that when refiners and importers mix
and handle EFF and natural gasoline EFF blendstock for compliance
measurements, they utilize ASTM D5854.
We are proposing that EFF full-refiners and importers and natural
gasoline EFF blendstock refiners and importers measure sulfur content.
Currently our regulations for the measurement of sulfur content in
gasoline at 40 CFR 80.46 designates ASTM D2622 as the primary test
method. For consistency's sake, we are proposing ASTM D2622 as the
designated primary test method for measuring the sulfur content of EFF
and natural gasoline EFF blendstock. We are also proposing six
alternative test methods for the measurement of sulfur content of EFF
and natural gasoline EFF blendstock: ASTM D1266, ASTM D3120, ASTM
D5453, ASTM D6920, ASTM D7220, and ASTM D7039, provided that their test
results are correlated to ASTM D2622. Of the test methods discussed
here for measuring the sulfur content of EFF and natural gasoline EFF
blendstock, we believe ASTM D2622 is the most precise test method.
We are also proposing that EFF full-refiners and importers and
natural gasoline EFF blendstock refiners and importers measure benzene
content. Currently our regulations for the measurement of aromatic
content in gasoline at 40 CFR 80.46 designates ASTM D5769 as the
primary test method. ASTM D5769 also measures the benzene content of
gasoline. For consistency's sake and since ASTM D5769 also measures
benzene content, we are proposing ASTM D5769 as the designated primary
test method for measuring the benzene content of EFF and natural
gasoline EFF blendstock. We are also proposing the allowance of three
alternative test methods for the measurement of benzene content of EFF
and natural gasoline EFF blendstock: ASTM D3606, ASTM D5580, and ASTM
D6730, provided that their test results are correlated to ASTM D5769.
Since ASTM D3606 has the potential for interference between ethanol and
benzene when ethanol is present in the fuel sample, we do not believe
ASTM D3606 is the best candidate to be the designated primary test
method for EFF
[[Page 80866]]
and natural gasoline EFF blendstock compared to ASTM D5769, which lacks
the potential for interference issues between benzene and ethanol. The
EPA seeks comment on whether to designate only ASTM D5769 for measuring
benzene content in gasoline, or whether to add ASTM D5769 as a
designated primary test method for benzene in gasoline along with ASTM
D3606.
We are also proposing that EFF bulk blender-refiners and blender
pump-refiners measure oxygenate content as part of the proposed EFF
survey program. Currently our regulations for the measurement of
oxygenate content in gasoline at 40 CFR 80.46 designates ASTM D5599 as
the primary test method. For consistency's sake, we are proposing to
designate ASTM D5599 as the designated primary test method for
measuring the oxygenate content of EFF. We are also proposing for the
allowance of one alternative test method for oxygenate content
measurement of EFF: ASTM D4815, provided that its test results are
correlated to ASTM D5599.
We are also proposing that EFF full-refiners and importers, EFF
bulk blender-refiners, and natural gasoline EFF blendstock refiners and
importers measure RVP. Currently our regulations for the measurement of
RVP in gasoline at 40 CFR 80.46 designates ASTM D5191 as the primary
test method. For consistency's sake, we are proposing to designate ASTM
D5191 as the designated primary test method for measuring the RVP of
EFF and natural gasoline EFF blendstock. We are also proposing for the
allowance of two alternative test methods for the RVP measurement of
EFF and natural gasoline EFF blendstock: ASTM D5482 and ASTM D6378,
provided that their test results are correlated to ASTM D5191.
Finally, we are also proposing that natural gasoline EFF blendstock
refiners and importers measure the 90 percent distillation point and
final boiling point of natural gasoline EFF blendstock. Currently our
regulations for the measurement of the distillation point of gasoline
at 40 CFR 80.46 designates ASTM D86-12 as the primary test method. For
consistency's sake, we are proposing to designate ASTM D86-12 as the
designated primary test method for measuring the 90 percent
distillation point and final boiling point of natural gasoline EFF
blendstock.
All of the test methods discussed here do not have established
precision estimates for repeatability or reproducibility that would
enable the EPA to propose Performance-Based Measurement System (PBMS)
requirements for these analytical test methods. Once these estimates
have been established by ASTM, at that time the EPA may propose PBMS
requirements for the measurement of sulfur, benzene, oxygenate, RVP, 90
percent distillation point, and final boiling point of EFF and natural
gasoline EFF blendstock. We welcome comment on our proposed sampling
and test methods.
Table IV.F.2-1--ASTM Sampling and Designated Primary and Alternative
Analytical Test Methods for EFF and Natural Gasoline EFF Blendstock
------------------------------------------------------------------------
ASTM Analytical standard practice
Fuel parameter or test method
------------------------------------------------------------------------
Standard Practice for Manual Sampling ASTM D4057-12, entitled,
``Standard Practice for Manual
Sampling of Petroleum and
Petroleum Products''.
Standard Practice for Automated ASTM D4177-95 (Reapproved 2010),
Sampling. entitled, ``Standard Practice
for Automatic Sampling of
Petroleum and Petroleum
Products''.
Standard Practice for Handling of ASTM D5842-14, entitled,
Fuels for Volatility Measurement. ``Standard Practice for Sampling
and Handling of Fuels for
Volatility Measurement''.
Standard Practice for Mixing and ASTM D5854-96 (Reapproved 2010),
Handling of Liquid Samples of entitled, ``Standard Practice
Petroleum and Petroleum Products. for Mixing and Handling of
Liquid Samples of Petroleum and
Petroleum Products''.
Sulfur (designated primary test ASTM D2622-10, entitled
method). ``Standard Test Method for
Sulfur in Petroleum Products by
Wavelength Dispersive X-Ray
Fluorescence Spectrometry''.
Sulfur (alternative test method)..... ASTM D1266-13, entitled, ``Sulfur
Test Method for Sulfur in
Petroleum Products (Lamp
Method)''.
Sulfur (alternative test method)..... ASTM D3120-08 (Reapproved 2014),
entitled, ``Standard Test Method
for Trace Quantities of Sulfur
in Light Liquid Petroleum
Hydrocarbons by Oxidative
Microcoulometry''.
Sulfur (alternative test method)..... ASTM D5453-12, entitled,
``Standard Test Method for
Determination of Total Sulfur in
Light Hydrocarbons, Spark
Ignition Engine Fuel, Diesel
Engine Fuel, and Engine Oil by
Ultraviolet Fluorescence''.
Sulfur (alternative test method)..... ASTM D6920-13, entitled,
``Standard Test Method for Total
Sulfur in Naphthas, Distillates,
Reformulated Gasolines, Diesels,
Biodiesels, and Motor Fuels by
Oxidative Combustion and
Electrochemical Detection''.
Sulfur (alternative test method)..... ASTM D7220-12, entitled,
``Standard Test Method for
Sulfur in Automotive, Heating,
and Jet Fuels by Monochromatic
Energy Dispersive X-ray
Fluorescence Spectrometry''.
Sulfur (alternative test method)..... ASTM D7039-13, entitled,
``Standard Test Method for
Sulfur in Gasoline, Diesel Fuel,
Jet Fuel, Kerosine, Biodiesel,
Biodiesel Blends, and Gasoline-
Ethanol Blends by Monochromatic
Wavelength Dispersive X-ray
Fluorescence Spectrometry''.
Benzene (designated primary test ASTM D5769-10, entitled,
method). ``Standard Test Method for
Determination of Benzene,
Toluene, and Total Aromatics in
Finished Gasolines by Gas
Chromatography/Mass
Spectrometry''.
Benzene (alternative test method).... ASTM D3606-10, entitled,
``Standard Test Method for
Determination of Benzene and
Toluene in Finished Motor and
Aviation Gasoline by Gas
Chromatography''.
Benzene (alternative test method).... ASTM D5580-13, entitled,
``Standard Test Method for
Determination of Benzene,
Toluene, Ethylbenzene, p/m-
Xylene, o-Xylene, C9 and Heavier
Aromatics, and Total Aromatics
in Finished Gasoline by Gas
Chromatography''.
Benzene (alternative test method).... ASTM D6730-01 (Reapproved 2011),
entitled, ``Standard Test Method
for Determination of Individual
Components in Spark Ignition
Engine Fuels by 100-Metre
Capillary (with Precolumn) High-
Resolution Gas Chromatography''.
Oxygenate Content (designated primary ASTM D5599-00(2010), entitled,
test method). ``Standard Test Method for
Determination of Oxygenates in
Gasoline by Gas Chromatography
and Oxygen Selective Flame
Ionization Detection''.
Oxygenate Content (alternative test ASTM D4815-15a, entitled,
method). ``Standard Test Method for
Determination of MTBE, ETBE,
TAME, DIPE, tertiary-Amyl
Alcohol and C1 to C4 Alcohols in
Gasoline by Gas
Chromatography''.
[[Page 80867]]
RVP (designated primary test method). ASTM D5191-13, entitled,
``Standard Test Method for Vapor
Pressure of Petroleum Products
(Mini Method)''.
RVP (alternative test method)........ ASTM D5482-07 (Reapproved 2013),
entitled, ``Standard Test Method
for Vapor Pressure of Petroleum
Products (Mini-Method--
Atmospheric)''.
RVP (alternative test method)........ ASTM D6378-10, entitled,
``Standard Test Method for
Determination of Vapor Pressure
(VPx) of Petroleum Products,
Hydrocarbons, and Hydrocarbon
Oxygenate Mixtures (Triple
Expansion Method)''.
Distillation Point (designated ASTM D86-12, entitled, ``Standard
primary test method). Test Method for Distillation of
Petroleum Products at
Atmospheric Pressure''.
------------------------------------------------------------------------
The EPA is also taking comment on whether we should establish
Performance-Based Analytical Test Method Approach (PBATMA) requirements
for the parameters of sulfur, benzene, distillation point, oxygenate
content, and RVP in EFF and natural gasoline EFF blendstock. The EPA
envisions that sulfur would fall under the absolute fuel parameter
category for PBATMA where the precision criteria \157\ and accuracy
criteria \158\ would be the same as for sulfur in gasoline.\159\ The
EPA envisions the fuel parameters of benzene, T90 distillation point,
oxygenate content, and RVP would fall under the method defined fuel
parameter category for PBATMA.\160\ Under the method defined fuel
parameter PBATMA requirements, the EPA envisions that the precision
criteria would be the same as for each of these respective fuel
parameters in gasoline.\161\ The EPA envisions that the accuracy
criteria would be addressed by ASTM D6708 assessments to determine the
need for a correction equation.\162\ The EPA envisions following the
same approval process for EFF as for gasoline; that is, voluntary
consensus standard body (VCSB) test methods self-qualify to regulatory
criteria and non-VCSB test methods submit required information to the
EPA for approval.\163\ Finally the EPA envisions that the EFF and
natural gasoline EFF blendstock statistical quality control (SQC)
PBATMA requirements for accuracy and precision would mirror what was
finalized for PBAMTA for motor vehicle gasoline and diesel fuel.\164\
The EPA is interested in comments on whether the test methods discussed
here sufficiently address EFF and natural gasoline EFF blendstock in
their precision statement in order to establish PBATMA accuracy and
precision criteria as discussed above for the fuel parameters of
sulfur, benzene, distillation point, oxygenate content, and RVP.
---------------------------------------------------------------------------
\157\ The maximum allowable standard deviation computed from the
results of a minimum of 20 tests made over 20 days (tests may be
arranged into no fewer than five batches of four or fewer tests
each, with only one such batch allowed per day over the minimum of
20 days) on samples using good laboratory practices taken from a
single homogeneous commercially available gasoline must be less than
or equal to 1.5 times the repeatability ``r'' divided by 2.77, where
``r'' equals the ASTM repeatability of ASTM D7039 (Example: A 10 ppm
sulfur gasoline sample: Maximum allowable standard deviation of 20
tests<=1.5*(1.73ppm/2.77)=0.94 ppm). The 20 results must be a series
of tests with a sequential record of analysis and no omissions.
\158\ Two accuracy demonstrations would be completed based on
the test method repeatability statements of ASTM D7039. The
arithmetic average of a continuous series of at least 10 tests
performed using good laboratory practices on a commercially
available gravimetric sulfur standard in the range of 1-10 ppm shall
not differ from the accepted reference value (ARV) of the standard
by more than 0.70 ppm, where the accuracy criteria is 0.75*(1.5*r/
2.77), where ``r'' is the repeatability (Example: 0.75*(1.5*1.73ppm/
2.77)=0.70 ppm); and The arithmetic average of a continuous series
of at least 10 tests performed using good laboratory practices on a
commercially available gravimetric sulfur standard in the range of
10-20 ppm shall not differ from the ARV of the standard by more than
1.02 ppm sulfur, where the accuracy criteria is 0.75*(1.5*r/2.77),
where ``r'' is the repeatability (Example: 0.75*(1.5*2.52ppm/
2.77)=1.02 ppm).
\159\ See 40 CFR 80.47(b).
\160\ See 40 CFR 80.47.
\161\ Proposed method defined precision criteria for EFF and
natural gasoline EFF blendstock. A precision demonstration would
show through self-qualification for these method defined fuel
parameters that the maximum allowable standard deviation computed
from the results of a minimum of 20 tests made over 20 days (tests
may be arranged into no fewer than five batches of four or fewer
tests each, with only one such batch allowed per day over the
minimum of 20 days) on samples using good laboratory practices taken
from a single homogeneous commercially available gasoline must be
less than or equal to 0.3 times the reproducibility ``R'', where
``R'' equals the ASTM reproducibility for benzene see 40 CFR
80.47(i), for T90 Distillation see 40 CFR 80.47(h), for oxygenate
content see 40 CFR 80.47(f), and for RVP see 40 CFR 80.47(g).
\162\ See 40 CFR 80.47(l).
\163\ See 40 CFR 80.47(m).
\164\ See 40 CFR 80.47(o), 80.47(p), and 80.47(q).
---------------------------------------------------------------------------
3. Alternate Provisions for EFF Bulk Blender-Refiners to Demonstrate
Compliance With Volatility Standards
As an alternative to per-batch RVP testing, we are proposing that
EFF bulk blender-refiners that use natural gasoline to produce EFF
could use an RVP tool to demonstrate compliance with the proposed
maximum RVP specifications for EFF.\165\ Records of the use of such an
RVP compliance tool could be used as part of an affirmative defense
against potential liability by an EFF bulk blender-refiner in cases
where a batch of EFF was later found to exceed the proposed RVP
standards. This would parallel how records of an RVP test on such a
batch could be used as part of an affirmative defense. We are proposing
the use of RVP equations 6, 8, and 11 described in SAE technical paper
2007-01-4006, entitled ``A Model for Estimating Vapor Pressures of
Commingled Ethanol Fuels,'' by Sam R. Reddy, which are copied below:
---------------------------------------------------------------------------
\165\ EFF bulk blender-refiners that use only DFE (or in the
case of EFF bulk blender-refiners that are also ethanol producers,
potentially undenatured ethanol), and certified gasoline/BOBs that
do not take advantage of the 1 psi RVP waiver for E10 could
demonstrate compliance simply by maintaining PTDs to demonstrate
that only these blendstocks are used.
[GRAPHIC] [TIFF OMITTED] TP16NO16.000
[[Page 80868]]
[GRAPHIC] [TIFF OMITTED] TP16NO16.001
[GRAPHIC] [TIFF OMITTED] TP16NO16.002
Equations 8 and 11 were modified from those in the referenced SAE
paper by replacing the term ``gasoline'' with ``hydrocarbon'' to
reflect that we are proposing that the RVP tool could be used when
natural gasoline (and BOBs) are used as EFF blendstocks as well as
gasoline. The proposed RVP compliance tool was developed based on data
from ethanol blends made with gasoline as the hydrocarbon blend
component.
There is some concern regarding the representativeness of the
proposed RVP compliance tool when natural gasoline is used as a
blendstock because of the low aromatic content of natural gasoline
relative to gasoline/BOBs and the effect of aromatic content on the RVP
of ethanol blends. However, we believe that the proposed tool would be
suitable to cover the use of natural gasoline as an EFF blendstock.
Because of the characteristics of natural gasoline, including its
typical lower aromatic concentration, we anticipate that the proposed
RVP compliance tool would tend to slightly overestimate the actual RVP
of blends made using natural gasoline rendering its use somewhat
conservative. The EPA is currently conducting work to test the RVP of
ethanol blends made with natural gasoline. The results of this study
will be used to validate that the proposed RVP compliance tool provides
accurate results for blends that contain natural gasoline. If the
results of this study indicate that the proposed tool needs to be
amended to accurately reflect the RVP blending properties of natural
gasoline, the EPA would modify it in a later action.
The RVP of unoxygenated gasoline, BOB, and/or natural gasoline EFF
blendstock used to produce the EFF would be volume weighted to arrive
at a value for the RVP of the mixture of the hydrocarbon blend
components for use in equations 8 and 11. If DFE is used as an EFF
blendstock rather that undenatured ethanol, the denaturant would also
be included in the volume weighted calculation to arrive at a value for
the RVP of the mixture of the hydrocarbon blend components used in
equations 8 and 11. We expect that in most cases EFF would be produced
at product terminals and that DFE would be used as a blendstock. EFF
bulk blender-refiners that are also ethanol producers would have the
option to use undenatured ethanol in blending EFF that they manufacture
at their production facilities. For the purpose of calculating the
inputs for the RVP compliance tool regarding the RVP and volume percent
of the hydrocarbons in the EFF blend, it could be assumed that the DFE
used as a blendstock contains 3 volume percent denaturant at 15 psi
RVP. The volume percent ethanol input to the RVP compliance tool
equations would also be assumed to be 97 percent of the volume percent
of the DFE used as a blendstock.
We believe that this approach would provide a conservative estimate
of the effect of the ethanol denaturant on the volatility of the
finished EFF blend. Ethanol denaturant concentration is limited to a
maximum of 3.0 volume percent beginning January 1, 2017, pursuant to
the requirement of the Tier 3 final rule.\166\ Requirements in the RFS
program, which specify that only 2 volume percent ethanol may be
included for the purposes of compliance, have also prompted ethanol
producers to limit denaturant concentration to 2 volume percent
(effectively 2.5 volume percent given rounding) to streamline their RFS
compliance calculations.\167\ Therefore, assuming a 3 volume percent
denaturant concentration would be an upper-bound estimate, and the
limited information available to the EPA indicates that an RVP of 15
psi would be representative of higher volatility natural gasoline that
is used as the predominant ethanol denaturant. We also understand that
the volatility of natural gasoline is typically limited to below
atmospheric pressure to ease transport and storage logistical issues.
Standard atmospheric pressure is 14.7 psi. Therefore 15 psi should
represent an upper bound.
---------------------------------------------------------------------------
\166\ See 40 CFR 80.1610.
\167\ See 40 CFR 80.1401.
---------------------------------------------------------------------------
We are proposing that EFF bulk blender-refiners would be required
to participate in the proposed EFF quality survey. We expect that
participation in this survey would provide needed assurance that the
RVP compliance tool is being used appropriately, as well as providing
needed assurance that other EFF requirements are being satisfied.
We request comment on the above RVP compliance tool, any
alternative RVP correlations that might be more accurate, and any data
that might be available to enhance its accuracy. We also request
comment on whether the proposed RVP blending compliance tool could be
extended to cover the use of butane and/or pentane as an EFF blendstock
if the use of these blendstocks was allowed.\168\
---------------------------------------------------------------------------
\168\ As discussed in section IV.C.7.c of this preamble, we are
requesting comment on including provisions to allow the use of
butane and pentane as EFF blendstocks.
---------------------------------------------------------------------------
4. PTD Requirements
The EPA is proposing several changes and additions to the existing
PTD requirements to provide the information needed for fuel providers
to properly manufacture or blend EFF. The EPA has previously
established similar requirements for PTDs for E10 and E15 to help
ensure downstream compliance
[[Page 80869]]
with sulfur, benzene, and RVP requirements. The introduction of EFF
into the marketplace makes it important to include additional
information on the PTDs that accompany the transfer of EFF and EFF
blendstocks.
a. PTD Requirements for EFF Transferred Downstream of an EFF Full-
Refinery or Bulk Blender-Refinery
Under the current regulations, the transferor of gasoline-ethanol
blends with ethanol content above 15 percent is required to provide to
the transferee information on ethanol concentration of the blend by the
following statement: ``EXX--Contains no more than XX% ethanol.'' \169\
The purpose of the statement was to ensure proper labeling of gasoline-
ethanol blends above E15 and to prevent any downstream parties from
commingling fuels that could result in RVP exceedances or other
violations. As we are proposing EFF regulations that encompass EFF from
E16 to E83, we are proposing to replace ``EXX'' with ``Ethanol Flex
Fuel.''
---------------------------------------------------------------------------
\169\ See 40 CFR 80.1503(b)(1)(vi)(E).
---------------------------------------------------------------------------
b. PTD Requirements for EFF
We are proposing to add new PTD requirement for transfers of EFF.
The general requirements would be similar to that of gasoline, where
any person that transfers EFF would be required to provide PTD
information including the name and address of the transferor and
transferee, the volume of EFF being transferred, the location of EFF at
the time of transfer, the date of transfer, and the approximate ethanol
concentration as discussed above. The transferor would also be required
to provide a statement on the PTD that indicates its suitability or
lack thereof for use as a blendstock to manufacture EFF in a blender
pump. As discussed earlier, there are a number of paths to manufacture
EFF and the challenges in demonstrating compliance with the RVP
standard are greatest for blender pumps, given the non-linear RVP
blending characteristics of potential blendstocks. To resolve this
concern, we are proposing to list the blendstocks that can be used in
blender pumps to make EFF and to require a statement on the PTD that
states whether the blendstock is suitable for use in a blender pump and
meets the RVP requirements.
Under the proposed rule, blender pumps can manufacture EFF by
blending no more than two blend components: A high ethanol content
blend component and a high hydrocarbon content blend component. The
components will primarily vary based on two factors: Whether the
blendstock is being used in a CG or RFG area and whether it is between
June 1 and September 15.\170\ For instance, a blender pump that is
located in an RFG area cannot use a hydrocarbon blendstock composed of
conventional gasoline to manufacture EFF. The blender pump also cannot
blend a hydrocarbon blendstock that is not compliant with RVP
requirements from June 1 through September 15 with other blendstocks to
manufacture EFF. In accordance with this approach, we are proposing
that a statement be written on the PTD that indicates the suitability
of the EFF for use at a blender pump.
---------------------------------------------------------------------------
\170\ It is important to note that EFF may also be subject to
different RVP standards based on being in an RVP controlled area
within an RFG or CG area.
---------------------------------------------------------------------------
c. PTD Requirements for Certified Natural Gasoline EFF Blendstock
We are proposing to add a new PTD requirement for the transfer of
certified natural gasoline EFF blendstock. The PTD would require
general information such as the name and address of the transferor and
transferee, volume of the blendstock being transferred, location of the
blendstock at the time of the transfer, and the date of the transfer.
We are also proposing to require reporting the RVP on the PTD to
facilitate downstream blending by alleviating the need for additional
downstream testing and to minimize any improper commingling. The
natural gasoline EFF blendstock refiner or importer may choose to
either conduct per-batch sampling to determine the RVP or use a default
RVP value of 15 psi.
We are also proposing to require a statement on the PTD prohibiting
the use of natural gasoline EFF blendstock as a blendstock at blender
pumps and its sale as conventional blendstock for oxygenate blending
(CBOB) or reformulated blendstock for oxygenated blending (RBOB).
Natural gasoline is known to be the higher temperature boiling
components of natural gas liquids that is sometimes used as a
denaturant for ethanol. It is also utilized in producing EFF since it
is conveniently stored at the plant for its denaturant use and is
considerably less expensive than CBOB and RBOB. Yet natural gasoline is
known to have a higher RVP than CBOB or RBOB, so its use may hinder
downstream RVP compliance. As explained above, EFF blender pump-
refiners are similar to full-refiners in that they have the ability to
manufacture EFF, but do not have the same quality assurance
requirements. Accordingly, we are proposing that the natural gasoline
EFF blendstock be prohibited from use as a blendstock at blender pumps.
Furthermore, we are proposing to require a statement to distinguish
natural gasoline EFF blendstock from other blendstocks (such as CBOB or
RBOB) to prevent any confusion for downstream parties. We are proposing
to require a statement that it cannot be used as CBOB or RBOB or
blended into CBOB, RBOB, or gasoline without meeting all requirements
applicable to refiners. This statement would minimize any confusion for
downstream parties and help ensure that certified natural gasoline EFF
blendstock is not used as a gasoline blendstock.
5. Attest Engagements, Affirmative Defenses, Violations, and Penalties
We are proposing attest engagement requirements for EFF full-
refiners and importers, EFF bulk blender-refiners, and certified
natural gasoline EFF blendstock refiners and importers using the
procedures used in other EPA fuels programs for attest engagements. We
believe that attest engagements are particularly important for EFF bulk
blender-refiners. Having an independent auditor review blending records
to ensure that EFF made by bulk blender-refiners meet applicable EFF
requirements would help ensure compliance, given the reduced sampling,
testing, and reporting requirements. Attest engagements would also help
ensure applicable EFF requirements are met, similar to how attest
engagements help assure compliance for fuel manufacturers in other EPA
fuels programs.
We are also proposing affirmative defense requirements for parties
that manufacture, distribute, and sell EFF. These provisions would
allow parties that manufacture, distribute, or sell EFF to help
establish affirmative defenses against potential violations of the
proposed EFF requirements if all applicable conditions are met. These
proposed potential affirmative defenses are analogous to those provided
to other parties in other EPA fuels programs.
The violation and penalty provisions applicable to this proposed
EFF program would be very similar to the provisions currently in effect
in other fuels programs. We are proposing that EFF and natural gasoline
EFF blendstock downstream violations follow the same presumptive
liability approach used in other fuel programs. We request comment on
the need for additional attest engagement, violation, penalty, or any
other compliance and enforcement related provisions to the proposed EFF
and natural gasoline EFF blendstock requirements.
[[Page 80870]]
6. Compliance Dates
Based on our experience with our past fuel standards, we are
proposing a sequence of start dates for compliance depending on the
point in the fuel production and distribution system. We are proposing
that the proposed requirements for EFF would apply to EFF full-refiners
and bulk blender-refiners beginning January 1, 2018. EFF full-refiners
and EFF bulk blender-refiners would be required to submit their
registration applications to the EPA by November 1, 2017, or 2 months
prior to producing EFF. To allow sufficient time for certified natural
gasoline EFF blendstock to be made available to EFF full-refiners and
bulk blender-refiners, we are proposing that the requirements for
certified natural gasoline EFF blendstock would apply beginning
December 1, 2017. Producers of certified natural gasoline EFF
blendstock would be required to submit their registration applications
to the EPA by October 1, 2017, or 2 months prior to producing certified
natural gasoline EFF blendstock.
We are proposing that the proposed requirements for EFF would apply
at retail and WPC facilities beginning February 1, 2018. We are
proposing that the provisions for E15 blender pump retail and WPC
facilities would likewise be effective beginning February 1, 2018. This
would provide one month between the date when upstream producers of EFF
are required to comply and the date for retail and WPC compliance to
allow time for EFF retail tank turnover. This time for retail/WPC tank
turnover would be needed for blender pumps that produce E10/E15 as well
as those that produce E16-50 using EFF as a parent blend. We anticipate
that retailers and WPC facilities would draw down their storage tank
volumes and manage deliveries to facilitate compliance on February 1,
2018. We request comment on whether these proposed compliance dates
would provide sufficient time for the various parties in the EFF
production and distribution system to prepare for compliance.
We are planning on allowing at least 4 months after the publication
of the final rule that results from this action before the EFF
requirements and gasoline blender pump provisions would apply at retail
and WPC facilities. If publication of the final rule is delayed, we
would adjust the compliance dates for the various parties in the EFF
production and distribution system discussed above to maintain a
similar sequenced compliance schedule.
Under the volatility control provisions for conventional gasoline,
retail outlets and WPC facilities are required to comply with gasoline
RVP requirements from June 1 through September 15 of each year.\171\
Upstream parties are required to comply from May 1 through September 15
of each year to facilitate retail and WPC compliance. Operators of
retail and WPC facilities manage the timing of their gasoline
deliveries so that storage tank volume is drawn down prior to the first
delivery of RVP controlled gasoline in the spring of each year. These
practices ensure retail and WPC level compliance by the June 1
compliance date.
---------------------------------------------------------------------------
\171\ See 40 CFR 80.27.
---------------------------------------------------------------------------
The same seasonal environmental concerns exist regarding the
control of evaporative emissions for FFVs as exist for gasoline
vehicles. Therefore, we are proposing that EFF retail and WPC
facilities would be required to comply with the proposed RVP standards
for EFF from June 1 through September 15 each year in parallel with the
requirements for gasoline. We are also proposing that all facilities
upstream of retail and WPC facilities would be required to comply with
the proposed RVP requirements for EFF from May 1 through September 15
each year in parallel with the gasoline RVP requirements. We believe
that this compliance schedule should provide sufficient time for EFF
retail and WPC tank turnover provided that EFF retailers and WPC
carefully manage their tank volume and delivery schedules. However, we
are requesting comment on whether an earlier compliance date would be
appropriate for parties upstream of retail and WPC facilities given the
historically longer turnover time for EFF retail tanks.
The proposed compliance dates discussed above are summarized below
in the Table IV.F.6-1.
Table IV.F.6-1--Proposed EFF Compliance Dates
----------------------------------------------------------------------------------------------------------------
Certified natural EFF full-refiners and
gasoline EFF blendstock EFF bulk blender- EFF retail and WPC
producers refiners facilities
----------------------------------------------------------------------------------------------------------------
EPA Registration..................... 10/1/2017 or 2 months 11/1/2017 or 2 months Not applicable.
prior to production. prior to production.
Sulfur, Benzene, and CHONS 12/1/2017.............. 1/1/2018............... 2/1/2018.
Requirements.
Seasonal RVP Requirements............ Not applicable. Year- 5/1 through 9/15 of 6/1 through 9/15 of
round RVP cap each year beginning 5/ each year beginning 6/
beginning 12/1/2017. 1/2018 *. 1/2018.
----------------------------------------------------------------------------------------------------------------
* These seasonal RVP compliance dates apply to all parties in the EFF production and distribution system
(including terminals) except retail and WPC facilities.
** The provisions for E10/E15 blender pump-refiners would be effective 2/1/2018.
7. Renewable Volume Obligation
CAA section 211(o)(2)(A)(i) requires that the EPA establish a
regulatory program to ensure that transportation fuel contain specified
volumes of renewable fuel. In the regulatory program enacted as part of
the RFS2 final rule,\172\ we specified that obligated party RVOs would
be based on their production and import of gasoline and diesel fuel,
since other forms of transportation fuel (e.g., natural gas, propane,
and electricity) were used in much smaller quantities than gasoline and
diesel, and their use as transportation fuel would be difficult to
distinguish at the production level from their use for other
purposes.\173\ However, we also reserved expansion of the RVOs to other
forms of transportation fuel for future inclusion if warranted. As a
result, the RVOs applicable to refiners and importers are currently
based only on the non-renewable volumes of the gasoline and diesel that
they produce or import for use in the U.S.
---------------------------------------------------------------------------
\172\ See 75 FR 14670 (March 26, 2010).
\173\ See 75 FR 14721 (March 26, 2010).
---------------------------------------------------------------------------
At the time of the RFS2 final rule, E51-83 was not included with
gasoline and diesel as a fuel that incurs an RVO, despite the fact that
it can be used as a transportation fuel and it has some non-renewable
content. Gasoline is the only non-renewable material that currently can
be used to make E51-83 EFF while ensuring that it meets the gasoline
sub-
[[Page 80871]]
sim requirement. Since all gasoline incurs an RVO, therefore, the non-
renewable fraction of E51-83 incurs an RVO under our current RFS
regulations. Since E16-50 blends are being made at blender pumps using
gasoline and E85, the non-renewable fraction of E16-50 blends also
incurs an RVO under our current regulations. Moreover, since E16-50
blends are also treated as gasoline under our current regulations, we
saw no need in the RFS2 final rule to add the non-renewable portion of
E16-83 blends to the list of fuels that incur an RVO under the RFS
program.
In the years since 2010, there has been increasing interest in the
use of natural gasoline as an E51-83 blendstock. Since E16-50 blends
are produced at blender pumps using E51-83 as one of the parent blends,
such natural gasoline would also be a component of E16-50 blends. As
stated before, gasoline is the only non-renewable material that
currently can be used to make E51-83 EFF, and natural gasoline, which
is typically extracted from the condensates produced from natural gas
wells, is not considered to be gasoline under our current regulations.
This proposal contains provisions to allow the use of natural gasoline
as an EFF blendstock.
Since under our current regulations natural gasoline is not
considered to be finished or unfinished gasoline that will eventually
be used in the transportation sector, it does not currently incur an
RVO under the RFS program. However, by replacing the finished and
unfinished gasolines that had formerly been used to produce E16-83 with
natural gasoline, it is appropriate to consider whether the RFS
regulations should be modified to add natural gasoline used to produce
E16-83 to the list of fuels that incur an RVO. This proposal also
contains provisions to regulate all E16-83 blends as EFF rather than to
continue to treat E16-50 blends as gasoline, thereby providing
additional impetus to the consideration of whether natural gasoline
used in EFF blends should be added to the list of fuels that incur an
RVO.
Under the RFS regulations, the party that first produces or imports
a transportation fuel is generally the party that incurs the RVO for
the non-renewable portion of that transportation fuel. If EPA were to
require all natural gasoline used to make EFF to incur an RVO, there
would be a different point of obligation for certified versus
uncertified natural gasoline used as an EFF blendstock. For certified
natural gasoline EFF blendstocks, the party incurring the RVO would be
the producers or importers, consistent with producers and importers of
all gasoline and diesel. For uncertified natural gasoline EFF
blendstock, however, the party incurring the RVO would be the party
that blends DFE with the uncertified natural gasoline EFF blendstock to
produce EFF, since the natural gasoline would not have been designated
or treated as an EFF blendstock upstream at the point of production or
importation. EFF is generally produced by blenders and ethanol
producers that would typically not produce any other fuels that would
incur an RVO. Thus, the imposition of an RVO on the producer of EFF
would make certain parties responsible for satisfying an RVO that have
not had such obligations to date. The EFF producer would need to
quantify and track volumes of natural gasoline separately from gasoline
and BOBs used to produce EFF. The EFF producer would also be required
to acquire and retire an appropriate number of RINs to meet their
obligation under the RFS program. There would be both practical and
economic impacts on EFF producers that might discourage its expansion
in the marketplace.
While in general we continue to believe that all non-renewable
transportation fuel should incur an RVO, we also believe that expanding
opportunities for the use of EFF is an important goal of the RFS
program. Since imposing an RVO on EFF producers that use natural
gasoline could potentially conflict with that goal, it may not be
appropriate to do so at this time. Moreover, the volume of EFF is
currently significantly smaller than the volume of other non-renewable
transportation fuels, and is expected to remain so for some time. Based
on these considerations, we are not proposing that natural gasoline
used to make EFF would incur an RVO, but are instead proposing to defer
the imposition of an RVO on parties making EFF with natural gasoline
until such time as EFF produced using natural gasoline becomes a more
substantial fraction of the transportation fuel pool. We seek comment
on this issue and the option to defer the RVO obligation for this fuel.
8. Other Compliance Issues
a. Pump Labeling
During the Tier 3 public comment period, we received comments
requesting that the EPA adopt labeling provisions for EFF fuels to help
prevent the misfueling of EFF into gasoline-powered conventional
vehicles.\174\ The EPA also sought comment on this issue in the E15
misfueling mitigation rulemaking.\175\ As was described in the E15
misfueling mitigation rulemaking, the EPA chose not to require labels
for EFF at that time because the FTC was planning to require labels
that were consistent in size, shape, and content with the EPA's E15
label.\176\ We also noted that two separate labeling requirements for
EFF by the FTC and the EPA would potentially be confusing and
counterproductive to the mitigation of misfueling.
---------------------------------------------------------------------------
\174\ See Docket Item No. EPA-HQ-OAR-2011-0135-5212.
\175\ See 75 FR 68044 (November 4, 2010).
\176\ See 76 FR 44406 (July25, 2011).
---------------------------------------------------------------------------
Since the publication of the E15 misfueling mitigation rulemaking
and the end of the Tier 3 public comment period, the FTC has finalized
labeling requirements for EFF.\177\ We believe the FTC EFF labeling
requirements are consistent in size, shape, and content with our E15
label and will help mitigate the misfueling of gasoline-fueled
vehicles, engines, and equipment with EFF. Therefore, to avoid
confusion we are not proposing to require additional EFF labeling
requirements at this time.
---------------------------------------------------------------------------
\177\ See 79 FR 18850 (April 4, 2014).
---------------------------------------------------------------------------
b. E15 Misfueling Mitigation Harmonization
While this proposal focuses on establishing requirements for EFF
quality, minor modifications to the E15 misfueling mitigation
requirements at 40 CFR part 80, subpart N, are needed to accommodate
the proposed EFF requirements. We are not reopening any other portions
of subpart N, and are therefore not seeking comments on aspects of
subpart N other than those described in this proposal.
We are proposing a restructuring of 40 CFR part 80, subpart N, to
incorporate the proposed EFF requirements. In general, the E15
misfueling mitigation requirements are unchanged; however, some slight
modifications to the E15 misfueling mitigation requirements would be
necessary to incorporate EFF requirements. For example, we are
proposing to change the PTD requirements for E15 misfueling mitigation
in 40 CFR 80.1563 to be consistent with PTD requirements for the Tier 3
gasoline sulfur program and incorporate new language to help EFF
blender pump-refiners comply with applicable EFF requirements.
Additionally, consistent with PTD requirements in other EPA fuels
programs, we are proposing to allow parties to submit alternative EFF
PTD language for EPA approval, including E15 misfueling mitigation PTD
requirements. This would allow all affected parties an opportunity to
use
[[Page 80872]]
more concise PTD language, with EPA approval, to help address the
manifold complex situations that may occur in the fuel distribution
system while meeting the intent of the EPA's PTD requirements.
We are also proposing to add a definition for flexible-fuel engines
and language that exempts flexible-fuel nonroad engines from the
prohibition on the use of gasoline-ethanol blended fuels containing
more than 10 volume percent ethanol since these engines have been
certified on the use of EFF similar to FFVs. Although we have pointed
out that the current regulatory requirements allow flexible-fuel
engines to use EFF,\178\ we are proposing to remove any ambiguity from
the regulations to better accommodate appropriate EFF use at retail
stations.
---------------------------------------------------------------------------
\178\ Letter to Bob Greco, American Petroleum Institute, from
Adam Kushner, U.S. EPA, July 31, 2008.
---------------------------------------------------------------------------
9. EFF Quality Survey Program
The EPA has a successful history of allowing regulated parties to
participate in survey programs managed by an independent survey
association as a way to decrease compliance costs for both regulated
parties and the EPA. We recognize that many, if not all, EFF bulk
blender-refiners and blender pump-refiners would have difficulty
complying with the EFF full-refiner requirements, including sampling
and testing, compliance reporting, recordkeeping requirements, and
attest engagements. As a result, we have developed compliance systems
for EFF bulk blender-refiners and blender pump-refiners that rely
primarily on monitoring records as discussed above. Such systems,
however, are subject to fraud and abuse without some means to verify
their authenticity. As a result, we need some means of doing so for
EFF. Based on past experience with our other fuel programs, we believe
the least costly and most effective way of doing so is through in-use
fuel quality surveys. As such, we believe that allowing EFF bulk
blender-refiners and blender pump-refiners to verify compliance with
the proposed EFF requirements through participation in a survey program
and the use of appropriate blendstocks and parent fuels is appropriate.
EFF bulk blender-refiners and blender pump-refiners would comply with
the applicable EFF standards through the use of appropriate parent
fuels and blendstocks and by contracting an independent survey
association to conduct a survey of EFF manufactured through blender
pumps and blended in bulk at terminals or at an ethanol production
facility. The scope of the EFF blender pump survey program and specific
design requirements for the survey program are discussed below.
a. Scope of the EFF Quality Survey Program
The survey would be limited to collecting and analyzing samples of
EFF for ethanol content, sulfur content, benzene content, and RVP (from
June 1 to September 15) at EFF and blender pump retail stations. The
proposed EFF requirements would impose a 10 ppm annual average sulfur
standard, 95 ppm per-gallon sulfur cap, and 0.62 volume percent annual
average benzene standard on all EFF. In lieu of requiring the sampling
and testing of each batch to ensure compliance with the sulfur and
benzene standards, the EPA is proposing to allow EFF bulk blender-
refiners and blender pump-refiners the flexibility to comply with these
standards by contracting with an independent survey association to
randomly sample and test the EFF they manufacture. The EPA believes
that most terminals, ethanol production facilities, and retail stations
that make EFF would prefer to contract an independent survey
association to conduct such a survey since it would be significantly
cheaper than sampling and testing each batch of fuel for sulfur and
benzene content.
As discussed earlier, determining the RVP resulting from
commingling gasoline, ethanol, and natural gasoline is complicated for
parties that are simply creating small batches of EFF.\179\ This
situation is even more complex at blender pumps where many different
gasolines could be commingled through the dispenser and in the
underground storage tanks, with many different EFF in varying
proportions. Although we are proposing to control the RVP for EFF
manufactured through a blender pump by regulation of the parent fuels,
the EPA believes that RVP information from the samples would help
ensure that EFF dispensed through blender pumps does not result in
summertime fuels greater than 10 psi that would impose problems for FFV
evaporative emissions controls. The EPA would monitor the information
from the EFF survey to inform whether an EFF blender pump-refiner RVP
requirement would be necessary.
---------------------------------------------------------------------------
\179\ See section IV.D.3.b of this preamble.
---------------------------------------------------------------------------
The benzene and sulfur test results from these fuels would help
ensure that EFF manufactured by an EFF bulk blender-refiner and the
parent blends at an EFF blender pump-refinery (i.e., the gasoline and
EFF used to make gasoline-ethanol blended fuels at blender pumps) are
meeting applicable benzene and sulfur standards at a regional and
national level. This information would be useful to identify if further
requirements to control sulfur and benzene levels in EFF are needed.
Additional parties (e.g., EFF full-refiners and natural gasoline EFF
blendstock refiners) could participate in the survey to help establish
affirmative defenses similar to what we are proposing for RVP, in-use
sulfur, and benzene content. We also seek comment on whether there are
any other fuel parameters that should be measured as part of the
proposed EFF survey program to help ensure EFF compliance with proposed
requirements.
The EPA is also proposing to require that EFF bulk blender-refiners
participate in the survey as part of satisfying the alternative
compliance provisions as EFF bulk blender-refiners. In order to ensure
that the EFF produced by an EFF bulk blender-refiner met applicable EFF
standards, all EFF retail outlets would need to be surveyed. Testing
these fuels for regulated parameters would help ensure that EFF
produced by bulk blender-refiners met standards.
We are not proposing to require that EFF full-refiners participate
in the EFF survey program in addition to the other proposed
requirements for EFF full-refiners. We believe that EFF full-refiners
can demonstrate that their fuels would meet applicable EFF fuel quality
standards through the sampling and testing of each batch of EFF at the
point of production consistent with how gasoline refiners have done so
in other EPA fuels programs. Historically, the EPA has never required
that parties contract with an independent surveyor as the only means of
demonstrating requirements. Compliance surveys have always been a
compliance option for parties in lieu of conducting their own
compliance assurance programs. Requiring all EFF refiners to
participate in the survey would also blur the lines between the
compliance options of being an EFF full-refiner or an EFF bulk blender-
refiner and make the full-refiner option less attractive to parties
that manufacture EFF. However, requiring EFF full-refiners to
participate in the survey program would help spread out the compliance
costs across all parties that manufacture EFF since the EFF survey
would sample and test EFF from retail stations regardless of which
party produced it. Therefore, although we are not proposing to require
EFF full-refiners to participate in the EFF survey program, we seek
comment on whether EFF full-refiners should be required to participate
in the EFF survey program.
[[Page 80873]]
We recognize that the proposed EFF survey program overlaps
significantly with the E15 survey program. The E15 survey program
already regularly samples blender pump stations for the ethanol content
of gasoline samples, with a focus on E15. Currently, most blender pump
stations are selected for sampling and testing since these stations
make up a bulk of the stations already offering E15 and are the most
likely to offer E15 without satisfying E15 misfueling mitigation
requirements. Additionally, some retail stations that market E85, but
do not have blender pumps, are randomly selected as part of the E15
survey program. Since these stations are already being surveyed as part
of the E15 survey program, we believe that responsible parties could
integrate the proposed EFF survey program with the E15 survey to reduce
the cost to industry. However, the proposed EFF survey program
requirements are separate from the E15 survey requirements in the
regulations and EFF bulk blender-refiners and blender pump-refiners may
choose to have two different independent survey associations to conduct
the E15 and EFF surveys.
b. Specific EFF Quality Survey Design Requirements
We are proposing similar survey design elements for the EFF survey
program as those used in other EPA fuels survey programs. The survey
would be conducted by an independent survey association with the same
independence requirements used in other fuels survey programs. The
independent survey association would submit an annual plan to the EPA
for approval that outlines how the EFF blender pump survey requirements
would be met. These requirements would include how blender pump and EFF
stations would be selected for sampling and testing, how samples would
be procured, how samples would be tested for sulfur, benzene, RVP, and
ethanol content, and how potential issues would be reported to the EPA.
The survey association would have to also submit periodic and annual
reports on aggregate survey results to the EPA. The survey association
would be responsible for identifying blender pump and EFF station
locations and providing those locations to the EPA on a regular basis.
The survey association would also let the EPA know if any EFF bulk
blender-refiner or blender pump-refiner fails to participate in the EFF
survey consortium. Similar to other survey programs, the survey
association would also have to provide proof of monies for the approved
survey plan prior to the implementation of the annual EFF survey plan.
Consistent with other EPA fuels survey programs, the EFF survey program
would require four quarterly surveys.
We also are proposing a slightly different sample size
determination methodology from those used in other EPA fuels survey
programs for the EFF survey program. Since the EFF survey program needs
to sample EFF produced by a bulk blender-refiner and distributed to all
EFF stations (i.e., stations offering only ``E85'' and stations that
operate blender pumps), the EFF survey would need to take samples from
a subset of all stations that offer EFF. However, EFF produced at a
blender pump and EFF produced at a terminal or ethanol production
facility necessitates different sampling and sample size methodologies
to ensure that the EFF sampled and tested is representative of the
fuels produced by EFF bulk blender-refiners and blender pump-refiners,
respectively. Therefore, we are proposing to have separate sample size
determinations for all EFF stations and for the subset of stations with
EFF that make EFF through a blender pump.
For all EFF stations, the sample size determination methodology
would be similar to those already required in other EPA fuels survey
programs with one difference. Since the number of total EFF stations is
still relatively small (around 3,000 stations), a finite population
correction would be needed to account for the small population of EFF
retail stations. Additionally, we are proposing a minimum number of
samples for the survey of all EFF retail stations of 500 stations to
account for the relatively low population of EFF retail stations. The
EPA would reconsider the minimum sample size if the number of EFF
retail stations increases substantially relative to the total number of
fuel retail stations nationwide.
For the subset of EFF stations that make EFF via a blender pump, we
believe a different sample size determination methodology is necessary
due to the even smaller relative size of the population of blender pump
stations. To date there have been a limited number of retail stations
that own or operate blender pumps (we estimate 400 to 500), spread out
over many states but focused primarily in the Midwest. Given the
limited number of retail stations that currently own or operate blender
pumps, we propose that the survey would be conducted at all blender
pump stations each year until the number of retail stations with
blender pumps exceeds 500 stations. This would mean that each retail
station with a blender pump could expect to be sampled at least once
per year. Once the number of stations with a blender pump exceeds 500
stations, the survey association would determine the number of retail
stations to be sampled in accordance with appropriate sample size
determination methodology.\180\ For these sample size determinations,
we are proposing similar sample size determination methodology as those
used in other EPA fuels survey programs.\181\ However, under no
circumstances would the minimum number of retail stations selected to
be sampled be less than 500.
---------------------------------------------------------------------------
\180\ It should be noted that this 500 station minimum is in
addition to the 500 station minimum for the entire EFF station
population. This means that the EFF survey program would have a
minimum number of 1,000 stations that are sampled in a given year.
These 500 stations cannot be double-counted within the EFF program;
however, stations selected for the E15 program could be counted for
the EFF survey program minimum number.
\181\ For the first year of the survey to determine the number
of retail stations for the survey, the estimated non-compliance rate
would be 2.3 percent. This number is based on historical compliance
rates from other fuel programs. Since it is most likely that the
first several years of the survey would be a virtual census of
blender pumps, actual compliance rates from these years would
substitute the historical figure of 2.3 percent.
---------------------------------------------------------------------------
Although we are not proposing a maximum number of samples, a
maximum sample size could be used to limit the cost of the survey
program since the number of retail stations that are needed to be
sampled would depend on compliance rates determined by the previous
survey period and the number of total retail stations with blender
pumps. For example, in the ULSD Survey Program, we established a
maximum number of samples at 9,600 to limit industry's potential
cost.\182\ We seek comment on these proposed sample size requirements.
---------------------------------------------------------------------------
\182\ See 40 CFR 80.6113(e)(4)(v).
---------------------------------------------------------------------------
We are proposing that the survey association use a method for
collecting samples of EFF produced through a blender pump consistent
with those specified in NIST Handbook 158. Since most E15 is currently
produced by blending E10 with EFF via a blender pump, the EPA has
encountered some challenges with collecting a valid sample due to the
unique way that blended fuels are produced at blender pumps. The issue
was that inconsistent ethanol content results occurred due to variation
between the independent survey association and states' weights and
measure offices. In order to address this issue, the EPA has worked
with industry, the RFG Survey Association, and other affected
stakeholders to
[[Page 80874]]
develop an agreed upon sampling protocol to ensure that representative
samples are collected from blender pumps. This agreed-upon method was
included in NIST Handbook 158, and we believe that the methods
specified there for collecting blended fuels produced through a blender
pump yield representative samples. Therefore, we are proposing that the
survey association use one of those methods, incorporated by reference,
for both the E15 and EFF survey programs. We seek comment on whether
this is appropriate.
Unlike in our other fuel survey programs, we are proposing not to
require that the samples at retail stations be stratified. The
practical implication of not stratifying the sample is that the annual
sample size of retail stations surveyed would be decreased.\183\ This
is related to the small number of retail stations with blender pumps
and the fact that many of these stations are located in rural areas.
Historically, the EPA has stratified the national retail station pool
to ensure that fuels from major metropolitan areas, transportation
corridors (i.e., the areas around interstates and major highways), and
rural areas were appropriately represented in the survey sample. This
helped give the EPA a sense of compliance rates in each stratum to help
target future compliance and enforcement efforts. Since blender pumps
are not concentrated in major metropolitan areas or along
transportation corridors, it does not make sense to have a survey that
stratifies a sample like other national fuels survey programs.
Additionally, at least for the first few years of the program, the EFF
quality survey program would take samples from all retail stations with
blender pumps, making stratification unnecessary. However, if EFF
stations become more prevalent nationwide, stratification of the
national EFF station pool could be incorporated into the annual EFF
survey plan in the future.
---------------------------------------------------------------------------
\183\ On the other hand, by not stratifying the sample, this
ensures the probability of an individual station being randomly
selected for sampling is relatively the same. This could help reduce
concerns associated with selection bias in the survey program.
---------------------------------------------------------------------------
We are proposing that the independent surveyor submit the survey
plans to the EPA for approval no later than November 15 of the
preceding year and that proof of monies be submitted to the EPA no
later than December 15 of the preceding year. These dates are
consistent with other EPA fuels survey programs and should provide
enough time for an independent surveyor to submit plans and begin
conducting the survey. It should be noted that responsible parties may
only take advantage of the alternative compliance provisions for EFF
bulk blender-refiners and blender pump-refiners if they participate in
a survey program with an EPA-approved survey plan.
Although the EFF quality survey program would be required for EFF
bulk blender-refiners and blender pump-refiners, we are proposing that
other parties (e.g., EFF full-refiners) could participate in the EFF
quality survey consortium to help establish an affirmative defense for
potential EFF violations. The EPA has provided this affirmative defense
opportunity to parties in other fuels programs (e.g., the E15 survey
program).
Even though the EFF quality survey program is similar to other EPA
fuels program surveys, we are proposing some significant changes to the
survey design to accommodate blender pumps and EFF stations. We believe
that the proposed survey design can effectively help assure compliance
without imposing unnecessary burden on responsible parties. However, we
are interested if there are changes to the proposed EFF survey program
that could improve its effectiveness in assuring compliance or further
reduce costs for responsible parties. One option to reduce costs would
be to find alternatives to ensuring compliance at the retail level
without sampling and testing. For example, the independent surveyor
could review the PTDs of parent fuels to ensure that EFF blender pump-
refiners only received certified gasoline and EFF for EFF production
through a blender pump. This PTD review could be less expensive than
the sampling and testing of EFF and could replace some of the sampling
that needs to occur under the proposed EFF survey program. The EPA is
not proposing this option over concerns that retail stations may not
wish to allow an independent surveyor to review their PTDs and thus
diminish response rates in the proposed survey program. We seek comment
on allowing independent surveyors to review PTDs in lieu of taking an
EFF sample and testing it for compliance and whether there are any
additional survey design changes that should be incorporated in the
proposed EFF survey program.
G. Simplified EFF Alternatives
The proposed provisions to allow the use of natural gasoline as a
blendstock to produce EFF could reduce the cost of EFF and result in
the increased use of ethanol to help meet the RFS mandates. However,
the use of natural gasoline would also introduce complications,
necessitate the substantial new provisions discussed in this proposal,
and increase the EPA's burden to ensure that EFF meets environmentally
protective standards. Accordingly, we are also seeking comment on
implementing two alternative simpler programs to regulate EFF.
The first alternative would only allow the use of EPA-compliant
gasoline, BOBs, and DFE as EFF blendstocks. This would parallel the
current requirements in California while still expanding the allowable
range of ethanol blends.
A number of the provisions in this proposal would remain unchanged
under this simpler approach. For example, we would still propose to
treat E16-50 in a similar way to other EFF blends that may only be used
in FFVs (E51-83), and would defer consideration of requiring compliance
with the F&FA program requirements for all EFF to a future action. The
proposed EFF blender pump-refiner provisions would also remain the
same.
Since parties that produce EFF would only be using DFE and EPA-
compliant gasoline or BOBs, they would not have to conduct any sampling
or testing to demonstrate compliance with any of the proposed
requirements for EFF, including the RVP requirements. The only
programmatic requirements for EFF bulk blender-refiners would be to
register with the EPA, keep PTDs and other records regarding their
blending activities, and submit simple annual reports with information
regarding the EFF batches they produced during the year.
The second alternative would allow EFF producers to use certified
natural gasoline EFF blendstocks in addition to certified gasoline and
BOBs, but would not allow the use of uncertified natural gasoline EFF
blendstocks. Thus, the EFF full-refiner certification option would no
longer be included. There are several benefits of this proposed
approach, as it would allow the increased use of natural gasoline to
produce EFF, thereby reducing the costs, and would also assure that the
overall emissions from EFF are no greater than emissions from the
production of EFF with certified gasoline without the complications
necessitated by the use of uncertified natural gasoline. The EFF full-
refiner option would allow natural gasoline with higher benzene and
sulfur levels to be used to produce EFF, provided that tests on the
finished EFF demonstrated the same level of control as provided for
gasoline under the current regulations. The added complexity under the
EFF full-refiner option, which is needed to
[[Page 80875]]
ensure that the use of higher sulfur and benzene natural gasoline does
not result in increased emissions, may create confusion among regulated
parties and increase the likelihood of violations for downstream
parties.
We request comment on whether the increased flexibility of allowing
the use of either certified or uncertified natural gasoline as an EFF
blendstock justifies the EPA promulgating the previously discussed
comprehensive compliance provisions and the increased burden of
governmental oversight, or whether it would be more appropriate to
implement one of the simpler programs described above.
H. Statutory Authority for Proposed EFF Requirements
FFVs have been manufactured and introduced into commerce for more
than two decades and are typically designed to operate on gasoline and
any gasoline-ethanol mixture of up to 83 percent ethanol. These fuels
contribute to emissions of VOC and NOX that result in the
formation of both ozone and fine particulate matter (PM2.5).
These pollutants present a significant risk of harm to public health
and welfare. Given the environmental and health effects of evaporative
emissions from fuels, the EPA has responded by consistently setting
requirements to address such emissions. For example, beginning in 1971,
the EPA established a series of evaporative control requirements for
vehicles and engines, under CAA section 202(b). Similarly, beginning in
1989, the EPA set volatility requirements for gasoline under CAA
section 211(c) by requiring that gasoline meet a maximum RVP of 9.0 psi
during the ozone high season. In 1990, Congress ratified these
regulations by promulgating CAA section 211(h). The EPA has also
limited sulfur in gasoline in its Tier 3 rule under CAA section
211(c),\184\ and has limited levels of benzene under the Mobile Source
Air Toxics (MSAT) rule.\185\
---------------------------------------------------------------------------
\184\ See 79 FR 23414 (April 28, 2014).
\185\ See 72 FR 8428 (February 26, 2007).
---------------------------------------------------------------------------
When operating on gasoline, FFV emissions are minimized due to the
existing gasoline content requirements (i.e., sulfur, benzene, CHONS,
and RVP). Currently, the only fuel requirement for higher ethanol
blends used in FFVs is that it has to be either substantially similar
to certification fuel or have a waiver under CAA section 211(f). FFVs
are also equipped with the same type of emission control systems as
conventional gasoline vehicles and are generally subject to the same
emissions standards. Therefore, we believe that in order to maintain
emissions control performance, FFVs need EFF that meet quality
specifications similar to those for gasoline, such as the 10 ppm annual
average sulfur standard in the Tier 3 gasoline sulfur program,\186\ and
the 0.62 volume percent annual average benzene standard in the gasoline
benzene program.\187\
---------------------------------------------------------------------------
\186\ See 40 CFR part 80, subpart O.
\187\ See 40 CFR part 80, subpart L.
---------------------------------------------------------------------------
The EPA is proposing to regulate EFF content pursuant to our
authority under CAA section 211(c). We are proposing sulfur, benzene,
and RVP controls for EFF based on both of the criteria in section
211(c). This section allows the EPA to establish a fuel control if at
least one of the following two criteria is met: (1) The emission
products of the fuel cause or contribute to air pollution that may
reasonably be anticipated to endanger the public health and welfare;
\188\ or (2) The emissions products of the fuel will impair to a
significant degree the performance of any emissions control device or
system which is either in general use or which the Administrator finds
has been developed to a point where in a reasonable time it will be in
general use or which the administrator finds has been developed to a
point where in a reasonable time it will be in general use were the
fuel control to be adopted.\189\ We are also proposing to limit EFF to
CHONS using our authority under CAA section 211(f).
---------------------------------------------------------------------------
\188\ See CAA section 211(c)(1)(A).
\189\ See CAA section 211(c)(1)(B).
---------------------------------------------------------------------------
1. Section 211(c)(1)(A)
Under the first criterion of CAA section 211(c)(1), we believe that
EFF with current levels of sulfur, benzene, and RVP causes or
contributes to ambient levels of ozone, PM and air toxics that endanger
the public health and welfare. EFF containing sulfur at the current
levels increases emissions of NOX and PM from FFVs and as
such contributes to the formation of ozone and PM in the atmosphere.
EFF with current RVP levels is a source of VOC emissions and as such
contributes to the formation of ozone in the atmosphere. In addition,
EFF is also a source of MSATs. MSATs are present in gasoline and
gasoline-ethanol blends or their additives and are emitted to the air
when EFF evaporates or passes through FFV engines.
The EPA has set National Ambient Air Quality Standards (NAAQS) for
ambient concentrations of PM and ozone.\190\ PM is a highly complex
mixture of substances that exist as discrete particles. Particles span
many sizes and shapes and may consist of hundreds of different
chemicals. PM is linked to a broad range of health effects.\191\ There
are well documented studies on the health effects associated with both
short-term and long-term PM exposure. Short-term PM2.5
exposure has been associated with increased cardiovascular and
respiratory effects and mortality.\192\ With regard to long-term
exposure, there are also studies that demonstrate a link between long-
term exposure to PM2.5 with an array of cardiovascular
effects such as heart attacks, congestive heart failure, stroke, and
mortality.\193\ Specific groups within the general population are at
increased risk for experiencing adverse health effects related to PM
exposures, including children, older adults, and individuals with pre-
existing heart and lung disease. Further, environmental and welfare
effects of PM2.5 include reduced visibility in certain parts
of the country, overall contamination through deposition to terrestrial
and aquatic ecosystems and soiling and aesthetic damage by corroding
and degrading buildings and monuments.\194\
---------------------------------------------------------------------------
\190\ See 40 CFR 50.18 and 50.19.
\191\ See 78 FR 3103-3104 (January 15, 2013).
\192\ U.S. EPA, ``2009 Final Report: Integrated Science
Assessment for Particulate Matter,'' EPA/600/R-08/139F, at chapter 2
(sections 2.3.1-2) and chapter 6.
\193\ Id. at chapter 7.
\194\ Id. at chapter 2 (sections 2.5.1-3) and chapter 9.
---------------------------------------------------------------------------
Ground level ozone pollution is typically formed through reactions
involving VOC and NOX in the lower atmosphere in the
presence of sunlight. In humans, exposure to ozone can irritate the
respiratory system, reduce lung function and aggravate asthma and other
lung diseases.\195\ Several groups are at increased risk for ozone-
related health effects, including people with asthma, children, older
adults, and outdoor workers. In addition ozone has effects on
vegetation and ecosystems.\196\ These effects include visible foliar
injury, impacts on tree growth, productivity and carbon storage, and
crop yield loss.\197\ The proposed EFF sulfur and RVP controls would
reduce emissions of NOX and VOCs which
[[Page 80876]]
contribute to ambient concentrations of PM and ozone.
---------------------------------------------------------------------------
\195\ U.S. EPA, ``2013 Final Report: Integrated Science
Assessment for Ozone,'' EPA/600/R-10/076F, at chapter 6.
\196\ See the NAAQS for Ozone (80 FR 65292, 65302-65340, October
26, 2015).
\197\ See 80 FR 65470 (October 26, 2015). A more detailed
discussion of the health and welfare effects of these pollutants can
be found in the final rules for the NAAQS for Ozone (80 FR 65292,
65302-65340, October 26, 2015), NAAQS for PM (78 FR 3087, January
15, 2013), and their ISAs, which are available at https://www.epa.gov/isa.
---------------------------------------------------------------------------
Natural gasoline can have high benzene content, potentially
resulting in high levels of benzene in EFF. The EPA's Integrated Risk
Information System (IRIS) database lists benzene as a known human
carcinogen.\198\ Benzene causes leukemia by all routes of exposure, and
exposure is associated with additional health effects, including
genetic changes in both humans and animals and increased proliferation
of bone marrow cells in mice.\199\ A number of adverse noncancer health
effects including blood disorders, such as pre leukemia and aplastic
anemia, have also been associated with long-term exposure to
benzene.\200\ We believe that the EFF benzene standard, when finalized,
will limit benzene exhaust and evaporative emissions from FFVs that are
fueled by EFF. In addition, it will limit evaporative benzene emissions
from EFF distribution systems.
---------------------------------------------------------------------------
\198\ U.S. EPA, ``Toxicological Review of Benzene (Noncancer
Effects),'' EPA/635/R-02/001F, at 22.
\199\ Id. at 72, 108. See also, U.S. EPA, ``Integrated Risk
Information System Chemical Assessment Summary: Benzene,'' at
Section II, https://cfpub.epa.gov/ncea/iris/iris_documents/documents/subst/0276_summary.pdf.
\200\ U.S. EPA, ``Toxicological Review of Benzene (Noncancer
Effects).'' EPA/635/R-02/001F. See also, Aksoy, M. (1989).
``Hematotoxicity and carcinogenicity of benzene.'' Environ. Health
Perspect. 82: 193-197; See also, Goldstein, B.D. (1988). ``Benzene
toxicity.'' Occupational medicine. State of the Art Reviews. 3: 541-
554.
---------------------------------------------------------------------------
In sum, we are proposing that emission products of EFF will
endanger public health and welfare. FFVs represent more than 6 percent
of the current vehicle fleet and approximately 25 percent of new light
duty vehicles produced in 2014. Given that FFVs tend to be newer
vehicles that are driven more than older vehicles, FFVs account for
nearly 8 percent of all light duty vehicle miles traveled in 2015.\201\
Thus, we believe that control of sulfur, benzene, and RVP in EFF will
lead to significant effective reductions in emissions of these air
pollutants and thus, benefits to public health and welfare.
---------------------------------------------------------------------------
\201\ EIA, ``2015 Annual Energy Outlook,'' http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
---------------------------------------------------------------------------
Prior to adopting a fuel control based on a finding that the fuel's
emission products contribute to air pollution that can reasonably be
anticipated to endanger public health or welfare, under CAA section
211(c)(2)(A), the EPA must consider ``all relevant medical and
scientific evidence available, including consideration of other
technologically or economically feasible means of achieving emission
standards under [section 202 of the CAA].'' The EPA has considered
medical and scientific evidence as well as other technologically or
economically feasible means of achieving emissions control using
vehicle controls. The EPA's analysis of the medical and scientific
evidence relating to the emissions impact from EFF is described in more
detail in various documents cited earlier, including the MSAT rule, and
the Ozone and PM NAAQS final rules and their associated Integrated
Science Assessments (ISAs). The EPA has also satisfied the statutory
requirement to consider ``other technologically or economically
feasible means of achieving emission standards under [section 202 of
the CAA].'' This provision has been interpreted as requiring
consideration of establishing emission standards under CAA section 202
prior to establishing controls or prohibitions on fuels or fuel
additives under CAA section 211(c)(1)(A).\202\ In Ethyl Corp. v. EPA,
the court stated that CAA section 211(c)(2)(A) calls for good faith
consideration of the evidence and options, not for mandatory deference
to regulation under CAA section 202 compared to fuel controls.\203\ As
a general matter, under Title II of the CAA, the EPA has adopted a
systems-approach towards mobile source standard setting (i.e., the
simultaneous promulgation of both engine and fuels requirements, under
CAA sections 202 and 211(c)). In so doing, the EPA considers
interactions between the designs of vehicles and the fuels they use in
order to assure optimum emission performance at minimum cost. The EPA
has previously promulgated various emissions standards for FFVs and FFV
engines under CAA section 202. These include the 2007 MSAT evaporative
emission standards applicable to diurnal and hot soak emissions for
FFVs that became fully effective in 2014 and more recently the Tier 3
final rule.\204\ In the Tier 3 rule, the EPA proposed both fuel quality
and emissions standards for FFVs but only finalized vehicle and engine
standards and certification fuel.\205\ As previously explained,
emissions certification testing of FFVs is required using both the test
fuel specified for conventional gasoline vehicles and a high ethanol
content FFV test fuel (E83). Regulatory specifications for conventional
gasoline emissions certification test fuel have long existed.\206\
Regulatory specifications for the high-ethanol content FFV
certification test fuel were finalized in the Tier 3 final rule and
will become mandatory for MY 2017 FFVs.\207\ As previously explained,
EFF must be substantially similar to vehicle certification fuel, under
CAA section 211(f).\208\ These proposed standards for EFF, which expand
on the Tier 3 proposal, will therefore restrict sulfur, benzene, and
RVP content in EFF and enable compliance with the MSAT benzene
evaporative standards as well as Tier 3 emission standards for FFVs
that were based on use of advanced emission control technology now in-
use by FFVs.
---------------------------------------------------------------------------
\202\ See Ethyl Corp. v. EPA, 541 F.2d. 1, 31-32 (D.C. Cir.
1976).
\203\ Id. at 32, n.66.
\204\ See 72 FR 8473 (February 26, 2007) and 79 FR 23414 (April
28, 2014).
\205\ See 79 FR 23558 (April 28, 2014).
\206\ See, e.g., ``The effects of Ultra-Low Sulfur Gasoline on
Emissions form Tier 2 Vehicles in the In-Use Fleet,'' EPA-420-R-14-
002. See also, Durbin, T. ``The effect of fuel sulfur on
NH3 and other emissions from 2000-2001 model year
vehicles.'' Atmospheric Environment 38, 2699 (2004).
\207\ See 79 FR 23414 (April 28, 2014) and 40 CFR 1065.725.
\208\ See 40 CFR 1801-12.
---------------------------------------------------------------------------
2. Section 211(c)(1)(B)
We are also proposing requirements for sulfur content in EFF and
RVP limits for EFF under the second criterion of CAA section 211(c). We
believe that sulfur in EFF could significantly impair the emission-
control systems expected to be in general use in FFVs and FFV engines.
There are well documented studies on the impact of sulfur on emissions
control performance of exhaust catalyst systems.\209\ Sulfur is a well-
known catalyst poison because it inhibits and degrades the emissions
control performance of exhaust catalyst systems by selectively binding
and reacting, in some instances, with active sites and coating
materials.\210\ As a general matter, reducing fuel sulfur levels has
been the primary regulatory mechanism to minimize sulfur contamination
of the catalyst and ensure optimum emissions performance over the
useful life of a vehicle. As also explained in the Tier 3 final rule,
the impact of sulfur poisoning on exhaust catalyst performance and the
relative stringency of the Tier 3 exhaust emissions standards, when
considered together make a compelling argument for the virtual
elimination of sulfur from
[[Page 80877]]
fuel used in vehicles equipped with catalytic aftertreatment.
---------------------------------------------------------------------------
\209\ See the Tier 3 final rule, 79 FR 23414 (April 28, 2014).
\210\ Nat'l Petrochemical & Refiners Ass'n v. EPA, 287 F.3d
1130, 1143 (D.C. Cir. 2002); See also section IV.6 of the Tier 3
final rule preamble, which describes the substantial adverse effect
of high gasoline sulfur levels on emission control devices or
systems for Tier 3 vehicles and engines (79 FR 23463-23474, April
28, 2014).
---------------------------------------------------------------------------
There are currently no specifications in 40 CFR part 80 for natural
gasoline used as an EFF blendstock that would ensure that the resulting
EFF is suitable for use in FFVs. Additionally, natural gasoline can
have high sulfur content, potentially resulting in high levels of these
harmful components in EFF that could impair the performance of FFV
emissions control catalysts. As also previously explained, the EPA set
vehicle and engines standards, under CAA section 202, in the recent
Tier 3 rule that relied on sulfur reduction in gasoline. FFVs utilize
the same aftertreatment catalysts as gasoline vehicles, which are
adversely affected by sulfur in EFF in the same way as sulfur in
gasoline. Therefore, we believe that control of sulfur in EFF to 10 ppm
(the same as sulfur in gasoline) will significantly improve the
efficiency of emissions control systems currently in use in FFVs and
continue prevention of the substantial adverse effects of sulfur levels
on the performance of such emissions control systems when they operate
on any fuel.
We also believe that high RVP levels in EFF could impair FFV
evaporative emissions control systems. FFVs are equipped with
evaporative canisters similar to conventional gasoline vehicles. These
canisters have limited storage abilities and fuel vapors must be
``purged'' each time the engine is operated. FFVs with properly
designed evaporative control systems are equipped with purging systems
that remove enough vapor as well as control fuel flow rates so that
purged vapor does not increase emissions. They are also designed to
regenerate their vapor storage capacity so that vapor can continue to
be controlled. However, when FFVs are operated on EFF with RVP levels
above the test fuels used during FFV certification the evaporative
canisters on FFVs can be overloaded resulting in excessive evaporative
emissions. Therefore, we believe that the RVP of EFF must be controlled
to ensure that FFVs are not subjected to EFF that exceeds the RVP of
test fuels used during FFV certification.
CAA section 211(c)(2)(B) requires that, prior to adopting a fuel
control based on a significant impairment to vehicle emission-control
systems, the EPA consider available scientific and economic data,
including a cost benefit analysis comparing emission-control devices or
systems which are or will be in general use that require the proposed
fuel control with such devices or systems which are or will be in
general use that do not require the proposed fuel control. As
previously explained, there are existing emissions standards for FFVs
and FFV engines under CAA section 202, including the MSAT evaporative
emission standards applicable to diurnal and hot soak emissions for
FFVs,\211\ and more recently the Tier 3 final rule.\212\ For these
purposes, the EPA is relying on the Regulatory Impact Analyses (RIAs)
for the Tier 3 rule and 2007 MSAT rule.\213\ We believe that the
emissions control technology being used to meet these existing
standards would be significantly impaired by operation on EFF with
annual average sulfur levels greater than 10 ppm and current RVP
levels. Our analysis of the available scientific and economic data can
also be found in the Tier 3 RIA. The EPA is relying on the detailed
analysis of the environmental benefits of the Tier 3 sulfur standards
(Chapters 6 and 8), the analysis of the technological feasibility and
cost of controlling sulfur to the levels established in the Tier 3
final rule (Chapters 4 and 5), and the cost-effectiveness analysis of
the sulfur control and motor vehicle and engine emission standards
(Chapter 8). These EFF requirements, when finalized, will ensure that
emission control devices available for general use in FFVs can continue
to meet existing emission standards and would not be significantly
impaired by EFF with current sulfur and RVP levels, as well as when EFF
is made with natural gasoline.
---------------------------------------------------------------------------
\211\ See 72 FR 8473 (February 26, 2007).
\212\ See 79 FR 23414 (April 28, 2014).
\213\ The Tier 3 RIA is available at https://www3.epa.gov/otaq/documents/tier3/420r14005.pdf and the MSAT RIA is available at
http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2005-0036-
1168.
---------------------------------------------------------------------------
3. Section 211(c)(2)(C)
CAA section 211(c)(2)(C) requires that prior to prohibiting a fuel
or fuel additive, the EPA must make a finding that such prohibition
will not cause the use of another fuel or fuel additive ``which will
produce emissions which endanger the public health or welfare to the
same or greater degree'' than the prohibited fuel or additive. This
finding is required by the CAA only prior to prohibiting a fuel or
additive, not prior to controlling a fuel or additive.\214\ Since the
EPA is not proposing to prohibit use of sulfur, benzene, or RVP, but
rather controlling their levels in EFF, this finding is not required
for this proposed rulemaking. Nevertheless, the EPA does not believe
that these various controls for EFF will result in the use of any other
fuel or additive that will produce emissions that will endanger public
health or welfare to the same or greater degree as the emissions
produced by EFF with their current levels.
---------------------------------------------------------------------------
\214\ See Ethyl Corp. v. EPA, 541 F.2d. at 32.
---------------------------------------------------------------------------
4. Section 211(f)
The EPA is also proposing to regulate the elemental composition of
EFF, as we believe that elements that poison (deactivate) vehicle
emissions control catalysts such as anions or cations (e.g., metals)
can exist naturally in petroleum deposits or can be added in the
process of extracting such deposits. They can also become entrained in
either petroleum or ethanol products through contamination or could
purposefully be added to a fuel. As a result, the EPA limited the
elemental content for gasoline and gasoline additives to CHONS.\215\
Refiners are required to limit the elemental composition of the
gasoline they produce to CHONS, except for trace quantities of other
atypical elements. We are proposing to regulate EFF to consist only of
CHONS in the same fashion.
---------------------------------------------------------------------------
\215\ See 46 FR 38582 (July 28, 1981).
---------------------------------------------------------------------------
As also previously explained, there are currently no specifications
in 40 CFR part 80 on the quality of natural gasoline used as EFF
blendstock that would ensure that the resulting EFF is suitable for use
in FFVs. Were natural gasoline used in EFF to contain non-CHONS
elements (e.g., metals and salts), either naturally or through
addition, it could also quickly destroy the effectiveness of FFV
emissions control catalysts. Thus, significant concern exists about the
potential increase in FFV emissions that might result from the
unregulated use of natural gasoline of uncontrolled quality as an EFF
blendstock. Additionally, other components of EFF (e.g., ethanol and
additives) can also contain non-CHONS elements that can adversely
affect FFV emissions control catalysts. We are also concerned about the
non-CHONS content of these components and the resulting effect on
emissions from FFVs.
CAA section 211(f) requires fuel and fuel additives introduced into
commerce to be ``substantially similar'' to fuels or fuel additives
used in certification. This requirement applies to all fuels used in
motor vehicles, including FFVs. The term ``substantially similar'' is
not defined in the CAA and has been interpreted and historically used
to regulate the elemental content, molecular structure, and total
concentration of fuel and fuel
[[Page 80878]]
additives.\216\ Current emissions certification testing for FFVs is
required using both the test fuel specified for conventional gasoline
vehicles (E10, starting in MY 2017 vehicles) and a high ethanol content
FFV test fuel (E83). Regulatory specifications for conventional
gasoline emissions certification testing have long existed to ensure
that atypical elements are not present. Regulatory specifications for
the ethanol gasoline blends certification test fuel were finalized in
the Tier 3 final rule and will become mandatory for MY 2017 FFVs.\217\
Regulatory specifications were also set for the certification fuel for
gasoline (E10) in the Tier 3 final rule and will also become mandatory
of MY 2017 FFVs. These regulations ensure that FFV exhaust emissions
test fuel is composed only of CHONS. Thus, in order for EFF to meet the
statutory requirement in CAA section 211(f), it must consist only of
CHONS, as is the case for the gasoline and FFV certification test fuels
that are used in vehicle testing. That fuels introduced into commerce
be CHONS is fundamental to the EPA's understanding of ``substantially
similar'' as it relates to both certification fuels for FFVs (i.e., E85
and E10).
---------------------------------------------------------------------------
\216\ See, e.g., 73 FR 22277 (April 25, 2008), 56 FR 5352
(February 11, 1991), and 46 FR 38582 (July 28, 1981).
\217\ See 79 FR 23414 (April 28, 2014) and 40 CFR 1065.725.
---------------------------------------------------------------------------
We are proposing regulations under CAA section 211(f) that limit
elemental composition of EFF to CHONS. We are proposing that parties
must demonstrate the elemental composition of EFF using our authority
under CAA sections 114 and 208 to establish and maintain records, and
make reports.
V. CCS Implementation Under the RFS Program
A. Background
CCS is a potentially important technology for reducing GHG
emissions from stationary sources. As described in the final standards
of performance for GHG emissions from new, modified, and reconstructed
electric utility generating units (``NSPS for EGUs''), it is important
to promote deployment and further development of CCS technologies that
allow for meaningful reductions in CO2 emissions from fossil
fuel-fired utility boilers.\218\ In that rulemaking, the EPA found that
partial CCS has been adequately demonstrated, is technically feasible,
and can be implemented at reasonable costs.\219\ The rulemaking also
found that partial CCS provides meaningful emission reductions and its
implementation will serve to promote further development and deployment
of the technology.\220\ We believe that allowing CCS as a technology
for reducing lifecycle GHG emissions for renewable fuels under the RFS
program would complement the NSPS for EGUs by providing another
opportunity for the deployment of this important GHG reduction
technology. CCS can also enhance the RFS program by allowing an
additional mechanism for renewable fuel producers to significantly
reduce their lifecycle GHG emissions associated with the production of
renewable fuel.
---------------------------------------------------------------------------
\218\ See 80 FR 64548 (October 23, 2015).
\219\ See 80 FR 64548, 64558 (October 23, 2015).
\220\ See 80 FR 64513 (October 23, 2015). In the NSPS for EGUs,
partial CCS refers to CCS with capture of a level of CO2
emissions lower than 90 percent. To meet the final standard of
performance of 1,400 lb CO2/MWh, a new, highly efficient
steam generating EGU would need to capture and store approximately
20 percent of its potential CO2 emissions.
---------------------------------------------------------------------------
The EPA has received petitions under the RFS program to apply CCS
to reduce the lifecycle GHG emissions associated with ethanol produced
as renewable fuel.\221\ Under such a process, a renewable fuel producer
would capture, treat, and compress CO2 produced from the
ethanol fermentation process. The captured CO2 stream \222\
would be transported and injected deep underground for geologic
sequestration (GS), the long-term containment of CO2 in
subsurface geologic formations such as deep saline formations or oil
and gas reservoirs.\223\ The capture and geologic sequestration of the
CO2 generated from ethanol fermentation could substantially
reduce the lifecycle GHG emissions associated with the production of
renewable fuel.
---------------------------------------------------------------------------
\221\ The petitions have been received pursuant to 40 CFR
80.1416. See https://www.epa.gov/renewable-fuel-standard-program/pending-petitions-renewable-fuel-pathways for a list of petitions.
\222\ The EPA's GHG Reporting Program defines CO2
stream as CO2 that has been captured from an emission
source (e.g., a power plant or other industrial facility) or
extracted from a CO2 production well plus incidental
associated substances either derived from the source materials and
the capture process or extracted with the CO2. See 40 CFR
98.6. In referring to captured CO2, this proposal
generally uses the terms ``CO2'' and ``CO2
stream'' interchangeably.
\223\ The petitioners have indicated for purposes of their
application that the geologic sequestration of delivered
CO2 would be part of EOR operations, such that the
CO2 would be utilized for oil or gas extraction before
ultimately being geologically stored.
---------------------------------------------------------------------------
In this action we are proposing registration, recordkeeping,
reporting, and RIN generation requirements that the EPA would use if we
were to allow CCS as a lifecycle GHG emissions reduction technology in
the context of the RFS program. At this time, the EPA is not proposing
to add a generally applicable CCS technology to an approved pathway in
Table 1 to 40 CFR 80.1426, but instead will evaluate, on an individual
basis, petitions that are received pursuant to 40 CFR 80.1416 that
propose to use CCS. In this action we are proposing regulations that
would generally govern the use of CCS if and when such a pathway is
approved. Were a renewable fuel pathway involving use of CCS to be
created in the future, use of the pathway in the context of the RFS
program would remain voluntary and all other applicable existing RFS
regulations would apply.\224\ As discussed below, this proposal relies
substantially on other relevant EPA regulatory programs already in
place concerning the disposition of captured CO2.
---------------------------------------------------------------------------
\224\ The RFS regulations at 40 CFR 80.1401 define advanced
biofuel as ``renewable fuel, other than ethanol derived from
cornstarch, that has lifecycle greenhouse gas emissions that are at
least 50 percent less than baseline lifecycle greenhouse gas
emissions.'' Based on this definition, a future renewable fuel
pathway using CCS to produce ethanol as an advanced biofuel could
not use cornstarch as a feedstock, but could potentially use other
feedstocks (e.g., grain sorghum or barley).
---------------------------------------------------------------------------
B. Existing Regulatory Frameworks Related to CCS
The EPA has already developed an effective and coherent regulatory
framework to ensure the long-term, secure, and safe storage of large
volumes of CO2. This includes air-side monitoring and
reporting requirements promulgated under the CAA through the GHG
Reporting Program (GHGRP) and Safe Drinking Water Act (SDWA)
Underground Injection Control (UIC) Program requirements that regulate
the underground injection of fluids \225\ in a manner that ensures
protection of underground sources of drinking water (USDWs).\226\
Together, the requirements of the GHGRP and the UIC Program provide a
regulatory framework that addresses the injection and geologic
sequestration of CO2, and provide the monitoring mechanisms
to identify and address potential leakage. This proposal
[[Page 80879]]
builds upon these existing regulatory frameworks.
---------------------------------------------------------------------------
\225\ The EPA's UIC regulations define the term fluid to include
any material or substance which flows or moves whether in a
semisolid, liquid, sludge, gas or any other form or state. See 40
CFR 146.3.
\226\ The EPA's UIC regulations define USDW as an aquifer or its
portion: (a)(1) Which supplies any public water system; or (2) Which
contains a sufficient quantity of ground water to supply a public
water system; and (i) Currently supplies drinking water for human
consumption; or (ii) Contains fewer than 10,000 mg/l total dissolved
solids; and (b) Which is not an exempted aquifer. See 40 CFR 144.3.
For more information, see https://www.epa.gov/uic/general-information-about-injection-wells.
---------------------------------------------------------------------------
The UIC Program is designed to ensure that injected CO2
remains isolated from USDWs. The UIC Program regulates the injection of
fluids through six categories of injection wells (i.e., Classes I
through VI). Class II wells are used to inject fluids associated with
oil and natural gas production activities, including CO2
injection for enhanced oil or gas recovery (EOR). Class II requirements
address site characterization, area of review, well construction (e.g.,
casing and cementing), well operation (e.g., injection pressure),
injectate sampling, mechanical integrity testing, plugging and
abandonment, financial responsibility, and reporting. Class VI wells
are used to inject CO2 for geologic sequestration.\227\ The
Class VI requirements address comprehensive site characterization and
project area delineation, computational modeling of the area of review,
financial responsibility, reporting and recordkeeping, injection well
construction, operation and permitting, testing and monitoring (e.g.,
of the well and project area), post-injection site care, and site
closure.\228\ These requirements are built upon decades of experience
regulating underground injection wells and help ensure the safe and
secure sequestration of large volumes of CO2 for long term
containment.
---------------------------------------------------------------------------
\227\ CO2 that is injected into oil and gas
reservoirs for the primary purpose of enhancing the recovery of oil
or gas (ER) are regulated as Class II enhanced recovery wells under
the UIC Program. Transitions to a Class VI permit would be
considered if the purpose of the injection activity changes from oil
or gas production, or if the risk of endangerment to USDWs is likely
to increase and cannot be addressed by the Class II UIC Program.
\228\ For a summary of the UIC Program and more details on the
UIC Class VI Rule finalized in December 2010, see the UIC Geologic
Sequestration of Carbon Dioxide Web site at https://www.epa.gov/uic.
---------------------------------------------------------------------------
40 CFR part 98, subpart RR, of the GHGRP establishes an accounting
framework for the geologic sequestration of CO2, including
monitoring and reporting requirements.\229\ The NSPS for EGUs
specifically requires that any affected EGU that captures
CO2 to meet the applicable emissions limit must transfer the
captured CO2 to a facility that reports under the GHGRP, 40
CFR part 98, subpart RR.\230\ Under subpart RR, facilities must: Report
basic information on the amount of CO2 received for
injection; develop and implement an EPA-approved monitoring, reporting,
and verification (MRV) plan; and report the amount of CO2
sequestered using a mass balance approach and annual monitoring
activities.\231\
---------------------------------------------------------------------------
\229\ More information on the relationship between the 40 CFR
part 98, subpart RR, of the GHGRP, and the UIC program can be found
in the preamble to subpart RR (75 FR 75060, December 1, 2010) and
the preamble to the UIC Class VI Final Rule (75 FR 77230, December
10, 2010).
\230\ See 40 CFR 60.5555(f). Any affected unit that captures
CO2 to meet the applicable emissions limit must report,
under 40 CFR part 98, subpart RR, if the captured CO2 is
injected onsite. If the captured CO2 is sent offsite,
there is a requirement that the captured CO2 that the
permittee sends offsite of the EGU facility is transferred to an
entity that is subject to the requirements of subpart RR.
\231\ See 40 CFR 98.446(a)(1), 40 CFR 98.446(b)(4), 40 CFR
98.448, 40 CFR 98.446(f)(9) and (10), and 40 CFR 98.446(f)(12).
---------------------------------------------------------------------------
For the purposes of this proposed rulemaking, a facility is
conducting geologic sequestration if it is reporting under 40 CFR part
98, subpart RR.\232\ The facility may hold either a Class II or Class
VI permit.\233\ The petitions that EPA has received to date under
80.1416 requesting EPA evaluation of renewable fuel production pathways
using CCS have stated that the geologic sequestration of CO2
would be part of EOR operations before ultimately being geologically
sequestered.\234\ The following sections discuss proposed requirements
that the EPA would use if we were to allow CCS as a lifecycle GHG
emissions reduction technology in the context of the RFS program.
---------------------------------------------------------------------------
\232\ Pursuant to 40 CFR 98.440(a), ``[t]he geologic
sequestration of carbon dioxide (CO2) source category
comprises any well or group of wells that inject a CO2
stream for long-term containment in subsurface geologic
formations.''
\233\ Pursuant to 40 CFR 98.440(c), ``[t]his source category
does not include a well or group of wells where a CO2
stream is being injected in subsurface geologic formations to
enhance the recovery of oil or natural gas unless one of the
following applies: (1) The owner or operator injects the
CO2 stream for long-term containment in surface geologic
formations and has chosen to submit a proposed monitoring,
reporting, and verification (MRV) plan to EPA and received an
approved plan from EPA (2) [t]he well is permitted as Class VI under
the Underground Injection Control program.''
\234\ The petitions have been received pursuant to 40 CFR
80.1416. See https://www.epa.gov/renewable-fuel-standard-program/pending-petitions-renewable-fuel-pathways for a list of petitions.
---------------------------------------------------------------------------
C. Proposed Requirements for Use of CCS in Renewable Fuel Production
This rulemaking proposes and seeks comment on a series of
registration, recordkeeping, reporting, and additional requirements
associated with the use of CCS as a lifecycle GHG emissions reduction
technology in the context of the RFS program. The proposed requirements
would apply only to renewable fuel producers that seek to achieve the
GHG reductions necessary to qualify for a given renewable fuel pathway
by using CCS as part of the renewable fuel production process. By
building on the foundation established in the GHGRP and UIC Program,
this proposal seeks to contribute to a consistent approach across the
EPA for facilities that use CCS. It is important to note that in this
action the EPA specifically seeks comment only on the proposed
requirements for use of CCS as part of the RFS program. This proposed
action is not seeking comments on the recently finalized NSPS for EGUs,
nor does it seek comment on any of the requirements under the UIC
Program or the GHGRP. Any such comments that are submitted on those
programs will be considered beyond the scope of this rulemaking.
Furthermore, EPA is not proposing to consider use of CCS in any
particular application in the RFS program at this time, and any
comments suggesting its application in particular renewable fuel
production pathways will also be considered beyond the scope of this
rulemaking.
1. Registration
A renewable fuel producer seeking to use a pathway involving CCS
would be required to submit a CCS plan for review and approval by the
EPA's Office of Transportation and Air Quality as part of the facility
registration requirements under 40 CFR 80.1450. The CCS plan would
contain fundamental information regarding various elements of a given
CCS project, including information related to sequestration processes
and energy usage. This information is needed for the EPA to determine
the amount of geologically sequestered CO2 that should be
considered credited for purposes of lifecycle GHG emissions. The CCS
plan would also include a contract or contracts between the renewable
fuel producer (supplier of the CO2 stream) and the
designated sequestration facility (if not the same entity).
The EPA is proposing that the CCS plan the renewable fuel producer
submits at registration would contain the following information:
1. A statement of affirmation by the sequestration facility that
the sequestration facility will inject CO2 captured from the
renewable fuel production process in accordance with an MRV plan
developed pursuant to 40 CFR part 98, subpart RR.\235\
---------------------------------------------------------------------------
\235\ Submission of registration materials under the RFS program
pursuant to 80.1450 and review of an MRV plan pursuant to 40 CFR
98.448 may occur concurrently. The MRV plan must be approved prior
to approval of registration under the RFS program.
---------------------------------------------------------------------------
2. A statement of affirmation by the renewable fuel producer using
a method approved by EPA--as part of the
[[Page 80880]]
response to a petition pursuant to 40 CFR 80.1416--that lifecycle GHG
emissions associated with renewable fuel produced are no greater than a
specified threshold lifecycle GHG emissions value. We expect that the
lifecycle GHG emissions value would be calculated according to the
method discussed in the technical support document available in the
docket for this action. The EPA seeks comment on this method.
3. If the CO2 is or will be transferred offsite to a
sequestration facility, a contract or contracts between the renewable
fuel producer and sequestration facility and any intermediate or
necessary parties demonstrating:
a. The sale or transfer of CO2 from the renewable fuel
producer to the sequestration facility.
b. The duty of the sequestration facility to inject the
CO2 for geologic sequestration.
c. The geologic sequestration facility's duty to notify the
renewable fuel producer of CO2 surface leaks within 24 hours
of detection.
d. Acknowledgement of the geologic sequestration facility's duty to
help the renewable fuel producer develop a remediation plan within 30
days of the EPA being notified by the renewable fuel producer of a
surface leak, providing information related to the date(s) the surface
leak occurred, the GHGRP facility identification number of the geologic
sequestration facility, a detailed description of how the leak
occurred, the amount of CO2 that leaked, and a description
of plans by the sequestration facility to remediate the leak. The
remediation plan would need to be submitted to the EPA within 30 days
of the EPA being notified by the renewable fuel producer of the surface
leak.
e. Acknowledgement of the geologic sequestration facility's duty to
notify the renewable fuel producer within 30 days of its annual
submission to the EPA of all reports required pursuant to 40 CFR part
98 subpart RR.
f. Acknowledgement of the geologic sequestration facility's duty to
notify the renewable fuel producer if the sequestration facility
submits a request pursuant to 40 CFR 98.441 for discontinuation of
reporting under 40 CFR part 98 subpart RR or ends sequestration
operations.
g. Acknowledgement of the geologic sequestration facility's duty to
retain, for at least five years, all records required by the applicable
provisions of the UIC program under 40 CFR part 146, subpart H, and the
GHGRP pursuant to 40 CFR 98.3.
In addition to requiring a CCS plan at the time of registration,
the EPA also proposes that the renewable fuel producer must provide a
description of the CO2 capture and sequestration process
and, if the CO2 is transferred to a sequestration facility
after capture, a description of the transfer process of the
CO2 from the renewable fuel production facility to the
sequestration facility. This description would be verified by a third-
party engineer as part of the required engineering review and must
include the mode of transport (e.g., whether CO2 is
transferred by pipeline or by container), as well as the projected
annual quantity of CO2 transferred. The EPA also seeks
comment on what, if any, additional registration requirements are
necessary.
2. Reporting and Recordkeeping
The proposed requirements associated with use of CCS as part of the
RFS program would rely substantially, but not exclusively, on the
requirements, processes, and methodologies established in the GHGRP and
the UIC Program.
The sequestration facility injecting CO2 captured from
the renewable fuel production process would submit an MRV plan and
would be required to meet all other applicable requirements under 40
CFR part 98, subpart RR, including all applicable reporting
requirements. Subpart RR provides a mechanism for facilities to account
for the quantity of CO2 sequestered on an annual basis
through a mass balance approach.\236\ Additionally, renewable fuel
producers that capture CO2 in order to sequester it
underground would also be subject to all applicable requirements under
40 CFR part 98, subpart PP, of the GHGRP, which is applicable to
suppliers of CO2. Importantly, under subpart PP,
CO2 suppliers are required to report the annual quantity of
CO2 transferred offsite, and indicate the CO2's
known end use, including geologic sequestration.\237\
---------------------------------------------------------------------------
\236\ Therefore, renewable fuel producers that achieve the GHG
reductions necessary to qualify for a renewable fuel pathway by
using CCS that are injecting CO2 onsite would be subject
to all applicable reporting requirements of 40 CFR part 98, subpart
RR. These producers must report to the EPA that onsite injection is
occurring, that they are reporting in accordance with the
requirements of subpart RR, and that no surface leaks occurred
during the appropriate compliance period. If the captured
CO2 is injected offsite, the renewable fuel producer
would not be considered a source category under subpart RR, but the
injecting geologic sequestration facility would be. If the captured
CO2 is injected offsite, we are proposing that at
registration the renewable fuel producer would be required to
demonstrate the injection is occurring offsite and affirm that the
offsite geologic sequestration facility that plans to inject the
CO2 underground will submit a MRV plan and meet all other
applicable requirements under subpart RR.
\237\ See 40 CFR 98.426. Subpart PP requires suppliers of
CO2 that meet certain applicability requirements to
report CO2 supplied to the economy or injected
underground. This includes facilities with production process units
that capture and supply CO2 for commercial applications
that capture and maintain custody of a CO2 stream in
order to sequester or otherwise inject it underground. Suppliers of
CO2 under subpart PP must keep records on the mass of
CO2 captured from the relevant production processes. Data
from subpart PP includes the amount of CO2 that leaves
the ethanol facility for off-site underground injection and GS.
---------------------------------------------------------------------------
Building on the foundation established by the UIC Program and GHGRP
helps contribute to a consistent and transparent approach for
facilities that use a renewable fuel production pathway involving CCS
under the RFS program. At the same time, we are proposing several
additional reporting and recordkeeping requirements in order to make
sure the emissions reduction requirements of the RFS program are met.
The EPA is proposing that producers of renewable fuel that achieve the
GHG reductions necessary to qualify for a renewable fuel pathway by
using CCS as part of the renewable fuel production process would have
to calculate the lifecycle GHG emission value (LEV) \238\ for each
batch of fuel produced using an EPA-approved method, maintain records
of these calculations, and periodically report these calculations to
the EPA.\239\ The renewable fuel producer would also report the
electronic GHGRP facility identification number of the geologic
sequestration facility and the GHGRP facility identification number of
the renewable fuel facility.
---------------------------------------------------------------------------
\238\ The LEV for a given fuel is the GHG emissions as
calculated per Btu of fuel produced.
\239\ A GHG calculation method is discussed in the memorandum,
``Example Method for Calculating Lifecycle Greenhouse Gas Emissions
Associated with Renewable Fuel Production including Carbon Capture
and Sequestration,'' available in the docket for this action.
---------------------------------------------------------------------------
We are also proposing provisions in keeping with the reporting
termination provisions of 40 CFR 98.441. These provisions establish
that a facility reporting in accordance with the requirements of 40 CFR
part 98, subpart RR, must continue to report, ``until the Administrator
has issued a final decision on an [injection well] owner or operator's
request to discontinue reporting [under subpart RR].'' Pursuant to 40
CFR 98.441(b), the facility may discontinue reporting under 40 CFR part
98, subpart RR by making a demonstration that current monitoring and
model(s) show that the injected CO2 stream is not expected
to migrate in the future in a manner likely to result in surface
leakage or, in the case of UIC
[[Page 80881]]
Class VI wells, by providing a copy of the applicable UIC Program
Director's authorization of site closure. The EPA proposes that
renewable fuel producers using a pathway involving CCS would be
required to notify the EPA if a participating geologic sequestration
facility has filed a request for discontinuation under 40 CFR 98.441
and must update their RFS registration if the participating geologic
sequestration facility ends sequestration operations or if the
renewable fuel producer intends to sends to CO2 to a
different the geologic sequestration facility.
The EPA is also proposing that, consistent with existing RFS
requirements, all records associated with the use of CCS under the RFS
program must be kept for five years to be consistent with other RFS
program requirements.\240\ The five-year records retention period is
ubiquitous across the EPA fuels programs and stems from the limitations
on bringing enforcement action for civil cases as described in 28
U.S.C. 2462.\241\ The EPA seeks comment on alternative or additional
reporting, termination of reporting, recordkeeping, and RIN generation
requirements that should be considered.
---------------------------------------------------------------------------
\240\ See 40 CFR 80.1454(n).
\241\ 28 U.S.C. 2462 states that ``Except as otherwise provided
by Act of Congress, an action, suit, proceeding for the enforcement
of any civil fine, penalty, or forfeiture, pecuniary or otherwise,
shall not be entertained unless commenced within five years from the
date when the claim first accrued[.]''
---------------------------------------------------------------------------
One of the petitions the EPA received suggests an alternative
crediting method relating to displacement of naturally occurring
CO2 extracted from domes. The suggested ``displacement
approach'' would consider CO2 from ethanol plants that is
captured and sent offsite for a commercial use (e.g., in beverage
carbonation, EOR \242\) as a co-product of the ethanol production
process that displaces CO2 from other sources. The emissions
that would have occurred from production and use of the displaced
CO2 would then be subtracted (as a credit) from the
lifecycle GHG emissions associated with ethanol production. Under a
displacement approach, the petition asserts that if the CO2
from the ethanol process is used for commercial purposes and replaces
CO2 from geologic reservoirs, it would represent a reduction
in the lifecycle GHG emissions of the ethanol on the basis that
displaced geologic CO2 remains underground and does not
enter the market. The petition further asserts that any surface leakage
that occurs during commercial usage would have happened regardless of
whether the source of the CO2 was from a geologic or ethanol
fermentation source. Under the displacement method, the petition
asserts that it is unnecessary to report or track the CO2
injected for EOR, along with any leakage or recycling during use in
EOR, as long as the renewable fuel facility can demonstrate that they
are displacing carbon that would have otherwise been supplied by a
geologic source.\243\ A report from the National Energy Technology
Laboratory (NETL) suggests that the market for CO2 is
supply-limited, in flux, and will rely on industrial sources for
expansion, making long-term displacement by fermentation sources
difficult to determine.\244\ The EPA is not proposing this crediting
approach, but seeks comment on its use.
---------------------------------------------------------------------------
\242\ CO2 injected for GS (in the case where EOR is
not occurring) would not be considered under this approach because
no alternative sources of CO2 are displaced.
\243\ The displacement approach is further discussed in the
memorandum, ``Example Method for Calculating Lifecycle Greenhouse
Gas Emissions Associated with Renewable Fuel Production including
Carbon Capture and Sequestration,'' available in the docket for this
action.
\244\ ``Near-Term Projections of CO2 Utilization for
Enhanced Oil Recovery,'' DOE/NETL-2014/1648.
---------------------------------------------------------------------------
3. RIN Generation
The EPA is proposing that a renewable fuel producer using CCS to
achieve the GHG reductions necessary to qualify for a given renewable
fuel pathway can only generate RINs for a batch of renewable fuel if
the lifecycle GHG emissions for the batch are determined to be below
the threshold value for the applicable pathway by a method approved by
the EPA as part of its response to a petition pursuant to 40 CFR
80.1416.\245\ The EPA is also proposing that a renewable fuel producer
using a pathway involving CCS cannot generate RINs in a given calendar
year after the annual GHG report deadline in 40 CFR 98.3 for the
geologic sequestration facility unless the renewable fuel producer has
received verification from the geologic sequestration facility that the
geologic sequestration facility's applicable reporting obligations
under 40 CFR part 80, subpart RR have been satisfied.
---------------------------------------------------------------------------
\245\ An example of a GHG calculation method is discussed in the
memorandum, ``Example Method for Calculating Lifecycle Greenhouse
Gas Emissions Associated with Renewable Fuel Production including
Carbon Capture and Sequestration,'' available in the docket for this
action. Rather than assigning specific emission limits for
individual stages of the CCS process, the example method would use
facility-specific data to calculate a lifecycle GHG emission value
for the renewable fuel produced, which could account for small
amounts of surface leakage and equipment usage.
---------------------------------------------------------------------------
4. Surface Leaks
We are proposing that a renewable fuel producer using CCS to
achieve the GHG reductions necessary to qualify for a given renewable
fuel pathway could only generate RINs for a batch of renewable fuel if
the calculated lifecycle GHG emissions for the batch are below the
threshold value for the applicable pathway. In the context of using CCS
as a lifecycle GHG emissions reduction technology in the RFS program, a
calculation of lifecycle GHG emissions would consider whether
CO2 emissions through any potential surface leakage \246\
pathways identified in an EPA-approved MRV plan as specified in 40 CFR
98.448 could cause the lifecycle GHG emissions to exceed the threshold
value required for the approved pathway under 40 CFR 80.1416.\247\
While small, sporadic surface leaks may not have a significant impact
on the lifecycle GHG emissions of a fuel, particularly if the GHG
emissions are calculated on a 365 day rolling average, large surface
leaks could significantly increase the lifecycle GHG emissions for
batches of renewable fuels produced using a CCS pathway, which could
potentially preclude RIN generation for those batches. Although the EPA
believes such surface leaks would rarely occur, we are proposing a
series of RIN validation and remediation requirements that would be
applied to potentially invalid RINs (PIRs) generated for renewable fuel
produced using CCS. These proposed requirements would be in addition to
any validation and remediation requirements under the existing RFS
program.\248\
---------------------------------------------------------------------------
\246\ Surface leakage means the movement of the injected
CO2 stream from the injection zone to the surface and
into the atmosphere, indoor air, oceans, or surface water. See 40
CFR 98.449.
\247\ As discussed above, EPA proposes that at the time of
registration, the renewable fuel producer must demonstrate, using an
EPA-approved approach, that lifecycle GHG emissions associated with
renewable fuel produced are no greater than a specified threshold
lifecycle emissions value. An example of a GHG calculation method is
discussed in the memorandum, ``Example Method for Calculating
Lifecycle Greenhouse Gas Emissions Associated with Renewable Fuel
Production including Carbon Capture and Sequestration,'' available
in the docket for this action.
\248\ In the RFS QAP rulemaking, the EPA established an
administrative process to help identify PIRs and help determine if
those PIRs were invalidly generated. See 79 FR 42078 (July 18,
2014). Under the administrative process described in 40 CFR 80.1474,
designated parties can identify a PIR (e.g., the renewable fuel
producer, a third-party auditor under QAP, or the EPA), and the
renewable fuel producer has an opportunity to demonstrate the
validity of the RIN or take appropriate corrective action within
certain timeframes depending on the party that identified the PIR.
If a renewable fuel producer fails to demonstrate that the PIRs are
valid (as determined by the EPA), corrective action from the
renewable fuel producer involves either retiring or replacing the
PIR. If the producer fails to retire or replace the PIR, the parties
that own or used those RINs for compliance may become responsible
for retiring or replacing the PIRs.
---------------------------------------------------------------------------
[[Page 80882]]
A key element of the proposed surface leak remediation process is
the timely reporting of surface leaks by the renewable fuel producer to
the EPA. Under 40 CFR part 98, subpart RR, of the GHGRP, the geologic
sequestration facility is required to develop a strategy for detecting
and quantifying surface leakage of CO2 from the geologic
sequestration facility.\249\ Under the proposed surface leak
requirements, the renewable fuel producer would need to report that no
surface leaks that could cause the lifecycle GHG emissions to exceed
the threshold value required for the approved pathway under 40 CFR
80.1416 occurred during the appropriate compliance period. Should a
surface leak occur, under the proposed surface leak remediation
requirements the renewable fuel producer would need to report to the
EPA that detection of a surface leak occurred at a geologic
sequestration facility within 24 hours of notification by the geologic
sequestration facility that a leak has been detected.\250\ To help
limit the number of affected RINs, the EPA also proposes that such
emissions, once detected and reported, would result in a suspension of
the renewable fuel producer's ability to generate RINs under that
pathway.\251\ Failure to notify the EPA of a surface leak, submit a
remediation plan, or take corrective actions may result in a suspension
of the renewable fuel producer's RFS registration. We recognize that
the 24-hour notification period may appear to present logistical
challenges. However, we envision that a simple message from the
renewable fuel producer to the EPA's EMTS support line would suffice to
satisfy this requirement. We believe that allowing longer time periods
would increase the number of RINs affected by the surface leak and
further complicate the resolution of the PIR administrative process. We
seek comment on whether a longer reporting timeframe is appropriate.
---------------------------------------------------------------------------
\249\ See 40 CFR 98.448.
\250\ As discussed above, if the CO2 is transferred
offsite from a renewable fuel facility to a sequestration facility,
then at registration the renewable fuel producer must submit a
contract(s) demonstrating the sequestration facility's duty to
notify the renewable fuel producer of CO2 surface leaks
within 24 hours of detection. The producer must then report
detection of the surface leak to the EPA within 24 hours of
receiving this notification or otherwise becoming of the surface
leakage. The EPA recognizes that it may take some time for the
geologic sequestration facility to determine if a leak, as defined
in 40 CFR 98.449, has in fact occurred.
\251\ It should be noted that the renewable fuel producer could
continue to generate RINs using non-CCS pathways if they are able to
produce renewable fuel under another approved pathway.
---------------------------------------------------------------------------
Under the proposed surface leak remediation process, the renewable
fuel producer would need to submit a remediation plan to the EPA for
approval within 30 days of notifying the EPA of the surface leak. The
remediation plan would:
1. If possible, demonstrate that the PIRs are not invalid. For
example, the producer could provide calculations showing that the
surface leak did not result in lifecycle GHG emissions exceeding the
GHG emission reduction threshold required for the renewable fuel
production pathway for which RINs were previously generated and for
future RINs that would be generated using the CCS pathway.\252\
---------------------------------------------------------------------------
\252\ We envision that one way that a renewable fuel producer
could mitigate the effects of a surface leak would be to sequester
GHGs in excess of the GHG reduction threshold for the D-Code for
RINs generated under the CCS pathway. For example, for a D5 RIN
generated under a CCS pathway, a renewable fuel producer could
reduce GHGs by 53 percent (instead of the minimum threshold of 50
percent). Over the course of five years of RIN generation, this
over-compliance could shield the producer from all but the largest
of surface leaks. We believe that parties that purchase these RINs
for compliance may drive renewable fuel producers to over-comply in
order to ensure that the RINs remain valid in the event of a surface
leak. The remediation plan process is an opportunity to allow the
renewable fuel producer to demonstrate that PIRs from surface leaks
are not invalid.
---------------------------------------------------------------------------
2. Describe corrective actions that:
a. When taken, would remediate the surface leak and that the
renewable fuel producer working with the geologic sequestration
facility was taking all necessary steps to ensure a high likelihood
that no further CO2 would be emitted that would cause the
lifecycle GHG emissions to exceed the threshold value required for the
approved pathway.\253\ Such demonstration may require the modification
of the producer's registration, structural or other alterations to the
geologic sequestration facility, or other steps as needed.
---------------------------------------------------------------------------
\253\ This demonstration must include an evaluation of any
potential surface leakage pathways identified in an EPA-approved MRV
plan as described in 40 CFR 98.448.
---------------------------------------------------------------------------
b. Demonstrate how the renewable fuel producer intends to take
corrective action for any PIRs resulting from the surface leak.
Corrective actions that could be part of a remediation plan could
include retiring the PIRs or purchasing and retiring replacement RINs
under 40 CFR 80.1474.
Again, we recognize that the 30-day period for renewable fuel
producers to prepare and submit a remediation plan may appear to be a
short time frame. However, we note that if the surface leak was
immaterial (i.e., a leak so small that affected RINs generated under a
CCS pathway would continue to meet the applicable lifecycle GHG
reduction threshold), 30 days should be sufficient for a renewable fuel
producer to demonstrate that affected RINs are not invalid and resume
generating RINs from a CCS pathway. We believe that renewable fuel
producers wishing to generate RINs using a CCS pathway would want to
remediate the issues as quickly as possible to begin generating RINs
using that pathway again. Further, any the corrective actions described
in the remediation plan do not need to be implemented within 30 days.
Nonetheless, we seek comment on whether we should allow renewable fuel
producers generating RINs from a CCS pathway more time to prepare and
submit a remediation plan.
Under the existing regulations, producers can already take
corrective action under the options above. However, we are proposing
that producers generating RINs under a CCS pathway would need to
provide additional information to that already required under the PIR
administration process (e.g., adjusted calculated GHG emissions for
affected RINs). This information would help the producer demonstrate
whether the affected RINs continued to meet the applicable GHG
reduction threshold.
Under this approach, the renewable fuel producer is responsible for
submitting the remediation plan and ensuring that surface leaks are
remediated at the geologic sequestration site prior to the further
generation of RINs under a CCS pathway. We believe that continuing to
have the renewable fuel producer ultimately responsible for all aspects
related to the valid generation of RINs is consistent with our goals of
promoting compliance within the RFS. However, we seek comment on this
approach.
We are proposing that all RINs generated under a CCS pathway during
the five years preceding the surface leak would be PIRs in the event of
a surface leak at the facility sequestering CO2 from the
renewable fuel production facility. Therefore, the GHG emissions
attributable to the leak would be applied equally to all PIRs. If the
producer could demonstrate that the average calculated GHGs for each
RIN continued to meet the RFS GHG threshold requirements, then under
this proposed approach those PIRs would not be invalid. If the
calculated GHG emissions for the PIRs fell below the RFS GHG reduction
threshold, then the producer would
[[Page 80883]]
need to retire and/or replace all of the PIRs.
Under the proposed remediation process, failure to submit a
remediation plan or take appropriate corrective action would trigger
the procedures outlined in 40 CFR 80.1474 as discussed in the following
paragraph. In addition, the EPA would only allow the renewable fuel
producer to generate RINs using a CCS pathway after the EPA approves a
remediation plan and the renewable fuel producer takes appropriate
corrective action. If a renewable fuel producer does not notify the EPA
of a surface leak within 24 hours of detection, stop RIN generation as
described above, and comply with the PIR administrative procedures
outlined in 40 CFR 80.1474, the renewable fuel producer would be deemed
to have failed to have taken corrective action and all RINs generated
under the CCS pathway during the five years preceding the leak could be
considered invalid. However, the EPA is proposing that RINs generated
under the CCS pathway prior to the five years preceding the leak would
not potentially invalid.
The EPA believes that the proposed remediation process as a
supplement to the existing PIR administrative process would allow
renewable fuel producers an opportunity to remediate PIRs resulting
from surface leaks without going through the process of replacing all
RINs generated using a CCS pathway prior to the surface leak. The EPA
recognizes that renewable fuel producers that generate RINs from a CCS
pathway may not be able to replace RINs in the case of a large surface
leak. Although we do not believe this is likely to occur, we seek
comment on alternative corrective actions renewable fuel producers
could take in order to remediate PIRs resulting from the surface leak.
We also seek comment on the proposed remediation process and whether
there is any additional information we should require of renewable fuel
producers to ensure that PIRs resulting from surface leaks are
appropriately addressed.
D. Lifecycle GHG Emissions Analysis of Renewable Fuel Produced in
Conjunction With CCS
Through amendments to the CAA enacted as part of EISA, Congress
established specific lifecycle GHG emission thresholds for each of four
types of renewable fuels, requiring a percentage reduction compared to
lifecycle GHG emissions for gasoline or diesel (whichever is being
replaced by the renewable fuel) sold or distributed as transportation
fuel in 2005. For example, the CAA requires a 50 percent reduction in
order for a fuel to be classified as advanced biofuel.
Determining whether a fuel's lifecycle GHG emissions meet a
threshold level of lifecycle GHG reduction requires a comprehensive
evaluation of the lifecycle GHG emissions of the renewable fuel as
compared to the lifecycle GHG emissions of the baseline gasoline or
diesel fuel that it replaces. As mandated by CAA section 211(o), the
lifecycle assessment must evaluate the aggregate quantity of GHG
emissions (including direct emissions and significant indirect
emissions such as significant emissions from land use changes) related
to the full fuel lifecycle, including all stages of fuel and feedstock
production, distribution, and use by the ultimate consumer.
As discussed above, the EPA proposes that at the time of
registration, the renewable fuel producer must affirm that when using
an EPA-approved approach, lifecycle GHG emissions associated with
renewable fuel produced will be no greater than a specified threshold
lifecycle emissions value. The lifecycle GHG calculation would be based
in part on the amount of CO2 injected and would account for
any CO2 lost during injection and recycling as well as
energy used in the injection and recycling process. The renewable fuel
producer would need to keep appropriate records and report data on a
regular basis to demonstrate that the fuel produced achieved the
required lifecycle value and was accurate over time. The EPA discusses
calculating lifecycle GHG emissions for renewable fuel produced using
CCS in greater depth a memorandum to the docket and requests comment on
the approaches discussed and the example method provided.\254\
---------------------------------------------------------------------------
\254\ See the memorandum, ``Example Method for Calculating
Lifecycle Greenhouse Gas Emissions Associated with Renewable Fuel
Production including Carbon Capture and Sequestration,'' available
in the docket for this action.
---------------------------------------------------------------------------
VI. Renewable Fuels Produced From Short-Rotation Trees
The EPA is proposing to approve new fuel pathways for ethanol and
naphtha produced from short-rotation hybrid poplar and willow using a
production process that converts cellulosic biomass to fuel for the
generation of cellulosic biofuel (D-code 3) RINs. We are also proposing
to approve new fuel pathways for diesel, jet fuel, and heating oil
produced from short-rotation hybrid poplar and willow using a
production process that converts cellulosic biomass to fuel for the
generation of cellulosic biomass-based diesel (D-code 7) RINs. As
discussed in this section, the EPA's analysis shows that fuel produced
from short-rotation hybrid poplar and willow using a variety of
processing technologies meets the 60 percent GHG emissions reduction
threshold needed to qualify as cellulosic biofuel. This section
includes an overview of short-rotation hybrid poplar and willow growing
systems, and explains our analysis of the lifecycle GHG emissions
associated with these fuel pathways.
A. Background and Scope of Analysis
As part of the RFS2 final rule, the EPA analyzed various biofuel
production pathways to determine whether fuels produced through those
pathways meet minimum lifecycle GHG reduction thresholds specified in
the CAA for different categories of biofuel (i.e., 60 percent reduction
for cellulosic biofuel, 50 percent reduction for biomass-based diesel
and advanced biofuel, and 20 percent reduction for other renewable
fuels). The RFS2 final rule focused on fuels that were anticipated to
contribute relatively large volumes of renewable fuel by 2022 and thus
did not cover all fuels that are contributing or could potentially
contribute to the national renewable fuel volumes prescribed in EISA.
In the preamble to the rule, the EPA indicated that it had not
completed the GHG emissions analyses for several specific biofuel
production pathways but that the EPA would complete these analyses
through supplemental actions.\255\ Since the RFS2 final rule, the EPA
has continued to examine additional renewable fuel pathways. In this
proposed rulemaking, we present our analysis of lifecycle GHG emissions
associated with producing biofuel from short-rotation hybrid poplar and
willow. The modeling approach the EPA used for this analysis is the
same general approach used in the RFS2 final rule for lifecycle
analyses of other biofuels, as described in more detail in section VI.C
of this preamble.\256\
---------------------------------------------------------------------------
\255\ See 75 FR 14680 (March 26, 2010).
\256\ The RFS2 final rule preamble (75 FR 14670, March 26, 2010)
and Regulatory Impact Analysis (RIA) (EPA-420-R-10-006) provide
further discussion of our approach. These documents are available in
the docket for this action or online at https://www.epa.gov/renewable-fuel-standard-program/renewable-fuel-standard-rfs2-final-rule-additional-resources.
---------------------------------------------------------------------------
The EPA requests public comment on our analysis of the lifecycle
GHG emissions related to the production and use of biofuel from short-
rotation hybrid poplar and willow. The EPA specifically requests
comments on the modeling used to conduct our analysis, and the
definitions of short-rotation hybrid
[[Page 80884]]
poplar and willow that we are proposing.
B. Overview of Short-Rotation Tree Systems
Short-rotation tree (SRT) systems, also known as short-rotation
coppice (SRC), are stands of woody trees producing multiple stems from
coppice growth, and harvested in relatively short rotations (generally
less than 10 years) for bioenergy use. Common genera grown in SRT
systems include Populus (cottonwoods, poplars, aspens), Salix
(willows), Pinus (southern pines), and Eucalyptus (eucalypts). Most
definitions of SRTs or SRCs classify these systems by maximum rotation
length or coppicing abilities.\257 258 259\ SRT systems can vary widely
by planting density, species composition, and rotation length.\260\ For
instance, systems purposed for high frequency harvesting of biomass are
often managed on shorter rotations (e.g., 2-4 years), with high density
planting. Others are harvested less frequently (e.g., 10 years), with
more spaced planting to allow each plant to grow to a larger size
(without being hindered by competition for sunlight, water, and soil
nutrients).
---------------------------------------------------------------------------
\257\ Wright L.L. et al. ``Short Rotation Woody Crops: Using
Agroforestry technology for energy in the United States.'' Oak Ridge
National Laboratory. Dec 1993.
\258\ Short Rotation Crops for Bioenergy Systems. IEA
Bioeenergy, Task 30. Technical Review No. 3. April 2009.
\259\ Coppicing is the process by which new shoots and trees are
regenerated from a cut stump following harvest. Hinchee et al.
``Short-rotation woody crops for bioenergy and biofuels
applications.'' In Vitro Cell Dev Biol Plant. 2009 Dec; 45(6): 619-
629. Published online 2009 Aug 26. doi: 10.1007/s11627-009-9235-5.
\260\ Wang et al., ``GREET Model Short Rotation Woody Crops
(SRWC) Parameter Development.'' Argonne National Laboratory.
December 2012.
---------------------------------------------------------------------------
SRT systems can provide a number of environmental benefits over a
tilled agricultural system. They result in greater accumulation of
carbon through below-ground organic matter that goes undisturbed for
longer periods of time, as well as protection against nutrient runoff
and soil erosion due to larger root networks.\261\ A key feature of
most SRT systems is coppicing. Coppicing is a desirable characteristic
of short-rotation system because it requires relatively low maintenance
between harvests compared to an annual crop. Original site
establishment of SRT systems requires the planting of a seedling,
usually one to two years old, followed by successive harvest cycles
(e.g., 6 to 8 rounds of 3-4 year rotations) until the coppice reaches
the end of its productive lifespan (e.g., 20-30 years). Managed SRT
systems exist in many parts of the world, predominantly in Europe
(notably willow in Sweden and the UK, and poplar in Italy, among
others).\262\
---------------------------------------------------------------------------
\261\ Hansen. ``Soil carbon sequestration beneath hybrid poplar
plantations in the North Central United States.'' Biomass and
Bioenergy. Volume 5, Issue 5, 1993, pg. 431-436.
\262\ Langeveld et al. ``Assessing Environmental Impacts of
Short Rotation Coppice (SRC) Expansion: Model Definition and
Preliminary Results.'' Bioenerg. Res. (2012) 5:621-635.
---------------------------------------------------------------------------
1. Short-Rotation Hybrid Poplar
The EPA has analyzed a set of taxa being grown in short-rotation
systems known as the hybrid poplar. Hybrid poplars are plants created
by the cross pollination of multiple members of Populus species within
the Salicaceae family. Specifically, hybridization is most commonly
performed between two (of six) Populus sections, Aigeiros and
Tacamahaca (cottonwoods), with the most common parent poplars being
black cottonwood (Populus trichocarpa) and eastern cottonwood (Populus
deltoides).\263\ Artificial hybridization is performed to take
advantage of an effect called heterosis (or ``hybrid vigor''), in which
the hybrid offspring exhibits enhanced traits compared to either of the
parents (be it greater yield growth, disease resistance, or other
biological characteristics). Hybridization of poplar species began in
1925 with initial interest in cultivation for conventional pulpwood,
and in various parts of the world poplar is currently grown for pulp
and other solid wood uses.\264 265 266\ Over time, the fast-growing
nature of hybrid poplar attracted research for short-rotation, smaller
diameter purposes. In the U.S., USDA has participated in hybrid poplar
development through the biomass crop assistance program (BCAP), with
most of the focus occurring in the Pacific Northwest. Hybrid poplar is
mostly being grown on demonstration scale plots; there is not currently
large scale commercial production in the U.S. USDA does not formally
track hybrid poplar production so there is no U.S. government estimate
of national acreage or production quantity. However, there are
approximately 100,000 acres of short-rotation hybrid poplar grown in
the Pacific Northwest (including Canada), approximately 25-30 thousand
acres grown in Minnesota, and small pockets of production in other
parts of the U.S. and Canada.\267 268\ Existing production from
demonstration sites goes to research associated with the production of
cellulosic biofuel, bioenergy, and pulp.\269 270\
---------------------------------------------------------------------------
\263\ ``Hybrid Poplar, an Intermediate Crop for the
Intermountain West.'' USDA-Natural Resources Conservation Service,
Boise, Idaho. January 2001.
\264\ Stout, A. B., and E. J. Schreiner. 1933. ``Results of a
project in hybridizing poplars.'' Journal of Heredity 24:2 16-229.
\265\ Stout, A. B., R. H. McKee, and E. J. Schreiner. 1927.
``The breeding of forest trees for pulp wood.'' Journal of New York
Botanical Gardens 28:49-63.
\266\ Utilization Opportunities and Economics, Hybrid Poplar
Best Management Practices. University of Minnesota, Extension. Fall
2011. http://www.extension.umn.edu/environment/agroforestry/docs/hybrid-poplar-utilization-opportunities.pdf.
\267\ Hybrid Poplar Research Program, Washington State
University. http://puyallup.wsu.edu/poplar/.
\268\ Hybrid Poplar (Populus spp). Agroforestry. University of
Minnesota Extension. http://www.extension.umn.edu/environment/agroforestry/hybrid-poplar-populus-spp/hybrid-poplar-populus-spp.html.
\269\ ``Biomass Energy Opportunities from Hybrid Poplars in
Minnesota.'' Dean Schmidt, WesMin Resource Conservation and
Development. Information presented at Woody Biomass Harvesting and
Utilization Workshop presentation in St. Cloud, MN on March 21,
2006. http://www.extension.umn.edu/environment/agroforestry/biomass/schmidt.pdf.
\270\ Project Overview, Infosheet no. 1. March 2014. Advanced
Hardwood Biofuels Northwest. http://hardwoodbiofuels.org/wp-content/uploads/2014/03/ProjectOverviewFinal.pdf.
---------------------------------------------------------------------------
2. Short-Rotation Willow
The EPA also analyzed short-rotation willow, also known as shrub
willow, which is another short-rotation species. Shrub willow refers to
a number of Salix species also within the family Salicaceae (like
Populus). Multiple Salix species are being used in SRT systems. In the
U.S., common varieties include S. miyabeana, S. purpurea, S.
sachalinesis, and S. viminalis (and crosses between these and other
species).271 272 In addition to use as a bioenergy
feedstock, willow has gathered interest for other purposes. Willow
``living fences'' can be used as windbreaks, visual/noise screens, or
to trap blowing snow along roadways, which reduces the cost of snow
plowing and improves road safety. Additionally, willow is well-suited
to grow in wet soils and can be used to stabilize stream banks,
reducing the risk of flooding and providing a vegetated buffer to
prevent pollutants and sediments from entering surface and
groundwater.\273\ Research of shrub willow for bioenergy and
bioproducts began in the U.S. in 1986 through the State University of
New York College of Environmental Science
[[Page 80885]]
and Forestry (SUNY-ESF). Through the BCAP, USDA has partnered with
SUNY-ESF to develop willow in upstate New York where there are
approximately 1,200 acres of willow in production.\274\ There it is
harvested in 3-4 year cycles. Since the initial trials in upstate New
York in the mid-1980s, yield trials have been conducted, or are
underway, in 14 states \275\ and six provinces in Canada.\276\ USDA
does not formally track willow production so there is no U.S.
government estimate of national acreage or production quantity.
---------------------------------------------------------------------------
\271\ Zalesny, Jr., R.S., et al. ``Woody Biomass from Short
Rotation Energy Crops.'' Chapter 2, American Chemical Society 2011.
\272\ Whereas all of the Populus varieties we are considering
are hybrid crosses, only some of the qualifying willow cultivars are
crosses, while others are from single species. When we reference
``willow'' we mean both a single species and crosses between
multiple species.
\273\ ``Introduction to Shrub Willow Fact Sheet.'' State
University of New York College of Environmental Science and
Forestry. http://www.esf.edu/willow/documents/1IntroToShrubWillow.pdf.
\274\ ``Willow Bioenergy in New York State.'' State University
of New York College of Environmental Science and Forestry. http://www.esf.edu/willow/documents/2NewYorkWillow.pdf.
\275\ Delaware, Indiana, Illinois, Maryland, Michigan,
Minnesota, Missouri, New Jersey, New York, Pennsylvania, South
Carolina, Virginia, Vermont, and Wisconsin.
\276\ U.S. DOE. 2011. ``U.S. Billion-Ton Update: Biomass Supply
for a Bioenergy and Bioproducts Industry.'' R.D. Perlack and B.J.
Stokes (Leads), ORNL/TM-2011/224. Oak Ridge National Laboratory, Oak
Ridge, TN. 227p. (pg. 109).
---------------------------------------------------------------------------
Willow also has a history as a bioenergy feedstock in numerous
countries in Europe, including Sweden, the UK, and Poland, where it is
pelletized and co-fired with coal in electricity generation to help
meet renewable energy goals. By one estimate, there are over 40,000
acres of commercial plantings in Europe.\277\
---------------------------------------------------------------------------
\277\ ``Developing Willow Biomass Crops as a Source of Home
Grown Energy.'' T.A. Volk, State University of New York College of
Environmental Science and Forestry. Renewable Energy Forum, Auburn,
NY, March 20, 2010. http://www.esf.edu/willow/documents/VolkWillowOverview111110.pdf.
---------------------------------------------------------------------------
C. Analysis of Lifecycle GHG Emissions
The EPA's analysis shows that fuel produced from short-rotation
hybrid poplar and willow using a variety of processing technologies
meets the 60 percent GHG emissions reduction threshold necessary to
qualify as cellulosic biofuel. This section explains our analysis of
the lifecycle GHG emissions associated with fuel produced from these
feedstocks.
1. Methodology and Scenarios Evaluated
The EPA's analysis of the domestic impacts of short-rotation hybrid
poplar and willow biofuel pathways use the same model of U.S.
agricultural and forestry sectors that was used for the RFS2 final
rule: The Forestry and Agricultural Sector Optimization Model (FASOM)
developed by Texas A&M University.\278\ The model requires a number of
inputs and assumptions that are specific to the pathway being analyzed,
including projected yields of feedstock per acre planted, projected
fertilizer use, and energy use in feedstock processing and fuel
production.\279\
---------------------------------------------------------------------------
\278\ For more information on the FASOM model, refer to the RFS2
final rule preamble (75 FR 14670, March 26, 2010) or the RFS2 final
rule RIA. These documents are available in the docket for this
action or online at https://www.epa.gov/renewable-fuel-standard-program/renewable-fuel-standard-rfs2-final-rule-additional-resources.
\279\ Detailed information on model inputs, assumptions,
calculations, and the results of this and other components of our
assessment of the lifecycle GHG emissions performance for short-
rotation hybrid poplar and willow pathways can be found in the
memorandum, ``Short-Rotation Trees Technical Memorandum,'' available
in the docket for this action.
---------------------------------------------------------------------------
For international impacts, we applied results from the switchgrass
analysis performed for the RFS2 final rule. The switchgrass analysis
used the Food and Agricultural Policy and Research Institute
international model as maintained by the Center for Agricultural and
Rural Development at Iowa State University (the FAPRI-CARD model). This
approach is similar to the methodology we used to evaluate and approve
other dedicated bioenergy feedstocks, such as energy cane, giant reed,
and napier grass. As we discussed in the RFS2 final rule, some
feedstock sources can be determined to be similar enough to those
modeled that the modeled results could reasonably be extended to these
similar feedstock types. Switchgrass, short-rotation hybrid poplar, and
short-rotation willow are all dedicated bioenergy feedstocks, and are
expected to grow on the same types of land and cause the same types of
crop displacement. As the EPA assumed for the analysis of energy cane,
giant reed, and napier grass, we do not believe that these bioenergy
feedstocks will cause large land use change impacts, as they do not
generate the economic returns of row crops on productive lands, and are
therefore being targeted for development on less productive lands. For
analysis of short-rotation hybrid poplar and willow, we scaled the
switchgrass international emissions for yield differences in
switchgrass, short-rotation hybrid poplar, and short-rotation willow,
and applied these adjusted emissions to short-rotation hybrid poplar
and willow.\280\
---------------------------------------------------------------------------
\280\ Additional details on the application of switchgrass
results to this analysis are available in the memorandum, ``Short-
Rotation Trees Technical Memorandum,'' available in the docket for
this action.
---------------------------------------------------------------------------
To assess the impacts of an increase in renewable fuel volume from
a ``business-as-usual'' scenario likely to have occurred without the
short-rotation hybrid poplar and willow-based biofuels, we compared
impacts in a control case to the impacts in two new cases: ``short-
rotation hybrid poplar biofuel'' and ``short-rotation willow biofuel.''
\281\ The control case includes a projection of renewable fuel volumes
from feedstocks such as corn, soybeans, and switchgrass, among others.
The control case used for this analysis had zero gallons of short-
rotation hybrid poplar or willow biofuel production. For the ``short-
rotation hybrid poplar biofuel'' and ``short-rotation willow biofuel''
cases, our modeling assumed that 400 million gallons of short-rotation
hybrid poplar ethanol or short-rotation willow ethanol are produced in
2022.
---------------------------------------------------------------------------
\281\ This approach is similar to the approach used in the RFS2
final rule. For more information, refer to the RFS2 final rule
preamble (75 FR 14670, March 26, 2010) or the RFS2 final rule RIA
(EPA-420-R-10-006). These documents are available in the docket or
online at https://www.epa.gov/renewable-fuel-standard-program/renewable-fuel-standard-rfs2-final-rule-additional-resources.
---------------------------------------------------------------------------
The scenario volume of 400 million gallons of biofuel per year used
in the model is the target production level of hybrid poplar based
biofuel as of 2012 by Advanced Hardwood Biofuels Northwest (AHB), a
USDA-funded consortium of universities and industry partners. We
believe this is a reasonable volume to model for a number of reasons.
While there is little production of short-rotation hybrid poplar or
willow-based biofuel currently, the biotechnology company Zeachem Inc.,
with a loan guarantee from USDA, is planning a 25 million gallon/year
cellulosic biorefinery in Boardman, Oregon, sourcing hybrid poplar as
the primary feedstock. Zeachem Inc. currently operates a 250,000
gallon/year demonstration plant also in Boardman, Oregon. Although
these currently identified projects are much lower than the 400 million
gallons modeled, there is also data supporting larger volumes. For
example, the Department of Energy (DOE), in the 2011 ``U.S. Billion Ton
Study Update'' assessed the potential supplies of bioenergy feedstocks
at various economic conditions. At baseline conditions, they concluded
that in 2022, 67 million dry tons of ``woody crops'' (roughly 6 billion
gallons of biofuel) could be supplied at $50/dry ton.282 283
When weighing the potential for large-scale feedstock production with
the more modest volume of projects currently identified, we think
[[Page 80886]]
400 million gallon/year is a reasonable volume for our modeling
purposes.
---------------------------------------------------------------------------
\282\ In addition to poplar and willow, ``woody crops'' also
included eucalyptus and southern pines in this study, so this full
amount would not be expected to come from short-rotation hybrid
poplar and/or willow. However, these volumes are indicative of
supply potential in a future with favorable conditions for dedicated
bioenergy feedstocks. U.S. DOE. 2011. ``U.S. Billion-Ton Update:
Biomass Supply for a Bioenergy and Bioproducts Industry''. R.D.
Perlack and B.J. Stokes (Leads), ORNL/TM-2011/224. Oak Ridge
National Laboratory, Oak Ridge, TN. 227p. (pg. 130).
\283\ These biofuel volumes assume a conversion yield of 92.3
gallons of ethanol per dry ton.
---------------------------------------------------------------------------
Understanding the uncertainty in the ability for hybrid poplar and
willow biofuel to penetrate and grow in the market, we also analyzed
smaller volume scenarios as a sensitivity analysis that is included in
the memo to the docket. The purpose of doing so was to test the GHG
emissions impact of a lesser demand for these fuels on agricultural
markets and land use. These lower volume scenarios produced
agricultural market and land use impacts on a per-gallon basis that
were similar to the respective 400 million gallon/year scenarios, and
LCA GHG results were also consistent with the larger volume
scenarios.\284\
---------------------------------------------------------------------------
\284\ We analyzed a 200 million gallon/year hybrid poplar
scenario and a 200 million gallon/year willow scenario. These
results can be found in the memorandum, ``Short-Rotation Trees
Technical Memorandum,'' available in the docket for this action.
---------------------------------------------------------------------------
Similar to our analysis of renewable fuel feedstocks in the RFS2
final rule, the EPA assessed what the lifecycle GHG emissions impacts
would be from the use of additional volumes of short-rotation hybrid
poplar or willow for biofuel production. The information provided below
discusses the outputs of the analysis using the FASOM model to
determine changes in the domestic agricultural and livestock markets.
We then discuss the results of our analysis of international impacts
from the switchgrass analysis in the RFS2 final rule. Finally, we
discuss other GHG emissions associated with the pathways, and conclude
with a summary of all GHG emissions associated with the production of
biofuel from short-rotation hybrid poplar or willow feedstock.
2. Domestic Impacts
Using FASOM, we estimated the domestic impacts of producing 400
million gallons of biofuel from short-rotation hybrid poplar or willow.
FASOM estimates that 6.3 million tons of additional short-rotation
hybrid poplar production will be needed to produce 400 million gallons
of ethanol in 2022, and that these tons will come exclusively from
around 950,000 acres in the Pacific Northwest East region of FASOM. The
Pacific Northwest East region, which covers Oregon and Washington, east
of the Cascade mountain range, has the highest yield in the model. The
Pacific Northwest East region is also the location of actual current
production. The increased short-rotation hybrid poplar production in
the Pacific Northwest East causes cropland in this region to be shifted
away from wheat, barley, and hay. Although production of these crops
increases in other regions, overall the national production of these
crops decreases (see Table VI.C.2-1).
The total active cropland in the U.S. increases by 260,000 acres in
2022 (see Table VI.C.2-2). These additional acres primarily come from
the conversion of idle cropland (131,000 acres), pastureland (72,000
acres), and forests (57,000 acres) to active cropland.\285\
---------------------------------------------------------------------------
\285\ Additional details about national land cover changes are
available in the docket for this action.
---------------------------------------------------------------------------
In the short-rotation willow scenario, approximately 6.5 million
tons of short-rotation willow will be needed to produce 400 million
gallons of ethanol in 2022. Like short-rotation hybrid poplar, short-
rotation willow currently has no commercial market in FASOM, and all of
the short-rotation willow for fuel comes from new production. In 2022,
all short-rotation willow production is projected to be in the
Northeast, and around 1.2 million acres will be required.\286\ In
FASOM, the Northeast has the highest short-rotation willow yield. This
is also the region where short-rotation willow is currently grown for
research purposes. Short-rotation willow production causes decreases in
the production of hay, corn, and soybeans in the Northeast. Although
production increases in other regions, overall the national production
of these crops decreases (see Table VI.C.2-1).
---------------------------------------------------------------------------
\286\ The Northeast region in FASOM covers the New England
states, New York, Pennsylvania, New Jersey, Delaware, Maryland, and
West Virginia.
---------------------------------------------------------------------------
For this high-volume willow scenario, the total active cropland in
the U.S. increases by 363,000 acres (see Table VI.C.2-2). The cropland
comes primarily from the conversion of forest (212,000 acres),
pastureland (90,000 acres), and idle cropland (60,000 acres) to active
cropland.\287\
---------------------------------------------------------------------------
\287\ According to the 2012 Census of Agriculture, there were
389.7 million acres of cropland in 2012. This means that according
to FASOM, producing 400 million gallons of willow or hybrid poplar
biofuel would increase total cropland in the U.S. by less than 0.1
percent in 2022 relative to 2012 levels. See ``Farms and Farmland,
Numbers, Acreage, Ownership, and Use.'' September 2014. 2012 Census
of Agriculture. United States Department of Agriculture. https://www.agcensus.usda.gov/Publications/2012/Online_Resources/Highlights/Farms_and_Farmland/Highlights_Farms_and_Farmland.pdf.
Table VI.C.2-1--Changes in U.S. Production in 2022 Relative to Control
Case
[Million tons]
------------------------------------------------------------------------
Short-rotation
hybrid poplar Short-rotation
case willow case
------------------------------------------------------------------------
Short-Rotation Hybrid Poplar............ 6.28 0
Short-Rotation Willow................... 0 6.49
Corn.................................... -0.01 -1.22
Wheat................................... -0.52 -0.12
Soybeans................................ -0.03 -0.23
Barley.................................. -0.09 0.03
Hay..................................... -0.77 -0.75
------------------------------------------------------------------------
Table VI.C.2-2--Changes in Harvested Area by Crop in the U.S. in 2022
Relative to Control Case
[Thousand acres]
------------------------------------------------------------------------
Short-rotation
hybrid poplar Short-rotation
case willow case
------------------------------------------------------------------------
Short-Rotation Hybrid Poplar............ 948 0
Short-Rotation Willow................... 0 1,187
Corn.................................... 26 -299
[[Page 80887]]
Wheat................................... -485 -2
Soybeans................................ -26 -178
Hay..................................... -91 -320
Other................................... -112 -25
-------------------------------
Total *............................. 260 363
------------------------------------------------------------------------
* Total may differ from subtotals due to rounding.
3. International Impacts
As explained above, the results of the FASOM model provide insights
into the domestic impacts of producing biofuel from short-rotation
hybrid poplar or willow. In this section we explain the international
impacts. The FASOM model shows that in the short-rotation hybrid poplar
and willow scenarios, the national production of crops such as wheat,
corn, and soybeans will decrease as a result of increased land
competition.\288\ The decrease of production creates upwards price
pressure on these crops. The primary response of these supply pressures
in FASOM is the decline of U.S. exports, especially wheat in the short-
rotation hybrid poplar case and corn in the short-rotation willow case.
This effect creates an incentive for international producers to
increase production of these crops, which likely requires some
conversion of new land into agriculture and produces land use change
emissions. In addition, increased international crop production can
cause an increase in the amount of fertilizers and energy used
internationally for crop production, which would increase GHG
emissions. Finally, international changes in crop production can cause
changes in livestock and rice methane emissions, which will also
influence GHG emissions. Given the limited historical and market data
associated with growing dedicated bioenergy feedstocks, we believe it
is reasonable to assume that short-rotation hybrid poplar and willow
will have similar international impacts as other dedicated energy
feedstocks such as switchgrass. Since there are not well established
global markets for SRT feedstocks, we don't expect a significant
interaction between an increase in the production of short-rotation
willow and hybrid poplar for biofuels in the U.S. and other hybrid
poplar and willow production around the world. Switchgrass, short-
rotation hybrid poplar, and short-rotation willow are expected to be
grown on similar types of land and have similar impacts on the
production of other crops. Therefore, we believe it is reasonable to
apply the international emissions associated with increased biofuel
production from switchgrass to our analysis of impacts associated with
producing biofuels from short-rotation hybrid poplar and willow, an
approach that we have taken for other bioenergy feedstocks such as
miscanthus, energy cane, and napier grass.\289\ International GHG
emissions are discussed in section VI.C.6 of this preamble.
---------------------------------------------------------------------------
\288\ See section VI.C.2 of this preamble.
\289\ We scaled the switchgrass emissions to account for the
lower yields of short-rotation hybrid poplar and willow, as
described in more detail in the memorandum, ``Short-Rotation Trees
Technical Memorandum,'' available in the docket for this action.
Table VI.C.3-1--Changes in U.S. Exports in 2022 (Thousand Tons) Relative
to the Control Case
------------------------------------------------------------------------
Short-rotation
hybrid poplar Short-rotation
case willow case
------------------------------------------------------------------------
Corn.................................... 27 -931
Soybeans................................ -27 -226
Barley.................................. -4 0
Wheat................................... -524 -93
------------------------------------------------------------------------
4. Feedstock Transport
GHG emissions associated with distributing short-rotation hybrid
poplar and willow are expected to be similar to the EPA's estimate for
switchgrass because they are all dedicated bioenergy feedstocks
requiring similar transport, loading, unloading, and storage regimes
and have similar conversion yields as discussed in section VI.C.5 of
this preamble. Our analysis therefore assumes the same GHG impact for
feedstock distribution as we assumed for switchgrass.
5. Fuel Production, Distribution, and Use
Short-rotation hybrid poplar and willow are suitable for the same
conversion processes as other cellulosic feedstocks, such as
switchgrass and corn stover. Currently available information on short-
rotation hybrid poplar and willow composition shows that their
hemicellulose, cellulose, and lignin content are comparable to or
higher than other feedstocks that qualify under the RFS regulations for
the production of cellulosic biofuels. Conversion yield data provided
by a technical assessment of cellulosic feedstocks by National
Renewable Energy Laboratory (NREL) suggests that the yield will be
higher for short-rotation hybrid poplar and willow than for other
cellulosic feedstocks.\290\ However, as a conservative estimate, we
applied the same production process energy inputs and conversion yields
[[Page 80888]]
that were modeled for switchgrass in the RFS2 final rule (biochemical
ethanol, thermochemical ethanol, and Fischer-Tropsch (F-T) diesel
\291\) to short-rotation hybrid poplar and willow.\292\ The EPA also
assumes that the distribution and use of biofuel made from short-
rotation hybrid poplar and willow will not differ significantly from
similar biofuel produced from other cellulosic sources. As was done for
the switchgrass case, this analysis assumes that dedicated bioenergy
feedstocks are grown in the U.S. for production purposes. If feedstocks
were grown internationally for biofuel production, and the fuel was
shipped to the U.S., shipping the finished fuel to the U.S. could
increase transport emissions. However, based on analysis of the
increased transport emissions associated with sugarcane ethanol
distribution to the U.S. considered for the RFS2 final rule, this would
at most add 1-2 percent to the overall lifecycle GHG impacts of the
dedicated bioenergy feedstocks.
---------------------------------------------------------------------------
\290\ Tao, L. and A. Aden. November 2008. ``Technoeconomic
Modeling to Support the EPA Notice of Proposed Rulemaking.'' NREL.
Docket Item No. EPA-HQ-OAR-2005-0161-0844.
\291\ As explained in the RFS2 final rule (75 FR 14782), the F-T
diesel process modeled applies to cellulosic diesel, jet fuel,
heating oil, and naphtha. More information about F-T production
technology can be found in: David, Ryan. August 2009. ``Techno-
economic analysis of current technology for Fischer-Tropsch fuels
production.'' NREL. Docket Item No. EPA-HQ-OAR-2005-0161-3035.
\292\ Details about the energy input assumptions and GHG
emissions calculations can be found in the memorandum, ``Short-
Rotation Trees Technical Memorandum,'' available in the docket for
this action.
---------------------------------------------------------------------------
6. Results of Lifecycle GHG Analysis
As described above, we analyzed the GHG emissions associated with
agriculture, land use change, fuel and feedstock transport, and
tailpipe emissions for renewable fuels produced from short-rotation
hybrid poplar and willow. Tables VI.C.6-1 and VI.C.6-2 break down by
stage the lifecycle GHG emissions of the 2005 gasoline and diesel
baselines and of short-rotation hybrid poplar and willow fuels produced
in 2022.\293\
---------------------------------------------------------------------------
\293\ More details on these values are available in the
memorandum, ``Short-Rotation Trees Technical Memorandum,'' available
in the docket for this action.
---------------------------------------------------------------------------
Net agricultural emissions include domestic and international
impacts related to changes in crop inputs such as fertilizer, energy
used in agriculture, livestock production, and other agricultural
changes in the scenarios modeled. Increased demand for short-rotation
hybrid poplar or short-rotation willow results in negative net
agricultural emissions, meaning the emissions decrease relative to the
control case. Short-rotation hybrid poplar and short-rotation willow
use fewer agricultural inputs than corn, soybeans, barley, and wheat.
Because land was converted from these crops to short-rotation hybrid
poplar or short-rotation willow production, there was a reduction in
the usage of agricultural inputs, and a corresponding reduction in the
emissions from farm inputs.\294\
---------------------------------------------------------------------------
\294\ A breakdown of the emissions from domestic and
international farm inputs, livestock, and rice methane can be found
in the memorandum, ``Short-Rotation Trees Technical Memorandum,''
available in the docket for this action.
---------------------------------------------------------------------------
Domestic land use change emissions are negative for short-rotation
hybrid poplar and willow. One reason for this is that most of the land
used for short-rotation hybrid poplar or willow production comes from
existing cropland. Using this cropland for short-rotation hybrid poplar
or willow rather than annual crops like corn or wheat increases the
amount of carbon stored in the soil and below-ground biomass (roots)
due to the longer rotation and no-tillage characteristics of short-
rotation hybrid poplar and willow. Another reason for the decrease in
domestic land use change emissions in 2022 is due to more intensive
management of forest acres in response to expected pressure on forest
acres and forest product supply in the future.
As a result of increased demand for short-rotation willow and
hybrid poplar, international land use change emissions increase. The
increase in international land use change emissions for short-rotation
hybrid poplar and short-rotation willow are larger than the decrease in
domestic land use change emissions, leading to a net increase in land
use change emissions.
The fuel production stage includes emissions from ethanol or diesel
production plants, as described in section VI.C.5 of this preamble.
Fuel and feedstock transport includes emissions from transporting
short-rotation hybrid poplar or willow from the farm to a fuel
production facility. As we assume for cellulosic pathways approved
under the 2010 RFS2 final rule for the biochemical conversion process,
lignin from the feedstock is burned to produce electricity, which
offsets grid electricity, resulting in negative emissions. Even without
this credit, short-rotation willow and hybrid poplar would meet the 60
percent GHG reduction threshold.
For short-rotation hybrid poplar, total emissions are 77-132
percent lower than the 2005 gasoline or diesel baseline. For short-
rotation willow, total emissions are 69-125 percent below the gasoline
or diesel baseline. These results, if finalized, would justify a
determination that short-rotation hybrid poplar and willow ethanol,
diesel, jet fuel, heating oil, and naphtha would meet the 60 percent
reduction threshold required to qualify as cellulosic biofuel.
Table VI.C.6-1--Lifecycle GHG Emissions for Short-Rotation Hybrid Poplar Biofuel
[g CO2-eq/mmBtu]
----------------------------------------------------------------------------------------------------------------
Biochemical Thermochemical 2005 Gasoline 2005 Diesel
Fuel type ethanol ethanol F-T diesel ** baseline baseline
----------------------------------------------------------------------------------------------------------------
Net Agriculture (w/o land use -4,503 -4,714 -4,670
change)........................
Domestic Land Use Change........ -2,481 -2,597 -2,573
International Land Use Change... 23,608 24,709 24,481
Fuel Production................. -53,116 559 835 19,200 17,998
Fuel and Feedstock Transport.... 4,565 4,778 3,981 (*) (*)
Tailpipe Emissions.............. 880 880 700 79,004 79,008
-------------------------------------------------------------------------------
Total Emissions............. -31,048 23,616 22,753 98,204 97,006
Lifecycle GHG Percent Reduction 132% 76% 77%
Compared to Petroleum Baseline.
----------------------------------------------------------------------------------------------------------------
* Emissions included in fuel production stage.
** The F-T diesel process modeled applies to cellulosic diesel, jet fuel, heating oil, and naphtha.
[[Page 80889]]
Table VI.C.6-2--Lifecycle GHG Emissions for Short-Rotation Willow Biofuel
[g CO2-eq/mmBtu]
----------------------------------------------------------------------------------------------------------------
Biochemical Thermochemical 2005 Gasoline 2005 Diesel
Fuel type ethanol ethanol F-T diesel ** baseline baseline
----------------------------------------------------------------------------------------------------------------
Net Agriculture (w/o land use -4,210 -4,407 -4,366
change)........................
Domestic Land Use Change........ -2,596 -2,717 -2,692
International Land Use Change... 29,556 30,935 30,649
Fuel Production................. -53,116 559 835 19,200 17,998
Fuel and Feedstock Transport.... 4,679 4,897 4,099 (*) (*)
Tailpipe Emissions.............. 880 880 700 79,004 79,008
-------------------------------------------------------------------------------
Total Emissions............. -24,807 30,148 29,225 98,204 97,006
Lifecycle GHG Percent Reduction 125% 69% 70%
Compared to Petroleum Baseline.
----------------------------------------------------------------------------------------------------------------
* Emissions included in fuel production stage.
** The F-T diesel process modeled applies to cellulosic diesel, jet fuel, heating oil, and naphtha.
Although this analysis assumes short-rotation hybrid poplar and
willow biofuels produced for sale and use in the U.S. will most likely
come from domestically produced feedstock, we also intend for the
proposed pathways to cover short-rotation hybrid poplar and willow from
other countries. We do not expect biofuels from short-rotation hybrid
poplar and willow feedstocks produced in other nations to have
significantly different lifecycle GHG emissions than we have calculated
for domestically-produced fuels. As explained above, we believe that
increased transport for fuel produced internationally would only
increase the total lifecycle GHG emissions by at most 1-2 percent.
Moreover, other countries most likely to be exporting short-rotation
hybrid poplar, short-rotation willow, or biofuels produced from these
feedstocks are likely to be major producers that typically use similar
cultivars and farming techniques. Therefore, GHG emissions from
producing biofuels with short-rotation hybrid poplar and willow grown
in other countries should be similar to the GHG emissions we estimated
for U.S. short-rotation hybrid poplar and willow, though they could be
slightly (and insignificantly) higher or lower.
7. Risk of Potential Invasiveness
Poplars (i.e., Populus species) and willows (i.e., Salix species)
are potential bioenergy feedstocks when grown as SRTs. Potential
candidates for feedstocks include species that are both native and
exotic to the U.S., as well as a variety of hybrids and cultivars of
these species. While we are not necessarily concerned about the
invasive potential of the native species, some exotics are weedy or
potentially weedy, and hybrids can sometimes have weedy or invasive
characteristics that are not shared by the parent species. Because
poplar and willow species and hybrids are actively being developed for
bioenergy use on large landscape scales, there is uncertainty regarding
the potential invasiveness of these taxa. Therefore, we are seeking
comment on what regulatory requirements, if any, would be appropriate
for mitigating the risk of invasiveness of these taxa of poplars and
willows.
D. Proposed Regulations
1. Adding Pathways to Table 1 to 40 CFR 80.1426
As discussed previously, the EPA's analysis shows that fuel
produced from short-rotation hybrid poplar and willow using a variety
of processing technologies meets the 60 percent GHG emissions reduction
threshold needed to qualify as a cellulosic biofuel. Therefore, we are
proposing to modify rows K, L, and N of Table 1 to 40 CFR 80.1426 to
add these new pathways. Producers would then be able to submit
registration materials to produce renewable fuels through these
pathways, subject to compliance with all applicable regulations. We
invite comment on all aspects of this analysis.
2. Proposed Definitions for Short-Rotation Hybrid Poplar and Short-
Rotation Willow
For purposes of the RFS program, we are proposing that short-
rotation hybrid poplar means a species or cross of species in the
Populus genus that is grown with harvest rotations of less than 10
years. The EPA is considering hybrid poplar to include the following
species, as well as crosses between them: Populus (P.) deltoides, P.
trichocarpa, P. nigra, and P. suaveolens subsp. maximowiczii. We are
also proposing that short-rotation willow means a species or a cross of
species in the Salix genus that is grown with harvest rotations of less
than 10 years. Qualifying species include Salix (S.) miyabeana, S.
purpurea, S. eriocephala, S. caprea hybrid, and S. x dasyclados as well
as crosses between S. koriyanagi and S. purpurea, S. viminalis and S.
miyabeana, and S. purpurea and S. miyabeana. The proposed pathways do
not affect the existing pathways for slash or pre-commercial thinnings.
We invite comment on the proposed definitions of short-rotation hybrid
poplar and short-rotation willow.
3. Registration, Recordkeeping, and Reporting Requirements
To be used as feedstock for qualifying renewable fuel under the RFS
program, short-rotation hybrid poplar and short-rotation willow must be
grown on a tree plantation as defined in 80 CFR 1401, and producers of
fuel made from such feedstock must meet all of the registration,
recordkeeping, and reporting requirements specified in the regulations
for producers of renewable fuel made from qualified planted trees or
tree residues. These requirements are designed to implement the
statutory requirement that qualifying renewable fuel be made from
``renewable biomass'' as defined in the CAA, including ``planted trees
and tree residue from actively managed tree plantations on non-federal
lands [. . .].'' Among other requirements, the current regulations
specify that a tree plantation must have been actively managed as a
tree plantation on December 19, 2007, and that producers using these
feedstocks maintain records serving as evidence that this is the case.
However, we believe that the central purpose of the renewable biomass
requirement is to prevent the conversion of land that was not cleared
and actively managed as agricultural land as of the date of EISA
enactment from being converted to production of renewable fuel
feedstocks. This purpose can be satisfied with respect to tree
plantations providing the land in question was cleared and
[[Page 80890]]
actively managed for any agricultural purpose on December 19, 2007. In
addition, we believe that modifying the definition of tree plantation
to allow their placement on land that was actively managed for any
agricultural purpose on December 19, 2007, will facilitate the
production of cellulosic biofuels, which is consistent with the purpose
of the statute to promote the rapid development and use of such fuels.
Therefore, the EPA is proposing to revise the definition of tree
plantation and the associated recordkeeping requirements so as to allow
planted trees and tree residue to be sourced from lands that were
actively managed as agricultural land on December 19, 2007, in addition
to those that were actively managed as tree plantations on that date.
This revision would be applicable for all uses of renewable biomass
from tree plantations under the RFS program. We are also amending the
regulatory definition of tree plantation to include the statutory
requirement that they be located on non-federal lands.
The EPA is proposing new registration and recordkeeping
requirements for renewable fuel producers generating cellulosic biofuel
(D-code 3) or cellulosic biomass-based diesel (D-code 7) RINs for
renewable fuel produced from short-rotation hybrid poplar or willow.
These requirements are to ensure that feedstocks used for these
pathways meet the definitions of short-rotation hybrid poplar or willow
and that the feedstocks were grown on tree plantations as defined in
80.1401. At registration, producers would be required to list all
species and hybrids that they intend to use as a short-rotation hybrid
poplar or willow. In addition, they would need to provide a written
justification of why each feedstock meets the definition of short-
rotation willow or short-rotation hybrid poplar, including the
specification that the harvest rotation is less than 10 years. Finally,
at registration the producer would have to submit records (including
contracts and affidavits from the tree plantation supplying the
feedstocks) demonstrating that the short-rotation hybrid poplar or
short-rotation willow feedstocks will be sourced from a tree
plantation, as defined in 40 CFR 80.1401.
The EPA is proposing additional recordkeeping requirements for
renewable fuel producers using short-rotation hybrid poplar and short-
rotation willow. Producers would be required to keep records of the
specific short-rotation hybrid poplar or willow species or hybrids used
to produce renewable fuel for each batch of fuel produced, the total
quantity of each feedstock used for each batch, and the total amount of
fuel produced in each batch. In addition, producers would be required
to keep affidavits obtained on a quarterly basis and contracts from the
short-rotation hybrid poplar or short-rotation willow feedstock
providers confirming that the feedstocks provided are from a tree
plantation meeting the definition in 80.1401. We invite comment on the
proposed new registration and recordkeeping requirements for short-
rotation hybrid poplar and short-rotation willow.
In addition to these new proposed requirements, renewable fuel
producers using short-rotation hybrid poplar and short-rotation willow
would need to comply with all existing applicable regulatory
requirements. Short-rotation hybrid poplar and willow are considered
planted trees as defined in 40 CFR 80.1401. Applicable requirements
include but are not limited to registration requirements at 40 CFR
80.1450(b)(1)(ii), which require producers to demonstrate that their
production process has the ability to convert cellulosic components of
their feedstock into fuel. Producers using short-rotation hybrid poplar
and willow as feedstocks would also have to comply with all applicable
reporting requirements and submit quarterly reports pursuant to 40 CFR
80.1451(d). Producers would also have to report the specific type and
quantity of each short-rotation hybrid poplar or willow species or
hybrids used as feedstocks to produce the renewable fuel in EMTS
consistent with existing requirements for all renewable fuels.\295\
Because hybrid poplar and willow are considered planted trees rather
than crops, they do not fall under the aggregate compliance approach,
and therefore existing recordkeeping and reporting requirements
applicable to planted trees are required. These include the
requirements listed at 40 CFR 80.1454(c) and 80.1454(d) specific to
producers of renewable fuel made from feedstocks that are planted
trees. Additionally, producers would also have to comply with any other
applicable recordkeeping requirements listed at 40 CFR 80.1454.
Producers would also have to ensure that their feedstock satisfies all
applicable definitions in the CAA and RFS regulations, including the
definitions at 40 CFR 80.1401 of planted trees, tree plantations, and
renewable biomass, which, among other provisions, prohibit direct
conversion of previously uncleared land for the production of planted
trees.
---------------------------------------------------------------------------
\295\ See 40 CFR 80.1452(b).
---------------------------------------------------------------------------
VII. Generating RINs for Renewable Electricity
A. Background
The RFS regulations currently contain pathways for the generation
of cellulosic RINs when electricity, produced from biogas, is used as a
transportation fuel.\296\ There has been growing interest in RINs
generated for renewable electricity \297\ as the fleet of electric
vehicles (EVs) has expanded in recent years. Based on 2011-2014 sales
data, we estimate that the current EV fleet is comprised of ~120,000
battery electric vehicles and ~150,000 plug-in hybrid electric
vehicles. Were this fleet to be charged exclusively using renewable
electricity, there exists the potential for the generation of
approximately 30 million RINs annually. The EPA expects that the
potential annual generation of RINs generated for renewable electricity
could increase by roughly 10 million per annum over the next few years.
The EPA believes that these potential RINs represent an opportunity to
incentivize the growth of the EV market in the U.S. while
simultaneously advancing the goals of the CAA to reduce air pollution
and GHG emissions from mobile sources and the fuels that power them.
Revenue from the sale of RINs could be used to incentivize increased
generation of renewable electricity, greater availability of public
charging infrastructure, increased ownership of EVs, or any combination
thereof. As the EPA considers the requirements for generating RINs for
renewable electricity under the RFS program, we do so with the goal of
adopting a structure that best achieves the greater goals of the RFS
program: Increasing the production and use of low GHG fuels produced
from renewable biomass.
---------------------------------------------------------------------------
\296\ See Pathways Q and T in Table 1 to 40 CFR 80.1426. These
pathways presumes that the electricity input into EVs carries the
environmental attributes borne by electricity that is generated from
biogas. The mechanics of this presumption were specified in the
Pathways II rule (79 FR 42128, July 18, 2014).
\297\ We use the term ``renewable electricity'' in this preamble
to refer to electricity produced from biogas and used as
transportation fuel.
---------------------------------------------------------------------------
The EPA has received a number of registration requests for approval
under the existing provisions for generating RINs for renewable
electricity generated from biogas.\298\ These requests vary
considerably in their approach, from parties interested in generating
RINs for the electricity used by a fleet of EVs, several charging
stations, or groups of interested EV owners, to those interested in
generating RINs for the electricity used by all of the EVs produced by
an EV manufacturer. Many
[[Page 80891]]
elements of these RIN generation structures conflict with one another.
This has created an untenable environment for the approval of any
single registration request by the EPA to date. Many of the
registration requests submitted envision generating RINs using
different types of information to verify the use of electricity as
transportation fuel.
---------------------------------------------------------------------------
\298\ See 40 CFR 80.1426(f)(10) and (11).
---------------------------------------------------------------------------
Given the diversity of the registration requests submitted for the
generation of RINs for renewable electricity to date, and the necessity
of avoiding the double-counting of RINs for the same quantity of
electricity, the approval of any one of these proposed systems may
preclude the approval of others. The regulations prohibit double-
counting of RINs for the same quantity of renewable electricity. Thus,
for a given quantity of renewable electricity, at most one party--
whether it is the electricity producer, the utility distributing the
electricity, the EV owner, the charging station, or the manufacturer--
can generate the corresponding RINs. The EPA believes the question of
the appropriate party to generate RINs in these circumstances deserves
the opportunity for public comment. In determining the regulatory
requirement for parties seeking to generate RINs for renewable
electricity, our goal is to establish an open and comprehensive program
that will best incentivize growth in the use of renewable electricity
without sacrificing the integrity of the RIN market. We seek comment on
the following discussion and potential RIN generation structures for
renewable electricity in order to help resolve the many issues
associated with choosing an appropriate structure and its design, as
well as which of these structures would best further the goals of the
RFS program. Feedback received in response to this request for comment
will be essential to ensuring that an equitable, open, and
comprehensive program structure is adopted and implemented.
B. Data Requirements for Generating RINs for Renewable Electricity
A key requirement of the RFS program is the type of data required
to demonstrate that RINs were generated validly and identification of
who is responsible for providing the necessary data for RIN generation.
Vehicle charging data demonstrate the use of electricity as
transportation fuel, one of the two main requirements for RIN
generation (production from renewable biomass being the other).
However, there are several sources of charging data that could be
provided to verify the use of electricity as transportation fuel:
Charging data from charging stations and/or fleet owners
Charging data from electric utilities
Charging data from vehicle manufacturers
Information from EV owners (from separate meters, telemetric
devices, or onboard diagnostic tools)
Any of these sources of data could conceivably be used as the basis
for generating RINs for renewable electricity.
Although multiple types of data can be used to demonstrate the use
of electricity as transportation fuel, allowing them to be used
simultaneously would almost certainly result in the generation of RINs
by multiple parties for the same charging event (i.e., double
counting). For example, if an EV owner charged their vehicle at a
public charging station, it is possible that the vehicle owner,
charging station owner, and vehicle manufacturer would all have record
of the amount of renewable electricity used in this single charging
event.\299\ To protect the integrity of the RIN system, as well as to
further the GHG reduction goals of the CAA, we therefore seek comment
on the entity or entities that the EPA should register for the
generation of RINs for renewable electricity.
---------------------------------------------------------------------------
\299\ At the time of writing, there has been little resolution
regarding whether any of the parties actually has exclusive, legal
rights to the data generated by a vehicle charging event. Some
vehicle manufacturers have entered into ``user'' agreements with the
vehicle owners that grants them permission to use the vehicle data,
but these agreements do not appear to grant either party exclusive
use rights.
---------------------------------------------------------------------------
In addition to determining the type of information that will be
required for RIN generation for renewable electricity, the EPA proposes
to determine the extent to which parties authorized to generate RINs
would be allowed to use estimates or averages (rather than empirical
data) for the basis of RIN generation. These estimates or averages
could range from relatively simplistic (e.g., assuming 80 percent of EV
charging occurs at home and 20 percent occurs at public charging
stations) to more complex (e.g., utilizing models generated from a
sample of EV behavior to estimate the average electricity use of all
EVs, or a certain type thereof). Allowing the use of estimates or
averages would enable the EPA to consider a wider variety of data and
data providers for participation in RIN generation. Allowing greater
participation through acceptance of averaging or estimation methods may
better allow RINs generated for renewable electricity to be used to
incentivize future growth. For example, allowing the use of estimates
and assumptions could enable the EPA to:
Allow utilities or other parties to estimate the quantity
of electricity used as transportation fuel by all EVs within their
customer base.
Allow a hybrid system wherein different types of parties
(i.e., charging station owners, utilities, and/or vehicle
manufacturers) could participate in different segments of the market
(e.g., public charging or home charging).
Whether it is necessary for the EPA to adopt a system that strictly
requires empirical charging data, rather than a system that allows for
reasonable assumptions, remains undecided. The empirical data approach
would require that large quantities of data be generated, managed, and
provided by the RIN generator. A program of that scope could be
resource intensive for both the RIN generator and the EPA and,
depending on the approach, may prevent large-scale participation,
thereby undermining the potential of the RFS program to stimulate EV
usage, infrastructure, and reduce GHGs.
A program that relies upon some degree of simplification, through
assumptions, would reduce resource allocation for data generation and
oversight. This reduced complexity may allow for a larger variety of
parties to participate in the RFS program and would likely increase
participation, the number of RINs generated, and encourage future
growth. Allowing the use of assumptions, such as estimates or averages,
would sacrifice some of the precision present in systems that rely on
empirical data, but it may also help mitigate concerns over data
ownership and consumer privacy infringement. For example, if the
quantity of RINs that could be generated annually by an EV were
determined based upon average vehicle miles traveled, rather than
empirical charging data, knowing the size of the fleet for a given year
is all that is required rather than vehicle-specific charging data.
There are privacy and data ownership concerns that may arise with any
structure that requires empirical charging data from the EV. Issues
surrounding data ownership and privacy concerns are present throughout
the structures described below. Some of these structures offer more
established pathways to resolution (e.g., auto manufacturers and
vehicle purchasers through dealer networks) while others may require
the creation of resolution pathways.
Another important consideration for the EPA in determining the data
requirements to allow for RIN generation for renewable electricity is
[[Page 80892]]
whether or not to allow third parties to generate RINs using data as
discussed in the various structures below. These third parties could
serve an important role within these structures as aggregators of the
required data and agents or intermediaries for RIN generation. In some
structures (``Vehicle Owner'') it is difficult to conceive how the
program could effectively work without third parties to manage data and
generate RINs, whereas in other structures (``Electric Utility'' or
``Vehicle Manufacturer'') the potential RIN-generating parties may be
large enough to avoid the need for a third party's involvement. While
allowing third parties to generate RINs could potentially increase
participation in the RFS program, particularly under some of the
structures discussed below, the EPA is concerned that it could also
present an opportunity for the generation of fraudulent RINs by
allowing companies with minimal capital investment to participate in a
lucrative new market only temporarily, making them hard to track and
hold responsible. Additionally, whatever portion of the RIN value is
extracted by the third party for their services cannot be used to
incentivize the use of renewable electricity as transportation fuel.
C. Potential Program Structures
Allowing the generation of RINs for renewable electricity under the
RFS program provides a potentially significant opportunity to
incentivize investment in EV technologies and infrastructure, as well
as the generation of electricity from biogas. However, the unique
characteristics of the generation and tracking of renewable electricity
from biogas present implementation challenges. The EPA is aware that
how these challenges are dealt with and resolved will have significant
consequences for who can generate RINs for renewable electricity, how
the program is implemented and monitored, the level of program
participation, and the degree to which RINs will be used to incentivize
growth in the number of EVs, the charging infrastructure, and the
generation of electricity from biogas for use as transportation fuel.
In light of these concerns, the EPA is seeking comment on the type
of structure and accompanying data to be employed in allowing parties
to generate RINs for renewable electricity. The following sections
discuss several potential structures considered by the EPA and informed
by preliminary discussions with several stakeholders. Each of these
structures addresses the two primary RFS requirements for the
generation of RINs for renewable electricity: (a) That renewable
electricity has been generated from approved renewable biomass
(biogas); and (b) That the renewable electricity is used as
transportation fuel. Some of the structures discussed below are better
positioned to verify the first requirement (the generation of
electricity from biogas), while others are better positioned to verify
the latter requirement (that electricity is used as transportation
fuel). All of these structures are being considered on an individual
basis, but could also be considered in the context of a hybrid approach
that would combine multiple structures and/or reserve percentages of
the RINs from renewable electricity for specific structures (e.g.,
vehicle owner and vehicle manufacturers).
Any of the structures (or hybrids thereof) would impose
significant, additional implementation challenges. The current RFS
program would need to be adjusted to accommodate new registered parties
(e.g., vehicle manufacturers) and the information that those parties
would need to submit during registration or during periodic reporting.
EMTS may need to be modified to accommodate data submissions from new
sources (e.g., vehicle telematics) to more appropriately generate and
track RINs generated from renewable electricity. Additionally, the
complexity of a new or modified renewable electricity regulatory
structure could make assuring the validity of RINs more challenging for
all parties and could increase the potential for fraud. Since the
complexity of generating RINs from any of these discussed structures is
significantly different from traditional renewable fuels, both
submission and review of registrations and reports will likely be
unique. These issues, and other issues related to the implementation of
a new regulatory structure, would need to be addressed.
The EPA believes that the best-case scenario would be the adoption
of a structure for generating RINs for renewable electricity that would
simultaneously provide greater incentive for EV use and ownership
(thereby reducing air pollution and GHG emissions from vehicles),
increase the amount of renewable electricity produced, and minimize
challenges related to program oversight. As of 2014, however, roughly
11,000 GWh of electricity were generated from biogas, while slightly
less than 700 GWh from all sources were used as transportation fuel.
This means that in the near term, the number of RINs that are able to
be generated from renewable electricity will likely be limited by the
size of the EV fleet. Structures that do not incentivize increased
ownership of EVs are therefore likely to have limited impact on the
quantity of renewable electricity produced in the near term. Any
program that does not induce additional electricity generation from
biogas is not expected to provide additional GHG reductions beyond
those provided by the efficiency of the additional EVs added to the
fleet. Finally, in order to fully understand the implication of our
decision on the structure for the generation of RINs for renewable
electricity, we believe we should take into account the existing and
significant incentives currently in place for the production of EVs and
the generation of electricity from biogas.
We understand that many of the options under consideration differ
from the typical approach under the RFS of placing authority and
responsibility for RIN generation on the renewable fuel producer. We
believe that a unique approach with respect to renewable electricity
could be justifiable if it provides greater incentives for use of
renewable electricity in the transportation sector and simplifies
program implementation, but we seek comment on this issue.
1. Vehicle Owner Structure
One possible program structure would be to allow vehicle owners to
use the data on the quantity of electricity used to charge their EVs,
as measured by separate meters or telemetric devices, to generate RINs.
Under this system, the data available to the RIN generator clearly
demonstrate the use of electricity as transportation fuel. Allowing EV
owners to generate RINs for renewable electricity could provide a
direct financial incentive to owners and potential owners of EVs;
however, such a system would have several major challenges that the EPA
believes would prevent this structure from achieving the desired
impact.
One major issue for EV owners is to measure and keep records of the
amount of electricity used to charge their EVs. Barriers currently
exist for vehicle owners to access and log their vehicle charging
activity. Vehicle owners may opt for a second electricity meter to be
installed by their utility company, which would then provide charging
activity information through a dedicated billing account. The validity
of charging data captured by dedicated EV charging meters would be
verifiable and documented. Alternatively, vehicle owners may opt to
purchase a current measurement device capable of measuring and logging
charging activity.
[[Page 80893]]
The extent of verification challenges related to charging data
captured through an independent current management device is unclear is
unclear and we request comment on this issue. Either of these options
would necessitate an initial financial investment, which could reduce
program participation.
Even if EV owners were able to log their vehicle charging activity
through one of these options, there would still be a challenge for
program administration because the EPA would need to collect and verify
the accounting accuracy of the charging data compared to number of RINs
generated for each individual EV owner (e.g., potential of ~270,000 EV
owners and hundreds of charging events over the course of one year).
The EPA would also need to invest in IT system upgrades or
modifications to store and process the significant number of additional
registrations and large volume of data. Currently, the RFS program has
approximately 1,200 registrants. The addition of potentially hundreds
of thousands of additional registered parties is not something
currently supported by the registration system and would require a
significant amount of time and resources to implement. Other program
administration challenges include educating EV owners on the
registration, reporting, recordkeeping, and other requirements for RIN
generation under the RFS program. Since EV owners are less likely to be
familiar with the requirements of the RFS program, this would likely
result in a higher chance of noncompliance or violations and pose
further challenges for EPA enforcement. Conversely, the compliance
challenge imposed upon EV owners may be too high, and not worth the
incentive of the RIN value. This could result in less participation by
EV owners in the RFS program, which would be counter to the program
goals. We request comment on the extent to which these program
administration challenges could be minimized or overcome.
A second major issue would be the need to verify that the vehicle
charging was completed using electricity generated from renewable
biomass. Individual vehicle owners would likely be unable to enter into
direct contracts with independent power producers or investor-owned
utilities in order to demonstrate the renewable content requirements
for RIN generation. Broad EV owner participation would therefore likely
necessitate the creation and maintenance of a novel contract mechanism
by the EPA or the involvement of a third-party aggregator in order to
fulfill the requirements for RIN generation. A substantial degree of
simplification for assuring renewable content, as well as eliminating
charging data measurement and reporting by vehicle owners, could be
achieved through the use of assumptions. The complexity of
administering the vehicle owner structure could be greatly reduced by
modeling usage behavior and then allowing a third party to aggregate
vehicle owners and contract to meet renewable content requirements. The
third party could then distribute RIN value to vehicle owners, less
administrative costs, after the sale of RINs to obligated parties. Some
mechanism for aggregation would be required, as another major issue is
the sale of small numbers of RINs. Under the RFS program, obligated
parties purchase RINs in blocks of millions and are not set up to
purchase small numbers from individual parties. Therefore, aggregation
would almost certainly be a necessity for the vehicle owner structure
or any other structure predicated upon the generation of small numbers
of RINs by a single party.
It is conceivable that owners of large EV fleets may be willing to
meet the administrative and recordkeeping challenges posed by RIN
generation under a non-assumption based version of the vehicle owner
structure. However, because the number of EVs in fleets is small
relative to the total number of EVs in the market, allowing for this
structure alone would not maximize the number of RINs generated. Under
a strictly empirical data version of the vehicle owner structure, even
EV owners willing and able to create and maintain the necessary records
would likely be dependent on a third-party aggregator to generate and
sell RINs on their behalf, as the registration requirements and
realities of the RIN market \300\ would provide practical barriers to
individual EV owners participating directly. Therefore, without some
allowance for modeling or assumptions, the vehicle owner structure
would be unlikely to achieve the desired impact of promoting increased
generation of renewable electricity and increased EV ownership.
---------------------------------------------------------------------------
\300\ Obligated parties purchase RINs in quantities of millions
of RINs, far more than any individual EV owner could generate.
---------------------------------------------------------------------------
2. Public Charging Station Structure
Another potential structure could allow the owners of vehicle
charging stations to generate RINs based on the electricity used by
their charging stations. Charging data from public stations could be
verified by meter billing statements that would be readily available to
participating stations. Allowing charging station owners to generate
RINs could also incentivize the building of additional public charging
infrastructure, which could also impact the willingness of consumers to
purchase and use EVs. If this structure were adopted, it is probable
that the EPA could rely on verifiable empirical charging data (rather
than estimates or averages) for the amount of renewable electricity
used. However, such charging stations would still have to contract with
upstream parties to verify that the renewable electricity used as
transportation fuel for which RINs were generated was consistent with
the quantity of renewable electricity generated from qualifying
renewable biomass supplied to the grid from which the charging stations
withdrew their electricity.
The program administration challenges for the EPA under this
structure would be to verify and rectify contracts among all of the
parties upstream of the charging station, particularly when there are
multiple parties involved. For example, it is particularly challenging
for the EPA to ensure that RINs are generated only for the quantity of
electricity that is actually produced at a renewable electricity
generation facility if the facility has multiple contracts with
multiple charging stations for a portion of their electricity. The
charging station would not know if they were contracted for a quantity
of electricity that was above the capacity of the renewable electricity
generation facility, and therefore the burden would fall on the EPA, or
others, to conduct this verification. We seek comment on how to
overcome this implementation challenge without imposing overly
burdensome restrictions on how parties set up contracts and conduct
business in this competitive market.
Additionally, a majority of EV charging is currently performed at
work or home. Therefore, adopting this structure alone would limit the
ability to achieve the desired goals of the RFS program. Even if all
public charging station owners were able to participate in the RFS
program, this structure would not allow for the generation of RINs for
renewable electricity when EVs are not charged at public charging
stations. This would significantly limit the number of RINs that could
be generated for renewable electricity, thereby reducing the
effectiveness of this structure to be used to incentivize ongoing EV
growth. It is possible that this structure could be used in
[[Page 80894]]
conjunction with another structure--one in which the public charging
structure is used to account for the public charging of EVs and another
structure is used to account for the private charging of EVs. Such a
hybrid system could enable the value of the RINs generated for
renewable electricity sold at charging stations to incentivize
increased public charging infrastructure while capturing a larger
proportion of EV charging events. It may also be possible to register
public charging stations or fleet owners under the current regulations
while the structure adopted to allow for RINs to be generated for home
charging remains undecided. We request comment on this approach.
Another challenge of this structure is that many of the public
charging stations are owned by municipalities or other entities that
may find it difficult, due to human resource or other constraints, to
make their charging data available and participate in the RFS program.
These challenges, though unique to charging stations, are not
materially different than the challenges that were outlined in the
vehicle owner structure for smaller entities generating RINs and
participating in the RFS program. Whether adopted alone, or in concert
with another structure to capture home charging, the difficulties
associate with recordkeeping, reporting, and the likely need to
aggregate small RIN generators so that they may participate in the RIN
market are present and will need solutions prior to the public charging
structure being ready for implementation.
3. Electric Utility Structure
While the other structures discussed here allow one to more easily
quantify and verify the amount of electricity used as transportation
fuel, they are far removed from the point where one can verify that the
feedstock used to generate the renewable electricity was actually
qualifying renewable biomass (i.e., biogas from landfills or other
qualified biomass sources). In contrast, an electric utility structure
may be more effective at ensuring that the electricity was derived from
a qualified source of biogas, but less effective at quantifying how
much was actually used as transportation fuel. Utilities would likely
have no direct knowledge of the amount of such electricity that was
actually used as transportation fuel (except in circumstances where a
dedicated EV charging meter had been installed) and would need to
contract with downstream parties to obtain this information. Program
administration challenges under the electric utility structure would
include verifying and rectifying contracts among all the parties
upstream and downstream of the transmission of electricity to the
vehicle charger. Due to the restructuring of many utilities in the
U.S., multiple parties may have to be regularly contractually connected
in order for the electric utility to be the RIN generator. An
additional administrative challenge would be verifying that RINs are
only generated for the quantity of electricity actually produced at a
renewable electricity generation facility if the facility has contracts
with multiple utilities or charging stations for a portion of their
electricity. We seek comment on how to overcome this implementation
challenge without imposing overly burdensome restrictions on how
parties set up contracts and conduct business in this competitive
market.
There are several additional reasons beyond the physical connection
to the qualified biomass being converted to electricity as to why an
electric utility structure may be desirable. Depending on the design of
the program, value from RINs generated by utilities could incentivize
new forms of biomass to electricity generation or drive the increased
use of biogas to generate renewable electricity, providing GHG
benefits. It could also provide a source of revenue for utilities to
help offset the cost of upgrading electricity distribution
infrastructure, which would likely be necessary if EVs are adopted to a
significant degree. Finally, as the parties that sell electricity to
the end users, utilities would conceptually be best positioned to
provide renewable electricity to EV owners at discounted rates.
A version of this form of structure has been adopted by the State
of California in their Low Carbon Fuel Standard Program (LCFS). Under
the LCFS, electric utilities generate credits based upon the number of
EVs in their service territories. The amount of electricity used by
each vehicle is estimated based on data from a limited number of EV
owners with separate meters to directly measure the amount of
electricity used to charge their vehicles. The LCFS program also allows
public charging stations and fleet owners to generate credits based on
charging data. The system addresses the potential for generating
multiple credits for the same charging event by allowing utilities to
generate credits based on estimates of the electricity used only for
the home charging of EVs, while allowing public charging stations and
fleet owners to generate credits based on their own charging data.\301\
An important provision of the LCFS is that the utilities are required
to use the LCFS credit proceeds for the direct benefit of EV owners, a
provision that is not currently a part of the EPA's RFS program. While
some utilities may pass revenue from RIN generation along to customers
if a utility structure was adopted, the generally non-competitive
nature of utilities is likely to limit the degree to which customers
directly benefit from any RIN revenue.
---------------------------------------------------------------------------
\301\ The LCFS program does not involve EV manufacturers as the
source of charging data or as parties eligible to generate LCFS
credits.
---------------------------------------------------------------------------
Unlike the RFS program, the LCFS program has no requirement that
the electricity used to generate the LCFS credits come from any
specific source. Their program relies on a grid average carbon
intensity to determine the amount of LCFS credits that are to be
awarded for each charging event. This is fundamentally different from
the requirements under the RFS program, where credits may only be
generated for electricity generated from qualifying renewable biomass
sources.
The use of grid average carbon intensity also obscures another
important issue which will need to be resolved by any national
structure for RINs generated for renewable electricity: Most facilities
generating electricity from biogas are independent power producers
(IPPs) not owned by electric utility companies. In 1978, the Public
Utility Regulatory Policy Act (PURPA) was passed, granting qualifying
facilities the right to be able to generate and sell electricity to
utility companies at the utility's avoided cost.\302\ The allowance of
IPPs was expected to reduce electricity costs for consumers by allowing
cheaper generation sources to participate in the market. Perhaps
unintentionally, PURPA set the stage for the erosion of the regulatory
consensus surrounding the vertically integrated utility model in much
of the U.S. Today, many once vertically integrated utility companies
have divested or separated their transmission, distribution, and
generation services. In many parts of the country, the notion of
``utility'' is tantamount to the entity responsible for providing
electric distribution services. The implication of this for any program
structure for generating RINs for renewable electricity is that there
is an added layer of complication because the utility that is
delivering the electricity in such areas is rarely the owner/operator
of the biogas electricity generation facility. For example, in 2014,
roughly 11,000 GWh of electricity
[[Page 80895]]
were generated from biogas, less than 1,000 GWh of which were generated
by traditional electric utilities.
---------------------------------------------------------------------------
\302\ See PURPA Sec. 210.
---------------------------------------------------------------------------
This disaggregation introduces a potential challenge to the
electric utility structure. Any utility-based structure would likely
need to determine whether to allow utilities to contract with IPPs
currently generating electricity from biogas or require that the
utilities directly generate electricity from biogas in order to
generate RINs for renewable electricity. Allowing utilities to contract
with IPPs would likely result in the greatest participation in the RFS
program, but may limit the procurement of new biogas generation in the
near term (until the amount of electricity used as transportation fuel
nears the amount of electricity presently generated from biogas).
Alternatively, requiring that utilities generate the RINs for biogas
generation capacity they either already own or newly procure could
provide an incentive for increasing the amount of electricity generated
from biogas, but would likely reduce utilities' participation in the
RFS program.\303\ Regardless of whether program participation is
affected by IPP contracting, there is a tradeoff between these two
alternative programs which would have ramifications for how the RIN
value might be used.\304\ If contracting with IPPs was allowed, more of
the RIN value could be reserved for incentivizing EVs but there would
be little change in electricity generation from biogas as a result of
RIN generation (additional GHG reductions unlikely). If contracting
with IPPs was not allowed, more electricity generation from biogas may
be built (additional GHG reduction possible), but a much smaller
fraction of the RIN value would likely remain to incentivize EVs.
---------------------------------------------------------------------------
\303\ Substituting the IPPs as the RIN generators would face
other challenges. Unlike utilities, IPPs do not have a customer base
from which to aggregate the total electricity used as transportation
fuel. Secondly, as of 2013, the average size of an IPP biogas
project was 3.2 Megawatts. This is diminutive relative to utility-
scale projects and it is doubtful that many of these producers would
have the resources to be able to participate in the RFS program
independently. Third-party aggregators would likely be required to
manage the RINs generated by IPPs. Also, if IPPs were generating the
RINs, the role (especially financially) of the utility would be
greatly diminished and the administrative costs of participating in
RFS may not be justifiable. This could present an obstacle if
neither the utility nor the renewable electricity producers have
sufficient capacity or incentive to participate in the RFS program.
\304\ It is unclear that providing the RIN value to IPPs or
utilities would result in an increase in electricity generation from
biogas. Under PURPA, biogas facilities are guaranteed the utility's
avoided cost of generation. Additionally, many state and federal
production tax credits, investment tax credits, and compliance
market credits (RECs, etc.) are already accrued by these facilities;
contributing to the current large supply of electricity generation
from biogas in relation to the EV market demand. Nevertheless,
despite the preexisting level of subsidization, many potential
biogas generating projects remain undeveloped. Additional
information would be helpful to understand the degree to which the
value of the RIN would result in additional generation of biogas for
electricity.
---------------------------------------------------------------------------
In summary, the utility centric structure has some advantages, such
as most directly providing the linkage to the renewable nature of the
RINs generated, and could provide funds for the upgrading of
electricity distribution infrastructure. In addition, the utility
structure could be used in conjunction with the public charging
structure used to separately capture private and public charging of
EVs. There remain several challenges to the adoption of the utility
centric structure however. The disaggregated nature of electricity
generation from biogas would provide program administration challenges.
A decision about whether or not to allow utilities to contract with
IPPs to fulfill the requirement that the renewable electricity was
generated from biogas would have to be made. Finally, questions remain
as to the degree to which utilities, many of which are publicly
regulated entities, would be legally able to participate in the RFS
program as RIN generators, or whether they would be dependent on third
parties to generate RINs on their behalf. We request comment from such
entities regarding potential legal issues that may limit or prevent
their participation.
4. Vehicle Manufacturer Structure
An additional RIN generation structure option would be a program
that would use charging data collected by the vehicle manufacturer as
the basis for RIN generation. This structure, like the vehicle owner
and public charging station structures, is focused on quantifying the
amount of electricity used as transportation fuel and less well-suited
to ensuring that the electricity is generated from qualifying renewable
biomass pursuant to an approved pathway (e.g., biogas from an
appropriate source). Currently, however, the principle constraint in
the biogas to electricity to transportation fuel pathway is the use of
electricity as transportation fuel, precisely what would be reflected
in the EV's state of charge. Therefore, the state of charge data which
could be provided by vehicle manufacturers (or their designated
intermediary) may constitute a logical source of data for RIN
generation. Furthermore, many vehicle manufacturers are already
collecting vehicle charging data, increasing the availability of EV
charging data for potential inclusion in the RFS program.
The vehicle manufacturer structure, due to the ability of OEMs to
independently generate charging data, could be adopted unilaterally or
this structure could be used in conjunction with another structure
(e.g., the charging station model) to incentivize infrastructure. Use
of a vehicle manufacturer structure alone could potentially reduce the
variety of data being submitted and help with the process of data
verification for RIN generation. Additionally, EV manufacturers are
positioned to pass on the revenue from the sale of RINs to the customer
directly by discounting the purchase price of EVs or through other
rebate mechanisms. This would allow the RFS program to be used to
address an important factor currently limiting the amount of renewable
electricity used as transportation fuel: The number of EVs in the U.S.
There may be concerns that setting up the program structure in this
manner would result in the automotive manufacturers collecting a
windfall profit, rather than reducing the sale price of the EVs they
sell. However, market forces may ultimately transfer a substantial
portion of the RIN revenue to the EV owners. Automotive manufacturers
have enticed costumers to purchase their products over their
competitors for decades through the use of incentives. Automotive
manufacturers, which have existing requirements motivating them to sell
EVs, may use the RIN revenue to further incentivize vehicle buyers to
purchase their product over a competitors.
From a program administration perspective, the parties that would
be able to generate RINs for renewable electricity in a vehicle
manufacturer structure would be a small pool of relatively homogenous
applicants. It has been suggested that vehicle manufacturer telematics
data could be used, in a raw or processed form, as the basis for RIN
generation. However, EMTS is not currently configured to accept,
process, or track the quantity and format of information that may be
provided from vehicle telematics. Although these data could perhaps
provide reliable information for RIN generation, the parsing of the
substantial amount of information down to the vehicle level would be
difficult to review for RIN verification. Significant modifications to
EMTS and the registration system would still be needed to allow for the
appropriate generation and tracking of RINs using data from EV
manufacturers at this time.
Another aspect of the vehicle manufacturer centric structure is
that it could also be administered to allow for the use of assumptions
or models rather
[[Page 80896]]
than empirical charging data for the basis of RIN generation. Under
this approach, the burden of collecting and verifying data could be
greatly reduced. For example, EV electricity consumption models could
range from something as simple as average U.S. vehicle miles travelled
to usage models based on samples taken from the local EV population.
The number of vehicles that each manufacturer has in the fleet could be
determined based on vehicle registration data or estimated based on
sales data and vehicle scrappage rates. Using these types of averages
or models is one way that could also address consumer privacy concerns
associated with EV manufacturers using charging data from individual
EVs as the basis for RIN generation.
Like the utility centric structure, the vehicle manufacturer
centric structure does not preclude a hybrid option where public or
private charging stations could also be RIN generators. In order to
avoid the double-counting of RINs, many different approaches could be
adopted. A simplistic hybrid approach would be to adopt a market
segmentation similar to that employed by California in the LCFS. Under
this structure a certain percentage of the market, based on the
percentage of EV charging that is expected to take place at public
charging stations, is reserved for public charging stations. The number
of RINs that vehicle manufacturers would be able to generate would be
reduced by a corresponding percentage which could vary depending on the
extent to which vehicles produced by a particular manufacturer are
designed to use public charging stations. The intent of this reduction
would be for vehicle manufacturers to capture only the charging of EVs
that happens at the vehicle owner's homes. This approach is coarse in
the sense that discounting the total RINs which were measured (or
modeled) by the vehicle manufacturers by a percentage and then allowing
charging stations to generate RINs based upon their aggregated charging
data could result in more or less RINs being awarded than should have
been depending upon the actual home to public charging split. However,
this approach would simplify implementation and allow a hybrid system
to incentivize both EVs and charging infrastructure.
In summary, the vehicle manufacturer centric structure has several
potential advantages (potential for simplicity of implementation and
providing financial incentives to increase the adoption rate of EVs),
as well as some issues which would need to be resolved. Vehicle
manufacturers have a privileged position in terms of access to charging
data, and would thereby have the least amount of need to create complex
registration requests. Vehicle manufacturers also have an opportunity
to resolve potentially complex data ownership issues surrounding EV
charging data. There is also flexibility in this program structure for
the use of assumptions and models that could serve to reduce
administrative and applicant resource expenditure, which could lead to
greater program participation. Vehicle manufacturers, however, would
have to rely on contractual mechanisms to verify that the electricity
used as the basis for RIN generation was generated from qualifying
biogas and that the electricity was introduced into a grid servicing
their customers. A single vehicle manufacturer would likely need to
rely on a sizable number of contracts with IPPs, given the small scale
of many IPPs that generate electricity from biogas and the necessity
for the IPPs to be able to supply electricity onto the electrical grid
from which the manufacturer's EVs draw electricity.
D. Equivalence Value and Other Issues Related to Generating RINs for
Renewable Electricity
The EPA has received input from various parties regarding the
equivalence value assigned to RINs generated for renewable electricity
used as transportation fuel. A number of these parties have voiced
concern that the unique nature of electric vehicles warrants an
equivalence value calculated using a different set of parameters than
those used to calculate the equivalence value of other renewable fuels
under the RFS program. The EPA acknowledges that there are undoubtedly
differences between vehicles that use internal combustion engines
(ICEs) for propulsion and those that utilize electric motors. Whether
the equivalence value for RINs generated for renewable electricity
should be evaluated differently in light of these differences is a
considerably more complex issue, and as such, the EPA would like to
open up the issue of the renewable electricity RIN equivalence value
for public comment. We are not at this time seeking comment on the how
equivalence value is calculated for fuels other than renewable
electricity.
The history of how equivalence values were conceived and calculated
plays an important role in how the discussion on potentially
establishing a unique equivalence value for RINs generated for
renewable electricity should be framed. In the preamble to RFS1 final
rule we stated: \305\
---------------------------------------------------------------------------
\305\ See 72 FR 23920 (May 1, 2007).
To appropriately account for the different energy contents of different
renewable fuels as well as the fact that some renewable fuels actually
contain some non-renewable content, we are requiring that Equivalence
Values be calculated using both the renewable content of a renewable
fuel and its energy content. This section describes the calculation
methodology for Equivalence Values. In order to take the energy content
of a renewable fuel into account when calculating the Equivalence
Values, we must identify an appropriate point of reference. Ethanol is
a reasonable point of reference as it is currently the most prominent
renewable fuel in the transportation sector, and it is likely that the
authors of the Act saw ethanol as the primary means through which the
required volumes would be met in at least the first years of the RFS
program. By comparing every renewable fuel to ethanol on an equivalent
energy content basis, each renewable fuel is assigned an Equivalence
Value that precisely accounts for the amount of petroleum in motor
vehicle fuel that is reduced or replaced by that renewable fuel in
comparison to ethanol. To the degree that corn-based ethanol continues
to dominate the pool of renewable fuel, this approach allows actual
volumes of renewable fuel to be consistent with the volumes required by
---------------------------------------------------------------------------
the Act.
This language establishes two important precepts: (1) Equivalence
values are to be calculated using both the renewable content of the
fuel and its energy content; and (2) Corn-based ethanol was selected as
the reference fuel. These principles were reaffirmed in the current
regulatory structure for the RFS program in 2010 when the EPA decided,
through a notice and comment rulemaking, to retain the use of an energy
and renewable content-based equivalence value for purposes of
calculating the number of RINs generated for any quantity of renewable
fuel. Therefore, the EPA has maintained the position that although
there are efficiency differences present in the operation of ICEs,
including those powered by different fuels, the current equivalence
value of 22.6 kWh per gallon of ethanol is appropriate. However, due to
concerns raised by various parties that maintaining this position may
unduly negatively affect the renewable electricity pathway, we are
seeking comment on whether a
[[Page 80897]]
different means of determining the equivalence value for renewable
electricity would be appropriate. The following discussion is broken
into segments which address the many issues that have been raised
concerning renewable electricity RIN generation.
1. Landfill Gas Pathway Effectiveness
Proponents of revising the equivalence value for renewable
electricity have noted that aside from electricity, all of the approved
fuels under the RFS are chemical fuels and this difference requires a
novel approach. Their supporting reasoning is as follows: Electric
motors used to propel a vehicle are not subject to the same fundamental
efficiency limitations of ICEs. This makes electricity fundamentally
different and unique and means that a ``gallon of gasoline equivalent''
of electricity in the battery of an EV provides several times more
miles of transportation service than a gasoline vehicle with a gallon
of ethanol in the tank. If we constrain the bounds of the analysis to a
``tank-to-wheels'' efficiency metric as they are suggesting should be
done, then it is undeniable that EVs are far more efficient that ICE
powered vehicles. A representative value for a tank-to-wheels
efficiency for EVs is near 90 percent, whereas a value around 20-30
percent is representative of ICEs. Using this logic, it is
understandable that proponents of revising the equivalence value feel
that the EPA is not capturing the superiority of EVs consuming
renewable electricity compared to ICEs consuming chemical fuels in the
current equivalence value. However, it should be noted that the EPA is
currently giving credit for electric vehicle efficiency to vehicle
manufacturers under the Light Duty Vehicle GHG program.
An alternative interpretation could also be reached if the scope of
the analysis is broadened. Using a source of renewable electricity,
landfill gas (LFG), as the starting point of this comparison, there are
currently two approved pathways under the RFS program by which LFG can
be utilized to generate RINs. One of these is the direct use of the
cleaned LFG to generate renewable electricity (referred to as
``Electric''), typically in an ICE or a turbine. The other pathway is
to upgrade the LFG to high BTU ``Renewable Gas'' (referred to as
``Gas''), which can then be compressed and used in CNG/LNG vehicles as
transportation fuel. As shown in Figure VII.D.1-1 below, these two
pathways are assessed to determine the quantity of original energy
content from the LFG that is ultimately available to provide drive
energy to propel a vehicle. Starting with a nominal unit of energy,
each conversion process in the value chain for each respective pathway
is assessed a high and low efficiency to provide a rough bandwidth for
drive energy efficiency.
[GRAPHIC] [TIFF OMITTED] TP16NO16.003
The specific assumptions for this illustrative comparison for the
efficiency of the energy conversion processes in Figure VII.D.1-1 are
presented in Table VII.D.1-1 below.
Table VII.D.1-1--Landfill Gas Use Scenario Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Electricity Electricity Battery ``Tank'' to
Landfill gas use scenario Nominal LFG compression compression transmission charging [eta] wheels [eta] Drive energy
energy [eta] (%) [eta] (%) [eta] (%) (%) (%) available
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric (High-[eta])................... 1 n/a 45 98 95 90 0.38
Electric (Low-[eta]).................... 1 n/a 20 90 65 60 0.07
Gas (High-[eta])........................ 1 93 n/a n/a n/a 30 0.28
Gas (Low-[eta])......................... 1 93 n/a n/a n/a 14 0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 80898]]
The energy required for gas compression for the gas pathway was
calculated assuming an isentropic efficiency of 80 percent, a CNG
pressure of 3600 psi, and it was assumed that the compressor was
consuming electricity generated from LFG at an efficiency of 35
percent. This way of representing the energy penalty of upgrading LFG
to CNG may be simplistic, but we believe it provides sufficient
accuracy for this relative assessment of the two pathways. The ``tank''
to wheels efficiency values for ICE engines \306\ are representative of
the upper and lower bounds of expected fuel energy to drive energy
conversion. The ``tank'' (battery) to wheels efficiency upper-bound is
representative of reported values by manufacturers and the lower-bound
is an assessment based upon reported behavior of EVs in cold weather,
but no reliable empirical data was available to substantiate the value
used of 60 percent.
---------------------------------------------------------------------------
\306\ See https://www.fueleconomy.gov/feg/atv.shtml.
---------------------------------------------------------------------------
The key point illustrated by the Figure VII.D.1-1 is that the
Electric pathway is not always superior to the Gas pathway on a drive
energy provided basis when starting with the same quantity of landfill
gas. Depending on the efficiencies for key energy conversion processes,
either of the pathways can appear superior to the other. By contrast,
an analysis using median efficiency values for all the energy
conversion processes highlighted, would find that the overall
efficiency of converting LFG to drive energy in a vehicle is roughly
equivalent regardless of the pathway chosen. If both pathways generated
RINs based upon the quantity of LFG used, the resulting interpretation
of delivered drive energy parity between the pathways for establishing
a novel equivalence value for the electricity pathway would likely be
that no change to the EPA's current energy content methodology would be
warranted. However, neither pathway is currently evaluated based upon
the quantity of LFG used to deliver drive energy.
2. RIN Generation and Measurement Location
Another important, and tightly coupled aspect, of the equivalence
value issue is where the RINs are generated along the value chain.
Whether bulk gas from the LFG producer, electricity generator LFG
consumption or electricity production, electrical feed to the battery
charging device, or onboard vehicle state of charge is designated as
the point of RIN generation can have a significant effect on the
quantity of RINs generated. The determination of an appropriate point
in the value chain for RIN generation is a major factor highlighted by
parties suggesting an undervaluation of RINs generated from
electricity. Those stakeholders have asserted that there is inequity
created by allowing the Gas pathway for LFG to be measured on the
upstream side of the ICE (the vehicle's ICE) while the Electric pathway
is required to be measured on the downstream side of the ICE (the
electrical generation equipment). This idea is illustrated in Figure
VII.D.2-1 below, where each LFG pathway starts with 1 MMBTU of cleaned
LFG on the left and the required conversion processes for each pathway
are applied cumulatively moving to the right.
[GRAPHIC] [TIFF OMITTED] TP16NO16.004
The quantity of energy from the nominal cleaned LFG that remains
for Vehicle Drive Energy is very similar for each pathway. However, due
to the point in the process at which energy is measured for RIN
generation in the two pathways currently, the Gas pathway produces
roughly 3.5 times the RINs for an equivalent quantity of cleaned LFG.
The EPA seeks comment on whether the parity that is observed in the
delivered vehicle drive energy between the two pathways should be
reflected by the quantity of RINs generated by the two pathways and
requests comment on the appropriate means of doing so.
One means of ensuring that the Gas and Electric pathways for LFG
would generate commensurate quantities of RINs would be to have RIN
generation be tied to the quantity of LFG consumed. However, the EPA
has concerns regarding the potential generation of RINs from LFG prior
to the generation of electricity as this may create a perverse
incentive for generators to operate inefficiently. Put
[[Page 80899]]
another way, if credits are given based upon the amount of LFG that
gets converted to electricity rather than on the amount of electricity
generated, operators may be incentivized to consume more LFG to meet
demand. This concern is more plausible given the current oversupply of
electricity generated from LFG relative to the quantity of electricity
consumed by EV charging (and eligible for RINs). Consequently, it may
be more appropriate to maintain RIN generation for renewable
electricity after generation of the electricity.
3. Additional Challenges Unique to Electricity
Unlike the chemical fuels typically used to generate RINs under the
RFS program, which incur very minimal loses from the time they are
produced until they are consumed in the vehicle, renewable electricity
used as a transportation fuel presents some unique challenges. As a
result, one of the requirements being considered for parties interested
in generating RINs for renewable electricity is for the parties to
ensure that a corresponding quantity of biogas-generated electricity is
produced to provide the ultimate kWh converted to transportation fuel.
One interpretation of this provision is that RINs would be awarded
exclusively based on the quantity of kWh increased in the battery of
the EV being fueled, and should therefore account for the efficiency of
the charging system used. The degree to which this value varies from
the quantity of kWh used to charge the vehicle's battery is a function
of the efficiency of the charging system used to alter the battery's
state of charge. Depending on whether a system is inductive or
conductive, level I, II, fast charging, or something yet to be
developed, there will be associated charging losses. Additionally, the
electricity must be generated at facilities that vary in the efficiency
by which they convert landfill gas to renewable electricity. There is
potential for variation in every energy conversion or transfer process
associated with the electricity RIN generation pathway. Furthermore,
the transmission of electricity across the country incurs resistive
losses, which result in approximately 6 percent of the originally
generated kWh being lost before it can even begin the process of being
converted to transportation fuel. We request comment on the degree to
which parties interested in generating RINs for renewable electricity
should be responsible for accounting for electricity generation
efficiency and the losses associated with EV charging efficiency and
the transmission of electricity.
A related complexity for properly determining the amount of RINs to
be awarded for a charging event is parasitic and vampire losses. Unlike
their ICE counterparts, EVs cannot utilize waste engine heat for
passenger compartment heating and must use electricity, which would
otherwise be used to propel the vehicle, to warm the passenger
compartment. Additionally, parasitic losses associated with maintaining
battery pack temperature, providing passenger compartment air
conditioning, etc., can amount to a non-trivial quantity of electricity
not being used to propel the vehicle. The combined effect of these
system losses will inevitably result in less vehicle miles being driven
on a given charge than would otherwise be anticipated under more mild
conditions. We request comment on whether or not parasitic and vampire
losses should be accounted for in determining the number or RINs that
should be generated for renewable electricity, as well as options for
accounting for these losses.
Finally, the environmental attributes associated with a unit of
generated electricity have value above and beyond wholesale electricity
depending upon generation source and local environmental compliance
market conditions. Several states and regions currently have programs
that require electric utility companies to produce or procure an
allotment of renewable energy credits (RECs) to be retired annually in
order to promote the buildout of renewable electricity. There are also
FTC regulations that ensure consumers who purchase products based on
advertised reduced environmental impact that these claims are
substantiated. Although RIN generation under the RFS program is not
constrained by state laws, it is the responsibility of the regulated
community to ascertain the extent to which RIN generation under the RFS
program has implications for their actions and obligations under state
programs and laws administered by other federal agencies.
4. RFS Complications and Ancillary Issues
Several parties have suggested that the equivalence value for
renewable electricity should reflect the higher efficiency of electric
vehicles. Deviating from the current system for determining the
equivalence value, where the number of RINs generated is calculated
strictly on the energy content of the fuel entering the vehicle, to a
system that also considered the engine and vehicle efficiency would
introduce significant complexity to the RFS program. Engine
efficiencies vary not only according to fuel type (e.g., gasoline,
diesel, natural gas, electricity), but also according to a number of
other factors, such as the compression ratio of the engine and final
drive ratio. Further, a number of factors specific to each individual
driver, such as the type of driving (primarily city vs. highway),
environmental conditions (e.g., temperature, elevation change, etc.),
and driver behavior, can impact vehicle efficiency. Perhaps more
importantly, none of these factors remain constant, as vehicle
efficiencies are continuously changing over time. Therefore, it could
introduce considerable complexity to consider engine efficiency when
calculating the number of RINs that can be generated for any given
quantity of fuel under the RFS program. For this reason, at this time
we are only seeking comment on a unique methodology for the
determination of RINs from renewable electricity and not other
biofuels.
Another issue for consideration is that the EPA currently
administers programs beyond the scope of the RFS (such as the Light
Duty Vehicle and Heavy Duty Vehicle GHG Standards) that already take
into consideration and provide credit for engine and vehicle
efficiency. Including vehicle efficiency in RIN determination would
result in counting the same benefit under multiple programs. For
example, if the vehicle manufacturer approach were ultimately selected
as the RIN generation structure and an equivalence value that
preferentially rewarded the electricity pathway for LFG adopted,
vehicle manufacturers would essentially be receiving large quantities
of credits for producing EVs under both the RFS program and the Light
Duty Vehicle GHG Standard. Such ``double dipping'' may be perceived as
unwarranted and inequitable by the taxpayers supporting those programs
and the consumers purchasing those vehicles. Similar examples of
``double dipping'' could be postulated for other RIN generation
structures. For example, the utility structure where electricity
produced from LFG is already accruing a production tax credit of $11/
MWh for the plant operator. Providing an additional incentive through
the value of the RIN in the RFS program would therefore be providing
two incentives for the same engine efficiency benefit. We seek comment
on the appropriateness of doing so and introducing vehicle/engine
efficiency into the RIN value for RINs generated
[[Page 80900]]
for renewable electricity and the appropriate means of doing so.
The EPA believes that the best-case scenario would be the adoption
of a structure for generating RINs for renewable electricity that would
simultaneously provide greater incentive for EV use and ownership,
increase the amount of renewable electricity produced, and minimize
challenges related to program oversight. The discussion of potential
program structures is meant to elicit comment on the mechanics of the
program, what is most likely to be directly incentivized by each, and
which entities should ultimately be able to generate RINs in a manner
that will minimize the administrative burden of participation for both
the RIN-generating entities and the EPA. By opening up for comment the
subject of the equivalence value for RINs generated for renewable
electricity, the EPA hopes to receive public comment from all
stakeholders to better inform any changes to the RIN values in the
future. This program represents an opportunity to incentivize more
widespread adoption of EVs, but decisions regarding which structure(s)
should be adopted, how and at what point RINs should be generated, and
what types of data and oversight should be required will ultimately
determine the successfulness of any future program. While we are not
proposing a particular structure at this point in time, we do recognize
the importance of resolving this issue as quickly as possible to
support the growth of renewable electricity and electric vehicles. As
such, we request not only comments that comprehensively address the
range of issues raised in this discussion, but also supporting data
that might allow us to move quickly to a proposal.
VIII. Other Revisions to the RFS Program
A. RVO Reporting
Currently, obligated parties report the total volume of gasoline
and diesel fuel that they produce or import. This volume is used to
calculate their RVOs. In order to more effectively ensure compliance,
we are proposing to revise the RVO reporting requirements for obligated
parties as described in 40 CFR 80.1451(a) in two ways. First, we are
proposing that obligated parties would now report the constituent
products described in 40 CFR 80.1407(c) and (e) separately, instead of
in total beginning with the 2017 compliance year. This would enable the
EPA to more easily track the production of gasoline and diesel by
obligated parties and verify that the reported volumes are accurate.
Second, beginning with the 2017 compliance year, we are also
proposing to require that obligated parties report heating oil
production volumes as part of their annual compliance reports to help
ensure that RVOs are appropriately calculated. While heating oil
production is not counted towards an obligated party's RVO, it is often
chemically identical to diesel fuel. Numerous states and cities in the
Northeast and Mid-Atlantic \307\ have recently revised their standards
for heating oil such that heating oil sold in those states and cities
is (or soon will be) subject to the same 15 ppm ultra-low sulfur
standard that the EPA established for ultra-low sulfur diesel in 40 CFR
part 80, subpart I.\308\ As such, refineries are now shipping their
heating oil to the Northeast in the same pipelines and in the same
batches as diesel fuel. By aligning the production breakdown by
category more closely with other fuels programs and collecting heating
oil production information, the EPA would be able to help ensure that
heating oil and diesel fuel are appropriately accounted for in
obligated parties' RVOs.
---------------------------------------------------------------------------
\307\ Connecticut, Delaware, Maine, Massachusetts, New Jersey,
New York, Rhode Island, Vermont, and the city of Philadelphia, along
with a proposal for the District of Columbia.
\308\ See the New England Fuel Institute's (NEFI) ``State Sulfur
& Bioheat Requirements for No. 2 Heating Oil in the Northeast & Mid-
Atlantic States,'' available in the docket for this action.
---------------------------------------------------------------------------
B. Oil From Corn Oil Extraction
In the RFS2 final rule,\309\ the EPA established two pathways
(pathways F and H in Table 1 to 40 CFR 80.1426) for biomass-based
diesel (D-code 4) or advanced biofuel (D-code 5) made from ``non-food
grade corn oil.'' The lifecycle GHG analyses for these pathways were
based on the EPA's modeling of corn oil recovered from distillers
grains with solubles (DGS) produced by a dry-mill corn ethanol plant
through corn oil extraction. The EPA is proposing to revise pathways F
and H in Table 1 to 40 CFR 80.1426 to specify that the feedstock is
``oil from corn oil extraction,'' and to include a revised and somewhat
broadened definition of ``corn oil extraction.''
---------------------------------------------------------------------------
\309\ See 75 FR 14670 (March 26, 2010).
---------------------------------------------------------------------------
The RFS regulations currently define ``corn oil extraction'' as
``the recovery of corn oil from the thin stillage and/or the distillers
grains and solubles produced by a dry mill corn ethanol plant, most
often by mechanical separation.'' \310\ As the industry has evolved and
matured, new approaches are being used to extract corn oil, and at
different locations in the ethanol production process. Despite the
current regulatory language, we believe that the precise timing and
method of corn oil extraction is not relevant for GHG reductions to be
accomplished pursuant to pathways F and H, provided that: (1) The corn
is converted to ethanol; (2) The corn oil is extracted at a point in
the dry mill ethanol production process that renders it unfit for food
uses without further refining; and (3) The resulting DGS from the dry
mill operation is marketable as animal feed. Therefore, we are
proposing a revised definition of ``corn oil extraction'' to include
these points. The revised definition would include corn oil recovered
at any point downstream of when a dry mill corn ethanol plant grinds
the corn (provided that the three conditions listed above are
satisfied), as corn ground at a dry mill ethanol plant is typically
rendered unsuitable for food uses. For example, this would include
recovery of corn oil before fermentation from the slurry or
liquefaction tanks. It would also include recovery of corn oil after
fermentation from the thin stillage and/or DGS. Further, it would also
include recovery of corn oil by a third-party from DGS produced by a
dry mill corn ethanol plant.\311\ Given that the EPA's modeling of corn
oil from corn oil extraction for approved pathways F and H considered
the impacts of using the DGS co-product as animal feed, the proposed
revision also specifies that the oil extraction results in DGS that is
marketable as animal feed.
---------------------------------------------------------------------------
\310\ See 40 CFR 80.1401.
\311\ Like any other renewable fuel producer, such a third-party
would be required to satisfy requirements designed to ensure that
their biofuel product is derived from renewable biomass.
---------------------------------------------------------------------------
Based on currently available information, the indirect GHG impacts
of using corn oil recovered through means other than corn oil
extraction as a biofuel feedstock are likely to be different than the
GHG impacts for corn oil extraction that the EPA modeled for the RFS2
final rule. The corn fractionation and wet milling processes to recover
corn oil are not covered either by the existing definition or the
proposed definition of ``corn oil extraction.'' \312\ Given the other
potential market impacts of using corn oil recovered by corn
fractionation or wet milling as a biofuel feedstock, the EPA is not in
a position to determine whether corn oil from those sources meets the
GHG reduction thresholds for
[[Page 80901]]
non-grandfathered fuel that is required by the CAA. Companies wishing
to produce non-grandfathered biofuels from corn oil that is not
recovered by corn oil extraction may petition the EPA for approval of
their proposed pathway pursuant to 40 CFR 80.1416.
---------------------------------------------------------------------------
\312\ The RFS regulations at 40 CFR 80.1401 define corn oil
fractionation as ``a process whereby seeds are divided in various
components and oils are removed prior to fermentation for the
production of ethanol.''
---------------------------------------------------------------------------
C. Allowing Production of Biomass-Based Diesel From Separated Food
Waste
In the RFS2 final rule, we determined that waste grease biodiesel
achieved an 86 percent reduction in lifecycle GHG emissions compared to
the baseline diesel fuel. This analysis formed the basis for our
determination that the biodiesel from biogenic waste oils/fats/greases
would qualify for generation of biomass-based diesel (D-code 4) and
advanced biofuel (D-code 5) RINs. These pathways are specified in Rows
F and H of Table 1 to 80.1426.
We have received a request to approve a pathway for the use of non-
cellulosic portions of separated food waste to produce biodiesel. The
process by which the food waste would be converted to biodiesel is
similar to the process we modeled in the RFS2 final rule for waste
oils/fats/greases biodiesel. In addition, as a waste product, separated
food waste would have negligible GHG emissions associated with its
production, as is the case for waste oils/fats/greases. Therefore, we
believe that utilizing separated food waste to produce biodiesel would
have a similar lifecycle emissions profile as using biogenic waste
oils/fats/greases to produce biodiesel. As a result, we are proposing
to amend the pathways specified in Rows F and H of Table 1 to 80.1426
to allow for the generation of D-code 4 and D-code 5 RINs for the
production of biodiesel and advanced biofuel, respectively, from the
non-cellulosic portions of separated food waste. This amendment is
consistent with the CAA, which defines both biomass-based diesel and
advanced biofuels as fuels that result in at least 50 percent less GHG
emissions than the petroleum fuels they replace.
For the same reasons, and to provide more flexibility to renewable
fuel providers, we are also proposing that renewable diesel made from
the non-cellulosic portions of separated food waste would qualify for
the generation of D-code 4 and D-code 5 RINs. This additional
flexibility is also reflected in proposed amendments to Rows F and H of
Table 1 to 80.1426.
D. Registration of New and Expanded Grandfathered Volumes
The CAA and the EPA's implementing regulations provide for two
exemptions to the otherwise generally applicable requirement that all
qualifying renewable fuel attain at least a 20 percent lifecycle GHG
reduction as compared to baseline petroleum fuel. The first exemption
is for a baseline volume of fuel from facilities that commenced
construction prior to December 19, 2007, and completed construction by
December 19, 2010, without an 18 month hiatus in construction.\313\ The
second exemption is for a baseline volume of ethanol from facilities
fired by natural gas or biomass that commenced construction after
December 19, 2007, but prior to December 31, 2009, and completed
construction within 36 months without an 18 months hiatus in
construction.\314\ In both cases the baseline volume of exempt fuel for
qualifying facilities is determined by reference to the most
restrictive of all applicable preconstruction, construction, and
operating permits issued prior to December 19, 2007, or December 31,
2009, depending on which exemption is applicable. If permitted capacity
cannot be determined, the baseline volume is calculated by reference to
actual production volumes in a specified historic time period. In the
RFS2 final rule, the EPA noted that verifying the facts underlying
claims related to exempt baseline volumes was likely to become
increasingly difficult over time, and therefore included a requirement
that applications for registration of facilities claiming an exemption
from the 20 percent GHG reduction requirement be submitted to the EPA
by May 1, 2013.\315\ In a later action, the EPA extended this deadline
to July 1, 2013.\316\ The regulation also provided, however, that the
EPA could continue to process registration applications for facilities
seeking an exemption from the 20 percent GHG reduction requirement
after July 1, 2013, if the EPA, in its sole discretion, determined that
it could adequately verify the factual basis for a producer's claims.
---------------------------------------------------------------------------
\313\ See 40 CFR 80.1403(c).
\314\ See 40 CFR 80.1403(d).
\315\ See 75 FR 14690 (March 26, 2010) and 40 CFR 80.1450(f).
\316\ See 75 FR 26030 (May 10, 2010).
---------------------------------------------------------------------------
Although the EPA envisioned that it would stop processing
registration requests for facilities claiming an exemption from the 20
percent GHG reduction requirement after the regulatory July 1, 2013,
deadline, we have exercised our discretion to review a number of
additional requests on a case-by-case basis. Since the July 1, 2013,
deadline, we have accepted approximately 12 requests for either new
registrations or for amendments to the registered baseline volume of
exempt fuel at a facility. We are aware of approximately 13 additional
requests of this nature pending with the EPA, but expect that there may
be additional applications undergoing initial processing by EPA
contractors.
The EPA is proposing November 16, 2016, as a firm cut-off date for
the receipt by the EPA of registration materials related to facilities
not previously registered with the EPA that seek to produce renewable
fuel exempt from the 20 percent GHG reduction requirement, and for
currently-registered facilities that seek to amend their registrations
to increase the registered baseline volume of renewable fuel exempt
from the 20 percent requirement. The primary reason for this proposed
change is that it has become increasingly difficult for EPA staff to
independently verify the authenticity of the air permits, construction
permits, or similar documents that are in some cases over 10 years old,
to determine whether a complete set of such permits has been provided
by the would-be registrant, or, in the alternative where permitted
capacity cannot be determined, to verify the actual production volumes
from facilities during historic time periods. Thus, we believe this
proposal is justified for the reason expressed in the current
regulation--that registration applications, cannot be verified by the
EPA in the same manner as would have been possible with a timely
submission. While this may also be the case for submissions received
prior to November 16, 2016, we are proposing to review those
submissions on a case-by-case basis. A secondary basis for our proposal
is related to the first. The later the date of registration submissions
that are based on data pre-dating 2007 or 2009, the greater the burden
on EPA staff to attempt to verify the claims. This additional burden
prevents or limits EPA staff from timely attending to other critical
implementation and enforcement matters.
Although there is scant legislative history for EISA to shed light
on the purposes of the statutory exemptions from the 20 percent GHG
reduction requirement, we believe it is likely that the primary purpose
of the exemptions was to protect facilities that had made substantial
investments to supply biofuels to the U.S. market in response to the
incentives provided by Energy Policy Act of 2005, and that might be
financially unable to upgrade their facilities to meet the new 20
percent GHG reduction requirement imposed by EISA. We believe that all
such facilities
[[Page 80902]]
would have submitted registration materials with the EPA prior to
November 16, 2016, and at this point in time allowing continued
registration of facilities claiming an exemption is not warranted given
the difficulty in establishing facts and verifying documents going back
a decade and the considerable administrative burden to the EPA in
attempting to do so.
It should be noted that this proposed change would not affect
facilities that have already registered with the EPA and are producing
renewable fuel pursuant to an exemption from the GHG reduction
requirements under the provisions of 40 CFR 80.1403. Those companies
would continue to be able to produce renewable fuels that are exempt
from the 20 percent GHG reduction requirement, up to their individual
baseline volumes. In addition, facilities can register with the EPA at
any time for the production of fuels meeting the 20 percent (or
greater) lifecycle GHG emissions reduction thresholds applicable to
non-exempt renewable fuel.
Given the dynamic nature of the renewable fuels marketplace,
facilities are frequently bought and sold, and this proposal is not
intended to change the existing practice allowing facilities that
change ownership to retain the exemptions available in 40 CFR 80.1403.
We are proposing to add language to the regulations to make clear that
when a facility is transferred, the new owners are able to register to
produce renewable fuel subject to an exemption in 40 CFR 80.1403 to the
extent the prior owner's registration reflects eligibility for such an
exemption, provided of course that other regulatory requirements are
satisfied.
Taken together, these proposed changes would not allow registration
of facilities claiming new or expanded exempt baseline volumes if their
requests were received by the EPA after November 16, 2016, but would
not impact the operations or eligibility for producing fuel pursuant to
the exemptions in 40 CFR 80.1403 for facilities that are already
registered. If finalized, the EPA would undertake a case-by-case review
of all registration applications received prior to November 16, 2016,
to ascertain if the claims for eligibility to produce biofuel exempt
from the 20 percent GHG reduction requirement are accurate and
verifiable, and requests received after that date would be denied for
the reasons stated above.
E. Flexibilities for Renewable Fuel Blending for Military Use
The EPA proposes to amend 40 CFR 80.1440 to allow parties that
blend renewable fuel to produce fuels for use as transportation fuel,
heating oil, or jet fuel under a national security exemption or that
sell neat renewable fuel for use in vehicles, engines, and equipment
that have a national security exemption for emissions certification to
delegate to an upstream party the RIN-related responsibilities (i.e.,
RIN separation, reporting, recordkeeping, and attest engagement
requirements). These parties could include the U.S. Military itself, or
contractors working for the U.S. Military. The EPA currently has a
provision that allows blenders who handle and blend small volumes of
renewable fuel per year (less than 250,000 gallons per year) to
delegate RIN-related responsibilities to an upstream party. The EPA has
received a number of inquiries from parties that have wished to provide
renewable fuel, either neat or blended into transportation fuel, for
use by the U.S. Military as part of Department of Defense (DOD)
renewable military initiatives. One obstacle to this use of renewable
fuel by the DOD is that, unlike other EPA fuels programs, there are no
exemptions related to national security uses in the RFS regulatory
program.
The EPA believes that it would be appropriate to allow DOD or its
contractors to delegate RFS RIN responsibilities to upstream parties;
doing so would remove a potential obstacle to the use of renewable
fuels by DOD and would promote use of renewable fuel by the military.
Therefore, we are proposing similar upstream delegation provisions for
neat and blended renewable fuels supplied to DOD under a NSE as those
already in place for small renewable fuel blenders. The EPA seeks
comment on whether this is appropriate.
F. Heating Oil Used for Cooling
We are proposing to amend the definition of heating oil in 40 CFR
80.1401. This amendment would expand the current definition of heating
oil to include fuels that differ from those meeting the current
definition only because they are used to cool, rather than heat,
interior spaces of homes or buildings to control ambient climate for
human comfort. We are also proposing to make minor modifications to the
registration, reporting, PTD, and recordkeeping requirements for
renewable heating oil to correspond with this change. We have received
questions related to the use of renewable heating oil in equipment that
cools interior spaces. We believe that displacing the use of petroleum
based fuel oil with renewable heating oil for cooling is consistent
with the CAA section 211(o) requirements and should be allowed. We seek
comment on whether this approach is appropriate.
G. Separated Food Waste Plans
We are proposing to amend the RFS registration procedures for
separated food waste plans. The current regulations require that plans
include: ``(1) The location of any municipal waste facility or other
facility from which the waste stream consisting solely of separated
food waste is collected; and (2) A plan documenting how the waste will
be collected, how the cellulosic and non-cellulosic portions of the
waste will be quantified, and for ongoing verification that such waste
consists only of food waste (and incidental other components such as
paper and plastics) that is kept separate since generation from other
waste materials.'' \317\ In addition to submission of separated food
waste plans during RFS registration, the EPA also requires that
renewable fuel producers using separated food waste feedstock update
the registration information whenever there is a change to the plan,
and in some cases, the newly updated plan must be reviewed by a third-
party engineer in accordance with EPA registration procedures. The EPA
has received numerous company updates for production facilities with
separated food waste plans, and some parties have noted that the
requirement to identify and update suppliers of feedstocks through a
plan is overly burdensome.
---------------------------------------------------------------------------
\317\ See 40 CFR 80.1450(b)(1)(vii)(B).
---------------------------------------------------------------------------
Recognizing that business relationships for recovery of food wastes
evolve and that a renewable fuel producer may elect over time to
purchase feedstocks from different or multiple parties, the EPA
proposes to remove the requirement to provide the location of every
facility from which separated food waste feedstock is collected. It
should also be noted that renewable fuel producers are required to
retain records that contain this information under the recordkeeping
requirements under 40 CFR 80.1454. The RFS regulations only allow
renewable fuel producers to generate RINs for fuel if they can
demonstrate, pursuant to the recordkeeping requirements, that the fuel
was produced from renewable biomass. The recordkeeping section of the
regulations requires renewable fuel producers to
[[Page 80903]]
keep documents associated with feedstock purchases and transfers that
identify where the feedstocks were produced and are sufficient to
verify that the feedstocks meet the definition of renewable
biomass.\318\ Removing this registration requirement would alleviate
numerous company registration updates as a facility's feedstock
supplier list evolves, as well as make it easier for renewable fuel
producers to have their separated food waste plans reviewed in a
timelier manner. However, renewable fuel producers would still be
required to establish that they used a qualifying feedstock to generate
RINs.
---------------------------------------------------------------------------
\318\ See 40 CFR 80.1426(a) and 80.1454(c) and (d).
---------------------------------------------------------------------------
We are also proposing to modify the regulations to specify that
separated food waste plans identify the type(s) of separated food waste
to be used and the type(s) of establishment the waste will be collected
from. For instance, CAA section 211(o) identifies ``recycled cooking
and trap grease'' as an example of a type of separated food waste.
Examples of types of establishments could be restaurants,
slaughterhouses, or specific food production plants (the kind of food
production should be provided). We believe this information is
necessary for the EPA to determine whether a renewable fuel producer
can make fuel from its proposed feedstock under currently approved
separated food waste pathways. Without this information, we would not
know what the specific feedstock is (e.g., tallow, yellow grease, etc.)
or whether it would qualify as a separated food waste.
We are also proposing to require that producers of renewable fuels
made from biogenic waste oils/fats/greases that are not separated food
waste to submit a plan at registration with many of the same
requirements as the plan for producers of renewable fuels made from
separated food waste. We would henceforth refer to such plans as
``waste oils/fats/greases feedstock plans.'' There is significant
overlap between the two categories of feedstock, with a considerable
quantity of biogenic waste oils/fats/greases qualifying as renewable
biomass as a result of its additional qualification as separated food
waste. For these reasons, the EPA has required parties intending to use
biogenic waste oils/fats/greases as a renewable fuel feedstock to
submit separated food waste plans at registration. In addition to
helping the EPA determine if the feedstock in question meets renewable
biomass requirements, the EPA has found that the plans help the EPA
assess whether the feedstocks specified by a prospective producer
qualify as biogenic waste oils/fats/greases. This assessment is made on
a case-by-case basis. This proposed amendment will conform the
regulations to the EPA's current practice. A party fully describing
their feedstock in a separated food waste plan would not be required to
submit an additional waste oils/fats/greases plan. Since most, if not
all, producers of renewable fuel from biogenic waste oils/fats/greases
have submitted a separated food waste plan at registration, we do not
believe that this revision would add much, if any, burden to existing
registered facilities. We propose that those few registered producers
using biogenic waste oils/fats/greases who have not previously
submitted a separated food waste plan at registration or in a
subsequent registration update would be required to do so as part of
their next periodic registration update. We seek comment on whether
requiring waste oils/fats/greases feedstock plans for producers of
renewable fuels from biogenic waste oils/fats/greases is appropriate
and whether we should require any additional information.
H. RFS Facility Ownership Changes
We are proposing to amend the RFS registration, EMTS reporting, and
RIN generation requirements to more explicitly outline requirements for
renewable fuel producers that transfer the ownership of a facility that
was registered immediately preceding the sale. Throughout the
implementation of 40 CFR part 80 fuels programs (e.g., RFG, Anti-
dumping, Gasoline Sulfur, RFS, etc.), the EPA has treated the transfer
of ownership of a facility as requiring a new registration. However,
the EPA has recognized that many elements of the registration for the
facility previously registered to another renewable fuel producer
remain the same upon change of ownership and has, in some cases,
allowed parties to rely upon previously submitted registration
materials. The EPA has tried to work with companies to minimize
disruption of continued operation of the facility. However, some new
owners have expressed confusion over what the appropriate registration
procedures are incident to the transfer of ownership of a previously
registered facility. To help ameliorate this potential confusion, we
are proposing to amend the RFS registration, EMTS reporting, and RIN
generation requirements in three ways.
First, we are proposing that the regulations explicitly note that
RINs cannot be generated nor assigned to any batches of renewable fuels
in EMTS until a renewable fuel producer has completed all applicable
registration requirements and the EPA has accepted that renewable fuel
producer's registration. Although this requirement is apparent under
the current regulations, since the requirements for RIN generation at
40 CFR 80.1426 only allow for the generation of RINs if all
registration requirements under 40 CFR 80.1450 are satisfied, we
believe that the requirement can be re-iterated for additional clarity.
Second, we are proposing specific requirements for parties that are
assuming ownership of a facility that was already registered by another
renewable fuel producer. The renewable fuel producer that would newly
acquire the previously registered facility would have to submit all
applicable registration information required for the registration of a
new renewable fuel producer, an appropriately conducted engineering
review, and a letter from the responsible corporate officers (RCOs) of
both companies notifying the EPA of the date the transfer of ownership
is expected to take place. In addition, proof of sale would need to be
submitted after the transfer of ownership is completed. Consistent with
the requirements of the registration of a new renewable fuel producer,
the new renewable fuel producer would need to supply all information to
the EPA (with one exception noted below) 60 days prior to the
generation of RINs.\319\
---------------------------------------------------------------------------
\319\ See 40 CFR 80.1450(b).
---------------------------------------------------------------------------
The only exception to the 60-day requirement would be that the new
renewable fuel producer may supply the proof of sale or ownership
within three business days of the effective date of the transfer of
ownership. We recognize that it will likely be impractical for parties
to provide appropriate proof of sale or ownership until on or after the
actual effective date of the transfer of ownership. Therefore, we are
proposing to allow some flexibility on when renewable fuel producers
may submit the proof of sale or ownership. The EPA would be able to
review all other registration materials well in advance of the
effective date of the transfer of ownership and be in a position to
approve the new renewable fuel producer's registration shortly after
receiving the proof of sale or ownership.
Third, we are proposing that the regulations state that the EPA has
the sole discretion to allow the new renewable fuel producer to
retroactively generate RINs for renewable fuel produced and sold in the
interim between the effective date of transfer of ownership of the
facility and EPA acceptance of new registration materials. With EPA
approval, the RINs could be assigned in EMTS and back-
[[Page 80904]]
dated to the time of renewable fuel sale. In most cases, the EPA should
be able to accommodate renewable fuel producers that submit
registration materials in accordance with the proposed deadlines for
facility ownership changes (i.e., the EPA would be able to accept the
registration submission and administratively activate the company in
CDX and EMTS with sufficient time for the company to generate RINs
within the five business day limitation for such transactions in EMTS).
However, instances may arise where the EPA cannot administratively act
even when a company has satisfied all the proposed regulatory
requirements (e.g., an upgrade to EMTS or government closure). In such
cases, the EPA would need to allow the company to bypass certain
administrative business rules in CDX and EMTS to generate RINs. This
discretion should allow the EPA an adequate amount of time to
thoroughly review the submitted registration materials while not
risking the continued operation or profitability of facilities that
were previously registered. The EPA would not, however, use this
discretion to allow the retroactive generation of RINs at a facility
for which the new owner did not satisfy all RFS registration
requirements.
Taken together, we believe these changes outline what requirements
parties are required to meet to register a facility that is changing
ownership. We also believe that the proposed changes would allow the
EPA the flexibility to work with parties to ensure that companies can
continue operation of the facility and generate RINs, when appropriate.
We seek comment on whether there are any additional requirements we
should specify for parties that are assuming the ownership of a
facility, and whether our proposed approach is appropriate.
I. Changes to the Requirements for Independent Third-Party Professional
Engineers and Electronic Submission of Engineering Reviews
Independent third-party auditors and professional engineers play
critical roles in ensuring the integrity of the RFS program and if
renewable fuel is allowed to be produced through the use of
biointermediates as we are proposing, there will be a significant
expansion in the scope and number of regulated entities under the RFS
program, making third-party verifications even more critical. However,
in recent years the EPA has taken a number of enforcement actions
against renewable fuel producers that generated invalid RINs,\320\ and
the extent of unlawful and fraudulent activities associated with the
RFS program, as demonstrated by these cases, is troubling given the
roles that independent third-parties play in the RFS program. The
independent third-party professional engineer ensures that a renewable
fuel producer can actually produce renewable fuel in accordance with
the RFS regulations and thus generate valid RINs, and the independent
third-party auditor (when hired by a renewable fuel producer) verifies
that the renewable fuel produced adheres to its registered and approved
feedstocks and processes, and therefore qualifies for RIN generation
under the QAP program. Because we are concerned that independent third-
party auditors and professional engineers may not be mitigating
unlawful and fraudulent activities in the RFS program to the extent
needed for a successful program, we are proposing to strengthen the
requirements that apply to these entities. Specifically, we are
proposing to modify the requirements for the independent third-party
auditors that use approved QAPs to audit renewable fuel production to
verify that RINs were validly generated by the producer. The purpose of
these modifications is to strengthen the independence requirements that
protect against conflicts of interest.
---------------------------------------------------------------------------
\320\ See https://www.epa.gov/enforcement/civil-enforcement-renewable-fuel-standard-program.
---------------------------------------------------------------------------
We are also proposing several changes to the requirements for the
professional engineer serving as an independent third-party conducting
an engineering review for a renewable fuel producer as part of the RFS
registration requirements and/or conducting other duties in connection
with a renewable fuel producer's registration updates. First, we are
proposing to strengthen the independence requirements for third-party
professional engineers by requiring those engineers to comply with
similar requirements (including the additional requirements we are
proposing) to those that currently apply to independent third-party
auditors. Second, we are proposing that the third-party professional
engineer would be required to register directly with the EPA (as is
currently required for third-party auditors). This includes submission
of documentation that the third-party engineer meets minimum
qualifications (e.g., independence and professional competency
requirements) and maintains professional liability insurance. Third, as
part of any engineering review, the third-party engineer would be
required to submit electronic engineering reports directly to the EPA.
This would be a change from current provisions, which require that the
renewable fuel producer submits the engineering review report and
allows the option for submission of hardcopy engineering review reports
via the mail. Fourth, we are proposing that third-party professional
engineers provide documents and more detailed engineering review write-
ups that demonstrate the professional engineer performed the required
site visit and independently verified the information through the site
visit and independent calculations. Fifth, we are proposing new
prohibited acts applicable to third-party professional engineers to
reduce the potential of a conflict of interest with the renewable fuel
producer. The purpose of these requirements is to help the EPA and
obligated parties better ensure that third-party audits and engineering
reviews are being correctly conducted, provide greater accountability,
and ensure that third-party auditors and professional engineers
maintain a proper level of independence from the renewable fuel
producer. Taken together, we believe these proposed requirements would
help avoid RIN fraud by strengthening third-party verification of
renewable fuel producers' registration information.
1. Third-Party Auditors
As discussed extensively in the EPA's Accidental Release Prevention
Requirements: Risk Management Programs under the Clean Air Act proposed
rule,\321\ third-party independence is critical to the success of any
third-party compliance program. Based on the research discussed in that
proposal, we believe that the independence requirements applicable to
third-party auditors in the RFS program should be clarified and
strengthened to further minimize (and hopefully eliminate) any
conflicts of interest between auditors and renewable fuel producers
that might facilitate improper RIN validation. Currently, the RFS
regulations require the auditor to be free from any interest, or the
appearance of any interest, in the renewable fuel producer's
business.\322\ We believe that an appearance of a conflict of interest
exists in situations where auditors may have incentives to ensure that
their customers continue to produce RINs by not reporting potential
issues arising from audits. We are proposing language that clarifies
the current prohibition against an appearance of a conflict of interest
to include:
---------------------------------------------------------------------------
\321\ See 81 FR 13638, 13654-62 (March 14, 2016).
\322\ See 40 CFR 80.1471(b)(4) and (5).
---------------------------------------------------------------------------
[[Page 80905]]
Acting impartially when performing all auditing
activities.
Not having conducted research, development, design,
construction, or consulting services for the producer within the last
three years.\323\
---------------------------------------------------------------------------
\323\ For purposes of this requirement, consulting does not
include performing or participating in third-party audits pursuant
to 40 CFR 80.1472.
---------------------------------------------------------------------------
Not providing business or consulting services for the
producer for a period of at least three years following submission of
the final QAP audit for the producer.
Ensuring that all personnel involved in audit activities
for a specific producer do not accept future employment with that
producer for a period of at least three years following submission of
the final QAP audit for the producer.
These provisions are intended to prevent third-party auditors from
expecting, anticipating, or conducting prospective ``cross-selling'' of
other services unrelated to the QAP verification. They are also
intended to prevent third-party auditors from seeking or obtaining
employment from producers for which the auditors are conducting QAP
verification activities. In both instances, we believe that third-party
auditors could be unduly influenced in their QAP verification
activities as a result. With regard to companies that employ personnel
who previously worked for or otherwise engaged in consulting services
with a producer, those companies meet the independence criteria when
such personnel do not participate on, manage, or advise the audit
teams. Additionally, employees of these companies are not prohibited
from accepting future employment with a producer as long as they were
not involved in performing or managing the audit.
Additionally, we are proposing to preclude third-party auditors
from providing initial and triennial engineering reviews for the same
renewable fuel producers. In the RFS QAP final rule, we stated that we
continued to be concerned that allowing an auditor to also perform
engineering reviews and attest engagements will tie the auditor's
financial interests too closely with the renewable fuel producers being
audited and could create incentives for auditors to fail to report
potentially invalid RINs; however, we did not want to exclude potential
third-party auditors that had significant knowledge of the RFS program
and renewable fuel production facilities from participating in the QAP
program.\324\ To balance those concerns, the final rule prohibited
third-party auditors from continuing to provide annual attest
engagements and QAP implementation to the same audited renewable fuel
producer, but allowed third-party auditors to continue to conduct
engineering reviews. After further evaluation, we continue to have
significant concerns that third-parties that perform engineering
reviews and provide QAP services to the same producer may have
financial incentives to overlook certain registration and/or RIN
generation issues to continue a revenue stream from a renewable fuel
producer. Precluding the same entity from providing both engineering
reviews and QAP services for the same renewable fuel producer adds an
additional level of assurance that RINs are being generated validly.
Furthermore, the EPA was initially concerned that the number of third-
parties available to conduct both engineering reviews and QAP services
was limited. However, the EPA now believes that there are a sufficient
number of parties with RFS knowledge to provide these services.
Therefore, we believe that allowing these parties to perform both
services is no longer needed. We are also proposing that a third-party
auditor that provided an engineering review for a renewable fuel
producer prior to November 16, 2016, would not be precluded from
implementing a QAP for that producer so long as the auditor provides no
more engineering review services in the future.
---------------------------------------------------------------------------
\324\ See 79 FR 42094 (July 18, 2014).
---------------------------------------------------------------------------
We seek comment on whether these criteria are appropriate and
sufficient to prevent any conflict of interest or the appearance of any
conflict of interest between the third-party auditor and the renewable
fuel producer and to provide maximum assurances that RINs are being
generated validly. We seek comment on whether any adjustments to these
criteria are necessary for maximum effectiveness and efficiency,
including comments or suggestions on how to provide more flexibility
into these criteria. We also seek comment on whether the proposed
three-year timeframe to separate the audit from other business
arrangements is appropriate.
2. Third-Party Professional Engineers
In 2013, a report from the Inspector General for the EPA
highlighted concerns with the independence requirements of third-party
professional engineers in the RFS program.\325\ One way to partially
address those concerns is to strengthen the independence requirements
for third-party professional engineers and to require submission of
engineering reviews from third-party professional engineers directly to
the EPA. Currently, third-party professional engineers conduct the
engineering review and often provide the report for submission to the
renewable fuel producer, who must then submit the report to the EPA.
---------------------------------------------------------------------------
\325\ U.S. EPA, Office of Inspector General, ``The EPA Should
Improve Monitoring of Controls in the Renewable Fuel Standard
Program,'' Report No. 13-P-0373, September 5, 2013.
---------------------------------------------------------------------------
Engineering reviews from independent third-party professional
engineers are integral to the successful implementation of the RFS
program. Not only do they ensure that RINs are properly categorized,
but they also provide a check against fraudulent RIN generation. As we
have designed our registration system to accommodate the association
between third-party auditors and renewable fuel producers to implement
the RFS QAP, we have realized that both the way engineering reviews are
conducted and the nature of the relationships among the third-party
professional engineers, affiliates, and renewable fuel producers are
analogous to third-party auditors and renewable fuel producers. As a
result, we are proposing to strengthen the independence requirements
for third-party professional engineers by requiring those engineers to
comply with similar requirements (including the additional requirements
we are proposing) to those that currently apply to independent third-
party auditors. We seek comment on whether the independence
requirements that apply to third-party auditors should also apply to
third-party professional engineers, and whether any adjustments to the
third-party auditor independence criteria are necessary for third-party
engineers.
We are also proposing that third-party professional engineers
become regulated parties under the RFS program and register with the
EPA. Requiring third-party professional engineers to register would
allow the EPA to determine that the basic minimum qualifications (e.g.,
independence and professional competency requirements) are met. One
goal we have with proposing the registration submission changes is to
leverage the IT infrastructure that we developed to implement the RFS
QAP program to deal more directly with the third-party professional
engineers. This means that third-party professional
[[Page 80906]]
engineers would need to register with the EPA through CDX, the EPA's
electronic reporting site, and submit engineering reviews
electronically on forms established by the EPA.
Currently, third-party professional engineers conduct the
engineering review and often provide the report for submission to the
renewable fuel producer, who must then submit the report to the EPA.
This creates an opportunity, or at least the perception of an
opportunity, for the renewable fuel producer to alter the information
submitted to the EPA. Additionally, renewable fuel producers have
several options for submitting their engineering review to the EPA: (1)
A hard-copy typically as a written report and attachments in a three-
ring binder sent through the mail; (2) An engineering review form with
accompanying report and attachments in PDF format uploaded to the EPA's
registration system (CDX or OTAQREG); or (3) Submission using an EPA-
developed electronic webform. The current submission of hard-copy
engineering reviews presents a significant administrative burden on EPA
staff to process the mail, scan the engineering review report, and
upload it to the EPA system to route to the team for review. The hard-
copy engineering reviews also create a large volume of paper records
that the EPA must further store and protect following CBI requirements,
as appropriate. By requiring engineering reviews to be submitted
electronically, the EPA would be able to reduce the administrative
burden of processing these reports, as well as reduce a significant
amount of paper that is used since these reports are typically hundreds
of pages long. This proposed change may reduce burden for the
submitters as well.
These proposed requirements would eliminate the current options for
renewable fuel producers to submit engineering review reports directly
to the EPA and for third-party professional engineers to submit
engineering review reports in hardcopy via the mail, which could be a
concern for some parties. We seek comment on these proposed changes.
If the proposed changes to engineering reviews are finalized, we
plan to develop and require a new electronic webform for engineering
reviews reflecting those changes at some point in the future. The added
benefits of the electronic reporting form are a reduction in errors and
omissions for engineering reviews and a more IT-accessible format that
would reduce the amount of time that the EPA takes to review and accept
RFS registrations. This should allow EPA acceptance of registrations
for renewable fuel producers in a timelier manner. However, since the
electronic webforms for the engineering reviews may require the EPA to
develop new or revise existing systems, including troubleshooting, we
may require significant time to fully implement this component after
the effective date of these requirements.
We are also proposing to improve the RFS registration requirements
for engineering reviews by requiring site visits to take place when the
facility is producing renewable fuel. This will provide the regulated
community and the EPA with greater confidence in the production
capabilities of the renewable fuel facility. Since the adoption of the
RFS2 requirements in 2010, most engineering reviews are conducted by a
handful of third-party professional engineers. Some of these engineers
are using templates that make it difficult for the EPA to determine
whether registration information was verified. We are concerned that,
in some instances, the third-party engineers are relying too heavily on
information provided by the renewable fuel producers, and not
conducting a truly independent verification. In order to provide
greater confidence in third-party engineering reviews, we are proposing
that the engineering review submission include evidence of a site visit
while the facility is producing renewable fuel(s) that it is registered
to produce. We also propose to incorporate the EPA's current
interpretation and guidance into the regulations regarding actions that
third-party engineers must take to verify information in the renewable
fuel producer's registration application. The amendments would explain
that in order to verify the applicable registration information, the
third-party auditor must independently evaluate and confirm the
information, and cannot rely on representations made by the renewable
fuel producer. We believe these amendments would help provide greater
assurance that third-party professional engineering reviews are based
upon independent verification of the required registration information
in 40 CFR 80.1450, helping to provide enhanced assurance of the
integrity of the registration materials submitted by the facility, as
well as the renewable fuel they produce.
Finally, we are proposing prohibited activities for third-party
professional engineers. Specifically, we are proposing to prohibit
third-party professional engineers from failing to identify incorrect
information in a renewable fuel producer's registration, failing to
properly conduct an engineering review, failing to disclose to the EPA
any financial, professional, business, or other interest with parties
for whom the third-party professional engineer provides services for
under the RFS registration requirements. The EPA staff that review RFS
registrations have concerns that third-party professional engineers may
be acting, independently or through an affiliate, as consultants and
agents for the same renewable fuel producer, or that, directly or
through an affiliate, they may have a financial interest in the
renewable fuel producer, may not appropriately conduct engineering
reviews, or may not meet the requirements for independence to qualify
as a third-party. We believe that making third-party professional
engineers more accountable for properly conducting engineering reviews
under the regulations and requiring that they interact more directly
with the EPA will help our ability to identify potential conflicts of
interests and bring enforcement actions against third-party
professional engineers should an issue arise.
We seek comment on these proposed changes and input on whether
there is anything else the EPA should do to help ensure that third-
party professional engineering reviews are conducted so as to maximize
the submission of relevant and accurate information to the EPA.
J. Additional Registration Deactivation Justifications
We are proposing additional circumstances in which the EPA may
deactivate the registration of a company, third-party auditor, or
third-party engineer under 40 CFR 80.1450(h). In July 2014, the EPA
finalized requirements that describe circumstances under which the EPA
may deactivate a company registration and an administrative process to
initiate deactivation that provides companies an opportunity to respond
to and/or submit the required information in a timely manner.\326\
Since finalizing these requirements, the EPA has identified a number of
other cases in which it would be appropriate to deactivate the
registration of a company. In addition we believe the provisions should
be extended to cover deactivation of registrations for third-party
auditors and third-party engineers. Specifically, we propose to amend
the current regulations to provide that the EPA may deactivate
registrations of a company,
[[Page 80907]]
third-party auditor, or third-party engineer for the following reasons:
---------------------------------------------------------------------------
\326\ Under this administrative process, the company will have
14 calendar days from the date of the notification to correct the
deficiencies identified or explain why there is no need for
corrective action. See 40 CFR 80.1450(h)(2)(i).
---------------------------------------------------------------------------
The company, third-party auditor, or third-party engineer
fails to comply with the registration requirements of 40 CFR 80.1450.
The company, third-party auditor, or third-party engineer
fails to submit any required report within thirty days of the required
submission date.
The company, third-party auditor, or third-party engineer
fails to pay a penalty or to perform any requirements under the terms
of a court order, administrative order, consent decree, or
administrative settlement agreement between the company and the EPA.
The company, third-party auditor, or third-party engineer
submits false or incomplete information.
The company, third-party auditor, or third-party engineer
denies the EPA access or prevents the EPA from completing authorized
activities under CAA section 114 despite our presenting a warrant or
court order. This includes a failure to provide reasonable assistance.
The company, third-party auditor, or third-party engineer
fails to keep or provide the EPA with the records required in 40 CFR
80.1450.
The company, third-party auditor, or third-party engineer
otherwise circumvents the intent of the CAA or 40 CFR part 80, subpart
M.
These deactivation circumstances are consistent with cases where
the EPA may deny or revoke a certificate of conformity under 40 CFR
1051.255(c) and 86.442-78 for engines and vehicles manufactured in or
imported into the U.S. In addition, we are proposing that in instances
of willfulness or those in which public health, interest, or safety
requires otherwise, the EPA may also deactivate the registration of a
company, third-party auditor, or third-party engineer registration
without providing notice to the company, third-party auditor, or third-
party engineer prior to deactivation, and would send written
notification to the RCO describing the reasons for the deactivation.
Companies, third-party auditors, or third-party engineers could still
submit new registrations after appropriate actions were taken by the
company, third-party auditor, or third-party engineer.
We believe these proposed amendments would help parties better
understand when the EPA intends to restrict a party's participation in
the RFS program as well as the procedures that will be used in such
circumstances. We seek comment on whether there are any additional
circumstances when the EPA should deactivate the registration of a
company, third-party auditor, or third-party engineer.
K. Registration of Biogas Producers
Consistent with our proposed approach for biointermediate
producers, we are proposing that biogas producers whose biogas is used
to produce renewable electricity or CNG/LNG would be required to
register with the EPA and would be liable for violations of the
applicable RFS requirements, and that renewable fuel producers may only
generate RINs for renewable fuel produced from biogas sourced from a
registered biogas producer.\327\ A biogas producer would be defined as
the owner of any landfill, municipal wastewater treatment facility
digester, agricultural digester, or separated MSW digester that
produces biogas used to produce renewable electricity or CNG/LNG.
Biogas producers registering with the EPA would be required to undergo
a third-party engineering review, which we believe would help ensure
that the RINs generated for fuel derived from this biogas are indeed
valid. We are not proposing that biogas producers submit additional
reports to the EPA since the existing reporting requirements for
parties that generate RINs for fuel made from biogas are sufficient. We
also do not believe that additional PTD, attest engagement, or
recordkeeping requirements are necessary. Our intent is not to
substantially alter the current requirements for renewable electricity
or CNG/LNG produced from biogas, but rather to provide an additional
level of assurance through registration of biogas producers that biogas
used to make renewable electricity or CNG/LNG meets regulatory
requirements. \328\ However, we recognize that additional reporting and
third-party verification (i.e., through attest engagements) could help
ensure that RINs generated for fuel derived from biogas have the same
level of compliance assurance as RINs generated for fuel produced
through other pathways. We request comment on this proposed change and
whether there are any additional requirements that should be imposed on
biogas producers.
---------------------------------------------------------------------------
\327\ It should be noted that in cases where the biogas producer
is the RIN-generating party, the producer would already be
registered with EPA, and no additional registration would be
required.
\328\ Biogas producers would have to keep records related to
their registration similar to other parties.
---------------------------------------------------------------------------
L. New RIN Retirement Section
We are proposing to create a new section in the RFS regulations for
RIN retirements. The regulations have specific sections that address
when and how parties may generate and separate RINs. However, the cases
where parties must retire RINs are identified in various sections
throughout the regulations. The new section of the RFS regulations for
RIN retirements would simply organize these current sections into one
place. The EPA is aware of some confusion for some responsible parties
causing those parties to improperly retire RINs or fail to retire RINs
when they have a responsibility to do so under the regulations.
Improper retirements can lead to a time-consuming remediation process,
both for the EPA and responsible parties. This new section attempts to
organize these requirements into one location in the regulations to
make these determinations simpler to locate and understand.
We are also proposing new regulatory language for cases requiring
RIN retirement that are identified in EMTS, but may not be clear in the
regulations, given their current organization. Our intent is not to add
additional burden on parties that must retire RINs under the RFS
program, but rather to make the regulations consistent with how parties
retire RINs in EMTS and help reduce potential confusion regarding the
situations when parties must retire RINs.
Taken together by enumerating the specific instances in which a
party must retire RINs in a new specific section of the regulations and
by making those retirements consistent with how parties
administratively retire RINs in EMTS, we believe that the newly
proposed RIN generation section would provide beneficial clarification.
M. New Pathway for Co-Processing Biomass With Petroleum To Produce
Cellulosic Diesel, Jet Fuel, and Heating Oil
One of the potential technologies that may be enabled to
participate in the RFS program by the proposed regulations for
biointermediates is the production of bio-oil from cellulosic
feedstocks. While these bio-oils can be upgraded to finished
transportation fuels at stand-alone facilities that process only
renewable biomass and RINs can be generated for these fuels under the
existing RFS regulations, it may be more efficient and cost-effective
to upgrade these bio-oils along with petroleum crude oils at existing
refineries. Currently, pathways exist for renewable gasoline and
gasoline blendstock (Pathway M in Table 1 to 40 CFR 80.1426) and
naphtha (Pathway N in Table 1 to 40 CFR 80.1426) produced from
cellulosic biomass that is co-processed with petroleum. However, there
is currently no pathway for diesel,
[[Page 80908]]
jet fuel, or heating oil produced in this manner.
The current pathway for cellulosic diesel, jet fuel, and heating
oil (Pathway L in Table 1 to 40 CFR 80.1426) excludes processes that
co-process renewable biomass and petroleum. To qualify as cellulosic
diesel, a fuel must meet the requirements for both cellulosic biofuel
and biomass-based diesel. The definition of biomass-based diesel
explicitly excludes renewable fuels that are derived from co-processing
biomass with petroleum, and therefore a process that produces diesel,
jet fuel, or heating oil by co-processing renewable biomass with
petroleum cannot qualify as biomass-based diesel or cellulosic diesel
under Pathway L in Table 1 to 40 CFR 80.1426. The EPA is proposing a
new pathway that would allow these fuels to qualify as cellulosic
biofuel and generate cellulosic (D-code 3) RINs, as cellulosic biofuels
that are not prohibited from being derived from biomass co-processed
with petroleum. We are also proposing to amend the definition of
cellulosic diesel to no longer require that it meet the definition of
biomass-based diesel, and proposing to create a new definition for
cellulosic biomass-based diesel to refer to fuels that meet the
definition for both cellulosic biofuel and biomass-based diesel. Fuels
that meet the cellulosic biomass-based diesel definition would be able
to generate D7 RINs, while fuels that meet the cellulosic diesel
definition but not the cellulosic biomass-based diesel definition due
to co-processing with petroleum would be able to generate D3 RINs.
We believe that the lifecycle modeling that was done for the
current pathway for cellulosic diesel, jet fuel, and heating oil
provides sufficient basis for concluding that fuels produced using
similar processes and technologies, where the only difference is that
the bio-oil is co-processed with petroleum, meet the appropriate GHG
reduction thresholds. Any emissions related to the transportation of
bio-oil from the production site to a refinery or other facility that
co-processes renewable biomass with petroleum to produce transportation
fuel is not expected to have a significant impact on the emissions of
these fuels. We seek comment on whether this proposed approach is
appropriate.
N. Vegetable Oil as Feedstock and Renewable Fuel
Vegetable oils (e.g., soy oil, algal oil, corn oil, and many waste
plant oils) can be used as feedstock both for biodiesel production and
for the production of drop-in renewable diesel that meets the same
specifications as petroleum-based diesel fuel. However, vegetable oils
can also be blended without processing into petroleum diesel fuel in
concentrations up to 5 percent for use in conventional diesel engines,
and can be used in their neat form in vehicle engines that have been
specifically modified to run on it. Given the possible use of vegetable
oils both directly as a transportation fuel and as a feedstock for the
production of biodiesel and drop-in renewable diesel fuels, it has been
the subject of an overwhelming number of the enforcement actions taken
by the EPA for RIN fraud under the RFS program. Typically, parties
engaging in fraudulent activity simply purify or clean up vegetable oil
to produce a product that they generate RINs for, claiming that it
would be used as transportation fuel, but instead sell the vegetable
oil to another facility that uses it to produce biodiesel for which
RINs are also generated. These cases of RIN fraud have substantially
undermined the integrity of the RFS program and significantly increased
compliance costs for affected parties as they have had to retire and/or
replace the invalid RINs. We believe the RIN fraud problem with
vegetable oil is so pervasive that it merits a different approach to
RIN generation than most other types of renewable fuels.
As an initial matter, the EPA is proposing two regulatory
definitions for vegetable oil that differentiate between its use as a
feedstock and its use as a renewable fuel. When vegetable oil is used
as a feedstock, we propose to refer to it as ``straight vegetable oil
(SVO)''. If the same material is used as renewable fuel (either in a
blend with petroleum diesel or in neat form for use in a modified
engine), we propose to refer to it as ``viscous non-ester renewable
diesel (VRD).'' RINs would not be generated for SVO because it is
intended to be used as a feedstock rather than as a renewable fuel, but
RINs could be generated for VRD under appropriate conditions.
However, to avoid the enforcement problems noted above, we are
proposing unique provisions related to RIN generation for VRD. Although
under the RFS program it is generally the renewable fuel producer that
generates RINs for renewable fuel, we propose that for VRD this would
only be the case if it is intended to be used in its neat form.
Furthermore, in such circumstances the producer would be required to
demonstrate in their registration submission that an end-user has: (a)
Modified engines to operate on the fuel in accordance with an EPA-
approved Clean Alternative Fuel Conversion under 40 CFR part 85,
subpart F; and (b) contracted with the producer to use the neat VRD as
transportation fuel, heating oil, or jet fuel. Given that there are
relatively few such EPA-approved Clean Alternative Fuel Conversions, it
should not be difficult for the EPA to establish that an end-user has
made the necessary modifications at the time of VRD producer
registration and would help ensure that RINs are only generated for
fuel that is actually used as transportation fuel, heating oil, or jet
fuel. Additionally, we are proposing that the VRD producer would need
to have the use of the neat VRD verified by a third-party auditor under
the QAP program prior to RIN generation.
In instances where VRD is to be blended with petroleum diesel, we
propose that the only party that could generate RINs for VRD would be
the party actually doing the blending (i.e., the party that uses the
VRD to produce a fuel that meets ASTM D975 standards for No. 1 or No. 2
diesel fuel). This approach will best ensure that RINs are not
generated for vegetable oils that are actually destined to be used as a
feedstock for biodiesel production.\329\ Under this proposal, the
producers of VRD would be subject to all of the proposed registration,
recordkeeping, and reporting requirements for biointermediate producers
as described in section III.F of this preamble. Parties blending VRD
with petroleum diesel would be required to register with the EPA in a
manner that is similar to renewable fuel producers; registration would
include, for example, an independent third-party engineering review
designed to verify that they have the capability for VRD blending.
Since VRD blenders would be RIN generators, they would also be required
to submit RIN transaction reports, and keep records related to RIN
transactions and blending activity.
---------------------------------------------------------------------------
\329\ Under this proposed approach, producers of SVO destined
for use as a feedstock to produce biodiesel or renewable diesel
would continue to not have to register or report to the EPA under
the RFS program.
---------------------------------------------------------------------------
VRD would be defined as a form of ``non-ester renewable diesel''
which, in turn, is a type of biomass-based diesel. Therefore, biomass-
based diesel RINs (D-code 4) could be generated for VRD under the
existing renewable diesel pathways in Table 1 to 40 CFR 80.1426. We are
proposing to amend the definition of non-ester renewable diesel in two
ways. First, it would differentiate between VRD and non-VRD renewable
fuels. The definition would clarify that non-VRD renewable fuels must
be produced through a hydrotreating
[[Page 80909]]
process and be able to be used in an engine designed to operate on
conventional diesel fuel. Such fuels would meet the petroleum diesel
specifications in ASTM D975. VRD fuels would be defined as SVO that is
intended for use as transportation fuel, heating oil, or jet fuel.
We believe that these proposed amendments would reduce the
potential for RIN fraud and provide greater certainty to obligated
parties regarding the validity of the RINs they purchase. We seek
comment on our proposed approach for vegetable oils, including whether
there may be additional scenarios in which it may be appropriate to
allow for RINs to be generated by VRD producers.
O. Public Access to Information
The EPA is proposing regulations that would streamline our
processing of claims that RFS-related information should be withheld
from public disclosure under the Freedom of Information Act (FOIA), 5
U.S.C. 552(b)(4), as CBI. If finalized, the rules would identify which
types of RFS information would receive confidential treatment as CBI
and which would be available for disclosure in response to a FOIA
request without the need for the often time-consuming notice and
substantiation procedural requirements that would otherwise be required
under 40 CFR part 2, subpart B.
The EPA recently received and responded to a FOIA request seeking
release of a substantial amount of RFS transactional and compliance
information submitted to the EPA through EMTS and in other
formats.\330\ The EPA evaluated each EMTS data element within the scope
of the FOIA request, and on March 27, 2015, issued a determination
identifying the extent to which those elements are eligible for CBI
treatment. The FOIA request, and the EPA's response, covered only the
data submitted within a certain historic time period. The EPA is
proposing to establish by rule that the same determinations of
eligibility for CBI treatment would apply to all of the EMTS data
elements covered by this determination, regardless of the date the data
was received.\331\ To the extent that the proposed rules identify data
elements as CBI, we note that it is not our intent to suggest that all
records making use of such data, including, for example, EPA-derived
documents that aggregate the information in a manner that masks
individual company data, would necessarily be entitled to protection as
CBI. The EPA will continue to make individual case-by-case CBI
determinations regarding public disclosure of such records.
---------------------------------------------------------------------------
\330\ See 79 FR 73577 (December 11, 2014).
\331\ The EPA's rationale for these determinations is set forth
in ``Freedom of Information Act Request EPA-HQ-2013-006023 (HQ-APP-
2013-008586); Confidentiality Determination--Final Version with All
Errata Corrected (Clean),'' available in the docket for this action.
---------------------------------------------------------------------------
In addition, we are proposing to codify a determination that basic
information related to EPA actions on petitions for RFS small refinery
and small refiner exemptions may not be claimed as confidential
business information. Small refineries and small refiners may petition
the EPA pursuant to 40 CFR 80.1441 and 80.1442 for an extension of
exemptions from RFS compliance obligations on the basis of
disproportionate economic hardship. Some petitioners availing
themselves of this opportunity have claimed their submissions to be
CBI. To the extent that the EPA determines that such CBI claims are
justifiable, the EPA protects the information from disclosure to the
public pursuant to FOIA Exemption 4, which covers ``trade secrets and
commercial or financial information obtained from a person that is
privileged or confidential.'' The EPA generally evaluates CBI claims
pursuant to its regulations in 40 CFR part 2, subpart B. While it is
appropriate to consider the potential that information that the EPA
obtains from outside of the agency, such as detailed business
information within a petition submission, could qualify for protection
as CBI, the courts have clarified that data generated within the
government are not ``obtained from a person'' within the meaning of
FOIA Exemption 4, and therefore cannot be claimed as CBI.\332\ In
addition, basic facts related to government decisions are also not
entitled to CBI treatment under FOIA Exemption 4.\333\ Nevertheless,
the courts have recognized that where an agency decision repeats or
would otherwise divulge sensitive business information that was
submitted to the agency by a person outside of government, that
sensitive information does not lose its CBI status by virtue of its
reference in the agency decision.\334\ In light of this precedent, and
to expedite processing of information requests related to EPA small
refinery/refiner exemption petition determinations, we propose to
clarify in the regulations that a clearly delineated set of basic
information related to our decisions on small refinery/refiner
exemption petitions is not entitled to treatment as CBI, since it is
inherently part of the EPA's decision and is not ``obtained from a
person'' outside of government. The EPA does not intend to suggest by
this proposal how it will respond to requests for the underlying
information provided by petitioners to substantiate a claim of
disproportionate economic hardship. Such information is ``obtained from
a person'' within the meaning of FOIA Exemption 4, may be claimed as
CBI, and will be evaluated on a case-by-case basis by the EPA following
the procedures specified in 40 CFR part 2, subpart B, when and if the
EPA receives a request for public release of such documents.
---------------------------------------------------------------------------
\332\ See Board of Trade v. Commodity Futures Trading
Commission, 627 F.2d 393, 404 (D.C. Cir. 1980); Soucie v. OST, 448
F.2d 1067 (D.C. Cir. 1971).
\333\ See Bloomberg v. Board of Governors, 601 F.3d 143 (2d Cir.
2010); Philadelphia Newspapers Inc., v. HHS, 69 F. Supp. 2d 63
(D.D.C. 1999).
\334\ See Southern Alliance for Clean Energy v. Dept. of Energy,
853 F. Supp. 2d 60 (D.D.C. 2012).
---------------------------------------------------------------------------
The proposed regulations would specify that with respect to each
decision on a small refinery/refiner exemption request, we would
release to the public the petitioner's name, the name and location of
the facility for which relief was requested, the general nature of the
relief requested, the time period for which relief was requested, and
the extent to which the EPA granted or denied the requested relief. All
of this information is inherent to the EPA's decision and, we believe,
is not entitled to treatment as CBI. The EPA could post this
information on its Web site, or otherwise provide it to the public in
response to individual information requests. If finalized, the
procedures in 40 CFR part 2, subpart B, related to EPA processing of
requests for documents for which CBI claims have been made would not
apply to requests for the information specified in the rule.
We also believe that parties cannot claim as CBI information
related to the EPA's internal workload, since the matters that the EPA
has decided to work on reflect an EPA decision, and those decisions
were not ``obtained from a person'' outside of government. Thus, we
believe that once a small refinery/refiner petition is accepted by the
EPA for processing, and added to the queue of projects that are pending
EPA evaluation, basic information regarding the matter is not entitled
to treatment as CBI. We propose, therefore, to establish by rule that
after adding the response to a small refinery/refiner petition to its
queue of projects to be completed, the EPA would publicly release
information on the name of the petitioner, the name and location of the
facility for which relief was requested, the general nature of the
relief requested, and the time period for which relief was requested.
This basic information is necessary to
[[Page 80910]]
identify the nature and scope of work that the EPA has decided to
undertake. The EPA could post this information on its Web site, or
otherwise provide it to the public in response to individual
information requests. If finalized, the procedures in 40 CFR part 2,
subpart B, would not apply with respect to requests for the information
specified in the rule.
Finally, we are proposing that the EPA is not releasing information
that is entitled to protection as CBI when it posts on its Web site or
otherwise publicly releases EPA enforcement-related determinations or
actions, together with basic information regarding the party or parties
involved and the RINs in question. The EPA determinations and actions
covered by this proposal include EPA determinations that RINs are
invalid under 40 CFR 1474(b)(4)(i)(C)(2) and 1474(b)(4)(ii)(C)(2),
notices of violation, administrative complaints, civil complaints,
criminal informations and criminal indictments. The information that
the EPA may post or otherwise publicly release in the context of these
determinations or actions includes the company name and EPA
identification number of the company that generated the RINs in
question, the facility name and EPA identification number of the
facility at which the fuel associated with the RINs in question was
allegedly produced or imported, the total quantity of RINs in question,
the time period when the RINs in question were generated, and the batch
number(s) and the D code(s) of the RINs in question. This basic
information is central to the EPA's enforcement-related actions and
determinations. Since these actions and determinations are not
``obtained from a person'' outside of the EPA, they and the basic
information necessary to describe them cannot be claimed as CBI. Thus,
while we are proposing that most RIN-related information is generally
entitled to treatment as CBI, as discussed above, we are also proposing
as an exception to that general rule that basic RIN information that is
central to the EPA's enforcement-related actions and determinations is
not entitled to such treatment.
We believe that publicly releasing the EPA's enforcement-related
actions and determinations described above is important to successful
operation and integrity of the RFS program. Doing so may prevent
parties from unwittingly transferring or attempting to use invalid RINs
for compliance, in contravention of the RFS regulations, or from
investing in invalid RINs that they will be unable to use for
compliance. We seek comment on whether any additional factual
information relating to the EPA actions described above should be
identified as ineligible for CBI protection and whether there are
additional EPA actions and determinations that we should identify as
including RIN-related information that does not qualify for CBI
protection.
We note that existing EPA regulations governing treatment of CBI
define the term ``person'' in 40 CFR 2.201(a) as including government
agencies and their employees. We believe that this is appropriate,
since we acknowledge that there may be instances where a government
report or decision could contain detailed information generated by the
EPA, but which is based on information submitted from outside of the
EPA and which could create competitive harm to the non-government data
submitter if released. We propose to interpret our regulatory
definition of ``person'' in accordance with the court decisions
interpreting the phrase ``obtained from a person'' for purposes of FOIA
Exemption 4, to both allow the EPA to withhold EPA-generated records in
appropriate circumstances where necessary to prevent disclosure of
information obtained from outside the EPA to inform those decisions,
and to release basic information related to EPA decisions and workload
as proposed in this action. However, we solicit comment on whether the
regulatory definition of ``person'' should be amended to more clearly
align with this proposal.
P. Grandfathered Facilities
The CAA provides an exemption from the minimum 20 percent lifecycle
GHG reduction requirement for a baseline volume of fuel made from two
classes of facilities; those that commenced construction prior to the
date of EISA's enactment, and ethanol facilities fired by natural gas
or biomass that commenced construction prior to December 31, 2009.\335\
While these facilities need not produce fuel pursuant to a pathway
specified in Table 1 to 80.1426, they are nevertheless required to use
feedstock that meets the CAA's definition of ``renewable biomass.'' In
light of implementation and enforcement concerns related to tracking
renewable biomass through a number of processing steps over multiple
facilities, we are proposing that fuel will not qualify for an
exemption from the 20 percent lifecycle GHG reduction requirement
unless it is: (1) Produced from renewable biomass in a single facility;
(2) Made at a single facility from a feedstock that is derived from
renewable biomass and is listed in Table 1 to 40 CFR 80.1426; or (3)
Made at a single facility from renewable biomass that was pre-processed
at another facility if that pre-processing at another facility was
limited to form changes such as chopping, crushing, grinding,
pelletizing, filtering, compaction/compression, centrifuging, dewater/
drying, melting, and/or the addition of water to produce a slurry. We
seek comment on our proposed approach.
---------------------------------------------------------------------------
\335\ See 40 CFR 80.1403.
---------------------------------------------------------------------------
To help implement this proposed change, the EPA is also proposing
changes to the registration and registration update requirements for
renewable fuel producers that either already have facilities registered
with an exemption under 40 CFR 80.1403 or renewable fuel producers that
have facilities that would have been able to claim an exemption under
40 CFR 80.1403 but cannot due to the proposed change. Since the EPA
would no longer need to establish a baseline volume from permits or
production information prior to December 19, 2007, or outdated
production information, the EPA is proposing that facilities that would
have been able to claim the exemption (i.e., those constructed prior to
December 19, 2007, or December 31, 2009, depending on the exemption)
only submit the most recent permits or, if not available, recent
production information to establish a facility's baseline volume.
Additionally, for three-year registration updates, the EPA is proposing
that facilities already claiming an exemption under 40 CFR 80.1403
would no longer need to provide copies of air permits to establish
exempted baseline volumes since all parties that could claim the
exemption under 40 CFR 80.1403 would have done so. The net result of
this change is that all facilities would need to submit their most
recent air permits or production information during initial
registration or three-year registration updates and parties would not
need to submit older air permits and production information to
establish baseline volumes.
To help distinguish total baseline volumes from exempted baseline
volumes, the EPA is proposing to redefine the term ``baseline volume''
and create a definition for ``exempted baseline volume.'' The proposed
definition for exempted baseline volume would include the permitted
capacity as established in air permits prior to December 19, 2007 or
older production records as defined in the current definition of actual
peak capacity. This definition should be consistent with the baseline
volumes previously established for facilities claiming an exemption
[[Page 80911]]
under 40 CFR 80.1403. However, many facilities that claim an exemption
under 40 CFR 80.1403 also produce renewable fuels that do not claim the
exemption. This leads to situations where the reported baseline volume
may not be consistent with the total actual production capacity of the
facility. Therefore, the EPA is also proposing to amend the definition
of baseline volume to better establish a facility's total production
capacity. Under this proposal, all facilities would need to submit
recent air permits or production information to establish current
baseline volumes. However, only facilities claiming a new exemption
under 40 CFR 80.1403--for example, facilities claiming an exemption
under 40 CFR 80.1403 involved in a change of ownership--would need to
submit information related to an exempted baseline volume. Facilities
would still need to maintain air permits and documentation used to
establish exempted baseline volumes under the recordkeeping
requirements in 40 CFR 80.1454. The EPA believes this change would
allow for more accurate total baseline volumes to be included as part
of registration information submitted to the EPA.
Q. Changes to Bond Requirement for Foreign Producers
The EPA is proposing to remove the option that allows a RIN-
generating foreign producer to pay the required bond amount to the U.S.
Treasury as stipulated under 40 CFR 80.1466(h)(2)(i) instead of
obtaining a bond in the proper amount from a third-party surety agent.
This option was provided as an alternative approach for RIN-generating
foreign producers that expressed possible difficulties in securing the
required bond to participate in the RFS program. We are now proposing
to remove this option because it has proven to be too much of a
challenge for the EPA to implement properly. For instance, a special
account would need to be established at the U.S. Treasury that would
allow the EPA to deposit the submitted bank checks (or hold in escrow)
and also allow the EPA the ability to draw upon these funds to satisfy
a potential judgment or reimburse the RIN-generating producer if they
no longer participate in the RFS program. This type of accounting
requires a lot of oversight and resources to ensure proper
implementation. Since there very few RIN-generating foreign producers
who are currently using this option, we believe it is not justified to
continue to allow this option due to the high administrative burden.
For these reasons, we are proposing to remove this option from the
regulations and believe this proposal will provide RIN-generating
foreign producers with sufficient time to obtain surety agreements to
meet the bond requirements. We request comment on this proposed change.
R. Redesignation of Renewable Fuel on a PTD for Non-Qualifying Uses
The EPA is proposing to amend the PTD, RIN management and
enforcement-related regulations to address situations where a party
subject to PTD requirements is aware that renewable fuel it intends to
transfer will be used for purposes other than as transportation fuel,
heating oil, or jet fuel.
CAA section 211(o)(1)(J) defines ``renewable fuel'' as fuel that is
produced from renewable biomass and that is used to replace or reduce
the quantity of fossil fuel present in a ``transportation fuel,'' which
is defined in CAA section 211(o)(1)(L) as ``fuel for use in motor
vehicles, motor vehicle engines, nonroad vehicles or nonroad engines
(except for ocean-going vessels). The CAA also provides, however, that
``additional renewable fuel,'' defined as fuel made from renewable
biomass that is used to replace or reduce the quantity of fossil fuel
present in home heating oil or jet fuel, may also receive credit under
the CAA. Thus, the CAA envisions use of renewable fuels under the RFS
program for transportation fuel, heating oil, and jet fuel, which we
refer to here as ``qualifying uses.'' While some of the more common
biofuels that participate in the RFS program (e.g., denatured ethanol)
have no significant non-qualifying uses, other types of biofuels, such
as renewable electricity and natural gas derived from biogas, can be
put to myriad uses, many of which are non-qualifying. Reflecting this
difference, EPA regulations include special provisions for certain
renewable fuels (e.g., natural gas derived from biogas) that limit RIN
generation to circumstances where the potential RIN generator can
document that their biofuel will be used as transportation fuel,
heating oil, or jet fuel, whereas such provisions are not required with
respect to biofuels like denatured ethanol that do not have significant
non-qualifying uses. All renewable fuels, however, must be accompanied
by a PTD when ownership of the fuel is transferred to parties other
than retail customers or wholesale purchaser-consumer facilities (as
defined in 40 CFR 80.2), and the PTD must include a good faith
designation of the fuels' intended use.\336\ The EPA modified the PTD
requirements and related enforcement provisions in the QAP final rule,
but in the course of doing so, the EPA included contradictory
statements in the preamble of its intent to finalize certain of the
proposed provisions, and these statements were inconsistent in part
with EPA's final actions in amending the regulations.\337\
---------------------------------------------------------------------------
\336\ See 40 CFR 80.1453.
\337\ See 79 FR 42078 (July 18, 2014).
---------------------------------------------------------------------------
The original RFS2 regulations required parties that obtained
renewable fuel with attached RINs and that either designated renewable
fuel for a non-qualifying fuel use or that used renewable fuel for a
non-qualifying fuel use to retire the RINs that they received with the
fuel.\338\ On February 21, 2013, the EPA published an NPRM for the QAP
rule that proposed to remove and reserve 40 CFR 80.1429(f) of the
regulations, expand the PTD requirements to require that parties
transferring renewable fuel include specific information in PTDs
regarding the character and intended use of blended and neat renewable
fuel, and add a new 40 CFR 80.1433 that would set forth a specific
mechanism for parties with PTD obligations that change a renewable fuel
designation from qualifying to non-qualifying fuel uses to retire the
appropriate number and type of RINs. In addition, the EPA proposed a
new 40 CFR 80.1460(g) to prohibit parties from redesignating renewable
fuel for a non-qualifying use without retiring RINs in accordance with
proposed 40 CFR 80.1433.\339\
---------------------------------------------------------------------------
\338\ See 40 CFR 80.1429(f).
\339\ See 78 FR 12193 (February 21, 2013).
---------------------------------------------------------------------------
In one section of the preamble to the final QAP Rule, the EPA
stated that it was implementing this proposal.\340\ However, the
preamble to the final QAP rule also included contradictory language
that stated, ``we feel that the program goal of ensuring appropriate
end use is already addressed and managed through the regulations. We
are therefore not finalizing the proposed Sec. 80.1433 and conforming
prohibited act provision for sellers and transferors of RIN-generating
renewable fuel.'' \341\ The regulations implemented in the final QAP
rule inadvertently removed 40 CFR 80.1429(f), without including the
proposed 40 CFR 80.1433 or 80.1460(g). The PTD regulations that were
adopted in the final QAP rule at 40 CFR 80.1453(a)(12) include a
reference to 40 CFR 80.1433, but that section was not included in the
final regulations.
---------------------------------------------------------------------------
\340\ See 79 FR 42106 (July 18, 2014).
\341\ Id.
---------------------------------------------------------------------------
[[Page 80912]]
The EPA recognizes that these contradictory statements have led to
confusion, and we are proposing to resolve this confusion by
implementing a new 40 CFR 80.1433 that would require a party that
receives renewable fuel without a PTD or with a PTD indicating that the
fuel is for qualified uses, and that subsequently transfers that fuel
to a party that the transferor knows or has reason to know will use the
fuel for a non-qualifying use, to include a statement on the PTD
designating the fuel for an alternative use and to retire an
appropriate number and type of RINs. We are also proposing that the
transfer of renewable fuel for use by stationary internal combustion
engines would not require RIN retirement. These engines often use the
same fuel as nonroad engines, and the effect of renewable fuel in
displacing petroleum products in fuel used in such engines is also
similar. We are also proposing to add a new prohibited act at 40 CFR
80.1460(j) for failing to retire RINs as would be required by proposed
40 CFR 80.1433. The RIN retirement provisions in proposed 40 CFR
80.1433 would not apply to a party that could demonstrate, through
records available at the time of fuel transfer and maintained for five
years, that no RINs were generated for any part of the fuel or fuel
blend that it transfers or that an appropriate number and type of RINs
had already been retired by a prior owner of the fuel or fuel blend.
With respect to situations where a party asserts that RINs were never
generated, we seek comment on whether the exemption from the RIN
retirement requirements in proposed 40 CFR 80.1433 should be limited to
those parties that purchased renewable fuel directly from the renewable
fuel producer, similar to the requirement specified for exports at 40
CFR 80.1430(a). We believe these proposed provisions, if finalized,
will remedy the confusion created by the contradictory statements in
the QAP rule, and will further the objectives of the statute by
augmenting the integrity of the RIN system.
We are also proposing to delete 40 CFR 80.1460(c)(2) and (c)(3)
from the prohibited acts section of the regulations, and replace these
sections with a new 40 CFR 80.1460(c)(2). We believe that the existing
two near-identically worded provisions would appropriately be replaced
by a single more clearly worded regulation that prohibits parties from
using RINs for compliance or transferring RINs to other parties, in a
situation where the party using or transferring the RINs uses the fuel
associated with the RINs for a purpose other than as transportation
fuel, heating oil or jet fuel. This prohibition would only apply to
parties that obtained renewable fuel with assigned RINs and then used
or transferred the renewable fuel for a non-qualifying fuel use; any
RINs improperly transferred by such a party would not be considered
invalid as a result of that action, and therefore could be used or
transferred by downstream parties notwithstanding the upstream
violation of 40 CFR 80.1460(c)(2).
IX. Other Revisions to the Fuels Program
A. Testing Revisions
The EPA is proposing several changes to its testing requirements,
as described in the following sections.
1. Non-VCSB Absolute Fuel Parameter--Sulfur Testing in Diesel,
Gasoline, Butane, and Pentane
The EPA is proposing to remove the requirement for periodic
resubmitting of non-VCSB test methods that have not been approved by
VCSBs. Non-VCSB test methods are required to resubmit accuracy and
precision qualification information every 5 years if the non-VCSB test
method has not been approved by a VCSB organization. At this time,
VCSBs, such as ASTM, have yet to qualify any non-VCSB test methods for
measuring the sulfur content in diesel, gasoline, butane, or pentane.
Moreover, the EPA requires minimal statistical quality control
requirements on every type test method approved under the diesel sulfur
accuracy and precision requirements \342\ to ensure proper test method
instrumentation use is as intended in practice. The EPA is, therefore,
proposing to amend the regulatory requirement that non-VCSB test
methods by eliminating the provision to re-submit accuracy and
precision qualification information every 5 years.
---------------------------------------------------------------------------
\342\ See 40 CFR 80.584.
---------------------------------------------------------------------------
The EPA is also proposing to require use of ASTM D6708 for
determining that sample specific biases are random prior to submission
for approval. If a non-VCSB test method absolute fuel parameter of
sulfur in diesel, gasoline, butane, or pentane as compared to its
designated primary test method were to exhibit sample-specific biases
that cannot be determined as random through the utilization of ASTM
D6708, such an indication of sample-specific biases would raise a
concern that the test method should be investigated and improved upon
prior to utilization in practice in order to eliminate any systematic
errors that may keep the test method from properly measuring sulfur in
either diesel, gasoline, butane, or pentane in the most accurate and
precise manner practically achievable. The EPA believes that the non-
VCSB test method applicant has to demonstrate through ASTM D6708 that
sample-specific biases existing between the candidate non-VCSB test
method and the designated primary test method are random prior to
submitting to the EPA for approval. If the applicant determines that
sample-specific biases exist between the candidate non-VCSB test method
and the designated primary test method that cannot be determined to be
random through utilization of ASTM D6708, then the non-VCSB test method
is automatically disqualified from consideration for approval. The EPA
is proposing to an additional requirement that non-VCSB test methods
for sulfur in diesel, gasoline, butane, and pentane must demonstrate
through the use of ASTM D6708 that sample-specific biases are random.
This demonstration must be made prior to submission for approval.
2. Removal of Sunset Date for Designated Primary Test Methods
Currently, EPA fuels regulations exempt those designated primary
test methods that were in use prior to October 28, 2013, from meeting
the accuracy and precision qualification requirements.\343\ We provided
this sunset exemption date in the Tier 3 final rule because we were
confident that test facilities were utilizing designated primary test
methods prior to this date. However, since the SQC requirements at 40
CFR 80.47 are intended to ensure proper utilization of designated
primary test methods in practice, the EPA is proposing to remove this
sunset exemption date. This action would exempt all designated primary
test methods from the accuracy and precision requirements of 40 CFR
80.47.
---------------------------------------------------------------------------
\343\ See 40 CFR 80.47(j).
---------------------------------------------------------------------------
3. Sulfur in Pentane and Test Methods for Benzene, Aromatics, and C6-
Plus Hydrocarbons in Pentane
The EPA is proposing to add accuracy and precision criteria for
sulfur in pentane that are identical to sulfur in gasoline. The Tier 3
regulations provided for the allowance of blending pentane in
gasoline.\344\ The EPA did not specify test methods for sulfur,
benzene, aromatics, and C6-plus hydrocarbons in pentane. The EPA is not
aware of an ASTM test method that has been
[[Page 80913]]
developed to analyze sulfur in pentane. It is our understanding that
the ASTM test methods currently utilized by industry for the analysis
of sulfur in gasoline may be adaptable for the analysis of sulfur in
pentane if refrigerated auto-samplers are added to the apparatus of
these test methods. This is being done in order to reduce safety issues
associated with analyzing the sulfur content in pentane which has a
lower boiling point than gasoline. Regardless of how these test methods
are innovated in order to determine the sulfur content of pentane, the
EPA believes it is appropriate to assign PBATMA criterion for sulfur in
pentane based on the current criterion for sulfur in gasoline. Once
industry has developed a test method for sulfur in pentane through the
VCS-based process and developed precision statements for the test
method, the EPA will revisit whether accuracy and precision criteria
need to be revised to reflect the VCSB test methods for sulfur in
pentane. The EPA is proposing to add accuracy and precision criterion
for sulfur in pentane in 40 CFR 80.47(b) that is identical to sulfur in
gasoline. We believe that this will provide greater assurance to both
the regulated community and the EPA that once pentane is blended into
gasoline, it meets the required sulfur fuel standard.
---------------------------------------------------------------------------
\344\ See 79 FR 23589-23591 (April 28, 2014).
---------------------------------------------------------------------------
In addition, the EPA is also proposing to establish two ASTM test
methods for the analysis of benzene content, aromatic content, and C6-
plus hydrocarbons in pentane at 40 CFR 80.46. We are proposing to
designate ASTM D6730 as the designated primary test method for
measuring benzene content, aromatic content, and C6-plus hydrocarbons
in pentane. We are also proposing one alternative test method for the
benzene content, aromatic content, and C6-plus hydrocarbons measurement
in pentane, ASTM D6729, provided that its test results are correlated
to ASTM D6730. Table IX.A.3-1 below lists the two ASTM test methods we
are proposing. The establishment of these two test methods would
provide greater assurance to both the regulated community and the EPA
that benzene content, aromatic content, and C6-plus hydrocarbons in
pentane meet the regulatory requirements at 40 CFR 80.86.
Table IX.A.3-1--Designated Primary and Alternative ASTM Analytical Test
Methods for the Analysis of Benzene Content, Aromatic Content, and C6-
Plus Hydrocarbon Content in Pentane
------------------------------------------------------------------------
Fuel parameter in pentane ASTM international analytical test method
------------------------------------------------------------------------
Benzene (Designated Primary ASTM 6730-01 (Reapproved 2011), Standard
Test Method). Test Method for Determination of
Individual Components in Spark Ignition
Fuels by 100-Metre Capillary (Pre-
Column) High-Resolution Gas
Chromatography.
Benzene (Alternative Test ASTM D6729-14, Standard Test Method for
Method). Determination of Individual Components
in Spark Ignition Engine Fuels by 100-
Metre Capillary High-Resolution Gas
Chromatography.
Aromatics (Designated Primary ASTM 6730-01 (Reapproved 2011), Standard
Test Method). Test Method for Determination of
Individual Components in Spark Ignition
Fuels by 100-Metre Capillary (Pre-
Column) High-Resolution Gas
Chromatography.
Aromatics (Alternative Test ASTM D6729-14, Standard Test Method for
Method). Determination of Individual Components
in Spark Ignition Engine Fuels by 100-
Metre Capillary High-Resolution Gas
Chromatography.
C6-plus Hydrocarbons ASTM 6730-01 (Reapproved 2011), Standard
(Designated Primary Test Test Method for Determination of
Method). Individual Components in Spark Ignition
Fuels by 100-Metre Capillary (Pre-
Column) High-Resolution Gas
Chromatography.
C6-plus Hydrocarbons ASTM D6729-14, Standard Test Method for
(Alternative Test Method). Determination of Individual Components
in Spark Ignition Engine Fuels by 100-
Metre Capillary High-Resolution Gas
Chromatography.
------------------------------------------------------------------------
4. Benzene Testing in Gasoline
We are proposing to add ASTM D5769 as a designated primary test
method for benzene in gasoline, gas chromatography mass spectrometry
(GCMS)-based test method. This would be in addition to the current
designated primary gas chromatography (GC)-based test method (ASTM
D3606) codified at 40 CFR 80.46(e). Currently, the majority of motor
vehicle gasoline in the U.S. contains ethanol. The current GC-based
designated primary test method for benzene in gasoline (ASTM D3606) has
the potential for interference issues with ethanol in determining the
benzene content in gasoline when ethanol is present as an oxygenate in
gasoline. This interference issue of ethanol with benzene peaks in ASTM
D3606 makes this test method very difficult to use and has significant
potential to impact the accuracy of the benzene content test
results.\345\ At the same time, we note that ASTM D3606 has been the
designated primary test method for benzene in motor vehicle gasoline
since the inception of the RFG fuel program, and technical procedures
exist to account for ethanol interference issues with benzene in
gasoline. Moreover, the current precision statements in ASTM D3606 do
not account for the presence of alcohols in gasoline.\346\ The GCMS-
based test method (ASTM D5769) utilizes both gas chromatography to
separate chemical compounds in a gasoline sample and then determines
the chemical compounds content by mass by utilizing a mass spectrometry
detector. From a technical perspective, the EPA believes ASTM D5769 is
a more accurate and precise test method for determining the benzene
content in motor vehicle gasoline regardless of the type of oxygenate
it contains. Thus, interference issues in determining the benzene
content in motor vehicle gasoline when alcohols are present does not
present a concern with ASTM D5769. ASTM D5769 already contains sample
component and internal standard values, calibration requirements,
quality control reference material for benzene in motor vehicle
gasoline, and precision statements for repeatability and
reproducibility have been developed as well.\347\ The EPA is not
proposing to change the PBATMA requirements for benzene in motor
vehicle gasoline that were promulgated in the Tier 3 rule at 40 CFR
80.47. Thus, the regulated community will continue to have the
flexibility to utilize ASTM
[[Page 80914]]
D3606 for measuring the benzene content in motor vehicle gasoline as
well as any other alternative test method that meets the PBATMA
requirements for benzene content in motor vehicle gasoline.
---------------------------------------------------------------------------
\345\ ASTM D3606 is difficult to utilize with E10, and as
ethanol concentrations increase in motor vehicle gasoline (such as
E15 or higher), we believe the difficulty in resolving ethanol peaks
from benzene peaks in the ASTM D3606 chromatogram will increase,
thus further increasing the likelihood of interferences between
ethanol and benzene.
\346\ See Note 7, ASTM D3606-10, ``Standard Test Method for
Determination of Benzene and Toluene in Finished Motor and Aviation
Gasoline by Gas Chromatograph.''
\347\ ASTM D5769-10, ``Standard Test method for Determination of
Benzene, Toluene, and Total Aromatics in Finished Gasolines by Gas
Chromatography.''
---------------------------------------------------------------------------
As previously explained, we are also proposing removal of the
sunset date for designated primary test methods. As a result of this
removal, the designated primary test methods for benzene in gasoline
would be exempt from accuracy and precision qualification requirements
at 40 CFR 80.47.
B. Oxygenate Added Downstream in Tier 3
After the Tier 3 rule was published,\348\ we received several
questions concerning the language at 40 CFR 80.1603(d) about accounting
for downstream oxygenate blending in refiners' and importers' average
annual sulfur calculations. Specifically, some refiners asked whether
40 CFR 80.1603(d) is consistent with the related RFG provisions for
downstream oxygenate blending in 40 CFR 80.69. Currently, refiners may
certify RFG after the addition of oxygenate to the RBOB sample at the
refinery lab (creating a so-called ``hand blend''), as allowed in 40
CFR 80.69(a). The Tier 3 regulations at 40 CFR 80.1603(d) require that
refiners and importers account for downstream oxygenate blending to any
gasoline or BOB by volume weighting the sulfur content of the gasoline
or BOB with the sulfur content of the added oxygenate. Under the Tier 3
regulations, refiners and importers may either rely upon test results
of batches of oxygenate supplied by the producer of the oxygenate or
use an assumed value of 5.00 ppm added at 10 volume percent ethanol
concentration if actual sulfur results are not available. These
refiners and importers suggested that the regulatory language at 40 CFR
80.1603(d) may be interpreted to continue to allow the use of hand-
blended RBOB samples for determining oxygenate sulfur content added
downstream by arguing that the language at 40 CFR 80.1603(d) only
applied to conventional gasoline and CBOB.
---------------------------------------------------------------------------
\348\ See 79 FR 23414 (April 28, 2014).
---------------------------------------------------------------------------
The EPA intended for the downstream oxygenate blending regulations
at 40 CFR 80.1603(d) to apply to all gasoline and BOBs, not just
conventional gasoline and CBOB. In the preamble to the Tier 3 rule, the
EPA explained that the ``final rule requires that in determining their
compliance with today's sulfur standards, refiners and importers must
either use the actual sulfur content of the DFE established through
testing of the DFE actually blended or assume a 5 ppm sulfur content
for the DFE added downstream. To prevent potential bias, a refiner or
importer must choose to use only one method during each annual
compliance period.'' \349\ The regulations at 40 CFR 80.101(d)(4) sets
forth the criteria that a refiner must meet to include downstream
ethanol in their conventional gasoline compliance calculations, and 40
CFR 80.69 sets forth the criteria a refiner must meet to include
downstream ethanol in their RFG or RBOB compliance calculations. If a
refiner satisfies these criteria, 40 CFR 80.1603(d) sets forth the
mechanism for accounting for downstream ethanol in annual compliance
calculations for all gasoline and BOBs. This section of the regulations
was designed to ensure that all refiners calculate their annual average
sulfur levels by including the ethanol that is actually added to their
gasoline or BOBs, or the default value of 5 ppm. This prevents refiners
from using hand blends prepared with ethanol that has less sulfur than
is actually blended with the refiner's gasoline or BOB for their
compliance calculations.
---------------------------------------------------------------------------
\349\ See 79 FR 23544 (April 28, 2014).
---------------------------------------------------------------------------
Although the EPA believes that 40 CFR 80.1603(d) clearly applies to
all gasoline and BOBs, not just RFG or RBOB, we are proposing minor
amendments to assure that the regulated community will not misinterpret
these requirements. We are also proposing minor amendments to the Tier
3 sulfur reporting requirements at 40 CFR 80.1652 to better accommodate
the inclusion of downstream oxygenate blending in annual average sulfur
compliance demonstrations. These added requirements would help align
the reported batch information with the annual average compliance
report and is necessary to ensure that refiners met both the per-gallon
and annual average sulfur standards. We also seek comment on whether we
should adopt similar provisions for the gasoline benzene program.
C. Technical Corrections and Clarifications
We are proposing numerous technical corrections to the EPA's fuels
programs. These amendments are being proposed to correct inaccuracies
and oversights in the current regulations. These proposed changes are
described in Table IX.C-1 below. We request comment on all of these
proposed changes.
Table IX.C-1--Miscellaneous Technical Corrections and Clarifications to
Title 40
------------------------------------------------------------------------
Part and section of Title 40 Description of revision
------------------------------------------------------------------------
79.51(f)(6)(iii), Amended by redirecting the mailing
79.59(a)(1), 80.27(e)(1)(i), addresses to the new address section in
80.69(a)(11)(viii)(C), 80.10.
80.93(d)(4), 80.174(b),
80.174(c), 80.235(b),
80.290(b), 80.533(b),
80.574(b)(1), 80.595(b),
80.607(a), 80.855(c)(2),
80.1285(b), 80.1340(b),
80.1415(c)(4), 80.1441(h),
80.1442(i), 80.1443(d)(2),
80.1449(d),
80.1454(h)(6)(iii),
80.1502(b)(5)(i),
80.1502(b)(5)(ii),
80.1622(g), 80.1625(c)(2),
and 80.1656(h).
80.9......................... Amended by updating the incorporation by
reference (IBR) to the most recent ASTM
version for ``Standard Practice for
Using Significant Digits in Test Data to
Determine Conformance with
Specifications,'' ASTM E29-02, which is
now ASTM E29-13. ASTM E29-13 assists our
regulated entities in determining the
number of significant digits when
rounding a test result or measurement
for determining conformance with our
fuel standards.
80.10........................ Amended by adding a new address section
that reflects the address change.
80.27(b)..................... Amended by clarifying the PBATMA
implementation for RVP compliance
assurance measurements.
[[Page 80915]]
80.46........................ Amended by clarifying that the PBATMA
requirements in 80.47 are now effective,
removing the VCSB alternative analytical
test methods from 80.46, as the VCSB
analytical test methods in 80.46 must
now meet the requirements in 80.47, and
adding test methods and corresponding
IBRs for benzene, aromatics, and C6-plus
hydrocarbons in pentane.
80.47(b)(2), 80.47(c)(2), Amended by removing the reference to the
80.47(d)(2), 80.47(e)(2), October 28, 2013, date and making the
80.47(f)(2), 80.47(g)(2), designated primary test methods exempt
80.47(h)(2), 80.47(i)(2), from the applicable accuracy and
80.47(j)(2), and 80.47(l)(4). precision requirements of 40 CFR 80.47,
given that there are SQC requirements
for these methods that will verify if
they are being carried out properly.
80.47(b)(2)(i) and Amended by clarifying accuracy criterion
80.47(b)(2)(ii). for sulfur in gasoline by adding
examples with accuracy criterion.
80.47(c)(2)(i) and Amended by clarifying accuracy criterion
80.47(c)(2)(ii). for sulfur in butane by adding examples
with accuracy criterion.
80.47(l)(2)(i)............... Amended by clarifying that test
facilities meet applicable precision
requirements for VCSB method defined and
non-VCSB absolute fuel parameters.
80.47(n)(1)(i), Removing the accuracy SQC requirement for
80.47(o)(1)(i), pre-treatment and assessment of results
80.47(p)(1)(i), and from the check standard testing after at
80.47(p)(2)(i). least 15 testing occasions as described
in section 8.2 of ASTM D6299.
80.47(n)(1)(ii), Clarifying the expanded uncertainty of
80.47(o)(1)(ii), and the accepted reference value of
80.47(p)(1)(ii). consensus named fuels shall be included
in the accuracy SQC qualification
criterion.
80.47(o)(1)(i)............... Clarifying participation in a
commercially available Inter Laboratory
Crosscheck Program (ILCP) at least three
times a year meeting the ASTM D6299
requirements for ILCP check standards
that meet the requirements for absolute
differences between test results and the
accepted reference value of the check
standard based on the designated primary
test method obtained through
participation in the ILCP satisfies the
accuracy SQC requirement as well as
appropriate calculation for adherence to
SQC criteria. Also clarifying the
accuracy SQC criteria is 0.75 times the
published reproducibility of the
applicable designated primary test
method for each method defined fuel
parameter to be consistent with non-VCSB
method defined fuel parameter accuracy
SQC requirements.
80.47(n)(2)(i), Clarification in Precision SQC
80.47(o)(2)(i), and requirements that the test facility's
80.47(p)(3)(i). long term precision standard deviation,
as demonstrated by control charts, is
expected to meet applicable precision
criterion for the test method.
80.164(a)(5) and Amended by updating the IBR to the most
80.177(d)(1)(ii). recent ASTM version for ``Standard
Specification for Automotive Spark-
Ignition Engine Fuel,'' ASTM D4814-95c
and ASTM D4814-13b, which is now ASTM
D4814-14b. ASTM D4814-14b is gasoline
specifications used in making
certification fuel for meeting gasoline
detergent requirements.
80.177(d)(1)(i).............. Amended by updating the IBR to the most
recent ASTM version for ``Standard
Specification for Denatured Fuel Ethanol
for Blending with Gasolines for Use as
Automotive Spark-Ignition Engine Fuel,''
ASTM D4806-13a, which is now ASTM-4806-
15 ethanol specification. ASTM D4806-15
is ethanol specifications used in making
certification fuel for meeting gasoline
detergent requirements.
80.1240(a)(1)(i) and Amended by clarifying that gasoline
80.1603(f). benzene and sulfur credits must be used
for compliance purposes (i.e., retired)
instead of simply being obtained.
80.1401...................... Adding definition of affiliate, foreign
renewable fuel producer, RIN-generating
foreign producer, and non-RIN-generating
foreign producer; amended by revising
the definition of foreign ethanol
producer and renewable fuel.
80.1426(a)(2), 80.1426(c)(4)- Amended by applying the new and revised
(5), 80.1450(b), 80.1451(b), definitions in 80.1401.
80.1451(g)(1)(ii)(D),
80.1451(i)(2)(x),
80.1454(p), and 80.1466(b)-
(p).
80.1440...................... Amended by adding a new paragraph related
to RIN responsibilities for renewable
fuel used for purposes subject to
national security exemptions.
80.1450(b)(1)(ix)(A), Amended by clarifying the term
80.1451(b)(1)(ii)(I), ``denaturant'' to mean ``ethanol
80.1451(g)(1)(ii)(I), denaturant.''
80.1452(b)(11), and
80.1464(b)(1)(ii).
80.1450(g)(9)................ Amended by clarifying the third-party
auditor registration updates language to
make QAP updates consistent with
registration updates.
80.1466(d)(3)(ii)............ Amended erroneous reference for third-
party independence requirements from
80.65(e)(2)(iii) to 80.65(f)(2)(iii).
80.1468(b)(1)................ Amended by updating the IBR to the most
recent ASTM version for ``Standard Guide
for Use of the Petroleum Measurement
Tables,'' ASTM D1250-08, which is now
ASTM D1250-08 (2013). ASTM D1250-08
(2013) is a standard guide used by our
regulated community for determining
temperature corrected standardized
volumes under the renewable fuels
program.
80.1468(b)(3)................ Amended by updating the IBR to the most
recent ASTM version for ``Standard Test
Method for Laboratory Standardization
and Calibration of Hand-Held Moisture
Meters,'' ASTM D4444-08, which is now
ASTM D4444-13. ASTM D4444-13 is a test
method used for determining moisture
content of wood samples in that must be
met when qualifying for RINs for
renewable fuels.
[[Page 80916]]
80.1468(b)(4)................ Amended by updating the IBR to the most
recent ASTM version for ``Standard
Specification for Biodiesel Blend Stock
(B100) for Middle Distillate Fuels,''
ASTM D6751-09, which is now ASTM D6751-
15. ASTM D6751-15 is biodiesel fuel
specifications that must be met
qualifying for RINs for renewable fuels.
80.1468(b)(7)................ Amended by updating the IBR to the most
recent ASTM version for ``Standard Test
Method for Analysis of Wood Fuels,''
ASTM E870-82, which is now ASTM E870-82
(2013). ASTM E870-82 (2013) is a test
method that covers the proximate and
ultimate analysis of wood fuels and the
determination of the gross caloric value
of wood sampled and prepared by
prescribed test methods and analyzed
according to ASTM established procedures
that must be met when qualifying for
RINs for renewable fuels.
80.1468(b)(8)................ Amended by updating the IBR to the most
recent ASTM version for ``Standard
Specification for Diesel Fuel Oils,''
ASTM D975-13a, which is now ASTM D975-
15. ASTM D975-15 is diesel fuel
specifications that must be met
qualifying for RINs for renewable fuels.
80.1469(e)(3)................ Amended by clarifying that quality
assurance plans submitted as part of
annual registration renewal are approved
at the same time as a third-party
auditor's registration.
80.1469(f)(1)................ Amended to more clearly link updates to
quality assurance plans with updates to
a third-party auditor's registration
under 80.1450(g)(9).
80.1501(b)(3)(i)............. Amended to reflect that the word
``ATTENTION'' should be in black font,
not orange.
80.1503...................... Amended by revising the section to
clarify that the absolute approach shall
be used in determining compliance
assurance with respect to ethanol
content.
80.1600...................... Amended by removing the duplicative
definition of ``Ethanol denaturant,''
which is already defined in 80.2(iiii).
80.1609(a)................... Amended by revising cross-reference to
80.1603(d)(3).
80.1616(c)(3)................ Amended by clarifying that Tier 2 credits
generated from January 1, 2017 through
December 31, 2019, must be used between
January 1, 2017 and December 31, 2019.
80.1650(b)(3)................ Amended by clarifying that the oxygenate
blender registration dates also apply to
persons who blend oxygenate into CBOB
and conventional gasoline.
80.1650(e)(1)(iii)(A) and Amended by clarifying that records are
80.1650(g)(1)(iii)(A). kept at the oxygenate production
``facility'' (instead of the oxygenate
production ``refinery'').
------------------------------------------------------------------------
X. Economic Impacts
The proposed provisions for biointermediates and the proposed
provisions for EFF and gasoline produced at blender pumps would have
economic impacts. The proposal would provide significant additional
regulatory flexibility, streamlined compliance provisions, and the
opportunity for increased biofuel production at reduced cost. The cost
savings are anticipated to far outweigh the minor costs imposed for
demonstrating compliance. In most cases, the associated costs would
only apply to those parties that elect to take advantage of the
proposed flexibilities because the potential economic benefits outweigh
the costs. This proposal contains minor additional registration,
reporting, and recordkeeping requirements that would apply to some
parties in the biofuel production and distribution system that do not
take advantage of the proposed flexibilities as well as those that do.
We are also seeking comment in this action on potential provisions for
generating RINs from renewable electricity and seek comment on what
economic impacts they may have.
A. What are the benefits?
1. Proposed Biointermediates Provisions and Other Fuels Program
Revisions
Under the current RFS regulations, the production of renewable
biofuels from feedstocks listed in approved pathways must all take
place at the same facility. Numerous companies have approached the EPA
about the use of biointermediates to produce renewable fuels as part of
the RFS program. Many of the biointermediates produced by these
companies would be used by renewable fuel producers to generate
cellulosic and other advanced renewable fuels. This proposal would
allow for the production of renewable fuel from biointermediates by
amending the RFS regulations to allow the new flexibility. By allowing
producers to use biointermediates to produce renewable fuels, the EPA
is enabling the production of potentially significant future volumes of
cellulosic and other advanced biofuels at reduced cost.
2. Proposed Provisions for EFF and Producing Gasoline at Blender Pumps
Without the regulatory flexibilities in this proposed rule, the
expansion of blender pumps and use of natural gasoline as an EFF
blendstock could not be accommodated while at the same time continuing
to ensure the control of emissions from FFVs. We anticipate that the
flexibility to use natural gasoline of appropriate quality to produce
EFF provided by this proposal could reduce the EFF production cost. For
example, we project that the use of natural gasoline to produce E70 in
place of gasoline might reduce the cost of E70 by 5 percent on an
energy adjusted basis.\350\ This could help to further the use of
increased volumes of renewable fuels under the RFS program. The
increased use of natural gasoline in motor fuels could also have energy
security benefits, providing another domestic outlet for this feedstock
currently in oversupply.
---------------------------------------------------------------------------
\350\ See the memorandum, ``Potential Impact on the Cost of
Ethanol Flex Fuel from the Use of Natural Gasoline as a
Blendstock,'' available in the docket for this action.
---------------------------------------------------------------------------
Our proposal to regulate E16-50 quality with other higher-level
ethanol blends that can only be used in FFVs rather than to continue to
treat E16-50 as gasoline would provide a practical and streamlined
means for blender pump-refiners to demonstrate compliance while
continuing to ensure the environmental quality to these blends. Our
proposal to allow gasoline to be made at blender pumps from September
16 through May 31 without triggering the full gasoline refiner
requirements would likewise provide a practical and streamlined means
for blender pump-refiners to demonstrate
[[Page 80917]]
compliance while ensuring the environmental quality of the gasoline
they produce.\351\ Without these proposed changes, it may be
impractical for blender pump-refiners to produce E16-50 or E15 while
meeting the existing EPA compliance demonstration requirements.\352\
---------------------------------------------------------------------------
\351\ We are also requesting comment on how to streamline the
compliance demonstration requirements for blender pump operators who
produce gasoline from June 1 through September 15 (see section IV.E
of this preamble).
\352\ For example, the existing regulations would require that
each batch of fuel produced at a blender pump (i.e., each delivery
to a vehicle) be sampled and tested to demonstrated compliance.
---------------------------------------------------------------------------
3. Other Proposed RFS and Fuels Program Revisions
The proposed revisions discussed in sections V, VI, VIII, and IX of
this preamble would all help support the RFS and other fuels programs
by doing such things as creating new renewable fuel production
pathways, clarifying various provisions of the RFS program, and
providing numerous technical corrections.
B. What are the cost impacts?
1. Proposed Biointermediates Provisions and Other Fuels Program
Revisions
The ability to produce renewable fuels and generate RINs for them
using biointermediates holds significant promise for reducing the costs
of producing cellulosic and other advanced biofuels. By concentrating
renewable fuel feedstocks prior to shipment to the renewable fuel
production facility and/or by taking advantage of existing
infrastructure, producers can significantly reduce their production
costs. At the same time, allowing the use of biointermediates will
require some additional minor compliance costs. The proposed provisions
for production of renewable fuel from biointermediates include new
registration, reporting, recordkeeping, and PTD requirements for
biointermediate producers. There would also be additional recordkeeping
and reporting requirements for renewable fuel producers that use
biointermediates. These requirements are typical of other EPA fuel
programs, and the associated costs are modest. As this is a new
flexibility that is not currently available to producers in the RFS
program, the EPA does not believe that a renewable fuel producer would
choose to take advantage of this program unless there was sufficient
economic incentive for the producer to do so. Current renewable fuel
producers would not be compelled to use biointermediates, and as such,
any costs associated with these provisions are purely voluntary.
2. Proposed EFF Provisions
Overall, we anticipate only a cost savings regarding the cost to
produce EFF blends and demonstrate compliance with the EPA fuel quality
requirements. This proposal would provide additional flexibility
regarding the hydrocarbon blendstocks that could be used to produce
EFF. These new flexibilities would apply to all EFF blends. Currently,
the only hydrocarbon blendstocks that producers of E85 may use to be
assured of compliance with the sub-sim requirement for E85 are
certified gasoline and BOBs. Under the proposed EFF bulk blender-
refiner provisions, certified natural gasoline EFF blendstock could
also be used to produce EFF. The EFF bulk blender-refiner certification
option includes streamlined compliance demonstration requirements to
limit the testing that would be required when such certified
blendstocks are used. We anticipate that the ability to use certified
natural gasoline EFF blendstock would be welcomed by EFF bulk blender-
refiners due to the anticipated lower cost compared to the use of
gasoline or BOBs.\353\ Under the proposed EFF full-refiner and importer
provisions, uncertified natural gasoline EFF blendstock could be used
to produce EFF provided that each batch is tested to demonstrate
compliance. The ability to blend other uncertified natural gasoline EFF
blendstock would also provide additional flexibility that may prove
useful to producers of EFF. Taking advantage of the proposed blending
flexibility to produce EFF would be voluntary. EFF producers that
continue to use only gasoline and BOBs that do not take advantage of
the 1 psi waiver for E10 as hydrocarbon blendstocks would not be
affected by the new regulatory requirements associated with the
proposed blending flexibility. EFF bulk blender-refiners that use
gasoline and BOBs that take advantage of the 1 psi waiver would have a
minimal additional burden to demonstrate compliance with the proposed
EFF RVP requirements. Such EFF bulk blender-refiners could use a
calculative RVP compliance tool that uses common business records to
demonstrate compliance with the proposed EFF RVP requirements.\354\ EFF
producers would only choose to be subject to the new regulatory
requirements associated with the use of natural gasoline as an EFF
blendstock to the extent that the economic benefits of the proposed
blending flexibility outweighs the associated costs.
---------------------------------------------------------------------------
\353\ See the memorandum, ``Potential Impact on the Cost of
Ethanol Flex Fuel from the Use of Natural Gasoline as a
Blendstock,'' available in the docket for this action.
\354\ The RVP compliance tool employs information on the RVP of
the blendstocks used to make EFF that is available on PTDs and EFF
blending records. See section IV.F.3 of this proposal for a
discussion of the RVP compliance tool.
---------------------------------------------------------------------------
This proposal would also provide streamlined provisions for EFF
blender pump-refiners to demonstrate that the blends they produce are
in compliance with EPA fuel quality requirements. Under the current
regulations, E16-50 blends are treated as gasoline. Consequently,
blender pump-refiners are currently subject to all of the requirements
of a gasoline refiner, including per-batch testing, registration, and
annual reporting. Under this proposal, E16-50 would no longer be
treated as gasoline, and would instead be subject to new fuel quality
requirements that apply to all EFF (E16-83). This would allow EFF
blender pump-refiners to demonstrate compliance with the proposed fuel
quality requirements for the EFF they produce by maintaining PTDs for
the parent blends they use to make EFF and participating in an EFF
quality survey.
Under the current regulations, the production of the E10 or E15
gasoline blends at blender pumps also subjects blender pump-refiners to
all of the gasoline refiner requirements. This proposal would provide a
streamlined means for producers of gasoline at blender pumps to
demonstrate compliance with these gasoline refiner requirements by
keeping the PTDs from the parent blends that were used. The proposed
provisions for producers of EFF and gasoline at blender pumps are
consistent with the common business practices and commensurate with the
ability of blender pump-refiners to affect the quality of the EFF and
gasoline (E15 and E10) they produce. Hence, we expect that these
proposed provisions would substantially reduce the cost of compliance
for blender pump-refiners.
The proposed provisions for EFF include new registration,
reporting, recordkeeping, PTD, and fuel survey requirements for EFF
full-refiners and bulk blender-refiners as well as recordkeeping
requirements for distributors and retailers of EFF and manufacturers of
additives for use in EFF. To support the proposed provisions to allow
the use of certified natural gasoline EFF blendstock, this proposal
also includes registration, batch testing, reporting, recordkeeping,
and PTD requirements for natural gasoline EFF blendstock refiners and
[[Page 80918]]
importers. The proposed requirements are consistent with other EPA fuel
programs, and the associated costs are modest and necessary to support
EPA compliance oversight.\355\ The use of natural gasoline as an EFF
blendstock would represent a new market opportunity to natural gasoline
producers. We anticipate that there would be sufficient economic
incentive to producers of natural gasoline to overcome the burden of
entry into this new outlet for their natural gasoline product. However,
natural gasoline producers would not be compelled to do so and could
choose to continue to use existing market outlets for their product.
---------------------------------------------------------------------------
\355\ These costs are discussed in the ICR associated with this
rule, as summarized in section XI.B of this preamble.
---------------------------------------------------------------------------
3. Other Proposed RFS and Fuels Program Revisions
The EPA does not anticipate that there would be any significant
costs associated with the proposed revisions to the RFS and other fuels
programs discussed in sections V, VI, VIII, and IX of this preamble.
XI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review because it
raises novel legal or policy issues. Any changes made in response to
OMB recommendations have been documented in the docket.
B. Paperwork Reduction Act (PRA)
The information collection activities in this proposed rule have
been submitted for approval to OMB under the PRA. The Information
Collection Request (ICR) document that the EPA prepared has been
assigned EPA ICR numbers 2545.01 (for the proposed biointermediates
provisions) and 2544.01 (for the proposed EFF provisions). You can find
a copy of the ICR in the docket for this rule, and it is briefly
summarized here.
The information to be collected for the proposed biointermediate
provisions are based on the proposed registration, recordkeeping,
reporting, and PTD requirements in 40 CFR part 80, subpart M, which
would be mandatory for biointermediate producers and renewable fuel
producers that use a biointermediate. The proposed recordkeeping,
reporting, and PTD requirements require only the specific information
needed to determine compliance. All information submitted to the EPA
pursuant to the recordkeeping and reporting requirements for which a
claim of confidentiality is made is safeguarded according to the EPA
policies set forth in 40 CFR part 2, subpart B.
Respondents/affected entities: Biointermediate producers and
renewable fuel producers.
Respondent's obligation to respond: Mandatory. These recordkeeping
and reporting requirements are specifically authorized by section 114
of the CAA (42 U.S.C. 7414).
Estimated number of respondents: 45.
Frequency of response: Annually, quarterly.
Total estimated burden: 100,532 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
Total estimated cost: $4,030,939 (per year).
The information to be collected for the proposed EFF provisions are
based on the proposed registration, recordkeeping, reporting, and PTD
requirements in 40 CFR part 80, subpart N, which would be mandatory for
producers of EFF and natural gasoline EFF blendstock. The proposed
recordkeeping, reporting, and PTD requirements require only the
specific information needed to determine compliance. All information
submitted to the EPA pursuant to the recordkeeping and reporting
requirements for which a claim of confidentiality is made is
safeguarded according to the EPA policies set forth in 40 CFR part 2,
subpart B.
Respondents/affected entities: EFF refiners and importers, natural
gasoline EFF blendstock refiners and importers, independent surveyors,
and independent auditors.
Respondent's obligation to respond: Mandatory. These recordkeeping
and reporting requirements are specifically authorized by section 114
of the CAA (42 U.S.C. 7414).
Estimated number of respondents: 1,850.
Frequency of response: Annually.
Total estimated burden: 44,826 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
Total estimated cost: $4,577,031 (per year).
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for the
EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the EPA's need for this information, the
accuracy of the provided burden estimates and any suggested methods for
minimizing respondent burden to the EPA using the docket identified at
the beginning of this rule. You may also send your ICR-related comments
to OMB's Office of Information and Regulatory Affairs via email to
[email protected], Attention: Desk Officer for the EPA.
Since OMB is required to make a decision concerning the ICR between 30
and 60 days after receipt, OMB must receive comments no later than
December 16, 2016. The EPA will respond to any ICR-related comments in
the final rule.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden, or otherwise has a positive economic effect on the small
entities subject to the rule. The small entities directly regulated by
this proposed rule are primarily EFF refiners, biointermediate
producers, and renewable fuel producers. To the extent small EFF
refiners take advantage of the flexibilities provided by this action,
it will only result in a cost savings. The requisite compliance
requirements that go along with the proposed flexibilities will impose
only minor costs in comparison to the savings; otherwise parties would
not take advantage of the flexibility offered. Similarly, we do not
believe that a small biointermediate producer or renewable fuel
producer would choose to take advantage of the proposed program for
biointermediates unless there was sufficient economic incentive for
them to do so. Current small renewable fuel producers would not be
compelled to use biointermediates, and as such, any costs associated
with these provisions are purely voluntary. We do not anticipate that
there will be any significant costs associated with the other proposed
revisions to the RFS and other fuels programs. We have therefore
concluded that this action will have no net regulatory burden for all
directly regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does
[[Page 80919]]
not significantly or uniquely affect small governments. The action
implements mandates specifically and explicitly set forth in CAA
section 211(o) without the exercise of any policy discretion by the
EPA. The action imposes no enforceable duty on any state, local, or
tribal governments.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. This proposed rule will be implemented at the
Federal level and affects transportation fuel refiners, blenders,
marketers, distributors, importers, exporters, and renewable fuel
producers and importers. Tribal governments would be affected only to
the extent they produce, purchase, and use regulated fuels. Thus,
Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it implements specific standards
established by Congress in statutes (CAA section 211(o)).
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action provides a new/expanded
market opportunity for natural gasoline, allows renewable fuel
suppliers to take advantage of biointermediate feedstocks that might
make fuel production more economical, and proposes various other
revisions to the RFS program. There are no additional costs for sources
in the energy supply, distribution, or use sectors.
I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This action involves technical standards. The EPA proposes to
update a number of regulations that already contain voluntary consensus
standards, practices, and specifications to more recent versions of
these standards, and to propose the use of VCS for motor vehicle
gasoline, EFF, natural gasoline EFF blendstock, butane, and pentane. In
accordance with the requirements of 1 CFR 51.5, the EPA is proposing to
incorporate by reference the use of ASTM test methods listed below in
Table XI.I-1. A detailed discussion of these test methods can be found
in sections IV.F.2, IX.A, and IX.C of this preamble. The standards may
be obtained through the ASTM Web site (www.astm.org) or by calling ASTM
at (610) 832-9585.
This proposed rulemaking also involves environmental monitoring or
measurement. Consistent with the EPA's PBMS approach, in this proposal
we have decided to seek comment on to allow the use of any method that
meets prescribed performance criteria for sulfur in pentane, as well as
sulfur, benzene, aromatic content, distillation, RVP, and oxygenate
content in EFF and natural gasoline EFF blendstock. The PBMS approach
is intended to be more flexible and cost effective for the regulated
community; it is also intended to encourage innovation in analytical
technology and improved data quality. The EPA is proposing not to
preclude the use of any one method, whether it constitutes a VCS or
not, as long as it meets the performance criteria specified in this
proposal.
Table XI.I-1--Designated Analytical Test Methods and Specifications for
Gasoline, Denatured Fuel Ethanol for Use With Gasoline, Diesel,
Biodiesel, Pentane, Ethanol Flex Fuel, and Natural Gasoline Ethanol Flex
Fuel Blendstock
------------------------------------------------------------------------
Designated analytical method
Fuel parameter or specification or specification
------------------------------------------------------------------------
Manual sampling........................... ASTM D4057-12.
Automated sampling........................ ASTM D4177-95 (Reapproved
2010).
Sample compositing........................ ASTM D5854.
Standard Practice for Sampling and ASTM D5842-07.
Handling of Fuels for Volatility
Measurement.
Sulfur in EFF and Natural Gasoline EFF ASTM D2622-10.
Blendstock.
Sulfur in EFF and Natural Gasoline EFF ASTM D1266-13.
Blendstock.
Sulfur in EFF and Natural Gasoline EFF ASTM D3120-08 (Reapproved
Blendstock. 2014).
Sulfur in EFF and Natural Gasoline EFF ASTM D5453-12.
Blendstock.
Sulfur in EFF and Natural Gasoline EFF ASTM D6920-13.
Blendstock.
Sulfur in EFF and Natural Gasoline EFF ASTM D7220-12.
Blendstock.
Sulfur in EFF and Natural Gasoline EFF ASTM D7039-13.
Blendstock.
Benzene in EFF and Natural Gasoline EFF ASTM D5769-10.
Blendstock.
Benzene in EFF and Natural Gasoline EFF ASTM D5580-13.
Blendstock.
Benzene in EFF and Natural Gasoline EFF ASTM D3606-10.
Blendstock.
Benzene in EFF and Natural Gasoline EFF ASTM D6730-01 (Reapproved
Blendstock. 2010).
RVP in EFF and Natural Gasoline EFF ASTM D5191-13.
Blendstock.
RVP in EFF and Natural Gasoline EFF ASTM D5842-14.
Blendstock.
RVP in EFF and Natural Gasoline EFF ASTM D6378-10.
Blendstock.
Distillation in Natural Gasoline EFF ASTM D86-12.
Blendstock.
Oxygenate Content in EFF and Natural ASTM D5599-00 (Reapproved
Gasoline EFF Blendstock. 2010).
Oxygenate Content in EFF and Natural ASTM D4815-15a.
Gasoline EFF Blendstock.
Benzene in Motor Vehicle Gasoline......... ASTM D5769-10.
Aromatics in Pentane...................... ASTM D6730-01 (Reapproved
2011).
Aromatics in Pentane...................... ASTM D6729-14.
[[Page 80920]]
Benzene in Pentane........................ ASTM D6730-01 (Reapproved
2011).
Benzene in Pentane........................ ASTM D6729-14.
C6 plus hydrocarbons in Pentane........... ASTM D6730-01 (Reapproved
2011).
C6 plus hydrocarbons in Pentane........... ASTM D6729-14.
Standard Guide for Use of Petroleum ASTM D1250-08 (2013).
Measurement Tables.
Standard Test Method for Laboratory ASTM D4444-13.
Standardization and Calibration of Hand-
Held Moisture Mixtures.
Standard Test Method for the Analysis of ASTM E870-82 (2013).
Wood Fuels.
Standard Specification for Biodiesel ASTM D6751-15.
Blendstock (B100) for Middle Distillate
Fuels.
Standard Practice for Using Significant ASTM E29-13.
Digits in Test Data to Determine
Conformance with Specifications.
Standard Specification for Diesel Fuel ASTM D975-15.
Oils.
Standard Specification for Gasoline....... ASTM D4814-14b.
Standard Specification for Denatured Fuel ASTM D4806-15.
Ethanol for use with gasoline.
------------------------------------------------------------------------
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations, and Low-Income Populations
The EPA believes the human health or environmental risk addressed
by this action will not have potential disproportionately high and
adverse human health or environmental effects on minority, low-income,
or indigenous populations. This proposed rule does not affect the level
of protection provided to human health or the environment by applicable
air quality standards. This action does not relax the control measures
on sources regulated by the fuel programs and RFS regulations and
therefore will not cause emissions increases from these sources.
List of Subjects in 40 CFR Part 79
Fuel additives, Gasoline, Motor vehicle pollution, Penalties,
Reporting and recordkeeping requirements.
List of Subjects in 40 CFR Part 80
Fuel additives, Gasoline, Imports, Incorporation by reference,
Labeling, Motor vehicle pollution, Penalties, Reporting and
recordkeeping requirements.
Dated: October 3, 2016.
Gina McCarthy,
Administrator.
For the reasons set forth in the preamble, the EPA proposes to
amend 40 CFR parts 79 and 80 as follows:
PART 79--REGISTRATION OF FUEL AND FUEL ADDITIVES
0
1. The authority citation for part 79 continues to read as follows:
Authority: 42 U.S.C. 7414, 7524, 7545 and 7601.
Subpart D--Designation of Fuels and Additives
0
2. Section 79.32 is amended by revising paragraph (a)(3) to read as
follows:
Sec. 79.32 Motor vehicle gasoline.
(a) * * *
(3) Motor vehicle gasoline, leaded, non-premium--motor vehicle
gasoline that contains more than 0.05 gram of lead per gallon but is
not sold as ``premium.'' The Act defines the term ``motor vehicle'' to
mean any self-propelled vehicle designed for transporting persons or
property on a street or highway. For purposes of this registration,
however, gasoline specifically blended and marketed for motorcycles,
flexible fuel vehicles as defined in 40 CFR 86.1803-01, or flexible
fuel engines as defined in 40 CFR 1054.801, is excluded.
* * * * *
Subpart F--Testing Requirements for Registration
0
3. Section 79.51 is amended by revising the last sentence of paragraph
(f)(6)(iii) to read as follows:
Sec. 79.51 General requirements and provisions.
* * * * *
(f) * * *
(6) * * *
(iii) * * * The registrants' communications should be sent to the
following address: Attn: Fuel/Additives Registration, U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Mail Code
6405A, Washington, DC 20460.
* * * * *
0
4. Section 79.59 is amended by revising the last sentence of paragraph
(a)(1) introductory text to read as follows:
Sec. 79.59 Reporting requirements.
(a) * * *
(1) * * * Forms for submitting this data may be obtained from EPA
at the following address: Attn: Fuel/Additives Registration, U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Mail Code
6405A, Washington, DC 20460.
* * * * *
PART 80--REGULATION OF FUEL AND FUEL ADDITIVES
0
5. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
Subpart A--General Provisions
0
6. Section 80.2 is amended by:
0
a. Revising paragraphs (h) and (l);
0
b. Adding paragraphs (p) and (q);
0
c. Revising paragraphs (r) and (t);
0
d. Adding paragraph (aa); and
0
e. Revising paragraphs (vvv) and (aaaa).
The revisions and additions read as follows:
Sec. 80.2 Definitions.
* * * * *
(h) Refinery means any facility, including but not limited to, a
plant, tanker truck, or vessel where gasoline, diesel fuel, ethanol
flex fuel, or natural gasoline ethanol flex fuel blendstock is
produced, including any facility at which blendstocks are combined to
produce gasoline, diesel fuel, ethanol flex fuel, or natural gasoline
ethanol flex fuel blendstock, or at which blendstock is added to
gasoline, diesel fuel, ethanol
[[Page 80921]]
flex fuel, or natural gasoline ethanol flex fuel blendstock.
* * * * *
(l) Distributor means any person who transports or stores or causes
the transportation or storage of gasoline, diesel fuel, ethanol flex
fuel, or natural gasoline ethanol flex fuel blendstock at any point
between any gasoline, diesel fuel, ethanol flex fuel, or natural
gasoline ethanol flex fuel refinery or importer's facility and any
retail outlet or wholesale purchaser-consumer's facility.
* * * * *
(p) Blendstock for oxygenate blending or BOB means gasoline
blendstock (RBOB, CBOB, or GTAB) that could become finished gasoline
solely upon the addition of an oxygenate.
(q) Ethanol Flex Fuel or EFF means a fuel that is not gasoline, has
an ethanol content greater than that covered under a waiver obtained
from the Administrator pursuant to the requirements of Clear Air Act
section 211(f)(4), contains no more than 83 volume percent ethanol, and
is used, intended for use, or made available for use in flex-fuel
vehicles or flex-fuel engines.
(r) Importer means a person who imports gasoline, gasoline blending
stocks or components, diesel fuel, ethanol flex fuel, or natural
gasoline ethanol fuel blendstock from a foreign country into the United
States (including the Commonwealth of Puerto Rico, the Virgin Islands,
Guam, American Samoa, and the Northern Mariana Islands).
* * * * *
(t) Carrier means any distributor who transports or stores or
causes the transportation or storage of gasoline, diesel fuel, BOB,
ethanol flex fuel, or natural gasoline ethanol flex fuel blendstock
without taking title to or otherwise having any ownership of the
gasoline, diesel fuel, BOB, ethanol flex fuel, or natural gasoline
ethanol flex fuel blendstock and without altering either the quality or
quantity of the gasoline, diesel fuel, BOB, ethanol flex fuel, or
natural gasoline ethanol flex fuel blendstock.
* * * * *
(aa) Natural gasoline ethanol flex fuel blendstock means a mixture
of hydrocarbons composed mostly of pentanes that is separated either
from natural gas at a natural gas processing plant or from crude oil at
a petroleum refinery, and that is blended into, intended to be blended
into, or offered to be blended into ethanol flex fuel.
* * * * *
(vvv) Denatured Fuel Ethanol or DFE means an alcohol of the
chemical formula C2H6O that contains an ethanol
denaturant to make it unfit for human consumption, is used or is
intended for use to produce gasoline or ethanol flex fuel, and meets
the requirements of Sec. 80.1610.
* * * * *
(aaaa) Conventional gasoline blendstock for oxygenate blending or
CBOB means gasoline blendstock that could become conventional gasoline
solely upon the addition of oxygenate.
* * * * *
0
7. Section 80.8 is amended by revising the section heading and
introductory text to read as follows:
Sec. 80.8 Sampling methods for gasoline, diesel fuel, fuel additives,
ethanol flex fuel, natural gasoline ethanol flex fuel blendstock, and
renewable fuels.
The sampling methods specified in this section shall be used to
collect samples of gasoline, diesel fuel, blendstocks, fuel additives,
ethanol flex fuel, natural gasoline ethanol flex fuel blendstock, and
renewable fuels for purposes of determining compliance with the
requirements of this part.
* * * * *
0
8. Section 80.9 is revised to read as follows:
Sec. 80.9 Rounding a test result for determining conformance with a
fuels standard.
(a) For purposes of determining compliance with the fuel standards
of 40 CFR part 80, a test result will be rounded to the nearest unit of
significant digits specified in the applicable fuel standard in
accordance with the rounding method described in ASTM E29-13, Standard
Practice for Using Significant Digits in Test Data to Determine
Conformance with Specifications, approved August 1, 2013.
(b) ASTM E29-13 is incorporated by reference. This incorporation by
reference was approved by the Director of the Federal Register in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy may be
obtained from the American Society for Testing and Materials, 100 Barr
Harbor Dr., West Conshohocken, PA 19428-2959. Copies may be inspected
at the Air Docket, EPA/DC, William Jefferson Clinton Building West,
Room B102, 1301 Constitution Ave. NW., Washington, DC, or at the
National Archives and Records Administration (NARA). For information on
the availability of this material at NARA, call (202) 741-6030 or go
to:
0
9. Section 80.10 is added to read as follows:
Sec. 80.10 Addresses.
(a) For submitting notifications, applications, petitions, or other
communications with the EPA, use one of the following addresses for
mailing:
(1) For U.S. Mail: Attn: [TITLE AS DIRECTED], U.S. Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Mail Code 6405A,
Washington, DC 20460
(2) For commercial service: Attn: [TITLE AS DIRECTED], U.S.
Environmental Protection Agency, William Jefferson Clinton Building
North, Mail Code 6405A, Room 6520V, 1200 Pennsylvania Ave. NW.,
Washington, DC 20004; Phone: 1-800-385-6164.
(b) [Reserved]
Subpart B--Controls and Prohibitions
0
10. Section 80.27 is amended by revising paragraphs (b) and (e)(1)(i)
to read as follows:
Sec. 80.27 Controls and prohibitions on gasoline volatility.
* * * * *
(b) Determination of compliance. Compliance with the standards
listed in paragraph (a) of this section shall be determined by the use
of the sampling methodologies specified in Sec. 80.8 and the testing
methodology specified in Sec. 80.46(c) until December 31, 2015, and
Sec. 80.47 beginning January 1, 2016.
* * * * *
(e) * * *
(1) * * *
(i) Any person may request a testing exemption by submitting an
application that includes all the information listed in paragraphs
(e)(3) through (6) of this section to the attention of ``Test
Exemptions'' to the address in Sec. 80.10(a).
* * * * *
Subpart D--Reformulated Gasoline
0
11. Section 80.46 is amended by:
0
a. Revising paragraphs (a), (b), (d), (e), (f), and (g);
0
b. Redesignating paragraph (h) as paragraph (k) and adding new
paragraphs (h) through (j); and
0
c. Revising newly redesignated paragraph (k)(1).
The revisions and additions read as follows:
Sec. 80.46 Measurement of reformulated gasoline and conventional
gasoline fuel parameters.
(a) Sulfur. Sulfur content of gasoline and butane must be
determined by use of the following methods:
[[Page 80922]]
(1)(i) Through December 31, 2015, the sulfur content of gasoline
must be determined by ASTM D2622.
(ii) Beginning January 1, 2016, the sulfur content of gasoline must
be determined by a test method approved under Sec. 80.47.
(2)(i) Through December 31, 2015, the sulfur content of butane must
be determined by ASTM D6667.
(ii) Beginning January 1, 2016, the sulfur content of butane must
be determined by a test method approved under Sec. 80.47.
(b) Olefins. Olefin content must be determined by use of the
following methods:
(1) Through December 31, 2015, olefin content must be determined
using ASTM D1319.
(2) Beginning January 1, 2016, olefin content must be determined by
a test method approved under Sec. 80.47.
* * * * *
(d) Distillation. Distillation parameters must be determined by use
of the following test methods:
(1) Through December 31, 2015, distillation parameters must be
determined using ASTM D86.
(2) Beginning January 1, 2016, distillation parameters must be
determined by a test method approved under Sec. 80.47. (Note: The
precision estimates for reproducibility in ASTM D86-12 do not apply;
see Sec. 80.47(h).)
(e) Benzene. Benzene content must be determined by use of the
following test methods:
(1) Through December 31, 2015, benzene content must be determined
using ASTM D5769 or ASTM D3606, except that ASTM D3606 instrument
parameters shall be adjusted to ensure complete resolution of the
benzene, ethanol, and methanol peaks because ethanol and methanol may
cause interference with ASTM D3606 when present.
(2) Beginning January 1, 2016, benzene content must be determined
by a test method approved under Sec. 80.47.
(f) Aromatic content. Olefin content must be determined by use of
the following methods:
(1) Through December 31, 2015, aromatic content must be determined
using ASTM D5769, except the sample chilling requirements in section 8
of this standard method are optional.
(2) Beginning January 1, 2016, aromatic content must be determined
by a test method approved under Sec. 80.47.
(g) Oxygen and oxygenate content analysis. Oxygen and oxygenate
content must be determined by use of the following methods:
(1) Through December 31, 2015, oxygen and oxygenate content must be
determined using ASTM D5599.
(2) Beginning January 1, 2016, oxygen and oxygenate content must be
determined by a test method approved under Sec. 80.47.
(h) Benzene in pentane. (1) Benzene content in pentane must be
determined using the primary test method ASTM D6730.
(2) Any refiner, importer, or oxygenate blender may determine
benzene content in pentane using ASTM D6729 for purposes of meeting any
testing requirement, provided that the test result is correlated with
the method specified in paragraph (h)(1) of this section.
(i) Aromatics in pentane. (1) Aromatic content in pentane must be
determined using the primary test method ASTM D6730.
(2) Any refiner, importer, or oxygenate blender may determine
aromatic content in pentane using ASTM D6729 for purposes of meeting
any testing requirement, provided that the test result is correlated
with the method specified in paragraph (i)(1) of this section.
(j) C6-plus hydrocarbons in pentane. (1) C6-plus hydrocarbon
content in pentane must be determined using the primary test method
ASTM D6730.
(2) Any refiner, importer, or oxygenate blender may determine C6-
plus hydrocarbon content in pentane using ASTM D6729 for purposes of
meeting any testing requirement, provided that the test result is
correlated with the method specified in paragraph (j)(1) of this
section.
(k) * * *
(1) ASTM International material. The following standards are
available from ASTM International, 100 Barr Harbor Dr., P.O. Box C700,
West Conshohocken, PA 19428-2959, (877) 909-ASTM, or http://www.astm.org:
(i) ASTM D86-12, Standard Test Method for Distillation of Petroleum
Products at Atmospheric Pressure, approved December 1, 2012 (``ASTM
D86'').
(ii) ASTM D1319-13, Standard Test Method for Hydrocarbon Types in
Liquid Petroleum Products by Fluorescent Indicator Adsorption, approved
May 1, 2013 (``ASTM D1319'').
(iii) ASTM D2622-10, Standard Test Method for Sulfur in Petroleum
Products by Wavelength Dispersive X-ray Fluorescence Spectrometry,
approved February 15, 2010 (``ASTM D2622'').
(iv) ASTM D3606-10, Standard Test Method for Determination of
Benzene and Toluene in Finished Motor and Aviation Gasoline by Gas
Chromatography, approved October 1, 2010 (``ASTM D3606'').
(v) ASTM D5191-13, Standard Test Method for Vapor Pressure of
Petroleum Products (Mini Method), approved December 1, 2013 (``ASTM
D5191'').
(vi) ASTM D5599-00 (Reapproved 2010), Standard Test Method for
Determination of Oxygenates in Gasoline by Gas Chromatography and
Oxygen Selective Flame Ionization Detection, approved October 1, 2010
(``ASTM D5599'').
(vii) ASTM D5769-10, Standard Test Method for Determination of
Benzene, Toluene, and Total Aromatics in Finished Gasolines by Gas
Chromatography/Mass Spectrometry, approved May 1, 2010 (``ASTM
D5769'').
(viii) ASTM D6667-10, Standard Test Method for Determination of
Total Volatile Sulfur in Gaseous Hydrocarbons and Liquefied Petroleum
Gases by Ultraviolet Fluorescence, approved October 1, 2010 (``ASTM
D6667'').
(ix) ASTM D6730-01 (Reapproved 2011), Standard Test Method for
Determination of Individual Components in Spark Ignition Fuels by 100-
Metre Capillary (Pre-Column) High-Resolution Gas Chromatography,
approved May 1, 2011 (``ASTM D6730'').
(x) ASTM D6729-14, Standard Test Method for Determination of
Individual Components in Spark Ignition Fuels by 100-Metre Capillary
High-Resolution Gas Chromatography, approved October 1, 2014 (``ASTM
D6729'').
* * * * *
0
12. Section 80.47 is amended by:
0
a. Revising paragraphs (b), (c)(2)(i) and (ii), (c)(3), (d)(2), (e)(2),
(f)(2), (g)(2), (h)(2), (i)(2), (j)(2), and (l)(2)(i);
0
b. Adding paragraph (l)(2)(iii); and
0
c. Revising paragraphs (l)(4), (n)(1), (n)(2)(i), (o)(1), (o)(2)(i),
(p)(1), (p)(2)(i), and (p)(3)(i).
The revisions and addition read as follows:
Sec. 80.47 Performance-based Analytical Test Method Approach.
* * * * *
(b) Precision and accuracy criteria for approval for the absolute
fuel parameter of gasoline sulfur and pentane sulfur. (1) Precision.
Beginning January 1, 2016, for motor vehicle gasoline, gasoline
blendstock, pentane, and gasoline fuel additives subject to the
gasoline sulfur standard at Sec. Sec. 80.195 and 80.1603, the maximum
allowable standard deviation computed from the results of a minimum of
20 tests made over 20 days
[[Page 80923]]
(tests may be arranged into no fewer than five batches of four or fewer
tests each, with only one such batch allowed per day over the minimum
of 20 days) on samples using good laboratory practices taken from a
single homogeneous commercially available gasoline must be less than or
equal to 1.5 times the repeatability ``r'' divided by 2.77, where ``r''
equals the ASTM repeatability of ASTM D7039 (Example: A 10 ppm sulfur
gasoline sample: Maximum allowable standard deviation of 20 tests
<=1.5*(1.73ppm/2.77) = 0.94 ppm). The 20 results must be a series of
tests with a sequential record of analysis and no omissions. A
laboratory facility may exclude a given sample or test result only if
the exclusion is for a valid reason under good laboratory practices and
it maintains records regarding the sample and test results and the
reason for excluding them.
(2) Accuracy. Beginning January 1, 2016, for motor vehicle
gasoline, gasoline blendstock, pentane, and gasoline fuel additives
subject to the gasoline sulfur standard at Sec. Sec. 80.195 and
80.1603:
(i) The arithmetic average of a continuous series of at least 10
tests performed using good laboratory practices on a commercially
available gravimetric sulfur standard in the range of 1-10 ppm shall
not differ from the accepted reference value (ARV) of the standard by
more than 0.47 ppm sulfur, where the accuracy criteria is 0.75*(1.5*r/
2.77), where ``r'' is the repeatability (Example: 0.75*(1.5*1.15ppm/
2.77) = 0.47 ppm);
(ii) The arithmetic average of a continuous series of at least 10
tests performed using good laboratory practices on a commercially
available gravimetric sulfur standard in the range of 10-20 ppm shall
not differ from the ARV of the standard by more than 0.94 ppm sulfur,
where the accuracy criteria is 0.75*(1.5*r/2.77), where ``r'' is the
repeatability (Example: 0.75*(1.5*2.30ppm/2.77) = 0.94 ppm); and
(iii) In applying the tests of paragraphs (b)(2)(i) and (ii) of
this section, individual test results shall be compensated for any
known chemical interferences using good laboratory practices.
(3) The test method specified at Sec. 80.46(a)(1) is exempt from
the requirements of paragraphs (b)(1) and (2) of this section.
(c) * * *
(2) * * *
(i) The arithmetic average of a continuous series of at least 10
tests performed using good laboratory practices on a commercially
available gravimetric sulfur standard in the range of 1-10 ppm, say 10
ppm, shall not differ from the ARV of the standard by more than 0.47
ppm sulfur, where the accuracy criteria is 0.75*(1.5*r/2.77), where
``r'' is the repeatability (Example: 0.75*(1.5*1.15ppm/2.77) = 0.47
ppm);
(ii) The arithmetic average of a continuous series of at least 10
tests performed using good laboratory practices on a commercially
available gravimetric sulfur standard in the range of 10-20 ppm, say 20
ppm, shall not differ from the ARV of the standard by more than 0.94
ppm sulfur, where the accuracy criteria is 0.75*(1.5*r/2.77), where
``r'' is the repeatability (Example: 0.75*(1.5*2.30ppm/2.77) = 0.94
ppm); and
* * * * *
(3) The test method specified at Sec. 80.46(a)(2) is exempt from
the requirements of paragraphs (c)(1) and (2) of this section.
(d) * * *
(2) The test method specified at Sec. 80.46(b)(1) is exempt from
the requirements of paragraph (d)(1) of this section.
(e) * * *
(2) The test method specified at Sec. 80.46(f)(1) is exempt from
the requirements of paragraph (e)(1) of this section.
(f) * * *
(2) The test method specified at Sec. 80.46(g)(1) is exempt from
the requirements of paragraph (f)(1) of this section.
(g) * * *
(2) The test method specified at Sec. 80.46(c)(1) is exempt from
the requirements of paragraph (g)(1) of this section.
(h) * * *
(2) The test method specified at Sec. 80.46(d)(1) is exempt from
the requirements of paragraph (h)(1) of this section.
(i) * * *
(2) The test methods specified at Sec. 80.46(e)(1) are exempt from
the requirements of paragraph (i)(1) of this section.
(j) * * *
(2) The test method specified at Sec. 80.2(z) is exempt from the
requirements of paragraph (j)(1) of this section.
* * * * *
(l) * * *
(2)(i) The test facility demonstrates that the test method meets
the applicable precision information for the method-defined or non-VCSB
absolute fuel parameter as described in this section.
* * * * *
(iii) For the non-VCSB absolute fuel parameter of sulfur in
gasoline, butane, and pentane, the test facility shall include
information demonstrating that the comparison of the non-VCSB test
method and respective designated primary test method results in sample
specific biases that are determined as random. If the sample specific
biases through use of ASTM D6708 between the non-VCSB test method and
designated primary test method cannot be determined as random, the non-
VCSB test method is disqualified from approval.
* * * * *
(4) The test methods specified at Sec. Sec. 80.2(z) and
80.46(a)(1), (a)(2), (b)(1), (c)(1), (d)(1), (e)(1), (f)(1), and (g)(1)
are exempt from the requirements of paragraphs (l)(1) through (3) of
this section.
* * * * *
(n) * * *
(1)(i) Accuracy SQC. Every facility shall conduct tests on every
instrument with a commercially available gravimetric reference
material, or check standard as defined in ASTM D6299 at least three
times a year using good laboratory practices. The facility must
construct ``MR'' and ``I'' charts with control lines as described in
section 8.4 and appropriate Annex sections of this standard practice.
In circumstances where the absolute difference between the mean of
multiple back-to-back tests of the standard reference material and the
ARV of the standard reference material is greater than 0.75 times the
published reproducibility of the test method, the cause of such
difference must be investigated by the facility. Records of the
standard reference materials measurements as well as any investigations
into any exceedance of these criteria must be kept for a period of five
years.
(ii) The expanded uncertainty of the ARV of consensus named fuels
shall be included in the following accuracy qualification criterion:
Accuracy qualification criterion = square root [(0.75R)[supcaret]2 +
(0.75R)[supcaret]2/L], where L = the number of single results obtained
from different labs used to calculate the consensus ARV.
(2)(i) Precision SQC. Every facility shall conduct tests of every
instrument with a quality control material as defined in paragraph
3.2.8 in ASTM D6299 either once per week or once per every 20
production tests, whichever is more frequent. The facility must
construct and maintain an ``I'' chart as described in section 8 and
section A1.5.1 and a ``MR'' chart as described in section A1.5.4. Any
violations of control
[[Page 80924]]
limit(s) shall be investigated by personnel of the facility and records
kept for a period of five years. The test facility's long term site
precision standard deviation, as demonstrated by the ``I'' chart and
``M'' chart, must meet the applicable precision criterion as described
in paragraph (b)(1) or (c)(1) of this section.
* * * * *
(o) * * *
(1)(i) Accuracy SQC. Every facility shall conduct tests of every
instrument with a commercially available check standard as defined in
ASTM D6299 at least three times a year using good laboratory practices.
The check standard must be an ordinary fuel with levels of the fuel
parameter of interest close to either the applicable regulatory
standard or the average level of use for the facility. For facilities
using a VCSB designated method defined test method, the ARV of the
check standard must be determined by the respective designated test
method for the fuel parameter following the guidelines of ASTM D6299.
Facilities using a VCSB alternative method defined test method must use
the ARV of the check standard as determined in a VCSB Inter Laboratory
Crosscheck Program (ILCP) or a commercially available ILCP following
the guidelines of ASTM D6299. If the ARV is not provided in the ILCP,
accuracy must be assessed based upon the respective EPA-designated test
method using appropriate production samples. The facility must
construct ``MR'' and ``I'' charts with control lines as described in
section 8.4 and appropriate Annex sections of this standard practice.
In circumstances where the absolute difference between test results and
the ARV of the check standard based on the designated primary test
method is greater than 0.75 times the published reproducibility of the
designated primary test method, the cause of such difference must be
investigated by the facility. Participation in a VCSB ILCP or a
commercially available ILCP meeting the ASTM D6299 requirements for
ILCP check standards, based on the designated primary test method, at
least three times a year, and, meeting the requirements in this section
for absolute differences between the test results and the ARV of the
check standard based on the designated primary test method of less than
0.75 times the published reproducibility of the designated primary test
method obtained through participation in the ILCP satisfies this
Accuracy SQC requirement (Examples of VCSB ILCPs: ASTM Reformulated
Gasoline ILCP or ASTM motor gasoline ILCP). Records of the standard
reference materials measurements as well as any investigations into any
exceedance of these criteria must be kept for a period of five years.
(ii) The expanded uncertainty of the ARV of consensus named fuels
shall be included in the following accuracy qualification criterion:
Accuracy qualification criterion = square root [(0.75R)-2 + (0.75R)-2/
L], where L = the number of single results obtained from different labs
used to calculate the consensus ARV.
(2)(i) Precision SQC. Every facility shall conduct tests of every
instrument with a quality control material as defined in paragraph
3.2.8 in ASTM D6299 either once per week or once per every 20
production tests, whichever is more frequent. The facility must
construct and maintain an ``I'' chart as described in section 8 and
section A1.5.1 and a ``MR'' chart as described in section A1.5.4. Any
violations of control limit(s) shall be investigated by personnel of
the facility and records kept for a period of five years. The test
facility's long term site precision standard deviation, as demonstrated
by the ``I'' chart and ``M'' chart, must meet the applicable precision
criterion as described in paragraph (d)(1), (e)(1), (f)(1), (g)(1),
(h)(1), (i)(1), or (j)(1) of this section.
* * * * *
(p) * * *
(1)(i) Accuracy SQC for Non-VCSB Method-Defined test methods with
minimal matrix effects. Every facility shall conduct tests on every
instrument with a commercially available check standard as defined in
the ASTM D6299 at least three times a year using good laboratory
practices. The check standard must be an ordinary fuel with levels of
the fuel parameter of interest close to either the applicable
regulatory standard or the average level of use for the facility.
Facilities using a Non-VCSB alternative method defined test method must
use the ARV of the check standard as determined in either a VCSB Inter
Laboratory Crosscheck Program (ILCP) or a commercially available ILCP
following the guidelines of ASTM D6299. If the ARV is not provided in
the ILCP, accuracy must be assessed based upon the respective EPA
designated test method using appropriate production samples. The
facility must construct ``MR'' and ``I'' charts with control lines as
described in section 8.4 and appropriate Annex sections of this
standard practice. In circumstances where the absolute difference
between the mean of multiple back-to-back tests of the standard
reference material and the ARV of the standard reference material is
greater than 0.75 times the published reproducibility of the fuel
parameter's respective designated test method, the cause of such
difference must be investigated by the facility. Records of the
standard reference materials measurements as well as any investigations
into any exceedance of these criteria must be kept for a period of five
years.
(ii) The expanded uncertainty of the ARV of consensus named fuels
shall be included in the following accuracy qualification criterion:
Accuracy qualification criterion = square root [(0.75R)-2 + (0.75R)-2/
L], where L = the number of single results obtained from different labs
used to calculate the consensus ARV.
(2)(i) Accuracy SQC for Non-VCSB Method-Defined test methods with
high sensitivity to matrix effects. Every facility shall conduct tests
on every instrument with a production fuel on at least a quarterly
basis using good laboratory practices. The production fuel must be
representative of the production fuels that are routinely analyzed by
the facility. The ARV of the production fuel must be determined by the
respective reference installation of the designated test method for the
fuel parameter following the guidelines of ASTM D6299. The facility
must construct ``MR'' and ``I'' charts with control lines as described
in section 8.4 and appropriate Annex sections of this standard
practice. In circumstances where the absolute difference between the
mean of multiple back-to-back tests of the standard reference material
and the ARV of the standard reference material is greater than 0.75
times the published reproducibility of the test method must be
investigated by the facility. Documentation on the identity of the
reference installation and its control status must be maintained on the
premises of the method-defined alternative test method. Records of the
standard reference materials measurements as well as any investigations
into any exceedances of this criterion must be kept for a period of
five years.
* * * * *
(3)(i) Precision SQC. Every facility shall conduct tests of every
instrument with a quality control material as defined in paragraph
3.2.8 in ASTM D6299 either once per week or once per every 20
production tests, whichever is more frequent. The facility must
construct and maintain an ``I'' chart as described in section 8 and
section A1.5.1 and a ``MR'' chart as described in section A1.5.4. Any
violations of control
[[Page 80925]]
limit(s) shall be investigated by personnel of the facility and records
kept for a period of five years. The test facility's long term site
precision standard deviation, as demonstrated by the ``I'' chart and
``M'' chart, must meet the applicable precision criterion as described
in paragraph (b)(1), (c)(1), (d)(1), (e)(1), (f)(1), (g)(1), (h)(1),
(i)(1) or (j)(1) of this section.
* * * * *
0
13. Section 80.69 is amended by revising paragraph (a)(11)(viii)(C) to
read as follows:
Sec. 80.69 Requirements for downstream oxygenate blending.
(a) * * *
(11) * * *
(viii) * * *
(C) The survey plan must be sent to the attention of ``RFG Program
(Survey Plan)'' to the address in Sec. 80.10(a);
* * * * *
Subpart E--Anti-Dumping
0
14. Section 80.93 is amended by revising paragraph (d)(4) to read as
follows:
Sec. 80.93 Individual baseline submission and approval.
* * * * *
(d) * * *
(4) For U.S. Postal delivery, the petition shall be sent to the
attention of ``RFG Program (Baseline Petition)'' to the address in
Sec. 80.10(a).
* * * * *
Subpart F--Attest Engagements
0
15. Section 80.130 is amended by revising paragraph (a)(2) to read as
follows:
Sec. 80.130 Agreed upon procedures reports.
(a) * * *
(2) The CPA or CIA shall provide a copy of the auditor's report to
the EPA within the time specified in Sec. 80.75(m).
* * * * *
Subpart G--Detergent Gasoline
0
16. Section 80.164 is amended by revising the first two sentences of
paragraph (a)(5) to read as follows:
Sec. 80.164 Certification test fuels.
(a) * * *
(5) Unless otherwise required by this section, finished test fuels
must conform to the requirements for commercial gasoline described in
ASTM D 4814-14b, Standard Specification for Automotive Spark-Ignition
Engine Fuel, approved October 1, 2014, which is incorporated by
reference. This incorporation by reference was approved by the Director
of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. Copies may be inspected at U.S. Environmental Protection
Agency, William Jefferson Clinton Building West, Room B102, 1301
Constitution Ave. NW., Washington, DC 20460, or at the National
Archives and Records Administration (NARA). * * *
* * * * *
0
17. Section 80.169 is amended by revising paragraph (c)(9)(v) to read
as follows:
Sec. 80.169 Liability for violations of the detergent certification
program controls and prohibitions.
* * * * *
(c) * * *
(9) * * *
(v) In all such instances, a curing VAR must be created and
maintained, which documents the use of the appropriate equation as
specified above, and otherwise complies with the requirements of Sec.
80.170(f)(7).
0
18. Section 80.170 is amended by redesignating paragraphs (f)(4)
through (6) as (f)(5) through (7) and adding a new paragraph (f)(4) to
read as follows:
Sec. 80.170 Volumetric additive reconciliation (VAR), equipment
calibration, and recordkeeping requirements.
* * * * *
(f) * * *
(4) For all detergent blending facilities, a record specifying, for
each VAR period, the total volume in gallons of unadditized base
gasoline used to produce ethanol flex fuel pursuant to the requirements
of subpart N of this part;
* * * * *
0
19. Section 80.173 is amended by adding paragraph (d) to read as
follows:
Sec. 80.173 Exemptions.
* * * * *
(d) Ethanol flex fuel exemption. Any gasoline or blendstock for
oxygenate blending used to make ethanol flex fuel, as defined in Sec.
80.2(q), is exempt from the provisions of this subpart, provided the
ethanol flex fuel is in compliance with all applicable requirements of
subpart N of this part.
0
20. Section 80.174 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 80.174 Addresses.
* * * * *
(b) Other detergent registration and certification data, and
certain other information which may be specified in this subpart, shall
be sent to the attention of ``Detergent Additive Certification'' to the
address in Sec. 80.10(a).
(c) Notifications to EPA regarding program exemptions, detergent
dilution and commingling, and certain other information which may be
specified in this subpart, shall be sent to the attention of
``Detergent Enforcement Program'' to the address in Sec. 80.10(a).
0
21. Section 80.177 is amended by revising paragraphs (d)(1)(i) and (ii)
to read as follows:
Sec. 80.177 Certification test fuels for use with the alternative
test procedures and standards.
* * * * *
(d) * * *
(1) * * *
(i) ASTM D4806-15, Standard Specification for Denatured Fuel
Ethanol for Blending with Gasolines for Use as Automotive Spark-
Ignition Engine Fuel, approved April 1, 2015.
(ii) ASTM D4814-14b, Standard Specification for Automotive Spark-
Ignition Engine Fuel, approved October 1, 2014.
* * * * *
Subpart H--Gasoline Sulfur
0
22. Section 80.235 is amended by revising paragraph (b) to read as
follows:
Sec. 80.235 How does a refiner obtain approval as a small refiner?
* * * * *
(b) Applications for small refiner status must be sent to the
attention of ``Gasoline Sulfur Program (Small Refiner)'' to the address
in Sec. 80.10(a).
* * * * *
0
23. Section 80.290 is amended by revising paragraph (b) to read as
follows:
Sec. 80.290 How does a refiner apply for a sulfur baseline?
* * * * *
(b) The sulfur baseline request must be sent to the attention of
``Gasoline Sulfur Program (Sulfur Baseline)'' to the address in Sec.
80.10(a).
* * * * *
Subpart I--Motor Vehicle Diesel Fuel; Nonroad, Locomotive, and
Marine Diesel Fuel; and ECA Marine Fuel
0
24. Section 80.533 is amended by revising paragraph (b) as follows:
Sec. 80.533 How does a refiner or importer apply for a motor vehicle
or non-highway baseline for the generation of NRLM credits or the use
of the NRLM small refiner compliance options?
* * * * *
[[Page 80926]]
(b) The baseline must be sent to the attention of ``Nonroad Rule
Diesel Fuel Baseline'' to the address in Sec. 80.10(a).
* * * * *
0
25. Section 80.574 is amended by revising paragraph (b) as follows:
Sec. 80.574 What labeling requirements apply to retailers and
wholesale purchaser-consumers of ECA marine fuel beginning June 1,
2014?
* * * * *
(b) Alternative labels to those specified in paragraph (a) of this
section may be used as approved by EPA. Send requests to the attention
of ``ECA Marine Fuel Alternative Label Request'' to the address in
Sec. 80.10(a).
0
26. Section 80.585 is amended by:
0
a. Redesignating paragraph (b)(4) as paragraph (b)(5) and adding a new
paragraph (b)(4); and
0
b. Revising paragraph (d)(4).
The addition and revision read as follows:
Sec. 80.585 What is the process for approval of a test method for
determining the sulfur content of diesel or ECA marine fuel?
* * * * *
(b) * * *
(4) Provide information indicating that a comparison of the non-
VCSB test method and its respective designated primary test method
results in sample specific biases that are determined to be random. If
the sample specific biases through use of ASTM D6708 between the non-
VCSB test method and designated primary test method cannot be
determined as random, the non-VCSB test method is disqualified from
approval.
* * * * *
(d) * * *
(4) The approval of any test method under paragraph (b) of this
section shall be valid from the date of approval from the
Administrator.
* * * * *
0
27. Section 80.595 is amended by revising paragraph (b) to read as
follows:
Sec. 80.595 How does a small or GPA refiner apply for a motor vehicle
diesel fuel volume baseline for the purpose of extending their gasoline
sulfur standards?
* * * * *
(b) The volume baseline must be sent via certified mail with return
receipt or express mail with return receipt to the attention of
``Diesel Baseline'' to the address in Sec. 80.10(a).
* * * * *
0
28. Section 80.607 is amended by revising paragraph (a) to read as
follows:
Sec. 80.607 What are the requirements for obtaining an exemption for
diesel fuel used for research, development or testing purposes?
(a) Written request for a research and development exemption. Any
person may receive an exemption from the provisions of this subpart for
diesel fuel or ECA marine fuel used for research, development, or
testing purposes by submitting the information listed in paragraph (c)
of this section to the attention of ``Diesel Program (Diesel Exemption
Request)'' to the address in Sec. 80.10(a).
* * * * *
Subpart J--Gasoline Toxics
0
29. Section 80.855 is amended by revising paragraph (c)(2) to read as
follows:
Sec. 80.855 What is the compliance baseline for refineries or
importers with insufficient data?
* * * * *
(c) * * *
(2) Application process. Applications must be submitted to the
attention of ``Anti-Dumping Compliance Period'' to the address in Sec.
80.10(a).
* * * * *
Subpart L--Gasoline Benzene
0
30. Section 80.1230 is amended by adding paragraph (a)(6) to read as
follows:
Sec. 80.1230 What are the gasoline benzene requirements for refiners
and importers?
(a) * * *
(6) Beginning February 1, 2018, a refiner that produces E15 at a
blender pump-refinery, as defined in Sec. 80.1500, shall be deemed in
compliance with the provisions of this subpart, provided the refiner is
in compliance with the requirements for gasoline produced by blender
pump-refiners in Sec. 80.1530.
* * * * *
0
31. Section 80.1240 is amended in paragraph (a)(1)(i) in the equation
by revising the definition ``OC'' to read as follows:
Sec. 80.1240 How is a refinery's or importer's compliance with the
gasoline benzene requirements of this subpart determined?
(a) * * *
(1)(i) * * *
OC = Benzene credits used by the refinery or importer to show
compliance (gallons benzene).
* * * * *
0
32. Section 80.1285 is amended by revising paragraph (b) to read as
follows:
Sec. 80.1285 How does a refiner apply for a benzene baseline?
* * * * *
(b) For U.S. Postal delivery, the benzene baseline application
shall be sent to the attention of ``MSAT2 Benzene'' to the address in
Sec. 80.10(a).
* * * * *
0
33. Section 80.1340 is amended by revising paragraph (b) to read as
follows:
Sec. 80.1340 How does a refiner obtain approval as a small refiner?
* * * * *
(b) Applications for small refiner status must be sent to the
attention of ``MSAT2 Benzene'' to the address in Sec. 80.10(a).
* * * * *
Subpart M--Renewable Fuel Standard
0
34. Section 80.1401 is amended by:
0
a. Revising the definition of ``Actual peak capacity'';
0
b. Adding in alphabetical order a definition for ``Affiliate'';
0
c. Revising the definition of ``Baseline volume'';
0
d. Adding in alphabetical order definitions for ``Biogas producer'',
``Biointermediate'', ``Biointermediate import facility'',
``Biointermediate importer'', ``Biointermediate producer'',
``Biointermediate production facility'', ``Carbon capture and storage
or CCS'', and ``Cellulosic biomass-based diesel'';
0
e. Revising the definitions of ``Cellulosic diesel'', ``Co-processed'',
and ``Corn oil extraction'';
0
f. Adding in alphabetical order definitions for ``Exempted baseline
peak capacity'' and ``Exempted baseline volume'';
0
g. Revising the definition of ``Foreign ethanol producer'';
0
h. Adding in alphabetical order definitions for ``Foreign renewable
fuel producer'' and ``Geologic sequestration facility'';
0
i. Revising paragraph (2) in the definition of ``Heating oil'' and the
definition of ``Non-ester renewable diesel'';
0
j. Adding in alphabetical order definitions for ``Non-renewable
feedstock'' and ``Non-RIN-generating foreign producer'';
0
k. Revising the definitions of ``Quality assurance audit'' and
``Quality assurance plan, or QAP'';
0
l. Revising paragraph (2) in the definition of ``Renewable fuel'';
0
m. Adding in alphabetical order definitions for ``RIN-generating
foreign producer'', ``Short-rotation hybrid poplar'', ``Short-rotation
willow'', ``Straight vegetable oil'', and ``Surface leakage'';
[[Page 80927]]
0
n. Revising the definition of ``Tree plantation''; and
0
o. Adding in alphabetical order a definitions for ``Viscous renewable
diesel blender or VRD blender''.
The revisions and additions read as follows:
Sec. 80.1401 Definitions.
* * * * *
Actual peak capacity means 105% of the maximum annual volume of
renewable fuels produced from a specific renewable fuel production
facility on a calendar year basis. The actual peak capacity is based on
the last five calendar years prior to the year in which the owner or
operator registers the facility under the provisions of Sec. 80.1450,
unless no such production exists, in which case actual peak capacity is
based on any calendar year after startup during the first three years
of operation.
* * * * *
Affiliate is used to indicate a relationship to a specified entity,
and means any entity that, directly or indirectly or through one or
more intermediaries, owns or controls, is owned or controlled by, or is
under common ownership or control with such entity.
* * * * *
Baseline volume means the permitted capacity or, if permitted
capacity cannot be determined, the actual peak capacity of a specific
renewable fuel production facility on a calendar year basis. If neither
permitted capacity nor actual peak capacity can be determined, baseline
volume means the nameplate capacity of a specific renewable fuel
production facility on a calendar year basis. Baseline volume includes
exempted baseline volume and any additional renewable fuel production
capacity for which a renewable fuel producer is not claiming an
exemption as described in Sec. 80.1403(c) or (d).
* * * * *
Biogas producer means any landfill, municipal wastewater treatment
facility digester, agricultural digester, or separated MSW digester
that produces biogas used to produce renewable fuel.
Biointermediate means any feedstock material that is used to
produce renewable fuel and meets all of the following requirements:
(1) It is derived from renewable biomass.
(2) It does not meet the definition of renewable fuel and RINs were
not generated for it as a renewable fuel in its own right.
(3) It is produced at a facility registered with EPA that is
different than the facility at which it is used to produce renewable
fuel.
(4) It is made from the feedstock and will be used to produce the
renewable fuel in accordance with the process(es) listed in the
approved pathway (as described in Table 1 to Sec. 80.1426 or a pathway
approval pursuant to Sec. 80.1416) that the biointermediate producer
and renewable fuel producer are using to convert renewable biomass to
renewable fuel.
(5)(i) It is substantially altered from the feedstock listed in the
approved pathway that the biointermediate producer and renewable fuel
producer are using to convert renewable biomass to renewable fuel;
(ii) The substantial alteration is other than a form change such as
chopping, crushing, grinding, pelletizing, filtering, compacting/
compression, centrifuging, dewatering/drying, melting, or the addition
of water to produce a slurry; and
(iii) The substantial alteration does not involve the isolation or
concentration of non-characteristic components of the feedstock to
yield an intermediate product not contemplated by EPA in establishing
the approved pathway that the biointermediate producer and the
renewable fuel producer are using to convert renewable biomass to
renewable fuel.
Biointermediate import facility means any facility where a
biointermediate is imported into the United States.
Biointermediate importer means any person who owns, leases,
operates, controls, or supervises a biointermediate import facility.
Biointermediate producer means any person who owns, leases,
operates, controls, or supervises a biointermediate production
facility.
Biointermediate production facility means all of the activities and
equipment associated with the production of a biointermediate starting
from the point of delivery of feedstock material to the point of final
storage of the end biointermediate product, which are located on one
property, and are under the control of the same person (or persons
under common control).
* * * * *
Carbon capture and storage or CCS means the capture, treatment, and
compression of CO2 at a renewable fuel facility,
transportation of that CO2, and geologic sequestration of
that CO2 at a geologic sequestration facility.
* * * * *
Cellulosic biomass-based diesel is any renewable fuel that meets
both the definitions of cellulosic diesel and biomass-based diesel, as
defined in this section 80.1401.
Cellulosic diesel is any renewable fuel that meets the definition
of cellulosic biofuel, as defined in this section 80.1401, and meets
all of the requirements of paragraph (1) of this definition:
(1)(i) Is a transportation fuel, transportation fuel additive,
heating oil, or jet fuel.
(ii) Meets the definition of either biodiesel or non-ester
renewable diesel.
(iii) Is registered as a motor vehicle fuel or fuel additive under
40 CFR part 79, if the fuel or fuel additive is intended for use in a
motor vehicle.
(2) Cellulosic diesel includes heating oil and jet fuel made from
cellulosic feedstocks and renewable fuel that is co-processed with
petroleum.
* * * * *
Co-processed means that renewable biomass or a biointermediate was
simultaneously processed with fossil fuels or other non-renewable
feedstock in the same unit or units to produce a fuel that is partially
derived from renewable biomass or a biointermediate.
Corn oil extraction means the recovery of corn oil at any point
downstream of when a dry mill corn ethanol plant grinds the corn,
provided that the corn is converted to ethanol, the oil is rendered
unfit for food uses without further refining, and the oil extraction
results in distillers grains marketable as animal feed.
* * * * *
Exempted baseline peak capacity means 105% of the maximum annual
volume of renewable fuels produced from a specific renewable fuel
production facility on a calendar year basis for which a renewable fuel
producer is claiming the exemption described in Sec. 80.1403(c) or
(d).
(1) For facilities that commenced construction prior to December
19, 2007, the exempted baseline peak capacity is based on the last five
calendar years prior to 2008, unless no such production exists, in
which case actual peak capacity is based on any calendar year after
startup during the first three years of operation.
(2) For facilities that commenced construction after December 19,
2007, and before January 1, 2010, that are fired with natural gas,
biomass, or a combination thereof, the exempted baseline peak capacity
is based on any calendar year after startup during the first three
years of operation.
Exempted baseline volume means the capacity of a facility for
volume for which a renewable fuel producer is claiming the exemption
described in Sec. 80.1403(c) or (d). The exempted baseline volume is
the permitted
[[Page 80928]]
capacity as demonstrated during registration as described in Sec.
80.1450(b)(1)(v)(B), or if permitted capacity cannot be determined, the
exempted baseline peak capacity.
* * * * *
Foreign ethanol producer means a foreign renewable fuel producer
who produces ethanol for use in transportation fuel, heating oil, or
jet fuel, but who does not add ethanol denaturant to their product as
described in paragraph (2) of the definition of renewable fuel in this
section.
Foreign renewable fuel producer means a person from a foreign
country or from an area that has not opted into the program
requirements of this subpart who produces renewable fuel.
* * * * *
Geologic sequestration facility means any well or group of wells
that is a ``facility,'' as defined under 40 CFR 98.6, that inject a
CO2 stream for long-term containment in subsurface geologic
formations as described in 40 CFR 98.440.
Heating oil * * *
(2) A fuel oil that is used to heat or cool interior spaces of
homes or buildings to control ambient climate for human comfort. The
fuel oil must be liquid at 60 degrees Fahrenheit and 1 atmosphere of
pressure, and contain no more than 2.5% mass solids.
* * * * *
Non-ester renewable diesel, also known as renewable diesel, is
either viscous or non-viscous renewable diesel:
(1) Non-viscous renewable diesel satisfies all of the following:
(i) Is not a mono-alkyl ester.
(ii) Meets the ASTM D975-13a (incorporated by reference, see Sec.
80.1468) Grade No. 1-D or No. 2-D specifications prior to blending with
any other product.
(iii) Can be used in an engine designed to operate on conventional
diesel fuel.
(iv) Is produced through a hydrotreating process.
(2) Viscous renewable diesel (VRD) satisfies all of the following:
(i) Is not a mono-alkyl ester.
(ii) Is a straight vegetable oil
(iii) Is intended for use as one of the following:
(A) A blend in an engine designed to operate on conventional diesel
fuel (referred to as VRD for blending or VRD-B).
(B) A neat fuel for use either: In a vehicle or engine that has
been converted to use such fuel under an EPA-approved Clean Alternative
Fuel Conversion under 40 CFR part 85, subpart F; as heating oil; or as
jet fuel (collectively referred to as VRD for neat use or VRD-N).
* * * * *
Non-renewable feedstock means a feedstock that does not meet the
definition of renewable biomass.
Non-RIN-generating foreign producer means a foreign renewable fuel
producer that has been approved by EPA to produce renewable fuel for
which RINs have not been generated.
* * * * *
Quality assurance audit means an audit of a renewable fuel
production facility or biointermediate production facility conducted by
an independent third-party auditor in accordance with a QAP that meets
the requirements of Sec. Sec. 80.1469, 80.1472, and 80.1476.
Quality assurance plan, or QAP, means the list of elements that an
independent third-party auditor will check to verify that the RINs
generated by a renewable fuel producer or importer are valid, including
RINs generated from renewable fuel produced from a biointermediate. A
QAP includes both general and pathway specific elements.
* * * * *
Renewable fuel * * *
(2) Ethanol covered by this definition shall be denatured using an
ethanol denaturant as required in 27 CFR parts 19 through 21. Any
volume of ethanol denaturant added to the undenatured ethanol by a
producer or importer in excess of 2 volume percent shall not be
included in the volume of ethanol for purposes of determining
compliance with the requirements under this subpart.
* * * * *
RIN-generating foreign producer means a foreign renewable fuel
producer that has been approved by EPA to generate RINs for renewable
fuel it produces.
Short-rotation hybrid poplar means a species or a cross of species
in the Populus genus that is grown with harvest rotations of less than
10 years. Qualifying species include Populus (P.) deltoides, P.
trichocarpa, P. nigra, and P. suaveolens subsp. maximowiczii, as well
as crosses between them.
Short-rotation willow means a species or a cross of species in the
Salix genus that is grown with harvest rotations of less than 10 years.
Qualifying species include Salix (S.) miyabeana, S. purpurea, S.
eriocephala, S. caprea hybrid, and S. x dasyclados, as well as crosses
between S. koriyanagi and S. purpurea, S. viminalis and S. miyabeana,
and S. purpurea, and S. miyabeana.
* * * * *
Straight vegetable oil includes all of the following products:
(1) Soy bean oil.
(2) Oil from annual covercrops.
(3) Algal oil.
(4) Biogenic waste oils/fats/greases that are of plant origin.
(5) Non-food grade corn oil.
(6) Camelina sativa oil.
(7) Canola/Rapeseed Oil.
(8) Any other vegetable oil listed as a feedstock in Table 1 to
Sec. 80.1426 or described in a pathway approved pursuant to Sec.
80.1416.
Surface leakage has the same meaning as defined in 40 CFR 98.449.
* * * * *
Tree plantation is a stand of no less than 1 acre on non-federal
lands that is composed primarily of trees established by hand- or
machine-planting of a seed or sapling, or by coppice growth from the
stump or root of a tree that was hand- or machine-planted. Tree
plantations must have been cleared prior to December 19, 2007 and must
have been actively managed on December 19, 2007, as evidenced by
records which must be traceable to the land in question, which must
include:
(1) Sales records for planted trees or tree residue together with
other written documentation connecting the land in question to these
purchases;
(2) Purchasing records for seeds, seedlings, or other nursery stock
together with other written documentation connecting the land in
question to these purchases;
(3) A written management plan for silvicultural purposes;
(4) Documentation of participation in a silvicultural program
sponsored by a Federal, state or local government agency;
(5) Documentation of land management in accordance with an
agricultural or silvicultural product certification program;
(6) An agreement for land management consultation with a
professional forester that identifies the land in question;
(7) Evidence of the existence and ongoing maintenance of a road
system or other physical infrastructure designed and maintained for
logging use, together with one of the above-mentioned documents; or
(8) Records satisfying the requirements of paragraph (2) of the
definition of existing agricultural land in this section that
demonstrates that the land was actively managed or fallow agricultural
land.
* * * * *
[[Page 80929]]
Viscous renewable diesel blender or VRD blender means a party that
blends VRD-B with petroleum diesel to produce fuel that meets the
specifications of ASTM D975 Grade No. 1-D or No. 2-D (incorporated by
reference, see Sec. 80.1468).
0
35. Section 80.1403 is amended by adding paragraph (g) to read as
follows:
Sec. 80.1403 Which fuels are not subject to the 20% GHG thresholds?
* * * * *
(g) Fuel produced by a facility meeting the requirements of
paragraphs (c) or (d) of this section is not a qualifying renewable
fuel unless it meets one of the following requirements:
(1) It is made in one facility from feedstock that is renewable
biomass.
(2) It is made from a feedstock that is derived from renewable
biomass and is listed in Table 1 to Sec. 80.1426.
(3) It is made from a feedstock that is renewable biomass that was
pre-processed at another facility, and such pre-processing at that
facility was limited to form changes such as chopping, crushing,
grinding, pelletizing, filtering, compaction/compression, centrifuging,
dewater/drying, melting, and/or the addition of water to produce a
slurry.
0
36. Section 80.1415 is amended by revising paragraph (c)(4) to read as
follows:
Sec. 80.1415 How are equivalence values assigned to renewable fuel?
* * * * *
(c) * * *
(4) Applications for equivalence values must be sent to the
attention of ``RFS2 Program (Equivalence Value Application)'' to the
address in Sec. 80.10(a).
* * * * *
0
37. Section 80.1425 is amended by revising paragraph (g)(5) to read as
follows:
Sec. 80.1425 Renewable Identification Numbers (RINs).
* * * * *
(g) * * *
(5) D has the value of 7 to denote fuel categorized as cellulosic
biomass-based diesel.
* * * * *
0
38. Section 80.1426 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraphs (a)(1) introductory text and (a)(2);
0
c. Adding paragraph (a)(4);
0
d. Revising paragraphs (c)(4) and (5);
0
e. Adding paragraphs (c)(8) and (9);
0
f. Revising paragraph (e)(1);
0
g. Removing paragraph (f)(1) introductory text (but retaining the
subject heading);
0
h Adding paragraphs (f)(1)(i) through (vi) prior to tables 1 and 2 to
Sec. 80.1426;
0
i. In paragraph (f)(1), in Table 1 to Sec. 80.1426, revising the
entries F, H, K, L, and N and adding an entry U;
0
j. Revising the definitions of ``VRIN,CD'' and
``EVCD'' in Table 3 to Sec. 80.1426 in paragraph (f)(3)(v);
0
k. Revising the definition of ``VRIN,CD'' in Table 4 to
Sec. 80.1426 in paragraph (f)(3)(vi);
0
l. Revising the paragraph (f)(4) subject heading;
0
m. Revising the definitions of ``FER'' and
``FENR'' in paragraph (f)(4)(i)(A)(1); and
0
n. Adding paragraphs (f)(4)(iv) and (v), (f)(17)(ii), (f)(18), and
(f)(19).
The revisions and additions read as follows:
Sec. 80.1426 How are RINs generated and assigned to batches of
renewable fuel?
(a) * * *
(1) To the extent permitted under paragraphs (b) and (c) of this
section, producers and importers of renewable fuel (other than VRD-B)
and VRD blenders must generate RINs to represent that fuel if all of
the following occur:
* * * * *
(2) To generate RINs for imported renewable fuel, including any
renewable fuel contained in imported transportation fuel, heating oil,
or jet fuel, importers must obtain information from a non-RIN-
generating foreign renewable fuel producer that is registered pursuant
to Sec. 80.1450 sufficient to make the appropriate determination
regarding the applicable D code and compliance with the renewable
biomass definition for each imported batch for which RINs are
generated.
* * * * *
(4) Where a feedstock or biointermediate is used to produce
renewable fuel is not entirely renewable biomass, RINs may only be
generated for the portion of fuel that is derived from renewable
biomass, as calculated under paragraph (f)(4) of this section.
* * * * *
(c) * * *
(4) Importers shall not generate RINs for renewable fuel imported
from a non-RIN-generating foreign renewable fuel producer unless the
foreign renewable fuel producer is registered with EPA as required in
Sec. 80.1450.
(5) Importers shall not generate RINs for renewable fuel that has
already been assigned RINs by a RIN-generating foreign renewable fuel
producer.
* * * * *
(8) RINs shall not be generated for the production of a
biointermediate.
(9) Parties shall not generate RINs to represent renewable fuel
prior to EPA approval of applicable registration requirements under
Sec. 80.1450(b), (c), (d)(1), and (d)(4).
* * * * *
(e) * * *
(1) Except as provided in paragraph (g) of this section for delayed
RINs, the producer or importer of renewable fuel (other than VRD-B) or
the VRD blender must assign all RINs generated to volumes of renewable
fuel.
* * * * *
(f) * * *
(1) Applicable pathways. (i) D codes shall be used in RINs
generated by producers or importers of renewable fuel (other than VRD-
B) and VRD blenders according to the pathways listed in Table 1 of this
section, paragraph (f)(6) of this section, or as approved by the
Administrator.
(ii) In choosing an appropriate D code, producers and importers may
disregard any incidental, de minimis feedstock contaminants that are
impractical to remove and are related to customary feedstock production
and transport.
(iii) Tables 1 and 2 to this section do not apply to, and impose no
requirements with respect to, volumes of fuel for which RINs are
generated pursuant to paragraph (f)(6) of this section.
(iv) Pathways in Table 1 to this section and advanced technologies
in Table 2 to this section also apply in cases wherein the renewable
fuel producer is using a biointermediate as the feedstock.
(v) For the purposes of identifying the appropriate pathway in
Table 1 of this section, biointermediates used as feedstocks for the
production of renewable fuel are considered to be equivalent to the
renewable biomass from which they were derived, with the following
exceptions:
(A) Oil that is physically separated from any woody or herbaceous
biomass and used to produce cellulosic biofuel shall not generate D-
code 3 or 7 RINs.
(B) Sugar or starch that is physically separated from cellulosic
biomass and used to produce cellulosic biofuel shall not generate D-
code 3 or 7 RINs.
(C) Free fatty acids that are physically separated from mono-, bi-,
and triglycerides in biogenic waste oils/fats/greases are not biogenic
waste oils/fats/greases.
(vi) If a renewable fuel producer uses a biointermediate as the
feedstock for
[[Page 80930]]
the production of renewable fuel, additional requirements apply to both
the renewable fuel producer and the biointermediate producer as
provided in Sec. 80.1475.
Table 1 to Sec. 80.1426--Applicable D Codes for Each Fuel Pathway for Use in Generating RINs
----------------------------------------------------------------------------------------------------------------
Production process
Fuel type Feedstock requirements D-code
----------------------------------------------------------------------------------------------------------------
* * * * * * *
F........................ Biodiesel, renewable Soy bean oil; oil from One of the following: 4
diesel, jet fuel and annual covercrops; Trans-Esterification
heating oil. algal oil; biogenic Hydrotreating
waste oils/fats/ Excluding processes
greases; oil from that co-process
corn oil extraction; renewable biomass or
Camelina sativa oil; a biointermediate
non-cellulosic and petroleum.
portions of separated
food waste.
* * * * * * *
H........................ Biodiesel, renewable Soy bean oil; oil from One of the following: 5
diesel, jet fuel and annual covercrops; Trans-Esterification
heating oil. algal oil; biogenic Hydrotreating
waste oils/fats/ Includes only
greases; oil from processes that co-
corn oil extraction; process renewable
Camelina sativa oil; biomass or a
non-cellulosic biointermediate and
portions of separated petroleum.
food waste.
* * * * * * *
K........................ Ethanol............... Crop residue, slash, Any process that 3
pre-commercial converts cellulosic
thinnings and tree biomass to fuel.
residue, switchgrass,
miscanthus, energy
cane, Arundo donax,
Pennisetum purpureum,
and separated yard
waste; biogenic
components of
separated MSW;
cellulosic components
of separated food
waste; cellulosic
components of annual
cover crops; short-
rotation hybrid
poplar; short-
rotation willow.
L........................ Cellulosic diesel, jet Crop residue, slash, Any process that 7
fuel and heating oil. pre-commercial converts cellulosic
thinnings and tree biomass to fuel.
residue, switchgrass,
miscanthus, energy
cane, Arundo donax,
Pennisetum purpureum,
and separated yard
waste; biogenic
components of
separated MSW;
cellulosic components
of separated food
waste; cellulosic
components of annual
cover crops; short-
rotation hybrid
poplar; short-
rotation willow.
* * * * * * *
N........................ Naphtha............... Switchgrass, Gasification and 3
miscanthus, energy upgrading processes
cane, Arundo donax, that converts
Pennisetum purpureum; cellulosic biomass
short-rotation hybrid to fuel.
poplar; short-
rotation willow.
* * * * * * *
U........................ Cellulosic diesel, jet Crop residue, slash, Any process that 3
fuel and heating oil. pre-commercial converts cellulosic
thinnings and tree biomass to fuel;
residue, switchgrass, includes only
miscanthus, energy processes that co-
cane, Arundo donax, process renewable
Pennisetum purpureum, biomass or
and separated yard biointermediate with
waste; biogenic petroleum.
components of
separated MSW;
cellulosic components
of separated food
waste; and cellulosic
components of annual
cover crops.
----------------------------------------------------------------------------------------------------------------
* * * * *
(3) * * *
(v) * * *
VRIN,CD = RIN volume, in gallons, for use in determining
the number of gallon-RINs that shall be generated for the cellulosic
biomass-based diesel portion of the batch with a D code of 7.
* * * * *
EVCD = Equivalence value for the cellulosic biomass-
based diesel portion of the batch per Sec. 80.1415.
(vi) * * *
VRIN,CD = RIN volume, in gallons, for use in determining
the number of gallon-RINs that shall be generated for a batch of
cellulosic biomass-based diesel with a D code of 7.
* * * * *
[[Page 80931]]
(4) Renewable fuel that is produced from a partially renewable
biointermediate or by co-processing renewable biomass or a
biointermediate and non-renewable feedstocks simultaneously to produce
a fuel that is partially renewable.
(i) * * *
(A) * * *
(1) * * *
FER = Feedstock energy from renewable biomass or the
renewable portion of a biointermediate used to make the transportation
fuel, in Btu.
FENR = Feedstock energy from non-renewable feedstocks or
the non-renewable portion of a biointermediate used to make the
transportation fuel, heating oil, or jet fuel, in Btu.
* * * * *
(iv) In no case shall the RIN volume VRIN according to
paragraph (f)(4)(i)(A) or (f)(4)(i)(B) of this section be more than the
maximum renewable content as specified in the RIN generating party's
registration under 40 CFR part 79, as applicable.
(v) In determining the RIN volume VRIN for co-processed
fuels produced from a biointermediate, RIN-generating parties must use
Method B as described in paragraph (f)(4)(i)(B) of this section and
calculate the renewable fraction of a fuel R using Method B of ASTM
D6866 (incorporated by reference, see Sec. 80.1468) as described in
paragraph (f)(9)(ii) of this section.
* * * * *
(17) * * *
(ii) In addition to the requirements specified in paragraph
(f)(17)(i) of this section, VRD-N producers may generate RINs for such
fuel only in accordance with Sec. 80.1479(a).
(18) Requirements related to Renewable Diesel that is VRD. RINs may
only be generated for VRD in accordance with Sec. 80.1479.
(19) Renewable fuel produced using CCS. The following requirements
apply to producers of renewable fuel that generates RINs and achieves
the greenhouse gas reductions necessary to qualify for a renewable fuel
pathway by using CCS:
(i) Renewable fuel producers can only generate RINs if the
lifecycle greenhouse gas emissions are below the threshold value for
the applicable pathway when calculated by a method approved by EPA as
part of a petition pursuant to Sec. 80.1416.
(ii) Renewable fuel producers cannot generate RINs in a given
calendar year after the applicable submittal date for the annual GHG
report specified in 40 CFR 98.3 unless the renewable fuel producer has
received verification that the geologic sequestration facility has
satisfied all applicable reporting obligations pursuant to 40 CFR part
98, subpart RR.
(iii) If EPA is notified of a surface leak, the producer shall not
generate RINs using a CCS pathway until the remediation plan submitted
under Sec. 80.1474(g) has been approved by EPA and the renewable fuel
producer takes appropriate corrective action, if necessary.
(iv) Renewable fuel producers shall notify EPA if a participating
geologic sequestration facility has filed a request for discontinuation
under 40 CFR 98.441.
(v) Renewable fuel producers must meet all of the following
conditions (in addition to any other applicable requirements):
(A) Registration requirements under Sec. 80.1450(b)(1)(xvi).
(B) Reporting requirements under Sec. 80.1451(b)(1)(ii)(W).
(C) Recordkeeping requirements under Sec. 80.1454(b)(11).
* * * * *
0
39. Section 80.1427 is amended by revising paragraph (a)(3)(ii) and
adding paragraph (d) to read as follows:
Sec. 80.1427 How are RINs used to demonstrate compliance?
(a) * * *
(3) * * *
(ii) A cellulosic biomass-based diesel RIN with a D code of 7
cannot be used to demonstrate compliance with both a cellulosic biofuel
RVO and a biomass-based diesel RVO.
* * * * *
(d) Redesignation RVOs. (1) Each party that is obligated to meet an
RVO under Sec. 80.1433 must demonstrate pursuant to Sec.
80.1451(a)(1) that the party has retired for compliance purposes a
sufficient number of RINs to meet its RVOs by the deadline specified in
Sec. 80.1433(d).
(2) In fulfillment of its RVOs, each party is subject to the
provisions of paragraphs (a)(2), (a)(3), (a)(6), and (a)(8) of this
section.
(3) No more than 20 percent of the RVO calculated according to a
formula at Sec. 80.1433(a) may be fulfilled using RINs generated in
the year prior to the year in which the RVO was incurred.
0
40. Section 80.1429 is amended by adding paragraph (b)(11) to read as
follows:
Sec. 80.1429 Requirements for separating RINs from volumes of
renewable fuel.
* * * * *
(b) * * *
(11) Any party that must retire RINs for redesignated neat or
blended renewable fuel under Sec. 80.1433 must separate any RINs that
have been assigned to the redesignated volume.
* * * * *
0
41. Section 80.1430 is amended by revising paragraph (c) to read as
follows:
Sec. 80.1430 Requirements for exporters of renewable fuels.
* * * * *
(c) If the exporter knows or has reason to know that a volume of
exported renewable fuel is cellulosic biomass-based diesel, he must
treat the exported volume as either cellulosic biofuel or biomass-based
diesel when determining his Renewable Volume Obligations pursuant to
paragraph (b) of this section.
* * * * *
0
42. Section 80.1431 is amended by adding paragraph (a)(3) to read as
follows:
Sec. 80.1431 Treatment of invalid RINs.
(a) * * *
* * * * *
(3) In the event that EPA determines that some portion of RINs
generated for a batch of renewable fuel produced using a
biointermediate are invalid, then all RINs generated for that batch of
renewable fuel are deemed invalid, unless EPA in its sole discretion
determines that some portion of these RINs are valid.
* * * * *
0
43. Section 80.1433 is added to read as follows:
Sec. 80.1433 Requirements for a party who knows or has reason to know
that a party to whom it is transferring a renewable fuel or a renewable
fuel blend intends a use other than as transportation fuel, heating
oil, jet fuel, or fuel for a stationary internal combustion engine.
(a) A party that received fuel containing any amount of renewable
fuel, ethanol, butanol, biodiesel, renewable diesel, naptha, or other
biomass-derived fuel, and who knows or has reason to know that a party
to whom it is transferring the fuel intends a use other than as
transportation fuel, heating oil, jet fuel, or fuel for a stationary
internal combustion engine, must include a statement on a product
transfer document it delivers to the fuel transferee at the time of
fuel transfer designating the fuel for other uses, as specified in
paragraph (e) of this section, and must retire an appropriate number
and type of RINs according to one of the following equations, as
appropriate, depending on fuel volume and type, and in accordance with
paragraphs (a)(1) through (a)(4) of this section. However, this
paragraph and paragraphs (b) through (d) of this
[[Page 80932]]
section do not apply to a party that can demonstrate through records
available at the time of fuel transfer and which are maintained for a
period of no less than five years that no RINs were generated for any
part of the fuel or fuel blend that it transfers or that an appropriate
number and type of RINs had already been retired pursuant to this
section by a prior owner of the fuel or fuel blend as specified on the
PTD received with the fuel or fuel blend.
(1) Except as provided in paragraph (a)(5) of this section,
Cellulosic biofuel.
RINRETCB,i = [Sigma](VOLk *
EVk)i
Where:
RINRETCB,i = The quantity of cellulosic biofuel RINs that
must be retired for day i, in gallons.
k = A discrete volume of fuel that the party designated for use in
an application other than as transportation fuel, heating oil, jet
fuel, or fuel for a stationary internal combustion engine, and which
the party knows or has reason to know would qualify as cellulosic
biofuel if it was designated for use as transportation fuel, heating
oil, jet fuel, or fuel for a stationary internal combustion engine.
VOLk = The standardized volume of discrete volume k, in
gallons, calculated in accordance with Sec. 80.1426(f)(8) and, for
fuel blends, with paragraph (c) of this section.
EVk = The equivalence value associated with discrete
volume k.
(2) Except as provided in (a)(5), Biomass-based diesel.
RINRETBBD,i = [Sigma](VOLk *
EVk)i
Where:
RINRETBBD,i = The quantity of biomass-based diesel RINs
that must be retired for day i, in gallons.
k = A discrete volume of fuel that the party designated for use in
an application other than as transportation fuel, heating oil, jet
fuel, or fuel for a stationary internal combustion engine, and which
the party knows or has reason to know would qualify as biomass-based
diesel if it was designated for use as transportation fuel, heating
oil, jet fuel, or fuel for a stationary internal combustion engine.
VOLk = The standardized volume of discrete volume k, in
gallons, calculated in accordance with Sec. 80.1426(f)(8) and, for
fuel blends, with paragraph (c) of this section.
EVk = The equivalence value associated with discrete
volume k.
(3) Advanced biofuel.
RINRETAB,i = [Sigma](VOLk *
EVk)i
Where:
RINRETAB,i = The quantity of advanced biofuel RINs that
must be retired for day i, in gallons.
k = A discrete volume of fuel that the party designated for use in
an application other than as transportation fuel, heating oil, jet
fuel, or fuel for a stationary internal combustion engine, and which
the party knows or has reason to know would qualify as advanced
biofuel if it was designated for use as transportation fuel, heating
oil, jet fuel, or fuel for a stationary internal combustion engine.
VOLk = The standardized volume of discrete volume k, in
gallons, calculated in accordance with Sec. 80.1426(f)(8) and, for
fuel blends, with paragraph (c) of this section.
EVk = The equivalence value associated with discrete
volume k.
(4) Renewable fuel that does not qualify as a type of advanced
biofuel.
RINRETRF,i = [Sigma](VOLk *
EVk)i
Where:
RINRETRF,i = The quantity of renewable fuel RINs that
must be retired for day i, in gallons.
k = A discrete volume of fuel that the party designated for use in
an application other than as transportation fuel, heating oil, jet
fuel, or fuel for a stationary internal combustion engine, and which
the party knows or has reason to know would qualify as renewable
fuel (but not as a type of advanced biofuel) if it was designated
for use as transportation fuel, heating oil, jet fuel, or fuel for a
stationary internal combustion engine.
VOLk = The standardized volume of discrete volume k, in
gallons, calculated in accordance with Sec. 80.1426(f)(8) and, for
fuel blends, with paragraph (c) of this section.
EVk = The equivalence value associated with discrete
volume k.
(5) If the party knows or has reason to know that the fuel would
qualify as cellulosic biomass-based diesel if it was designated for use
as transportation fuel, heating oil, jet fuel, or fuel for a stationary
internal combustion engine, it must choose either the formula specified
in paragraph (a)(1) of this section or that in paragraph (a)(2) of this
section to calculate the number and type of RINs that must be retired.
(b) For the purposes of calculating the number of RINs that must be
retired under paragraphs (a) of this section:
(1) If the renewable fuel category and equivalence value for the
discrete volume k can be determined based on its composition, then the
appropriate formula and equivalence value based on such information
shall be used in the calculation pursuant to paragraph (a).
(2) If the discrete volume k is known to be biomass-based diesel
but the composition is unknown, the EVk shall be 1.5.
(3) If neither the renewable fuel category nor EVk of
discrete volume k can be determined by its composition, the renewable
fuel category and EVk in the formula used in paragraph (a)
of this section shall correspond to the renewable fuel designation on
the PTD received by the party, or shall be 1.0, whichever value is
greater.
(c) VOLk of fuel blends shall be based on one of the
following:
(1) Information from the supplier of the blend of the concentration
of fuel originally produced as renewable fuel in the blend.
(2) Determination of the renewable portion of the blend using
Method B or Method C of ASTM D 6866 (incorporated by reference, see
Sec. 80.1468), or an alternative test method as approved by the EPA.
(3) Assuming the maximum concentration of the renewable fuel in the
blend as allowed by law.
(d) All RIN retirements required pursuant paragraph (a) of this
section shall be identified in EMTS within thirty (30) business days of
the transfer of the fuel designated for use in an application other
than as transportation fuel, heating oil, jet fuel, or fuel for a
stationary internal combustion engine.
(e) A party that received fuel containing any amount of renewable
fuel, ethanol, butanol, biodiesel, renewable diesel, naptha, or other
biomass-derived fuel, and who knows or has reason to know that a party
to whom it is transferring the fuel intends a use other than as
transportation fuel, heating oil, jet fuel, or fuel for a stationary
internal combustion engine must include a statement on a product
transfer document it delivers to the fuel transferee at the time of
fuel transfer that includes the following information:
(1) ``This volume of fuel is designated and intended for use other
than as transportation fuel, heating oil, jet fuel, or fuel for a
stationary internal combustion engine.'';
(2) ``To the extent necessary, the appropriate number and type of
RINs have been retired pursuant to 40 CFR 80.1433.'';
(3) Date of RIN retirement in EMTS; and
(4) EMTS Transaction ID for the transaction in which the
appropriate number and type of RINs were retired.
(f) Any volume of fuel which is designated for use in an
application other than as transportation fuel, heating oil, jet fuel,
or fuel for a stationary internal combustion engine cannot be
redesignated as renewable fuel.
0
44. Section 80.1434 is added to read as follows:
Sec. 80.1434 RIN retirement.
(a) A RIN must be retired in any of the following cases:
(1) Demonstrate annual compliance. Except as specified in paragraph
(b) of this section or Sec. 80.1456, each party that
[[Page 80933]]
is an obligated party under Sec. 80.1406 and is obligated to meet the
RVO under Sec. 80.1407 must retire a sufficient number of RINs to
demonstrate compliance with an applicable RVO.
(2) Exported renewable fuel. Any exporter of renewable fuel that
incurs an ERVO as described in Sec. 80.1430(a) shall retire RINs
pursuant to Sec. Sec. 80.1430(b) through (g) and 80.1427(c).
(3) Redesignation. Any party that uses a renewable fuel in any
application that is not transportation fuel, heating oil, or jet fuel,
or designates a renewable fuel for use as something other than
transportation fuel, heating oil, or jet fuel, must retire any RINs
received with that renewable fuel as described in Sec. 80.1433.
(4) RIN expiration. Except as provided in Sec. 80.1427(a)(7), a
RIN is valid for compliance during the compliance year in which it was
generated, or the following compliance year. Any RIN that is not used
for compliance purposes for the compliance year in which it was
generated, or for the following compliance year, will be an expired
RIN. Pursuant to Sec. 80.1431(a), an expired RIN will be considered an
invalid RIN, cannot be used for compliance purposes, and must be
retired as described in Sec. 80.1431(b).
(5) Volume error correction. A RIN must be retired when it was
based on incorrect volumes or volumes that have not been standardized
to 60[emsp14][deg]F as described in Sec. 80.1426(f)(8).
(6) Import volume correction. Where the port of entry volume is the
lesser of the two volumes in Sec. 80.1466(e)(1)(i), the importer shall
calculate the difference between the number of RINs originally assigned
by the foreign producer and the number of RINs calculated under Sec.
80.1426 for the volume of renewable fuel as measured at the port of
entry, and retire that amount of RINs in accordance with Sec.
80.1466(k)(4).
(7) Spillage or disposal of renewable fuels. Except as provided in
Sec. 80.1432(c), in the event that a reported spillage or disposal of
any volume of renewable fuel, the owner of the renewable fuel must
notify any holder or holders of the attached RINs and retire a number
of gallon-RINs corresponding to the volume of spilled or disposed of
renewable fuel multiplied by its equivalence value.
(i) If the equivalence value for the spilled or disposed of volume
may be determined pursuant to Sec. 80.1415 based on its composition,
then the appropriate equivalence value shall be used.
(ii) If the equivalence value for a spilled or disposed volume of
renewable fuel cannot be determined, the equivalence value shall be
1.0.
(iii) If the owner of a volume of renewable fuel that is spilled or
disposed of and reported establishes that no RINs were generated to
represent the volume, then no gallon-RINs shall be retired.
(8) Contaminated or spoiled fuel. In the event that contamination
or spoliation of any volume of renewable fuel is reported, the owner of
the renewable fuel must notify any holder or holders of the attached
RINs and retire a number of gallon-RINs corresponding to the volume of
contaminated or spoiled renewable fuel multiplied by its equivalence
value.
(i) If the equivalence value for the contaminated or spoiled volume
may be determined pursuant to Sec. 80.1415 based on its composition,
then the appropriate equivalence value shall be used.
(ii) If the equivalence value for a contaminated or spoiled volume
of renewable fuel cannot be determined, the equivalence value shall be
1.0.
(iii) If the owner of a volume of renewable fuel that is
contaminated or spoiled and reported establishes that no RINs were
generated to represent the volume, then no gallon-RINs shall be
retired.
(9) Delayed RIN generation. In the event that a party generated a
delayed RIN as described in Sec. 80.1426(g)(1) through (4), parties
must retired RINs as described in accordance with Sec. 80.1426(g)(5)
and (6).
(10) Invalid RIN. In the case that a RIN is invalid as described in
Sec. 80.1431(a), the RIN will be considered invalid and must be
retired as described in Sec. 80.1431(b).
(11) Potentially invalid RINs. In the case that a RIN is identified
as a PIR under Sec. 80.1474(b)(1), the PIRs or replacement RINs must
be retired as described in Sec. 80.1474(b)(2) through (5).
(12) Replacement. As required by Sec. 80.1431(b) or Sec. 80.1474,
any party that must replace an invalid RIN or PIR that was used for
compliance must retire valid RINs to replace the invalid RINs
originally used for any RVO.
(13) Other. Any other instance identified by the EPA.
(b) In the case that retirement of a RIN is necessary, the
following provisions apply:
(1) Any party affected by such retirement must keep copies and
adjust its records, reports, and compliance calculations in which the
retired RIN was used.
(2) The retired RIN must be reported in the applicable reports
under Sec. 80.1451.
(3) The retired RIN must be reported in the EPA Moderated
Transaction System pursuant to Sec. 80.1452(c).
(4) Where the importer of renewable fuel is required to retire RINs
under paragraph (a)(6) of this section, the importer must report the
retired RINs in the applicable reports under Sec. Sec. 80.1451,
80.1466(k), and 80.1466(m).
0
45. Section 80.1440 is amended by revising the section heading and
paragraph (a) and adding paragraph (f) to read as follows:
Sec. 80.1440 What are the provisions for blenders who handle and
blend less than 250,000 gallons of renewable fuel per year or who
handle renewable fuel blended for fuels under a national security
exemption?
(a)(1) Renewable fuel blenders who handle and blend less than
250,000 gallons of renewable fuel per year, and who do not have one or
more reported or unreported Renewable Volume Obligations, are permitted
to delegate their RIN-related responsibilities to the party directly
upstream of them who supplied the renewable fuel for blending.
(2) Renewable fuel blenders who handle and blend renewable fuel for
parties that have a national security exemption under 40 CFR part 80,
or a national security exemption under paragraph (f) of this section,
and who do not have one or more reported or unreported Renewable Volume
Obligations, are permitted to delegate their RIN-related
responsibilities to the party directly upstream of them who supplied
the renewable fuel for blending.
* * * * *
(f) National security exemption. (1) The requirements described in
paragraph (b) of this section may be delegated directly upstream for
transportation fuel, heating oil, or jet fuel that is produced,
imported, sold, offered for sale, supplied, offered for supply, stored,
dispensed, or transported for use in any of the following:
(i) Tactical military vehicles, engines, or equipment having an EPA
national security exemption from emission standards under 40 CFR
85.1708, 89.908, 92.908, 94.908, 1042.635, or 1068.225.
(ii) Tactical military vehicles, engines, or equipment that are not
subject to a national security exemption from vehicle or engine
emissions standards as described in paragraph (f)(1)(i) of this section
but, for national security purposes (for purposes of readiness for
deployment overseas), need to be fueled on the same transportation
fuel, heating oil, or jet fuel as the vehicles, engines,
[[Page 80934]]
or equipment for which EPA has granted such a national security
exemption.
0
46. Section 80.1441 is amended by adding paragraph (e)(2)(iv) and
revising paragraph (h) to read as follows:
Sec. 80.1441 Small refinery exemption.
* * * * *
(e) * * *
(2) * * *
(iv)(A) The following information related to petitions submitted
under this section that have been accepted by EPA for evaluation is not
entitled to confidential treatment under 40 CFR part 2, subpart B:
(1) Petitioner's name.
(2) The name and location of the facility for which relief is
requested.
(3) The general nature of the relief requested.
(4) The time period for which relief is requested.
(B) The following information related to EPA determinations on
petitions submitted under this section is not entitled to confidential
treatment under 40 CFR part 2, subpart B:
(1) Petitioner's name.
(2) The name and location of the facility for which relief was
requested.
(3) The general nature of the relief requested.
(4) The time period for which relief was requested.
(5) The extent to which EPA either granted or denied the requested
relief.
(C) The EPA will disclose the information specified in paragraphs
(e)(2)(iv)(A) and (B) of this section on its Web site, or will
otherwise make it available to interested parties, notwithstanding any
claims that the information is entitled to confidential treatment under
40 CFR part 2, subpart B.
* * * * *
(h) Verification letters under paragraph (b) of this section,
petitions for small refinery hardship extensions under paragraph (e) of
this section, and small refinery exemption waiver notices under
paragraph (f) of this section shall be sent to the attention of ``RFS
Program'' to the address in Sec. 80.10(a).
0
47. Section 80.1442 is amended by adding paragraph (h)(6) and revising
paragraph (i) to read as follows:
Sec. 80.1442 What are the provisions for small refiners under the RFS
program?
* * * * *
(h) * * *
(6)(i) The following information related to petitions submitted
under this section that have been accepted by EPA for evaluation is not
entitled to confidential treatment under 40 CFR part 2, subpart B:
(A) Petitioner's name.
(B) The name and location of the facility for which relief is
requested.
(C) The general nature of the relief requested.
(D) The time period for which relief is requested.
(ii) The following information related to EPA determinations on
petitions submitted under this section is not entitled to confidential
treatment under 40 CFR part 2, subpart B:
(A) Petitioner's name.
(B) The name and location of the facility for which relief was
requested.
(C) The general nature of the relief requested.
(D) The time period for which relief was requested.
(E) The extent to which EPA either granted or denied the requested
relief.
(iii) The EPA will disclose the information specified in paragraphs
(h)(6)(i) and (ii) of this section on its Web site, or will otherwise
make it available to interested parties, notwithstanding any claims
that the information is entitled to confidential treatment under 40 CFR
part 2, subpart B.
(i) Small refiner status verification letters, small refiner
exemption waivers, or applications for extensions of the small refiner
temporary exemption under this section must be sent to the attention of
``RFS Program'' to the address in Sec. 80.10(a).
0
48. Section 80.1443 is amended by revising paragraph (d)(2) to read as
follows:
Sec. 80.1443 What are the opt-in provisions for noncontiguous states
and territories?
* * * * *
(d) * * *
(2) A petition submitted under this section should be sent to the
attention of ``RFS Program'' to the address in Sec. 80.10(a).
* * * * *
0
49. Section 80.1449 is amended by revising paragraph (d) to read as
follows:
Sec. 80.1449 What are the Production Outlook Report requirements?
* * * * *
(d) Production outlook reports shall be sent to the attention of
``RFS Program (Production Output Reports)'' to the address in Sec.
80.10(a).
* * * * *
0
50. Section 80.1450 is amended by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (b) introductory text and (b)(1) introductory
text;
0
c. Revising paragraphs (b)(1)(i) and (ii), (b)(1)(iv)(A)(1) and (2);
0
d. Revising paragraphs (b)(1)(v) introductory text, (b)(1)(v)(A),
(b)(1)(v)(C)(1), (b)(1)(vii), (b)(1)(viii), (b)(1)(ix)(A), and
(b)(1)(xi)(A) and (B);
0
e. Revising paragraph (b)(1)(xv) introductory text;
0
f. Adding paragraphs (b)(1)(xvi) through (xxi);
0
g. Revising paragraph (b)(2) introductory text and (b)(2)(i) and (ii);
0
h. Redesignating paragraphs (b)(2)(iii) through (vi) as paragraphs
(b)(2)(v) through (viii) and adding new paragraphs (b)(2)(iii) and
(iv);
0
i. Revising newly redesignated paragraph (b)(2)(vi);
0
j. Adding paragraphs (b)(2)(ix) and (x);
0
k. Revising paragraphs (d), (f), (g)(9), and (g)(11)(i);
0
l. Redesignating paragraphs (h) and (i) as paragraphs (i) and (j) and
adding a new paragraph (h); and
0
m. Revising newly redesignated paragraph (i).
The revisions and additions read as follows:
Sec. 80.1450 What are the registration requirements under the RFS
program?
(a) Obligated parties and exporters. Any obligated party described
in Sec. 80.1406, any exporter of renewable fuel described in Sec.
80.1430, and any party that must retire RINs under Sec. 80.1433, must
provide EPA with the information specified for registration under Sec.
80.76, if such information has not already been provided under the
provisions of this part. An obligated party, an exporter of renewable
fuel, or party that must retire RINs under Sec. 80.1433 must receive
EPA-issued identification numbers prior to engaging in any transaction
involving RINs. Registration information must be submitted and accepted
by EPA by July 1, 2010, or 60 days prior to RIN ownership, whichever
date comes later.
(b) Producers. Any RIN-generating foreign producer, any non-RIN-
generating foreign producer, or any domestic renewable fuel producer
that generates RINs, or any biointermediate producer that transfers any
biointermediate for the production of a renewable fuel for RIN
generation, must provide EPA the information specified under Sec.
80.76 if such information has not already been provided under the
provisions of this part, and must receive EPA-issued company and
facility identification numbers prior to the generation of any RINs for
their fuel or for fuel made with their ethanol, or prior to the
transfer of any biointermediate to be used in the production of a
renewable fuel for which RINs may be generated. Unless otherwise
specifically indicated, all the
[[Page 80935]]
following registration information must be submitted and accepted by
EPA by July 1, 2010, or 60 days prior to the generation of RINs,
whichever date comes later (for renewable fuel producers and foreign
producers), or by the effective date of the final rule, or 60 days
prior to the transfer of any biointermediate to be used in the
production of a renewable fuel for the generation of RINs, whichever
date comes later (for biointermediate producers):
(1) A description of the types of renewable fuels, ethanol, or
biointermediate(s) that the producer intends to produce at the facility
and that the facility is capable of producing without significant
modifications to the existing facility. For each type of renewable
fuel, ethanol, or biointermediate(s) the renewable fuel producer or
foreign ethanol producer shall also provide all the following:
(i)(A) A list of all the feedstocks and/or biointermediates the
facility intends to utilize without significant modification to the
existing facility.
(B) A description of the type(s) of renewable biomass that will be
used as feedstock material to produce the biointermediate, if
applicable.
(C) A list of the EPA company registration numbers and EPA facility
registration numbers of all biointermediate producers and
biointermediate production facilities that will supply biointermediates
for renewable fuel or ethanol production, as appropriate.
(D) An affidavit from or contract with the biointermediate producer
stating its intent to supply biointermediate to the renewable fuel
producer, and certifying the renewable and non-renewable components of
the biointermediate that it intends to provide to the renewable fuel
producer.
(ii) A description of the facility's renewable fuel, ethanol, or
biointermediate production processes, including:
(A) A process diagram with all relevant unit processes labeled,
including required inputs and outputs at each step and current
operating pressures and temperatures of each unit.
(B) A description of the renewable biomass or ethanol treatment
process, including required inputs and outputs used at each step.
(C) A description of the mechanical, chemical, and biochemical
mechanisms by which renewable biomass is processed prior to being
converted to renewable fuel, ethanol, or a biointermediate.
(D) Determination of the throughput rate-limiting step in the
production process and corresponding capacity of the production
process.
(E) For a producer of renewable fuel seeking to generate RINs with
different D codes from the same batch or co-processing renewable
biomass and non-renewable biomass:
(1) The expected overall fuel yield, calculated as the total volume
of fuel produced per batch divided by the total feedstock mass per
batch on a dry weight basis.
(2) The Converted Fraction (CF) that will be used for generating
RINs.
(3) Chemical analysis data supporting the calculated Converted
Fraction and a discussion of the possible variability that could be
expected between reporting periods per Sec. 80.1451(b)(1)(ii)(U)(1).
Data used to calculate the CF must be representative and obtained using
an analytical method certified by a voluntary consensus standards body,
or using a method that would produce reasonably accurate results as
demonstrated through peer reviewed references provided to the third
party engineer performing the engineering review at registration.
(4) A description and calculations showing how the data were used
to determine the cellulosic Converted Fraction.
(F) For registrations indicating production of cellulosic biofuel
(D codes 3 or 7) from feedstocks other than biogas (including through
pathways in rows K, L, M, and N of Table 1 to Sec. 80.1426), the
producer must demonstrate the ability to convert cellulosic components
of feedstock into fuel by providing all of the following:
(1) A process diagram with all relevant unit processes labeled and
a designation of which unit process is capable of performing cellulosic
treatment, including required inputs and outputs at each step.
(2) A description of the cellulosic biomass treatment process,
including required inputs and outputs used at each step.
(3) A description of the mechanical, chemical and biochemical
mechanisms by which cellulosic materials can be converted to biofuel
products.
(G) For registrations indicating the production of any
biointermediate, the biointermediate producer must provide all of the
following:
(1) The company names, EPA company registration numbers, and EPA
facility registration numbers of all renewable fuel producers and
facilities at which each biointermediate will be used.
(2) Copies of documents and corresponding calculations
demonstrating production capacity of each biointermediate produced at
the biointermediate production facility.
(3) A description of the types of feedstocks that the
biointermediate producer intends to process at the facility and that
the facility is capable of producing without significant modifications
to the existing facility. For each type of feedstocks that the
biointermediate producer intends to process the biointermediate
producer shall also provide all the following:
(i) A list of all the feedstocks the facility intends to utilize
without significant modification to the existing facility.
(ii) A description of the type(s) of renewable biomass that will be
used as feedstock material to produce the biointermediate.
(iii) The type of co-products produced with each type of
biointermediate.
(4) The pathway(s) in Table 1 to Sec. 80.1426 or the approved
pathway under Sec. 80.1416 that the biointermediate could be used in
to produce renewable fuel.
* * * * *
(iv) * * *
(A) * * *
(1) Each type of process heat fuel used at the facility to produce
the renewable fuel, ethanol, or biointermediate.
(2) The name and address of the company supplying each process heat
fuel to the renewable fuel facility, foreign ethanol facility, or
biointermediate production facility.
* * * * *
(v) For renewable fuel producers, the following records that
support the facility's baseline volume and exempted baseline volume, as
applicable, as defined in Sec. 80.1401 or, for foreign ethanol
facilities, their production volume:
(A) For all facilities, copies of the most recent applicable air
permits issued by the U.S. Environmental Protection Agency, state,
local air pollution control agencies, or foreign governmental agencies
and that govern the construction and/or operation of the renewable fuel
or foreign ethanol facility.
* * * * *
(C) * * *
(1) For all facilities, copies of documents demonstrating each
facility's actual peak capacity and exempted baseline peak capacity, if
applicable, as defined in Sec. 80.1401 if the maximum rated annual
volume output of renewable fuel is not specified in the air permits
specified in paragraphs (b)(1)(v)(A) and (b)(1)(v)(B) of this section,
as appropriate.
* * * * *
[[Page 80936]]
(vii)(A) For a producer of renewable fuel, a foreign producer of
ethanol, or a biointermediate producer producing a biointermediate made
from separated yard waste per Sec. 80.1426(f)(5)(i)(A):
(1) The location of any municipal waste establishment(s) or other
establishments from which the waste stream consisting solely of
separated yard waste is collected.
(2) A plan documenting how the waste will be collected and how the
renewable fuel producer or foreign ethanol producer will conduct
ongoing verification that such waste consists only of yard waste (and
incidental other components such as paper and plastics) that is kept
separate since generation from other waste materials.
(B) For a producer of renewable fuel, a foreign producer of
ethanol, or a biointermediate producer producing a biointermediate made
from separated food waste per Sec. 80.1426(f)(5)(i)(B) or from
biogenic waste oils/fats/greases:
(1) A plan documenting the type(s) of separated food waste or
biogenic waste oils/fats/greases, the type(s) of establishment the
waste is collected from, how the waste will be collected, a description
of ongoing verification measures that demonstrate such waste consists
only of food waste (and an incidental amount of other components such
as paper and plastics) or biogenic waste oils/fats/greases that is kept
separate from other waste materials, and if applicable, how the
cellulosic and non-cellulosic portions of the waste will be quantified.
(2) [Reserved]
(viii) For a producer of renewable fuel, a foreign producer of
ethanol, or biointermediate producer of a biointermediate made from
separated municipal solid waste per Sec. 80.1426(f)(5)(i)(C):
(A) The location of the municipal waste establishment(s) from which
the separated municipal solid waste is collected or from which material
is collected that will be processed to produce separated municipal
solid waste.
(B) A plan providing ongoing verification that there is separation
of recyclable paper, cardboard, plastics, rubber, textiles, metals, and
glass wastes to the extent reasonably practicable and which documents
the following:
(1) Extent and nature of recycling that occurred prior to receipt
of the waste material by the renewable fuel producer, foreign ethanol
producer, or biointermediate producer.
(2) Identification of available recycling technology and practices
that are appropriate for removing recycling materials from the waste
stream by the fuel producer, foreign ethanol producer, or
biointermediate producer.
(3) Identification of the technology or practices selected for
implementation by the fuel producer, foreign ethanol producer, or
biointermediate producer including an explanation for such selection,
and reasons why other technologies or practices were not.
(C) Contracts relevant to materials recycled from municipal waste
streams as described in Sec. 80.1426(f)(5)(iii).
(D) Certification by the producer that recycling is conducted in a
manner consistent with goals and requirements of applicable State and
local laws relating to recycling and waste management.
(ix) * * *
(A) For a producer of ethanol from grain sorghum or a foreign
ethanol producer making product from grain sorghum and seeking to have
it sold as renewable fuel after addition of ethanol denaturant, provide
a plan that has been submitted and accepted by U.S. EPA that includes
the following information:
* * * * *
(xi) * * *
(A) An affidavit from the producer of the fuel oil meeting
paragraph (2) of the definition of heating oil in Sec. 80.1401 stating
that the fuel oil for which RINs have been generated will be sold for
the purposes of heating or cooling interior spaces of homes or
buildings to control ambient climate for human comfort, and no other
purpose.
(B) Affidavits from the final end user or users of the fuel oil
stating that the fuel oil meeting paragraph (2) of the definition of
heating oil in Sec. 80.1401 is being used or will be used for purposes
of heating or cooling interior spaces of homes or buildings to control
ambient climate for human comfort, and no other purpose, and
acknowledging that any other use of the fuel oil would violate EPA
regulations and subject the user to civil and/or criminal penalties
under the Clean Air Act.
* * * * *
(xv) For a producer of cellulosic biofuel made from crop residue, a
foreign ethanol fuel producer from crop residue and seeking to have it
sold after denaturing as cellulosic biofuel, or a biointermediate
producer producing a biointermediate for use in the production of a
cellulosic biofuel made from crop residue, provide all the following
information:
* * * * *
(xvi) For a producer of renewable fuel that achieves the greenhouse
gas reductions necessary to qualify for a renewable fuel pathway by
using CCS:
(A) A CCS plan that includes each of the following:
(1) A statement of affirmation that the owner or operator of the
sequestration facility will inject CO2 underground from the
renewable fuel production process under 40 CFR part 98, subpart RR. The
MRV plan must be approved pursuant to 40 CFR 98.448 prior to approval
of registration under the RFS program.
(2) A statement of affirmation that the renewable fuel producer is
using the methodology approved under Sec. 80.1416 for calculating
lifecycle greenhouse gas emissions associated with renewable fuel
produced and that the lifecycle greenhouse gas emissions associated
with renewable fuel produced are no greater than a specified emissions
value.
(3) If the CO2 is or will be transferred offsite to a
sequestration facility, a contract or contracts between the renewable
fuel producer and sequestration facility (and any intermediate or
necessary parties) demonstrating the sale of CO2 from the
fuel producer to the sequestration facility and all of the following
sequestration facility duties:
(i) A duty to inject the CO2 for geologic sequestration.
(ii) A duty to help the renewable fuel producer develop a
remediation plan for the leaked CO2 to be submitted to EPA
within 30 days of EPA being notified by the renewable fuel producer of
the surface leak, and which provides information related to the date(s)
the surface leak occurred, the GHGRP facility identification number of
the sequestration facility, a detailed description of how the leak
occurred, the amount of CO2 that leaked, and a description
of how the leak would be remediated.
(iii) A duty to notify the renewable fuel producer of
CO2 surface leaks within 24 hours of detection.
(iv) A duty to certify to the renewable fuel producer annually and
within 30 days of submission to EPA that the geologic sequestration
facility has submitted to EPA all reports pursuant to 40 CFR part 98,
subpart RR.
(v) A duty for the geologic sequestration facility to notify the
renewable fuel producer if the geologic sequestration facility ends
sequestration operations.
(vi) A duty for the geologic sequestration facility to notify the
renewable fuel producer if the geologic sequestration facility submits
a request pursuant to 40 CFR 98.441 for discontinuation of reporting
under 40 CFR part 98, subpart RR.
(vii) Acknowledgement of the geologic sequestration facility's duty
to retain, for at least five years, all records required by the
applicable provisions of the UIC
[[Page 80937]]
program under Part 146, Subpart H, and the GHGRP under 40 CFR 98.3.
(B) A description of the CO2 capture and sequestration
process. If the CO2 is transferred to a sequestration
facility after capture, a description of the transfer process must be
included. The transfer process description must include the mode of
transport (e.g., whether CO2 is transferred by pipeline or
by container), as well as the annual quantity of CO2
transferred.
(C) If a producer of renewable fuel that achieves the greenhouse
gas reductions necessary to qualify for a renewable fuel pathway by
using CCS changes the geologic sequestration facility or if the
participating geologic sequestration facility ends sequestration
operations, the renewable producer shall update their registration
under paragraph (d)(1) of this section.
(D) Any additional information EPA may request, as appropriate.
(xvii) For a producer of renewable fuel that is produced by co-
processing renewable biomass and non-renewable feedstocks
simultaneously to produce a fuel that is partially renewable:
(A) A description of how the renewable content of the partial
renewable fuel will be determined after co-processing.
(B) The method the producer will use to calculate the number of
gallon-RINs on a per-batch basis as described in Sec. 80.1426(f)(4).
(C) Any additional information EPA may request, as appropriate.
(xviii) For a producer of cellulosic biofuel made from short-
rotation willow or short-rotation hybrid poplar:
(A) A list of all the species and hybrids the producer intends to
utilize as short-rotation willow or short-rotation hybrid poplar.
(B) A written justification that explains why each feedstock a
producer lists according to paragraph (b)(1)(xviii)(A) of this section
meets the definition of ``short-rotation willow'' or ``short-rotation
hybrid poplar'' per Sec. 80.1401.
(C) Records demonstrating that the short-rotation willow or short-
rotation hybrid poplar feedstocks will only be sourced from locations
that qualify as a tree plantation as defined in Sec. 80.1401,
including documentation that the land was cleared prior to December 19,
2007, and actively managed on December 19, 2007.
(D) Contracts and affidavits from the party or parties supplying
the producer with short-rotation willow or short-rotation hybrid poplar
that the feedstocks supplied to the producer shall be grown only at
locations that qualify as a tree plantation and for which records
required pursuant to paragraph (b)(1)(xviii)(C) of this section have
been provided to the producer.
(xix) For VRD-N producers, submit all relevant information in Sec.
80.1426(f)(17) and the following:
(A) Letters of approval from EPA for a Clean Alternative Fuel
Conversion under 40 CFR part 85, subpart F, for all intended
transferees of VRD-N.
(B) Copies of contracts with the intended fuel transferee, or
affidavits signed by a responsible officer of the intended transferee,
together with other documentation that EPA may specify on a case-by-
case basis that demonstrate that the contracted end users have
converted vehicles and engines under an EPA-approved Clean Alternative
Fuel Conversion under 40 CFR part 85, subpart F.
(xx) A responsible corporate officer, or an official in an
equivalent position, of the renewable fuel producer, foreign ethanol
producer, or biointermediate producer in submitting its registration
materials to EPA under this section, must include, sign, and date the
following certification: ``I certify under penalty of law that the
attached registration materials were developed, received, reviewed, and
responded to under my direction or supervision by qualified personnel
in accordance with the requirements of 40 CFR part 80. Based on my
personal knowledge and experience, or inquiry of personnel involved in
developing the registration materials, the information submitted herein
is true, accurate, and complete. I am aware that there are significant
penalties for submitting false information, including the possibility
of fines and imprisonment for knowing violations.''
(xxi) For each facility, the renewable fuel producer, foreign
ethanol producer, or biointermediate producer shall make the following
information readily accessible on the facility's publicly-available Web
site (if such Web site exists) as a public notification:
(A) The name of the independent third-party engineer that conducted
the engineering review under paragraph (b)(2) of this section.
(B) A summary of how the independent third-party engineer meets the
competency and independent criteria.
(C) The independent third-party engineer's and producer's signed
certification statements as required under paragraphs (b)(1)(xx) and
(b)(2)(iii) of this section.
(2) Engineering review. An independent third-party engineer shall
conduct an engineering review that verifies the information provided
pursuant to paragraph (b)(1) of this section and submit a written
report that demonstrates the verification of the information provided
pursuant to paragraph (b)(1) of this section. The engineering review
and written report shall be based upon a site visit occurring while the
facility is producing renewable fuel, ethanol, or a biointermediate,
and review of relevant documents, and shall separately identify each
item required by paragraph (b)(1) of this section, describe how the
independent third-party engineer evaluated the accuracy of the
information provided, state whether the independent third-party
engineer agrees with the information provided, and identify any
exceptions between the independent third-party engineer's findings and
the information provided.
(i) The engineering review and written report required under this
section must be conducted by a professional engineer, as specified in
paragraph (b)(2)(i)(A) or (B) of this section, as applicable, who is an
independent third-party engineer. The verifying independent third-party
engineer must be:
(A) For a domestic renewable fuel production facility or a domestic
biointermediate production facility: A professional engineer who is
licensed by an appropriate state agency in the United States and
trained or certified in proper verification techniques, with
professional work experience in the chemical engineering field or
related to renewable fuel production.
(B) For a foreign renewable fuel production facility, a foreign
ethanol production facility, or a foreign biointermediate production
facility: An engineer who is a foreign equivalent to a professional
engineer licensed in the United States and trained or certified in
proper auditing techniques, with professional work experience in the
chemical engineering field or related to renewable fuel production.
(ii) The independent third-party engineer and its contractors and
subcontractors must be registered with EPA and meet all applicable
requirements under paragraph (h) of this section.
(iii) The independent third-party engineer shall sign, date, and
submit to EPA with the written report the following conflict of
interest statement: ``I certify that the engineering review and written
report required and submitted under 40 CFR 80.1450(b)(2) was conducted
and prepared by me, or under my direction or supervision, in accordance
with a system designed to assure that qualified personnel properly
gather and evaluate the information
[[Page 80938]]
upon which the engineering review was conducted and the written report
is based. I further certify that the engineering review was conducted
and this written report was prepared pursuant to the requirements of 40
CFR part 80 and all other applicable auditing, competency,
independence, impartiality, and conflict of interest standards and
protocols. Based on my personal knowledge and experience, and inquiry
of personnel involved, the information submitted herein is true,
accurate, and complete. I am aware that there are significant penalties
for submitting false information, including the possibility of fines
and imprisonment for knowing violations.''
(iv)(A) To verify the accuracy of the information provided in
paragraph (b)(1)(ii) of this section, the independent third-party
engineer shall conduct independent calculations of the throughput rate-
limiting step in the production process, take digital photographs with
date and geographic coordinates stamps of all process units depicted in
the process flow diagram during the site visit, and certify that all
process unit connections are in place and functioning based on the site
visit.
(B) To verify the accuracy of the information in paragraph
(b)(1)(iii) of this section, the independent third-party engineer shall
obtain independent documentation from parties in contracts with the
producer for any co-product sales or disposals.
(C) To verify the accuracy of the information provided in paragraph
(b)(1)(iv) of this section, the independent third-party engineer shall
obtain independent documentation from all process heat fuel suppliers
of the process heat fuel supplied to the facility.
(D) To verify the accuracy of the information provided in paragraph
(b)(1)(v) of this section, the independent third-party engineer shall
conduct independent calculations of the Converted Fraction that will be
used to generate RINs.
* * * * *
(vi) The renewable fuel producer, foreign ethanol producer, or
biointermediate producer must retain records of the review and
verification, as required in Sec. 80.1454(b)(6) or (n)(4), as
applicable.
* * * * *
(ix) The independent third-party engineer must provide to EPA
documentation demonstrating that a site visit, as described in
paragraph (b)(2) of this section, occurred. Such documentation shall
include digital photographs with date and geographic coordinates stamps
of the process units taken during the site visit and a description of
what is depicted in the photographs.
(x) Reports required under paragraph (b)(2) of this section shall
be electronically submitted directly to EPA by an independent third-
party engineer using forms and procedures established by EPA.
* * * * *
(d) Registration updates. (1)(i)(A) Any producer of renewable fuel
or any foreign ethanol producer who makes changes to their facility
that will allow them to produce renewable fuel that is not reflected in
the producer's registration information on file with EPA must update
their registration information and submit a copy of an updated
independent third-party engineering review on file with EPA at least 60
days prior to producing the new type of renewable fuel.
(B) Any biointermediate producer who makes changes to their
biointermediate production facility that will allow them to produce a
biointermediate for use in the production of a renewable fuel that is
not reflected in the biointermediate producer's registration
information on file with EPA must update their registration information
and submit a copy of an updated independent third-party engineering
review on file with EPA at least 60 days prior to producing the new
biointermediate for use in the production of the renewable fuel.
(ii) The producer may also submit an addendum to the independent
third-party engineering review on file with EPA provided the addendum
meets all the requirements in paragraph (b)(2) of this section and
verifies for EPA the most up-to-date information at the producer's
existing facility.
(2)(i) Any producer of renewable fuel or any foreign ethanol
producer who makes any other changes to a facility that will affect the
producer's registration information but will not affect the renewable
fuel category for which the producer is registered per paragraph (b) of
this section must update his registration information 7 days prior to
the change.
(ii)(A) Any biointermediate producer who makes any other changes to
a biointermediate production facility that will affect the
biointermediate producer's registration must update their registration
information 7 days prior to the change.
(B) All biointermediate producers must update their registration
information on file with EPA at least 60 days prior to transferring any
biointermediate for use in the production of a renewable fuel produced
by a renewable fuel producer not contained in their registration
information on file with EPA.
(3) All producers of renewable fuel, foreign ethanol producers, and
biointermediate producers must update registration information and
submit an updated independent third-party engineering review according
to the schedule in paragraph (d)(3)(i) or (ii) of this section, and
including the information specified in paragraph (d)(3)(iii) or (iv) of
this section, as applicable:
(i) For all producers of renewable fuel and foreign ethanol
producers registered in calendar year 2010, the updated registration
information and independent third-party engineering review shall be
submitted to EPA by January 31, 2013, and by January 31 of every third
calendar year thereafter; or
(ii) For all producers of renewable fuel, foreign ethanol
producers, and biointermediate producers registered in any calendar
year after 2010, the updated registration information and independent
third-party engineering review shall be submitted to EPA by January 31
of every third calendar year after the first year of registration.
(iii) For all producers of renewable fuel and foreign ethanol
producers, in addition to conducting the engineering review and written
report and verification required by paragraph (b)(2) of this section,
the updated independent third-party engineering review shall include a
detailed review of the renewable fuel producer's calculations used to
determine VRIN of a representative sample of batches of each type of
renewable fuel produced since the last registration. The representative
sample shall be selected in accordance with the sample size guidelines
set forth at Sec. 80.127.
(iv) For biointermediate producers, in addition to conducting the
engineering review and written report and verification required by
paragraph (b)(2) of this section, the updated independent third-party
engineering review shall include a detailed review of the
biointermediate producer's calculations used to determine the renewable
biomass and cellulosic renewable biomass proportions, as required to be
reported to EPA under Sec. 80.1451(i)(2), of a representative sample
of batches of each type of biointermediate produced since the last
registration. The representative sample shall be selected in accordance
with the sample size guidelines set forth at Sec. 80.127.
(v) Renewable fuel producers claiming an exemption specified in
[[Page 80939]]
Sec. 80.1403(b) or (c) do not need to resubmit air permits as
specified in paragraph (b)(1)(v)(B) of this section or exempted
baseline peak capacity as specified in paragraph (b)(1)(v)(C)(1) of
this section. Air permits and documentation specified in paragraphs
(b)(1)(v)(B) and (C) of this section must be kept as specified in Sec.
80.1454(e).
(4) Facility ownership changes. (i) Parties that purchase, acquire,
or otherwise obtain a facility that has not been operational for more
than six months must submit a new registration for the facility under
paragraph (b) of this section.
(ii) Producers of renewable fuel that purchase, acquire, or
otherwise obtain a facility that has been operational within the
previous six months and was previously registered to a different
renewable fuel producer under paragraph (b) of this section, must meet
the following requirements:
(A) The following information must be provided to EPA:
(1) All applicable information described in paragraph (b)(1) of
this section.
(2) An engineering review as described in paragraph (b)(2) or
(d)(1) of this section.
(3) A letter, signed by both a responsible corporate officer from
the renewable fuel producer that previously registered the facility and
the renewable fuel producer that currently owns or will own the
facility that details the effective date of the transfer of ownership
of the facility and summarizes any changes to the registration
information provided to EPA pursuant to paragraph (b) of this section
for the facility.
(4) Documents that demonstrate proof of sale or ownership of the
facility.
(B) The documents and information described in paragraphs
(b)(4)(ii)(A)(1) through (3) of this section must be provided to EPA no
later than 60 days prior to the effective date of the transfer of
ownership for a facility.
(C) The document(s) described in paragraph (b)(4)(ii)(A)(4) of this
section must be provided to EPA within 3 business days of the effective
date of the transfer of ownership.
(iii) The renewable fuel producer that is acquiring the previously
registered facility under paragraph (d)(4)(ii) of this section shall
not generate RINs under Sec. 80.1426 until EPA accepts all applicable
registration information.
(iv) For renewable fuel producers that have been approved by EPA to
transfer ownership of a facility under paragraph (d)(4)(ii) of this
section, those parties may, at EPA's sole discretion, be allowed to
retroactively generate RINs pursuant to Sec. 80.1426(f) and assign
those RINs to batches of renewable fuel pursuant to Sec. 80.1452(e)
back to the effective date of the transfer of ownership for the
facility, if EPA determines that the renewable fuel producer met all
applicable requirements under paragraphs (b) and (d) of this section
for the facility at the effective date of the transfer of ownership for
the facility.
(v) The previous renewable fuel producer that owned the facility
shall not generate RINs pursuant to Sec. 80.1426 or assign RINs to a
batch of renewable fuel for a facility pursuant to Sec. 80.1452(b) on
or after the effective date of the transfer of ownership for the
facility.
(vi) For purposes of this section, the effective date of the
transfer of ownership for a facility shall be the date that the
renewable fuel producer that is acquiring the previously registered
facility purchased the facility, took custody of the facility, or began
operating the facility, whichever is later.
* * * * *
(f)(1) Except as provided in paragraph (f)(2) of this section, all
documents required for a new registration of any facility claiming an
exemption under Sec. 80.1403(c) or (d), and all documents required to
support requests by registered facilities to amend registrations to
increase the baseline volume of fuel qualifying for an exemption under
Sec. 80.1403(c) or (d), must be received by EPA no later than November
16, 2016.
(2) Paragraph (f)(1) of this section does not limit the ability of
a renewable fuel producer to newly register with EPA as a result of the
transfer of ownership of a facility that was previously registered to
another renewable fuel producer, provided that such producer shall be
subject to the same limitations as the previous owner regarding the
baseline volume for which an exemption under Sec. 80.1403(c) or (d)
apply.
(g) * * *
(9) Registration updates. (i) Any independent third-party auditor
who makes changes to its quality assurance plan(s) that will allow it
to audit new renewable fuel production facilities, as defined in Sec.
80.1401, that is not reflected in the independent third-party auditor's
registration information on file with the EPA must update its
registration information and submit a copy of an updated QAP on file
with the EPA at least 60 days prior to producing the new type of
renewable fuel.
(ii) Any independent third-party auditor who makes any changes
other than those specified in paragraphs (g)(9)(i), (iii), and (iv) of
this section that will affect the third-party auditor's registration
information must update its registration information 7 days prior to
the change.
(iii) Independent third-party auditors must update their QAPs at
least 60 days prior to verifying RINs generated by a renewable fuel
facility for a pathway not covered in the independent third-party
auditor's QAPs.
(iv) Independent third-party auditors must update their QAPs at
least 60 days prior to verifying RINs generated by any renewable fuel
facility not identified in the independent third-party auditor's
existing registration.
* * * * *
(11) * * *
(i) The Administrator may issue a notice of intent to revoke the
registration of a third-party auditor if the Administrator determines
that the auditor has failed to fulfill any requirement of this subpart,
including, but not limited to, the failure to fulfill QAP services. The
notice of intent shall include an explanation of the reasons for the
proposed revocation.
* * * * *
(h) Independent third-party engineers. Each independent third-party
engineer who conducts an independent third-party engineering review
must register with EPA as an independent third-party engineer and
receive an EPA issued identification number prior to conducting an
engineering review pursuant to paragraph (b)(2) or (d)(1) of this
section. Each independent third-party engineer must directly provide to
EPA all of the following registration materials at least 30 days prior
to conducting an engineering review pursuant to paragraph (b)(2) or
(d)(1) of this section:
(1) Documentation, as described in paragraph (b)(2)(i)(A) and (B)
of this section, for every professional engineer who will provide a
third-party engineering review.
(2) Documentation of the independent third-party engineer's
training or certification in proper verification techniques, with
professional work experience in the chemical engineering field or
related to renewable fuel production.
(3) Documentation demonstrating that every independent third-party
engineer who conducts an independent third-party engineering review
pursuant to paragraph (b)(2) or (d)(1) of this section is, as required,
maintaining professional liability insurance, as defined in 31 CFR
50.5(q). Independent third-party engineers shall use insurance
providers
[[Page 80940]]
that possess a financial strength rating in the top four categories
from either Standard & Poor's or Moody's (i.e., AAA, AA, A, or Aa, A,
or Baa for Moody's). Independent third-party engineers shall disclose
the level of professional liability insurance they possess when
entering into contracts to provide independent third-party engineering
review services.
(4) Documentation of the name, address, company, and facility
identification numbers of all renewable fuel producers, foreign ethanol
producers, and biointermediate producers that the independent third-
party engineer intends to conduct an independent third-party
engineering review for under paragraph (b)(2) or (d)(1) of this section
during the current calendar year.
(5) An affidavit, or electronic consent, from each domestic
renewable fuel producer and biointermediate producer stating its intent
to have the independent third-party engineer conduct an independent
third-party engineering review of any of the renewable fuel producer,
foreign ethanol producer, or biointermediate producer's facilities
during the current calendar year.
(6) An affidavit stating that the independent third-party engineer,
its affiliates, contractors, and subcontractors are independent of the
renewable fuel producer, foreign ethanol producer, or biointermediate
producer. For an independent third-party engineer or its affiliates,
contractors, or subcontractors to be considered independent under this
section, all of the following conditions must be met:
(i) The independent third-party engineer shall act impartially when
performing all activities under this section.
(ii) The independent third-party engineer shall not be owned or
operated by the renewable fuel producer, foreign ethanol producer, or
biointermediate producer, or any subsidiary or employee of these
producers.
(iii) The independent third-party engineer shall not be owned or
operated by an obligated party or any subsidiary or employee of an
obligated party as defined in Sec. 80.1406.
(iv) The independent third-party engineer shall not have conducted
research, development, design, construction, or consulting for the
renewable fuel producer, foreign ethanol producer, or biointermediate
producer within the last three years. For purposes of this requirement,
consulting does not include performing or participating in the
engineering review (including the verification activities) pursuant to
this section.
(v) The independent third-party engineer shall not provide other
business or consulting services to any renewable fuel producer, foreign
ethanol producer, or biointermediate producer, including advice or
assistance to implement the findings or recommendations of the written
report described in paragraph (b)(2) of this section, for a period of
at least three years following submission of the final written report.
(vi) The independent third-party engineer shall ensure that all
personnel involved in the engineering review activities under this
section do not accept employment with the owner or operator of the
renewable fuel producer, foreign ethanol producer, or biointermediate
producer for a period of at least three years following submission of
the final written report. For the purposes of this requirement,
employment does not include performing or participating in the
engineering review activities pursuant to paragraph (b)(2) of this
section.
(vii) The independent third-party engineer shall have written
policies and procedures to ensure that the independent third-party
engineer and all personnel under the independent third-party engineer's
direction or supervision comply with the competency, independence, and
impartiality requirements of this section.
(viii) For engineering review services as described in paragraph
(b)(2) of this section provided to a biointermediate producer, the
independent third-party engineer shall not be owned or operated by any
renewable fuel producer listed in paragraph (b)(1)(xv) of this section
and the independent third-party engineer shall be free from any
interest in any renewable fuel producer listed in paragraph (b)(1)(xv)
of this section. Any renewable fuel producer listed in paragraph
(b)(1)(xv) of this section shall be free from any interest in the
independent third-party engineer's business.
(ix) The independent third-party engineer shall not perform an
attest engagement under Sec. 80.1464 for the renewable fuel producer,
foreign ethanol producer, or biointermediate producer within three
years of the date that the independent third-party engineer conducted
the independent third-party engineering review at that same facility
pursuant to paragraph (b)(2) or (d)(1) of this section.
(x) The independent third-party engineer shall not be a QAP
auditor, as described in Sec. 80.1471, or perform QAP audits, as
described in Sec. 80.1472, for the renewable fuel producer, foreign
ethanol producer, or biointermediate producer in which it performed an
independent third-party engineering review pursuant to paragraph (b)(2)
or (d)(1) of this section.
(xi) The independent third-party engineer shall not own, buy, sell,
or otherwise trade RINs.
(xii) The independent third-party engineer shall be free from any
interest or the appearance of any interest in the renewable fuel
producer, foreign ethanol producer, or biointermediate producer's
business and receive no financial benefit from the outcome of the
registration, apart from receipt of payment for the independent third-
party engineering review services under paragraph (b)(2) of this
section.
(xiii) The renewable fuel producer, foreign ethanol producer, or
biointermediate producer shall be free from any interest or the
appearance of any interest in the independent third-party engineer's
business.
(xiv) The independent third-party engineer must not be debarred,
suspended, or proposed for debarment pursuant to the Government-wide
Debarment and Suspension regulations, 40 CFR part 32, or the Debarment,
Suspension and Ineligibility provisions of the Federal Acquisition
Regulations, 48 CFR part 9, subpart 9.4.
(7) Documentation with the name and contact information for each
person employed, affiliated with, or under contract or subcontract, by
the independent third-party engineer to conduct independent third-party
engineering reviews.
(8) Documentation of the independent third-party engineer's written
policies and procedures to ensure that the independent third-party
engineer and all affiliates, contractors, and subcontractors under the
professional engineer's direction or supervision comply with the
competency, independence, and impartiality requirements of this
section.
(9) The independent third-party engineer shall sign, date, and
submit to EPA with the registration the following conflict of interest
statement: ``I certify under penalty of law that the registration
materials submitted to EPA were developed, received, reviewed, and
responded to under my direction or supervision by qualified personnel
in accordance with the requirements of 40 CFR part 80. Based on my
personal knowledge and experience, or inquiry of personnel involved in
developing the registration materials, the information submitted herein
is true, accurate, and complete. I am aware that there are
[[Page 80941]]
significant penalties for submitting false information, including the
possibility of fines and imprisonment for knowing violations.''
(10) Registration updates. Any independent third-party engineer who
has any changes to the information in paragraphs (h)(1) through (9) of
this section must update their registration information seven days
prior to the change.
(11) Revocation of registration. (i) The Administrator may issue a
notice of intent to revoke the registration of an independent third-
party engineer if the Administrator determines that the independent
third-party engineer has failed to fulfill any requirement of this
subpart, including, but not limited to, the submittal to EPA of an
inaccurate independent third-party engineering review. The notice of
intent shall include an explanation of the reasons for the proposed
revocation.
(ii) Within 60 days of receipt of the notice of intent to revoke,
the independent third-party engineer may submit written comments
concerning the notice, including, but not limited to, a demonstration
of compliance with the requirements that provide the basis for the
proposed revocation. The Administrator shall review and consider any
such submission before taking final action concerning the proposed
revocation.
(iii) If the independent third-party engineer fails to respond in
writing, within 60 days, to the notice of intent to revoke, the
revocation shall become final by operation of law and the Administrator
shall notify the independent third-party engineer of such revocation.
(i) Deactivation of company, third-party auditor, or third-party
engineer registration. (1) EPA may deactivate the registration of a
company, third-party auditor, or third-party engineer, using the
process in paragraph (i)(2) of this section, if any of the following
criteria are met:
(i) The company has reported no activity in EMTS for twenty-four
consecutive months.
(ii) The company, third-party auditor, or independent third-party
engineer has failed to comply with the registration requirements of
this section.
(iii) The company, third-party auditor, or independent third-party
engineer has failed to submit any required notification or report
within 30 days of the required submission date under this subpart.
(iv) Any attest engagement required under Sec. 80.1464 has not
been received within 30 days of the required submission date.
(v) The company, third-party auditor, or independent third-party
engineer fails to pay a penalty or to perform any requirements under
the terms of a court order, administrative order, consent decree, or
administrative settlement between the company and EPA.
(vi) The company, third-party auditor, or independent third-party
engineer submits false or incomplete information.
(vii) The company, third-party auditor, or independent third-party
engineer denies EPA access or prevents EPA from completing authorized
activities under sections 114 or 208 of the Clean Air Act despite
presenting a warrant or court order. This includes a failure to provide
reasonable assistance.
(vii) The company, third-party auditor, or independent third-party
engineer fails to keep or provide the records required in this section.
(ix) The company, third-party auditor, or independent third-party
engineer otherwise circumvents the intent of the Clean Air Act or of
this subpart.
(x) If a company has registered a facility using CCS technology
pursuant to Sec. 80.1450(b)(xvi) and there is an occurrence of surface
leakage of any CO2 emissions at the geologic sequestration
facility.
(2) Except as provided in paragraph (i)(3) of this section, EPA
will use the following process whenever it decides to deactivate the
registration of a company, third-party auditor, or independent third-
party engineer:
(i) EPA will provide written notification to the responsible
corporate officer identifying the reasons or deficiencies of why EPA
intends to deactivate the company's registration. The company will have
fourteen calendar days from the date of the notification to correct the
deficiencies identified or explain why there is no need for corrective
action.
(ii) If the basis for EPA's notice of intent to deactivate
registration is the absence of EMTS activity, a stated intent to engage
in activity reported through EMTS will be sufficient to avoid
deactivation of registration.
(iii) If the company does not respond, does not correct identified
deficiencies, or does not provide an adequate explanation regarding why
such correction is not necessary within the time allotted for response,
EPA may deactivate the company's registration without further notice to
the party.
(3) In instances of willfulness or those in which public health,
interest, or safety requires otherwise, EPA may deactivate the
registration of the company, third-party auditor, or independent third-
party engineer without any notice to the party. EPA will provide
written notification to the responsible corporate officer identifying
the reasons EPA deactivated the registration of the company, third-
party auditor, or independent third-party engineer.
(4) Impact of registration deactivation:
(i) A company whose registration is deactivated shall still be
liable for violation of any requirements of this subpart.
(ii) A company whose registration is deactivated will not be listed
on any public list of actively registered companies that is maintained
by EPA.
(iii) A company whose registration is deactivated will not have
access to any of the electronic reporting systems associated with the
renewable fuel standard program, including the EPA Moderated
Transaction System (EMTS).
(iv) A company whose registration is deactivated must submit any
corrections of deficiencies to EPA on forms, and following policies,
established by EPA.
(v) If a company, third-party auditor, or independent third-party
engineer whose registration has been deactivated wishes to re-register,
they may seek to do so by submitting a new registration pursuant to the
requirements in paragraphs (a) through (c), (e), and (g) of this
section, as applicable.
* * * * *
0
51. Section 80.1451 is amended by:
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraphs (a)(1)(v) through (xviii) as paragraphs
(a)(1)(viii) through (xxi) and adding new paragraphs (a)(1)(v) through
(vii);
0
c. Revising newly redesignated paragraphs (a)(1)(viii), (ix), (xi), and
(xix);
0
d. Revising paragraphs (b) introductory text, (b)(1)(ii)(D), (I), (K),
and (L);
0
e. Redesignating paragraph (b)(1)(ii)(W) as paragraph (b)(1)(ii)(X) and
adding a new paragraph (b)(1)(ii)(W);
0
f. Revising paragraphs (g)(1)(ii)(D) and (I) and (g)(2)(vii); and
0
g. Redesignating paragraphs (i) and (j) as paragraphs (k) and (l) and
adding new paragraphs (i) and (j).
The revisions and additions read as follows:
Sec. 80.1451 What are the reporting requirements under the RFS
program?
(a) Obligated parties and exporters. Any obligated party described
in Sec. 80.1406, exporter of renewable fuel described in Sec.
80.1430, or party that must retire RINs under Sec. 80.1433, must
submit to EPA reports according to the schedule, and containing all the
information, that is set forth in this paragraph (a).
[[Page 80942]]
(1) * * *
(v) Beginning with the 2017 compliance year and every year
thereafter, the production volume and import volume for each of the
products listed in Sec. 80.1407(c) and (e) for the reporting year.
(vi) Beginning with the 2017 calendar year and every year
thereafter, the volume of renewable fuel blended into gasoline or
diesel fuel as described in Sec. 80.1407(b) and (d) for the reporting
year.
(vii) Beginning with the 2017 calendar year and every year
thereafter, the production volume and import volume for heating oil, as
defined in Sec. 80.2(ccc). Volumes of renewable heating oil for which
RINs were generated under Sec. 80.1426 shall not be included.
(viii) The combined total production volume and import volume as
calculated in Sec. 80.1407(b) and (d) for the reporting year.
(ix) The RVOs, as defined in Sec. 80.1427(a) for obligated
parties, Sec. 80.1430(b) for exporters of renewable fuel, and Sec.
80.1433(a) for parties that must retire RINs under Sec. 80.1433, for
the reporting year.
* * * * *
(xi) The total current-year RINs by category of renewable fuel, as
those fuels are defined in Sec. 80.1401 (i.e., cellulosic biofuel,
biomass-based diesel, advanced biofuel, renewable fuel, and cellulosic
biomass-based diesel), retired for compliance.
* * * * *
(xix) The total current-year RINs by category of renewable fuel, as
those fuels are defined in Sec. 80.1401 (i.e., cellulosic biofuel,
biomass-based diesel, advanced biofuel, renewable fuel, and cellulosic
biomass-based diesel), retired for compliance that are invalid as
defined in Sec. 80.1431(a).
* * * * *
(b) Renewable fuel producers (domestic and foreign) and importers.
Any domestic producer or importer of renewable fuel who generates RINs,
or any RIN-generating foreign producer must submit to EPA reports
according to the schedule, and containing all of the following
information:
(1) * * *
(ii) * * *
(D) The importer EPA facility registration number and foreign
renewable fuel producer company registration number, if applicable.
* * * * *
(I) The volume of ethanol denaturant and applicable equivalence
value of each batch.
* * * * *
(K) The types and quantities of feedstocks and biointermediates
used.
(L) The process(es), feedstock(s), and biointermediate(s) used and
proportion of renewable volume attributable to each process and
feedstock.
* * * * *
(W) Renewable fuel producers that achieve the greenhouse gas
reductions necessary to qualify for a renewable fuel pathway by using
CCS as part of the renewable fuel production process shall report to
EPA in accordance with the applicable requirements of 40 CFR part 98,
subpart PP, and shall also meet the following requirements:
(1) Calculated lifecycle greenhouse gas emissions value for each
batch of fuel produced using a method approved by EPA for each batch of
renewable fuel produced.
(2) The facility identification number associated with the 40 CFR
part 98, subpart RR, annual GHG report of the geologic sequestration
facility and the GHGRP facility identification number of the renewable
fuel facility.
(3)(i) If the CO2 injection occurs onsite, report that
onsite injection is occurring and affirm that they are reporting in
accordance with the requirements of 40 CFR part 98, subpart RR, and
that no surface leaks that could cause the lifecycle greenhouse gas
emissions to exceed the threshold value required for the approved
pathway under Sec. 80.1416 occurred during the appropriate compliance
period.
(ii) If the CO2 injection occurs offsite, report that
injection is occurring offsite and affirm that the captured
CO2 is transferred to a facility or facilities that reports
in accordance with 40 CFR part 98, subpart RR and that no surface leaks
that could cause the lifecycle greenhouse gas emissions to exceed the
threshold value required for the approved pathway under Sec. 80.1416
occurred during the appropriate compliance period.
* * * * *
(g) * * *
(1) * * *
(ii) * * *
(D) The importer EPA facility registration number and foreign
renewable fuel producer company registration number, if applicable.
* * * * *
(I) The volume of ethanol denaturant and applicable equivalence
value of each verified batch.
* * * * *
(2) * * *
(vii) A list of all facilities including the EPA's company and
facility registration numbers audited under an approved quality
assurance plan under Sec. 80.1469, the date the independent third-
party auditor conducted the on-site visit and audit, the name(s) of the
professional engineer(s) that conducted or oversaw the on-site visit
and audit, and whether the facility has a remote monitoring system.
* * * * *
(i) Biointermediate producers and importers. Any biointermediate
producer or biointermediate importer must submit to EPA reports
according to the schedule, and containing all of the following
information:
(1) Beginning on the effective date of the final rule,
biointermediate batch production reports for each biointermediate
production facility shall be submitted according to the schedule
specified in paragraph (f)(2) of this section.
(2) The biointermediate batch production reports shall include all
the following information for each batch of biointermediate produced or
imported, where ``batch'' means a discrete quantity of biointermediate
produced or imported and assigned a unique batch number per Sec.
80.1475(h):
(i) The biointermediate producer's name.
(ii) The biointermediate producer's EPA company registration
number.
(iii) The biointermediate producer's EPA facility registration
number.
(iv) The applicable reporting period.
(v) The production date and batch number of each batch.
(vi) The adjusted cellulosic content of each batch, as defined in
Sec. 80.1401, and certification that the cellulosic content of each
batch was derived from cellulose, hemicellulose, or lignin that was
derived from renewable biomass, as defined in Sec. 80.1401.
(vii) The volume of each batch produced.
(viii) The types and quantities of feedstocks used.
(ix) The renewable fuel type(s) each batch of biointermediate was
designated to be used as a feedstock material for.
(x) The EPA company registration number and EPA facility
registration number for each renewable fuel producer or foreign
renewable fuel producer that received title to each batch.
(xi) The percentage of each batch of biointermediate that met the
definition of renewable feedstock and certification that this portion
of the batch of biointermediate was derived from renewable biomass, as
defined in Sec. 80.1401.
(xii) The process(es) and feedstock(s) used and proportion of
biointermediate volume attributable to each process and feedstock.
[[Page 80943]]
(xiii) The type of co-products produced with each batch.
(xiv) The quantity of co-products produced in each quarter.
(xv) Any additional information the Administrator may require.
(j) The following tables set forth EPA determinations regarding the
extent to which listed data elements from reports submitted pursuant to
this section are eligible for treatment as confidential business
information.
Table 2-80.1451--EMTS Data Submitted in Quarterly Activity Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Report Number............................................ N
b--Report Type.............................................. N
c--CBI...................................................... N
d--Report Date.............................................. N
e--Company ID............................................... Y
f--Company Name............................................. Y
g--Compliance Period Code................................... N
h--Compliance Basis/Facility ID............................. ..........
h.1--Compliance Basis....................................... N
h.2--Facility ID............................................ Y
i--Compliance Year.......................................... Y
j--RIN Status (assigned/separated).......................... Y
k--Volume of renewable fuel owned at the end of the quarter. ..........
k.1--If company identifying information present............. Y
k.2.--If company identifying information absent............. N
l--Prior-year RFS2 RINs owned at the start of the quarter in Y
EMTS.......................................................
m--Prior-year RFS2 RINs purchased in EMTS................... Y
n--Prior-year RFS2 RINs sold in EMTS........................ Y
o--Prior-year RFS2 RINs separated in EMTS................... Y
p--Prior-year RFS2 RINs retired in EMTS..................... Y
q--Prior-year RFS2 RINs owned at the end of the quarter in Y
EMTS.......................................................
r--Prior-year RFS2 RINs expired in EMTS at the end of the ..........
quarter (Current Year--2 only).............................
r.1--If company identifying information present............. Y
r.2--If company identifying information absent.............. N
s--Current-year RFS2 RINs owned at the start of the quarter Y
in EMTS....................................................
t--Current-year RFS2 RINs purchased in EMTS................. Y
u--Current-year RFS2 RINs sold in EMTS...................... Y
v--Current-year RFS2 RINs separated in EMTS................. Y
w--Current-year RFS2 RINs retired in EMTS................... Y
x--Current-year RFS2 RINs owned at the end of the quarter in Y
EMTS.......................................................
y--RFS2 RINs generated during the quarter in EMTS........... Y
z--Submission Comment....................................... Y
System 1--CDX Submission ID................................. Y
System 2--Submitter......................................... Y
------------------------------------------------------------------------
Table 3-80.1451--EMTS Data Submitted in Annual Compliance Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Company ID............................................... Y
b--Company Name............................................. Y
c--Report Number............................................ N
d--Report Type.............................................. N
e--CBI...................................................... N
f--Report Date.............................................. N
g--Compliance Year.......................................... Y
h--Renewable Volume Obligation (RVO)........................ Y
i--Gasoline and Diesel Production/Renewable Fuel Export Y
Volume.....................................................
j--Renewable Fuel Standard Value/Equivalence Value.......... N
k--Cellulosic Biofuel Waiver Credits Payment ID............. Y
l--Cellulosic Biofuel Waiver Credits Payment Method......... Y
m--Cellulosic Biofuel Waiver Credits Used................... Y
n--Compliance Basis/Facility ID............................. Y
o--Compliance Facility Number............................... Y
p--Renewable Fuel Export Type............................... Y
q--Prior Year Deficit....................................... Y
r--Renewable Volume Obligation (Name)....................... N
s--Prior-year RFS2 RINs used, D code of 3................... Y
t--Prior-year RFS2 RINs used, D code of 4................... Y
u--Prior-year RFS2 RINs used, D code of 5................... Y
v--Prior-year RFS2 RINs used, D code of 6................... Y
w--Prior-year RFS2 RINs used, D code of 7................... Y
x--Current-year RFS2 RINs used, D code of 3................. Y
y--Current-year RFS2 RINs used, D code of 4................. Y
z--Current-year RFS2 RINs used, D code of 5................. Y
aa--Current-year RFS2 RINs used, D code of 6................ Y
ab--Current-year RFS2 RINs used, D code of 7................ Y
ac--Deficit RVO............................................. Y
ad--Submission Comment...................................... Y
ae--CDX Submission ID....................................... Y
af--Submitter............................................... Y
------------------------------------------------------------------------
Table 4-80.1451--Data in PDF Versions of Quarterly RIN Sell Transaction
Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Seller Company ID........................................ Y
b--Seller Company Name...................................... Y
c--Buyer Company ID......................................... Y
d--Buyer Company Name....................................... Y
e--RIN Year................................................. Y
f--Fuel D-Code.............................................. Y
g--Assignment Code Text..................................... Y
h--Batch Volume............................................. Y
i--RIN Quantity............................................. Y
j--Ptd Number............................................... Y
k--Generate Organization ID (non-FIFO)...................... Y
l--Generate Facility ID (non-FIFO).......................... Y
m--Generate Batch Number (non-FIFO)......................... Y
n--Sell Reason Code Text.................................... N
o--Document ID.............................................. Y
p--Document Name............................................ Y
q--Transaction Comment...................................... Y
System 1--CDX Submission ID................................. Y
System 2--EMTS Submission Date.............................. N
System 3--EMTS Submission ID................................ N
System 4--EMTS Transaction Date............................. N
System 5--EMTS Transaction ID............................... N
------------------------------------------------------------------------
Table 5-80.1451--Data in PDF Versions of Quarterly RIN Buy Transaction
Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Buyer Company ID......................................... Y
b--Buyer Company Name....................................... Y
c--Seller Company ID........................................ Y
d--Seller Company Name...................................... Y
e--RIN Year................................................. Y
f--Fuel D-Code.............................................. Y
g--Assignment Code Text..................................... Y
h--Batch Volume............................................. Y
i--RIN Quantity............................................. Y
j--Ptd Number............................................... Y
k--Generate Organization ID (non-FIFO)...................... Y
l--Generate Facility ID (non-FIFO).......................... Y
m--Generate Batch Number (non-FIFO)......................... Y
n--Buy Reason Code Text..................................... N
o--Document ID.............................................. Y
p--Document Name............................................ Y
q--Transaction Comment...................................... Y
System 1--CDX Submission ID................................. Y
System 2--EMTS Submission Date.............................. N
System 3--EMTS Submission ID................................ N
System 4--EMTS Transaction Date............................. N
System 5--EMTS Transaction ID............................... N
------------------------------------------------------------------------
[[Page 80944]]
Table 6-80.1451--Data in PDF Versions of Quarterly RIN Separate
Transaction Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Separator Company ID..................................... Y
b--Separator Company Name................................... Y
c--RIN Year................................................. Y
d--Fuel D-Code.............................................. Y
e--Assignment Code.......................................... Y
f--Batch Volume............................................. Y
g--Blender Company ID....................................... Y
h--Blender Company Name..................................... Y
i--RIN Quantity............................................. Y
j--Separate Reason Code Text................................ N
k--Generate Organization ID (non-FIFO)...................... Y
l--Generate Facility ID (non-FIFO).......................... Y
m--Generate Batch Number (non-FIFO)......................... Y
n--Document ID.............................................. Y
o--Document Name............................................ Y
p--Transaction Comment...................................... Y
System 1--CDX Submission ID................................. Y
System 2--EMTS Submission ID................................ N
System 3--EMTS Transaction Date............................. N
System 4--EMTS Transaction ID............................... N
------------------------------------------------------------------------
Table 7-80.1451--Data in PDF Versions of Quarterly RIN Retire
Transaction Reports
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Retirement Company ID.................................... Y
b--Retirement Company Name.................................. Y
c--RIN Year................................................. Y
d--Fuel D-Code.............................................. Y
e--Assignment Code Text..................................... Y
f--Batch Volume............................................. Y
g--RIN Quantity............................................. Y
h--Generate Organization ID (non-FIFO)...................... Y
i--Generate Facility ID (non-FIFO).......................... Y
j--Generate Batch Number (non-FIFO)......................... Y
k--Retire Reason Code Text.................................. N
l--Compliance Year.......................................... Y
m--Compliance Level Code.................................... Y
n--Compliance Facility ID................................... Y
o--Transaction Comment...................................... Y
p--Document ID.............................................. Y
q--Document Name............................................ Y
System 1--CDX Submission ID................................. Y
System 2--EMTS Submission ID................................ N
System 3--EMTS Transaction Date............................. N
System 4--EMTS Transaction ID............................... N
------------------------------------------------------------------------
* * * * *
0
52. Section 80.1452 is amended by:
0
a. Revising paragraph (b)(11);
0
b. Redesignating paragraph (b)(16) as paragraph (b)(18) and adding new
paragraph (b)(16) and paragraph (17); and
0
c. Redesignating paragraph (d) as paragraph (g) and adding new
paragraph (d) and paragraphs (e) and (f).
The revisions and additions read as follows:
Sec. 80.1452 What are the requirements related to the EPA Moderated
Transaction System (EMTS)?
* * * * *
(b) * * *
(11) The volume of ethanol denaturant and applicable equivalence
value of each batch.
* * * * *
(16) Starting January 1, 2018, or a later date designated by EPA,
the type and quantity of biointermediate(s) used for the batch, if
applicable.
(17) Starting January 1, 2018, or a later date designated by EPA,
the EPA facility registration number of each biointermediate production
facility at which a biointermediate used for the batch was produced, if
applicable.
* * * * *
(d) Parties shall not assign RINs to a batch of renewable fuel
pursuant to paragraph (b) of this section prior to EPA approval of
applicable registration requirements under Sec. 80.1450(b), (c),
(d)(1), and (d)(4).
(e) The following tables set forth EPA determinations regarding the
extent to which listed EMTS data elements are eligible for treatment as
confidential business information.
Table 1 to Sec. 80.1452--EMTS Data Related to RIN Generation
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--RIN Originator Company ID................................ Y
b--RIN Originator Company Name.............................. Y
c--RIN Quantity............................................. Y
d--Batch Volume............................................. Y
e--Fuel D-Code.............................................. Y
f--Production Process....................................... Y
g--Fuel Category Code Text.................................. Y
h--Fuel Production Date..................................... Y
i--Denaturant Volume........................................ Y
j--Equivalence Value........................................ Y
k--Renewable Fuel Producer Company ID....................... Y
l--Renewable Fuel Producer Company Name..................... Y
m--Renewable Fuel Producer Facility Number.................. Y
n--RIN Originator Facility Number........................... Y
o--RIN Originator Import Facility Number.................... Y
p--RIN Originator Batch Number.............................. Y
q--Production Source Comment................................ Y
r--Feedstocks............................................... Y
s--Feedstocks Amount........................................ Y
t--Feedstocks Unit of Measure............................... N
u--QAP Service Type......................................... Y
v--Feedstock Comment........................................ Y
w--Co-Product............................................... Y
x--Co-Product Comment....................................... Y
y--RIN Year................................................. Y
System 1--CDX Submission ID................................. Y
System 2--Data Preparer..................................... N
System 3--EMTS Generate Transaction ID...................... N
System 4--EMTS Submission Date.............................. N
System 5--EMTS Submission ID................................ N
System 6--EMTS Transaction Date............................. N
System 7--EMTS Transaction ID............................... N
System 8--Submission Method................................. N
System 9--Submitter......................................... Y
------------------------------------------------------------------------
Table 2 to Sec. 80.1452--EMTS Data Related to RIN Sell Transactions
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Seller Company ID........................................ Y
b--Seller Company Name...................................... Y
c--Buyer Company ID......................................... Y
d--Buyer Company Name....................................... Y
e--Ptd Number............................................... Y
f--RIN Quantity............................................. Y
g--Batch Volume............................................. Y
h--Fuel D-Code.............................................. Y
i--Assignment Code Text..................................... Y
j--RIN Year................................................. Y
k--QAP Service Type......................................... Y
l--Transfer Date............................................ Y
m--Sell Reason Code Text.................................... N
n--Price Per Gallon......................................... Y
o--Price Per RIN............................................ Y
p--Transaction Comment...................................... Y
q--Generate Organization ID (non-FIFO)...................... Y
r--Generate Facility ID (non-FIFO).......................... Y
s--Generate Batch Number (non-FIFO)......................... Y
t--Public Supporting Document (text box 1).................. Y
u--Public Supporting Document ID (text box 1)............... Y
v--Public Supporting Document (text box 2).................. Y
w--Public Supporting Document (text box 2).................. Y
System 1--CDX Submission ID................................. Y
System 2--Data Preparer..................................... N
System 3--EMTS Buy Transaction ID........................... N
System 4--EMTS Submission Date.............................. N
System 5--EMTS Submission ID................................ N
System 6--EMTS Transaction Date............................. N
System 7--EMTS Transaction ID............................... N
System 8--Matched EMTS Transaction ID....................... N
System 9--Submission Method................................. N
System 10--Submitter........................................ Y
------------------------------------------------------------------------
Table 3 to Sec. 80.1452--EMTS Data Related to RIN Buy Transactions
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--Buyer Company ID......................................... Y
[[Page 80945]]
b--Buyer Company Name....................................... Y
c--Seller Company ID........................................ Y
d--Seller Company Name...................................... Y
e--Ptd Number............................................... Y
f--RIN Quantity............................................. Y
g--Batch Volume............................................. Y
h--Fuel D-Code.............................................. Y
i--Assignment Code Text..................................... Y
j--RIN Year................................................. Y
k--QAP Service Type......................................... Y
l--Transfer Date............................................ Y
m--Buy Reason Code Text..................................... N
n--Price Per RIN............................................ Y
o--Price Per Gallon......................................... Y
p--Transaction Comment...................................... Y
q--Generate Organization ID (non-FIFO)...................... Y
r--Generate Facility ID (non-FIFO).......................... Y
s--Generate Batch Number (non-FIFO)......................... Y
t--Public Supporting Document (text box 1).................. Y
u--Public Supporting Document ID (text box 1)............... Y
v--Public Supporting Document (text box 2).................. Y
w--Public Supporting Document (text box 2).................. Y
System 1--CDX Submission ID................................. Y
System 2--Data Preparer..................................... N
System 3--EMTS Buy Transaction ID........................... N
System 4--EMTS Submission Date.............................. N
System 5--EMTS Submission ID................................ N
System 6--EMTS Transaction Date............................. N
System 7--EMTS Transaction ID............................... N
System 8--Matched EMTS Transaction ID....................... N
System 9--Submission Method................................. N
System 10--Submitter........................................ Y
------------------------------------------------------------------------
Table 4 to Sec. 80.1452--EMTS Data Related to RIN Separate
Transactions
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--RIN Separator Company ID................................. Y
b--RIN Separator Company Name............................... Y
c--Transaction Date......................................... Y
d--RIN Quantity............................................. Y
e--Batch Volume............................................. Y
f--Fuel D-Code.............................................. Y
g--Separate Reason Code Text................................ N
h--Assignment Code.......................................... Y
i--RIN Year................................................. Y
j--QAP Service Type......................................... Y
k--Blender Company ID....................................... Y
l--Blender Company Name..................................... Y
m--Transaction Comment...................................... Y
n--Generate Organization ID (non-FIFO)...................... Y
o--Generate Facility ID (non-FIFO).......................... Y
p--Generate Batch Number (non-FIFO)......................... Y
q--Document ID.............................................. Y
r--Document Name............................................ Y
System 1--CDX Submission ID................................. Y
System 2--Data Preparer..................................... N
System 3--EMTS Submission Date.............................. N
System 4--EMTS Submission ID................................ N
System 5--EMTS Transaction Date............................. N
System 6--EMTS Transaction ID............................... N
System 7--Submission Method................................. N
System 8--Submitter......................................... Y
System 9--Separation Transaction ID......................... N
------------------------------------------------------------------------
Table 5 to Sec. 80.1452--EMTS Data Related to RIN Retire Transactions
------------------------------------------------------------------------
Field name CBI
------------------------------------------------------------------------
a--RIN Retirement Company ID................................ Y
b--RIN Retirement Company Name.............................. Y
c--RIN Quantity............................................. Y
d--Batch Volume............................................. Y
e--Fuel D-Code.............................................. Y
f--Assignment Code Text..................................... Y
g--RIN Year................................................. Y
h--QAP Service Type......................................... Y
i--Retire Reason Code Text.................................. N
j--Compliance Year.......................................... Y
k--Compliance Level Code Text............................... Y
l--Compliance Facility ID................................... Y
m--Transaction Comment...................................... Y
n--Generate Organization ID (non-FIFO)...................... Y
o--Generate Facility ID (non-FIFO).......................... Y
p--Generate Batch Number (non-FIFO)......................... Y
q--Document ID.............................................. Y
r--Document Name............................................ Y
System 1--CDX Submission ID................................. Y
System 2--Data Preparer..................................... N
System 3--EMTS Submission Date.............................. N
System 4--EMTS Submission ID................................ N
System 5--EMTS Transaction Date............................. N
System 6--EMTS Transaction ID............................... N
System 7--Submission Method................................. N
System 8--Submitter......................................... Y
System 9--Retire Transaction ID............................. N
------------------------------------------------------------------------
(f) EPA's public release of EPA enforcement-related determinations
and EPA actions under the RFS program, together with basic information
regarding the party or parties involved and the RINs in question, does
not involve the release of information that is entitled to treatment as
confidential business information. Such information may include the
company name and company identification number of the party that
generated the RINs in question, the facility name and facility
identification number of the facility at which the fuel associated with
the RINs in question was allegedly produced or imported, the total
quantity of RINs in question, the time period when the RINs in question
were generated, and the batch number(s) and the D code(s) of the RINs
in question. Enforcement-related determinations and actions within the
scope of this rule include EPA determinations that RINs are invalid
under Sec. 80.1474(b)(4)(i)(C)(2) and (b)(4)(ii)(C)(2), notices of
violation, administrative complaints, civil complaints, criminal
informations and criminal indictments.
0
53. Section 80.1453 is amended by revising paragraphs (a) introductory
text, (a)(12) introductory text, and (d), and adding paragraph (e) to
read as follows:
Sec. 80.1453 What are the product transfer document (PTD)
requirements for the RFS program?
(a) On each occasion when any person transfers ownership of neat
and/or blended renewable fuels or separated RINs subject to this
subpart, other than when fuel is sold or dispensed at a retail outlet
or wholesale purchaser-consumer facility, the transferor shall provide
to the transferee documents that include the following information, as
applicable.
* * * * *
(12) Except as provided in Sec. 80.1433(e), an accurate and clear
statement on the product transfer document of the fuel type and
intended fuel use or uses, from the options listed below, which is made
in good faith:
* * * * *
(d) For fuel oil meeting paragraph (2) of the definition of heating
oil in Sec. 80.1401, the PTD of the fuel oil shall state: ``This
volume of renewable fuel oil is designated and intended to be used to
heat or cool interior spaces of homes or buildings to control ambient
climate for human comfort. Do NOT use for process heat or cooling or
any other purpose, as these uses are prohibited pursuant to 40 CFR
80.1460(g).''
(e) On each occasion when any party transfers title or custody of a
biointermediate, the transferor must provide to the transferee
documents that include all of the following information:
(1) The name and address of the transferor and transferee.
(2) The transferor's and transferee's EPA company registration and
applicable facility registration numbers.
(3) The volume of biointermediate that is being transferred.
(4) The date of the transfer.
[[Page 80946]]
(5) The location of the biointermediate at the time of the
transfer.
(6) The renewable fuel type the biointermediate was designated to
be used as a feedstock material for by the biointermediate producer
under Sec. 80.1475(i).
(7) The composition of the biointermediate being transferred,
including:
(i) The type and quantity of each feedstock, specified exactly as
described in Table 1 to Sec. 80.1426, that was used to make the
biointermediate.
(ii) The percentage of each feedstock that is renewable biomass,
rounded to two decimal places.
(iii) For a biointermediate that contains both renewable and non-
renewable feedstocks:
(A) The percentage of each feedstock that is not renewable biomass,
rounded to two decimal places.
(B) The feedstock energy from the renewable biomass used to make
the biointermediate, in Btu.
(C) The feedstock energy from the non-renewable biomass used to
make the biointermediate, in Btu.
(D) The total percentage of the biointermediate that may generate
RINs, rounded to two decimal places.
(E) The total percentage of the biointermediate that may not
generate RINs, rounded to two decimal places.
(iv) For a biointermediate that contains cellulosic material:
(A) The percentage of each feedstock in Sec. 80.1453(e)(6)(ii)
that is cellulosic, rounded to two decimal places.
(B) The percentage of each feedstock in Sec. 80.1453(e)(6)(ii)
that is non-cellulosic, rounded to two decimal places, if applicable.
(C) The total percentage of the biointermediate that may generate
cellulosic RINs, rounded to two decimal places.
(D) For separated municipal solid waste as described in Sec.
80.1426(f)(5)(i)(C), the cellulosic portion of the biointermediate is
equivalent to the biogenic portion.
(E) For separated food waste, the non-cellulosic percentage is
assumed to be zero percent unless it is demonstrated to be partially
cellulosic.
(F) For separated yard waste, as described in Sec.
80.1426(f)(5)(i)(A), 100% of separated yard waste is deemed to be
cellulosic.
(G) The following statement ``I certify that the cellulosic content
of this feedstock was derived from cellulose, hemicellulose, or lignin
that was derived from renewable biomass.''
(v) The type and proportion of RINs that may be generated for the
biointermediate.
(8) Copies of records specified in Sec. Sec. 80.1454(n)(3) and
80.1454(n)(5) through (7) for the volume being transferred, as
applicable.
(9) The following statement designating the volume of
biointermediate as feedstock for the production of a renewable fuel:
``This volume is designated and intended for use as biointermediate
feedstock in the production of renewable fuel as defined in 40 CFR
80.1401. Parties shall not generate RINs on this feedstock material.''
0
54. Section 80.1454 is amended by:
0
a. Revising paragraphs (a) introductory text and (a)(4)(i);
0
b. Adding paragraph (a)(7);
0
c. Redesignating paragraphs (b)(3)(vii) through (xii) as paragraphs
(b)(3)(viii) through (xiii) and adding a new paragraph (b)(3)(vii);
0
d. Revising paragraph (b)(6);
0
e. Adding paragraph (b)(11);
0
f. Revising paragraph (d)(2) introductory text;
0
g. Redesignating paragraph (d)(2)(vi) as (d)(2)(vii) and adding new
paragraph (d)(2)(vi) and paragraph (d)(2)(viii);
0
h. Revising paragraph (h)(6)(iii);
0
i. Redesignating paragraphs (n) through (t) as paragraphs (q) through
(w) and adding new paragraphs (n) through (p); and
0
j. Revising newly redesignated paragraphs (q) and (t).
The revisions and additions read as follows:
Sec. 80.1454 What are the recordkeeping requirements under the RFS
program?
(a) Requirements for obligated parties and exporters. Beginning
July 1, 2010, any obligated party (as described at Sec. 80.1406),
exporter of renewable fuel (as described at Sec. 80.1401), or party
that must retire RINs under Sec. 80.1433, must keep all of the
following records:
* * * * *
(4) * * *
(i) Methods and variables used to calculate the Renewable Volume
Obligations pursuant to Sec. 80.1407, Sec. 80.1430, or Sec. 80.1433.
* * * * *
(7) For parties that must retire RINs under Sec. 80.1433,
invoices, bills of lading, and other documents describing the renewable
fuel and the intended use of the renewable fuel for which RINs must be
retired under Sec. 80.1433.
* * * * *
(b) * * *
(3) * * *
(vii) Type and quantity of biointermediate used.
* * * * *
(6) Copies of registration documents required under Sec. 80.1450,
including information on fuels and products, feedstocks,
biointermediates, facility production processes, process changes, and
capacity, energy sources, and a copy of the independent third party
engineering review written report submitted to EPA per Sec.
80.1450(b)(2).
* * * * *
(11) For any producer of renewable fuel that achieves the
greenhouse gas reductions necessary to qualify for a renewable fuel
pathway by using CCS technology as part of the renewable fuel
production process, records presenting accurate calculations verifying
compliance with the applicable lifecycle greenhouse gas reductions
reported in accordance with Sec. 80.1451(b)(1)(ii)(W).
* * * * *
(d) * * *
(2) Domestic producers of renewable fuel made from qualified
planted trees or tree residue from actively managed tree plantations
must keep records that serve as evidence that the land from which the
feedstock was obtained was cleared prior to December 19, 2007, and
actively managed on December 19, 2007. The records must be provided by
the feedstock producer and must include at least one of the following
documents, which must be traceable to the land in question:
* * * * *
(vi) An agreement for land management consultation with a
professional forester that identifies the land in question.
* * * * *
(viii) Records satisfying the requirements of paragraph (d)(3)(i)
of this section that serve as evidence that the land on which the tree
plantation is located was cleared or cultivated prior to December 19,
2007, and actively managed or fallow on December 19, 2007.
* * * * *
(h) * * *
(6) * * *
(iii) The survey plan must be sent to the attention of ``RFS
Program'' to the address in Sec. 80.10(a).
* * * * *
(n) Requirements for biointermediate producers. Beginning on the
effective date of the final rule, any biointermediate producer
producing a biointermediate must keep all of the following records in
addition to those required under paragraphs (a) through (m) of this
section:
(1) Product transfer documents consistent with Sec. 80.1453(e) and
associated with the biointermediate producer's activities, if any, as
transferor or transferee of biointermediates.
[[Page 80947]]
(2) Copies of all reports submitted to EPA under Sec. 80.1451(i).
(3) Records related to the production of biointermediates for each
biointermediate production facility, including all of the following:
(i) Batch volume.
(ii) Batch number.
(iii) Type and quantity of co-products produced.
(iv) Type and quantity of feedstocks used.
(v) Type and quantity of fuel used for process heat.
(vi) Feedstock energy calculations per Sec. 80.1426(f)(4), as
applicable.
(vii) Date of production.
(viii) Results of any laboratory analysis of batch chemical
composition or physical properties.
(4) Copies of registration documents required under Sec. 80.1450,
including information on products, feedstocks, facility production
processes, process changes, and capacity, energy sources, and a copy of
the independent third party engineering review submitted to EPA per
Sec. 80.1450(b)(2)(i).
(5) Records demonstrating that feedstocks are renewable biomass, as
required under paragraphs (d), (g), or (h) of this section.
(6) A biointermediate producer that produces a biointermediate from
separated yard and food waste for use in the production of a renewable
fuel, as described in Sec. 80.1426(f)(5)(i)(A) and (B), or from
separated municipal solid waste, as described in Sec.
80.1426(f)(5)(i)(C), shall keep all records described in paragraph (j)
of this section, as applicable.
(7) For any biointermediate made from Arundo donax or Pennisetum
purpureum per Sec. 80.1426(f)(14), all applicable records described in
paragraph (b)(7) of this section.
(8) Records, including contracts, related to the implementation of
a QAP under Sec. 80.1469.
(o) A producer of renewable fuel that achieves the greenhouse gas
reductions necessary to qualify for a renewable fuel pathway by using
CCS technology as part of the renewable fuel production process must
retain records of all information reported in accordance with the
applicable requirements of 40 CFR part 98, subpart PP, must follow the
applicable record retention requirements specified by 40 CFR part 98,
subpart PP, and one of the following, as applicable:
(1) If the injection occurs onsite, follow the record retention
requirements specified by 40 CFR part 98, subpart RR, and retain
records of all information reported by the producer or importer in
accordance with the requirements of 40 CFR part 98, subpart RR.
(2) If the injection occurs offsite, retain records of all
information reported by the facility or facilities that report in
accordance with the requirements of 40 CFR part 98, subpart RR.
(p) Producers of renewable fuel using short-rotation willow or
short-rotation hybrid poplar shall keep records of all of the
following:
(1) The specific short-rotation willow or short-rotation hybrid
poplar species or hybrids utilized to produce each batch of renewable
fuel.
(2) The total quantity of each specific short-rotation willow or
short-rotation hybrid poplar feedstock used for each batch.
(3) Total amount of fuel produced under the short-rotation willow
or short-rotation hybrid poplar pathway for each batch.
(4) Affidavits from the short-rotation willow or short-rotation
hybrid poplar feedstock suppliers confirming that the feedstocks
supplied to the producer are grown only at locations that qualify as a
tree plantation and for which records required pursuant to Sec.
80.1450(b)(1)(xviii)(C) have been provided to the producer. The
producer shall obtain affidavits under this paragraph at least once per
calendar quarter.
(5) Contracts from the short-rotation willow or short-rotation
hybrid poplar feedstock suppliers confirming that the feedstocks
supplied to the producer are grown only at locations that qualify as a
tree plantation and for which records required pursuant to Sec.
80.1450(b)(1)(xviii)(C) have been provided to the producer.
(q) The records required under paragraphs (a) through (d) and (f)
through (p) of this section and under Sec. 80.1453 shall be kept for
five years from the date they were created, except that records related
to transactions involving RINs shall be kept for five years from the
date of the RIN transaction.
* * * * *
(t) The records required in paragraphs (b)(3) and (c)(1) of this
section must be transferred with any renewable fuel sent to the
importer of that renewable fuel by any non-RIN-generating foreign
producer.
* * * * *
0
55. Section 80.1460 is amended by:
0
a. Revising paragraphs (b)(5) and (c)(2);
0
b. Removing paragraph (c)(3);
0
c. Revising paragraph (g); and
0
d. Adding paragraphs (j) through (l).
The revisions and additions read as follows:
Sec. 80.1460 What acts are prohibited under the RFS program?
* * * * *
(b) * * *
(5) Introduce into commerce any renewable fuel produced from a
feedstock, a biointermediate feedstock, or through a process that is
not described in the person's registration information.
* * * * *
(c) * * *
(2) Use a RIN for compliance or transfer a RIN that was assigned to
renewable fuel received by a person if the person uses the volume of
fuel associated with the RIN for an application other than as
transportation fuel, jet fuel, or heating oil.
* * * * *
(g) Failing to use a renewable fuel oil for its intended use. No
person shall use fuel oil that meets paragraph (2) of the definition of
heating oil in Sec. 80.1401 and for which RINs have been generated in
an application other than to heat or cool interior spaces of homes or
buildings to control ambient climate for human comfort.
* * * * *
(j) Improper biointermediate production violation. No person shall
introduce into commerce for use in the production of a renewable fuel
any biointermediate produced from a feedstock or through a process that
is not described in the person's registration information.
(k) Independent third-party engineer violations. No person shall do
any of the following:
(1) Fail to identify any incorrect information submitted by the
renewable fuel producer, foreign ethanol producer, or biointermediate
producer as described in Sec. 80.1450(b)(2).
(2) Fail to meet any requirement related to engineering reviews as
described in Sec. 80.1450(b)(2).
(3) Fail to disclose to EPA any financial, professional, business,
or other interests with parties for whom the independent third-party
engineer provides services under Sec. 80.1450.
(4) Fail to meet any requirement related to the independent third-
party engineering review registration requirements in Sec.
80.1450(b)(2) or (d)(1).
(l) Failing to designate fuel for an alternative use or retire RINs
as required. No person shall fail to designate fuel for an alternative
use or retire RINs as required by Sec. 80.1433.
0
56. Section 80.1461 is amended by revising paragraphs (a) and (c) and
adding paragraph (e) to read as follows:
[[Page 80948]]
Sec. 80.1461 Who is liable for violations under the RFS program?
(a) Liability for violations of prohibited acts. (1) Any person who
violates a prohibition under Sec. 80.1460(a) through (d) or Sec.
80.1460(g) through (l) is liable for the violation of that prohibition.
(2) Any person who causes another person to violate a prohibition
under Sec. 80.1460(a) through (d) or Sec. 80.1460(g) through (l) is
liable for a violation of Sec. 80.1460(e).
* * * * *
(c) Parent corporation liability. Any parent corporation is liable
for any violation of this subpart that is committed by any of its
subsidiaries, contractors, subcontractors, or affiliates.
* * * * *
(e) Biointermediate liability. When a biointermediate contained in
any storage tank at any facility owned, leased, operated, controlled,
or supervised by any biointermediate producer, biointermediate
importer, renewable fuel producer, or foreign ethanol producer is found
in violation of the prohibition described in Sec. 80.1460(j), the
following persons shall be deemed in violation:
(1) Each biointermediate producer, biointermediate importer,
renewable fuel producer, renewable fuel importer, or foreign ethanol
producer who owns, leases, operates, controls, or supervises the
facility where the violation is found.
(2) Each biointermediate producer, biointermediate importer,
renewable fuel producer, renewable fuel importer, or foreign ethanol
producer who manufactured, imported, sold, offered for sale, dispensed,
offered for supply, stored, transported, or caused the transportation
of any biointermediate that is in the storage tank containing the
biointermediate found to be in violation.
(3) Each carrier who dispensed, supplied, stored, or transported
any biointermediate that was in the storage tank containing the
biointermediate found to be in violation, provided that EPA
demonstrates, by reasonably specific showings using direct or
circumstantial evidence, that the carrier caused the violation.
0
57. Section 80.1464 is amended by:
0
a. Revising paragraphs (a) introductory text, (a)(1)(i)(A), and
(a)(1)(ii) and (v);
0
b. Adding paragraph (a)(1)(vii);
0
c. Revising paragraphs (b)(1)(ii) and (v); and
0
d. Adding paragraph (h).
The revisions and additions read as follows:
Sec. 80.1464 What are the attest engagement requirements under the
RFS program?
* * * * *
(a) Obligated parties and exporters. The following attest
procedures shall be completed for any obligated party as stated in
Sec. 80.1406(a), exporter of renewable fuel, or party that must retire
RINs under Sec. 80.1433:
(1) * * *
(i) * * *
(A) The obligated party's volume of all products listed in Sec.
80.1407(c) and (e), the exporter's volume of each category of exported
renewable fuel identified in Sec. 80.1430(b)(1) through (b)(4), or the
volume of each category of renewable fuel identified in Sec.
80.1433(a)(1) through (a)(4), as applicable.
* * * * *
(ii) Obtain documentation of any volumes of renewable fuel used in
products listed in Sec. 80.1407(c) and (e) at the refinery or import
facility, exported during the reporting year, or redesignated as
described in Sec. 80.1433; compute and report as a finding the total
volumes of renewable fuel represented in these documents.
* * * * *
(v) Compute and report as a finding the RVOs for the obligated
party, exporter, or party that must retire RINs under Sec. 80.1433,
and any deficit RVOs carried over from the previous year or carried
into the subsequent year, and verify that the values agree with the
values reported to EPA.
* * * * *
(vii) For parties that must retire RINs under Sec. 80.1433,
perform all of the following:
(A) Obtain the database, spreadsheet, or other documentation that
the party maintains for all renewable fuel for which RINs must be
retired under Sec. 80.1433.
(B) Compare the volume of products identified in these documents
with the volumes reported to EPA.
(C) Verify that the volumes reported to EPA agree with the volumes
identified in the database, spreadsheet, or other documentation, and
report as a finding any exception.
(D) Select sample batches in accordance with the guidelines in
Sec. 80.127 from each separate category of renewable fuel identified
in Sec. 80.1451(a); obtain invoices, bills of lading, and other
documentation for the representative samples; state whether any of
these documents refer to the renewable fuel as advanced biofuel or
cellulosic biofuel; and report as a finding whether or not the party
calculated an advanced biofuel or cellulosic biofuel RVO for these
fuels pursuant to Sec. 80.1433(a)(1) or Sec. 80.1433(a)(3).
(b) * * *
(1) * * *
(ii) Obtain production data for each renewable fuel batch by type
of renewable fuel that was produced or imported during the year being
reviewed; compute the RIN numbers, production dates, types, volumes of
ethanol denaturant and applicable equivalence values, and production
volumes for each batch; report the total RINs generated during the year
being reviewed; and state whether this information agrees with the
party's reports to EPA. Report as a finding any exceptions.
* * * * *
(v)(A) Obtain documentation, as required under Sec. 80.1451(b),
(d), and (e), associated with feedstock and biointermediate purchases
for a representative sample, selected in accordance with the guidelines
in Sec. 80.127, of renewable fuel batches produced or imported during
the year being reviewed.
(B) Verify that feedstocks were properly identified in the reports
and met the definition of renewable biomass in Sec. 80.1401.
(C) Verify that biointermediates were properly identified in the
reports, if applicable.
* * * * *
(h) Biointermediate producers. The following attest reports shall
be completed for any biointermediate producer that produces a
biointermediate in a calendar year:
(1) Biointermediate production reports. (i) Obtain and read copies
of the quarterly biointermediate production reports required under
Sec. 80.1451(i).
(ii) Obtain any database, spreadsheet, or other documentation used
to generate the information in the biointermediate production reports;
compare the corresponding entries in the database or spreadsheet and
report as a finding any discrepancies.
(iii) For a representative sample of biointermediate batches,
selected in accordance with the guidelines in Sec. 80.127, obtain
records required under Sec. 80.1454(n); compare these records to the
corresponding batch entries in the reports procured in paragraph
(h)(1)(i) of this section and report as a finding any discrepancies.
(2) Independent third-party engineering review. (i) Obtain
documentation of independent third-party engineering reviews required
under Sec. 80.1450(b)(2).
(ii) Review and verify the written verification and records
generated as
[[Page 80949]]
part of the independent third-party engineering review.
(3) Product transfer documents. (i) Obtain contracts, invoices, or
other documentation for the representative sample under paragraph
(h)(1)(iii) of this section and the corresponding copies of product
transfer documents required under Sec. 80.1453; compare the product
transfer documents with the contracts and invoices and report as a
finding any discrepancies.
(ii) Verify that the product transfer documents obtained in
paragraph (h)(3)(i) of this section contain the applicable information
required under Sec. 80.1453 and report as a finding any product
transfer document that does not contain the required information.
(iii) Verify the accuracy of the information contained in the
product transfer documents reviewed pursuant to paragraph (h)(3)(ii) of
this section with the records obtained and reviewed under paragraph
(h)(1)(iii) of this section and report as a finding any exceptions.
* * * * *
0
58. Section 80.1466 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraphs (a) and (b);
0
c. Revising paragraphs (c) introductory text and (c)(1);
0
d. Revising paragraphs (d)(1)(iii) and (v), (d)(1)(vi)(B), (d)(3)(ii),
and (e)(2)(ii);
0
e. Revising paragraphs (f) introductory text and (f)(1) introductory
text;
0
f. Revising paragraphs (f)(1)(ii)(C), (f)(1)(v)(A) and (C),
(f)(1)(vii), (f)(2) through (8), and (g);
0
g. Revising paragraph (h) introductory text;
0
h. In the equation in paragraph (h)(1) revising the definition ``G'';
0
i. Revising paragraphs (h)(2), (h)(3)(iii), (h)(4), (i), (j)(2) through
(4), (k)(1), (k)(2)(ii), (k)(4)(ii), and (k)(5);
0
j. Revising paragraphs (l) introductory text and (l)(1) introductory
text;
0
k. Revising paragraphs (l)(2)(i), (l)(3), (m)(3)(ii), and (m)(6)(i);
0
l. Revising paragraphs (n) introductory text and (n)(1), (3), and (4);
0
m. Revising paragraphs (o) introductory text and (o)(2); and
0
n. Adding paragraph (p).
The revisions and addition read as follows:
Sec. 80.1466 What are the additional requirements under this subpart
for foreign renewable fuel producers and importers of renewable fuels?
(a) Applicability. This section only applies to foreign renewable
fuel producers that are located outside the United States, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands (collectively
referred to in this section as ``the United States'').
(b) General requirements. An approved foreign renewable fuel
producer under this section must meet all requirements that apply to
renewable fuel producers under this subpart.
(c) Designation, RIN-generating foreign producer certification, and
product transfer documents. (1) Any approved foreign renewable fuel
producer must designate each batch of such renewable fuel as ``RFS-
FRRF'' at the time the renewable fuel is produced.
* * * * *
(d) * * *
(1) * * *
(iii) Obtain the EPA-assigned registration number of the RIN-
generating foreign producer.
* * * * *
(v) Determine the date and time the vessel departs the port serving
the RIN-generating foreign producer.
(vi) * * *
(B) That the RFS-FRRF remained segregated from Non-RFS-FRRF and
other RFS-FRRF produced by a different foreign producer.
* * * * *
(3) * * *
(ii) Be independent under the criteria specified in Sec.
80.65(f)(2)(iii); and
* * * * *
(e) * * *
(2) * * *
(ii) Where the port of entry volume is the lesser of the two
volumes in paragraph (e)(1)(i) of this section, the importer shall
calculate the difference between the number of RINs originally assigned
by the RIN-generating foreign producer and the number of RINs
calculated under Sec. 80.1426 for the volume of renewable fuel as
measured at the port of entry, and acquire and retire that amount of
RINs in accordance with paragraph (k)(3) of this section.
(f) Foreign producer commitments. Any foreign renewable fuel
producer shall commit to and comply with the following provisions as a
condition to being approved as a foreign renewable fuel producer under
this subpart:
(1) Any EPA inspector or auditor must be given full, complete, and
immediate access to conduct inspections and audits of the foreign
renewable fuel producer facility.
* * * * *
(ii) * * *
(C) Renewable fuel is stored or transported between the foreign
renewable producer and the United States, including storage tanks,
vessels and pipelines.
* * * * *
(v) * * *
(A) The volume of renewable fuel.
* * * * *
(C) Transfers of title or custody to the renewable fuel.
* * * * *
(vii) Any employee of the foreign renewable fuel producer must be
made available for interview by the EPA inspector or auditor, on
request, within a reasonable time period.
* * * * *
(2) An agent for service of process located in the District of
Columbia shall be named, and service on this agent constitutes service
on the foreign renewable fuel producer or any employee of the foreign
renewable fuel producer for any action by EPA or otherwise by the
United States related to the requirements of this subpart.
(3) The forum for any civil or criminal enforcement action related
to the provisions of this section for violations of the Clean Air Act
or regulations promulgated thereunder shall be governed by the Clean
Air Act, including the EPA administrative forum where allowed under the
Clean Air Act.
(4) United States substantive and procedural laws shall apply to
any civil or criminal enforcement action against the foreign renewable
fuel producer or any employee of the foreign renewable fuel producer
related to the provisions of this section.
(5) Applying to be an approved foreign renewable fuel producer
under this section, or producing or exporting renewable fuel under such
approval, and all other actions to comply with the requirements of this
subpart relating to such approval constitute actions or activities
covered by and within the meaning of the provisions of 28 U.S.C.
1605(a)(2), but solely with respect to actions instituted against the
foreign renewable fuel producer, its agents and employees in any court
or other tribunal in the United States for conduct that violates the
requirements applicable to the foreign renewable fuel producer under
this subpart, including conduct that violates the False Statements
Accountability Act of 1996 (18 U.S.C. 1001) and section 113(c)(2) of
the Clean Air Act (42 U.S.C. 7413).
(6) The foreign renewable fuel producer, or its agents or
employees, will not seek to detain or to impose civil or criminal
remedies against EPA inspectors or auditors for actions performed
within the scope of EPA employment or contract related to the
provisions of this section.
(7) The commitment required by this paragraph shall be signed by
the owner
[[Page 80950]]
or president of the foreign renewable fuel producer company.
(8) In any case where renewable fuel produced at a foreign
renewable fuel production facility is stored or transported by another
company between the production facility and the vessel that transports
the renewable fuel to the United States, the foreign renewable fuel
producer shall obtain from each such other company a commitment that
meets the requirements specified in paragraphs (f)(1) through (7) of
this section, and these commitments shall be included in the foreign
renewable fuel producer's application to be an approved foreign
renewable fuel producer under this subpart.
(g) Sovereign immunity. By submitting an application to be an
approved foreign renewable fuel producer under this subpart, or by
producing and exporting renewable fuel to the United States under such
approval, the foreign renewable fuel producer, and its agents and
employees, without exception, become subject to the full operation of
the administrative and judicial enforcement powers and provisions of
the United States without limitation based on sovereign immunity, with
respect to actions instituted against the foreign renewable fuel
producer, its agents and employees in any court or other tribunal in
the United States for conduct that violates the requirements applicable
to the foreign renewable fuel producer under this subpart, including
conduct that violates the False Statements Accountability Act of 1996
(18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42 U.S.C.
7413).
(h) Bond posting. Any RIN-generating foreign producer shall meet
the requirements of this paragraph (h) as a condition to approval as a
RIN-generating foreign producer under this subpart.
(1) * * *
G = the greater of: The largest volume of renewable fuel produced
by the RIN-generating foreign producer and exported to the United
States, in gallons, during a single calendar year among the five
preceding calendar years, or the largest volume of renewable fuel that
the RIN-generating foreign producers expects to export to the Unites
States during any calendar year identified in the Production Outlook
Report required by Sec. 80.1449. If the volume of renewable fuel
exported to the United States increases above the largest volume
identified in the Production Outlook Report during any calendar year,
the RIN-generating foreign producer shall increase the bond to cover
the shortfall within 90 days.
(2) Obtaining a bond in the proper amount from a third party surety
agent that is payable to satisfy United States administrative or
judicial judgments against the RIN-generating foreign producer,
provided EPA agrees in advance as to the third party and the nature of
the surety agreement.
(3) * * *
(iii) Include a commitment that the bond will remain in effect for
at least five years following the end of latest annual reporting period
that the RIN-generating foreign producer produces renewable fuel
pursuant to the requirements of this subpart.
(4) On any occasion a RIN-generating foreign producer bond is used
to satisfy any judgment, the RIN-generating foreign producer shall
increase the bond to cover the amount used within 90 days of the date
the bond is used.
(i) English language reports. Any document submitted to EPA by a
foreign renewable fuel producer shall be in English, or shall include
an English language translation.
(j) * * *
(2) No foreign renewable fuel producer or other person may cause
another person to commit an action prohibited in paragraph (j)(1) of
this section, or that otherwise violates the requirements of this
section.
(3) No foreign renewable fuel producer or importer may generate
RINs for the same volume of renewable fuel.
(4) A foreign renewable fuel producer is prohibited from generating
RINs in excess of the number for which the bond requirements of this
section have been satisfied.
(k) * * *
(1) Renewable fuel shall be classified as RFS-FRRF according to the
designation by the RIN-generating foreign producer if this designation
is supported by product transfer documents prepared by the foreign
producer as required in paragraph (c) of this section.
(2) * * *
(ii) Use the RIN-generating foreign producer's RFS-FRRF
certification to determine the name and EPA-assigned registration
number of the RIN-generating foreign producer that produced the RFS-
FRRF.
* * * * *
(4) * * *
(ii) The RIN-generating foreign producer, containing the
information determined under paragraph (k)(2)(i) of this section, and
including identification of the port at which the product was
offloaded, and any RINs retired under paragraph (e)(2) of this section.
(5) Any United States importer shall meet all other requirements of
this subpart for any imported renewable fuel that is not classified as
RFS-FRRF under paragraph (k)(1) of this section.
(l) Truck imports of RFS-FRRF produced by a RIN-generating foreign
producer. (1) Any RIN-generating foreign producer whose RFS-FRRF is
transported into the United States by truck may petition EPA to use
alternative procedures to meet all the following requirements:
* * * * *
(2) * * *
(i) Contracts with any facilities that receive and/or transport
RFS-FRRF that prohibit the commingling of RFS-FRRF with Non-RFS-FRRF or
RFS-FRRF from other foreign renewable fuel producers.
* * * * *
(3) The petition described in this section must be submitted to EPA
along with the application for approval as a RIN-generating foreign
producer under this subpart.
(m) * * *
(3) * * *
(ii) Obtain the documents used by the independent third party to
determine transportation and storage of the RFS-FRRF from the RIN-
generating foreign producer's facility to the load port, under
paragraph (d) of this section. Obtain tank activity records for any
storage tank where the RFS-FRRF is stored, and activity records for any
mode of transportation used to transport the RFS-FRRF prior to being
loaded onto the vessel. Use these records to determine whether the RFS-
FRRF was produced at the RIN-generating foreign producer's facility
that is the subject of the attest engagement, and whether the RFS-FRRF
was mixed with any Non-RFS-FRRF or any RFS-FRRF produced at a different
facility.
* * * * *
(6) * * *
(i) Be independent of the RIN-generating foreign producer;
* * * * *
(n) Withdrawal or suspension of foreign renewable fuel producer
approval. EPA may withdraw or suspend a foreign renewable fuel
producer's approval where any of the following occur:
(1) A foreign renewable fuel producer fails to meet any requirement
of this section.
* * * * *
(3) A foreign renewable fuel producer asserts a claim of, or a
right to claim, sovereign immunity in an action to enforce the
requirements in this subpart.
(4) A foreign renewable fuel producer fails to pay a civil or
criminal penalty
[[Page 80951]]
that is not satisfied using the foreign renewable fuel producer bond
specified in paragraph (h) of this section.
(o) Additional requirements for applications, reports, and
certificates. Any application for approval as a foreign renewable fuel
producer, alternative procedures under paragraph (l) of this section,
any report, certification, or other submission required under this
section shall be:
* * * * *
(2) Signed by the president or owner of the foreign renewable fuel
producer company, or by that person's immediate designee, and shall
contain the following declaration:
(i) ``I hereby certify:
(A) That I have actual authority to sign on behalf of and to bind
[NAME OF FOREIGN RENEWABLE FUEL PRODUCER] with regard to all statements
contained herein;
(B) That I am aware that the information contained herein is being
Certified, or submitted to the United States Environmental Protection
Agency, under the requirements of 40 CFR part 80, subpart M, and that
the information is material for determining compliance under these
regulations; and
(C) That I have read and understand the information being Certified
or submitted, and this information is true, complete and correct to the
best of my knowledge and belief after I have taken reasonable and
appropriate steps to verify the accuracy thereof.
(ii) I affirm that I have read and understand the provisions of 40
CFR part 80, subpart M, including 40 CFR 80.1465 apply to [NAME OF
FOREIGN RENEWABLE FUEL PRODUCER]. Pursuant to Clean Air Act section
113(c) and 18 U.S.C. 1001, the penalty for furnishing false, incomplete
or misleading information in this certification or submission is a fine
of up to $10,000 U.S., and/or imprisonment for up to five years.''
(p) Requirements for non-RIN-generating foreign producer. Any non-
RIN-generating foreign producer must comply with the requirements of
this section beginning on the effective date of the final rule or prior
to EPA acceptance, whichever is later.
0
59. Section 80.1468 is amended by:
0
a. in the first sentence of paragraph (a), removing ``this part'' and
adding ``this subpart'' in its place; and
0
b. revising paragraphs (b)(1), (3), (4), (5), (7), and (8) to read as
follows:
Sec. 80.1468 Incorporation by reference
* * * * *
(b) * * *
(1) ASTM D 1250-08 (Reapproved 2013) (``ASTM D 1250''), Standard
Guide for Use of the Petroleum Measurement Tables, Approved October 1,
2013; IBR approved for Sec. 80.1426(f)(8)(ii)(B).
* * * * *
(3) ASTM D 4444-13 (``ASTM D 4444''), Standard Test Method for
Laboratory Standardization and Calibration of Hand-Held Moisture
Meters, Approved April 1, 2013; IBR approved for Sec.
80.1426(f)(7)(v)(B).
(4) ASTM D 6751-15 (``ASTM D 6751''), Standard Specification for
Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels, Approved
January 1, 2015, IBR approved for Sec. 80.1401.
(5) ASTM D 6866-08 (``ASTM D 6866''), Standard Test Methods for
Determining the Biobased Content of Solid, Liquid, and Gaseous Samples
Using Radiocarbon Analysis, Approved 2008; IBR approved for Sec. Sec.
80.1426(f)(9)(ii), 80.1430(e)(2), and 80.1433(c)(2).
* * * * *
(7) ASTM E 870-82 (Reapproved 2006) (``ASTM E 870''), Standard Test
Methods for Analysis of Wood Fuels, Approved November 1, 2006; IBR
approved for Sec. 80.1426(f)(7)(v)(A).
(8) ASTM D 975-15, Standard Specification for Diesel Fuel Oils,
Approved March 1, 2015; IBR approved for Sec. Sec. 80.1401,
80.1426(f), 80.1450(b), 80.1451(b), and 80.1454(l).
0
60. Section 80.1469 is amended by:
0
a. Revising paragraphs (c)(1)(ii), (vi), and (vii);
0
b. Adding paragraphs (c)(4)(iv) and (c)(6); and
0
c. Revising paragraphs (e)(3) and (4), (f)(1) introductory text, and
(f)(1)(i).
The revisions and additions read as follows:
Sec. 80.1469 Requirements for Quality Assurance Plans.
* * * * *
(c) * * *
(1) * * *
(ii) If applicable, plans under Sec. 80.1426(f)(5)(ii) are
accepted and up to date.
* * * * *
(vi) Feedstock(s) and biointermediate(s) are consistent with
production process and D code being used as permitted under Table 1 to
Sec. 80.1426 or a petition approved through Sec. 80.1416, and is
consistent with information recorded in EMTS.
(vii) Feedstock(s) and biointermediate(s) are not renewable fuel
for which RINs were previously generated.
* * * * *
(4) * * *
(iv) Verify that RINs that needed to be separated under Sec.
80.1429(b)(11) and RINs that must be retired under Sec. 80.1433 were
appropriately separated and retired, as applicable.
* * * * *
(6) VRD-N components. In addition to applicable components
described in paragraphs (c)(1) through (4) of this section, the
independent third-party auditor shall perform the following for any
VRD-N prior to the generation of RINs from such volumes:
(i)(A) Verify that the end-user(s) of any VRD-N have converted
vehicles and engines to use such fuel under an EPA-approved Clean
Alternative Fuel Conversion under 40 CFR part 85, subpart F, if
applicable.
(B) Verify documentation demonstrating that end-user(s) can use
VRD-N as heating oil or jet fuel, if applicable.
(ii) Verify that any VRD-N has been used by the end-user(s) of the
VRD-N as transportation fuel, heating oil, or jet fuel.
(iii) Ensure that the VRD-N producer did not generate RINs for any
volume of VRD-N prior to verification by an independent third-party
auditor.
(iv) Independent third-party auditors shall not use representative
sampling as described in paragraph (c)(5) of this section for the
verification of VRD-N.
* * * * *
(e) * * *
(3) A QAP is approved on the date that the EPA notifies the third-
party independent auditor of such approval or if all of the conditions
specified in Sec. 80.1450(g)(10) are met.
(4) The EPA may revoke its approval of a QAP, in whole or in part
(e.g., QAP-specific feedstocks or process pathways), for cause,
including, but not limited to, an EPA determination that the approved
QAP has proven to be inadequate in practice.
* * * * *
(f) * * *
(1) A new QAP shall be submitted to the EPA according to paragraph
(e) of this section and the third-party auditor shall update their
registration according to Sec. 80.1450(g)(9) whenever any of the
following changes occur at a production facility audited by a third-
party independent auditor and the auditor does not possess an
appropriate pathway-specific QAP that encompasses the changes:
(i) Change in feedstock, including biointermediates.
* * * * *
0
61. Section 80.1471 is amended by:
0
a. Revising paragraphs (b) introductory text, (b)(1), and (b)(4)
through (6);
[[Page 80952]]
0
b. Adding paragraphs (b)(8) through (14);
0
c. Revising paragraphs (e) introductory text and (e)(4); and
0
d. Adding paragraph (e)(5).
The revisions and additions read as follows:
Sec. 80.1471 Requirements for QAP auditors.
* * * * *
(b) To be considered an independent third-party auditor under this
section, all of the following conditions must be met:
(1) The independent third-party auditor and its contractors and
subcontractors shall not be owned or operated by the renewable fuel
producer, foreign ethanol producer, or biointermediate producer, or any
subsidiary or employee of the renewable fuel producer, foreign ethanol
producer, or biointermediate producer.
* * * * *
(4) The independent third-party auditor and its contractors and
subcontractors shall be free from any interest or the appearance of any
interest in the renewable fuel producer, foreign ethanol producer, or
biointermediate producer's business.
(5) The renewable fuel producer, foreign ethanol producer, or
biointermediate producer shall be free from any interest or the
appearance of any interest in the third-party auditor's business and
the businesses of the third-party auditor's contractors and
subcontractors.
(6) The independent third-party auditor and its contractors and
subcontractors shall not have performed an attest engagement under
Sec. 80.1464 for the renewable fuel producer, foreign ethanol
producer, or foreign renewable fuel producer in the same calendar year
it performed a QAP audit pursuant to Sec. 80.1472 for the same
entities.
* * * * *
(8) The independent third-party auditor and its contractors and
subcontractors shall act impartially when performing all activities
under this section.
(9) The independent third-party auditor and its contractors and
subcontractors shall be free from any interest in the renewable fuel
producer, foreign ethanol producer, or biointermediate producer's
business and receive no financial benefit from the outcome of the
registration, apart from payment for the auditing services.
(10) The independent third-party auditor and its contractors and
subcontractors shall not have conducted past research, development,
design, construction, or consulting for the renewable fuel producer,
foreign ethanol producer, or biointermediate producer within the last
three years. For purposes of this requirement, consulting does not
include performing or participating in verification activities pursuant
to this section.
(11) The independent third-party auditor and its contractors and
subcontractors shall not provide other business or consulting services
to the renewable fuel producer, foreign ethanol producer, or
biointermediate producer, including advice or assistance to implement
the findings or recommendations in an audit report, for a period of at
least three years following submission of the its final QAP audit.
(12) The independent third-party auditor and its contractors and
subcontractors shall ensure that all personnel involved in the third-
party audit (including the verification activities) under this section
do not accept future employment with the owner or operator of the
renewable fuel producer, foreign ethanol producer, or biointermediate
producer for a period of at least three years. For purposes of this
requirement, employment does not include performing or participating in
the third-party audit (including the verification activities) pursuant
to Sec. 80.1472.
(13) The independent third-party auditor and its contractors and
subcontractors shall have written policies and procedures to ensure
that the independent third-party auditor and all personnel under the
independent third-party auditor's direction or supervision comply with
the competency, independence, and impartiality requirements of this
section.
(14) The independent third-party auditor and its contractors and
subcontractors shall not have performed an engineering review under
Sec. 80.1450(b)(2) for the renewable fuel producer, foreign ethanol
producer, or biointermediate producer.
* * * * *
(e) The independent third-party auditor shall identify RINs
generated from a renewable fuel producer as having been verified under
a QAP.
* * * * *
(4) The independent third-party auditor shall not identify RINs
generated from a renewable fuel producer as having been verified under
a QAP if a revised QAP must be submitted to and approved by EPA under
Sec. 80.1469(f).
(5) The independent third-party auditor shall not identify RINs
generated for renewable fuel produced using a biointermediate as having
been verified under a QAP unless the biointermediate used to produce
the renewable fuel was verified under an approved QAP pursuant to Sec.
80.1476.
* * * * *
0
62. Section 80.1472 is amended by revising paragraphs (b)(3)(i)
introductory text, (b)(3)(ii)(B), and (b)(3)(iii) and adding paragraph
(b)(3)(v) to read as follows:
Sec. 80.1472 Requirements for quality assurance audits.
* * * * *
(b) * * *
(3) * * *
(i) As applicable, the independent third-party auditor shall
conduct an on-site visit at the renewable fuel production facility,
foreign ethanol production facility, or biointermediate production
facility:
* * * * *
(ii) * * *
(B) 380 days after the previous on-site visit if a previously
approved (by EPA) remote monitoring system is in place at the renewable
fuel production facility, foreign ethanol production facility, and
biointermediate production facility, as applicable. The 380-day period
shall start the day after the previous on-site visit ends.
(iii) An on-site visit shall include verification of all QAP
elements that require inspection or evaluation of the physical
attributes of the renewable fuel production facility, foreign ethanol
production facility, or biointermediate production facility, as
applicable.
* * * * *
(v) Any on-site visit specified in paragraph (b)(3)(i) of this
section shall occur while the facility is producing renewable fuel,
undenatured ethanol, or a biointermediate. If the facility is not
operational at the time of the third-party on-site visit, then all of
the following requirements apply:
(A) The responsible corporate officer for the renewable fuel
producer, foreign ethanol producer, or biointermediate producer must
provide the third-party auditor with a signed affidavit explaining why
the facility is not operational.
(B) If the facility is not operational because of a maintenance
issue, the renewable fuel producer, foreign ethanol producer, or
biointermediate producer must provide the third-party auditor with
supporting written documentation of the maintenance issue.
(C) The independent third-party auditor shall include the reason
why the facility was not operational in their
[[Page 80953]]
report under Sec. 80.1451(g)(2) and keep the related affidavit
pursuant to the recordkeeping requirements under Sec. 80.1454(m).
(D) The independent third-party auditor shall not verify RINs for
the renewable fuel producer under Sec. 80.1471(e) until after an on-
site visit occurs while the facility is operational.
0
63. Section 80.1474 is amended by redesignating paragraph (g) as
paragraph (h) and adding a new paragraph (g) to read as follows:
Sec. 80.1474 Replacement requirements for invalidly generated RINs.
* * * * *
(g) PIRs for RINs generated from a CCS pathway after a surface
leak. (1) Renewable fuel producers that generate RINs using a CCS
pathway must notify EPA via the EMTS support line (support.com">support@epamts-support.com) within 24 hours of notification of the detection of any
occurrence of surface leakage from the geologic sequestration facility.
All RINs generated within the five years preceding the surface leak are
PIRs. Within 30 days, the producer shall submit to EPA a remediation
plan for EPA approval. The explanation must contain the following:
(i) The date(s) the surface leak occurred.
(ii) The facility identification number associated with the 40 CFR
part 98, subpart RR, annual GHG report of the geologic sequestration
facility.
(iii) The facility identification number associated with the 40 CFR
part 98, subpart PP, annual GHG report of the renewable fuel production
facility.
(iv) A detailed description of how the leak occurred.
(v) The amount of CO2 that leaked.
(vi) A description of corrective actions that when taken, would
remediate the surface leak.
(vii) A list of all PIRs affected by the surface leak.
(viii) The original calculated greenhouse gas emissions for each
affected batch of renewable fuel.
(ix) The updated calculated greenhouse gas emissions for each
affected batch of renewable fuel that accounts for the surface leak.
(x) A plan detailing how the RIN generator intends to remediate all
PIRs generated as a result of the surface leak.
(xi) A demonstration from the renewable fuel producer that all
necessary steps are being taken to ensure there will be no
CO2 emissions through any potential surface leakage pathways
identified in an EPA-approved monitoring, reporting, and verification
plan as described in 40 CFR 98.448 that would cause the lifecycle
greenhouse gas emissions to exceed the threshold value required for the
approved pathway under Sec. 80.1416.
(xii) Any other information requested by EPA.
(2) If EPA determines that the surface leak has caused the PIR(s)
to be invalid, the PIR generator must retire the PIR or a valid RIN
following the requirements of paragraph (d) of this section within 30
days of notification by EPA.
* * * * *
0
64. Section 80.1475 is added to read as follows:
Sec. 80.1475 Requirements for biointermediate producers.
Biointermediate producers shall comply with the following
requirements:
(a) Registration. No later than the effective date of the final
rule, or 60 days prior to the transfer of any biointermediate to be
used in the production of a renewable fuel for which RINs may be
generated, biointermediate producers shall register with EPA pursuant
to the requirements of Sec. 80.1450(b).
(b) Reporting. Beginning on the effective date of the final rule,
biointermediate producers shall comply with the reporting requirements
pursuant to Sec. 80.1451(i).
(c) Recordkeeping. Beginning on the effective date of the final
rule, biointermediate producers shall comply with the recordkeeping
requirements pursuant to Sec. 80.1454(n).
(d) PTDs. Beginning on the effective date of the final rule,
biointermediate producers shall comply with the PTD requirements
pursuant to Sec. 80.1453(e).
(e) Quality Assurance Plans. Until January 1, 2018, or a later date
designated by EPA, biointermediate producers shall have an approved
quality assurance plan pursuant to Sec. 80.1476(b). Beginning January
1, 2018, or a later date designated by EPA, biointermediate produces
may have an approved quality assurance plan pursuant to Sec.
80.1476(b), but are not required to do so.
(f) Attest engagements. Beginning on the effective date of the
final rule, biointermediate producers shall comply with the annual
attest engagement requirements pursuant to Sec. 80.1464(h).
(g) Interim implementation facility limitation. (1) Until January
1, 2018, or a later date designated by EPA, a biointermediate producer
shall be limited to designating and transferring a biointermediate to a
single renewable fuel production facility.
(2) Beginning January 1, 2018, or a later date designated by EPA, a
biointermediate producer may designate and transfer a biointermediate
to more than one renewable fuel production facility.
(3) The EPA in its sole discretion may allow a biointermediate
producer to designate and transfer a biointermediate to more than one
renewable fuel production facility prior to January 1, 2018, or a later
date designated by EPA.
(h) Batch numbers. Every batch of biointermediate produced or
imported at a biointermediate production facility shall be assigned a
number (the ``batch number''), consisting of the EPA-assigned company
registration number, the EPA facility registration number, the last two
digits of the year in which the batch was produced, and a unique number
for the batch, beginning with the number one for the first batch
produced or imported each calendar year and each subsequent batch
during the calendar year being assigned the next sequential number
(e.g., 4321-54321-95-000001, 4321-54321-95-000002, etc.). An
alternative batch numbering protocol may be used as approved by the
Administrator.
(i) Designation. Every batch of biointermediate produced or
imported at a biointermediate production facility shall be designated
for use in the production of a renewable fuel in accordance with the
biointermediate producer's registration under Sec. 80.1450. The
designation for the batch of biointermediate shall be clearly indicated
on PTDs for the biointermediate as described in Sec. 80.1453(e)(6).
0
65. Section 80.1476 is added to read as follows:
Sec. 80.1476 Requirements for QAPs for biointermediate producers.
(a) Independent third-party auditors that verify biointermediate
production must meet the requirements of Sec. 80.1471(a) through (c)
and (g) through (h).
(b) QAPs approved by EPA to verify biointermediate production must
meet the requirements in Sec. 80.1469(c) through (f), as applicable.
(c) Quality assurance audits, when performed, shall be conducted in
accordance with the requirements in Sec. 80.1472(a) and (b)(3).
(d)(1) If a third-party auditor identifies a potentially improperly
produced biointermediate, the third-party auditor shall notify EPA, the
biointermediate producer, and any renewable fuel producers that may
have been transferred the biointermediate in writing within five
business days of the identification, including an initial explanation
of why the biointermediate may have been improperly produced.
[[Page 80954]]
(2) If RINs were generated from the potentially improperly produced
biointermediate, the RIN generator shall follow the identification and
treatment of PIR procedures as specified in Sec. 80.1474.
(e) For the generation of Q-RINs for renewable fuels that were
produced from a biointermediate, the biointermediate must be verified
under an approved QAP as described in paragraph (b) of this section and
the RIN generating facility must be verified under an approved QAP as
described in Sec. 80.1469.
0
66. Section 80.1477 is added to read as follows:
Sec. 80.1477 Requirements for foreign biointermediate producers and
importers.
(a) Foreign biointermediate producer. For purposes of this subpart,
a foreign biointermediate producer is a person located outside the
United States, the Commonwealth of Puerto Rico, the Virgin Islands,
Guam, American Samoa, and the Commonwealth of the Northern Mariana
Islands (collectively referred to in this section as ``the United
States'') that has been approved by EPA to produce biointermediate for
use in the production of renewable fuel by a RIN-generating renewable
fuel producer.
(b) Foreign biointermediate producer requirements. Any foreign
biointermediate producer must meet all requirements that apply to
biointermediate producers under this subpart as a condition of being
approved as a foreign biointermediate producer under this subpart.
(c) Foreign biointermediate producer commitments. Any foreign
biointermediate producer must commit to the following provisions as a
condition of being approved as a foreign biointermediate producer under
this subpart:
(1) Any EPA inspector or auditor must be given full, complete, and
immediate access to conduct inspections and audits of the foreign
biointermediate producer facility.
(i) Inspections and audits may be either announced in advance by
EPA, or unannounced.
(ii) Access will be provided to any location where:
(A) Biointermediate is produced.
(B) Documents related to foreign biointermediate producer
operations are kept.
(C) Biointermediate is stored or transported between the foreign
biointermediate producer and the renewable fuel producer, including
storage tanks, vessels, and pipelines.
(iii) EPA inspectors and auditors may be EPA employees or
contractors to EPA.
(iv) Any documents requested that are related to matters covered by
inspections and audits must be provided to an EPA inspector or auditor
on request.
(v) Inspections and audits may include review and copying of any
documents related to the following:
(A) The volume of biointermediate produced and/or delivered to
renewable fuel production facilities.
(B) Transfers of title or custody to the biointermediate.
(C) Work performed and reports prepared by independent third
parties and by independent auditors under the requirements of this
section, including work papers.
(vi) Inspections and audits by EPA may include interviewing
employees.
(vii) Any employee of the foreign biointermediate producer must be
made available for interview by the EPA inspector or auditor, on
request, within a reasonable time period.
(viii) English language translations of any documents must be
provided to an EPA inspector or auditor, on request, within 10 working
days.
(ix) English language interpreters must be provided to accompany
EPA inspectors and auditors, on request.
(2) An agent for service of process located in the District of
Columbia shall be named, and service on this agent constitutes service
on the foreign biointermediate producer or any employee of the foreign
biointermediate producer for any action by EPA or otherwise by the
United States related to the requirements of this subpart.
(3) The forum for any civil or criminal enforcement action related
to the provisions of this section for violations of the Clean Air Act
or regulations promulgated thereunder shall be governed by the Clean
Air Act, including the EPA administrative forum where allowed under the
Clean Air Act.
(4) United States substantive and procedural laws shall apply to
any civil or criminal enforcement action against the foreign
biointermediate producer or any employee of the foreign biointermediate
producer related to the provisions of this section.
(5) Applying to be an approved foreign biointermediate producer
under this section, or producing or exporting biointermediate under
such approval, and all other actions to comply with the requirements of
this subpart relating to such approval constitute actions or activities
covered by and within the meaning of the provisions of 28 U.S.C.
1605(a)(2), but solely with respect to actions instituted against the
foreign biointermediate producer, its agents and employees in any court
or other tribunal in the United States for conduct that violates the
requirements applicable to the foreign biointermediate producer under
this subpart, including conduct that violates the False Statements
Accountability Act of 1996 (18 U.S.C. 1001) and section 113(c)(2) of
the Clean Air Act (42 U.S.C. 7413).
(6) The foreign biointermediate producer, or its agents or
employees, will not seek to detain or to impose civil or criminal
remedies against EPA inspectors or auditors for actions performed
within the scope of EPA employment or contract related to the
provisions of this section.
(7) The commitment required by this paragraph shall be signed by
the owner or president of the foreign biointermediate producer company.
(8) In any case where the biointermediate produced at a foreign
biointermediate production facility is stored or transported by another
company between the production facility and the vessel that transports
the renewable fuel to the United States, the foreign biointermediate
producer shall obtain from each such other company a commitment that
meets the requirements specified in paragraphs (c)(1) through (7) of
this section, and these commitments shall be included in the foreign
biointermediate producer's application to be an approved foreign
biointermediate producer under this subpart.
(d) Sovereign immunity. By submitting an application to be an
approved foreign biointermediate producer under this subpart, or by
producing and exporting biointermediate fuel to the United States under
such approval, the foreign biointermediate producer, and its agents and
employees, without exception, become subject to the full operation of
the administrative and judicial enforcement powers and provisions of
the United States without limitation based on sovereign immunity, with
respect to actions instituted against the foreign biointermediate
producer, its agents and employees in any court or other tribunal in
the United States for conduct that violates the requirements applicable
to the foreign biointermediate producer under this subpart, including
conduct that violates the False Statements Accountability Act of 1996
(18 U.S.C. 1001) and section 113(c)(2) of the Clean Air Act (42 U.S.C.
7413).
(e) English language reports. Any document submitted to EPA by a
foreign biointermediate producer must be in English, or must include an
English language translation.
[[Page 80955]]
(f) Foreign biointermediate producer contractual relationship. Any
foreign biointermediate producer must establish a contractual
relationship with the RIN-generating renewable fuel producer prior to
the sale of a biointermediate. Any foreign biointermediate producer
must retain contracts and documents memorializing the sale of
biointermediates for five years from the date they were created, and
must deliver such records to the Administrator upon request.
(g) Withdrawal or suspension of foreign biointermediate producer
approval. EPA may withdraw or suspend a foreign biointermediate
producer's approval where any of the following occur:
(1) A foreign biointermediate producer fails to meet any
requirement of this section.
(2) A foreign government fails to allow EPA inspections or audits
as provided in paragraph (c)(1) of this section.
(3) A foreign biointermediate producer asserts a claim of, or a
right to claim, sovereign immunity in an action to enforce the
requirements in this subpart.
(h) Additional requirements for applications, reports, and
certificates. Any application for approval as a foreign biointermediate
producer, any report, certification, or other submission required under
this section shall be:
(1) Submitted in accordance with procedures specified by the
Administrator, including use of any forms that may be specified by the
Administrator.
(2) Signed by the president or owner of the foreign biointermediate
producer company, or by that person's immediate designee, and must
contain the following declaration:
(i) ``I hereby certify:
(A) That I have actual authority to sign on behalf of and to bind
[NAME OF FOREIGN BIOINTERMEDIATE PRODUCER] with regard to all
statements contained herein;
(B) That I am aware that the information contained herein is being
Certified, or submitted to the United States Environmental Protection
Agency, under the requirements of 40 CFR part 80, subpart M, and that
the information is material for determining compliance under these
regulations; and
(C) That I have read and understand the information being Certified
or submitted, and this information is true, complete and correct to the
best of my knowledge and belief after I have taken reasonable and
appropriate steps to verify the accuracy thereof.
(ii) I affirm that I have read and understand the provisions of 40
CFR part 80, subpart M, including 40 CFR 80.1465 apply to [NAME OF
FOREIGN BIOINTERMEDIATE PRODUCER]. Pursuant to Clean Air Act section
113(c) and 18 U.S.C. 1001, the penalty for furnishing false, incomplete
or misleading information in this certification or submission is a fine
of up to $10,000 U.S., and/or imprisonment for up to five years.''
(i) Requirements for biointermediate importers. Any biointermediate
importer must meet all the following requirements:
(1) For each biointermediate batch, any biointermediate importer
shall have an independent third party do all the following:
(i) Determine the volume of biointermediate in the vessel.
(ii) Determine the name and EPA-assigned registration number of the
foreign biointermediate producer that produced the biointermediate.
(iii) Determine the name and country of registration of the vessel
used to transport the biointermediate to the United States.
(iv) Determine the date and time the vessel arrives at the United
States port of entry.
(2) Any biointermediate importer shall submit reports within 30
days following the date any vessel transporting biointermediate arrives
at the United States port of entry to all the following:
(i) The Administrator, containing the information determined under
paragraph (h)(1) of this section.
(ii) The foreign biointermediate producer, containing the
information determined under paragraph (h)(1) of this section, and
including identification of the port at which the product was
offloaded.
(3) The biointermediate importer and the third-party auditor must
keep records of the audits and reports required under paragraphs (h)(1)
and (2) of this section for five years from the date of creation.
0
67. Section 80.1478 is added to read as follows:
Sec. 80.1478 Requirements for biogas producers.
Biogas producers shall comply with the following requirements:
(a) Registration. (1) No later than the effective date of the final
rule, or 60 days prior to the production of biogas for the generation
of RINs under Sec. 80.1426, biogas producers must register either as a
renewable fuel producer or a biointermediate producer pursuant to the
requirements of Sec. 80.1450(b).
(2) No later than the effective date of the final rule, or 60 days
prior to the generation of RINs from biogas produced from a biogas
producer, whichever is later, biogas producers and the RIN generating
party must associate in the EPA's Central Data Exchange using forms and
procedures as prescribed by the Administrator.
(3) Biogas producers must update their registrations as described
in Sec. 80.1450(d).
(b) Recordkeeping. In addition to any records required to be
maintained under Sec. 80.1454(k), biogas producers must keep
applicable records related to the registration described in paragraph
(a) of this section pursuant to either Sec. 80.1454(b)(6) or (n)(4),
as applicable, for a period of five years from the date those records
were created.
(c) RIN Generation. (1) Biogas producers that register as renewable
fuel producers must generate RINs in accordance with applicable
requirements in Sec. 80.1426 and satisfy all applicable requirements
in this subpart for renewable fuels producers.
(2) Biogas producers that register as biointermediate producers
shall not generate RINs.
(3) Renewable fuel producers shall only generate RINs for renewable
fuel produced from biogas sourced from a biogas producer that satisfies
the requirements of this section.
(d) Reporting. (1) Biogas producers that register as renewable fuel
producers shall submit reports to the EPA as described in Sec.
80.1451(b) and (c), as applicable.
(2) Biogas producers that register as biointermediate producers
shall submit reports to the EPA as described in Sec. 80.1451(i).
(e) Attest Engagements. (1) Biogas producers that register as
renewable fuel producers shall comply with annual attest engagement
requirements as described in Sec. 80.1464(b).
(2) Biogas producers that register as biointermediate producers
shall comply with annual attest engagement requirements as described in
Sec. 80.1464(h).
(f) Quality Assurance Plans. Biogas producers that register as
biointermediate producers do not need to have quality assurance plans
as described in Sec. 80.1475(e).
(g) Interim Implementation Facility Limitation. The interim
implementation facility limitation as described in Sec. 80.1475(g)
does not apply to biogas producers that register as biointermediate
producers.
(h) Designation. Biogas produced by a biogas producer that has
registered as a
[[Page 80956]]
biointermediate producer must be designated as described in Sec.
80.1475(i).
(i) Prohibited acts. Biogas producers are prohibited from the acts
described in Sec. 80.1460.
(j) Liability. Biogas producers are liable for violations as
described in Sec. 80.1461(e).
0
68. Section 80.1479 is added to read as follows:
Sec. 80.1479 Requirements for VRD producers and blenders.
(a) Requirements for VRD-N producers. (1) The VRD-N producer shall
generate RINs.
(2) The VRD-N producer must satisfy all requirements specified in
this subpart for renewable fuel producers (including but not limited to
registration, recordkeeping, and reporting requirements).
(3) RINs may only be generated for VRD-N after an independent
third-party auditor has verified the use of the fuel as transportation
fuel, heating oil, or jet fuel under an EPA-approved QAP as described
in Sec. 80.1469.
(b) Requirements for VRD-B producers and VRD blenders. (1) Only
parties that are VRD blenders and are not VRD producers may generate
RINs for VRD-B.
(2) RINs shall not be assigned to finished fuel, but shall be
treated as separated RINs immediately upon generation.
(3) VRD blenders must satisfy all requirements specified in this
subpart for renewable fuel producers that are using a biointermediate
(including, but not limited to, registration, recordkeeping, and
reporting requirements). In applying such requirements, the facility at
which VRD-B is blended with petroleum diesel shall be considered the
renewable fuel production facility and the VRD-B producer shall be
considered the biointermediate producer.
(4) VRD-B producers must satisfy the requirements of paragraph (c)
of this section.
(c) Additional requirements for VRD-B producers. VRD-B producers
must meet the requirements in paragraphs (c)(1) through (11) of this
section. For the purposes of the other sections of this subpart
reference in this paragraph (c), VRD-B producers are considered to be
biointermediate producers.
(1) Registration. No later than the effective date of this rule, or
60 days prior to the production of VRD-B, whichever is later, VRD-B
producers must register with the EPA in accordance with the provisions
in Sec. 80.1450(b) that apply to biointermediate producers.
(2) Reporting. VRD-B producers shall submit reports to the EPA as
described in Sec. 80.1451(i).
(3) Recordkeeping. VRD-B producers must keep records specified in
Sec. 80.1454(n) and any additional records referenced therein.
(4) Product transfer documents. VRD-B producers shall comply with
the product transfer document requirements specified in Sec.
80.1453(e)(1) through (8). In addition, each PTD shall include the
following statement: ``This volume of viscous renewable diesel is
designated and intended for blending with petroleum diesel to produce
transportation fuel, heating oil or jet fuel.''
(5) Attest engagements. VRD-B producers shall comply with the
annual attest engagement requirements specified in Sec. 80.1464(h).
(6) Quality assurance plans. VRD-B producers must have quality
assurance plans as specified in Sec. 80.1475(e).
(7) Interim implementation facility limitation. The interim
implementation facility limitation specified in Sec. 80.1475(g)
applies to VRD-B producers.
(8) RIN generation. VRD-B producers are prohibited from generating
RINs for VRD-B.
(9) Prohibited acts. VRD-B producers are prohibited from the acts
specified in Sec. 80.1460.
(10) Liability. VRD-B producers are liable for violations specified
in Sec. 80.1461(e).
(11) Exemption for producers of straight vegetable oil for use as a
feedstock. Producers of straight vegetable oil that is used as a
feedstock to produce biodiesel are not subject to the requirements of
this section.
Subpart N--Additional Requirements for Gasoline-Ethanol Blends,
Ethanol Flex Fuel, and Natural Gasoline Ethanol Flex Fuel
Blendstock
0
69. The subpart N heading is revised to read as set forth above.
0
70. Section 80.1500 is revised to read as follows:
Sec. 80.1500 Definitions.
(a) Unless otherwise defined in paragraph (b) of this section, the
definitions in Sec. 80.2 apply to this subpart, including, but not
limited to, the definitions for the following terms:
Carrier (Sec. 80.2(t))
Conventional gasoline blendstock for oxygenate blending or CBOB (Sec.
80.2(aaaa))
Conventional gasoline (Sec. 80.2(ff))
Denatured fuel ethanol or DFE (Sec. 80.2(vvv))
Distributor (Sec. 80.2(l))
Ethanol blender (Sec. 80.2(v))
Ethanol flex fuel or EFF (Sec. 80.2(q))
Gasoline (Sec. 80.2(c))
Importer (Sec. 80.2(r))
Natural gasoline ethanol flex fuel blendstock (Sec. 80.2(aa))
Oxygenate blender (Sec. 80.2(mm))
Oxygenate blending facility (Sec. 80.2(ll))
Refiner (Sec. 80.2(i))
Refinery (Sec. 80.2(h))
Reformulated gasoline (Sec. 80.2(ee))
Reformulated gasoline blendstock for oxygenate blending or RBOB (Sec.
80.2(kk))
Retail outlet (Sec. 80.2(j))
Retailer (Sec. 80.2(k))
Wholesale purchaser-consumer (Sec. 80.2(o))
(b) The following definitions apply for the purposes of this
subpart:
Batch means a quantity of ethanol flex fuel or natural gasoline
ethanol flex fuel blendstock that is homogeneous with regard to those
properties that are specified for these fuels.
Blender pump means a fuel dispenser at a blender pump-refinery.
Blender pump-refiner means any person who owns, leases, operates,
controls, or supervises a blender pump-refinery.
Blender pump-refinery means a retail outlet or wholesale purchaser-
consumer facility where, in the process of fueling a vehicle, engine,
or portable fuel container, certified E0, E10, or E15 is blended with
certified ethanol flex fuel to produce a fuel pursuant to the
requirements of Sec. 80.1523 (for ethanol flex fuel) or Sec. 80.1530
(for gasoline) and other provisions of this subpart.
California ethanol flex fuel means ethanol flex fuel that meets the
requirements of Sec. 80.1558.
Certified natural gasoline ethanol flex fuel blendstock means
natural gasoline ethanol flex fuel blendstock that has been certified
as meeting the standards and requirements in Sec. 80.1524.
Crude oil refinery means a facility that refines gasoline and or
diesel fuel using crude oil as a feedstock.
E0 means a gasoline that contains no ethanol.
E10 means gasoline that contains at least 9 and no more than 10
volume percent ethanol.
E15 means gasoline that contains greater than 10 volume percent
ethanol and no more than 15 volume percent ethanol.
Ethanol flex fuel additive means any additive that is added to,
intended to be added to, used in, or offered for use in ethanol flex
fuel or in flex-fuel vehicle or engine fuel systems pursuant to the
provisions of Sec. 80.1525.
[[Page 80957]]
Ethanol flex fuel additive manufacturer means any person who
produces, manufactures, or imports an ethanol flex fuel additive and/or
sells or imports for sale such additive under the person's own name.
Ethanol flex fuel bulk blender-refiner means any person who owns,
leases, operates, controls, or supervises an ethanol flex fuel bulk
blender-refinery.
Ethanol flex fuel bulk blender-refinery means any facility upstream
of a retail outlet or wholesale purchaser-consumer facility, including
but not limited to, a plant, tanker truck, or vessel where ethanol flex
fuel is produced by combining blendstocks pursuant to the provisions of
Sec. 80.1522 and other requirements in this subpart.
Ethanol flex fuel full-refiner means any person who owns, leases,
operates, controls, or supervises an ethanol flex fuel full-refinery.
Ethanol flex fuel full-refinery means any facility upstream of a
retail outlet or wholesale purchaser-consumer facility, including but
not limited to, a plant, tanker truck, or vessel where ethanol flex
fuel is produced by combining blendstocks pursuant to the provisions of
Sec. 80.1521 and other requirements in this subpart.
Ethanol flex fuel import facility means any facility where ethanol
flex fuel is imported from a foreign country into the United States
(including the Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Commonwealth of the Northern Mariana Islands).
Ethanol flex fuel importer means any person who owns, leases,
operates, controls, or supervises an ethanol flex fuel import facility.
Ethanol flex fuel refiner means any person who owns, leases,
operates, controls, or supervises an ethanol flex fuel refinery.
Ethanol flex fuel refinery means any facility, including but not
limited to, a plant, tanker truck, vessel, ethanol flex fuel retail
station, or wholesale purchaser-consumer facility where ethanol flex
fuel is produced, including any facility at which blendstocks are
combined to produce ethanol flex fuel pursuant to the requirements of
Sec. 80.1520 and other provisions of this subpart, including ethanol
flex fuel full-refineries, ethanol flex fuel bulk blender-refineries,
and blender pump-refineries.
Ethanol flex fuel retail station means any establishment where
ethanol flex fuel is sold or offered for sale for use in flex-fuel
vehicles and flex-fuel engines.
Ethanol importer means a person who brings denatured ethanol into
the United States (including from the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands)
for use in motor vehicles and nonroad engines.
Ethanol producer means any person who owns, leases, operates,
controls, or supervises a facility that produces ethanol for use in
motor vehicles or nonroad engines.
Flex-fuel engine has the same meaning as flexible-fuel engine as
defined in 40 CFR 1054.801.
Flex-fuel vehicle has the same meaning as flexible fuel vehicle as
defined in 40 CFR 86.1803-01.
Fuel dispenser means the apparatus used to dispense fuel into motor
vehicles or nonroad vehicles, engines or equipment, or into a portable
fuel container as defined at 40 CFR 59.680.
Natural gas processing plant means a facility designed to ``clean''
raw natural gas by separating impurities and various non-methane
hydrocarbons and fluids to produce what is known as ``pipeline
quality'' dry natural gas. A gas processing plant is used to recover
natural gas liquids, including natural gasoline, and to remove other
substances such as sulfur and benzene as needed.
Natural gasoline ethanol flex fuel blendstock importer means any
person who imports natural gasoline ethanol flex fuel blendstock is
imported from a foreign country into the United States (including the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Islands).
Natural gasoline ethanol flex fuel blendstock refiner means any
person who owns, leases, operates, controls, or supervises a natural
gasoline ethanol flex fuel blendstock refinery.
Natural gasoline ethanol flex fuel blendstock refinery means a
natural gas processing plant or crude oil refinery that produces
natural gasoline ethanol flex fuel blendstock.
Survey series means the four quarterly surveys that comprise a
survey program.
Sampling strata means the three types of areas sampled during a
survey which include the following:
(i) Densely populated areas;
(ii) Transportation corridors; and
(iii) Remaining areas.
Uncertified natural gasoline ethanol flex fuel blendstock means
natural gasoline ethanol flex fuel blendstock that meets the standards
and requirements in Sec. 80.1521(b)(5).
Undenatured ethanol means an alcohol of the chemical formula
C2H6O that does not contain an ethanol denaturant
to make it unfit for human consumption.
Sec. Sec. 80.1502, 80.1503, 80.1504, 80.1505, 80.1506, 80.1507, and
80.1508 [Redesignated as Sec. Sec. 80.1561, 80.1563, 80.1504,
80.1565, 80.1566, 80.1567, and 80.1568]
0
71a. Sections 80.1502, 80.1503, 80.1504, 80.1505, 80.1506, 80.1507, and
80.1508 are redesignated as Sec. Sec. 80.1561, 80.1563, 80.1504,
80.1565, 80.1566, 80.1567, and 80.1568, respectively.
Sec. 80.1501 [Redesignated as Sec. 80.1502]
0
71b. Section 80.1501 is redesignated as section 80.1502.
Sec. 80.1509 [Redesignated as Sec. 80.1503]
0
71c. Section 80.1509 is redesignated as section 80.1503.
0
72. A new section 80.1501 is added to read as follows:
Sec. 80.1501 Fuels subject to the provisions of this subpart.
(a) The following fuels are subject to the standards and
requirements of this subpart:
(1) Reformulated and conventional gasoline, RBOB, and CBOB
(collectively called ``gasoline'' unless otherwise specified).
(2) Any blendstock blended with PCG.
(3) Oxygenates blended with gasoline, RBOB, or CBOB.
(4) Ethanol flex fuel.
(5) Certified and uncertified natural gasoline ethanol flex fuel
blendstock.
(b) The following fuels are not subject to the standards and
requirements of this subpart:
(1) Gasoline and ethanol flex fuel that is used to fuel aircraft,
racing vehicles, or racing boats that are used only in sanctioned
racing events, provided that the following requirements are met:
(i) Product transfer documents associated with such gasoline and
ethanol flex fuel, and labels from any pump stand from which such
gasoline and ethanol flex fuel is dispensed, identify the gasoline and
ethanol flex fuel either as gasoline or ethanol flex fuel that is
restricted for use in aircraft, or as gasoline or ethanol flex fuel
that is restricted for use in racing motor vehicles or racing boats
that are used only in sanctioned racing events.
(ii) The gasoline and ethanol flex fuel is completely segregated
from all other gasoline and ethanol flex fuel throughout production,
distribution, and sale to the ultimate consumer.
(iii) The gasoline and ethanol flex fuel is not made available for
use as motor vehicle gasoline and ethanol flex fuel, or dispensed for
use in motor vehicles, except for motor vehicles used only in
sanctioned racing events.
[[Page 80958]]
(2) California gasoline as defined in Sec. 80.1600 and subject to
the provisions of Sec. 80.1654.
(3) California ethanol flex fuel as defined in Sec. 80.1500 and
subject to the provisions of Sec. 80.1558.
(4) Gasoline and ethanol flex fuel that is exported for sale and
use outside the United States.
(5) Exempt fuels under Sec. Sec. 80.1555 (national security
exemptions), 80.1556 (ethanol flex fuel used for research, development,
or testing purposes), and 80.1557 (ethanol flex fuel used in American
Samoa, Guam, and the Commonwealth of the Northern Mariana Islands).
0
73. Newly redesignated section 80.1502 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraphs (b)(3)(i) and (b)(5)(i); and
0
c. Removing and reserving paragraph (b)(5)(ii).
The revisions read as follows:
Sec. 80.1502 Labeling requirements that apply to retailers and
wholesale purchaser-consumers of gasoline that contains greater than 10
volume percent ethanol and not more than 15 volume percent ethanol.
* * * * *
(b) * * *
(3) * * *
(i) The word ``ATTENTION'' shall be capitalized in 20-point, black,
Helvetica Neue LT 77 Bold Condensed font, and shall be placed in the
top 1.25 inches of the label as further described in paragraph
(b)(4)(iii) of this section.
* * * * *
(5) * * *
(i) A request for approval of an alternative label shall be sent to
the attention of ``E15 Alternative Label Request'' to the address in
Sec. 80.10(a).
* * * * *
0
74. Newly redesignated section 80.1503 is revised to read as follows:
Sec. 80.1503 Rounding a test result for purposes of this subpart.
The provisions of Sec. 80.9 apply for purposes of determining the
ethanol content, sulfur content, benzene content, or Reid vapor
pressure (RVP) of any fuel, blendstock, or oxygenate subject to this
subpart.
0
75. A new section 80.1504 is added to read as follows:
Sec. 80.1504 Implementation dates and standards format for the
requirements for ethanol flex fuel and natural gasoline ethanol flex
fuel blendstock in this subpart.
(a) Registration dates. (1) Any ethanol flex fuel full-refiner,
ethanol flex fuel importer, or ethanol flex fuel bulk blender-refiner
must register by November 1, 2017, or at least 60 days in advance of
the first date that such person will produce or import ethanol flex
fuel, whichever is later.
(2) Any natural gasoline ethanol flex fuel blendstock refiner or
importer must register by October 1, 2017, or at least 60 days in
advance of the first date that such person will produce or import
certified natural gasoline ethanol flex fuel blendstock, whichever is
later.
(b) Standards compliance dates. (1) Any ethanol flex fuel full-
refiner, ethanol flex fuel importer, or ethanol flex fuel bulk blender-
refiner must comply with the requirements of this subpart by January 1,
2018, or the first date that such person produces or imports ethanol
flex fuel, whichever is later. Such parties must also comply with the
RVP requirements in Sec. 80.1520(c) from May 1 through September 15
each year beginning May 1, 2018, through September 15, 2018.
(2) Any blender pump-refiner must comply with the requirements of
this subpart by February 1, 2018, or the first date that such person
blends ethanol flex fuel, whichever is later. Such parties must also
comply with the RVP requirements in Sec. 80.1520(c) from June 1
through September 15 each year beginning June 1, 2018, through
September 15, 2018.
(3) Any certified natural gasoline ethanol flex fuel blendstock
refiner or importer must comply with the requirements of this subpart
by December 1, 2017, or the first date that such person produces or
imports natural gasoline ethanol flex fuel blendstock, whichever is
later.
(4) Any party in the ethanol flex fuel production and distribution
system except for retail and wholesale purchaser consumer facilities
must comply with the RVP requirements in Sec. 80.1520(c) from May 1
through September 15 each year beginning May 1, 2018, through September
15, 2018.
(5) Any ethanol flex fuel retail or wholesale purchaser consumer
facility must comply with the RVP requirements in Sec. 80.1520(c) from
June 1 through September 15 each year beginning June 1, 2018, through
September 15, 2018.
(c) Standards format--(1) Annual average standards. (i) An annual
average standard is the maximum average level allowed for ethanol flex
fuel produced at a refinery or imported by an importer during each
calendar year beginning on the date specified in paragraph (b) of this
section.
(ii) For annual average standards, the averaging period is a
calendar year (January 1 through December 31) or any part thereof
during which ethanol flex fuel is produced, imported, sold, offered for
sale, dispensed, supplied, offered for supply, stored, or transported
for use.
(2) Per-gallon cap standards. A per-gallon cap standard is the
maximum level allowed for any batch of ethanol flex fuel produced,
imported, sold, offered for sale, dispensed, supplied, offered for
supply, stored, or transported or any batch of certified natural
gasoline ethanol flex fuel blendstock used or made available for use to
produce ethanol flex fuel beginning on the date specified in paragraph
(b) of this section.
(3) RVP standards. The RVP standard is the maximum RVP level
allowed for any batch of ethanol flex fuel produced, imported, sold,
offered for sale, dispensed, supplied, offered for supply, stored, or
transported or any batch of certified natural gasoline ethanol flex
fuel blendstock used or made available for use to produce ethanol flex
fuel beginning on the date specified in paragraph (b) of this section.
(4) T90 distillation point and final distillation point. The T90
distillation point and final distillation point standards are the
maximum T90 distillation point and final distillation point allowed for
any batch of natural gasoline ethanol flex fuel blendstock used or made
available for use to produce ethanol flex fuel beginning on the date
specified in paragraph (b) of this section.
(5) Elemental composition requirements. The elemental composition
requirements apply to any batch of ethanol flex fuel produced,
imported, sold, offered for sale, dispensed, supplied, offered for
supply, stored, or transported or any batch of certified natural
gasoline ethanol flex fuel blendstock used or made available for use to
produce ethanol flex fuel beginning on the date specified in paragraph
(b) of this section.
Sec. Sec. 80.1505-80.1519 [Reserved]
0
76. Reserved Sec. Sec. 80.1505 through 80.1519 are added.
0
77. Section 80.1520 is added to read as follows:
Sec. 80.1520 Standards for ethanol flex fuel.
(a) Applicability. All ethanol flex fuel shall meet the
requirements of this section beginning on the date specified in Sec.
80.1504(b), unless otherwise provided in this subpart.
(b) Sulfur, benzene, and elemental composition standards--(1)
Sulfur content--(i) Annual average standard. (A) For all ethanol flex
fuel, the annual average sulfur standard is a maximum of 10.00 ppm.
(B) [Reserved]
[[Page 80959]]
(ii) Per-gallon cap standard. (A) For ethanol flex fuel produced by
an ethanol flex fuel full-refiner, the sulfur per-gallon cap standard
is a maximum of 80 ppm.
(B) For all other ethanol flex fuel, the sulfur per-gallon cap
standard is a maximum of 95 ppm.
(2) Benzene content--(i) Annual average standard. (A) For all
ethanol flex fuel, the annual average benzene standard is a maximum of
0.62 volume percent.
(B) [Reserved]
(ii) [Reserved]
(3) Elemental composition requirement. All ethanol flex fuel shall
be composed solely of carbon, hydrogen, oxygen, nitrogen, and/or
sulfur, unless a waiver has been granted under 42 U.S.C. 7545(f)(4).
(c) RVP standard. Except for ethanol flex fuel produced by a
blender pump-refiner satisfying the requirements of Sec. 80.1523, no
person may sell, offer for sale, dispense, supply, offer for supply,
transport or introduce into commerce ethanol flex fuel that does not
comply with the applicable RVP standard as specified in Sec. 80.1531.
0
78. Section 80.1521 is added to read as follows:
Sec. 80.1521 Requirements for ethanol flex fuel produced by ethanol
flex fuel full-refiners or imported by ethanol flex fuel importers.
(a) Applicability. Any ethanol flex fuel full-refiner or ethanol
flex fuel importer shall demonstrate compliance with the standards in
Sec. 80.1520 by complying with the requirements of this section for
all ethanol flex fuel that they produce or import beginning on the date
specified in Sec. 80.1504(b). This section does not apply to ethanol
flex fuel bulk blender-refiners meeting the requirements in Sec.
80.1522 and ethanol flex fuel blender pump-refiners meeting the
requirements is Sec. 80.1523.
(b) Ethanol flex fuel composition. Ethanol flex fuel full-refiners
and ethanol flex fuel importers may only produce ethanol flex fuel
using the following components:
(1) Ethanol that meets the requirements of paragraph (b)(1)(i) or
(b)(1)(ii) of this section, as applicable.
(i) Denatured fuel ethanol that meets the requirements of Sec.
80.1610.
(ii) Undenatured ethanol at an ethanol production facility that has
a sulfur content not greater than 10 ppm and is composed solely of
carbon, hydrogen, nitrogen, oxygen, and sulfur unless a waiver has been
granted under 42 U.S.C. 7545(f)(4).
(2) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in areas other than the reformulated
gasoline areas described in Sec. 80.70:
(i) Conventional gasoline or CBOB that meets the applicable
requirements of this part, including subparts L and O.
(ii) Reformulated gasoline or RBOB that meets the applicable
requirements of this part, including subparts D, L, and O.
(3) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in the reformulated gasoline areas
described in Sec. 80.70:
(i) Reformulated gasoline or RBOB that meets the applicable
requirements of this part, including subparts D, L, and O.
(ii) [Reserved]
(4) Certified natural gasoline ethanol flex fuel blendstock that
meets the requirements of Sec. 80.1524.
(5) Uncertified natural gasoline ethanol flex fuel blendstock that
meets the following requirements:
(i) RVP standard. (A) The maximum RVP standard for uncertified
natural gasoline ethanol flex fuel blendstock is 15.0 psi.
(B) Compliance with the RVP standard in paragraph (b)(5)(i)(A) of
this section shall be determined by sampling and testing each batch of
uncertified natural gasoline ethanol flex fuel blendstock pursuant to
Sec. 80.1553(g).
(ii) T90 distillation point and final distillation point. (A) The
per-gallon T90 distillation point for uncertified natural gasoline
ethanol flex fuel blendstock shall be no higher than 135 [deg]C (275
[deg]F). The per-gallon final distillation point for uncertified
natural gasoline ethanol flex fuel blendstock shall be no higher than
190 [deg]C (375 [deg]F).
(B) Compliance with the T90 distillation point and final
distillation point standards in paragraph (b)(5)(ii)(A) of this section
shall be determined by sampling and testing each batch pursuant to
Sec. 80.1553(h).
(iii) Elemental composition requirements. (A) All uncertified
natural gasoline ethanol flex fuel blendstock shall be composed solely
of carbon, hydrogen, oxygen, nitrogen, and/or sulfur, unless a waiver
has been granted under 42 U.S.C. 7545(f)(4).
(B) To demonstrate compliance with the elemental composition
requirements in paragraph (b)(5)(iii)(A) of this section, the
uncertified natural gasoline ethanol flex fuel blendstock must have
been produced from a processing unit (e.g., a distillation tower or
desulfurization unit) at a natural gas processing plant or crude oil
refinery and must not contain any additives that are composed of
elements other than carbon, hydrogen, oxygen, nitrogen, and sulfur.
(6) The combined concentration of certified and uncertified natural
gasoline ethanol flex fuel blendstock blended to produce ethanol flex
fuel must not exceed 30 volume percent. This 30 volume percent cap on
the amount of natural gasoline that may be blended to produce ethanol
flex fuel is in addition to the amount of natural gasoline that may be
added to denature the denatured fuel ethanol used as an ethanol flex
fuel blendstock pursuant to the requirements of Sec. 80.1610(a)(4).
(7) Ethanol flex fuel additives that meet the requirements of Sec.
80.1525.
(c) Sulfur content--(1) Annual average standard. Compliance with
the annual average sulfur content standard in Sec. 80.1520(b)(1)(i)
shall be determined by sampling and testing each batch of ethanol flex
fuel pursuant to Sec. 80.1553(e) and calculating the annual average
sulfur level in accordance with paragraph (c)(3) of this section.
(2) Calculation of the annual average sulfur level. (i) The annual
ethanol flex fuel refinery or ethanol flex fuel import facility average
ethanol flex fuel sulfur level is calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP16NO16.005
Where:
Sa = The ethanol flex fuel refinery or ethanol flex fuel
import facility annual average sulfur level, in ppm (mg/kg).
Vi = The volume of ethanol flex fuel produced or imported
in batch i, in gallons.
Si = The sulfur content of batch i determined using the
procedure specified in Sec. 80.1553(e), in ppm (mg/kg).
n = The number of batches of ethanol flex fuel produced or imported
during the averaging period.
i = Individual batch of ethanol flex fuel produced or imported
during the averaging period.
(ii) The annual average sulfur level calculation in paragraph
(c)(2)(i) of this section shall be conducted to two decimal places
using the rounding procedure specified in Sec. 80.1503.
(3) Per-gallon cap standard. Compliance with the sulfur per-gallon
cap standard in Sec. 80.1520(b)(1)(ii)(A) shall be determined by
sampling and testing each batch of ethanol flex fuel pursuant to Sec.
80.1553(e).
(d) Benzene content--(1) Benzene compliance. Compliance with the
annual average benzene content standard in Sec. 80.1520(b)(2)(i) shall
be determined by sampling and testing each batch of ethanol flex fuel
pursuant to Sec. 80.1553(f) and calculating the annual average benzene
level in
[[Page 80960]]
accordance with paragraph (d)(2) of this section.
(2) Calculation of the annual average benzene level. (i) The annual
ethanol flex fuel refinery or ethanol flex fuel import facility average
ethanol flex fuel benzene level is calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP16NO16.006
Where:
Ba = The ethanol flex fuel refinery or ethanol flex fuel
import facility annual benzene level, in volume percent.
Vi = The volume of ethanol flex fuel produced or imported
in batch i, in gallons.
Bi = The benzene content of batch i determined using the
procedure specified in Sec. 80.1553(f), in volume percent.
n = The number of batches of ethanol flex fuel produced or imported
during the averaging period.
i = Individual batch of ethanol flex fuel produced or imported
during the averaging period.
(ii) The annual benzene level calculation in paragraph (d)(2)(i) of
this section shall be conducted to two decimal places using the
rounding procedure specified in Sec. 80.1503.
(e) Elemental composition compliance. Compliance with the elemental
composition standard in Sec. 80.1520(b)(3) shall be demonstrated by
maintaining records to demonstrate that the only blend components used
are compliant with the requirements of paragraph (b) of this section
pursuant to the recordkeeping requirements of Sec. 80.1552(a).
(f) RVP standard compliance. Compliance with the applicable RVP
standard in Sec. 80.1520(c) shall be determined by sampling and
testing each batch of ethanol flex fuel pursuant to Sec. 80.1553(g).
(g) Batch numbering. Every batch of ethanol flex fuel produced by
an ethanol flex fuel full-refiner or imported by an ethanol flex fuel
importer shall be assigned a number (the ``batch number''), consisting
of the EPA-assigned ethanol flex fuel refiner or ethanol flex fuel
importer registration number, the EPA facility registration number, the
last two digits of the year in which the batch was produced, and a
unique number for the batch, beginning with the number one for the
first batch produced or imported each calendar year and each subsequent
batch during the calendar year being assigned the next sequential
number (e.g., 4321-54321-95-000001, 4321-54321-95-000002, etc.).
0
79. Section 80.1522 is added to read as follows:
Sec. 80.1522 Requirements for ethanol flex fuel produced by ethanol
flex fuel bulk blender-refiners.
(a) Applicability. Any ethanol flex fuel bulk blender-refiner may
choose to demonstrate compliance with the standards of Sec. 80.1520 by
complying with the requirements of this section for all ethanol flex
fuel that they produce beginning on the date specified in Sec.
80.1504(b).
(b) Ethanol flex fuel composition. Ethanol flex fuel bulk blender-
refiners may only produce ethanol flex fuel using the following
components:
(1) Ethanol that meets the requirements of paragraph (b)(1)(i) or
(ii) of this section, as applicable.
(i) Denatured fuel ethanol that meets the requirements of Sec.
80.1610.
(ii) Undenatured ethanol at an ethanol production facility that has
a sulfur content not greater than 10 ppm and is composed solely of
carbon, hydrogen, nitrogen, oxygen, and sulfur unless a waiver has been
granted under 42 U.S.C. 7545(f)(4).
(2) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in areas other than the reformulated
gasoline areas described in Sec. 80.70:
(i) Conventional gasoline or CBOB that meets the applicable
requirements of this part, including subparts L and O.
(ii) Reformulated gasoline or RBOB that meets the applicable
requirements of this part, including subparts D, L, and O.
(3) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in the reformulated gasoline areas
described in Sec. 80.70:
(i) Reformulated gasoline or RBOB that meets the applicable
requirements of this part, including subparts D, L, and O.
(ii) [Reserved]
(4) Certified natural gasoline ethanol flex fuel blendstock that
meets the requirements of Sec. 80.1524. The concentration of certified
natural gasoline ethanol flex fuel blendstock blended to produce
ethanol flex fuel shall be limited to 30 volume percent. This 30 volume
percent cap on the amount of natural gasoline that may be blended to
produce ethanol flex fuel is in addition to the amount natural gasoline
that may be added to denature the denatured fuel ethanol used as an
ethanol flex fuel blendstock pursuant to the requirements of Sec.
80.1610(a)(4).
(5) Ethanol flex fuel additives that meet the requirements of Sec.
80.1525.
(c) Compliance demonstration--(1) Sulfur, benzene, and elemental
composition compliance. Compliance with the sulfur content, benzene
content, and elemental composition standards in Sec. 80.1520(b) shall
be demonstrated by maintaining records for each batch of ethanol flex
fuel to demonstrate that the only blend components used are compliant
with the requirements of paragraph (b) of this section pursuant to the
recordkeeping requirements of Sec. 80.1552(b).
(2) RVP standard compliance. Compliance with the applicable RVP
standard in Sec. 80.1520(c) shall be determined by sampling and
testing each batch of ethanol flex fuel pursuant to Sec. 80.1553(g) or
using the alternative provisions of Sec. 80.1553(j).
(d) Batch numbering. Every batch of ethanol flex fuel produced by
an ethanol flex fuel bulk blender-refiner shall be assigned a number
(the ``batch number''), consisting of the EPA-assigned ethanol flex
fuel refiner or ethanol flex fuel importer registration number, the EPA
facility registration number, the last two digits of the year in which
the batch was produced, and a unique number for the batch, beginning
with the number one for the first batch produced or imported each
calendar year and each subsequent batch during the calendar year being
assigned the next sequential number (e.g., 4321-54321-95-000001, 4321-
54321-95-000002, etc.).
0
80. Section 80.1523 is added to read as follows:
Sec. 80.1523 Requirements for ethanol flex fuel produced by blender
pump-refiners.
(a) Applicability. Any blender pump-refiner may choose to
demonstrate compliance with the standards of Sec. 80.1520 by complying
with the requirements of this section for all ethanol flex fuel that
they produce beginning on the date specified in Sec. 80.1504(b).
(b) Ethanol flex fuel composition. Blender pump-refiners may only
produce ethanol flex fuel using the following components:
(1) Ethanol flex fuel produced by an ethanol flex fuel full-refiner
or imported by an ethanol flex fuel importer that meets the
requirements of Sec. Sec. 80.1520 and 80.1521, or produced by an
ethanol flex fuel bulk blender-refiner that meets the requirements of
Sec. Sec. 80.1520 and 80.1522.
(2) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in areas other than the reformulated
gasoline areas described in Sec. 80.70:
(i) Conventional gasoline that meets the applicable requirements of
this part, including subparts L and O.
[[Page 80961]]
(ii) Reformulated gasoline that meets the applicable requirements
of this part, including subparts D, L, and O.
(3) For ethanol flex fuel sold, offered for sale, dispensed,
supplied, or offered for supply in the reformulated gasoline areas
described in Sec. 80.70:
(i) Reformulated gasoline that meets the applicable requirements of
this part, including subparts D, L, and O.
(ii) [Reserved]
(4) Ethanol flex fuel additives that meet the requirements of Sec.
80.1525.
(c) Compliance demonstration--(1) Sulfur, benzene, and elemental
composition compliance. Compliance with the sulfur content, benzene
content, and elemental composition standards in Sec. 80.1520(b) shall
be demonstrated by maintaining records to demonstrate that the only
blend components used are compliant with the requirements of paragraph
(b) of this section pursuant to the recordkeeping requirements of Sec.
80.1552(c).
(2) RVP standard compliance. Compliance with the applicable RVP
standard in Sec. 80.1520(c) shall be demonstrated by maintaining
records to demonstrate that the only blend components used are
compliant with the requirements of paragraph (b) of this section
pursuant to the recordkeeping requirements of Sec. 80.1552(c).
0
81. Section 80.1524 is added to read as follows:
Sec. 80.1524 Standards and requirements for certified natural
gasoline ethanol flex fuel blendstock.
(a) Applicability. All certified natural gasoline ethanol flex fuel
blendstock produced, imported, sold, offered for sale, dispensed,
supplied, offered for supply, stored, or transported shall meet the
requirements of this section beginning on the date specified in Sec.
80.1504(b).
(b) Sulfur standard. (1) The sulfur per-gallon cap standard for
certified natural gasoline ethanol flex fuel blendstock is a maximum of
10.00 ppm.
(2) The sulfur content of certified natural gasoline ethanol flex
fuel blendstock shall be determined by sampling and testing each batch
pursuant to Sec. 80.1553(e).
(c) Benzene standard. (1) The benzene per-gallon cap standard for
certified natural gasoline ethanol flex fuel blendstock is a maximum of
0.62 volume percent.
(2) The benzene content of certified natural gasoline ethanol flex
fuel blendstock shall be determined by sampling and testing each batch
pursuant to Sec. 80.1553(f).
(d) RVP standard. (1) The maximum RVP standard for certified
natural gasoline ethanol flex fuel blendstock is 15.0 psi.
(2) Compliance with the RVP standard in paragraph (d)(1) of this
section shall be determined by sampling and testing each batch of
certified natural gasoline ethanol flex fuel blendstock pursuant to
Sec. 80.1553(g).
(e) T90 distillation point and final distillation point. (1) The
per-gallon T90 distillation point for certified natural gasoline
ethanol flex fuel blendstock shall be no higher than 135 [deg]C (275
[deg]F). The per-gallon final distillation point for certified natural
gasoline ethanol flex fuel blendstock shall be no higher than 190
[deg]C (375 [deg]F).
(2) Compliance with the T90 distillation point and final
distillation point standards in paragraph (e)(1) of this section shall
be determined by sampling and testing each batch pursuant to Sec.
80.1553(h).
(f) Elemental composition requirements. (1) All certified natural
gasoline ethanol flex fuel blendstock shall be composed solely of
carbon, hydrogen, oxygen, nitrogen, and/or sulfur, unless a waiver has
been granted under 42 U.S.C. 7545(f)(4).
(2) To demonstrate compliance with the elemental composition
requirements in paragraph (f)(1) of this section, the uncertified
natural gasoline ethanol flex fuel blendstock must have been produced
from a processing unit (e.g., a distillation tower or desulfurization
unit) at a natural gas processing plant or crude oil refinery.
(g) Batch numbering. Every batch of certified natural gasoline
ethanol flex fuel blendstock produced by a certified natural gasoline
ethanol flex fuel blendstock refiner or imported by a certified natural
gasoline ethanol flex fuel blendstock importer shall be assigned a
number (the ``batch number''), consisting of the EPA-assigned certified
natural gasoline ethanol flex fuel blendstock refiner or certified
natural gasoline ethanol flex fuel blendstock importer registration
number, the EPA facility registration number, the last two digits of
the year in which the batch was produced, and a unique number for the
batch, beginning with the number one for the first batch produced or
imported each calendar year and each subsequent batch during the
calendar year being assigned the next sequential number (e.g., 4321-
54321-95-000001, 4321-54321-95-000002, etc.).
(h) Natural gasoline ethanol flex fuel blendstock cannot be sold as
gasoline or used as a gasoline blendstock unless the party that uses
natural gasoline to manufacture gasoline complies with all applicable
gasoline refiner requirements in 40 CFR part 80, including subparts L
and O. Natural gasoline ethanol flex fuel blendstock may not be
commingled with gasoline unless it is being blended with gasoline by an
ethanol flex fuel full-refiner or ethanol flex fuel bulk blender-
refiner in the process of producing ethanol flex fuel.
(i) No additives may be added to certified natural gasoline ethanol
flex fuel blendstock after the point of production or importation.
0
82. Section 80.1525 is added to read as follows:
Sec. 80.1525 Standards and requirements for manufacturers and
blenders of additives used in ethanol flex fuel.
(a) Ethanol flex fuel additive manufacturers must meet the
following requirements:
(1) Except as otherwise provided, this section applies to any
ethanol flex fuel additive manufactured for use in ethanol flex fuel
and is sold for use at a concentration of less than 1.0% by volume.
(2) The ethanol flex fuel additive must contribute no more than 3
ppm on a per-gallon basis to the sulfur content of ethanol flex fuel
when used at the maximum recommended treatment rate.
(3) The ethanol flex fuel additive manufacturer must maintain
records of its additive production quality control activities that
demonstrates that the sulfur content of its additive production batches
complies with the sulfur requirement in paragraph (a)(2) of this
section and make these records available to EPA upon request.
(4) The ethanol flex fuel additive shall be composed solely of
carbon, hydrogen, oxygen, nitrogen, and/or sulfur, unless a waiver has
be granted under 42 U.S.C. 7545(f)(4).
(5) The maximum treatment rate on the product transfer document for
the additive must state all the following:
(i) The maximum concentration.
(ii) The maximum allowed treatment rate that corresponds to the
maximum concentration. The maximum allowed concentration must comply
with the requirements in paragraph (a)(2) of this section.
(b) The following provisions in paragraphs (b)(1) and (2) of this
section apply to parties who are downstream of the ethanol flex fuel
refiner or ethanol flex fuel importer and who blend additives into
ethanol flex fuel.
(1) On any occasion where an ethanol flex fuel additive blender
blends an ethanol flex fuel additive (subject to the requirements of
this section) at a concentration of less than 1.0% by volume, it is
subject to the prohibitions in Sec. 80.1564 and the ethanol flex fuel
sulfur standards of Sec. 80.1520(b)(1).
[[Page 80962]]
(2) On any occasion where an ethanol flex fuel additive blender
blends an ethanol flex fuel additive at a concentration of 1.0% by
volume or greater, it is a fuel manufacturer as defined in Sec.
79.2(d) of this chapter, and is subject to all the provisions that
apply to ethanol flex fuel refiners and importers under this subpart.
Sec. Sec. 80.1526-80.1529 [Reserved]
0
83. Reserved Sec. Sec. 80.1526 through 80.1529 are added.
0
84. Section 80.1530 is added to read as follows:
Sec. 80.1530 Requirements for E15 gasoline produced by blender pump-
refiners.
(a) Applicability. (1) Beginning February 1, 2018, and thereafter,
a blender pump-refiner that produces E15 may demonstrate compliance
with the gasoline registration requirements in 40 CFR part 79 and the
gasoline refiner requirements in this part, except those that pertain
to the volatility standards for conventional gasoline in subpart B of
this part and those that pertain to the hydrocarbon standard for
reformulated gasoline in subpart D of this part, by complying with the
requirements in paragraph (b) of this section and using only the
following components to produce E15:
(i) Ethanol flex fuel produced by an ethanol flex fuel full-refiner
or imported by an ethanol flex fuel importer that meets the
requirements of Sec. Sec. 80.1520 and 80.1521, or produced by an
ethanol flex fuel bulk blender-refiner that meets the requirements of
Sec. Sec. 80.1520 and 80.1522.
(ii) For E15 sold, offered for sale, dispensed, supplied, or
offered for supply in areas other than the reformulated gasoline areas
described in Sec. 80.70:
(A) Conventional gasoline that meets the applicable requirements of
this part, including subparts L and O.
(B) Reformulated gasoline that meets the applicable requirements of
this part, including subparts D, L, and O.
(iii) For E15 sold, offered for sale, dispensed, supplied, or
offered for supply in the reformulated gasoline areas described in
Sec. 80.70:
(A) Reformulated gasoline that meets the applicable requirements of
this part, including subpart D, L, and O.
(B) [Reserved]
(iv) Gasoline additives that meet the requirements of Sec.
80.1613.
(2) Beginning February 1, 2018, and thereafter, a blender pump-
refiner that produces E15 may demonstrate compliance with the gasoline
registration requirements in 40 CFR part 79 and the gasoline refiner
requirements in this part, including those that pertain to the
volatility standards for conventional gasoline in subpart B of this
part and those that pertain to the hydrocarbon standard for
reformulated gasoline in subpart D of this part, by complying with the
requirements in paragraph (b) of this section and using only the
following components to produce E15:
(i) Ethanol flex fuel produced by an ethanol flex fuel full-refiner
or imported by an ethanol flex fuel importer that meets the
requirements of Sec. Sec. 80.1520 and 80.1521, or produced by an
ethanol flex fuel bulk blender-refiner that meets the requirements of
Sec. Sec. 80.1520 and 80.1522.
(ii) For E15 sold, offered for sale, dispensed, supplied, or
offered for supply in areas where the 1 psi RVP waiver for E10 in Sec.
80.27(d) does not apply other than the reformulated gasoline areas
described in Sec. 80.70:
(A) E10 conventional gasoline that meets the applicable
requirements of this part, including subparts L and O.
(B) E10 reformulated gasoline that meets the applicable
requirements of this part, including subparts D, L, and O.
(iii) For E15 sold, offered for sale, dispensed, supplied, or
offered for supply in the reformulated gasoline areas described in
Sec. 80.70:
(A) E10 reformulated gasoline that meets the applicable
requirements of this part, including subpart D, L, and O.
(B) [Reserved]
(iv) Gasoline additives that meet the requirements of Sec.
80.1613.
(b) Compliance demonstration. Compliance with the gasoline
composition standards in paragraphs (a)(1) and (a)(2) of this section
shall be demonstrated by maintaining records to demonstrate that the
only blend components used are compliant with the applicable
requirements of paragraphs (a)(1)(i) through (iv) and (a)(2)(i) through
(iv) of this section pursuant to the recordkeeping requirements of
Sec. 80.1552(c).
0
85. Section 80.1531 is added to read as follows:
Sec. 80.1531 Controls and prohibitions on ethanol flex fuel
volatility.
(a) Prohibited activities in 2018 and beyond. Beginning in 2018 and
thereafter, from June 1 through September 15, no person, including
without limitation, no retailer or wholesale purchaser-consumer, and
from May 1 through September 15, no refiner, importer, distributor,
reseller, or carrier shall sell, offer for sale, dispense, supply,
offer for supply, transport, or introduce into commerce ethanol flex
fuel whose RVP exceeds the applicable standard specified in this
section. As used in this section and in Sec. 80.1564, ``applicable
standard'' means the standard listed in this paragraph for the state
and time period in which the ethanol flex fuel is intended to be
dispensed to flexible fuel vehicles.
(1) Alabama. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(2) Arizona. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
that part of Maricopa county commencing at a point which is the
intersection of the eastern line of Range 7 East, Gila and Salt River
Baseline and Meridian, and the southern line of Township 2 South, said
point is the southeastern corner of the Maricopa Association of
Governments Urban Planning Area; thence, running northerly along the
eastern line of Range 7 East to a point where the eastern line of Range
7 East intersects the northern line of Township 1 North; thence,
running westerly along the northern line of Township 1 North to
approximately the southwest corner of the southeast quarter of Section
35, Township 2 North, Range 7 East, said point being the boundary of
the Tonto National Forest and Usery Mountain Semi-Regional Park; thence
running northerly along the Tonto National Forest Boundary, which is
generally the western line of the east half of Sections 26 and 35 of
Township 2 North, Range 7 East, to a point which is where the quarter
section line intersects with the northern line of Section 26, Township
2 North, Range 7 East, said point also being the northeast corner of
the Usery Mountain Semi-Regional Park; thence running westerly along
the Tonto National Forest Boundary, which is generally the south line
of Sections 19, 20, 21 and 22 and the southern line of the west half of
Section 23, Township 2 North, Range 7 East, to a point which is the
southwest corner of Section 19, Township 2 North, Range 7 East; thence
running northerly along the Tonto National Forest Boundary to a point
where the Tonto National Forest Boundary intersects with the eastern
boundary of the Salt River Indian Reservation, generally described as
the center line of the Salt River Channel; thence running northeasterly
and northerly along the common boundary of the Tonto National Forest
and the Salt River
[[Page 80963]]
Indian Reservation to a point which is the northeast corner of the Salt
River Indian Reservation and the southeast corner of the Fort McDowell
Indian Reservation; thence running northeasterly along the common
boundary between the Tonto National Forest and the Fort McDowell Indian
Reservation to a point which is the northeast corner of the Fort
McDowell Indian Reservation; thence running southwesterly along the
northern boundary of the Fort McDowell Indian Reservation, which line
is a common boundary with the Tonto National Forest, to a point where
the boundary intersects with the eastern line of Section 12, Township 4
North, Range 6 East; thence running northerly along the eastern line of
Range 6 East to a point where the eastern line of Range 6 East
intersects with the southern line of Township 5 North, said line is the
boundary between the Tonto National Forest and the east boundary of
McDowell Mountain Regional Park; thence running westerly along the
southern line of Township 5 North to a point where the southern line
intersects with the eastern line of Range 5 East which line is the
boundary of Tonto National Forest and the north boundary of McDowell
Mountain Regional Park; thence running northerly along the eastern line
of Range 5 East to a point where the eastern line of Range 5 East
intersects with the northern line of Township 5 North, which line is
the boundary of the Tonto National Forest; thence running westerly
along the northern line of Township 5 North to a point where the
northern line of Township 5 North intersects with the easterly line of
Range 4 East, said line is the boundary of Tonto National Forest;
thence running northerly along the eastern line of Range 4 East to a
point where the eastern line of Range 4 East intersects with the
northern line of Township 6 North, which line is the boundary of the
Tonto National Forest; thence running westerly along the northern line
of Township 6 North to a point of intersection with the Maricopa-
Yavapai County line, which is generally described in Arizona Revised
Statutes Section 11-109 as the center line of the Aqua Fria River (Also
the north end of Lake Pleasant); thence running southwesterly and
southerly along the Maricopa-Yavapai County line to a point which is
described by Arizona Revised Statutes Section 11-109 as being on the
center line of the Aqua Fria River, two miles southerly and below the
mouth of Humbug Creek; thence running southerly along the center line
of Aqua Fria River to the intersection of the center line of the Aqua
Fria River and the center line of Beardsley Canal, said point is
generally in the northeast quarter of Section 17, Township 5 North,
Range 1 East; thence running southwesterly and southerly along the
center line of Beardsley Canal to a point which is the center line of
Beardsley Canal where it intersects with the center line of Indian
School Road; thence running westerly along the center line of West
Indian School Road to a point where the center line of West Indian
School Road intersects with the center line of North Jackrabbit Trail;
thence running southerly along the center line of Jackrabbit Trail
approximately nine and three-quarter miles to a point where the center
line of Jackrabbit Trail intersects with the Gila River, said point is
generally on the north-south quarter section line of Section 8,
Township 1 South, Range 2 West; thence running northeasterly and
easterly up the Gila River to a point where the Gila River intersects
with the northern extension of the western boundary of Estrella
Mountain Regional Park, which point is generally the quarter corner of
the northern line of Section 31, Township 1 North, Range 1 West; thence
running southerly along the extension of the western boundary and along
the western boundary of Estrella Mountain Regional Park to a point
where the southern extension of the western boundary of Estrella
Mountain Regional Park intersects with the southern line of Township 1
South; thence running easterly along the southern line of Township 1
South to a point where the south line of Township 1 South intersects
with the western line of Range 1 East, which line is generally the
southern boundary of Estrella Mountain Regional Park; thence running
southerly along the western line of Range 1 East to the southwest
corner of Section 18, Township 2 South, Range 1 East, said line is the
western boundary of the Gila River Indian Reservation; thence running
easterly along the southern boundary of the Gila River Indian
Reservation which is the southern line of Sections 13, 14, 15, 16, 17,
and 18, Township 2 South, Range 1 East, to the boundary between
Maricopa and Pinal Counties as described in Arizona Revised Statutes
Sections 11-109 and 11-113, which is the eastern line of Range 1 East;
thence running northerly along the eastern boundary of Range 1 East,
which is the common boundary between Maricopa and Pinal Counties, to a
point where the eastern line of Range 1 East intersects the Gila River;
thence running southerly up the Gila River to a point where the Gila
River intersects with the southern line of Township 2 South; thence
running easterly along the southern line of Township 2 South to the
point of beginning which is a point where the southern line of Township
2 South intersects with the eastern line Range 7 East; except that
portion of the area defined by paragraphs 1 through 28 above that lies
within the Gila River Indian Reservation.
(3) Arkansas. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(4) Colorado. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson
Counties, and that part of Larimer County that lies south of a line
described as follows: Beginning at a point on Larimer County's eastern
boundary and Weld County's western boundary intersected by 40 degrees,
42 minutes, and 47.1 seconds north latitude, proceed west to a point
defined by the intersection of 40 degrees, 42 minutes, 47.1 seconds
north latitude and 105 degrees, 29 minutes, and 40.0 seconds west
longitude, thence proceed south on 105 degrees, 29 minutes, 40.0
seconds west longitude to the intersection with 40 degrees, 33 minutes
and 17.4 seconds north latitude, thence proceed west on 40 degrees, 33
minutes, 17.4 seconds north latitude until this line intersects Larimer
County's western boundary and Grand County's eastern boundary), and
part of Weld (That portion of the county that lies south of a line
described as follows: Beginning at a point on Weld County's eastern
boundary and Logan County's western boundary intersected by 40 degrees,
42 minutes, 47.1 seconds north latitude, proceed west on 40 degrees, 42
minutes, 47.1 seconds north latitude until this line intersects Weld
County's western boundary and Larimer County's eastern boundary.
(5) Connecticut No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 7.0 psi standard.
(6) Delaware. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
7.0 psi standard.
(7) District of Columbia. No person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex
[[Page 80964]]
fuel that has an RVP that exceeds a 7.0 psi standard.
(8) Florida. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(9) Georgia. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth,
Fulton, Gwinnett, Henry, Paulding, and Rockdale Counties.
(10) Idaho. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(11) Illinois. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Cook, Du Page, Jersey, Kane,
Lake, Madison, McHenry, Monroe, St. Clair, and Will Counties, and the
townships of Aux Sable and Goose Lake in Grundy County and Oswego
Township in Kendall County.
(12) Indiana. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.0 psi standard in Lake and Porter Counties.
(13) Iowa. No person may sell, offer for sale, dispense, supply, or
offer for supply ethanol flex fuel that has an RVP that exceeds a 9.0
psi standard.
(14) Kansas. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
Johnson and Wyandotte Counties.
(15) Kentucky. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Boone, Campbell, Jefferson,
and Kenton Counties and the portion of Bullitt county beginning at the
intersection of Ky 1020 and the Jefferson-Bullitt County Line
proceeding to the east along the county line to the intersection of
county road 567 and the Jefferson-Bullitt County Line; proceeding south
on county road 567 to the junction with Ky 1116 (also known as Zoneton
Road); proceeding to the south on KY 1116 to the junction with Hebron
Lane; proceeding to the south on Hebron Lane to Cedar Creek; proceeding
south on Cedar Creek to the confluence of Floyds Fork turning southeast
along a creek that meets Ky 44 at Stallings Cemetery; proceeding west
along Ky 44 to the eastern most point in the Shepherdsville city
limits; proceeding south along the Shepherdsville city limits to the
Salt River and west to a point across the river from Mooney Lane;
proceeding south along Mooney Lane to the junction of Ky 480;
proceeding west on Ky 480 to the junction with Ky 2237; proceeding
south on Ky 2237 to the junction with Ky 61 and proceeding north on Ky
61 to the junction with Ky 1494; proceeding south on Ky 1494 to the
junction with the perimeter of the Fort Knox Military Reservation;
proceeding north along the military reservation perimeter to Castleman
Branch Road; proceeding north on Castleman Branch Road to Ky 44;
proceeding a very short distance west on Ky 44 to a junction with Ky
1020; and proceeding north on Ky 1020 to the beginning, and the portion
of Oldham county beginning at the intersection of the Oldham-Jefferson
County Line with the southbound lane of Interstate 71; proceeding to
the northeast along the southbound lane of Interstate 71 to the
intersection of Ky 329 and the southbound lane of Interstate 71;
proceeding to the northwest on Ky 329 to the intersection of Zaring
Road on Ky 329; proceeding to the east-northeast on Zaring Road to the
junction of Cedar Point Road and Zaring Road; proceeding to the north-
northeast on Cedar Point Road to the junction of Ky 393 and Cedar Point
Road; proceeding to the south-southeast on Ky 393 to the junction of
county road 746 (the road on the north side of Reformatory Lake and the
Reformatory); proceeding to the east-northeast on county road 746 to
the junction with Dawkins Lane (also known as Saddlers Mill Road) and
county road 746; proceeding to follow an electric power line east-
northeast across from the junction of county road 746 and Dawkins Lane
to the east-northeast across Ky 53 on to the La Grange Water Filtration
Plant; proceeding on to the east-southeast along the power line then
south across Fort Pickens Road to a power substation on Ky 146;
proceeding along the power line south across Ky 146 and the Seaboard
System Railroad track to adjoin the incorporated city limits of La
Grange; then proceeding east then south along the La Grange city limits
to a point abutting the north side of Ky 712; proceeding east-southeast
on Ky 712 to the junction of Massie School Road and Ky 712; proceeding
to the south-southwest and then north-northwest on Massie School Road
to the junction of Ky 53 and Massie School Road; proceeding on Ky 53 to
the north-northwest to the junction of Moody Lane and Ky 53; proceeding
on Moody Lane to the south-southwest until meeting the city limits of
La Grange; then briefly proceeding north following the La Grange city
limits to the intersection of the northbound lane of Interstate 71 and
the La Grange city limits; proceeding southwest on the northbound lane
of Interstate 71 until intersecting with the North Fork of Currys Fork;
proceeding south-southwest beyond the confluence of Currys Fork to the
south-southwest beyond the confluence of Floyds Fork continuing on to
the Oldham-Jefferson County Line; and proceeding northwest along the
Oldham-Jefferson County Line to the beginning.
(16) Louisiana. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.8 psi standard from June 1 through September 15
in Ascension, Beauregard, Calcasieu, East Baton Rouge, Iberville,
Jefferson, Lafayette, Lafourche, Livingston, Orleans, Point Coupee, St.
Bernard, St. Charles, St. James, St. Mary, and West Baton Rouge
parishes.
(17) Maine. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.0 psi standard in Androscoggin, Cumberland, Kennebec,
Knox, Lincoln, Sagadahoc, and York Counties.
(18) Maryland. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Anne
[[Page 80965]]
Arundel, Baltimore, Calvert, Carroll, Charles, Cecil, Frederick,
Harford, Howard, Kent, Montgomery, Prince George's, and Queen Anne's
Counties and the City of Baltimore.
(19) Massachusetts. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Barnstable, Berkshire,
Bristol, Dukes, Essex, Franklin, Hampden, Hampshire, Middlesex,
Nantucket, Norfolk, Plymouth, Suffolk, and Worcester Counties.
(20) Michigan. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(21) Minnesota. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(22) Mississippi. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(23) Missouri. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.8 psi standard from June 1 through September 15
in Clay, Jackson, and Platte Counties, and a 7.0 psi standard in St.
Louis, Franklin, Jefferson, and St. Charles Counties and the city of
St. Louis.
(24) Montana. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(25) Nebraska. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(26) Nevada. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
Washoe County.
(27) New Hampshire. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Hillsborough, Rockingham,
Merrimack, and Strafford Counties.
(28) New Jersey. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 7.0 psi standard.
(29) New Mexico. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(30) New York. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Bronx, Dutchess, Kings,
Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk,
and Westchester Counties, and the portion of Essex County that consists
of the portion of Whiteface Mountain above 4,500 feet in elevation.
(31) North Carolina. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(32) North Dakota. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(33) Ohio. No person may sell, offer for sale, dispense, supply, or
offer for supply ethanol flex fuel that has an RVP that exceeds a 9.0
psi standard.
(34) Oklahoma. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(35) Oregon. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in
Clackamas, Multnomah, and Washington Counties and the parts of Marion
and Polk Counties that are part of the Salem Area Transportation Study.
(36) Pennsylvania. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Bucks, Chester, Delaware,
Montgomery, and Philadelphia Counties.
(37) Rhode Island. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 7.0 psi standard.
(38) South Carolina. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(39) South Dakota. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(40) Tennessee. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.8 psi standard from June 1 through September 15
in Davidson, Rutherford, Shelby, Sumner, Williamson, and Wilson
Counties.
(41) Texas. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard except that no person may sell, offer for sale,
dispense, supply, or offer for supply ethanol flex fuel that has an RVP
that exceeds a 7.8 psi standard from June 1 through September 15 in El
Paso, Hardin, Jefferson, and Orange Counties, and a 7.0 psi standard in
Brazoria, Chambers, Collin, Dallas, Denton, Fort Bend, Galveston,
Harris, Liberty, Montgomery, Tarrant, and Waller Counties.
(42) Utah. No person may sell, offer for sale, dispense, supply, or
offer for supply ethanol flex fuel that has an RVP that exceeds a 9.0
psi standard except that no person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 7.8 psi standard from June 1 through September 15 in Davis
and Salt Lake Counties.
(43) Vermont. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(44) Virginia. Ethanol flex fuel intended to be dispensed to
flexible fuel vehicles in Virginia shall meet a 9.0 psi standard except
that no person may sell, offer for sale, dispense, supply, or offer for
supply ethanol flex fuel that has an RVP that exceeds a 7.0 psi
standard in Arlington, Charles City, Chesterfield, Fairfax, Hanover,
Henrico, James City, Loudoun, Prince William, Stafford, and York
Counties and the cities of Alexandria, Chesapeake, Colonial Heights,
Fairfax, Falls Church, Hampton, Hopewell, Manassas, Manassas Park,
Newport News, Norfolk, Poquoson, Portsmouth, Richmond,
[[Page 80966]]
Suffolk, Virginia Beach, and Williamsburg.
(45) Washington. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(46) West Virginia. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard.
(47) Wisconsin. No person may sell, offer for sale, dispense,
supply, or offer for supply ethanol flex fuel that has an RVP that
exceeds a 9.0 psi standard except that no person may sell, offer for
sale, dispense, supply, or offer for supply ethanol flex fuel that has
an RVP that exceeds a 7.0 psi standard in Kenosha, Milwaukee, Ozaukee,
Racine, Washington, and Waukesha Counties.
(48) Wyoming. No person may sell, offer for sale, dispense, supply,
or offer for supply ethanol flex fuel that has an RVP that exceeds a
9.0 psi standard.
(b) Determination of compliance. Compliance with the standards
listed in paragraph (a) of this section shall be determined by the use
of the sampling and testing methodologies specified in Sec. 80.1553(g)
or (j).
(c) Liability. Liability for violations of paragraph (a) of this
section shall be determined according to the provisions of Sec.
80.1564. Where the terms refiner, importer, distributor, reseller,
carrier, retailer, or wholesale purchaser-consumer are expressed in the
singular in Sec. 80.1564, these terms shall include the plural.
Sec. Sec. 80.1532-80.1549 [Reserved]
0
86. Reserved Sec. Sec. 80.1532 through 80.1549 are added.
0
87. Section 80.1550 is added to read as follows:
Sec. 80.1550 Registration requirements for ethanol flex fuel
refiners, ethanol flex fuel importers, natural gasoline ethanol flex
fuel blendstock refiners, and certified natural gasoline ethanol flex
fuel blendstock importers.
The following registration requirements apply under this subpart:
(a) Registration. Registration is required for the following:
(1) Any ethanol flex fuel full-refiner or importer.
(2) Any ethanol flex fuel bulk blender-refiner.
(3) Any certified natural gasoline ethanol flex fuel blendstock
refiner or importer.
(b) Registration requirements. (1) Registration shall be on forms
and use procedures prescribed by the Administrator, and shall include
all of the following information, as applicable, for each ethanol flex
fuel full-refiner, ethanol flex fuel importer, ethanol flex fuel bulk
blender-refiner, certified natural gasoline ethanol flex fuel
blendstock refiner, and certified natural gasoline ethanol flex fuel
blendstock importer:
(i) The name, business address, contact name, email address, and
telephone number of the refiner or importer.
(ii) For each separate refinery or import facility, the facility
name, physical location, contact name, email address, telephone number,
and type of facility.
(iii) For each separate refinery or importer's operations in a
single Petroleum Administration for Defense District (PADD)--
(A) Whether records are kept on-site or off-site of the refinery or
import facility's registered address.
(B) If records are kept off-site, the primary off-site storage
facility name, physical location, contact name, email address, and
telephone number.
(iv) The type(s) of ethanol flex fuel or natural gasoline ethanol
flex fuel blendstock that is produced, imported, or blended.
(v) Registrations for certified natural gasoline ethanol flex fuel
blendstock refiners and importers must contain sufficient information
to demonstrate that the refiner produces natural gasoline ethanol flex
fuel blendstock solely from natural gas processing plants or a crude
oil refineries.
(2) EPA will supply a company registration number to each refiner
or importer and a facility registration number for each refinery or
import facility that is identified. These registration numbers shall be
used in all reports to the Administrator.
(3) Any refiner or importer shall submit updated registration
information to the Administrator within thirty days of any occasion
when the registration information previously supplied becomes
incomplete or inaccurate.
0
88. Section 80.1551 is added to read as follows:
Sec. 80.1551 Reporting requirements for ethanol flex fuel refiners
and importers and certified natural gasoline ethanol flex fuel
blendstock refiners and importers.
Beginning with the compliance date specified in Sec. 80.1504(b)
and continuing for each averaging period thereafter, any ethanol flex
fuel full-refiner, ethanol flex fuel importer, ethanol flex fuel bulk
blender-refiner, certified natural gasoline ethanol flex fuel
blendstock refiner, or certified natural gasoline ethanol flex fuel
blendstock importer, shall submit annual reports to EPA that contain
the information required in this section, and any other information as
EPA may require. Reporting shall be on forms and use procedures
prescribed by the Administrator. Blender pump-refiners that comply with
the requirements of Sec. 80.1523 are exempt from the annual reporting
requirements of this section.
(a) Annual reports for ethanol flex fuel full-refiners and
importers. Any ethanol flex fuel full-refiner, for each of its
refineries, and any ethanol flex fuel importer, for the ethanol flex
fuel that it imports, shall submit a report for each calendar year
period that includes all of the following information:
(1) The EPA-issued company registration number.
(2) The EPA-issued facility registration number.
(3) The total volume of ethanol flex fuel produced or imported, in
gallons, reported to the nearest whole number.
(4) For each batch of ethanol flex fuel produced or imported during
the calendar year, all of the following:
(i) The batch number assigned under Sec. 80.1521(g).
(ii) The date the batch was produced.
(iii) The volume of the batch, in gallons, reported to the nearest
whole number.
(iv) The volume percent ethanol content of the batch, reported to
one decimal place.
(v) The sulfur content of the batch, reported to the nearest ppm,
and the benzene content of the batch, reported to two decimal places,
along with identification of the test methods used to determine the
sulfur content and benzene content of the batch, as determined under
Sec. 80.1553(e) and (f), respectively.
(vi) For batches sold, offered for sale, dispensed, supplied, or
offered for supply from May 1 through September 15, the RVP of the
batch, reported to two decimal places, along with identification of the
test method used to determine the RVP of the batch, as determined under
Sec. 80.1553(g).
(vii) The type and volume of each hydrocarbon and ethanol
blendstock that was used to produce the ethanol flex fuel, as
applicable (i.e., conventional gasoline, reformulated gasoline, CBOB,
RBOB, certified natural gasoline ethanol flex fuel blendstock,
uncertified natural gasoline ethanol flex fuel blendstock, denatured
fuel ethanol, and undenatured ethanol).
(5) The annual average sulfur level and annual average benzene
level of the ethanol flex fuel produced or imported, reported to two
decimal places.
(6) Certification that all batches of ethanol flex fuel produced or
imported
[[Page 80967]]
were compliant with the requirements of Sec. Sec. 80.1520 and 80.1521.
(b) Annual reports for ethanol flex fuel bulk blender-refiners. Any
ethanol flex fuel bulk blender-refiner, for each of its refineries,
shall submit a report for each calendar year period that includes all
of the following information:
(1) The EPA importer, or refiner and refinery facility registration
numbers.
(2) The total volume of ethanol flex fuel produced, in gallons,
reported to the nearest whole number.
(3) For each batch of ethanol flex fuel blended during the calendar
year, all of the following:
(i) The batch number assigned under Sec. 80.1522(d).
(ii) The date the batch was produced.
(iii) The volume of the batch, in gallons, reported to the nearest
whole number.
(iv) The ethanol content of the batch, reported to one decimal
place.
(v) For batches sold, offered for sale, dispensed, supplied, or
offered for supply from May 1 through September 15, the RVP of the
batch, reported to two decimal places, and the method used to
demonstrate compliance with the applicable RVP standard, as determined
by either:
(A) The use of an EPA-approved RVP compliance tool under Sec.
80.1553(j).
(B) A test method pursuant to the requirements of Sec. 80.1553(g).
(vi) The type and volume of each hydrocarbon and ethanol blendstock
that was used to produce the ethanol flex fuel, as applicable (i.e.,
conventional gasoline, reformulated gasoline, CBOB, RBOB, certified
natural gasoline ethanol flex fuel blendstock, denatured fuel ethanol,
and undenatured ethanol).
(4) Certification that all batches of ethanol flex fuel blended
were compliant with the requirements of Sec. Sec. 80.1520 and 80.1522.
(c) Annual reports for refiners and importers of certified natural
gasoline ethanol flex fuel blendstock. Any certified natural gasoline
ethanol flex fuel blendstock refiner, for each of its refineries, and
any certified natural gasoline ethanol flex fuel blendstock importer,
for the certified natural gasoline ethanol flex fuel blendstock that it
imports, shall submit a report for each calendar year averaging period
that includes all of the following information:
(1) The EPA-issued company registration number.
(2) The EPA-issued facility registration number.
(3) The total volume of certified natural gasoline ethanol flex
fuel blendstock produced or imported during the calendar year, in
gallons, reported to the nearest whole number.
(4) For each batch of certified natural gasoline flex fuel
blendstock produced or imported during the calendar year, all of the
following:
(i) The batch number assigned under Sec. 80.1524(g).
(ii) The date the batch was produced.
(iii) The volume of the batch, in gallons, reported to the nearest
whole number.
(iv) The sulfur content of the batch, reported to the nearest ppm,
and the benzene content of the batch, reported to two decimal places,
along with identification of the test methods used to determine the
sulfur content and benzene content of the batch, as determined under
Sec. 80.1553(e) and (f), respectively.
(v) The RVP of the batch, reported to two decimal places, along
with identification of the test method used to determine the RVP of the
batch, as determined under Sec. 80.1553(g). Documentation from the
certified natural gasoline ethanol flex fuel blendstock refiner may be
used to satisfy the requirement of this paragraph. In lieu of using a
procedure specified in Sec. 80.1553(g), if the RVP of the batch is
less than atmospheric pressure as evidenced by its storage/handling
procedures, a natural gasoline ethanol flex fuel blendstock refiner or
natural gasoline ethanol flex fuel blendstock importer may report an
RVP value of 15.0 psi for the batch.
(vi) The T90 distillation point and final distillation point
temperatures of the batch reported to nearest whole degree F, along
with identification of the test method used, as determined under Sec.
80.1553(h). Documentation from the supplier of the natural gasoline
used to produce certified natural gasoline ethanol flex fuel blendstock
may be used to satisfy the requirement of this paragraph.
(vii) For each imported batch of certified natural gasoline ethanol
flex fuel blendstock, the source refinery's EPA registration number.
(5) Certification that all batches of certified natural gasoline
ethanol flex fuel blendstock produced or imported were compliant with
the requirements of Sec. 80.1524.
(d) Report submission. Any annual report required under this
section shall meet the following requirements:
(1) Be signed and certified as meeting all of the applicable
requirements of this subpart by the owner or a responsible corporate
officer of the refiner or importer.
(2) Be submitted to EPA no later than the March 31 each year for
the prior calendar year.
(3) All values measured or calculated pursuant to the requirements
of this subpart shall be in accordance with the rounding procedure
specified in Sec. 80.1503.
(e) Attest reports. Any attest engagement reports required under
Sec. 80.1569 shall be submitted to the Administrator by June 1 of each
year for the prior calendar year.
0
89. Section 80.1552 is added to read as follows:
Sec. 80.1552 Recordkeeping requirements.
Unless otherwise provided for in this section, the records required
by this section shall be kept beginning on the compliance date
specified in Sec. 80.1504(b) and retained for a period of five years
from the date of creation, and shall be delivered to the EPA
Administrator or to the Administrator's authorized representative upon
request.
(a) Records that ethanol flex fuel full-refiners and importers must
keep. Any ethanol flex fuel full-refiner, for each of its ethanol flex
fuel refineries, and any ethanol flex fuel importer, for the ethanol
flex fuel that it imports, must keep records that include all of the
following information:
(1) The product transfer document information required under Sec.
80.1563.
(2) The date each batch was produced or imported.
(3) The batch volume.
(4) For each batch, all of the following information for any
sampling and testing for sulfur content, benzene content, and RVP
required under this subpart:
(i) The location, date, time, and storage tank or truck
identification for each sample collected.
(ii) The name and title of the person who collected the sample and
the person who performed the test.
(iii) The results of the test as originally printed by the testing
apparatus, or where no printed result is produced, the results as
originally recorded by the person who performed the test.
(iv) Any record that contains a test result for the sample that is
not identical to the result recorded under paragraph (a)(4)(iii) of
this section.
(v) The test methodology used.
(5) The batch number assigned under Sec. 80.1521(g) and the
appropriate designation under paragraph (a)(9) of this section.
(6) A copy of all registration records submitted to EPA under Sec.
80.1550.
(7) A copy of all reports submitted to EPA under Sec. 80.1551.
[[Page 80968]]
(8) Any calculations used to determine compliance with the
applicable benzene content, sulfur content, and RVP standards of
Sec. Sec. 80.1520 and 80.1521.
(9) If appropriate, the designation of the batch as exempt ethanol
flex fuel for national security purposes under Sec. 80.1555, exempt
ethanol flex fuel for research and development under Sec. 80.1556,
exempt ethanol flex fuel used in American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands under Sec. 80.1557,
California ethanol flex fuel that meets the requirements of Sec.
80.1558, or for export outside the United States.
(10) Bills of lading, invoices, certificates of analysis, and other
commercial documents relating to the blendstocks used to produce the
batch.
(11) For each batch of uncertified natural gasoline ethanol flex
fuel used during the calendar year to produce ethanol flex fuel:
(i) The RVP of the batch, along with identification of the test
method used, as determined under Sec. 80.1553(g).
(ii) The T90 distillation point and final distillation point
temperatures, along with identification of the test method used, as
determined under Sec. 80.1553(h).
(iii) Documentation from the supplier of the natural gasoline used
by the ethanol flex fuel full-refiner or importer as uncertified
natural gasoline ethanol flex fuel blendstock that demonstrates the
uncertified natural gasoline ethanol flex fuel blendstock was produced
from a processing unit (e.g., a distillation tower or desulfurization
unit) at a natural gas processing plant or crude oil refinery.
(iv) Documentation from the supplier of the natural gasoline used
by the ethanol flex fuel full-refiner or importer as uncertified
natural gasoline ethanol flex fuel blendstock may be used to satisfy
the requirements in paragraphs (a)(11)(i) and (a)(11)(ii) of this
section.
(b) Records that ethanol flex fuel bulk blender-refiners must keep.
Any ethanol flex fuel bulk blender-refiner, for each of its ethanol
flex fuel bulk blender-refineries, must keep records that include all
of the following information:
(1) Product transfer documents. (i) The product transfer document
information required under Sec. 80.1563 for the blendstocks used to
produce ethanol flex fuel.
(ii) The product transfer document information required under Sec.
80.1610 for any DFE used to producer ethanol flex fuel.
(iii) Any product transfer document information for gasoline used
to produce ethanol flex fuel, as required under Sec. 80.77, Sec.
80.106, Sec. 80.210, Sec. 80.219, Sec. 80.1563, and/or Sec.
80.1651.
(2) The date each batch was produced.
(3) The batch volume.
(4) In cases where natural gasoline ethanol flex fuel blendstock is
used to produce ethanol flex fuel, the test or modeling results on the
RVP of each batch and the test methodology used.
(5) For each batch, documentation concerning the composition of the
ethanol flex fuel, including:
(i) The volume or concentration of the ethanol blend component as
described in Sec. 80.1522(b)(1).
(ii) The volume or concentration of any gasoline, CBOB, or RBOB
blending component(s), as described in Sec. 80.1522(b)(2) and (b)(3).
(iii) The volume or concentration of any natural gasoline ethanol
flex fuel blendstock as described in Sec. 80.1522(b)(4).
(iv) The type and amount of any ethanol flex fuel additives as
described in Sec. 80.1522(b)(5).
(v) Bills of lading, invoices, certificates of analysis, and other
commercial documents relating to the blendstocks used to produce the
batch.
(6) The batch number assigned under Sec. 80.1522(d) and the
appropriate designation under paragraph (b)(10) of this section.
(7) A copy of all registration records submitted to EPA under Sec.
80.1550.
(8) A copy of all reports submitted to EPA under Sec. 80.1551.
(9) Records related to the participation in a survey program under
Sec. 80.1561 or Sec. 80.1562, as applicable.
(10) If appropriate, the designation of the batch as exempt ethanol
flex fuel for national security purposes under Sec. 80.1555, exempt
ethanol flex fuel for research and development under Sec. 80.1556,
exempt ethanol flex fuel used in American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands under Sec. 80.1557,
California ethanol flex fuel that meets the requirements of Sec.
80.1558, or for export outside the United States.
(c) Records that blender pump-refiners must keep. Any blender pump-
refiner, for each of its blender pump-refineries, shall keep records
that include all of the following information:
(1) The product transfer document information required under Sec.
80.1563 for the ethanol flex fuel used as a blendstock to produce
ethanol flex fuel at a blender pump.
(2) Any product transfer document information for gasoline used to
produce ethanol flex fuel, as required under Sec. 80.77, Sec. 80.106,
Sec. 80.210, Sec. 80.219, Sec. 80.1563, and/or Sec. 80.1651.
(3) Records related to the participation in a survey program under
Sec. 80.1561 or Sec. 80.1562, as applicable.
(4) Records related to any quality control program, including any
calibration or certification required by a federal, state, or local
government entity, conducted by the blender pump-refiner.
(5) Bills of lading, invoices, certificates of analysis, and other
commercial documents relating to any parent blend used to produce
ethanol flex fuel.
(d) Records that natural gasoline ethanol flex fuel blendstock
refiners and natural gasoline ethanol flex fuel blendstock importers
must keep. Any natural gasoline ethanol flex fuel blendstock refiner,
for each of its natural gasoline ethanol flex fuel blendstock
refineries, and any natural gasoline ethanol flex fuel blendstock
importer, for the natural gasoline ethanol flex fuel blendstock that it
imports, must keep records that include all of the following
information:
(1) The product transfer document information required under Sec.
80.1563.
(2) The date each batch was produced.
(3) The batch volume.
(4) The sulfur content, benzene content, and RVP of the batch, as
determined pursuant to the requirements of Sec. 80.1553, as
applicable. For batches reporting an RVP value of 15.0 pursuant to
Sec. 80.1551(c)(4)(v), the storage/handling procedures demonstrating
an RVP less than atmospheric pressure.
(5) All of the following information for any sampling and testing
for sulfur content, benzene content, and RVP required under this
subpart:
(i) The location, date, time, and storage tank or truck
identification for each sample collected.
(ii) The name and title of the person who collected the sample and
the person who performed the test.
(iii) The results of the test as originally printed by the testing
apparatus, or where no printed result is produced, the results as
originally recorded by the person who performed the test.
(iv) Any record that contains a test result for the sample that is
not identical to the result recorded under paragraph (d)(5)(iii) of
this section.
(v) The test methodology used.
(6) The batch number assigned under Sec. 80.1524(g).
(7) Documentation from the supplier of the natural gasoline used to
produce certified natural gasoline ethanol flex fuel blendstock that
demonstrates the certified natural gasoline ethanol flex fuel
blendstock was produced from a
[[Page 80969]]
processing unit (e.g., a distillation tower or desulfurization unit) at
a natural gas processing plant or crude oil refinery.
(8) A copy of all registration records submitted to EPA under Sec.
80.1550.
(9) A copy of all reports submitted to EPA under Sec. 80.1551.
(10) Bills of lading, invoices, certificates of analysis, and other
commercial documents relating to the natural gasoline used to produce
certified natural gasoline ethanol flex fuel blendstock.
(11) For each imported batch of certified ethanol flex fuel
blendstock, the source refinery's EPA registration number.
(e) Records that parties that take custody of ethanol flex fuel
must keep. All parties that take custody of ethanol flex fuel other
than when ethanol flex fuel is sold or dispensed for use in flex-fuel
vehicles or engines at a retail outlet or wholesale purchaser-consumer
facility, must retain records of the product transfer document
information under Sec. 80.1563.
(f) Records that parties who take custody of certified natural
gasoline ethanol flex fuel blendstock must keep. All parties that take
custody of certified natural gasoline ethanol flex fuel blendstock--
from the refiner or importer through to the ethanol flex fuel full-
refiner or ethanol flex fuel bulk blender-refiner--must retain records
of the product transfer document information required in Sec. 80.1563.
(g) Records that ethanol flex fuel additive manufacturers must
keep. Any ethanol flex fuel additive manufacturer, for the ethanol flex
fuel additives that it produces or imports, must keep records that
include all of the following information:
(1) The product transfer document information for each batch.
(2) The date each batch was produced or imported.
(3) The batch volume.
(4) The maximum recommended treatment rate.
(5) Records of the additive manufacturer's control practices that
demonstrate that the additive will contribute no more than 3 ppm on a
per-gallon basis to the sulfur content of ethanol flex fuel when used
at the maximum recommended treatment rate.
(h) Make records available to EPA. On request by EPA, the records
required in this section shall be provided to the Administrator's
authorized representative. For records that are electronically
generated or maintained, the equipment and software necessary to read
the records shall be made available to EPA; or, if requested by EPA,
electronic records shall be converted to paper documents which shall be
provided to the Administrator's authorized representative.
0
90. Section 80.1553 is added to read as follows:
Sec. 80.1553 Sampling and testing requirements for ethanol flex fuel
refiners and importers and certified natural gasoline ethanol flex fuel
blendstock refiners and importers.
The sampling methods and test methods specified in this section
shall be used to collect and test samples of ethanol flex fuel produced
by ethanol flex fuel full-refiners, ethanol flex fuel importers, and
ethanol flex fuel bulk blender-refiners pursuant to the requirements of
Sec. Sec. 80.1520, 80.1521 and 80.1522, and certified natural gasoline
ethanol flex fuel blendstock produced by certified natural gasoline
ethanol flex fuel blendstock refiners and certified natural gasoline
ethanol flex fuel blendstock importers pursuant to the requirements of
Sec. 80.1524, for purposes of determining compliance with the
requirements of this subpart.
(a) Manual sampling. Manual sampling of tanks and pipelines shall
be performed according to the applicable procedures specified in ASTM
D4057.
(b) Automatic sampling. Automatic sampling of petroleum products in
pipelines shall be performed according to the applicable procedures
specified in ASTM D4177.
(c) Sampling and sample handling for volatility measurement.
Samples to be analyzed for RVP shall be collected and handled according
to the applicable procedures specified in ASTM D5842.
(d) Sample compositing. Composite samples shall be prepared using
the applicable procedures specified in ASTM D5854.
(e) Sulfur. Sulfur content of ethanol flex fuel and certified
natural gasoline ethanol flex fuel blendstock shall be determined by
use of one of the following methods:
(1) ASTM D2622.
(2) ASTM D1266, ASTM D3120, ASTM D5453, ASTM D6920, ASTM D7220, or
ASTM D7039, provided the test result is correlated with the method
specified in paragraph (e)(1) of this section.
(f) Benzene. Benzene content of ethanol flex fuel and natural
gasoline ethanol flex fuel blendstock shall be determined by use of one
of the following methods:
(1) ASTM D5769.
(2) ASTM D5580, ASTM D3606, or ASTM D6730, provided the test result
is correlated with the method specified in paragraph (f)(1) of this
section.
(g) Reid vapor pressure. The RVP of ethanol flex fuel and natural
gasoline ethanol flex fuel blendstock shall be determined by use of one
of the following methods:
(1) ASTM D5191.
(2) ASTM D5482 or ASTM D6378, provided the test result is
correlated with the method specified in paragraph (g)(1) of this
section.
(h) Distillation. The distillation point at which ninety percent of
the natural gasoline ethanol flex fuel blendstock has evaporated and
the final boiling point shall be determined by use of one of the
following methods:
(1) ASTM D86.
(2) [Reserved]
(i) Oxygenate and ethanol content. Oxygenate and ethanol content of
ethanol flex fuel shall be determined by use of one of the following
methods:
(1) ASTM D5599.
(2) ASTM D4815, provided the test result is correlated with the
method specified in paragraph (i)(1) of this section.
(j) Alternative requirements to RVP sampling and testing. Ethanol
flex fuel bulk blender-refiners may use the provisions in this
paragraph (j)(1) of this section as an alternative to the RVP sampling
and testing requirements in paragraph (g) of this section.
(1) Alternative sampling and testing provisions. (i) The RVP of
each batch of ethanol flex fuel shall be determined by using the RVP
equations specified in this paragraph.
(ii) The RVP of the CBOB, RBOB, E0, certified natural gasoline
ethanol flex fuel blendstock, and/or ethanol denaturant hydrocarbon
blend components used to produce the ethanol flex fuel shall be volume
weighted to arrive at a RVP of the mixture of the hydrocarbon blend
components. In cases where denatured fuel ethanol is used as a blending
component, the denaturant concentration in the denatured fuel ethanol
may be assumed to be 3 volume percent and the RVP of the denaturant to
be 15.0 psi.
(iii) The volume weighted RVP of the mixture of the hydrocarbon
blend components determined pursuant to the requirements of paragraph
(j)(1)(ii) of this section shall be used in determining the RVP of the
finished ethanol flex fuel blend using the RVP equations described in
paragraph (j)(1)(iv) of this section.
(iv) RVP equations: RVP expressed in pounds per square inch (psi).
K undenatured ethanol = 46.321 (vol%
undenatured ethanol)-\0.8422\
K hydrocarbon = -7E-07(vol%
undenatured ethanol)\3\
+ 0.0002 (vol% undenatured ethanol)\2\
[[Page 80970]]
+ 0.0024 (vol% undenatured ethanol) + 1
RVP EFF blend = K hydrocarbon (vol%
hydrocarbon/100) RVP hydrocarbon
+ K undenatured ethanol (vol%
undenatured ethanol/100) 2.4
(2) [Reserved]
0
91. Section 80.1554 is added to read as follows:
Sec. 80.1554 Sample retention requirements for ethanol flex fuel and
certified natural gasoline ethanol flex fuel blendstock refiners and
importers.
(a) Beginning on the date specified in Sec. 80.1504(b), any
ethanol flex fuel refiner, ethanol flex fuel importer, certified
natural gasoline ethanol flex fuel blendstock refiner, or certified
natural gasoline ethanol flex fuel blendstock importer shall:
(1) Retain a representative sample portion of each sample collected
under Sec. 80.1553, of at least 330 mL in volume.
(2) Retain such sample portions for the most recent 20 samples
collected, or for each sample collected during the most recent 21 day
period, whichever is greater, not to exceed 90 days for any given
sample.
(3) Comply with the ethanol flex fuel or natural gasoline ethanol
flex fuel blendstock sample handling procedures under Sec. 80.1553(c)
for each sample portion retained.
(4) Comply with any request by EPA to:
(i) Provide a retained sample portion to the Administrator's
authorized representative.
(ii) Ship a retained sample portion to EPA, within two working days
of the date of the request, by an overnight shipping service or
comparable means, to the address and following procedures specified by
EPA, and accompanied with the sulfur, benzene, RVP, and distillation
test result for the sample determined pursuant to Sec. 80.1553.
(b) [Reserved]
0
92. Section 80.1555 is added to read as follows:
Sec. 80.1555 National security exemptions.
(a) The ethanol flex fuel standards of Sec. 80.1520 do not apply
to ethanol flex fuel that is produced, imported, sold, offered for
sale, dispensed, supplied, offered for supply, stored, or transported
for use in any of the following:
(1) Tactical military vehicles, engines, or equipment having an EPA
national security exemption from the gasoline emission standards under
40 CFR part 86.
(2) Tactical military vehicles, engines, or equipment that are not
subject to a national security exemption from vehicle or engine
emissions standards as described in paragraph (a)(1) of this section
but, for national security purposes (for purposes of readiness for
deployment overseas), need to be fueled on the same ethanol flex fuel
as the vehicles, engines, or equipment for which EPA has granted such a
national security exemption.
(b) The exempt fuel must meet all the following conditions:
(1) It must be accompanied by product transfer documents as
required under Sec. 80.1563.
(2) It must be segregated from non-exempt ethanol flex fuel at all
points in the distribution system.
(3) It must be dispensed from a fuel pump stand, fueling truck, or
tank that is labeled with the appropriate designation of the fuel.
(4) It may not be used in any vehicles, engines, or equipment other
than those referred to in paragraph (a) of this section.
(c) Any national security exemptions approved under subparts H and
O of this part will remain in place under this subpart.
0
93. Section 80.1556 is added to read as follows:
Sec. 80.1556 Exemptions for ethanol flex fuel used for research,
development, or testing purposes.
(a) Written request for a research and development exemption. Any
person may receive an exemption from the provisions of this subpart for
ethanol flex fuel used for research, development, or testing (``R&D'')
purposes by submitting the information listed in paragraph (c) of this
section to EPA. Applications for R&D exemptions must be submitted to
the address in paragraph (h) of this section.
(b) Criteria for a research and development exemption. For a R&D
exemption to be granted, the person requesting an exemption must do all
the following:
(1) Demonstrate a purpose that constitutes an appropriate basis for
exemption.
(2) Demonstrate that an exemption is necessary.
(3) Design a R&D program that is reasonable in scope.
(4) Have a degree of control consistent with the purpose of the
program and EPA's monitoring requirements.
(c) Information required to be submitted. To demonstrate each of
the elements in paragraph (b) of this section, the person requesting an
exemption must include all the following information:
(1) A concise statement of the purpose of the program demonstrating
that the program has an appropriate R&D purpose.
(2) An explanation of why the stated purpose of the program cannot
be achieved in a practicable manner without performing one or more of
the prohibited acts under this subpart.
(3) A demonstration of the reasonableness of the scope of the
program, including all of the following:
(i) An estimate of the program's beginning and ending dates.
(ii) An estimate of the maximum number of vehicles or engines
involved in the program and the number of miles and engine hours that
will be accumulated on each.
(iii) The sulfur content, benzene content, and RVP of the ethanol
flex fuel expected to be used in the program.
(iv) The quantity of ethanol flex fuel that does not comply with
the requirements of Sec. 80.1520.
(v) The manner in which the information on vehicles and engines
used in the program will be recorded and made available to the
Administrator upon request.
(4) With regard to control, a demonstration that the program
affords EPA a monitoring capability, including all the following:
(i) A description of the technical and operational aspects of the
program.
(ii) The site(s) of the program (including facility name, street
address, city, county, state, and zip code).
(iii) The manner in which information on the fuel used in the
program (including quantity, fuel properties, name, address, telephone
number and contact person of the supplier, and the date received from
the supplier), will be recorded and made available to the Administrator
upon request.
(iv) The manner in which the party will ensure that the R&D fuel
will be segregated from ethanol flex fuel meeting the standards of this
subpart and how fuel pumps will be labeled to ensure proper use of the
R&D fuel.
(v) The name, address, telephone number, and title of the person(s)
in the organization requesting an exemption from whom further
information on the application may be obtained.
(vi) The name, address, telephone number, and title of the
person(s) in the organization requesting an exemption who is
responsible for recording and making available the information
specified in this paragraph (c), and the location where such
information will be maintained.
(d) Additional requirements. (1) The product transfer documents
associated with R&D ethanol flex fuel must comply with the requirements
of Sec. 80.1563.
(2) The R&D ethanol flex fuel must be designated by the refiner or
supplier, as
[[Page 80971]]
applicable, as exempt R&D ethanol flex fuel.
(3) The R&D ethanol flex fuel must be kept segregated from non-
exempt ethanol flex fuel at all points in the distribution system.
(4) The R&D ethanol flex fuel must not be sold, distributed,
offered for sale or distribution, dispensed, supplied, offered for
supply, transported to or from, or stored by a fuel retail outlet, or
by a wholesale purchaser-consumer facility, unless the wholesale
purchaser-consumer facility is associated with the R&D program that
uses the ethanol flex fuel.
(5) At the completion of the program, any emission control systems
or elements of design which are damaged or rendered inoperative shall
be replaced on vehicles remaining in service, or the responsible person
will be liable for a violation of the Clean Air Act section 203(a)(3)
(42 U.S.C. 7522(a)(3)) unless sufficient evidence is supplied that the
emission controls or elements of design were not damaged.
(e) Memorandum of exemption. The Administrator will grant an R&D
exemption upon a demonstration that the requirements of this section
have been met. The R&D exemption will be granted in the form of a
memorandum of exemption signed by the applicant and the Administrator
(or delegate), which may include such terms and conditions as the
Administrator determines necessary to monitor the exemption and to
carry out the purposes of this section, including restoration of
emission control systems.
(1) The volume of fuel subject to the approval shall not exceed the
estimated amount under paragraph (c)(3) of this section, unless EPA
grants a greater amount in writing.
(2) Any exemption granted under this section will expire at the
completion of the test program or three years from the date of
approval, whichever occurs first, and may only be extended upon re-
application consistent will all requirements of this section.
(3) EPA may elect at any time to review the information contained
in the request, and where appropriate may notify the responsible person
of disapproval of the exemption.
(4) In granting an exemption the Administrator may include terms
and conditions, including replacement of emission control devices or
elements of design, which the Administrator determines are necessary
for monitoring the exemption and for assuring that the purposes of this
subpart are met.
(5) Any violation of a term or condition of the exemption, or of
any requirement of this section, will cause the exemption to be void ab
initio.
(6) If any information required under paragraph (c) of this section
should change after approval of the exemption, the responsible person
must notify EPA in writing immediately. Failure to do so may result in
disapproval of the exemption or may make it void ab initio, and may
make the party liable for a violation of this subpart.
(f) Effects of exemption. Ethanol flex fuel that is subject to a
R&D exemption under this section is exempt from other provisions of
this subpart provided that the fuel is used in a manner that complies
with the purpose of the program under paragraph (c) of this section and
all other requirements of this section.
(g) Notification of completion. The party shall notify EPA in
writing within 30 days after completion of the R&D program.
(h) Submission. Requests for R&D exemptions shall be sent to the
attention of: ``Ethanol Flex Fuel Program (R&D Exemption Request)'' to
the address in Sec. 80.10(a).
0
94. Section 80.1557 is added to read as follows:
Sec. 80.1557 Requirements for ethanol flex fuel for use in American
Samoa, Guam, and the Commonwealth of the Northern Mariana Islands.
The ethanol flex fuel standards of this subpart do not apply to
ethanol flex fuel that is produced, imported, sold, offered for sale,
dispensed, supplied, offered for supply, stored, or transported for use
in the Territories of Guam, American Samoa, or the Commonwealth of the
Northern Mariana Islands, provided that such ethanol flex fuel meets
all the following requirements:
(a) The ethanol flex fuel is designated by the ethanol flex fuel
refiner or ethanol flex fuel importer as ethanol flex fuel only for use
in Guam, American Samoa, or the Commonwealth of the Northern Mariana
Islands.
(b) The ethanol flex fuel is used only in Guam, American Samoa, or
the Commonwealth of the Northern Mariana Islands.
(c) The ethanol flex fuel is accompanied by documentation that
complies with the product transfer document requirements of Sec.
80.1563.
(d) The ethanol flex fuel is segregated from non-exempt ethanol
flex fuel at all points in the distribution system from the point the
fuel is designated as ethanol flex fuel only for use in Guam, American
Samoa, or the Commonwealth of the Northern Mariana Islands, while the
fuel is in the United States but outside these Territories.
0
95. Section 80.1558 is added to read as follows:
Sec. 80.1558 California ethanol flex fuel requirements.
(a) California ethanol flex fuel exemption. California ethanol flex
fuel that complies with all the requirements of this section is exempt
from all other provisions of this subpart.
(b) Requirements for California ethanol flex fuel. (1) Each batch
of California ethanol flex fuel must be designated as such by its
refiner or importer.
(2) Designated California ethanol flex fuel must be kept segregated
from ethanol flex fuel that is not California ethanol flex fuel at all
points in the distribution system.
(3) Designated California ethanol flex fuel must ultimately be
dispensed into flex-fuel vehicles and engines in the State of
California for their use.
(4) For California ethanol flex fuel produced outside the State of
California, the transferors and transferees must meet the product
transfer document requirements of paragraph (b)(5) of this section.
(5)(i) Any refiner that operates a refinery located outside the
State of California at which California ethanol flex fuel is produced
must provide to any person to whom custody or title of such gasoline
has transferred, and each transferee must provide to any subsequent
transferee, documents that include all the following information:
(A) The name and address of the transferor.
(B) The name and address of the transferee.
(C) The volume of ethanol flex fuel which is being transferred.
(D) The location of the ethanol flex fuel at the time of the
transfer.
(E) The date and time of the transfer.
(F) The identification of the ethanol flex fuel as California
ethanol flex fuel.
(ii) Each refiner and transferee of California ethanol flex fuel
must maintain copies of the product transfer documents required to be
provided by paragraph (b)(5)(i) of this section for a period of five
years from the date of creation and shall deliver such documents to the
Administrator or to the Administrator's authorized representative upon
request.
(6) Ethanol flex fuel that is ultimately used or dispensed in any
part of the United States outside of the State of California must
comply with the standards of Sec. 80.1520 and any associated
applicable requirements, regardless of any designation as California
ethanol flex fuel.
[[Page 80972]]
Sec. Sec. 80.1559-80.1560 [Reserved]
0
96. Reserved Sec. Sec. 80.1559 and 80.1560 are added.
0
97. Newly redesignated Sec. 80.1561 is amended by revising the section
heading and paragraphs (b)(3)(ii), (b)(3)(iii) introductory text,
(b)(3)(v), (c)(4), (d)(3), and (e) introductory text to read as
follows:
Sec. 80.1561 Survey requirements related to E15.
* * * * *
(b) * * *
(3) * * *
(ii)(A) Obtain samples of gasoline offered for sale at gasoline
retail outlets in accordance with the survey program plan approved
under this paragraph (b), or immediately notify EPA of any refusal of
retail outlets to allow samples to be taken.
(B) Samples of E15 collected from blender pump-refineries shall be
collected using a method specified in NIST Handbook 1XX (incorporated
by reference, see Sec. 80.1580).
(iii) Test, or arrange to be tested, the samples required under
paragraph (b)(3)(ii) of this section for RVP and oxygenate content as
follows:
* * * * *
(v) Confirm that each fuel dispenser sampled is labeled as required
in Sec. 80.1502 by confirming that:
(A) The label meets the appearance and content requirements of
Sec. 80.1502.
(B) The label is located on the fuel dispenser according to the
requirements in Sec. 80.1502.
* * * * *
(c) * * *
(4) The survey program plan must be sent to the attention of ``E15
Survey Program Plan'' to the address in Sec. 80.10(a).
* * * * *
(d) * * *
(3) For the first year in which a survey program will be conducted,
no later than 15 days preceding the start of the survey EPA must
receive a copy of the contract with the independent surveyor and proof
that the money necessary to carry out the survey plan has either been
paid to the independent surveyor or placed into an escrow account; if
the money has been placed into an escrow account, a copy of the escrow
agreement must be sent to the official designated in paragraph (c)(4)
of this section.
* * * * *
(e) Consequences of failure to fulfill requirements. A failure to
fulfill or cause to be fulfilled any of the requirements of this
section is a prohibited act under Clean Air Act section 211(c) and
Sec. 80.1564.
* * * * *
0
98. Section 80.1562 is added to read as follows:
Sec. 80.1562 Ethanol flex fuel survey requirements.
(a) General blender pump survey requirements--(1) Survey program
participation. Any ethanol flex fuel bulk blender-refiner or blender
pump-refiner who manufactures, introduces into commerce, sells, or
offers for sale ethanol flex fuel produced at an ethanol flex fuel bulk
blender-refinery or blender pump must have an independent survey
association conduct a statistically valid program of compliance surveys
pursuant to a survey program plan that has been approved by EPA, in
accordance with the requirements of paragraphs (a)(2) through (a)(5) of
this section.
(2) Survey program requirements. The survey program must be:
(i) Planned and conducted by a survey association that is
independent of the ethanol flex fuel bulk blender-refiner and blender
pump-refiners that arrange to have the survey conducted. In order to be
considered independent, all of the following conditions must be met:
(A) Representatives of the survey association shall not be an
employee of any ethanol flex fuel bulk blender-refinery or blender
pump-refiner.
(B) The survey association shall be free from any obligation to or
interest in any ethanol flex fuel bulk blender-refinery or blender
pump-refiner.
(C) The ethanol flex fuel bulk blender-refinery and blender pump-
refiners that arrange to have the survey conducted shall be free from
any obligation to or interest in the survey association.
(ii) Conducted separately at all ethanol flex fuel retail stations
and at a subset of blender pump-refineries.
(iii) Represent all ethanol flex fuel retail stations and blender
pump-refineries that dispense ethanol flex fuel nationwide.
(3) Independent survey association requirements. The independent
survey association conducting the survey program described in paragraph
(a)(1) of this section shall:
(i) Submit to EPA for approval each calendar year a proposed survey
program plan in accordance with the requirements of paragraph (a)(4) of
this section.
(ii)(A) Obtain samples representative of the ethanol flex fuel
offered for sale separately from all ethanol flex fuel stations and the
subset of blender pump-refineries in accordance with the survey program
plan approved by EPA, or immediately notify EPA of any refusal of
blender pump-refineries or ethanol flex fuel retail stations that
operate blender pumps to allow samples to be taken.
(B) Samples of ethanol flex fuels collected from blender pump-
refineries shall be collected using a method specified in NIST Handbook
158 (incorporated by reference, see Sec. 80.1580).
(iii) Test, or arrange to be tested, the samples required under
paragraph (a)(3)(ii) of this section for oxygenate content, sulfur
content, benzene content, and RVP (from June 1 through September 15),
as follows:
(A) Samples collected shall be shipped the same day the samples are
collected via ground service to the laboratory and analyzed for
oxygenate content, sulfur content, benzene content, and RVP. Such
analysis shall be completed within 10 days after receipt of the sample
in the laboratory.
(B) Any laboratory to be used by the independent survey association
for oxygenate content, sulfur content, benzene content, or RVP testing
shall be approved by EPA and its test method for determining oxygenate
content, sulfur content, benzene content, and RVP shall be an
appropriate method as described in Sec. 80.1553(e) through (i).
(iv) In the case of any test that yields a result that a sample
potentially exceeds the 95 ppm sulfur standard of Sec.
80.1520(b)(1)(ii)(B) or applicable RVP standard of Sec. 80.1520(c),
the independent survey association shall, within 24 hours after the
laboratory has completed analysis of the sample, send notification of
the test result as follows:
(A) In the case of a sample collected at a blender pump-refinery at
which the brand name of a refiner or importer is displayed, to the
ethanol flex fuel refiner or ethanol flex fuel importer, and EPA. This
initial notification to the ethanol flex fuel refiner or ethanol flex
fuel importer shall include specific information concerning the name
and address of the blender pump-refinery or ethanol flex fuel retail
station, contact information, the brand, and the sulfur content and/or
RVP of the sample.
(B) In the case of a sample collected at any other blender pump-
refineries or ethanol flex fuel retail stations, to the ethanol flex
fuel bulk blender-refiner or blender pump-refiner and EPA, and such
notice shall contain the same information as in paragraph (a)(3)(iv)(A)
of this section.
(C) The independent survey association shall provide notice to the
identified contact person or persons for each party in writing (which
includes email or facsimile) and, if requested by the identified
contact person, by telephone.
[[Page 80973]]
(v) Provide to EPA quarterly and annual summary survey reports
which include the information specified in paragraph (a)(5) of this
section.
(vi) Maintain all records relating to the surveys conducted under
this paragraph (a) for a period of at least five (5) years.
(vii) Permit any representative of EPA to monitor at any time the
conducting of the surveys, including sample collection, transportation,
storage, and analysis.
(4) Survey Plan Design Requirements. The proposed survey program
plan required under paragraph (a)(3)(i) of this section shall, at a
minimum, include the following:
(i) Number of Surveys. The survey program plan shall include four
surveys each calendar year, which shall occur during the following time
periods:
(A) One survey during the period of January 1 through March 31.
(B) One survey during the period of April 1 through June 30.
(C) One survey during the period of July 1 through September 30.
(D) One survey during the period of October 1 through December 31.
(ii) No advance notice of surveys. The survey plan shall include
procedures to keep the identification of the sampling areas that are
included in any survey plan confidential from any regulated party prior
to the beginning of a survey in an area. However, this information
shall not be kept confidential from EPA.
(iii) Blender pump-refinery and ethanol flex fuel retail station
selection. (A) The blender pump-refineries and ethanol flex fuel retail
stations to be sampled in a sampling area shall be selected from among
all blender pump-refineries and ethanol flex fuel retail stations in
the sampling area that sell ethanol flex fuel, with the probability of
selection proportionate to the volume of ethanol flex fuel sold at the
blender pump-refineries or ethanol flex fuel retail station. The sample
should also include blender pump-refineries and ethanol flex fuel
retail stations with different brand names as well as those blender
pump-refineries and ethanol flex fuel retail stations that are
unbranded.
(B) In the case of any ethanol flex fuel blender pump-refinery or
ethanol flex fuel retail station from which a sample of ethanol flex
fuel was collected during a survey and determined to have a dispenser
containing fuel whose sulfur content does not comply with the 95 ppm
sulfur standard in Sec. 80.1520(b)(1)(ii)(B) or whose RVP does not
comply with the applicable RVP standard in Sec. 80.1520(c), that
blender pump-refinery or ethanol flex fuel retail station shall be
included in the subsequent survey.
(C) At least one sample of a product dispensed as ethanol flex fuel
shall be collected at each blender pump-refinery and ethanol flex fuel
retail station, and separate samples must be taken that represent the
gasoline or ethanol flex fuel contained in each storage tank, unless
collection of separate samples is not practicable.
(iv) Number of samples. (A) The number of stations to be sampled
shall be independently calculated for the total number of ethanol flex
fuel retail stations and the total number of blender pump-refineries.
(B) If the number of blender pump-refineries from participating
blender pump-refiners or ethanol flex fuel retail stations is less than
500, the minimum number of samples to be included in the survey plan
for each calendar year shall be sufficient to ensure that each blender
pump-refinery or ethanol flex fuel retail station is sampled at least
once during the calendar year.
(C) If the number of blender pump-refineries from participating
blender pump-refiners or ethanol flex fuel retail stations is 500 or
greater, the minimum number of samples to be included in the survey
plan for each calendar year shall be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP16NO16.007
Where:
n = Minimum number of samples in a year-long survey series. However,
in no case shall n be smaller than 500.
Z[alpha] = Upper percentile point from the normal distribution to
achieve a one-tailed 95% confidence level (5% [alpha]-level). Thus,
Z[alpha] equals 1.645.
Z[beta] = Upper percentile point to achieve 95% power. Thus, Z[beta]
equals 1.645.
[phiv]1 = The maximum proportion of non-compliant
stations for a region to be deemed compliant. In this test, the
parameter needs to be 5% or greater, i.e., 5% or more of the
stations, within a stratum such that the region is considered non-
compliant. For this survey, [phiv]1 will be 5%.
[phiv]0 = The underlying proportion of non-compliant
stations in a sample. For the first survey plan, [phiv]0
will be 2.3%. For subsequent survey plans, [phiv]0 will
be the average of the proportion of stations found to be non-
compliant over the previous four surveys.
Fa = Adjustment factor for the number of extra samples
required to compensate for collected samples that cannot be included
in the survey, based on the number of additional samples required
during the previous four surveys. However, in no case shall the
value of Fa be smaller than 1.1.
Fb = Adjustment factor for the number of samples required
to resample each blender pump-refinery with test results exceeding
the sulfur content or RVP standard pursuant to Sec. 80.1520, based
on the rate of resampling required during the previous four surveys.
However, in no case shall the value of Fb be smaller than
1.1.
Sun = Number of surveys per year. For purposes of this
survey program, Sun equals 4.
(D) The number of samples determined pursuant to paragraphs
(a)(4)(iv)(B) and (a)(4)(iv)(C) of this section, after being
incremented as necessary to allocate whole numbers of samples to each
cluster, shall be distributed approximately equally for the four
surveys conducted during the calendar year.
(5) Summary survey reports. The quarterly and annual summary survey
reports required under paragraph (a)(3)(v) of this section shall
include the following information:
(i) An identification of the parties that are participating in the
survey.
(ii) The identification of each sampling area included in a survey
and the dates that the samples were collected in that area.
(iii) For each retail blender pump-refinery and ethanol flex fuel
retail station sampled:
(A) The identification of the blender pump-refinery or ethanol flex
fuel retail station.
(B) The refiner or importer brand name displayed, if any.
(C) The fuel dispenser labeling (e.g., ``E20'').
[[Page 80974]]
(D) The sample test result for oxygenate content, sulfur content,
benzene content, and RVP result, if any.
(E) The test method used to determine oxygenate content as
described in Sec. 80.1553(i).
(F) The test method used to determine sulfur content as described
in Sec. 80.1553(e).
(G) The test method used to determine benzene content as described
in Sec. 80.1553(f).
(H) The test method used to determine RVP as described in Sec.
80.1553(g).
(iv) Ethanol level, sulfur content, benzene content, and RVP
summary statistics by brand and unbranded for each sampling area and
survey series. These summary statistics shall:
(A) Include the number of samples and the average, median, and
range of: ethanol content, expressed in volume percent; sulfur content,
expressed in parts per million; benzene content, expressed in volume
percent; and RVP, expressed in pounds per square inch.
(B) [Reserved]
(v) The quarterly reports required under paragraph (a)(3)(v) of
this section are due 60 days following the end of each survey period as
described in paragraph (a)(4)(i) of this section. The annual reports
required under paragraph (a)(3)(v) of this section are due 60 days
following the end of the calendar year.
(vi) The reports required under this paragraph (a)(3)(v) shall be
submitted to EPA in an electronic spreadsheet.
(b) Procedures for obtaining approval of survey plan and providing
required notices. (1) A survey program plan that complies with the
requirements of paragraph (a) of this section must be submitted to EPA
no later than November 15 of the year preceding the calendar year in
which the survey will be conducted.
(2) The survey program plan must be signed by a responsible officer
of the independent surveyor conducting the survey program.
(3) The survey program plan must be sent to the attention of
``Ethanol Flex Fuel Survey Requirements'' to the address in Sec.
80.10(a).
(4) EPA will send a letter to the party submitting the survey
program plan that indicates whether EPA approves or disapproves the
survey plan.
(5) The approving official for a survey plan under this section is
the Director of the Compliance Division, Office of Transportation and
Air Quality.
(6) Any notifications or reports required to be submitted to EPA
under this section must be directed to the official designated in
paragraph (b)(5) of this section.
(c) Independent surveyor contract. (1) No later than December 15 of
the year preceding the year in which the survey will be conducted, the
contract with the independent surveyor shall be in effect, and an
amount of money necessary to carry out the entire survey plan shall be
paid to the independent surveyor or placed into an escrow account with
instructions to the escrow agent to pay the money to the independent
surveyor during the course of the survey plan.
(2) No later than December 15 of the year preceding the year in
which the survey will be conducted, EPA must receive a copy of the
contract with the independent surveyor and proof that the money
necessary to carry out the survey plan has either been paid to the
independent surveyor or placed into an escrow account; if placed into
an escrow account, a copy of the escrow agreement must be sent to the
official designated in paragraph (b)(5) of this section.
(d) Consequences of failure to fulfill survey requirements. No
person shall fail to fulfill or cause to be fulfilled any of the
requirements of this section and is a prohibited act under Clean Air
Act section 211(c) and Sec. 80.1564.
(1) EPA may revoke its approval of a survey plan under this section
for cause, including, but not limited to, an EPA determination that the
approved survey plan has proved to be inadequate in practice.
(2) EPA may void ab initio its approval of a survey plan if EPA's
approval was based on false information, misleading information, or
incomplete information, or if there was a failure to fulfill, or cause
to be fulfilled, any of the requirements of the survey plan.
99. Newly redesignated Sec. 80.1563 is amended by:
a. Revising the section heading;
b. Revising paragraphs (a)(1)(vi)(A) and (b)(1)(vi)(E); and
c. Redesignating paragraphs (c) and (d) as paragraphs (f) and (g)
and adding new paragraphs (c) and (d) and paragraph (e).
The revisions and additions read as follows:
Sec. 80.1563 Product transfer document requirements for ethanol flex
fuel, certified natural gasoline ethanol flex fuel blendstock,
gasolines, and conventional blendstocks for oxygenate blending subject
to this subpart.
(a) * * *
(1) * * *
(vi) * * *
(A) The maximum RVP, as determined by an applicable method
permitted under Sec. 80.46, Sec. 80.47, Sec. 80.1553(g), or Sec.
80.1553(j), stated in the following format: ``The RVP of this gasoline
does not exceed [fill in appropriate value].''; and
* * * * *
(b) * * *
(1) * * *
(vi) * * *
(E) For all ethanol flex fuels, the following statement: ``Ethanol
Flex Fuel--Contains XX% ethanol.'' The term XX refers to the volume
percent of ethanol present in the ethanol flex fuel.
* * * * *
(c) Product transfer documentation for ethanol flex fuel. (1) On
each occasion when any person transfers custody or title of ethanol
flex fuel other than when ethanol flex fuel is sold or dispensed for
use in flex-fuel vehicles or engines at a retail outlet or wholesale
purchaser-consumer facility, the transferor shall provide to the
transferee product transfer documents that include all of the following
information, as applicable:
(i) The name and address of the transferor.
(ii) The name and address of the transferee.
(iii) The volume of ethanol flex fuel being transferred.
(iv) The location of the ethanol flex fuel at the time of the
transfer.
(v) The date of the transfer.
(vi) The concentration of ethanol pursuant to paragraph
(b)(1)(vi)(E) of this section.
(vii) The type and volume of each hydrocarbon feedstock expressed
in volume percent to the nearest whole number that was used to produce
the ethanol flex fuel (i.e., conventional gasoline, reformulated
gasoline, CBOB, RBOB, uncertified natural gasoline ethanol flex fuel
blendstock, certified natural gasoline ethanol flex fuel blendstock).
(viii) A statement that the ethanol flex fuel meets the applicable
RVP standard.
(ix) A statement that the concentration of natural gasoline ethanol
flex fuel blendstock blended in to produce ethanol flex fuel is less
than or equal to 30 volume percent.
(2) [Reserved]
(d) Product transfer documentation for certified natural gasoline
ethanol flex fuel blendstock. (1) On each occasion when any party
transfers custody or title of certified natural gasoline ethanol flex
fuel blendstock, the transferor shall provide to the transferee product
transfer documents that include all of the following information, as
applicable:
(i) The name and address of the transferor.
[[Page 80975]]
(ii) The name and address of the transferee.
(iii) The volume of certified natural gasoline ethanol flex fuel
blendstock being transferred.
(iv) The location of the certified natural gasoline ethanol flex
fuel blendstock at the time of the transfer.
(v) The date of the transfer.
(vi) The maximum RVP, as determined by an applicable method
permitted under Sec. 80.1553(g), or 15.0 psi as described Sec.
80.1551(c)(4)(v).
(vii) Statement on the product transfer document as follows:
(A) For certified natural gasoline ethanol flex fuel blendstock
that meet the requirements of Sec. 80.1524, ``Certified natural
gasoline EFF blendstock--Suitable for use to manufacture ethanol flex
fuels meeting EPA standards. Cannot be used as gasoline, CBOB, or
RBOB.''
(B) [Reserved]
(2) [Reserved]
(e) Alternative product transfer document language to that
specified in paragraphs (a) through (d) of this section may be used as
approved by EPA.
* * * * *
0
100. Newly redesignated Sec. 80.1564 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraphs (a)(2) and (3);
0
c. Adding paragraph (a)(4);
0
d. Revising paragraphs (b), (c), (d), and (e)(1);
0
e. Redesignating paragraphs (h) and (i) as paragraphs (y) and (z);
0
f. Adding new paragraphs (h) and (i) and paragraphs (j) through (x);
and
0
g. Revising newly redesignated paragraph (z).
The revisions and additions read as follows:
Sec. 80.1564 Prohibited activities.
(a) * * *
(2) Manufacture or introduce into commerce E15 in any calendar year
for use in an area prior to commencement of a survey approved under
80.1561 for that area.
(3) Sell, introduce, cause, or permit the sale or introduction of
gasoline containing greater than 15 volume percent ethanol (i.e.,
greater than E15) into any model year 2001 or newer light- or medium-
duty gasoline motor vehicle.
(4) Be prohibited from manufacturing, selling, introducing,
causing, or allowing the sale or introduction of gasoline containing
greater than 15 volume percent ethanol into any flex-fuel vehicle or
flex-fuel engine, notwithstanding paragraphs (a)(1) through (3) of this
section.
(b) Sell, offer for sale, dispense, or otherwise make available at
a retail or wholesale purchaser-consumer facility E15 that is not
correctly labeled in accordance with Sec. 80.1502.
(c) Fail to fully or timely implement, or cause a failure to fully
or timely implement, an approved survey required under Sec. 80.1561 or
Sec. 80.1562.
(d) Fail to generate, use, transfer, and maintain product transfer
documents that accurately reflect the type of product, ethanol content,
maximum RVP, and other information required under Sec. 80.1563.
(e) * * *
(1) Improperly blend, or cause the improper blending of, ethanol
into conventional blendstock for oxygenate blending, gasoline, or
gasoline already containing ethanol, in a manner inconsistent with the
information on the product transfer document under Sec.
80.1563(a)(1)(vi) or (b)(1)(vi).
* * * * *
(h) Produce, import, sell, offer for sale, dispense, supply, offer
for supply, store, or transport ethanol flex fuel or certified natural
gasoline ethanol flex fuel blendstock that does not comply with the
applicable sulfur standards under Sec. 80.1520(b)(1) or Sec.
80.1524(b)(1).
(i) Cause ethanol flex fuel or certified natural gasoline ethanol
flex fuel blendstock to be in the distribution system that does not
comply with the applicable sulfur per-gallon cap standard under Sec.
80.1520(b)(1)(ii) or Sec. 80.1524(b)(1).
(j) Produce, import, sell, offer for sale, dispense, supply, offer
for supply, store, or transport ethanol flex fuel or certified natural
gasoline ethanol flex fuel blendstock that does not comply with the
applicable benzene standards under Sec. 80.1520(b)(2) or Sec.
80.1524(c)(1).
(k) Cause certified natural gasoline ethanol flex fuel blendstock
to be in the distribution system that does not comply with the
applicable benzene per-gallon cap standard under Sec. 80.1524(c)(1).
(l) Produce, import, sell, offer for sale, dispense, supply, offer
for supply, store, or transport ethanol flex fuel or natural gasoline
ethanol flex fuel blendstock that does not comply with the applicable
carbon, hydrogen, oxygen, nitrogen, and sulfur elemental composition
standard under Sec. 80.1520(b)(3), Sec. 80.1521(b)(5)(iii), or Sec.
80.1524(f) without a waiver.
(m) Produce, import, sell, offer for sale, dispense, supply, offer
for supply, store, or transport ethanol flex fuel or natural gasoline
ethanol flex fuel blendstock that does not comply with the applicable
RVP standard under Sec. 80.1520(c), Sec. 80.1521(b)(5)(i), or Sec.
80.1524(d)(1).
(n) Cause ethanol flex fuel or natural gasoline ethanol flex fuel
blendstock to be in the distribution system that does not comply with
the applicable RVP standard under Sec. 80.1520(c), Sec.
80.1521(b)(5)(i), or Sec. 80.1524(d)(1).
(o) Produce, import, sell, offer for sale, dispense, supply, offer
for supply, store, or transport natural gasoline ethanol flex fuel
blendstock that does not comply with the T90 distillation point or
final distillation point standards under Sec. 80.1521(b)(5)(ii) or
Sec. 80.1524(e)(1).
(p) Cause natural gasoline ethanol flex fuel blendstock to be in
the distribution system that does not comply with the T90 distillation
point or final distillation point standards under Sec.
80.1521(b)(5)(iii) or Sec. 80.1524(e)(1).
(q) Produce ethanol flex fuel at an ethanol flex fuel full-refinery
pursuant to Sec. 80.1521 with blendstocks that do not meet the
certified natural gasoline ethanol flex fuel blendstock requirements in
Sec. 80.1524, the uncertified natural gasoline ethanol flex fuel
blendstock requirements in Sec. 80.1521(b)(5), the denatured fuel
ethanol requirements in Sec. 80.1610, the undenatured ethanol
requirements in Sec. 80.1521(b)(1)(ii), or the applicable gasoline,
RBOB, and CBOB requirements in this part.
(r) Produce ethanol flex fuel at an ethanol flex fuel bulk blender-
refinery pursuant to Sec. 80.1522 with blendstocks that do not meet
the certified natural gasoline ethanol flex fuel blendstock
requirements in Sec. 80.1524, the denatured fuel ethanol requirements
in Sec. 80.1610, the undenatured ethanol requirements in Sec.
80.1522(b)(1)(ii), or the applicable gasoline, RBOB, and CBOB
requirements in this part.
(s) Produce ethanol flex fuel at a blender pump-refinery pursuant
to Sec. 80.1523 with blendstocks other than ethanol flex fuel that
meets the requirements of Sec. 80.1520 or gasoline.
(t) Introduce an additive into ethanol flex fuel that contributes
more than 3 ppm to the sulfur content of the finished ethanol flex fuel
unless acting in the capacity of an ethanol flex fuel full-refiner or
ethanol flex fuel importer under Sec. 80.1521.
(u) Cause or contribute to the introduction into commerce of an
additive intended to be used in ethanol flex fuel at less than 1 volume
percent that does not comply with the requirements of Sec. 80.1525.
(v) Sell, introduce, cause, or permit the sale or introduction of a
gasoline-ethanol blended fuel containing greater than 83 volume percent
ethanol into a flexible fuel vehicle certified under 40 CFR part 86 or
flexible fuel engine
[[Page 80976]]
certified under 40 CFR part 1054 after the date specified in Sec.
80.1504(b)(2).
(w) Commingle separate batches of ethanol flex fuel except when
separate batches of ethanol flex fuel are commingled in a storage tank
at an ethanol flex fuel retail station or wholesale purchaser-consumer
facility.
(x) Add any hydrocarbon or ethanol blendstock to previously
certified ethanol flex fuel.
* * * * *
(z) Cause another person to commit an act in violation of
paragraphs (a) through (y) of this section.
0
101. Newly redesignated Sec. 80.1565 is amended by revising the
section heading and paragraphs (a) and (b) to read as follows:
Sec. 80.1565 Liability for violations.
(a) Persons liable. Any person who violates Sec. 80.1564 is liable
for the violation. In addition, when the gasoline, ethanol flex fuel,
or natural gasoline ethanol flex fuel blendstock contained in any
storage tank at any facility owned, leased, operated, controlled, or
supervised by any gasoline refiner, gasoline importer, oxygenate
blender, carrier, distributor, reseller, retailer, ethanol flex fuel
refiner, ethanol flex fuel importer, natural gasoline ethanol flex fuel
blendstock refiner, natural gasoline ethanol flex fuel blendstock
importer, or wholesale purchaser-consumer is found in violation of a
fuel quality standard or a requirement related to the concentration of
ethanol or natural gasoline in any gasoline or ethanol flex fuel, the
following persons shall be deemed in violation:
(1) Each gasoline refiner, gasoline importer, oxygenate blender,
ethanol flex fuel refiner, ethanol flex fuel importer, natural gasoline
ethanol flex fuel blendstock refiner, natural gasoline ethanol flex
fuel blendstock importer, carrier, distributor, reseller, retailer, or
wholesale purchaser-consumer who owns, leases, operates, controls, or
supervises the facility where the violation is found.
(2) Each gasoline refiner, gasoline importer, ethanol flex fuel
refiner, ethanol flex fuel importer, natural gasoline ethanol flex fuel
blendstock refiner, or natural gasoline ethanol flex fuel blendstock
importer whose corporate, trade, or brand name, or whose marketing
subsidiary's corporate, trade, or brand name, appears at the facility
where the violation is found.
(3) Each gasoline refiner, gasoline importer, oxygenate blender,
ethanol flex fuel refiner, ethanol flex fuel importer, natural gasoline
ethanol flex fuel blendstock refiner, natural gasoline ethanol flex
fuel blendstock importer, distributor, or reseller who manufactured,
imported, sold, offered for sale, dispensed, supplied, offered for
supply, stored, transported, or caused the transportation of any
gasoline, ethanol flex fuel, or natural gasoline ethanol flex fuel
blendstock that is in the storage tank containing gasoline, ethanol
flex fuel, or natural gasoline ethanol flex fuel blendstock found to be
in violation.
(4) Each carrier who dispensed, supplied, stored, or transported
any gasoline, ethanol flex fuel, or natural gasoline ethanol flex fuel
blendstock that is in the storage tank containing gasoline, ethanol
flex fuel, or natural gasoline ethanol flex fuel blendstock found to be
in violation, provided that EPA demonstrates, by reasonably specific
showings using direct or circumstantial evidence, that the carrier
caused the violation.
(b) For label violations under Sec. 80.1564(b), only the wholesale
purchaser-consumer or retailer and the branded gasoline refiner,
branded gasoline importer, branded ethanol flex fuel refiner, or
branded ethanol flex fuel importer, if any, shall be liable.
* * * * *
0
102. Newly redesignated Sec. 80.1566 is amended by revising the
section heading and paragraph (a) to read as follows:
Sec. 80.1566 Penalties.
(a) Any person under Sec. 80.1565 who is liable for a violation
under Sec. 80.1564 is subject to an administrative or civil penalty,
as specified in Clean Air Act sections 205 and 211(d), for every day of
each such violation and the amount of economic benefit or savings
resulting from the violation.
* * * * *
0
103. Newly redesignated Sec. 80.1567 is amended by revising the
section heading and paragraphs (a)(1) introductory text, (a)(1)(ii),
(a)(1)(iii)(B), (a)(2)(i)(B), (a)(2)(i)(C), (a)(3), (b) introductory
text, (b)(1), (b)(2) introductory text, (b)(3), (b)(4) introductory
text, and (b)(4)(i) to read as follows:
Sec. 80.1567 Defenses for prohibited activities.
(a) * * *
(1) In any case in which a gasoline refiner, gasoline importer,
oxygenate blender, ethanol flex fuel refiner, ethanol flex fuel
importer, natural gasoline ethanol flex fuel blendstock refiner,
natural gasoline ethanol flex fuel blendstock importer, carrier,
distributor, reseller, retailer, or wholesale purchaser-consumer would
be in violation under Sec. 80.1564(a) and (c) through (z) it shall be
deemed not in violation if it can demonstrate:
* * * * *
(ii) That product transfer documents account for all of the
gasoline, ethanol flex fuel, or natural gasoline ethanol flex fuel
blendstock in the storage tank found in violation and indicate that the
gasoline, ethanol flex fuel, or natural gasoline ethanol flex fuel
blendstock met relevant requirements; and
* * * * *
(iii) * * *
(B) A carrier may rely on the sampling and testing program carried
out by another party, including the party that owns the gasoline,
ethanol flex fuel, or natural gasoline ethanol flex fuel blendstock in
question, provided that the sampling and testing program is carried out
properly.
* * * * *
(2) * * *
(i) * * *
(B) The action of any reseller, distributor, oxygenate blender,
ethanol flex fuel bulk blender-refiner, blender pump-refiner, carrier,
or a retailer or wholesale purchaser-consumer supplied by any of these
persons, in violation of a contractual agreement imposed by the
gasoline refiner or ethanol flex fuel refiner designed to prevent such
action, and despite periodic sampling and testing by the gasoline
refiner or ethanol flex fuel refiner to ensure compliance with such
contractual obligation; or
(C) The action of any carrier or other distributor not subject to a
contract with the gasoline refiner or ethanol flex fuel refiner but
engaged by the gasoline refiner or ethanol flex fuel refiner for
transportation of gasoline or ethanol flex fuel, despite specification
or inspection of procedures and equipment by the gasoline refiner or
ethanol flex fuel refiner that are reasonably calculated to prevent
such action.
* * * * *
(3) For label violations under Sec. 80.1564(b), the branded
gasoline refiner, branded gasoline importer, branded ethanol flex fuel
refiner, or branded ethanol flex fuel importer shall not be deemed
liable if the requirements of paragraph (b)(4) of this section are met.
(b) Quality assurance program. In order to demonstrate an
acceptable quality assurance program for gasoline, ethanol flex fuel,
or natural gasoline ethanol flex fuel blendstock at all points in the
gasoline, ethanol flex fuel, or natural gasoline ethanol flex fuel
blendstock distribution network, other than at retail outlets and
wholesale purchaser-consumer facilities, a party
[[Page 80977]]
must present evidence of the following in addition to other regular
appropriate quality assurance procedures and practices:
(1)(i) For gasoline, a periodic sampling and testing program to
determine if the gasoline contains applicable maximum and minimum
volume percent of ethanol.
(ii) For ethanol flex fuel or natural gasoline ethanol flex fuel
blendstock, a periodic sampling and testing program to determine if the
ethanol flex fuel or natural gasoline ethanol flex fuel blendstock
meets the applicable maximum sulfur content standard and RVP standard.
(2) That on each occasion when gasoline, ethanol flex fuel, or
natural gasoline ethanol flex fuel blendstock is found in noncompliance
with one of the requirements referred to in paragraph (b)(1) of this
section:
* * * * *
(3) An oversight program conducted by a carrier under paragraph
(b)(1) or (b)(2) of this section need not include periodic sampling and
testing of gasoline, ethanol flex fuel, and natural gasoline ethanol
flex fuel blendstock in a tank truck operated by a common carrier, but
in lieu of such tank truck sampling and testing the common carrier
shall demonstrate evidence of an oversight program for monitoring
compliance with the requirements of Sec. 80.1564 relating to the
transport or storage of gasoline, ethanol flex fuel, or natural
gasoline ethanol flex fuel blendstock by tank truck, such as
appropriate guidance to drivers on compliance with applicable
requirements and the periodic review of records normally received in
the ordinary course of business concerning gasoline, ethanol flex fuel,
or natural gasoline ethanol flex fuel blendstock quality and delivery.
(4) The periodic sampling and testing program specified in
paragraph (b)(1) or (b)(2) of this section shall be deemed to have been
in effect during the relevant time period for any party, including
branded gasoline refiners, branded gasoline importers, branded ethanol
flex fuel importers, and branded ethanol flex fuel refiners if:
(i) An EPA approved survey program under Sec. 80.1561 or Sec.
80.1562 was in effect and was implemented fully and properly;
* * * * *
0
104. Newly redesignated Sec. 80.1568 is amended by revising paragraph
(a), redesignating paragraph (b) as paragraph (f), and adding new
paragraph (b) and paragraphs (c) through (e).
The revision and additions read as follows:
Sec. 80.1568 What evidence may be used to determine compliance with
the requirements of this subpart and liability for violations of this
subpart?
(a) Compliance with the ethanol content of gasoline or ethanol flex
fuel shall be determined based on the ethanol content of the gasoline
or ethanol flex fuel measured or otherwise determined, as applicable,
using any of the applicable methodologies specified in Sec. 80.46,
Sec. 80.47, or Sec. 80.1553. Any evidence or information, including
the exclusive use of such evidence or information, may be used to
establish the ethanol content of the gasoline or ethanol flex fuel if
the evidence or information is relevant to whether the ethanol content
of the gasoline or ethanol flex fuel would have been in compliance with
the standard if the appropriate sampling and testing methodologies had
been correctly performed. Such evidence may be obtained from any source
or location and may include, but is not limited to, test results using
methods other than those specified in Sec. Sec. 80.46, 80.47, and
80.1553, business records, and commercial documents.
(b) Compliance with the sulfur standards of this subpart shall be
determined based on the sulfur content of the gasoline, denatured fuel
ethanol, oxygenate, ethanol flex fuel, or certified natural gasoline
ethanol flex fuel blendstock measured or otherwise determined, as
applicable, using any of the applicable methodologies specified in
Sec. 80.46, Sec. 80.47, or Sec. 80.1553. Any evidence or
information, including the exclusive use of such evidence or
information, may be used to establish the sulfur content of the
gasoline, denatured fuel ethanol, oxygenate, ethanol flex fuel, or
certified natural gasoline ethanol flex fuel blendstock if the evidence
or information is relevant to whether the sulfur content of the
gasoline, denatured fuel ethanol, oxygenate, ethanol flex fuel, or
certified natural gasoline ethanol flex fuel blendstock would have been
in compliance with the standards if the appropriate sampling and
testing methodologies had been correctly performed. Such evidence may
be obtained from any source or location and may include, but is not
limited to, test results using methods other than those specified in
Sec. Sec. 80.46, 80.47, and 80.1553, business records, and commercial
documents.
(c) Compliance with the benzene standards of this subpart shall be
determined based on the benzene content of the gasoline, ethanol flex
fuel, or certified natural gasoline ethanol flex fuel blendstock
measured or otherwise determined, as applicable, using any of the
applicable methodologies specified in Sec. 80.46, Sec. 80.47, or
Sec. 80.1553. Any evidence or information, including the exclusive use
of such evidence or information, may be used to establish the benzene
content of the gasoline, ethanol flex fuel, or certified natural
gasoline ethanol flex fuel blendstock if the evidence or information is
relevant to whether the benzene content of the gasoline, ethanol flex
fuel, or certified natural gasoline ethanol flex fuel blendstock would
have been in compliance with the standard if the appropriate sampling
and testing methodologies had been correctly performed. Such evidence
may be obtained from any source or location and may include, but is not
limited to, test results using methods other than those specified in
Sec. Sec. 80.46, 80.47, and 80.1553, business records, and commercial
documents.
(d) Compliance with the RVP standards of this subpart shall be
determined based on the maximum psi of the gasoline, ethanol flex fuel,
or natural gasoline ethanol flex fuel blendstock measured or otherwise
determined, as applicable, using any of the applicable methodologies
specified in Sec. 80.46, Sec. 80.47, or Sec. 80.1553. Any evidence
or information, including the exclusive use of such evidence or
information, may be used to establish the RVP of the gasoline, ethanol
flex fuel, or natural gasoline ethanol flex fuel blendstock if the
evidence or information is relevant to whether the RVP of the gasoline,
ethanol flex fuel, or natural gasoline ethanol flex fuel blendstock
would have been in compliance with the standard if the appropriate
sampling and testing methodologies had been correctly performed. Such
evidence may be obtained from any source or location and may include,
but is not limited to, test results using methods other than those
specified in Sec. Sec. 80.46, 80.47, and 80.1553, business records,
and commercial documents.
(e) Compliance with the T90 distillation point and final
distillation point standards of this subpart for natural gasoline
ethanol flex fuel blendstock shall be determined based on the maximum
degrees Celsius of the natural gasoline ethanol flex fuel blendstock
measured or otherwise determined, as applicable, using any of the
applicable methodologies specified in Sec. 80.46, Sec. 80.47, or
Sec. 80.1553. Any evidence or information, including the exclusive use
of such evidence or information, may be used to establish the T90
distillation point and final distillation point of the natural gasoline
[[Page 80978]]
ethanol flex fuel blendstock if the evidence or information is relevant
to whether the T90 distillation point and final distillation point of
the natural gasoline ethanol flex fuel blendstock would have been in
compliance with the standard if the appropriate sampling and testing
methodologies had been correctly performed. Such evidence may be
obtained from any source or location and may include, but is not
limited to, test results using methods other than those specified in
Sec. Sec. 80.46, 80.47, and 80.1553, business records, and commercial
documents.
* * * * *
0
105. Section 80.1569 is added to read as follows:
Sec. 80.1569 Attest engagement requirements.
In addition to the requirements for attest engagements that apply
to refiners and importers under Sec. Sec. 80.125 through 80.130,
80.1666, and other sections of this part, the following annual attest
engagement procedures are required under this subpart.
(a) Ethanol flex fuel full-refiners, ethanol flex fuel importers,
ethanol flex fuel bulk blender-refiners, certified natural gasoline
ethanol flex fuel blendstock refiners, and certified natural gasoline
ethanol flex fuel blendstock importers, subject to national standards.
The provisions of this section apply to ethanol flex fuel full-
refiners, ethanol flex fuel importers, ethanol flex fuel bulk blender-
refiners, certified natural gasoline ethanol flex fuel blendstock
refiners, and certified natural gasoline ethanol flex fuel blendstock
importers. Blender pump-refiners that comply with the requirements of
Sec. 80.1523 are exempt from the attest engagement requirements of
this section.
(b) EPA reports for ethanol flex fuel full-refiners and importers.
(1) Obtain and read a copy of the ethanol flex fuel refiner's or
importer's annual reports filed with EPA for the year under Sec.
80.1551(a) and any underlying records maintained under Sec.
80.1552(a).
(2) Agree the yearly volume reported to EPA with the inventory
reconciliation analysis under the attest engagement provisions of Sec.
80.128.
(3) Calculate the annual average sulfur level and annual average
benzene level for all ethanol flex fuel and agree those values with the
values reported to EPA.
(4) Agree the information in the ethanol flex fuel full-refiner's
or importer's batch reports filed with EPA under Sec. 80.1551(a), and
any laboratory test results, with the information contained in the
annual report required under Sec. 80.1551(a).
(5) Reports as a finding any discrepancies identified in paragraphs
(b)(1) through (4) of this section in the attest engagement report
submitted to the EPA under Sec. 80.130.
(c) EPA reports for certified natural gasoline ethanol flex fuel
blendstock. (1) Obtain and read a copy of the certified natural
gasoline ethanol flex fuel blendstock refinery's or importer's annual
reports filed with EPA for the year under Sec. 80.1551(c) and any
underlying records maintained under Sec. 80.1552(c).
(2) Agree the yearly volume reported to EPA with the inventory
reconciliation analysis under the attest engagement provisions of Sec.
80.128.
(3) Agree the information in the certified natural gasoline ethanol
flex fuel blendstock refiner's or certified natural gasoline ethanol
flex fuel blendstock importer's batch reports filed with EPA under
Sec. 80.1551(c), and any laboratory test results, with the information
contained in the annual report required under Sec. 80.1551(c).
(4) Report as a finding any discrepancies identified in paragraphs
(c)(1) through (3) of this section in the attest engagement report
submitted to the EPA under Sec. 80.130.
(d) EPA reports for ethanol flex fuel bulk blender-refiners. (1)
Obtain and read a copy of the ethanol flex fuel bulk blender-refiner's
annual reports filed with EPA for the year under Sec. 80.1551(b) and
any underlying records maintained under Sec. 80.1552(b).
(2) Agree the yearly volume reported to EPA with the inventory
reconciliation analysis under the attest engagement provisions of Sec.
80.128.
(3) Calculate the total volume of ethanol flex fuel blended, and
agree those values with the values reported to EPA.
(4) Agree the information in the ethanol flex fuel bulk blender-
refiners batch reports filed with EPA under Sec. 80.1551(b), and any
laboratory test results, with the information contained in the annual
report required under Sec. 80.1551(b).
(5) Report as a finding any discrepancies identified in paragraphs
(d)(1) through (4) of this section in the attest engagement report
submitted to the EPA under Sec. 80.130.
Sec. Sec. 80.1570-80.1579 [Reserved]
0
106. Reserved Sec. Sec. 80.1570 through 80.1579 are added.
0
107. Section 80.1580 is added to read as follows:
Sec. 80.1580 Incorporation by reference.
The published materials identified in this section are incorporated
by reference into this subpart with the approval of the Director of the
Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. To enforce
any edition other than that specified in this section, a document must
be published in the Federal Register and the material must be available
to the public. All approved materials are available for inspection at
the Air and Radiation Docket and Information Center (Air Docket) in the
EPA Docket Center (EPA/DC) at Rm. 3334, William Jefferson Clinton
Building West, 1301 Constitution Ave. NW., Washington, DC. The EPA/DC
Public Reading Room hours of operation are 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
of the EPA/DC Public Reading Room is (202) 566-1744, and the telephone
number for the Air Docket is (202) 566-1742. These approved materials
are also available for inspection at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call (202) 741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. In
addition, these materials are available from the sources listed below.
(a) ASTM International material. The following standards are
available from ASTM International, 100 Barr Harbor Dr., P.O. Box C700,
West Conshohocken, PA 19428-2959, (877) 909-ASTM, or http://www.astm.org:
(1) ASTM D4057-12, Standard Practice for Manual Sampling of
Petroleum and Petroleum Products, approved December 1, 2012.
(2) ASTM D4177-95 (Reapproved 2010), Standard Practice for
Automatic Sampling of Petroleum and Petroleum Products, approved May 1,
2010.
(3) ASTM D5842-14, Standard Practice for Sampling and Handling of
Fuels for Volatility Measurement, approved July 1, 2009.
(4) ASTM D5854-96 (Reapproved 2010), Standard Practice for Mixing
and Handling of Liquid Samples of Petroleum and Petroleum Products,
approved May 1, 2010.
(5) ASTM D2622-10, Sulfur Test Method for Sulfur in Petroleum
Products by Wavelength Dispersive X-ray Fluorescence Spectrometry,
approved February 15, 2010.
(6) ASTM D1266-13, Sulfur Test Method for Sulfur in Petroleum
Products (Lamp Method), approved June 15, 2013.
(7) ASTM D3120-08 (Reapproved 2014), Standard Test Method for Trace
Quantities of Sulfur in Light Liquid Petroleum Hydrocarbons by
Oxidative
[[Page 80979]]
Microcoulometry, approved May 1, 2014.
(8) ASTM D5453-12, Standard Test Method for Determination of Total
Sulfur in Light Hydrocarbons, Spark Ignition Engine Fuel, Diesel Engine
Fuel, and Engine Oil by Ultraviolet Fluorescence, approved November 1,
2012.
(9) ASTM D6920-13, Standard Test Method for Total Sulfur in
Naphthas, Distillates, Reformulated Gasolines, Diesels, Biodiesels, and
Motor Fuels by Oxidative Combustion and Electrochemical Detection,
approved September 15, 2013.
(10) ASTM D7220-12, Standard Test Method for Sulfur in Automotive,
Heating, and Jet Fuels by Monochromatic Energy Dispersive X-ray
Fluorescence Spectrometry, approved June 15, 2012.
(11) ASTM D7039-13, Standard Test Method for Sulfur in Gasoline,
Diesel Fuel, Jet Fuel, Kerosine, Biodiesel, Biodiesel Blends, and
Gasoline-Ethanol Blends by Monochromatic Wavelength Dispersive X-ray
Fluorescence Spectrometry, approved September 15, 2013.
(12) ASTM D5769, Standard Test Method for Determination of Benzene,
Toluene, and Total Aromatics in Finished Gasolines by Gas
Chromatography/Mass Spectrometry, approved May 1, 2010.
(13) ASTM D5580-13, Standard Test Method for Determination of
Benzene, Toluene, Ethylbenzene, p/m-Xylene, o-Xylene, C9 and Heavier
Aromatics, and Total Aromatics in Finished Gasoline by Gas
Chromatography, approved September 15, 2013.
(14) ASTM D3606, Standard Test Method for Determination of Benzene
and Toluene in Finished Motor and Aviation Gasoline by Gas
Chromatography, approved October 1, 2010.
(15) ASTM D6730-01 (Reapproved 2011), Standard Test Method for
Determination of Individual Components in Spark Ignition Engine Fuels
by 100-Metre Capillary (with Precolumn) High-Resolution Gas
Chromatography, approved May 1, 2011.
(16) ASTM D5191-13, Standard Test Method for Vapor Pressure of
Petroleum Products (Mini Method), approved December 1, 2013.
(17) ASTM D5482-07 (Reapproved 2013), Standard Test Method for
Vapor Pressure of Petroleum Products (Mini-Method--Atmospheric),
approved June 1, 2013.
(18) ASTM D6378-10, Standard Test Method for Determination of Vapor
Pressure (VPx) of Petroleum Products, Hydrocarbons, and Hydrocarbon
Oxygenate Mixtures (Triple Expansion Method), approved October 1, 2010.
(19) ASTM D86-05, Standard Test Method for Distillation of
Petroleum Products at Atmospheric Pressure, approved July 1, 2005.
(20) ASTM D5599-00(2010), Standard Test Method for Determination of
Oxygenates in Gasoline by Gas Chromatography and Oxygen Selective Flame
Ionization Detection, approved October 1, 2010.
(21) ASTM D4815-15a, Standard Test Method for Determination for
MTBE, ETBE, TAME, DIPE, tertiary-Amyl Alcohol and C1 to C4 Alcohols in
Gasoline by Gas Chromatography, approved April 21, 2015.
(b) National Institute of Standards and Technology Material. NIST
Handbook 158 (2016) is available from the National Institute of
Standards and Technology, 100 Bureau Drive, Gaithersburg, MD 20899-
1070, (301) 975-6478, or http://www.nist.gov/pml/wmd/pubs/handbooks.cfm.
Subpart O--Gasoline Sulfur
Sec. 80.1600 [Amended]
0
108. Section 80.1600 is amended by removing the definition for
``Ethanol denaturant''.
0
109. Section 80.1603 is amended by:
0
a. Revising paragraph (d)(1);
0
b. Redesignating paragraph (d)(2) as paragraph (d)(3) and adding a new
paragraph (d)(2); and
0
c. In the equation in paragraph (f)(1) revising the definition of
``OC''.
The revisions and addition read as follows:
Sec. 80.1603 Gasoline sulfur standards for refiners and importers.
* * * * *
(d) * * *
(1) The refiner or importer shall calculate the sulfur content of
the batch by volume weighting the sulfur content of the gasoline or BOB
and the sulfur content of the added oxygenate pursuant to one of the
methods listed in paragraphs (d)(1)(i) and (ii) of this section. A
refiner or importer must choose to use only one method during each
annual compliance period.
(i) Testing the sulfur content of a sample of the oxygenate
pursuant to Sec. 80.46 or Sec. 80.47, as applicable. The refiner or
importer must demonstrate through records relating to sampling,
testing, and blending that the test result was derived from a
representative sample of the oxygenate that was blended with the batch
of gasoline or BOB.
(ii) If the oxygenate is denatured fuel ethanol, and the sulfur
content has not been tested under paragraph (d)(1)(i) of this section,
then the sulfur content must be assumed to be 5.00 ppm.
(2) For denatured fuel ethanol, the refiner or importer may assume
that the denatured fuel ethanol was blended with gasoline or BOB at a
concentration of 10 volume percent, unless the refiner or importer can
demonstrate that a different amount of denatured fuel ethanol was
actually blended with a batch of gasoline or BOB.
(i) The refiner or importer of conventional gasoline or CBOB must
comply with the requirements of Sec. 80.101(d)(4)(ii).
(ii) The refiner or importer of reformulated gasoline or RBOB must
comply with the requirements of Sec. 80.69(a).
(ii) Any gasoline or BOB must meet the per-gallon sulfur standard
of paragraph (a)(2) of this section prior to calculating any dilution
from the oxygenate added downstream.
(iv) The reported volume of the batch is the combined volume of the
reformulated gasoline, RBOB, conventional gasoline, or CBOB and the
downstream added oxygenate.
* * * * *
(f) * * *
(1) * * *
OC = Sulfur credits used by the refinery or importer to show
compliance, in ppm-gallons.
* * * * *
0
110. Section 80.1608 is added to read as follows:
Sec. 80.1608 Gasoline sulfur standards and requirements for refiners
that produce gasoline at a blender pump.
Beginning February 1, 2018, a refiner that produces E15 at a
blender pump-refinery, as defined in Sec. 80.1500, shall be deemed in
compliance with the provisions of this subpart, provided the refiner is
in compliance with the requirements for gasoline produced by blender
pump-refiners in Sec. 80.1530.
0
111. Section 80.1609 is amended by revising the last sentence of
paragraph (a) to read as follows:
Sec. 80.1609 Oxygenate blender requirements.
(a) * * * Such oxygenate blenders are subject to the requirements
of paragraph (b) of this section, the requirements and prohibitions
applicable to downstream parties, the requirements of Sec.
80.1603(d)(3), and the prohibition specified in Sec. 80.1660(e).
* * * * *
0
112. Section 80.1616 is amended by revising paragraph (c)(3) to read as
follows:
[[Page 80980]]
Sec. 80.1616 Credit use and transfer.
* * * * *
(c) * * *
(3) CRT2 credits generated under Sec. 80.1615(d) from
January 1, 2017, through December 31, 2019, may only be traded to and
ultimately used from January 1, 2017, through December 31, 2019, by
small refiners and small volume refineries approved under Sec.
80.1622.
0
113. Section 80.1622 is amended by revising paragraph (g) to read as
follows:
Sec. 80.1622 Approval for small refiner and small volume refinery
status.
* * * * *
(g) Small refiner and small volume refinery status applications,
and any other correspondence required by this section, Sec. 80.1620,
or Sec. 80.1621 shall be sent to the attention of ``Tier 3 Program
(Small Refiner/Small Volume Refinery Application)'' to the address in
Sec. 80.10(a).
0
114. Section 80.1625 is amended by revising paragraph (c)(2) to read as
follows:
Sec. 80.1625 Hardship provisions.
* * * * *
(c) * * *
(2) Hardship applications under this section must be sent to the
attention of ``Tier 3 Program (Hardship Application)'' to the address
in Sec. 80.10(a).
0
115. Section 80.1650 is amended by revising paragraphs (b)(3),
(e)(1)(iii)(A), and (g)(1)(iii)(A) to read as follows:
Sec. 80.1650 Registration.
* * * * *
(b) * * *
(3) Any oxygenate blender required to register shall do so by
November 1, 2016, or at least 90 days in advance of the first date that
such person will blend oxygenate into gasoline, RBOB, or CBOB where the
resulting gasoline is subject to the gasoline sulfur standards under
this subpart O.
* * * * *
(e) * * *
(1) * * *
(iii) * * *
(A) Whether records are kept on-site or off-site of the facility.
* * * * *
(g) * * *
(1) * * *
(iii) * * *
(A) Whether records are kept on-site or off-site of the facility.
* * * * *
0
116. Section 80.1652 is amended by revising paragraph (a)(7)
introductory text and adding paragraphs (a)(7)(v) and (a)(7)(vi) to
read as follows:
Sec. 80.1652 Reporting requirements for gasoline refiners, gasoline
importers, oxygenate producers, and oxygenate importers.
* * * * *
(a) * * *
(7) For each batch of BOB or gasoline produced or imported during
the averaging period, all the following:
* * * * *
(v) The type and amount of oxygenate, along with identification of
the method used to determine the type and amount of oxygenate content
of the batch, as determined under Sec. 80.1603(d).
(vi) The sulfur content of the oxygenate, reported to two decimal
places, along with identification of the method used to determine the
sulfur content of the oxygenate, as determined under Sec. 80.1603(d).
* * * * *
0
117. Section 80.1656 is amended by revising paragraph (h) to read as
follows:
Sec. 80.1656 Exemptions for gasoline used for research, development,
or testing purposes.
* * * * *
(h) Submission. Requests for research and development exemptions
shall be sent to the attention of ``Tier 3 Program (R&D Exemption
Request)'' to the address in Sec. 80.10(a).
[FR Doc. 2016-25292 Filed 11-15-16; 8:45 am]
BILLING CODE 6560-50-P