[Federal Register Volume 84, Number 111 (Monday, June 10, 2019)]
[Rules and Regulations]
[Pages 26980-27025]
[FR Doc No: 2019-11653]

Vol. 84

Monday,

No. 111

June 10, 2019

Part III

Environmental Protection Agency

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40 CFR Part 80

Modifications to Fuel Regulations To Provide Flexibility for E15;
Modifications to RFS RIN Market Regulations; Final Rule

Federal Register / Vol. 84 , No. 111 / Monday, June 10, 2019 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2018-0775; FRL-9994-87-OAR]
RIN 2060-AU34

Modifications to Fuel Regulations To Provide Flexibility for E15;
Modifications to RFS RIN Market Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is adopting a new
statutory interpretation and making corresponding regulatory changes to
allow gasoline blended with up to 15 percent ethanol to take advantage
of the 1-pound per square inch (psi) Reid Vapor Pressure (RVP) waiver
afforded under the Clean Air Act (CAA). In doing so, EPA is finalizing
an interpretive rulemaking which defines gasoline blended with up to 15
percent ethanol as ``substantially similar'' to the fuel used to
certify Tier 3 motor vehicles. Finally, EPA is making regulatory
changes to modify certain elements of the Renewable Fuel Standard (RFS)
compliance system, in order to improve functioning of the renewable
identification number (RIN) market and prevent market manipulation.

DATES: Amendatory instructions 4-10 are effective July 10, 2019.
Amendatory instructions 1-3 and 11-12 are effective June 5, 2019.
    Operational dates: For operational purposes under the Clean Air
Act, the amendments to 40 CFR part 80, subpart M and corresponding
portions of the preamble are effective as of July 10, 2019, and the
amendments to 40 CFR part 80, subparts B and N; corresponding portions
of the preamble; and the interpretation of ``substantially similar'' in
the appendix to this Federal Register document are effective as of May
30, 2019.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2018-0775. All documents in the docket are listed on the
https://www.regulations.gov website. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material is
not available on the internet and will be publicly available only in
hard copy form. Publicly available docket materials are available
electronically through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Office of
Transportation and Air Quality, Assessment and Standards Division,
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Effective date. Section 553(d)(1) of the Administrative Procedure
Act, 5 U.S.C. 553(d)(1), provides that final rules shall not become
effective until 30 days after publication in the Federal Register
``except . . . a substantive rule which grants or recognizes an
exemption or relieves a restriction.'' The purpose of this provision is
to ``give affected parties a reasonable time to adjust their behavior
before the final rule takes effect.'' Omnipoint Corp. v. Fed. Commc'n
Comm'n, 78 F.3d 620, 630 (D.C. Cir. 1996); see also United States v.
Gavrilovic, 551 F.2d 1099, 1104 (8th Cir. 1977) (quoting legislative
history). However, when the agency grants or recognizes an exemption or
relieves a restriction, affected parties do not need a reasonable time
to adjust because the effect is not adverse. EPA is issuing this final
rule under CAA sec. 307(d), which states ``The provisions of section
553 through 557 . . . of Title 5 shall not, except as expressly
provided in this section, apply to actions to which this subsection
applies.'' CAA sec. 307(d)(1). Thus, APA sec. 553(d) does not apply to
this rule. EPA is nevertheless acting consistently with the policies
underlying APA sec. 553(d) in making a portion of this rule effective
immediately. The regulatory amendments to 40 CFR part 80, subparts B
and N, relieve a restriction on the sale of E15 during the period of
May 1 through September 15, which the 40 CFR part 80 regulations define
as the ``regulatory control period.'' This action will enable E15 to
take advantage of the 1-pound per square inch Reid Vapor Pressure
waiver that currently applies to E10 during the summer months.
Accordingly, it is in keeping with the policy underlying the APA for
the regulatory amendments to 40 CFR part 80, subparts B and N, to take
effect immediately. In addition, APA sec. 553(d) contains an exception
for interpretive rules; thus, it is consistent with the APA to make the
interpretation of ``substantially similar'' in the appendix to this
Federal Register notice effective immediately. Finally, this CAA sec.
307(d) rule is promulgated upon signature. For operational purposes
under the CAA, EPA is making the amendments to 40 CFR part 80, subparts
B and N; corresponding portions of the preamble; and the interpretation
of ``substantially similar'' in the appendix to this Federal Register
notice effective as of May 30, 2019, which is the date of signature.
    Potentially affected entities. Entities potentially affected by
this final rule include those involved with the production,
importation, distribution, marketing, and retailing of transportation
fuels, including gasoline and diesel fuel or renewable fuels such as
ethanol, biodiesel, and renewable diesel. Potentially affected
categories include:

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                                                NAICS \1\                      Examples of potentially affected
                  Category                        codes       SIC \2\ codes                entities
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Industry...................................          324110            2911  Petroleum refineries.
Industry...................................          325193            2869  Ethyl alcohol manufacturing.
Industry...................................          325199            2869  Other basic organic chemical
                                                                              manufacturing.
Industry...................................          424690            5169  Chemical and allied products
                                                                              merchant wholesalers.
Industry...................................          424710            5171  Petroleum bulk stations and
                                                                              terminals.
Industry...................................          424720            5172  Petroleum and petroleum products
                                                                              merchant wholesalers.
Industry...................................          454319            5989  Gasoline service stations.
Industry...................................          447190            5541  Marine service stations.
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\1\ North American Industry Classification System (NAICS).
\2\ Standard Industrial Classification (SIC).

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by

this action. Other types of entities not listed in the table could also
be affected. To determine whether your entity will be affected by this
action, you should carefully examine the applicability criteria in 40
CFR part 80. If you have any questions regarding the applicability of
this proposed action to a particular entity, consult the person listed
in the FOR FURTHER INFORMATION CONTACT section.

Outline of This Preamble

I. Executive Summary
    A. Purpose of This Action
    B. Summary of the Major Provisions of This Action
    1. E15 Reid Vapor Pressure
    2. RIN Market Reform
    C. Severability
II. Application of the 1-psi Waiver to E15
    A. Background
    1. Summary of Statutory Framework
    2. Background on Ethanol Use Over Time
    3. Background on CAA Sec. 211(h)
    4. Background of E10 and E15 CAA Sec. 211(f)(4) Waivers
    B. Interpretation of CAA Sec. 211(h)(4)
    C. Interpretation of ``Substantially Similar'' for Gasoline
    1. Certification Fuels
    2. History of ``Substantially Similar'' Interpretations
    3. Interpretation of CAA Sec. 211(f)(1)
    4. Criteria for Determining Whether a Fuel Is ``Substantially
Similar''
    5. Impact of Volatility on ``Substantially Similar''
    6. Technical Rationale and Discussion for Tier 3 Vehicles
(MY2020 and Newer)
    7. Technical Rationale for MY2001-2019 Light-Duty Motor Vehicles
    8. Technical Rationale for Other Vehicles, Engines, and
Equipment
    9. Limitations of ``Substantially Similar'' Interpretative
Rulemaking
    10. Implications of ``Substantially Similar'' Interpretation
    D. Regulatory Amendments
    1. Modification of Regulations
    2. Status of Misfueling Mitigation Rule Regulations
    3. Waiver Applicability
    E. Expected Impact of This Rule on E15 Use
    F. E15 Criteria Pollutant and Air Toxics Emission Impacts
    G. E15 Economic Impacts
    1. Potential Benefits of This Action
    2. Costs of This Action
III. RIN Market Reforms
    A. Background
    B. Market Manipulation
    C. Reform 1: Public Disclosure if RIN Holdings Exceed Certain
Threshold
    D. Reform 5: Enhancing EPA's Market Monitoring Capabilities
    E. Other Reforms Proposed But Not Finalized at This Time
    F. RIN Market Reform Economic Impacts
    1. Benefits of RIN Market Reform
    2. Costs of RIN Market Reform
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Congressional Review Act (CRA)
V. Statutory Authority

I. Executive Summary

    On October 11, 2018, the President directed \1\ EPA to initiate a
Clean Air Act (CAA or the Act) rulemaking to extend to gasoline blends
containing 15 percent ethanol by volume, commonly referred to as E15,
the 1-psi (pound per square inch) Reid Vapor Pressure (RVP) waiver that
currently applies to E10 (gasoline containing up to 10 percent ethanol
by volume) during the summer ozone control season. The President also
directed EPA to consider four reforms to the Renewable Fuel Standard
(RFS) compliance system: (1) Prohibiting entities other than obligated
parties from purchasing separated Renewable Identification Numbers
(RINs); (2) requiring public disclosure when RIN holdings held by an
individual actor exceed specified limits; (3) limiting the length of
time a non-obligated party can hold RINs; and (4) requiring the
retirement of RINs for the purpose of compliance be made in real time.
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    \1\ See President Donald J. Trump Is Expanding Waivers for E15
and Increasing Transparency in the RIN Market: https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-expanding-waivers-e15-increasing-transparency-rin-market.
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A. Purpose of This Action

    The objectives of this action are twofold. First, this rulemaking
will take steps intended to create parity in the way the RVP of both
E10 and E15 fuels is treated under EPA regulations. Second, this action
finalizes reforms to RIN regulations intended to increase transparency
and deter potential manipulative and anti-competitive behaviors in the
RIN market.
    Further, in promulgating this rule, EPA is seeking to take
justified actions to remove barriers which unnecessarily limit the
potential growth in biofuel consumption, much as it did in 1987 for the
original 1-psi waiver as markets were evolving. As is also clear from
the text of the Energy Independence and Security Act of 2007, and the
associated 36 billion gallon mandate by 2022, that Congress intended to
promote and accommodate expanded biofuel use and outlined greenhouse
gas savings. While this rule alone is not expected to increase the
availability of E15, it removes one barrier to such an outcome.

B. Summary of the Major Provisions of This Action

1. E15 Reid Vapor Pressure
    We are modifying the volatility requirements for E15 during the
summer season or the period of May 1 through September
15.2 3 The changed volatility provisions for these blends
will allow E15 to receive the benefit of the

provision at CAA sec. 211(h)(4), commonly referred to as ``the 1-psi
waiver.'' The 1-psi waiver allows gasoline-ethanol blends to have a
higher RVP \4\ than would be allowed under CAA sec. 211(h)(1) and the
corresponding volatility provisions, which prohibit the RVP of gasoline
from exceeding 9.0 psi during the summer.\5\ Under EPA's previous
interpretation of CAA sec. 211(h)(4), and corresponding regulations,
only blends of ethanol and gasoline containing at least 9 percent and
no more than 10 percent ethanol by volume (E10) were granted the 1-psi
waiver.
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    \2\ For purposes of this preamble, E15 refers to gasoline-
ethanol blended fuels that contain greater than 10 volume percent
and no more than 15 volume percent ethanol content. Under EPA
regulations at 40 CFR part 80, we broadly define gasoline as ``any
fuel sold in any State for use in motor vehicles and motor vehicle
engines, and commonly or commercially known or sold as gasoline.''
We have also clearly stated that any fuel that is predominantly
gasoline is considered gasoline for purposes complying with EPA's
fuels regulations at 40 CFR parts 79 and 80 and relevant provisions
under the CAA (see 79 FR 23557 (April 28, 2014) and 81 FR 80841-
80843 (November 16, 2016)). Gasoline-ethanol blended fuels (referred
to as ``gasoline-ethanol blends'' in this action) are fuels under
the CAA and gasoline-ethanol blended fuels containing no more than
50 volume percent ethanol are defined as gasoline under EPA's
regulations. This preamble sometimes refers to gasoline or to
gasoline-ethanol blended fuels in terms of the ethanol content of
the fuel (e.g., ``E10'' or ``E15''). At other times, this preamble
uses the term gasoline to be inclusive of all fuels that are
predominantly composed of gasoline, which would include, but is not
limited to, all gasoline-ethanol blended fuels containing no more
than 50 volume percent ethanol.
    \3\ CAA sec. 211(h)(1) requires EPA to establish volatility
requirements--that is, a restriction on Reid Vapor Pressure (RVP)--
during the high ozone season. To implement these requirements, EPA
defines ``high ozone season'' at 40 CFR 80.27 as the period from
June 1 to September 15. The regulations at 40 CFR 80.27 also specify
that all parties except for retailers must make and distribute
gasoline meeting the RVP standards at 40 CFR 80.27 from May 1
through September 15 and calls this period the ``regulatory control
period.'' The E15 partial waivers impose the 9.0 psi RVP limit on
E15 from May 1 through September 15. See 75 FR 68094 (November 4,
2010) and 76 FR 4662 (January 26, 2011). In general practice by
industry and for purposes of this preamble, the high ozone season
and regulatory control period is referred to as the ``summer'' or
``summer season'' and gasoline produced to be used during the
regulatory control period and high ozone season is called ``summer
gasoline.'' EPA's regulations do not impose any volatility
requirements on any type of blend of gasoline outside of the summer
season.
    \4\ RVP is a measure of the volatility of gasoline. Gasoline
must have volatility in the proper range to prevent driveability,
performance, and emissions problems. If the volatility is too low,
the gasoline will not ignite properly; if the volatility is too
high, the vehicle may experience vapor lock. Importantly for this
rule, excessively high volatility also leads to increased
evaporative emissions from the vehicle. Vehicle evaporative emission
control systems are designed and certified on gasoline with a
volatility of 9.0 psi RVP. Higher volatility gasoline may overwhelm
the vehicle's evaporative control system, leading to a condition
described as ``breakthrough'' of the cannister and mostly
uncontrolled evaporative emissions. The regulations at 40 CFR part
86 defines evaporative emissions as ``hydrocarbons emitted into the
atmosphere from a motor vehicle, other than exhaust and crankcase
emissions.'' For purposes of this preamble, evaporative emissions
are generally referring to volatile organic compounds (VOCs) present
in gasoline that evaporate within the fuel system. This differs from
tailpipe or exhaust emissions which are defined under the
regulations at 40 CFR part 86 as ``substances emitted to the
atmosphere from any opening downstream from the exhaust port of a
motor vehicle engine.'' For purposes of this preamble, when we refer
to exhaust emissions, we are generally referring to exhaust
emissions that are controlled in motor vehicles under Title II of
the Clean Air Act.
    \5\ In a few areas, specified at 40 CFR 80.27, the RVP standard
is 7.8 psi. In these areas, after application of the 1-psi waiver,
gasoline-ethanol blended fuels covered by the 1-psi waiver could
have an RVP of up to 8.8 psi.
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    EPA is finalizing three steps to accomplish this change. First, we
are adopting a new interpretation of CAA sec. 211(h)(4). Second, we are
finalizing two approaches to address CAA sec. 211(f). In the first of
these approaches, we find that E15 is ``substantially similar'' (sub
sim) to Tier 3 E10 certification fuel for use in MY2001 and newer
light-duty vehicles.\6\ In the second of these approaches, we maintain
our interpretation of CAA sec. 211(f), making it clear that the
conditions on the CAA sec. 211(f)(4) waivers granted to E15 in 2010 and
2011 do not restrict the application of the 1-psi waiver to downstream
oxygenate blenders in most circumstances. Third and finally, we are
modifying our regulations to effect two changes: (1) Remove limitations
in our regulations on the volatility of E15 promulgated in the E15
Misfueling Mitigation Rule (``MMR'') that were put in place in keeping
with the prior interpretation of CAA sec. 211(h)(4); \7\ and (2) modify
the associated product transfer document (PTD) requirements also
promulgated in the MMR.
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    \6\ EPA last issued an interpretative rulemaking for what it
considers sub sim for gasoline in 2008. See 73 FR 22281 (April 25,
2008).
    \7\ See 76 FR 44406 (July 25, 2011).
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    As a result of this action, parties will be able to make,
distribute, and sell E15 made with the same conventional blendstock for
oxygenate blending (CBOB) \8\ that is used to make E10 by oxygenate
blenders during the summer.\9\ E15 will be held to the same gasoline
volatility standards that currently apply to E10, maintaining
substantially the same level of emissions performance as E10 since E15
made from the same CBOB as is used to make E10 during the summer would
have slightly lower RVP than E10 and would be expected to have similar
emissions performance as discussed in Sections II.C and II.E.
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    \8\ CBOB is the base gasoline typically made for blending with
10 percent ethanol in conventional gasoline areas of the country.
    \9\ As previously noted, EPA's regulations do not impose any
volatility requirements on any type of blend of gasoline outside of
the summer season. EPA does not have volatility limitations on
gasoline outside of the summer season. Therefore, E15 can already be
made from the same CBOB used to produce E10 outside of the summer
season. The rest of the year (outside of the summer season) is
commonly referred to as the ``winter season'' or ``winter.''
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2. RIN Market Reform
    EPA takes claims of RIN market manipulation seriously. Though, as
stated in the proposal and reaffirmed in this action, we have yet to
see data-based evidence of such behavior, the potential for
manipulation is a concern. Accordingly, we are finalizing two reforms
to increase our market monitoring capabilities, bring more transparency
to the RIN market, and discourage RIN holdings in excess of normal
business practices. Specifically, we are finalizing the following RIN
market reforms:
     Requiring public disclosure when RIN holdings held by an
individual actor exceed specified limits.
     Requiring the reporting of additional price and affiliate
data to EPA.
    First, we are finalizing two RIN holding thresholds that will work
in tandem to discourage potential accumulation of market power. These
thresholds will apply to holdings of separated D6 RINs only.\10\ If a
non-obligated party's end-of-day separated D6 RIN holdings exceed three
percent of the total implied conventional biofuel volume requirement,
it has triggered the primary threshold. If an obligated party's end-of-
day separated D6 RIN holdings exceed three percent of the total implied
conventional biofuel volume requirement and exceed 130 percent of its
individual implied conventional renewable volume obligation (RVO), it
has triggered the secondary threshold. We are requiring that parties
make calculations of daily RIN holdings and report new information in a
quarterly report, including a yes/no certification statement about
exceeding the threshold and a list of all RIN-holding corporate
affiliates and all contractual affiliates. We will publish on our
website the names of any parties that report exceeding the thresholds.
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    \10\ RINs specify a ``D-code'' corresponding to the renewable
fuel category applicable to the fuel, as determined by the feedstock
used, fuel type produced and GHG emissions of the fuel, among other
characteristics. There are five different D-Codes for RINs in the
RFS program. D3 RINs are cellulosic biofuel RINs. D4 RINs are
biomass-based diesel (including both biodiesel and renewable diesel)
RINs. D5 RINs are advanced biofuel RINs. D6 RINs are conventional
biofuel RINs (primarily corn ethanol). D7 RINs are cellulosic diesel
RINs which meet the requirements for both cellulosic biofuel and
biomass-based diesel.
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    Second, we are finalizing additional reporting requirements that
will enhance EPA's oversight capabilities of RIN market behavior. We
are finalizing requirements for parties to follow certain conventions
when reporting RIN prices to EPA and to report whether the RIN
transaction was on the spot market or as a result of a term contract.
    Third, we are confirming our intention to take non-regulatory steps
after promulgation of this action to update business rules in EMTS to
require that both parties in a RIN transaction enter the same RIN price
and to employ a third-party market monitor to conduct analysis of the
RIN market, including screening for potential anti-competitive
behavior. We intend to incorporate new information reported to EPA as a
result of this rulemaking into such RIN market analysis.
    Finally, we are not taking final action on three of the reforms
that were proposed. These reforms are related to RIN retirement
frequency, limitations on the parties that can purchase a D6 RIN, and
the duration parties can hold D6 RINs. We have decided to defer the
decision on whether or not to finalize these three proposed reforms as
we conduct more thorough analyses of the RIN market and of the
manipulation concerns presented by some stakeholders, with help from a
third party. If, after reviewing that data and

conducting additional market analysis, we determine that it would be
prudent to finalize one or more of these proposed reforms in the
future, we will share the analysis that has led us to believe it could
be appropriate and will allow time for parties to comment before we
proceed with a final rule.

C. Severability

    The actions we are taking with regard to Section II are made
pursuant to our authority under CAA secs. 211(c), 211(f), and 211(h).
The actions we are taking with regard to Section III are made pursuant
to our authority under Clean Air Act sec. 211(o). We consider Section
II and the regulatory provisions we are finalizing under 40 CFR part
80, subparts B and N, to be severable from Section III and the
regulatory provisions we are finalizing under 40 CFR part 80, subpart
M, as these are two separate actions, each of which operates
independently from the other.

II. Application of the 1-psi Waiver to E15

    In this action, we are finalizing changes to the volatility
provisions for E15 during the summer season based on revised
interpretations of CAA sec. 211(h)(4) and CAA sec. 211(f). The changed
volatility provisions for E15 will apply the 1-psi waiver to E15
pursuant to CAA sec. 211(h)(4). This provision allows certain gasoline-
ethanol blends to have a higher RVP than would otherwise be allowed
under CAA sec. 211(h)(1) and the corresponding volatility regulations
that prohibit the RVP of gasoline from exceeding 9.0 psi during the
summer. Prior to this rulemaking, EPA's interpretation of the statute
and the corresponding regulations only applied the 1-psi waiver to
gasoline-ethanol blends containing at least 9 percent and no more than
10 volume percent ethanol. The interpretation in this action represents
a change in EPA's prior interpretation and, as explained in more detail
below, is appropriate in light of the increased presence of E15 in the
gasoline marketplace. This interpretation is further supported by the
fact that the conditions that led us to provide the original 1-psi
waiver for E10 in 1990 are equally applicable to E15 today.
    The volatility of E15 is also limited by CAA sec. 211(f). CAA sec.
211(f) prohibits the introduction into commerce of fuels and fuel
additives unless they either: (1) Are substantially similar to fuels or
fuel additives utilized in the certification of motor vehicles, or (2)
receive a waiver from the sub sim requirement in accordance with CAA
sec. 211(f)(4). EPA granted E15 CAA sec. 211(f)(4) waivers in 2010 and
2011, subject to certain conditions. Under the waiver conditions, the
RVP limit for E15 is 9.0 psi from May 1 through September 15. In order
to effectuate the 1-psi waiver under CAA sec. 211(h)(4) and permit the
introduction of E15 at the higher RVP level into commerce, we are
addressing the statutory provisions under both CAA sec. 211(f) and (h).
    As discussed in Section I, we are taking this action in response to
the Presidential Directive to provide E15 the 1-psi waiver. All actions
we are taking under both CAA sec. 211(h) and CAA sec. 211(f)(1) are in
furtherance of that goal. EPA is taking several steps to provide E15
the 1-psi waiver. First, we are finalizing our proposed interpretation
of CAA sec. 211(h)(4). Under this new interpretation, gasoline-ethanol
blends containing at least 10 percent ethanol that are either
substantially similar under CAA sec. 211(f)(1) or that have been
granted a waiver under CAA sec. 211(f)(4) would receive the 1-psi
waiver, including E15.\11\
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    \11\ While any gasoline-ethanol blend containing at least 10
percent ethanol would receive the 1-psi waiver, that does not mean
that gasoline-ethanol blends higher than E15 can be introduced into
commerce at 10.0 psi. As discussed further below, in order for these
fuels to be introduced into commerce, they must be substantially
similar to certification fuel or obtain a waiver from the
substantially similar requirement. Therefore, once this action is
finalized, only E10 and E15 may be introduced into commerce at 10.0
psi.
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    Second, we are finalizing an interpretative rulemaking that defines
E15 with an RVP of 9.0 psi RVP in the summer as sub sim to the fuel
utilized to certify Tier 3 vehicles when used in model year (MY) 2001
and newer light-duty motor vehicles, subject to certain criteria. After
application of the CAA sec. 211(h)(4) 1-psi waiver, this new definition
of sub sim will allow E15 to be introduced into commerce with an RVP of
10.0 psi during the summer. Additionally, we maintain our
interpretation of CAA sec. 211(f), making it clear that the conditions
on the CAA sec. 211(f)(4) waivers granted to E15 in 2010 and 2011 do
not restrict the application of the 1-psi waiver to downstream
oxygenate blenders in most circumstances.
    Third, to effectuate our new interpretations under CAA sec. 211(h)
and 211(f)(1), we are finalizing the following changes to EPA's fuels
regulations: (1) Removing limitations on the volatility of E15 in our
regulations, that were put in place to implement the prior
interpretation of CAA sec. 211(h)(4); and (2) modifying the associated
Product Transfer Document (``PTD'') requirements.\12\
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    \12\ We also find that our existing understanding of the statute
that CAA sec. 211(f), generally, and any waiver conditions imposed
under CAA sec. 211(f)(4) more specifically, only apply to fuel and
fuel additive manufacturers and thus provide an additional basis for
the regulatory changes we are making in this action.
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    The actions we are taking, including those pursuant to our
authorities under CAA secs. 211(f) 211(h), are all taken to establish a
single, unified program that allows the introduction into commerce of
E15 at 10.0 psi RVP during the summer driving season. For example, the
actions we are taking under CAA sec. 211(f) are directly related to our
new interpretation of CAA sec. 211(h)(4), and in the absence of this
new CAA sec. 211(h)(4) interpretation, we would not be taking these
actions. Additionally, the restrictions adopted as part of the E15 sub
sim determination under CAA sec. 211(f)(1) are necessary to prevent the
use of E15 in vehicles, engines, and equipment other than MY2001 and
newer light-duty vehicles, and absent those restrictions and the
limited nature of the sub sim determination, we would not consider E15
to be sub sim to Tier 3 certification fuel. Finally, our amendments to
40 CFR part 80 subparts B and N are pursuant to our actions under CAA
secs. 211(f) and (h)(4). In sum, all actions we are taking today
constitute a single, cohesive effort, and as such we do not intend for
any of these individual actions to be severable. In the event it is
determined we lack authority to adopt any element of this program, EPA
believes the other elements of the program cannot be justified in
isolation.
    The following subsections provide further details on these changes,
as well as discussions on the potential effects of this action on
emissions and the economy. First, we provide background on both the
relevant statutory provisions and the history of gasoline-ethanol
blends in the fuel marketplace. We then discuss our new interpretation
of CAA sec. 211(h), under which the 1-psi waiver applies to blends up
to E15. Third, we provide a discussion of our new definition of
``substantially similar'' under CAA sec. 211(f)(1) and its application
to E15. Finally, we provide discussion of the potential economic and
environmental impacts of this action.

A. Background

    The discussion below provides general background explaining the CAA
provisions that are relevant to this action, as well as a description
of prior EPA actions taken under those

provisions. It also provides background on the presence of ethanol in
the fuels marketplace.
1. Summary of Statutory Framework
    The Air Quality Act of 1967 and the CAA of 1970 established the
basic framework for EPA's fuels regulations. CAA sec. 211(a) allows EPA
to designate fuels and fuel additives for registration. CAA sec. 211(b)
sets forth registration requirements for fuels and fuel additives and
authorizes EPA to require health and environmental effects testing for
the registration of fuels and fuel additives. CAA sec. 211(c)
authorizes EPA to regulate or prohibit fuels or additives for use in
motor (or nonroad) vehicles or engines if: (A) ``any fuel or fuel
additive or any emission product of such fuel or fuel additive causes,
or contributes, to air pollution . . . that may reasonably be
anticipated to endanger the public health or welfare,'' or (B) ``if
emission products of such fuel or fuel additive will impair to a
significant degree the performance of any emission control device or
system.'' CAA sec. 211(c) also provides that in order to place a
control or prohibition on a fuel or fuel additive under clause (A), EPA
must consider ``all relevant medical and scientific evidence available
. . . including consideration of other technologically or economically
feasible means of achieving emission standards.'' In order to place a
control or prohibition on a fuel or fuel additive under clause (B), EPA
must 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 and require the proposed control''
and those that do not require the proposed control.
    In the CAA Amendments of 1977, Congress established CAA sec.
211(f)(1), which prohibits manufacturers from first introducing into
commerce any fuel or fuel additive for general use in light-duty
vehicles that is not ``substantially similar to any fuel or fuel
additive utilized in the certification of any model year 1975, or
subsequent model year, vehicle.'' In a report accompanying the
enactment of this provision in addition to 211(c), Congress explained
that ``the intention of this [section] is to prevent the use of any new
or recently introduced additive in those unleaded grades of gasoline .
. . which may impair emission performance of vehicles.'' \13\ The
Senate Report also states that the sub sim provision was enacted in
recognition that ``due to the delay associated with statutory
procedural safeguards of [CAA sec. 211(c)]'' parties could introduce
fuel with negative impacts on emission controls before a CAA sec.
211(c) action could be completed.\14\
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    \13\ See S. Rep. 95-127 (95th Congress, 1st Session) at 90-91.
See also Motor Vehicle Manufacturers Association of the U.S., Inc.
v. EPA, 768 F.2d 385, 390 n.7 (D.C. Cir. 1985).
    \14\ Id.
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    If a fuel or fuel additive is not sub sim, a fuel or fuel additive
manufacturer may obtain a waiver under CAA sec. 211(f)(4) \15\ if the
manufacturer can demonstrate that the new fuel or fuel additive ``will
not cause or contribute to a failure of any emission control device or
system (over the useful life of the motor vehicle, motor vehicle
engine, nonroad engine, or nonroad vehicle in which such device or
system is used) to achieve compliance by the vehicle or engine with the
emission standards with respect to which it has been certified.''
Together, CAA sec. 211(f)(1) and (f)(4) prevent fuels and fuel
additives from being introduced into commerce that would degrade the
emission performance of the existing fleet and protect vehicle
manufacturers from their vehicles consequently failing emission
standards in use.
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    \15\ Quoted above is the current formulation of CAA sec.
211(f)(4). When enacted in 1977, the waiver provision stated a
waiver could be granted ``if [the administrator] determines that the
applicant has established that such fuel or fuel additive or a
specified concentration thereof, and the emission products of such
fuel or fuel additive or specified concentration thereof, will not
cause or contribute to a failure of any emission control device or
system (over the useful life of any vehicle in which such device or
system is used) to achieve compliance by the vehicle with the
emission standards with respect to which it has been certified
pursuant to section 206.'' See CAA Amendments of 1977.
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    In the CAA Amendments of 1990, Congress added CAA sec.
211(f)(1)(B), which extends the prohibition from first introduction
into commerce to ``any fuel or fuel additive for use by any person in
motor vehicles manufactured after model year 1974 which is not
substantially similar to any fuel or fuel additive utilized in the
certification of any model year 1975, or subsequent model year vehicle,
or engine.'' \16\
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    \16\ See 75 FR 68094, 68145 (Nov. 4, 2010).
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    Also, in the CAA Amendments of 1990, Congress added CAA sec. 211(h)
to address the volatility of gasoline, which largely codified EPA's
then-new RVP regulations.\17\ Accordingly, entirely separate from CAA
sec. 211(f), CAA sec. 211(h)(1) prohibits the sale of gasoline with an
RVP in excess of 9.0 psi during the high ozone season (while allowing
EPA to promulgate more stringent RVP requirements for nonattainment
areas),\18\ and CAA sec. 211(h)(4) provides a 1.0 psi RVP allowance for
``fuel blends containing gasoline and 10 percent'' ethanol.
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    \17\ See 54 FR 11868 (March 22, 1989) (Phase I) and 55 FR 23658
(June 11, 1990) (Phase II).
    \18\ A ``nonattainment area'' is an area designated as not
meeting a National Ambient Air Quality Standard, or as contributing
to another, nearby area's failure to meet such standard. See
generally CAA sec. 107.
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    Relevant to our discussion of CAA sec. 211(f)(1) are CAA sec. 206
and 213. These provisions provide EPA with authority to establish
vehicle and engine certification procedures; CAA sec. 213 also provides
EPA with authority to establish emissions standards. CAA sec. 206,
``Motor vehicle and motor vehicle engine compliance testing and
certification,'' authorizes EPA to established methods and procedures
for testing whether a motor vehicle or motor vehicle engine conforms
with our motor vehicle emissions standards promulgated under CAA sec.
202. CAA sec. 213, enacted in the CAA Amendments of 1990, authorizes
EPA to promulgate regulations containing emissions standards for
nonroad engines and nonroad vehicles.
    In the Energy Policy Act of 2005 (``EPAct'') Congress added sec.
211(o) to the CAA creating the Renewable Fuel Standard (RFS), and then
in the Energy Independence and Security Act of 2007 (``EISA'') modified
and greatly expanded the program. The RFS program places obligations on
refiners and importers to expand the use of renewable fuels such as
ethanol in the nation's fuel supply.
2. Background on Ethanol Use Over Time
    Prompted by concerns about reliance on foreign sources of oil and a
desire to support domestic agriculture, several corn-based ethanol
plants were constructed in the 1970s. In 1978, after a CAA sec.
211(f)(4) waiver application was submitted for E10, E10 was granted a
CAA sec. 211(f)(4) waiver by operation of law.\19\ The CAA sec.
211(f)(4) waiver along with an excise tax exemption for gasoline
containing ethanol resulted in the growth in the production of ethanol
through the mid-1980s at the rate of about 100 million gallons per
year. In the years following, ethanol use in gasoline continued to grow
as a result of a combination of state and federal programs and
policies, as well as

favorable market conditions, until essentially all gasoline contained
10% ethanol by around 2013.
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    \19\ See 44 FR 20777 (April 6, 1979). Under the CAA as it
existed in 1978, unless EPA acted to deny a waiver application
within 270 days, the waiver was deemed granted by operation of law.
See 42 U.S.C. 7545(f)(4) (1978). In EISA, Congress revised this
provision; under the statute as it now exists, EPA shall take final
action to grant or deny an application after public notice and
comment within 270 days of receipt, but does not automatically grant
applications upon agency inaction.
[GRAPHIC] [TIFF OMITTED] TR10JN19.004

    In the 1980s, to make E10, or ``gasohol'' as it was known at the
time, ethanol was ``splash blended'' into previously certified
gasoline. ``Splash blending'' occurred when tanker trucks were filled
up to 90 volume percent with gasoline at a gasoline terminal and then
driven to an ethanol tank (at the gasoline terminal or at another
location) to be filled with 10 volume percent ethanol. Mixing was
assumed to take place as the truck drove to the retail station.\20\ In
1987, when EPA first proposed the 1-psi RVP waiver for E10, just over
800 million gallons of ethanol was blended into gasoline. Assuming it
was all blended at 10 percent, E10 represented just over 7 percent of
the gasoline consumed in the U.S. This limited the impact of the 1-psi
RVP waiver to a small portion of the fuel pool. Growth in ethanol use
slowed between 1988 and 1990 as the volume of methyl tertiary butyl
ether (MTBE) as a gasoline additive rose to provide octane and oxygen
content to gasoline in lieu of ethanol.
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    \20\ 52 FR 31292 (August 19, 1987).
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    In 1989, the first phase of the federal volatility standards went
into effect.\21\ Gasoline containing about 10% ethanol was
simultaneously granted a 1-psi RVP waiver, such that continued use of
E10 did not require the production and distribution of a special low-
RVP gasoline blendstock for subsequent blending with ethanol. This
allowed the practice of splash blending of ethanol to continue. At the
time, gasohol also had a tax credit through which Congress intended to
encourage the use of ethanol as a means of reducing dependence on
foreign oil and making use of excess agricultural production.\22\
Neither the Phase I (1989) nor the Phase II (1990 and thereafter)
volatility standards appeared to have any direct impact on the
magnitude of ethanol use. In 1991, we promulgated regulations in
response to the CAA Amendments of 1990 that implemented the statutory
1-psi waiver. We again did not see significant impacts on ethanol use.
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    \21\ See 54 FR 11868 (March 22, 1989).
    \22\ Id.
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    In 1992, the winter oxygenated fuels (``oxyfuels'') program for
carbon monoxide (CO) nonattainment areas began as mandated by the CAA
Amendments of 1990.\23\ This program required the use of at least 2.7
percent by weight oxygen in gasoline, equivalent to about 15 volume
percent MTBE or 7.8 volume percent ethanol in those areas.\24\ The use
of both ethanol and MTBE as gasoline additives grew over the next
several years under the influence of the oxyfuels program, with ethanol
reaching 1.3 billion gallons and E10 representing approximately 11
percent of all gasoline in 1994 (assuming all the ethanol was blended
to make E10).
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    \23\ CAA sec. 211(m).
    \24\ Where allowed, ethanol was typically blended at 10 percent
to take advantage of the 1-psi waiver, in both nonattainment and
attainment areas.
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    The reformulated gasoline (RFG) program, also enacted under the CAA
Amendments of 1990, began in 1995 and applied to severe and extreme
ozone nonattainment areas.\25\ It required the use of at least 2.1
weight percent oxygen on average, equivalent to 11.6 volume percent
MTBE or 6.0 volume percent ethanol.\26\ Due to the summer volatile
organic compounds (VOC) emissions standards for RFG, the 1-psi waiver
for ethanol blends was effectively not applicable. This is because the
gasoline-ethanol blends would not meet the summer VOC emission
standards at the higher RVP. Thus ethanol blending into RFG required
the production and distribution of a special low-RVP gasoline
blendstock, referred to as reformulated blendstock for oxygenate
blending (RBOB), into which ethanol could be blended at the
terminal.\27\ Perhaps due to this, and the relative ease of blending
MTBE, ethanol's use in RFG was limited, and growth in the use of
ethanol as a gasoline additive was more limited in the years after 1995
than it would have been if MTBE had not been available as an
alternative to

ethanol. By the year 2000, ethanol use had grown to 1.7 billion
gallons, with E10 representing about 13% of all gasoline (assuming all
ethanol was blended to make E10). The practice of blending ethanol had
also evolved from simple splash blending, to ethanol being metered into
transport trucks at the 10% rate along with gasoline at the gasoline
terminal; into RBOB in RFG areas; and into conventional gasoline
(``CG'') in other areas.
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    \25\ See, generally, CAA sec. 211(k).
    \26\ Again, ethanol was typically blended at 10 percent where
allowed to take advantage of the 1-psi waiver.
    \27\ Because ethanol was high in octane, RBOB was also made to a
lower octane specification in order to reduce costs.
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    Beginning in the early 2000s, concerns about leaking underground
storage tanks and groundwater contamination led several states to ban
the use of MTBE as a gasoline additive. The use of MTBE as a gasoline
additive began falling in 2002, with its volume being replaced
essentially 1:1 with ethanol in RFG areas. EPAct in 2005 removed the
oxygenate mandate for RFG and replaced it with the Renewable Fuel
Standard (RFS). By this time, refiners had already removed essentially
all MTBE from RFG and replaced it with ethanol. This initially involved
shifting much of the existing discretionary blending of ethanol in CG
areas to RFG, until ethanol production and distribution capacity could
increase to supply both the CG and RFG markets. By 2007, MTBE was
rarely used, and coupled with the ongoing excise tax credit for
ethanol, and the certainty of the Renewable Fuel Standard (RFS)
mandate, ethanol's use rose significantly to 6.9 billion gallons by
2007, with E10 representing nearly half of all gasoline (assuming that
all of the ethanol was blended to make E10).
    In the following years, a combination of factors continued to
create ongoing incentives for the rapid growth of E10, including rising
crude oil prices, the expansion of the RFS program with the passage of
EISA, and California's Low Carbon Fuel Standard (LCFS). With E10
comprising the majority of gasoline produced and distributed
nationwide, refiners began producing not only low RVP/low octane RBOB
for blending with ethanol in RFG areas at downstream terminals, but
also a low octane conventional blendstock for oxygenate blending (CBOB)
for blending CG with ethanol. By 2013, the pipeline distribution
systems had switched over to transporting only CBOB for the production
of conventional gasoline, forcing all refiners to harmonize around
their production, and necessitating that 10 percent ethanol be added at
downstream terminals in order for conventional gasoline to meet its
octane and other specifications at retail. Essentially all gasoline,
both reformulated and conventional, was E10 by this time, and total
ethanol consumption was 13.2 billion gallons.
    Similar to E10 in the 1970's, E15 has begun to slowly enter the
marketplace. In October 2010, EPA partially approved a waiver request
from Growth Energy allowing the introduction of E15 into commerce for
use in model year 2007 and newer light-duty motor vehicles, subject to
several conditions.\28\ In January 2011, EPA extended this partial
waiver to include model year 2001-2006 light-duty vehicles, allowing
the use of E15 in model year 2001 and newer light-duty motor
vehicles.\29\ Since these partial waivers required E15 to meet a 9.0
psi RVP standard, in contrast to the 10.0 psi RVP standard E10 had to
meet in the summer, introduction into commerce of E15 into CG areas
required that CBOB for use to make E15 have a lower RVP than typically
available.\30\ This is similar to the situation faced by E10 in 1987.
In the years since the E15 waivers were granted, the number of retail
stations offering E15 has grown slowly, reaching 1,293 registered
stations \31\ (less than 1 percent of all retail stations) in May
2019.\32\ Figure II.A-2 shows the growth of E15 stations since
2012.\33\
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    \28\ 75 FR 68094 (November 4, 2010).
    \29\ 76 FR 4662 (January 26, 2011).
    \30\ Since RBOB was already sub-RVP, E15 could use the same RBOB
already produced and distributed for E10 in RFG areas.
    \31\ The regulations at 40 CFR 80.1502 require that parties that
produce E15 and ethanol for use in the production of E15 to
participate in a survey of retail stations to ensure compliance with
E15 misfueling mitigation requirements. As part of this process,
these parties register with the RFG survey association, the
independent surveyor that currently conducts the E15 survey. This
registration with RFGSA includes information related to the number
of E15 stations at which E15 is going to be sold. More information
on RFGSA is available at: http://rfgsa.org. Growth Energy in comment
also estimates this number at nearly 1,800 stations in 31 states.
See Comments from Growth Energy, pg. 1. See also ``New Mexico
Becomes 31st State to Add E15 Choice at the Pump,'' available at:
https://growthenergy.org/2019/05/01/growth-energy-new-mexico-becomes-31st-state-to-add-e15-choice-at-the-pump.
    \32\ Much of this growth has been driven by USDA's Biofuel
Infrastructure Program (BIP). In October 2015, USDA announced that
the BIP was investing a total of $210 million, including money from
USDA and matching commitments from states and private entities, to
increase the number of retail stations offering E15 and other higher
level gasoline-ethanol blends. These grants were intended to result
in an additional 1,486 stations selling E15. In addition to BIP,
Prime the Pump, a nonprofit organization supporting the expanded
availability of E15, has provided funds to retail stations to add
the necessary infrastructure to offer E15. This data demonstrates
that a very high proportion of the stations currently offering E15
have received funding from federal, state, and/or industry sources.
It also suggests that increasing the rate of growth of E15 stations
in the future may require the availability of funds from such
sources.
    \33\ See ``Data for Growth in E15 Retail Stations over Time from
Growth Energy'' in the docket. EPA-HQ-OAR-2018-0775.

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[GRAPHIC] [TIFF OMITTED] TR10JN19.005

    While there are no reliable statistics on the volume of E15
produced and distributed from these stations, it has remained small,
with little overall impact on ethanol use. In coming years, if gasoline
demand falls as projected by the U.S. Energy Information Administration
(EIA),\34\ growth in E15 would help offset a portion of the drop in
ethanol use from declining E10 gasoline sales. The extension of the 1-
psi RVP waiver to E15 in this action may help this, although there
remain considerable other barriers as discussed in Section II.E, such
that we do not project this action alone will meaningfully impact E15
sales in the coming years.
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    \34\ See ``Updated market impacts of biofuels in 2019,'' Docket
Item No. EPA-HQ-OAR-2018-0167-1330.
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    For reasons expanded upon in Section II.E (e.g., consumer
acceptance of E15 and demand for E10 in vehicles and engines not
permitted to use E15), we believe marketers and retailers of gasoline
will not be able to exclusively market E15 and will continue to offer
E10 as the predominant fuel for the foreseeable future.
3. Background on CAA Sec. 211(h)
    To properly understand this action, it is important to review the
history of EPA's volatility controls both leading up to and after the
enactment of CAA sec. 211(h). As mentioned above, Congress enacted CAA
sec. 211(h) as part of the CAA Amendments of 1990 to address the
volatility of gasoline. Congress did so in the context of EPA's prior
regulatory actions, under CAA sec. 211(c), which aimed to control the
RVP of gasoline. EPA has historically viewed Congress's enactment of
211(h), therefore, as a codification of EPA's regulatory actions
regarding RVP up to that point.\35\ Accordingly, CAA sec. 211(h)(1)
prohibits the sale of gasoline with an RVP in excess of 9.0 psi \36\
during the high ozone season while CAA sec. 211(h)(2) allows EPA to
promulgate more stringent RVP requirements for nonattainment areas. CAA
sec. 211(h)(4) provides a 1.0 psi RVP allowance for ``fuel blends
containing gasoline and 10 percent'' ethanol and recognizes the
existence of the 1979 CAA sec. 211(f)(4) waiver for E10--the only
ethanol blend which had received such a waiver at that time--in the
``deemed to comply'' provisions contained in CAA sec. 211(h)(4)(A)-(C),
which are discussed in more detail below.
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    \35\ See 76 FR 44433 (July 25, 2011).
    \36\ 9.0 psi RVP was and continues to be the level of RVP for
gasoline certification fuel used to certify motor vehicles.
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a. Pre-Enactment Volatility Regulations
    In 1987, prior to the CAA Amendments of 1990, EPA for the first
time proposed limitations on the volatility of gasoline under CAA sec.
211(c), which provides EPA with general authority to regulate fuels and
fuel additives. These limitations on gasoline volatility were proposed
to address evaporative emissions from gasoline-fueled vehicles due to
their contribution to ozone formation. The volatility of gasoline had
begun rising significantly above the 9.0 psi RVP vehicle certification
fuel level in the years preceding EPA's action, due to a strong
economic incentive to add butane \37\ to fuel due to favorable blending
economics.\38\ This led to very high evaporative VOC emissions from the
in-use fleet of gasoline vehicles. EPA believed that matching the
volatility of in-use gasoline to that of certification fuel would
reduce evaporative emissions and would help ensure that the vehicles
continued to have the same evaporative emissions levels in-use to the
levels on which the vehicles were certified. In particular, limiting
the volatility of gasoline to 9.0 psi RVP in the summer, which is the
level in the indolene, a gasoline containing no ethanol, on which
vehicles were certified under CAA sec. 206 at that time, would reduce
emissions from all gasoline-related sources, enabling additional VOC
emission reductions.\39\
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    \37\ Butane, in this context, refers to a high-volatility,
relatively inexpensive gasoline blendstock that gasoline refiners
typically add to or remove from gasoline to control RVP.
    \38\ 52 FR 31279 (August 19, 1987).
    \39\ See 52 FR 31274 at 31278-31287 (August 19, 1987).
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    At the time of the 1987 proposal, parties were primarily making E10
through ``splash blending,'' as described above. Adding 10 percent
ethanol to gasoline, however, causes roughly a 1.0 psi RVP increase in
the blend's volatility.\40\ At the time, due to the limited amount of
ethanol blended into gasoline, almost no low-RVP gasoline was available
into which 10 percent ethanol could be splash-blended without the
blended fuel exceeding the proposed RVP limit. Thus, even though the
CAA sec. 211(f)(4) waiver allowed E10 to be lawfully introduced into

commerce, the lowered RVP standards had the potential to shut down the
nascent ethanol blending industry.
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    \40\ Id.
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    To address this potential hurdle to continued ethanol blending, in
the 1987 proposal, EPA included interim regulations for gasohol that
allowed it to be 1.0 psi RVP higher than otherwise required for
gasoline.\41\ In describing our regulatory action to provide this
flexibility, we refer to it as the 1-psi RVP allowance.\42\ As a
result, downstream blenders could add 10 percent ethanol into the
gasoline that refineries had already produced without violating the
proposed RVP regulations. The Agency, therefore, designed the 1-psi RVP
allowance as a means to ensure that the effect of the CAA sec.
211(f)(4) waiver that was then applicable to E10 would not be
nullified, as well as to address other public policy concerns, such as
reducing dependence on foreign oil and making use of excess
agricultural production, as referenced above. The Agency proposed that
the 1-psi RVP allowance be conditioned on sampling and testing the
final blend of gasoline and ethanol for RVP by all regulated parties,
including downstream blenders, that elected to use the waiver.\43\
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    \41\ See 52 FR 31274, 31316 (August 19, 1987).
    \42\ See 52 FR 31316 (August 19, 1987).
    \43\ See 52 FR 31274, proposed 40 CFR 80.27(d)(1) (August 19,
1987). See also 54 FR 11872-73 (March 22, 1989), where we declined
to finalize this approach.
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    In 1989, EPA finalized regulations that imposed limits on the
volatility of gasoline and ethanol blends as ``Phase I'' of a two-phase
regulation under CAA sec. 211(c). EPA's regulation established a
maximum RVP standard of 10.5 psi for gasoline during the high ozone
season.\44\ In that action, EPA also provided an RVP allowance ``for
gasoline-ethanol blends commonly known as gasohol'' that was 1.0 psi
higher than for gasoline.\45\ This was finalized as an interim measure
with the intent to revisit the issue in ``Phase II'' of the volatility
regulations.\46\
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    \44\ See 54 FR 11879 (March 22, 1989).
    \45\ Id.
    \46\ Id.
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    EPA's final regulations in ``Phase I'' provided that in order to
receive the 1-psi RVP allowance, ``gasoline must contain at least 9%
ethanol (by volume),'' and that ``the ethanol content of gasoline shall
be determined by use of one of the testing methodologies specified in
Appendix F to this part.'' The regulations also provided that ``the
maximum ethanol content of gasoline shall not exceed any applicable
waiver conditions under section 211(f)(4) of the Clean Air Act.'' \47\
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    \47\ 54 FR 11872-73 (March 22, 1989) (codified at 40 CFR
80.27(d)).
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    In ``Phase I,'' EPA did not place limits on the upper bound of the
ethanol content, other than by providing, as quoted above, that the
ethanol content shall not exceed any applicable waiver conditions under
CAA sec. 211(f)(4) (and thereby implicitly incorporating any upper-
bound limit imposed as a condition on any future applicable waiver). At
the time, the highest permissible ethanol content under a CAA sec.
211(f)(4) waiver was 10 percent ethanol, and thus, this provision could
only apply to blends containing 9-10 percent ethanol. In other words,
EPA designed the 1-psi RVP allowance to allow for the continued lawful
introduction into commerce of E10 and the Phase I RVP regulatory
language would have automatically accommodated future increases in
allowable ethanol concentration in gasoline under a CAA sec. 211(f)(4)
waiver.
    In June 1990, in ``Phase II'' of the volatility regulations, EPA
established a maximum RVP standard of 9.0 psi for gasoline during the
high ozone season. The regulations also established an RVP standard of
7.8 psi for gasoline during the high ozone season in both ozone
attainment and nonattainment areas in the southern states of the
country. EPA further maintained the 1-psi RVP allowance for blends of
10 percent ethanol and gasoline and did not modify the regulations at
40 CFR 80.27(d).\48\ Thus, both the language stating that the gasoline
must contain at least 9 percent ethanol, and the language stating that
the maximum ethanol content of gasoline shall not exceed any applicable
waiver conditions under CAA sec. 211(f)(4), remained in the
regulations, effectively allowing for automatic accommodation of the 1-
psi RVP allowance for increases in allowable ethanol concentration in
gasoline under future CAA sec. 211(f)(4) waivers.\49\ In doing so, the
Agency reiterated that these regulatory provisions are intended to
accommodate the importance of ethanol to the nation's energy security
as well as the agricultural economy sector. The Agency also addressed
air quality impacts of allowing the 1-psi RVP allowance given that a
higher RVP limit for blends of 10 percent ethanol and gasoline would
result in increased evaporative VOC emissions in the small part of the
gasoline market attributable at that time to blended. EPA explained
that the 1 psi RVP allowance ``reflects the moderation in EPA's concern
about negative air quality impact as well as a reluctance to threaten
the motor fuel ethanol production and blending industries with
collapse.'' \50\
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    \48\ See 55 FR 23658, 23660 (June 11, 1990).
    \49\ Id.
    \50\ ``While some believe the industry should not exist . . .
[o]ther agencies and Congress will continue to address related
agricultural, trade and energy issues which have led to federal
support for the existence of the gasohol industry.'' 55 FR 23666
(June 11, 1990).
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b. Enactment of CAA Sec. 211(h)
    In November 1990, Congress enacted the CAA Amendments of 1990,
including CAA sec. 211(h), the first statutory provision specifically
addressing the volatility of gasoline. CAA sec. 211(h)(1) required EPA
``to promulgate regulations making it unlawful . . . during the high
ozone season to sell . . . or introduce into commerce gasoline with a
Reid Vapor Pressure in excess of 9.0 pounds per square inch.'' Further
in CAA sec. 211(h)(4), Congress, following EPA's lead in the 1989 and
1990 volatility regulations, also allowed fuel blends containing
gasoline and 10 percent ethanol to have 1 psi higher RVP than the RVP
standard otherwise established in CAA sec. 211(h)(1). This statutory
provision is referred to as the 1-psi RVP waiver.\51\ CAA sec.
211(h)(4) provides the following ethanol waiver: ``for fuel blends
containing gasoline and 10 percent denatured anhydrous ethanol, the
Reid vapor pressure limitation under this subsection shall be one pound
per square inch (psi) greater than the applicable Reid vapor pressure
limitations established under [CAA sec. 211(h)(1)].''
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    \51\ We also refer to the regulations at 40 CFR 80.27 as the
``1-psi RVP waiver'' as well.
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    According to legislative history, ``[t]his provision was included
in recognition that gasoline and ethanol are mixed after the refining
process has been completed. It was recognized that to require ethanol
to meet a nine pound RVP would require the creation of a production and
distribution network for sub-nine pound RVP gasoline. The cost of
producing and distributing this type of fuel would be prohibitive to
the petroleum industry and would likely result in the termination of
the availability of ethanol in the marketplace.'' \52\ EPA has
interpreted CAA sec. 211(h) as largely a codification of our prior RVP
regulations and the 1-psi RVP allowance.\53\
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    \52\ S. Rep. No. 101-228, at 110 (1989) (Conf. Rep.); reprinted
at 5 Leg. Hist. at 8450 (1993).
    \53\ See 76 FR 44433 (July 25, 2011).
---------------------------------------------------------------------------

    Further, Congress enacted a conditional defense against liability
for violations of the RVP level allowed

under the 1-psi waiver by providing that full compliance ``shall be
deemed'' with a demonstration that (A) ``the gasoline portion of the
blend complies with the Reid vapor pressure limitations promulgated
pursuant to this subsection;'' (B) ``the ethanol portion of the blend
does not exceed its waiver condition under subsection (f)(4) of this
section;'' and (C) ``no additional alcohol or other additive has been
added to increase the Reid Vapor Pressure of the ethanol portion of
this blend.'' (CAA sec. 211(h)(4)). This is referred to as the ``deemed
to comply'' provision, or the alternative compliance mechanism for the
1-psi waiver. It is considered a statutorily mandated defense that
allows regulated parties, such as downstream oxygenate blenders,\54\ to
demonstrate compliance with the RVP standard while taking advantage of
the 1-psi waiver by meeting the specified conditions in CAA sec.
211(h)(4) in lieu of complying with the testing provisions in 40 CFR
80.27(d)(2) (1987). It also reflects Congressional response to EPA's
proposed compliance testing provisions for the 1-psi RVP allowance in
the 1987 proposed rulemaking, which Congress viewed as complicated and
burdensome given the industry practices at the time used to produce
gasohol: ``the enforcement strategy recently proposed by the Agency . .
. would be totally unworkable for those motor vehicle fuels which are a
blend of gasoline and ethanol and which are allowed a higher RVP limit
under the reported bill.'' \55\
---------------------------------------------------------------------------

    \54\ ``Oxygenate blenders'' are defined in our regulations as
``any person who owns, leases, operates, controls, or supervises an
oxygenate blending facility, or who owns or controls the blendstock
or gasoline used or the gasoline produced at an oxygenate blending
facility.'' An oxygenate blending facility is defined as ``any
facility (including a truck) at which oxygenate is added to gasoline
or blendstock, and at which the quality or quantity of gasoline is
not altered in any other manner except for the addition of deposit
control additives.'' See 40 CFR 80.2(mm) and (ll).
    \55\ S. Rep. No. 100-231, 100th Cong. 1st Sess. at 149 (1987).
---------------------------------------------------------------------------

c. Implementation of CAA Sec. 211(h)(4)
    Subsequent to Congress's enactment of CAA sec. 211(h)(4), EPA
modified our volatility regulations to more explicitly align with the
new statutory provisions, but ``did not propos[e] any change to the
current requirement that the blend contain between 9 and 10 percent
ethanol (by volume) to obtain the one psi allowance.'' \56\ However,
EPA did modify its regulations at 40 CFR 80.27 to clarify that
``gasoline must contain denatured, anhydrous ethanol,'' and that
``[t]he concentration of the ethanol, excluding the required denaturing
agent, must be at least 9% and no more than 10% (by volume) of the
gasoline'' (where, as quoted above, the previous version of the
regulations provided that gasoline ``must contain at least 9% ethanol''
to qualify for the 1-psi RVP allowance and thus did not set an upper
limit on ethanol content). At that time, we read both the statutory 1-
psi waiver provision and the ``deemed to comply'' provision in CAA sec.
211(h)(4) together to limit the volume concentration of ethanol subject
to the CAA sec. 211(h)(4) waiver to between 9 and 10 percent, as only
blends of gasoline and up to 10 percent ethanol had a waiver under CAA
sec. 211(f)(4) at the time EPA promulgated the RVP requirements.\57\ We
further stated that ``this is consistent with Congressional intent
[because] the nature of the blending process . . . further complicates
a requirement that the ethanol portion of the blend be exactly 10
percent ethanol.'' \58\ For these reasons, the 1-psi waiver reflected
Congressional recognition of the existing CAA sec. 211(f)(4) waiver for
E10; Congress intended that the 1-psi waiver from the 9.0 psi RVP
requirement in CAA sec. 211(h)(1) would allow for E10's continued
lawful introduction into commerce.\59\
---------------------------------------------------------------------------

    \56\ See 56 FR 64708 (December 12, 1991).
    \57\ Id.
    \58\ Id.
    \59\ Id.
---------------------------------------------------------------------------

    In issuing implementing regulations at 40 CFR 80.28(g)(8) related
to the ``deemed to comply'' provision in CAA sec. 211(h)(4), EPA
allowed parties to demonstrate a defense against liability by making
the showings provided in CAA sec. 211(h)(4), stating that ``EPA
believes this defense is limited to ethanol blends which meet the
minimum 9 percent requirement in the regulations and the maximum 10
percent requirement in the waivers under section 211(f)(4).'' \60\
---------------------------------------------------------------------------

    \60\ Id. and 40 CFR 80.28(g).
---------------------------------------------------------------------------

4. Background of E10 and E15 CAA Sec. 211(f)(4) Waivers
    CAA sec. 211(f)(1) makes it unlawful for ``any manufacturer of any
fuel or fuel additive'' to first introduce into commerce, or to
increase the concentration in use of, any fuel or fuel additive for use
by any person in motor vehicles manufactured after MY1974, which is not
substantially similar (commonly referred to as ``sub sim'') to any fuel
or fuel additive used in the certification of any MY1975, or subsequent
model year, vehicle or engine under CAA sec. 206. Fuels or fuel
additives that are not sub sim to a fuel or fuel additive used in
certification cannot be introduced into commerce unless EPA has granted
a waiver under CAA sec. 211(f)(4). CAA sec. 211(f)(4) provides that
upon application of any fuel or fuel additive manufacturer, the
Administrator may waive the prohibitions of CAA sec. 211(f)(1) if the
Administrator determines that the applicant has established that such
fuel or fuel additive, or a specified concentration thereof, will not
cause or contribute to a failure of any emission control device or
system (over the useful life of the motor vehicle, motor vehicle
engine, nonroad engine, or nonroad vehicle in which such device or
system is used) to achieve compliance by the vehicle or engine with the
emission standards to which it has been certified pursuant to CAA sec.
206 and 213(a).
    In 1978, a waiver application was submitted for gasoline containing
ethanol at 10 percent by volume. EPA did not act to grant or deny the
application for a waiver for E10, and consequently, under the statutory
scheme as it existed at that time, the waiver was deemed granted by
operation of law.\61\ Thus, E10 was granted a waiver under CAA sec.
211(f)(4) without any conditions, in contrast to other CAA sec.
211(f)(4) waivers, which included, for example, conditions on fuel
characteristics such as RVP.\62\
---------------------------------------------------------------------------

    \61\ See 44 FR 20777 (April 6, 1979).
    \62\ See, e.g., ``Fuels and Fuel Additives; Waiver
Application,'' Octamix Waiver, 53 FR 3636 (February 8, 1988).
---------------------------------------------------------------------------

    For E15, EPA granted partial waivers under CAA sec. 211(f)(4) in
2010 and 2011.\63\ In March 2009, Growth Energy and 54 ethanol
manufacturers submitted an application to EPA to grant a waiver under
CAA sec. 211(f)(4) to allow E15 for use in all vehicles, engines, and
equipment (``the E15 waiver request''). On October 13, 2010, EPA
partially approved the E15 waiver request to allow the introduction of
E15 into commerce for use in MY2007 and newer light-duty motor vehicles
subject to certain waiver conditions.\64\ Subsequently, on January 21,
2011, EPA extended this partial waiver to include MY2001-2006 light-
duty motor vehicles after receiving and analyzing additional U.S.
Department of Energy (``DOE'') test data and finding that E15 will not
cause or contribute to a failure to achieve compliance with the
emissions standards to which these vehicles were certified over their
useful lives.\65\ EPA also denied the waiver request for MY2000 and
older light-duty motor

vehicles, as well as all model year heavy-duty gasoline engines and
vehicles, highway and off-highway motorcycles, and nonroad engines,
vehicles, and equipment. This denial was based on EPA's engineering
analysis that E15 could adversely affect the emissions and emissions
controls of vehicles, engines, and equipment not covered by the partial
waivers and that the applicants had not provided sufficient data or
other information to demonstrate that E15 would not cause or contribute
to a failure to achieve compliance with the emissions standards to
which these vehicles, engines, and equipment were certified over their
full useful lives, as required by CAA sec. 211(f)(4).
---------------------------------------------------------------------------

    \63\ See 75 FR 68094 (November 4, 2010) and 76 FR 4662 (January
26, 2011), respectively.
    \64\ See 75 FR 68094 (November 4, 2010).
    \65\ See 76 FR 4662 (January 26, 2011).
---------------------------------------------------------------------------

    In the October 2010 waiver, for MY2007 and newer motor vehicles,
EPA also concluded that the data and information show that E15 will not
lead to violations of evaporative emissions standards, so long as the
fuel does not exceed an RVP of 9.0 psi in the summer.\66\ EPA imposed a
condition that allows fuel manufacturers to introduce E15 into commerce
so long as the E15 does not have an RVP ``in excess of 9.0 psi during
the time period from May 1 to September 15.'' \67\ Subsequently, in the
January 2011 waiver, EPA imposed identical waiver conditions for
MY2001-2006 motor vehicles, including the requirement that the fuel not
exceed an RVP of 9.0 psi in the summer, based on the same
conclusion.\68\
---------------------------------------------------------------------------

    \66\ See 75 FR 68149-68150 (November 4, 2010).
    \67\ See 75 FR 68149 (November 4, 2010).
    \68\ See 76 FR 4682-4683 (January 26, 2011).
---------------------------------------------------------------------------

    Taken together, these partial waivers allow E15 to be used in
MY2001 and newer light-duty motor vehicles subject to particular waiver
conditions, including fuel quality conditions and conditions on the
sale and use of E15. These waiver conditions include the prohibition on
the use of E15 in pre-MY2001 motor vehicles, in addition to all model
year heavy-duty gasoline engines or vehicles, or motorcycles, as well
as any nonroad engines or nonroad vehicles. The waiver conditions also
place limitations on the ethanol that can be added (both the
concentration and quality),\69\ as well as a condition that the RVP of
the final fuel not exceed 9.0 psi.\70\ The waiver conditions also
require fuel and fuel additive manufacturers to submit to EPA a
misfueling mitigation plan describing all reasonable precautions for
ensuring E15 is only used in MY2001 and newer motor vehicles, as
described in the waiver conditions.\71\ To help facilitate the
implementation of the waiver conditions and place requirements on
parties other than fuel and fuel additive manufacturers, EPA
promulgated the Misfueling Mitigation Rule in 2011, under CAA sec.
211(c), subsequent to the E15 partial waiver decisions.\72\ The MMR
imposed fuel dispenser labeling, PTD, and compliance survey
requirements on parties that make and distribute E15. EPA promulgated
the MMR ``to mitigate misfueling with E15 that lawfully has been
introduced into commerce under the terms of the waiver[s]. The waiver
conditions, and implementation of the waiver conditions, address a
closely related but different issue--when, how and by whom E15 can be
introduced into commerce under the partial waiver decisions. This rule
only addresses the issue of mitigating misfueling in the event E15 is
lawfully introduced into commerce under the partial waivers, and is
issued under EPA's authority under section 211(c).'' \73\ The MMR also
applied EPA's prior interpretation of the 1-psi waiver in CAA sec.
211(h)(4) as not applying to E15 and adopted certain regulations
designed to effectuate that interpretation.\74\ In this action, EPA is
interpreting CAA sec. 211(h)(4) and also amending the regulations to
implement that interpretation.
---------------------------------------------------------------------------

    \69\ For example, the ethanol used to make E15 must meet ASTM
D4806-10 specifications for ethanol quality. See ASTM D4806-10,
``Standard Specification for Denatured Fuel Ethanol for Blending
with Gasolines for Use as Automotive Spark-Ignition Engine Fuel,''
ASTM International, West Conshohocken, PA, 2010.
    \70\ See 75 FR 68094 (November 4, 2010) and 76 FR 4662 (January
26, 2011). This RVP limit is identical to the limitation under CAA
sec. 211(h)(1) of 9.0 psi RVP during the high ozone season. The high
ozone season was defined by the Administrator via regulation to mean
the period from June 1 to September 15 of any calendar year.
    \71\ See 76 FR 4662, 4582 (January 26, 2011).
    \72\ See 76 FR 44406 (July 25, 2011).
    \73\ See 76 FR 44406, 44440 (July 25, 2011).
    \74\ As discussed further in Section II.B, in promulgating
regulations following the enactment of CAA sec. 211(h)(4), EPA
interpreted 211(h)(4) to apply to gasoline-ethanol blends containing
between 9 and 10 percent ethanol. See 56 FR 64708 (December 12,
1991).
---------------------------------------------------------------------------

B. Interpretation of CAA Sec. 211(h)(4)

    In this action, we are finalizing our proposed change in
interpretation of CAA sec. 211(h)(4). We find that the statutory
language at CAA sec. 211(h)(4) is ambiguous. We last interpreted this
section in 2011, and in this action we are changing our interpretation.
Our new interpretation is consistent with the text of the provision,
its context within CAA sec. 211(h), and Congressional intent. It is
also reasonable in light of the changed circumstances since we last
interpreted this provision in 2011, and in light of EPA's determination
that it is appropriate to provide E15 the 1-psi waiver.
    As discussed in Section II.A.2, gasoline-ethanol blends in the
marketplace have increased such that the in-use gasoline supply is now
almost entirely E10. E15 is now present in the marketplace, but the
current limitation of the applicability of the 1-psi waiver to only E10
in most CG areas is one of several hurdles to the continued entry of
E15 into the marketplace (discussed in more detail in Section
II.E).\75\ The same market limitation that prompted EPA to provide the
1-psi waiver for E10 nationwide in 1989 currently exists for E15 in
most CG areas. Namely, in order for E15 to be distributed in most CG
areas, it requires the production and distribution of a higher cost
low-RVP CBOB into which 15 percent ethanol could be blended while still
meeting the 9.0 psi RVP standard for gasoline during the high ozone
season.\76\ This is because E10 currently receives the benefit of the
1-psi waiver, but E15 does not. As a result, some parties for which
other constraints (e.g., compatible service station equipment) are not
of concern might still not be able to produce and distribute E15, given
the difficulty and cost associated with obtaining CBOB that when
blended to produce E15 would meet the 9.0 psi RVP during the summer.
With the 1-psi waiver, 15 percent ethanol could be blended using the
same CBOBs currently being distributed for use with 10 percent ethanol,
year-round.\77\ This action, therefore, is a response to changed
circumstances since the Agency's promulgation of RVP regulations in
1990, which pre-dates EPAct in 2005 and EISA in 2007, and since we last
interpreted CAA sec. 211(h)(4) in 2011. Further, because blending 15
volume percent ethanol into gasoline would result in an approximate 1.0
psi RVP increase, similar to E10, the resultant RVP for any blended
fuel would be no higher than the RVP standard plus the 1-psi waiver,
which is currently 10.0 psi for a gasoline-ethanol blended fuel

containing 10 percent ethanol.\78\ This interpretation is consistent
with the plain language of CAA sec. 211(h) and with Congress' intent to
promote ethanol blending into gasoline, and is not expected to cause
significant increases in emissions as compared to the current market
situation with E10 as discussed in Section II.F.
---------------------------------------------------------------------------

    \75\ See, e.g., Prime the Pump: Driving Ethanol Gallons,
available at: https://growthenergy.org/wp-content/uploads/2019/01/MDEV-19022-PTP-Overview-2019-01-25.pdf.
    \76\ Some parties have access to low RVP blendstocks created for
low-RVP areas and RFG areas. However, these blendstocks are not
widely distributed in all areas. For a list of state low-RVP areas,
see EPA's ``State Fuels'' website available at: https://www.epa.gov/gasoline-standards/state-fuels.
    \77\ In reformulated gasoline areas (approximately one-third of
gasoline nationwide) and certain other areas that do not provide a
1-psi waiver for E10, E15 can already be blended using the same
blendstocks used for E10.
    \78\ This is true for E15 made from blends of certified gasoline
or BOB and ethanol. This volatility relationship is not maintained
when other products (e.g., natural gas liquids) are blended to make
E15.
---------------------------------------------------------------------------

    In the MMR, we interpreted CAA sec. 211(h)(4) (which affords a 1-
psi waiver to ``fuel blends containing gasoline and 10 percent
denatured anhydrous ethanol'') as providing a 1-psi waiver for fuel
blends of gasoline and at least 9 volume percent ethanol and not more
than 10 volume percent ethanol despite having given E15 a partial CAA
sec. 211(f)(4) waiver from sub sim. As previously explained, this
interpretation was premised on a reading of regulations and statutory
provisions that reflected the existence of a CAA sec. 211(f)(4) waiver
for E10, which was the highest available ethanol content in the
gasoline marketplace at the time of the 1990 Amendments to the CAA, and
we did not alter this interpretation based on the existence of the E15
CAA sec. 211(f)(4) partial waivers. In that action, we read CAA secs.
211(h)(4), including the ``deemed to comply'' provision, and 211(h)(5)
together to only apply the 1-psi waiver for E10. In this action, we are
adopting a new interpretation of CAA sec. 211(h)(4), under which the
provision specifies the minimum ethanol content that fuel blends
containing ethanol and gasoline must contain in order to qualify for
the 1-psi waiver. We are finalizing a new interpretation of this
statutory provision that would allow the 1-psi waiver for gasoline
containing at least 10 percent ethanol. This reading, which harmonizes
all relevant provisions, removes the current, anomalous result whereby
a sole ethanol blend (E10) receives the 1-psi waiver, when market
conditions have changed over time such that E15 is an increased
presence in the marketplace. Specifically, it would mean that the 1-psi
waiver is equally applicable to gasoline-ethanol blends the agency
finds are sub sim under CAA sec. 211(f)(1) and those gasoline-ethanol
blends that receive or have received a CAA sec. 211(f)(4) waiver. At
present, these are blends up to 15 percent ethanol, based on: (1) EPA's
prior issuance of partial waivers in 2010 and 2011 under CAA sec.
211(f)(4) for E15; and (2) the finding in this rulemaking that E15 is
sub sim to Tier 3 E10 certification fuel.\79\
---------------------------------------------------------------------------

    \79\ See discussion at Section II.D.1, infra, for further
discussion of the regulatory changes associated with this changed
interpretation.
---------------------------------------------------------------------------

    Moreover, it is well settled that EPA has inherent authority to
reconsider, revise, or repeal past decisions to the extent permitted by
law so long as we provide a reasoned explanation. Many commenters
pointed to EPA's previous interpretation of CAA sec. 211(h)(4) in the
volatility regulations promulgated after the CAA Amendments of 1990,
and the MMR as reasons why EPA's new interpretation is flawed. We do
not find these arguments persuasive because of EPA's inherent authority
to reconsider, revise, or repeal past decisions to the extent permitted
by law. This authority exists in part because EPA's interpretations of
the statutes we administer ``are not carved in stone.'' \80\ An agency
``must consider varying interpretations and the wisdom of its policy on
a continuing basis.'' \81\ This is true when, as is the case here,
review is undertaken ``in response to changed factual circumstances or
a change in administration.'' \82\ EPA must also be cognizant where we
are changing a prior position that the revised position is permissible
under the statute and must articulate a reasoned basis for the
change.\83\ In this case, EPA's interpretation of the text of CAA sec.
211(h)(4) is a reasonable one, and takes into account changed
circumstances that have arisen since we issued the partial waivers for
E15 in 2010 and 2011.
---------------------------------------------------------------------------

    \80\ Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 863
(1984).
    \81\ Id. at 863-64.
    \82\ Nat'l Cable & Telecomms. Ass'n v. Brand X internet Servs.,
545 U.S. 967, 981 (2005). See also Nat'l Ass'n of Home Builders v.
EPA, 682 F.3d 1032, 1043 (DC Cir., 2012) (change in administration
is a ``perfectly reasonable basis'' for an agency's reappraisal of
its regulations and programs).
    \83\ FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515.
---------------------------------------------------------------------------

    The Clean Air Act does not define the term ``containing'' in the
phrase ``containing gasoline and 10 percent denatured anhydrous
ethanol,'' and at proposal, therefore, EPA relied on the dictionary
meaning that is reasonable, sensible and provides meaning to the
reading of CAA sec. 211(h)(4). As explained in more detail below and in
the response to comments (RTC) document accompanying this action, we
are interpreting this term to establish a lower limit on the minimum
ethanol content required for the 1-psi waiver in CAA sec. 211(h)(4).
This interpretation applies to 211(h)(4) in its entirety, and
211(h)(5). Most of the commenters that argued for limiting the 1-psi
waiver only selected their preferred meaning of ``containing'' without
addressing whether that definition fit within the statutory scheme of
CAA sec. 211(h)(4) or makes sense in this context and we have addressed
these comments in Section <IP_ADDRESS> of the RTC document. Even when other
potential meanings of the term are considered, EPA's interpretation and
definition are eminently reasonable, make the most sense and provide
meaning to the reading of CAA sec. 211(h)(4) in light of the current
circumstances with respect to E15.\84\
---------------------------------------------------------------------------

    \84\ See General Dynamics Land Systems v. Cline, 540 U.S. 581,
596 (2004) (finding that ``age'' has several commonly understood
meanings which should be interpreted in the context used).
---------------------------------------------------------------------------

    As explained at proposal, Congress enacted CAA sec. 211(h)(4) when
10 percent ethanol was the highest permissible ethanol content in
gasoline under the 1978 CAA sec. 211(f)(4) waiver that allowed for its
introduction into commerce. At that time, there were no other CAA sec.
211(f)(4) waivers for gasoline-ethanol blends. As also explained at
proposal, Congress promulgated the ``deemed to comply'' provision as an
enforcement mechanism for the 1-psi waiver. Of relevance is the
criterion that ``the ethanol portion of the blend does not exceed its
waiver condition under subsection (f)(4).'' \85\ In 2011, when EPA
declined to extend the 1-psi waiver to E15, the agency's interpretation
was premised largely on this additional criterion for the 1-psi
waiver.\86\ Nothing in these prior agency interpretations, however,
sheds light on how to read ``containing,'' at the current time.
---------------------------------------------------------------------------

    \85\ CAA sec. 211(h)(4)(B).
    \86\ See 76 FR 44406, 44433-35 (July 25, 2011).
---------------------------------------------------------------------------

    At proposal, we also explained that lack of modifiers in the phrase
``fuel blends containing gasoline and ten percent ethanol,'' supports
our reading that Congress established a lower limit on the minimum
ethanol content for the 1-psi waiver rather than an upper limit on the
ethanol content. We then explained that Congress could legislate and
would have likely employed terms connoting a maximum ethanol content
limit in CAA sec. 211(h)(4) similar to, for example, CAA secs. 211(k)
and (m) had Congress intended for the ethanol content to be an upper
bound. CAA secs. 211(k) and (m) are mandatory gasoline content
provisions that also employ specific units of measurement as an
indication of measurement precision. CAA sec. 211(m)(2) provides that
``gasoline is to be blended to contain not less than 2.7 percent oxygen
by weight.'' Section 211(k)(3)(A)(1)

provides that ``[t]he benzene content of reformulated gasoline shall
not exceed 1.0 per cent by volume;'' section 211(k)(3)(A)(ii) provides
that ``[t]he aromatics hydrocarbon content of the reformulated gasoline
shall not exceed 25 percent by volume.'' We further noted that CAA sec.
211(h)(1) employs the modifier ``in excess'' as compared to CAA sec.
211(h)(4). But Congress notably did not use any modifier in CAA sec.
211(h)(4), which sets out a relaxation of a mandatory provision. It,
therefore, appears that Congress made a deliberate choice--where
Congress sought to impose mandatory fuel content requirements, such as
in CAA secs. 211(k) and (m), it utilized modifiers as compared to where
it set out an allowance or relaxation of a mandatory requirement such
as CAA sec. 211(h)(4) for RVP, where it did not utilize modifiers. In
other words, where Congress intended to impose a ``no greater than''
requirement addressing fuel properties, it explicitly did so. In
contrast, in CAA sec. 211(h)(4), Congress included no such language.
    Additionally, Congress employed modifiers where fuel content or
properties were of a nature subject to precise determination, but as
also shown elsewhere in this preamble, Congress promulgated the deemed
to comply provision in response to measurement imprecision resulting
from splash blending ethanol into gasoline. These provisions thus
reflect a deliberate and intentional scheme and confirm our view that
Congress legislates and the omission of modifiers in CAA sec. 211(h)(4)
was also deliberate and intentional.
    Given that this provision lacks modifiers for the term
``containing,'' in contrast to the other statutory provisions
referenced above, there is support for our reading that this term as
employed in the phrase ``fuel blends containing gasoline and ten
percent ethanol'' is ambiguous and provides room for EPA to make
interpretive and policy choices.
    It is therefore permissible, and supported by the text of the
statute, where Congress has used only the ambiguous term ``containing''
in CAA sec. 211(h)(4), for EPA to interpret ``containing'' to mean
``containing at least.'' Given this ambiguity, EPA's construct only
needs to be a reasonable one and neither the best nor only reading of
``containing.'' (``Even if the statute does not compel EPA's reading,
and indeed even if EPA's reading is not the better reading, the statute
at a minimum is sufficiently ambiguous on this point to permit EPA's
reading.'') \87\ Where, as in this instance, EPA is confronted with a
reading of a provision that was enacted at the time the highest
permissible ethanol content under EPA's then-current regulations was
E10, this connotation of ``containing'' as specifying a minimum limit
or floor on the ethanol content for fuel blends to qualify for the 1-
psi waiver in CAA sec. 211(h)(4) is a permissible reading that gives
meaning to the phrase ``fuel blends containing gasoline and 10 percent
denatured anhydrous ethanol.'' It is neither strained nor contrived but
rather allows EPA as the agency tasked with administering the Clean Air
Act to give effect and meaning to the terms of a relevant provision.
(``The power of an administrative agency to administer a
congressionally created . . . program necessarily requires the
formulation of policy and the making of rules to fill any gap left,
implicitly or explicitly, by Congress.'') \88\
---------------------------------------------------------------------------

    \87\ NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014)
    \88\ Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 843
(1984).
---------------------------------------------------------------------------

    We are interpreting this language as establishing a lower limit, or
floor, on the minimum ethanol content for a 1-psi waiver from the
volatility requirements expressed in CAA sec. 211(h)(1), rather than an
upper limit on the ethanol content. As explained at proposal, we can
look to the use of the term ``containing'' in its ordinary sense, given
the purpose and context of CAA sec. 211(h)(4) described above.
``Containing'' is defined as ``to have within: hold.'' \89\ Under this
interpretation, the statute sets the minimum ethanol content, such that
all fuels which contain at least 10 percent ethanol may receive the 1-
psi waiver, including blends that contain more than 10 percent
ethanol.\90\ Therefore, E15, which has within it 10 percent denatured
anhydrous ethanol, meets this definition, and should receive the 1-psi
waiver specified in CAA sec. 211(h)(4).\91\
---------------------------------------------------------------------------

    \89\ Webster's Third New International Dictionary 491
(unabridged ed. 1981). See also American Heritage Dictionary online
2019, defining ``containing'' as ``to have within; hold.''
    \90\ We are not changing our interpretation of the term 10
volume percent, which includes as little as 9 volume percent, to
continue to provide the necessary blending flexibility for E10.
Comments requesting that EPA revise its interpretation to exclude
ethanol blends containing between 9 and 10 volume percent ethanol
are outside the scope of this action, since EPA proposed only to
interpret CAA sec. 211(h)(4) to apply to blends higher than 10
volume percent ethanol, and did not propose to revise its
interpretation that blends containing 9 volume percent ethanol also
receive the 1-psi waiver. Moreover, the text of CAA sec. 211(h)(4)
encompasses E10, and, as explained in regulations implementing CAA
sec. 211(h)(4), we stated that requiring exactly 10 volume percent
ethanol ``would place a next to impossible burden on ethanol
blenders,'' and that ``[t]he nature of the blending process itself .
. . further complicates a requirement that the ethanol portion of
the blend be exactly 10 percent ethanol.'' See 56 FR 24245 (May 29,
1991).
    \91\ CAA sec. 211(h)(5) also contains the language ``fuel blends
containing gasoline and ten percent denatured anhydrous ethanol.''
Our changed interpretation of CAA sec. 211(h)(4) also has
implications for CAA sec. 211(h)(5), which allows states to opt out
of the 1-psi wavier provided by CAA sec. 211(h)(4) for particular
areas upon a showing that the 1-psi waiver will increase emissions
that contribute to air pollution. Because the language in CAA sec.
211(h)(5) pertaining to the 1-psi waiver is identical to the
language in CAA sec. 211(h)(4), and both refer to the 1-psi waiver,
we believe that both sections should be read together to apply the
1-psi waiver to E10 and E15. Accordingly, we interpret CAA sec.
211(h)(5) to allow states to opt out of the 1-psi waiver provided by
CAA sec. 211(h)(4) for fuel blends containing gasoline and 9-15
percent denatured anhydrous ethanol.
---------------------------------------------------------------------------

    When EPA issued implementing regulations under both CAA sec. 211(c)
prior to the enactment of CAA sec. 211(h), and under CAA sec. 211(h),
once that provision was enacted, those regulations reflected the
highest permissible ethanol content at the time they were issued, which
was 10 percent ethanol under a CAA sec. 211(f)(4) waiver. In describing
the volatility regulations promulgated under CAA sec. 211(c), we stated
that the 1-psi waiver is ``for blends of gasoline with about 10 percent
ethanol, or gasohol.'' \92\ In regulations, we codified the CAA sec.
211(f)(4) waiver, providing that ``[t]he maximum ethanol content . . .
in gasoline shall not exceed any applicable waiver conditions under CAA
sec. 211(f)(4) waiver.'' \93\ Thus, EPA's actions merely reflected the
situation at the time the regulations were promulgated. Additionally,
prior EPA statements on the imprecise nature of gasoline-ethanol
blending also support the view that neither Congress nor EPA intended
to limit ethanol content for the 1-psi waiver. ``The nature of the
blending process . . . complicates a requirement that the ethanol
portion of the blend be exactly 10 percent ethanol.'' \94\
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    \92\ 55 FR 23660 (June 11, 1990).
    \93\ 55 FR 23660 (June 11, 1990) and 40 CFR 80.27(d)(2) (1987).
    \94\ 56 FR 24245 (May 29, 1991).
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    The phrase ``fuel blends containing gasoline and ten percent
ethanol'' is ambiguous, but as previously discussed, EPA as the agency
tasked with implementing CAA sec. 211(h)(4) is interpreting this
provision in a reasonable manner, which is consistent with the reading
articulated in the House bill, i.e., gasoline that contains at least 10
percent ethanol receives the 1-psi waiver.\95\ EPA is not aware of any
conference or committee reports, or

other legislative history, explaining why Congress ultimately enacted
the language in the CAA Amendments in lieu of the language in the House
Bill and commenters have not provided any such explanation. There is no
discussion, for example, of whether Congress felt that ``containing''
was sufficiently specific, or whether, as discussed above, the nature
of the blending process was likely to make a requirement of ``at
least'' ten percent difficult to meet in practice. Therefore, we do not
find the failure to adopt the ``containing at least 10 percent''
language in the final bill persuasive as to whether Congress intended
that meaning to be precluded under the statute.
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    \95\ See Edison Electric Inst. v. EPA, 2 F.3d 438, 451 (D.C.
Cir. 1993) (holding that ``the deletion of a word or phrase in the
throes of the legislative process does not ordinarily constitute,
without more, evidence of a specific legislative intent.'').
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    Our interpretation is also supported by the purpose of the 1-psi
waiver provision. The Senate Report published along with the enactment
of the 1990 CAA Amendments and CAA sec. 211(h)(4) also describes both
the purpose of including CAA sec. 211(h)(4), and general language about
ethanol use in the fuel supply. The report states that the 1-psi waiver
was:

included in recognition that gasoline and ethanol are mixed after
the refining process has been completed. It was recognized that to
require ethanol to meet a 9 pound RVP would require the creation of
a production and distribution network for sub-nine pound RVP
gasoline. The cost of producing and distributing this type of fuel
would be prohibitive to the petroleum industry and would likely
result in the termination of the availability of ethanol in the
marketplace. Under this provision, the RVP limitations promulgated
pursuant to this subsection for such ethanol/gasoline blends shall
be one pound per square inch greater than the applicable Reid vapor
pressure which apply to gasoline. Senate Report 101-228, at 3495.

    Finally, the Senate report states that the 1-psi waiver would
``allow ethanol blending to continue to be a viable alternative fuel,
with its beneficial environmental, economic, agricultural, energy
security and foreign policy implications.'' \96\ Like E10 at the time
of enactment, E15 currently requires the production and distribution of
low-RVP blendstock and the cost of producing and distributing this type
of blendstock has limited the availability of E15. While this
legislative history does not speak to the meaning of the word
``containing,'' it does articulate congressional intent in enacting the
provision, recognizing the role for ethanol in the marketplace. This
report and other relevant legislative history do not explicitly address
whether CAA sec. 211(h)(4) should apply to gasoline-ethanol blends that
contain at least 10 percent ethanol and are sub sim under CAA sec.
211(f)(1) or have a waiver under CAA sec. 211(f)(4), but, as explained
at proposal, the reasons it gives for extending the 1-psi waiver to
gasoline-ethanol blends up to 10 percent ethanol would today similarly
weigh in favor of interpreting the 1-psi waiver to apply to E15, given
that Congressional action in CAA sec. 211(h) was largely a ratification
of agency regulations for RVP (including the 1-psi waiver) that were
initiated in 1987, under CAA sec. 211(c).
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    \96\ See S. Rep. No. 101-228 at 110 (December 20, 1989).
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    Our primary consideration has been to balance the goals of limiting
gasoline volatility and ensure that the addition of ethanol does not
cause the exceedance of the maximum RVP standard, while also promoting
the use of ethanol consistent with the purpose of CAA sec. 211(h)(4).
As previously explained, blending gasoline with at least 10 percent
ethanol results in an approximate 1.0 psi RVP increase. It does not
result in ``different volatility levels than already recognized by EPA
as adding less than 1.0 psi RVP to gasoline.'' \97\ Similarly, we also
expect that E15 produced from the same BOB as E10 would have a similar
(if not slightly lower) RVP than E10 and thus, would not exceed the
current 10.0 psi RVP limit.\98\ Therefore, we are confident that
relative evaporative emissions effects for E15 would largely be similar
or slightly less than those for E10, as discussed in Section II.F.
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    \97\ Clean Air Act Amendments: Hearings on H.R. 2521, H.R. 3054
and H.R. 3196 Before the Subcommittee on Health and the House
Committee on Environment and Committee On Energy and Commerce, 100th
Cong. 1st Sess. (1987) (statement of Eric Vaughn, President and CEO
of renewable Fuels Association).
    \98\ ``Determination of the Potential Property Ranges of Mid-
Level Ethanol Blends.'' American Petroleum Institute, Washington,
DC. April 2010.
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    In sum, the primary consideration underlying the 1-psi waiver is to
limit gasoline volatility while promoting the use of ethanol due to its
importance to energy security and the agricultural sector. The
interpretation in this action will continue to further these policy
concerns given that agency action will now afford similar treatment to
all gasoline-ethanol blends.

C. Interpretation of ``Substantially Similar'' for Gasoline

    In this action, we are finalizing an interpretative rule which
determines that E15 with an RVP of 9.0 psi is substantially similar to
fuel used to certify Tier 3 light-duty vehicles (i.e., E10 at 9.0 psi
RVP) under CAA sec. 211(f)(1).\99\ This new interpretation of sub sim
would allow fuel manufacturers to introduce into commerce under CAA
sec. 211(f)(1) E15 for use in MY2001 and newer light-duty motor
vehicles because we find that E15 would have similar effects on the
emissions (exhaust and evaporative), materials compatibility, and
driveability when compared to Tier 3 E10 certification fuel when used
in MY2001 and newer light-duty motor vehicles.\100\ We are making this
determination for E15 solely in order to provide E15 produced by fuel
and fuel additive manufacturers the CAA sec. 211(h)(4) 1-psi waiver.
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    \99\ EPA does not have volatility standards on gasoline outside
of the regulatory control period (May 1 through September 15), which
includes the high ozone season (June 1 through September 15). For
both the 2008 definition and the new definition, gasoline introduced
into commerce outside of the regulatory control period is considered
sub sim if it meets any gasoline volatility class in ASTM D4814.
Tier 3 vehicles must be certified on fuels described at 40 CFR
1065.710(b). For purposes of this preamble, we refer to
certification test fuel used in certification testing for Tier 3
motor vehicles that contains 10 volume percent ethanol as ``Tier 3
E10 certification fuel.'' Tier 3 E10 certification fuel has an RVP
of approximately 9.0 psi.
    \100\ Auto manufacturers certified some light-duty motor
vehicles using Tier 3 E10 certification fuel as early as MY2017 and
almost all auto manufacturers must certify their light-duty motor
vehicles using Tier 3 E10 certification fuel by MY2020.
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    Additionally, we are not making this determination for E15 for use
in MY2000 and older motor vehicles, heavy-duty gasoline engines and
vehicles, on and off-highway motorcycles, and nonroad engines,
vehicles, and equipment as we have determined that E15 is not
``substantially similar'' to Tier 3 E10 certification fuel when used in
these vehicles, engines, and equipment.\101\ Our technical
justification for doing so is provided in Sections II.C.6-8.
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    \101\ For purposes of this preamble, nonroad engines, vehicles,
and equipment (including motorcycles and marine engines) are
referred to as ``nonroad products.''
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    This determination would make it lawful for any fuel or fuel
additive manufacturer to make and introduce into commerce E15 at 10.0
psi RVP during the summer without the use of the E15 waivers under CAA
sec. 211(f)(4). In conjunction with our interpretation of CAA sec.
211(h)(4) described in Section II.B, this would allow all parties the
ability to lawfully introduce into commerce E15 at 10.0 psi RVP from
May 1 through September 15 for use in MY2001 and newer light-duty
vehicles, and is needed to effectuate the 1-psi waiver provided for E15
under our revised interpretation of CAA sec. 211(h)(4).\102\
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    \102\ Without the sub sim determination, only parties who are
not fuel or fuel additive manufacturers as defined in 40 CFR 79.2,
as discussed in the NPRM and in Section II.D.3, could introduce E15
into commerce at 10.0 psi in the summer.

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    Prohibitions on the use of E15 in all other on-road and non-road
products that currently apply through regulations established under CAA
sec. 211(c) remain in place, and parties that make and distribute E15,
and ethanol for use in producing E15, would still need to satisfy the
MMR requirements under 40 CFR part 80, subpart N. However, we are also
including parameters within our definition of sub sim that fuel and
fuel additive manufacturers take reasonable precautions to ensure that
E15 is only used in vehicles, engines, and equipment for which E15 is
sub sim to Tier 3 E10 certification fuel. This includes submission to
EPA for approval of a misfueling mitigation plan as previously required
under the partial waivers and discussed further in Section II.C.9.\103\
This section outlines the background and rationale for our proposed
interpretative rulemaking.
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    \103\ Companies that already have an approved misfueling
mitigation plan under the E15 CAA sec. 211(f)(4) waivers will not
need to submit for approval a separate plan under the sub sim
interpretative rule in this action.
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1. Certification Fuels
    Historically, two fuels are utilized in EPA's emissions standards
certification of gasoline-powered vehicles and engines: (1)
Standardized gasoline with controlled parameters to ensure consistency
across vehicle and engine certification used in emissions testing, and
(2) commercially available mileage accumulation fuels used to ensure
in-use durability of exhaust and evaporative emissions controls.\104\
Historically, the fuel used in emissions testing (``certification test
fuel'') contained no oxygenates (e.g., ethanol) and was often referred
to by its brand name, ``indolene.''
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    \104\ See 46 FR 38582 (July 28, 1981).
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    In the 2014 Tier 3 rulemaking, we updated the certification test
fuel for Tier 3 certified motor vehicles and changed the certification
test fuel from E0 to E10 to reflect the widespread use of E10 in the
marketplace.\105\ The requirement to use Tier 3 E10 certification fuel
may have applied as early as MY2015 if a manufacturer elected to comply
early with the Tier 3 vehicle emissions standards, but the requirement
to use E10 in at least some vehicles began with MY2017. Almost all
MY2020 and newer vehicles must be certified for emissions testing with
Tier 3 E10 certification fuel, with some exceptions for small volume
vehicle manufacturers, which must use Tier 3 E10 certification fuel by
MY2022.
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    \105\ See 79 FR 23414 (April 28, 2014).
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    Service accumulation fuel for durability must be representative of
commercially-available gasoline \106\ and evaporative emissions
durability must ``employ gasoline fuel for the entire mileage
accumulation period that contains ethanol in, at least, the highest
concentration permissible in gasoline under federal law and that is
commercially available in any state in the United States.'' \107\ Since
MY2004, service accumulation fuel used for evaporative system aging
must contain the highest concentration of ethanol available in the
market. After EPA partially granted the waivers for E15 in 2010 and
2011, we notified manufacturers in early 2012 that new evaporative
emission families must be aged on E15 under 40 CFR 86.1824-
08(f)(1).\108\ We believe that auto manufacturers began evaporative
system aging on E15 as early as MY2014.
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    \106\ See 40 CFR 86.113-15(a)(5).
    \107\ See 40 CFR 86.1824-08(f)(1).
    \108\ As described in 40 CFR 86.1803-01, an evaporative/
refueling emissions family is ``the basic classification unit of a
manufacturers' product line used for the purpose of evaporative and
refueling emissions test fleet selection and determined in
accordance with Sec.  86.1821-01.'' This allows manufacturers of
motor vehicles to group models that have similar evaporative
emission control systems into a single family for purposes of
certifying all models within the family to applicable evaporative
emissions standards.
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2. History of ``Substantially Similar'' Interpretations
    EPA has issued four interpretative rules that defined
``substantially similar'' for gasoline used in all gasoline-fueled
vehicles. These interpretative rules describe the types of unleaded
gasoline that are considered substantially similar to the unleaded
gasoline utilized in our vehicle and engine certification programs, and
place limits on a gasoline's chemical composition and physical
properties, including the types and amount of alcohols and ethers
(oxygenates) that may be added to gasoline. Fuels that are found to be
substantially similar to certification fuels may be introduced into
commerce. Each of our past interpretative rules provided an allowance
for oxygenates within the gasoline. We last issued an interpretative
rule on the phrase ``substantially similar'' for gasoline in 2008.\109\
In that rulemaking, we allowed for the introduction into commerce of
gasoline with modified testing procedures for introduction into
commerce in Alaska. The current substantially similar interpretative
rule for unleaded gasoline allows oxygen content up to 2.7 percent by
weight for certain ethers and alcohols. Despite having changed
certification test fuel to include 10 volume percent ethanol, prior to
this proposed action, we have not addressed what should be considered
substantially similar to Tier 3 E10 certification fuel utilized in Tier
3 light-duty vehicle certification.
---------------------------------------------------------------------------

    \109\ See 73 FR 22281 (April 25, 2008).
---------------------------------------------------------------------------

    In defining what fuels are sub sim to certification fuels, we have
listed general physical and chemical characteristics, such as oxygen
content, after determining that fuels and fuel additives meeting these
general ``sub sim'' characteristics will not adversely affect
emissions. In our past interpretations defining what physical and
chemical characteristics are necessary to make a fuel or fuel additive
``sub sim'' to certification test fuel, we have taken three primary
factors into account: (1) Emissions, (2) materials compatibility, and
(3) driveability.110 111
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    \110\ See 56 FR 5352 (February 11, 1991).
    \111\ For example, we have interpreted that only fuels and fuel
additives with a chemical composition of carbon, hydrogen, oxygen,
nitrogen, and sulfur (CHONS) are sub sim under 211(f)(1). Non-CHONS
chemical compositions of fuels and fuel additives can impair
emission controls resulting in increased emissions or ultimately
failure of the emission controls, especially over time. We have also
historically been concerned with higher levels of oxygen content as
increased oxygen content in gasoline can result in enleanment of the
air-fuel ratio leading to higher emissions as well as higher exhaust
temperatures that can degrade emission controls over time,
especially in vehicles and engines that lack adaptive fuel controls
that adjust to oxygenate levels in fuels (e.g., MY2000 and older
light-duty motor vehicles).
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    We initially specified that fuel with oxygen content up to 2.0
weight percent is sub sim to certification test fuel.\112\ We later
revised the definition to allow oxygen content up to 2.7 weight percent
for gasoline containing aliphatic ethers and/or alcohols (excluding
methanol), finding, based on data and our experience with CAA sec.
211(f)(4) waiver applications, that such levels would not result in
emissions, materials compatibility, or drivability problems compared
with certification test fuel.\113\ Thus, we have a history of
establishing maximum oxygen content as a criterion, in addition to
other criteria, for determining whether a fuel or fuel additive is
substantially similar to a fuel utilized in certification.
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    \112\ See 45 FR 6743 (October 10, 1980). 2.0 weight percent
oxygen equates to approximately 5.7 volume percent ethanol.
    \113\ See 56 FR 5352 (February 11, 1991). 2.7 weight percent
oxygen equates to approximately 7.7 volume percent ethanol.
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    With respect to fuel volatility, our sub sim interpretations have
specified that in order to qualify as sub sim to certification test
fuel, which has

historically had an RVP of 9.0 psi in light of the vehicle test
conditions being reflective of summer conditions, fuels need only
``meet ASTM standards in general, that is, not necessarily for every
geographic location and time of year.'' \114\ To qualify as sub sim,
gasoline (whether or not containing ethanol) ``must possess, at time of
manufacture, all the physical and chemical characteristics of an
unleaded gasoline as specified in ASTM D4814-88 for at least one of the
Seasonal and Geographical Volatility Classes specified in the
standard.'' \115\
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    \114\ See 46 FR 38585 (July 28, 1981).
    \115\ See 73 FR 22281 (April 25, 2008).
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3. Interpretation of CAA Sec. 211(f)(1)
    In this action, we are putting forth a new interpretation of CAA
sec. 211(f)(1). Recognizing the changed gasoline marketplace, and the
multiple certification fuels used today, as compared to 1981, 1991, and
even 2008, when the previous definitions of ``substantially similar''
were articulated, we are interpreting CAA sec. 211(f)(1) to find that
E15 is substantially similar to Tier 3 E10 certification fuel for use
in MY2001 and newer motor vehicles. This finding is consistent with the
statutory text and purpose of CAA sec. 211(f)(1) and appropriate given
the changed circumstances since our previous interpretations of what is
``substantially similar.'' \116\
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    \116\ In this action, we are putting forth a new definition of
what is ``substantially similar'' to Tier 3 E10 certification fuel.
We are also operating under a new interpretation of CAA sec.
211(f)(1) that requires the examination of the entire scope of
vehicles and engines that could use E15, given that Tier 3 E10
certification fuel is only utilized in the certification of a subset
of the vehicle and engine fleet. Our discussion of our changed
interpretation of CAA sec. 211(f)(1) in this section applies both to
our general interpretation of the meaning of CAA sec. 211(f)(1) and
the scope of analysis and to our justification for a new
substantially similar definition.
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    Significant changes have occurred in the time period since CAA sec.
211(f)(1) was enacted and since we have had cause to interpret
211(f)(1) and to determine what fuels qualify as sub sim to our
certification fuels. First, we partially granted a CAA sec. 211(f)(4)
waiver that created a subset of gasoline fuel, E15 that can only be
used in MY2001 and newer light-duty motor vehicles. We have information
that the use of E15 in certain light-duty motor vehicles, as well as
heavy-duty vehicles and nonroad vehicles, engines, and equipment, could
cause or contribute to emission system failures.\117\ Second, we have
modified the certification fuel on which light-duty vehicles are
certified from indolene (gasoline containing no ethanol) to Tier 3 E10
certification fuel for light-duty vehicles. We have not modified the
certification fuel for other gasoline-powered vehicles, engines, and
equipment. This action resulted in a split in the national vehicle and
engine fleet by the certification fuel used to certify gasoline-powered
vehicles, engines, and equipment: Tier 3 certified vehicles certified
on Tier 3 E10 certification fuel and all other vehicles and engines
certified on indolene. The use of Tier 3 E10 certification fuel also
provides a new comparison point to determine which fuels would be
considered substantially similar in all gasoline-powered vehicles,
engines, and equipment. Additionally, E10, as discussed in Section
II.A.2, has become the predominant fuel used in gasoline powered motor
vehicles.
---------------------------------------------------------------------------

    \117\ See 76 FR 4662 (January 26, 2011).
---------------------------------------------------------------------------

    These two actions have resulted in a gasoline pool that is no
longer interchangeable in all vehicles and engines. Unleaded gasoline,
a fuel which we have interpreted CAA sec. 211(f)(1)(B) to apply, can be
used in light-duty vehicles, as well as heavy-duty vehicles, and
nonroad engines and equipment, including motorcycles and marine
engines. However, as a result of the 211(f)(4) waivers for E15, we know
that fueling a subset of those vehicles and engines with unleaded
gasoline that is E15 will result in emissions exceedances. Since E15
has increased in availability in the gasoline marketplace as discussed
in Section II.A.2 and may increase in the future, as discussed in
Section II.E, it is important that E15 be introduced into commerce only
for those vehicles for which it can be used without concerns over
emissions, materials compatibility, or driveability.
    We find that it would be inappropriate to allow the introduction
into commerce of E15 for use in all gasoline-powered vehicles and
engines in light of the demonstrated adverse impacts on emission
systems due to the use of E15 MY2000 and older motor vehicles, heavy-
duty gasoline engines and vehicles, on and off-highway motorcycles, and
nonroad engines, vehicles, and equipment. However, we do find that E15
is substantially similar to E10 when used in MY2001 and newer motor
vehicles. Therefore, in this action, we are finalizing an
interpretation of CAA sec. 211(f)(1) that accounts for the changed
circumstances in both the fuel pool, the certification fuels, and
vehicle fleet since we last interpreted this section.
    As discussed in Section II.B, EPA has the ability to modify its
interpretation of statutory provisions. We are doing so for our
interpretation of CAA sec. 211(f)(1). Our past ``substantially
similar'' interpretative rules have not attempted to limit the scope of
the vehicles and engines for which fuels would be considered sub sim to
our certification fuels. Rather, they put forth an interpretation
regarding how EPA would determine whether a new fuel or fuel additive
is ``substantially similar'' for general use in all gasoline powered
engines, vehicles and equipment. When EPA took those previous actions,
we had no information before us that indicated that use of those new
fuels or fuel additives in certain subsets of vehicles or engines may
be inappropriate. Therefore, there was no need for EPA to consider
limitations or other criteria to modify the sub sim interpretation to a
particular subset of vehicles or engines.