[Federal Register Volume 85, Number 94 (Thursday, May 14, 2020)]
[Proposed Rules]
[Pages 29034-29162]
[FR Doc No: 2020-09337]

Vol. 85

Thursday,

No. 94

May 14, 2020

Part II

Environmental Protection Agency

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40 CFR Parts 79, 80, 86, et al.

Fuels Regulatory Streamlining; Proposed Rule

Federal Register / Vol. 85 , No. 94 / Thursday, May 14, 2020 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 79, 80, 86, 1037, and 1090

[EPA-HQ-OAR-2018-0227; FRL-10007-52-OAR]
RIN 2060-AT31

Fuels Regulatory Streamlining

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This action proposes to update the Environmental Protection
Agency's (EPA) existing gasoline, diesel, and other fuels programs to
improve overall compliance assurance and maintain environmental
performance, while reducing compliance costs for industry and EPA. EPA
is proposing to streamline its existing fuel quality regulations by
removing expired provisions, eliminating redundant compliance
provisions (e.g., duplicative registration requirements that are
required by every EPA fuels program), removing unnecessary and out-of-
date requirements, and replacing them with a single set of provisions
and definitions that will apply across all gasoline, diesel, and other
fuels programs that EPA currently regulates. This action does not
propose to change the stringency of the existing fuel quality
standards.

DATES:
    Comments. Comments must be received on or before June 29, 2020.
Under the Paperwork Reduction Act (PRA), comments on the information
collection provisions are best assured of consideration if the Office
of Management and Budget (OMB) receives a copy of your comments on or
before June 15, 2020.
    Public Hearing. EPA will announce the public hearing date and
location for this proposal in a supplemental Federal Register document.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2018-0227, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Nick Parsons, 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>
Comments on this proposal should not be submitted to this email
address, but rather through http://www.regulations.gov as discussed in
the ADDRESSES section.

SUPPLEMENTARY INFORMATION:

Does this action apply to me?

    Entities potentially affected by this proposed rule are those
involved with the production, distribution, and sale of transportation
fuels, including gasoline and diesel fuel. Potentially affected
categories include:

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                                                Examples of potentially
         Category            NAICS \1\ Code        affected entities
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Industry..................            211130  Natural gas liquids
                                               extraction and
                                               fractionation.
Industry..................            221210  Natural gas production and
                                               distribution.
Industry..................            324110  Petroleum refineries
                                               (including importers).
Industry..................            325110  Butane and pentane
                                               manufacturers.
Industry..................            325193  Ethyl alcohol
                                               manufacturing.
Industry..................            325199  Manufacturers of gasoline
                                               additives.
Industry..................            424710  Petroleum bulk stations
                                               and terminals.
Industry..................            424720  Petroleum and petroleum
                                               products wholesalers.
Industry..................    447110, 447190  Fuel retailers.
Industry..................            454310  Other fuel dealers.
Industry..................            486910  Natural gas liquids
                                               pipelines, refined
                                               petroleum products
                                               pipelines.
Industry..................            493190  Other warehousing and
                                               storage--bulk petroleum
                                               storage.
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\1\ North American Industry Classification System (NAICS).

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
proposed action. This table lists the types of entities that EPA is now
aware could potentially be affected by this proposed action. Other
types of entities not listed in the table could also be affected. To
determine whether your entity would be affected by this proposed
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.

Table of Contents

I. Executive Summary
    A. Overview of Fuels Regulatory Streamlining
    B. Summary of Stakeholder Involvement and Rule Development
    C. Timing
    D. Costs and Benefits
II. Changes to Part 80
III. Structure of Proposed Regulations and General Provisions
    A. Structure of the Regulations
    B. Implementation Dates
    C. Prior Approvals
    D. Definitions
IV. General Requirements for Regulated Parties
V. Standards
    A. Gasoline Standards
    B. Diesel Fuel
VI. Exemptions, Hardships, and Special Provisions
    A. Exemptions
    B. Exports
    C. Hardships
VII. Averaging, Banking, and Trading Provisions
    A. Overview
    B. Compliance on Average
    C. Deficit Carryforward
    D. Credit Generation, Use, and Transfer
    E. Invalid Credits
    F. Downstream Oxygenate Accounting

    G. Downstream Oxygenate Recertification
VIII. Registration, Reporting, Product Transfer Document, and
Recordkeeping Requirements
    A. Overview
    B. Registration
    C. Reporting
    D. Product Transfer Documents (PTDs)
    E. Recordkeeping
    F. Rounding
    G. Certification and Designation of Batches
IX. Sampling, Testing, and Retention Requirements
    A. Overview and Scope of Testing
    B. Handling and Testing Samples
    C. Measurement Procedures
X. Proposed Third-Party Survey Provisions
    A. National Survey Program
    B. National Sampling and Testing Oversight Program
XI. Import of Fuels, Fuel Additives, and Blendstocks
    A. Importation
    B. Special Provisions for Importation by Rail or Truck
    C. Special Provisions for Importation by Marine Vessel
    D. Gasoline and Diesel Fuel Treated as Blendstocks
XII. Compliance and Enforcement Provisions and Attest Engagements
    A. Compliance and Enforcement Provisions
    B. Attest Engagements
    C. RVP Test Enforcement Tolerance
XIII. Other Requirements and Provisions
    A. Requirements for Independent Parties
    B. Labeling
    C. Refueling Hardware Requirements for Dispensing Facilities and
Motor Vehicles
    D. Previously Certified Gasoline (PCG)
    E. Transmix and Pipeline Interface Provisions
    F. Gasoline Deposit Control
    G. In-Line Blending
    H. Confidential Business Information
XIV. Costs and Benefits
    A. Overview
    B. Reduced Fuel Costs to Consumers From Improved Fuel
Fungibility
    C. Costs and Benefits for Regulated Parties
    D. Environmental Impacts
XV. 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) and
1 CFR Part 51
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
XVI. Statutory Authority

I. Executive Summary

A. Overview of Fuels Regulatory Streamlining

1. Why EPA Is Taking This Action
    As part of our continual effort to update our regulations to ensure
that fuel quality standards established under the Clean Air Act (CAA)
continue to be met in-use, while minimizing the burden associated with
doing so, we are proposing to streamline and modernize our existing 40
CFR part 80 (``part 80'') fuel quality regulations by transferring them
into a new proposed set of regulations in 40 CFR part 1090 (``part
1090''). In this action, we are taking a wholistic look at the existing
part 80 regulations in an attempt to consolidate the many different and
overlapping regulations into the proposed part 1090 regulations that
will also better reflect how fuels, fuel additives, and regulated
blendstocks are produced, distributed, and sold in today's marketplace.
2. What Is and Is Not Covered in This Action
    This action focuses primarily on streamlining and consolidating our
existing gasoline and diesel fuel programs that currently reside in
part 80.\1\ To accomplish this, we are proposing to remove expired
provisions and consolidate the remaining provisions from multiple fuel
quality programs into a single set of requirements. This action covers
almost all fuel programs and related provisions currently in part 80.
These programs include, but are not limited to, the reformulated
gasoline (RFG) program, the anti-dumping program, the diesel sulfur
program, the gasoline benzene program, the gasoline sulfur programs,
the E15 misfueling mitigation program, and the national fuel detergent
program. This proposed streamlining effort aims to combine these
separate, now fully-implemented programs, all of which affect the same
regulated parties, into a single, national fuel quality program.
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    \1\ Under the current regulations, EPA's fuels regulations are
in 40 CFR parts 79 and 80. Part 79 contains provisions related to
the registration of fuel and fuel additives under CAA sections
211(a), (b), (e), and (f), while Part 80 contains provisions for
fuel quality (e.g., fuel controls and prohibitions established under
CAA section 211(c) and the RFG program requirements promulgated
under CAA section 211(k)) and the RFS program. This action is
limited to the provisions related to EPA's fuel quality standards in
part 80, as the registration requirements in part 79 and the RFS
program in part 80 are significantly different in scope and would
involve different considerations to update those regulatory
requirements.
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    While this action proposes changes to many aspects of our fuel
quality programs, there are several areas of the existing part 80
regulations that would remain unchanged. Most importantly, this action
does not change the stringency of the existing fuel quality standards.
We are simply proposing to streamline and consolidate the existing part
80 fuel quality programs into a single streamlined fuel quality program
that would make compliance with the existing fuel quality standards
under part 80 more straightforward, and as a result potentially improve
fuel quality through increased compliance with our fuel quality
standards. This action proposes to transfer the part 80 fuel quality
standards mostly unchanged to part 1090, though in some cases we are
proposing to modify the form of the standards to translate them into a
format more conducive to streamlining the regulations and ensuring in-
use compliance.
    We recognize that while we are not proposing changes to the
standards, in some cases, the proposed consolidation of certain
provisions may slightly, indirectly affect in-use fuel quality. For
example, proposed changes to how parties record and report test results
that fall below the test method's lower limits of detection might cause
parties to have to report slightly higher sulfur and benzene levels in
gasoline, effectively improving in-use fuel quality by slightly
decreasing the sulfur national annual average. On the other hand, the
proposal to make it easier for fuel manufacturers of conventional
gasoline (CG) to account for oxygenates (e.g., ethanol) added
downstream of the manufacturing facility, thereby allowing for a
slightly lower reported level of gasoline benzene and sulfur levels,
might be perceived as slightly decreasing in-use fuel quality. There
are many such minor impacts of changes in part 1090 and we believe that
on balance the proposed program would maintain the same overall level
of fuel quality as the current part 80 standards. Throughout this
preamble, we have tried to identify such cases and we discuss the
cumulative costs and benefits of these changes in more detail in
Section XIV.
    We are also proposing some slight modifications to the Renewable
Fuel Standard (RFS) program in subpart M of part 80, primarily for
administrative purposes that follow from the proposed changes to our
other fuel programs. These subpart M regulations are mostly unique to
the RFS program, and

therefore do not need to be consolidated with the other part 80 fuel
standard regulations. One of the goals of this action is to help ensure
consistency in how parties comply with our regulatory requirements and
report information to EPA. Since the RFS program uses similar, if not
the same, reporting systems and compliance mechanisms for parties to
demonstrate compliance, we are proposing changes to help ensure that
this consistency is maintained or enhanced as a result of this action.
We will treat public comments received suggesting substantive changes
to the RFS program as outside the scope of this rulemaking.
    Finally, this action does not propose to remove any statutory
requirement for fuels specified by the CAA. For example, this action
does not propose to remove limits on lead levels in gasoline under CAA
section 211(n), remove the requirement that all gasoline be additized
with detergents under CAA section 211(l), or cetane index limits for
diesel fuel under CAA section 211(g) and (i). While this action does
update some of the provisions put in place to implement many provisions
of the CAA, and in some cases substantially streamline the implementing
regulations (e.g., for the gasoline detergents program), we are not
proposing to eliminate any requirement under the CAA for fuels and
parties that make, distribute, and sell such fuels.
    The majority of this action's proposed changes relative to part 80
focus on consolidating and streamlining compliance provisions currently
in part 80, not on adding new compliance requirements for regulated
parties. This action also does not propose to impose new standards on
fuels. As such, this action is mostly a compilation of numerous,
relatively minor proposed changes to the existing provisions under part
80. Many of these proposed changes may appear disconnected from one
another, as they are addressing a specific technical area that needs
consolidation, streamlining, and/or updating. Together, however, these
proposed changes will lead to a more effective, efficient EPA fuels
program.
3. Program Design
    The new part 1090 is designed to reduce compliance burdens for both
industry and EPA, potentially lower fuel costs for consumers, and
maintain fuel quality. To accomplish these goals, we have identified
three key elements that are included in part 1090:
     A simplification of the RFG summer VOC standards.
     A consolidation of the regulatory requirements across the
part 80 fuel quality programs.
     Improving oversight through the leveraging of third
parties to ensure in-use fuel quality.
    First, we are proposing to simplify the RFG standards by
translating the current summer RFG VOC standard into an RVP per-gallon
cap of 7.4 psi. This proposed change would allow us to remove the use
of the Complex Model \2\ as a requirement to certify batches of
gasoline and remove all the provisions associated with demonstrating
compliance on average. This proposed change would also allow for us to
minimize the restrictions on the commingling of RFG and CG, allowing
for a more fungible and efficient gasoline distribution system.
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    \2\ The Complex Model is a predictive model that estimates
emissions performance of gasoline based on measured fuel parameters
against a statutory baseline in model year 1990 vehicles (see 40 CFR
80.45 and CAA section 211(k)(10)). Under part 80, refiners and
importers are required to use the Complex Model to demonstrate
compliance with RFG standards. The Complex Model is available at:
https://www.epa.gov/fuels-registration-reporting-and-compliance-help/complex-model-used-analyze-rfg-and-anti-dumping.
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    The main remaining difference between RFG and CG is that in the
summer, RFG's volatility is functionally controlled through a summer
VOC performance standard determined with the Complex Model instead of
through the RVP per-gallon maximum standards established for CG under
CAA section 211(h). EPA has previously aligned the treatment RFG and CG
for NOX performance through the Tier 2 gasoline sulfur
program and toxics performance through the national gasoline benzene
program.\3\ This action would align treatment for RFG and CG by
translating the existing RFG VOC performance standard into an RVP per-
gallon cap standard, as is the case for CG in the summer. In Section
V.A.2, we describe how the proposed summer RVP per-gallon cap of 7.4
psi equates to the existing RFG summer VOC standards. This change alone
allows for the removal of the sampling, testing, and reporting
requirements associated with several Complex Model parameters, greatly
simplifying compliance with our fuel standards. With this proposed
translation of the RFG summer VOC performance standards into a summer
RFG RVP per-gallon maximum standard, the required controls on fuel
properties for RFG would be identical to the control of fuel properties
for CG, even though the standards would remain different.
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    \3\ See 72 FR 8428 (February 26, 2007).
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    Second, since the standards for volatility, benzene, and sulfur
would be treated similarly between RFG and CG, this would allow for the
streamlining and consolidation of the compliance and enforcement
provisions of the various part 80 fuel quality programs into a single
fuel quality program. This consolidation would improve consistency,
remove duplication, and ultimately reduce compliance burden on
regulated parties and EPA. For example, we are proposing to consolidate
the various gasoline reporting requirements into a single, unified
annual reporting requirement. Under part 80, we require quarterly batch
reports for RFG, versus annual reports for CG. We also require separate
batch reports for the gasoline benzene and gasoline sulfur programs.
    Third, the proposed streamlined fuel quality program aims to
improve oversight of our fuel quality programs. We hope to accomplish
this by updating and improving the third-party oversight programs we
already use in part 80. We are proposing to consolidate the existing
three in-use survey programs into a single national in-use fuel quality
survey. This proposed program would help ensure that all fuels
nationwide continue to meet EPA fuel quality standards when dispensed
into vehicles and engines, not just at the refinery gate. We are also
proposing to replace the RFG independent lab testing requirement with a
voluntary national oversight program. This proposed sampling oversight
program would impose substantially lower costs across industry than the
current regulations while helping to ensure the consistency of sampling
and testing across industry. Finally, we are proposing to update and
modernize the annual attest engagement program. These updated
procedures will help ensure that the quality and consistency of
reported information. Taken together, we believe these proposals will
help improve oversight of our fuel quality programs.

B. Summary of Stakeholder Involvement and Rule Development

    We have actively engaged stakeholders throughout the development of
this action to help maximize its potential effectiveness. Due to the
number of affected stakeholders, the complexity surrounding the
production and distribution of fuels, and the broad scope of this
action, active stakeholder involvement was necessary to help ensure
that the proposed fuels regulatory streamlining program achieved its
goals.

    As part of the proposal development process, we provided advance
notice through four discussion drafts of the proposed regulations.\4\
In doing so, we solicited feedback from stakeholders to: (1) Help
ensure that any gaps in our regulatory requirements were filled prior
to proposal; and (2) identify potential issues with the streamlined
regulations. We also held a three-day public workshop on a variety of
topics in Chicago on May 21-23, 2018.\5\ During this workshop, EPA
staff discussed a variety of issues related to the development of this
action to an audience of over 120 affected stakeholders. We also
reached out on at least two separate occasions to a broad spectrum of
interested stakeholders, including parties that make and distribute
fuels, states, environmental non-governmental organizations, and other
affected stakeholders. The proposed streamlined fuel quality program in
this action is intended to reflect the input of all of those who
participated in these activities and events.
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    \4\ The four discussion drafts are available in the docket for
this action and on our website at: https://www.epa.gov/diesel-fuel-standards/fuels-regulatory-streamlining.
    \5\ See 83 FR 20812 (May 8, 2018).
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C. Timing

    As discussed in more detail in Section III.B, we are proposing that
the part 1090 regulations would mostly replace the existing part 80
regulations on January 1, 2021. We believe that having an
implementation date at the beginning of a new compliance period would
provide for a smooth transition to new regulatory requirements.

D. Costs and Benefits

    We do not anticipate much, if any, change in air quality as a
result of this action. This is largely due to the fact that we are not
proposing changes to the existing fuel quality standards. As such, we
do not expect that regulated parties would need to make significant
changes to how fuels are made, distributed, and sold, which are the
factors EPA typically considers when determining the costs associated
with imposing or changing fuel quality standards.
    However, we do believe that this proposal could result in savings
to regulated parties and EPA by simplifying compliance with our fuel
quality standards and by allowing greater flexibility in the
manufacture and distribution of fuels. These savings would largely
arise from the reduction of the administrative costs on regulated
parties and EPA in complying with and implementing the existing fuel
quality standards. We estimate the annualized total costs savings in
administrative cost savings to industry to be $32.9 million per year.
Other savings associated with improving the fungibility of fuel and
providing greater flexibility could potentially be even more
significant but are much more difficult to quantify. Section XIV of the
preamble discusses in more detail the potential costs and benefits of
this action.

II. Changes to Part 80

    We are transferring several provisions in part 80 that are
currently in effect to part 1090.\6\ These provisions are all discussed
in the subsequent sections of this preamble and are now drafted in a
manner that makes them easier to understand. We are also proposing to
remove subparts B, D, E, F, G, H, I, J, K, L, N, and O and appendices A
and B to part 80. Some of these subparts have either expired (e.g.,
designate and track provisions for diesel fuel) or have been replaced
by newer subparts (e.g., subpart K (RFS1) was superseded by subpart M
(RFS2), subpart H (Tier 2 Sulfur) was supplanted by subpart O (Tier 3
Sulfur), and subpart J (MSAT1) was supplanted by subpart L (MSAT2)).
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    \6\ Note that if we update these provisions in part 80 as part
of a separate EPA action after this proposal, we plan to incorporate
those updated provisions to part 1090 in the final rule.
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    We are not transferring some provisions from part 80 to part 1090.
First, we are retaining the existing Renewable Fuel Standard (RFS)
provisions in subpart M. We are proposing minor edits to subpart M that
are intended to ensure consistency with the new language used in part
1090. These edits will not affect any of the actual requirements in
subpart M, but rather will homogenize the language used across all of
our fuels programs.
    Second, because we are retaining the RFS program in part 80, we
need to maintain certain general provisions contained in subpart A that
will continue to apply to the RFS program. We are also revising several
sections within subpart A to remove requirements, such as definitions
that would no longer be applicable to part 80. In addition, we are
reorganizing and consolidating the definitions in 40 CFR 80.2 to place
them in alphabetical order, as this would make it consistent with part
1090 and much easier to find terms.
    Finally, we are also retaining the Oxygenated Gasoline provisions
in subpart C in part 80. This subpart contains a single section related
to a requirement for labeling of oxygenated gasoline at retail pumps,
as mandated by CAA section 211(m)(4). We are maintaining this
requirement in part 80 because some state oxygenated fuel programs may
reference the labeling requirements in part 80 and we want to minimize
the amount of changes needed by states to revise regulations and update
state implementation plans.

III. Structure of Proposed Regulations and General Provisions

    This section describes the general structure of the proposed part
1090 regulations (i.e., how we propose to structure the regulations to
make them more accessible to users and readers of the regulations).
This section also describes the proposed implementation dates, how we
intend to deal with prior approvals made under part 80, and our
proposed approach to consolidating the hundreds of definitions in the
part 80 regulations. Finally, this section discusses key proposed
provisions (e.g., the definition of gasoline) in more detail to solicit
public feedback on terms fundamental to the proposed streamlined fuel
quality program.

A. Structure of the Regulations

    We are proposing a structure for part 1090 that differs from the
structure of our current part 80 regulations. Part 80 includes a
variety of fuel quality programs that, while designed to operate
together, appear as distinct programs in the regulations. Historically,
we have codified new fuel quality programs by adding a new subpart at
the end of part 80. This was often done because each new fuel quality
program implemented new regulatory requirements that augmented the
prior fuel quality programs. These new additions also helped provide
interim requirements needed to implement the new program. As a result,
part 80 includes numerous similar sections that either create multiple
methods of complying with certain regulatory requirements (e.g.,
submitting multiple gasoline batch reports for the RFG, antidumping,
gasoline benzene, and Tier \2/3\ gasoline sulfur programs) or create
what might appear to be contradictions in the regulations. Rather than
have subparts with all the provisions associated with a given fuel
standard (e.g., a subpart that contains all provisions related to
gasoline benzene and a separate subpart that contains all provisions
related to gasoline sulfur), part 1090 contains dedicated subparts
according to the various functional elements of our fuel regulations
(e.g., subparts that contain all gasoline standards or contain all
reporting requirements).
    As proposed, subpart A contains general requirements that apply

throughout the rest of part 1090. Subpart A includes regulatory
language that generally outlines the applicability and scope of the
regulation, defines key terms, and outlines when the part 1090
requirements come into effect. Subpart A also describes how
requirements under part 1090 interact with other parts of the
regulations that affect fuels--parts 79 and 80. Many of these sections
are described elsewhere; for example, rounding of data is discussed in
the reporting section (see Section VIII), and batch numbering is
discussed in the designation and product transfer document section (see
Section VIII).
    We are also proposing to include a list of general regulatory
requirements for parties in subpart B. This subpart would lay out the
general regulatory requirements for regulated parties. This helps
inform the regulated community of what is generally expected of them in
a succinct manner and provides references to the specific requirements
in the appropriate places in the regulations. While the roadmap in
subpart B does not remove or modify any of the regulatory obligations
required throughout the rest of part 1090, we believe it will serve as
a helpful guide. During the development of this proposed rule, we
received feedback from several stakeholders that such a roadmap would
not only be helpful for them to follow the part 1090 regulations, but
would especially help those new to the regulations more easily identify
general regulatory requirements.
    We are also proposing to keep the standards for different fuels in
separate subparts so as to make it easier for parties to identify the
specific standards that apply to fuels, regulated blendstocks, and
additives. For part 1090, we have put the gasoline-related standards
and the diesel-related (plus IMO marine fuel) standards in their own
individual subparts. We are also leaving a subpart reserved after the
gasoline and diesel standards, as we may need to use that subpart for
future standards and this would enable us to not have to move
subsequent subparts in a manner that would cause unnecessary confusion
on the part of the regulated community.
    The next block of subparts (E through P) involve the provisions and
requirements that regulated parties are expected to follow to
demonstrate compliance with the applicable standards. We have
consolidated the specific types of compliance activities where
possible. For example, we have consolidated all the registration
sections of part 80 into a single registration subpart in part 1090
(subpart I). For these subparts, we have included general provisions
that apply to all regulated parties, with sections devoted to specific
requirements for individual groups of regulated parties (e.g., gasoline
refiners or oxygenate blenders).
    Subpart Q includes the liability, compliance, and violation
provisions that EPA enforcement staff would use to enforce the program.
This subpart consolidates the similar sections from across part 80 into
a single streamlined subpart.
    Finally, subpart R includes the attest engagement procedures that
independent auditors would need to use to conduct annual auditing of
reports and records for gasoline refiners. These procedures are updated
versions of the those already included in part 80.
    We believe that this new structure would make the fuel quality
regulations more accessible to all stakeholders, help ensure compliance
by making requirements more easily identifiable by activity, and help
future participants in this regulated space understand our fuel quality
regulations in the future. We seek comment on this proposed structure
of the regulations.

B. Implementation Dates

    We are proposing that regulated parties would begin complying with
most provisions of part 1090 on January 1, 2021. This proposed date
would result in the first compliance reports for the 2021 compliance
period being due March 31, 2022, and the first attest engagement
reports for the 2021 compliance period being due June 1, 2022.
    We believe that this action minimizes the need for immediate
changes to how regulated parties comply with our fuel quality
regulations, and therefore, this proposed implementation schedule will
allow sufficient time for regulated parties to modify their current
business practices whenever it makes the most business sense for the
individual regulated party's situation. In general, we have tried to
minimize changes to existing requirements for regulated parties so as
to avoid unnecessary burden. However, to consolidate the RFG program
with the other fuel quality programs and maximize fuel fungibility,
some changes to the program design would result from consolidating the
programs into a single national program. Where possible, we wrote the
proposed requirements to allow flexibility for regulated parties to
adjust as needed.
    While we believe a January 1, 2021, implementation date provides
regulated parties enough time to come into compliance since we are not
requiring changes that would necessitate substantive investments to
meet new or modified fuel quality standards, we received feedback
during the rule development process that we may need to provide
regulated more time to implement some of the proposed provisions. In
particular, some stakeholders noted that modifying product transfer
document (PTD) language and adjusting to some of the proposed changes
for sampling and testing may not be possible by January 1, 2021. One
potential solution is to allow more time for these specific provisions
to phase in. For example, we could allow regulated parties to continue
to use the part 80 PTD requirements until the beginning or end of the
high ozone season (June 1 and September 15, respectively). A similar
approach could be allowed for other provisions that potentially need
more lead time. We seek comment specifically on what provisions may
require additional lead time to implement.

C. Prior Approvals

    We are proposing to allow regulated parties with existing approvals
under part 80 to maintain those approvals under part 1090. For example,
parties registered under part 80 would not need to reregister under
part 1090. We believe that making regulated parties resubmit
information already reviewed and approved by EPA would be duplicative
and burdensome on both the regulated parties and EPA staff. However,
this action would require that any new requests or updates to approvals
currently necessary under part 80 would have to meet the new proposed
regulatory requirements of part 1090.
    For existing approvals under part 80, regulated parties would not
need to update a previously approved submission under part 1090. For
example, we have approved alternative E15 labels under part 80. Parties
would not need to have these labels reapproved in order to use them
under part 1090. One notable exception is for in-line blending waivers.
As discussed more in Section XIII.G, we are proposing significant
changes to the in-line blending waiver provisions for RFG (mostly to
remove provisions related to parameters that would no longer need to be
reported) and for CG, which are designed to make consistent with the
proposed RFG in-line blending waiver provisions. As such, we are
proposing to require resubmission of all in-line blending waiver
requests to ensure that they meet the new requirements.

D. Definitions

    We are proposing to streamline and update the definitions contained

throughout part 80, as well as add and remove terms as needed to write
the proposed part 1090 regulations. How we define key terms in the
regulations has a significant effect on how regulated parties comply
with the regulations. As our fuel quality programs have expanded in
scope, definitions in part 80 have expanded as well. Additionally, as
we added new subparts to the part 80 regulations for each program, we
have added subpart specific definitions. We have also defined terms in
the context of specific sections of the regulations. This has created
situations where sometimes there are differences in definitions for the
different standards, which makes it more difficult for parties to
comprehend and comply with the regulations. In part 1090, we have
consolidated all the applicable definitions into a single section. We
have tried to avoid having a definition section in individual subparts;
however, some infrequently-used terms may still be defined in the
context of the regulatory text. We believe this approach would help the
regulated community and the public at large to more easily comprehend
the regulations.
    For the most part, we are proposing to transfer the existing part
80 definitions into part 1090 with minor proposed changes to specific
terms for consistency. However, in some cases, we are proposing to
redefine or reclassify key terms as part of part 1090. Specifically,
these areas include the defined terms for the types of regulated
products (discussed in Section III.D.1) and the descriptions of
regulated parties (discussed in Section III.D.2). We are also proposing
revisions to the definition of ``gasoline'' and ``diesel fuel''
(discussed in Section III.D.3). While we believe these three areas of
the proposed definitions warrant significant discussion, we seek
comment on all of the proposed definitions.
1. Fuels, Fuel Additives, and Regulated Blendstocks
    In order to improve the clarity and consistency of our regulations,
we are proposing changes regarding how to classify products regulated
under our fuel quality regulations. In part 80, most fuel programs were
written as a separate fuel program rather than a single, consolidated
fuel quality program. For example, 40 CFR part 80, subpart I, almost
exclusively deals with distillate fuels and 40 CFR par 80, subpart N,
deals with gasoline-ethanol blended fuels. Since part 1090 would
attempt to consolidate all fuel quality programs under part 80 into a
single, consolidated fuel quality program, a consistent nomenclature
for regulated products is needed.
    This action describes requirements for fuel quality on three
categories of products: Fuels, regulated blendstocks, and fuel
additives. We further classify these products into bins based on the
type of vehicle or engine that the fuel is used (i.e., gasoline-fueled,
diesel fueled, or in a vessel subject to MARPOL Annex VI requirements
(e.g., vessels that must use ECA or IMO marine fuel)). For gasoline-
fueled engines, we not only define the term gasoline (discussed in
detail in Section III.D.2), but we also define and place requirements
on specific types of gasoline based on its ethanol content (e.g., E0,
E10, and E15), whether the gasoline is intended for use or used as
summer or winter gasoline, and in the summer, what RVP standard the
fuel is subject to (i.e., 9.0 psi, 7.8 psi, or the proposed RFG 7.4 psi
standard). For diesel-fueled engines, since the requirement to use 15
ppm diesel fuel (or ultra-low-sulfur diesel (ULSD)) is now required in
almost all motor vehicle, non-road, locomotive, and marine applications
(called MVNRLM diesel fuel in part 80), we are defining this fuel
simply as ULSD, as it is more commonly known in the market. 500 ppm
diesel fuel continues to be allowed for certain locomotive and marine
applications.
    Regarding regulated blendstocks, we have historically not imposed
quality specifications on blendstocks, choosing instead to focus
compliance requirements on finished fuels that are ultimately used in
vehicles and engines. However, as the fuels marketplace has continued
to evolve, this structure has become increasingly difficult to
accommodate the complexity of manufacturing and distributing fuels
practices today. Therefore, we are proposing alternative provisions,
which are all currently permissible under part 80, for gasoline
manufacturers to demonstrate compliance with our fuel quality
requirements by imposing requirements on certain blendstocks that are
added to previously certified gasoline (PCG) if certain conditions are
met. We are referring to blendstocks for which we have proposed
standards collectively as ``regulated blendstocks.'' For example, under
both part 80 and the proposed part 1090 regulations, we allow gasoline
refiners to blend butane into gasoline and to rely on test results from
the producers of the butane if the butane meets more stringent sulfur
and benzene per-gallon standards.\7\ These butane blenders can use
these provisions in lieu of certifying the finished gasoline and having
to meet sulfur and benzene annual standards as these provisions are
designed to ensure that the national sulfur and benzene pool do not
increase as a result of blending these feedstocks. Under part 1090, we
are proposing the same flexibilities as under part 80 for gasoline
manufacturers that wish to blend butane that has been certified to meet
specifications (differences between parts 80 and 1090 are discussed in
Section V.A.3). We believe that this will also allow more opportunities
for parties to make cost-effective compliant fuels in the future.
---------------------------------------------------------------------------

    \7\ Under part 80, for summer CG, a butane blender must test the
finished gasoline (i.e., the resultant fuel from the combined PCG
and added butane) for the RVP; for RFG, butane blenders cannot blend
butane into summer RFG. This provision is not changing in part 1090.
---------------------------------------------------------------------------

    This action also includes the current part 80 specifications for
gasoline and diesel additives, mostly unchanged. Except for oxygenates
in gasoline, additives are added to fuels in low amounts (less than 1.0
volume percent of the fuel total) and often serve to help improve fuel
performance (e.g., to control deposits on intake valves). All diesel
fuel additives are subject to sulfur limitations. Under both part 80
and part 1090, gasoline additives are also subject to sulfur
limitations, but the term ``gasoline additives'' also includes gasoline
detergents and oxygenates. Also under both part 80 and part 1090,
gasoline detergents and oxygenates (including denatured fuel ethanol or
DFE) have specific requirements that apply in addition to the sulfur
requirements that apply for all gasoline additives.
2. Fuel Manufacturers, Regulated Blendstock Producers, and Fuel
Additive Manufacturers
    In part 80, a refinery is defined as '' any facility, including but
not limited to, a plant, tanker truck, or vessel where gasoline or
diesel fuel is produced, including any facility at which blendstocks
are combined to produce gasoline or diesel fuel, or at which blendstock
is added to gasoline or diesel fuel,'' \8\ while a refiner is ``any
person who owns, leases, operates, controls, or supervises a
refinery.'' \9\ When these terms were first defined, virtually all
finished fuels were produced at a crude oil refinery. As we have
permitted greater flexibility in the production of fuels through the
blending of regulated blendstocks to make new fuels and the market has
moved to allowing fuels to be produced downstream of crude oil

refineries, the use of the term ``refiner'' to encompass all parties
that make fuels has become less appropriate. Additionally, the
differences in terminology between part 79 and part 80 have caused
confusion among those required to or potentially required to comply
with the requirements of both parts. Refiners and importers of on-
highway motor vehicle gasoline and diesel fuel are fuel manufacturers
under part 79 and required to register under EPA's fuel and fuel
additive registration (FFARs) requirements. Under part 79, parties that
make gasoline or diesel fuel through the blending of blendstocks or
blending of blendstocks into PCG are also considered fuel manufacturers
and must registered under part 79. Part 79 also includes importers of
on-highway motor vehicle gasoline and diesel fuel as fuel manufacturers
for purposes of FFARs. Part 80 generally requires that importers of
gasoline and diesel fuel meet the same requirements as refiners, with
some additional requirements on importers depending on the situation.
---------------------------------------------------------------------------

    \8\ 40 CFR 80.2(h).
    \9\ 40 CFR 80.2(i).
---------------------------------------------------------------------------

    This action uses the term fuel manufacturer to describe any party
that owns, leases, operates, controls, or supervises a facility where
fuel is produced, imported, or recertified, whether through a refining
process (e.g., through the distillation of crude oil), through blending
of blendstocks or blending blendstocks into a previously certified fuel
to make fuel, or through the recertification of products not subject to
our fuel quality standards to fuels that are subject to our fuel
quality standards (e.g., redesignating heating oil to ULSD). Importers
of fuels would continue to be fuel manufacturers consistent with parts
79 and the CAA. We are also proposing to further distinguish between
parties that refine feedstocks to make fuels (more commonly known as
``crude refiners'') and blending manufacturers who make fuels through
blending blendstocks together to make a fuel or into an existing fuel
to make a new fuel.\10\ This action includes requirements specific to
the type of fuel manufacturer, and the proposed nomenclature makes it
easier for us to describe the proposed requirements for the types of
fuel manufacturers and for parties to understand what requirements
apply specifically to whom. However, while we are proposing to modify
the terminology used in part 1090 for these parties, generally, these
parties would have the same obligations and responsibilities under the
regulations.
---------------------------------------------------------------------------

    \10\ Under this approach, transmix processors are also
considered fuel manufacturers.
---------------------------------------------------------------------------

    We are proposing to define producers of regulated blendstocks as
regulated blendstock producers. For example, these parties would
include certified butane/pentane producers and oxygenate producers
(including DFE producers).
    As is the case currently under parts 79 and 80, parties that only
blend fuel additives into fuels are not fuel manufacturers. Any party
that adds a compound (other than oxygenate or transmix) that is 1.0
percent or more of the finished fuel would be a blending manufacturer,
as the compound added would be considered a blendstock and parties that
add blendstocks into fuel are considered fuel manufacturers and would
need to meet all the applicable regulatory requirements. Consistent
with part 79, oxygenate blenders that only add oxygenates at levels
permissible under the CAA section 211(f) continue to be considered
additive blenders and not fuel manufacturers.
3. Definition of Gasoline
    This action includes a new definition of gasoline. When we define
what constitutes a fuel, this determines which fuels are subject to our
fuel quality standards. The goal of our fuel quality programs is to
ensure that compliant fuel is ultimately used in vehicles, engines, and
equipment. To achieve this goal, we believe that the definition of
gasoline needs to reflect changes in the fuels marketplace that have
occurred over the last 40 years, as well as potential changes on the
horizon. While petroleum refineries still have the most direct impact
on gasoline fuel quality by volume, every party downstream of the
refinery can affect fuel quality, and in today's marketplace many of
these downstream parties are now the determinant of the quality of the
fuel that actually goes into the vehicle. For example, these parties
may add oxygenates (primarily ethanol) or augment the volume of
gasoline through the blending of various blendstocks into PCG to
produce new fuels.
    To ensure that gasoline meets fuel quality standards from the
petroleum refinery until it is dispensed into a gasoline-fueled vehicle
or engine, in light of the changing fuels marketplace, we believe that
the definition of gasoline should contain three elements. First, when a
party represents a fuel as meeting our fuel quality standards, such
fuel is subject to our standards regardless of whether the fuel meets
the standard. Were this not the case, then anytime a fuel failed to
meet our standards, we could not hold anyone accountable for failing to
meet the standards. In the proposed definition of gasoline, we define
gasoline as anything commonly and commercially known as gasoline. This
portion of the proposed definition is consistent with the existing
parts 79 and 80 definitions of gasoline.
    The second element of the definition of gasoline is whether the
product is made available for use or used in a gasoline-fueled vehicle
or engine. Since the ultimate purpose of our fuel standards is to
ensure that compliant fuel is used in vehicles and engines, if a person
makes a product available for use by designating it as gasoline or
placing it in the fuel distribution system, or if the product is used
in a gasoline-fueled vehicle or engine, the product should be subject
to EPA standards. We have used this terminology when describing other
fuels under part 80, notably in definitions related to motor vehicle
diesel fuel \11\ and ECA marine fuel.\12\
---------------------------------------------------------------------------

    \11\ See 40 CFR 80.2(y).
    \12\ See 40 CFR 80.2(ttt).
---------------------------------------------------------------------------

    The third element of the definition of gasoline is the product's
physical and chemical characteristics. Whether a fuel is subject to our
standards cannot be solely based on whether a regulated party calls or
labels a product it produces as gasoline. This would create an
incentive for parties to simply label fuel intended for use as gasoline
by another name to avoid having to meet our fuel standards. Therefore,
when a manufacturer produces a fuel that is chemically and physically
similar to gasoline, the fuel should be subject to our gasoline fuel
standards. To address this element, we are proposing that gasoline is
any product that meets the voluntary consensus standards body (VCSB)
industry specifications for gasoline (ASTM D4814).
    For the discussion drafts of the regulations,\13\ we presented
definitions of gasoline that attempted to conservatively capture any
product that could be used in vehicles and engines designed to operate
on gasoline. We received feedback from stakeholders suggesting that
this definition of gasoline was too broad, especially concerning the
third element, which would have resulted in blendstocks that are never
intended to be sold in their pure form as gasoline being subject to our
fuel quality standards. These stakeholders argued that some higher
quality blendstocks (e.g., alkylates) used to make gasoline would meet
the ASTM D4814 specifications for gasoline and may therefore be subject
to EPA

standards. To address this feedback, we have excluded those blendstocks
of concern that are not made available as gasoline but may otherwise
meet the definition of gasoline by meeting ASTM D4814 specifications.
Since there is an economic incentive for parties to keep these high
value blendstocks segregated from gasoline in the fuel distribution
system, these products will not generally be made available for use in
gasoline-fueled vehicles and engines and would not, therefore, be
considered gasoline. We seek comment on this approach.
---------------------------------------------------------------------------

    \13\ EPA-420-D-18-001, EPA-420-D-18-002, and EPA-420-D-19-001,
available in the docket for this action.
---------------------------------------------------------------------------

    We have taken a similar approach in the part 80 definitions for
diesel fuel and largely mirror the three elements proposed for the
definition of gasoline in the definition of diesel fuel. We seek
comment on these definitions.

IV. General Requirements for Regulated Parties

    As part of the streamlined fuel quality program, we are proposing a
subpart dedicated to outlining the general regulatory requirements for
each regulated party (subpart B). We received feedback during the rule
development process that due to the layout of the regulations in part
80, parties need to read the entire subpart to make sure they have
identified all applicable regulatory requirements. The current
regulations in part 80 are almost 1,000 pages long, and many regulated
parties spend a substantial amount of resources to comprehend and
interpret them or ask EPA staff through the help desk to identify
applicable regulatory requirements.
    To make the streamlined regulations more accessible, we are
proposing to make subpart B a roadmap for regulated parties, directing
them to those subparts that are most likely to affect them and their
business. We first outline the general requirements applicable to all
parties that make and distribute fuels, fuel additives, and regulated
blendstocks. These requirements include keeping records and being
subject to regulatory requirements under the proposed subpart if a
party makes and distributes fuels, fuel additives, and regulated
blendstocks.
    We then describe the requirements that apply to each group of
regulated parties based on their business activities. Examples of these
categories are fuel manufacturers, detergent blenders, oxygenate
blenders, and retailers. We believe this would help these parties more
easily identify regulatory provisions that apply to their specific
activities. For example, retailers are typically small businesses that
have greater difficulty affording consultants to help them understand
their regulatory requirements. Retailers also have a relatively small
number of regulatory requirements under the part 80 and part 1090
regulations. By identifying the generally applicable requirements that
apply to all retailers, these small businesses could more easily
identify those regulatory requirements that apply to them, helping them
to more easily comply with our fuel quality regulations.
    It is important to note that parties may have more than one
regulated activity, and, as is the case today, these parties would be
required to satisfy all regulatory requirements for each regulated
activity. Regulated parties would still need to comply with all
applicable requirements contained in part 1090, regardless of whether
they are identified for them in subpart B. EPA cannot predict every
possible situation a party may be in within the market place now or in
the future. Accordingly, regulated parties, as always, should pay
careful attention to all the applicable regulatory requirements to
ensure compliance.
    We request comment on the proposed structure of subpart B, as well
as whether the subpart would be helpful to regulated parties in
general. We also request comment on how we can improve the streamlined
regulations to further improve the understandability and navigation of
part 1090.

V. Standards

A. Gasoline Standards

1. Overview and Streamlining of Gasoline Program
    We are proposing to consolidate the various gasoline-related
standards into a single subpart in part 1090 (subpart C). We are not
proposing to change the lead, phosphorous, sulfur, benzene standards or
the RVP gasoline standards in the summer, nor are we proposing to
change the standards for oxygenates (including denatured fuel ethanol),
certified ethanol denaturant, gasoline additives, and standards for
certified butane and pentane. These standards are simply being moved
and consolidated into subpart C. Any comments on these standards will
be treated as beyond the scope of this rulemaking.
    However, to streamline the gasoline program, we are proposing some
changes in the form of the RFG VOC performance standards. These changes
are not expected to change the stringency of the gasoline standards. We
do, however, expect that these changes would greatly simplify the
gasoline program, resulting in: (1) Reduced burden associated with
demonstrating compliance with the gasoline standards; (2) improved
fungibility of gasoline, allowing the market to operate more
efficiently; and (3) reduced costs to consumers. First, we are
proposing to translate the RFG standard from the demonstration of the
VOC performance standard via the complex model into an equivalent
maximum RVP per-gallon standard, which would allow us to greatly
simplify the compliance demonstration requirements for RFG. Of all the
provisions being proposed, this is the key provision enabling
considerable streamlining of our existing gasoline regulations.
    Second, we are also proposing to consolidate the two grades of
butane and the two grades of pentane specified in part 80 for use by
butane and pentane blenders into a single grade each of certified
butane and certified pentane. This would greatly simplify the
registration and reporting of activities related to blending certified
butane and certified pentane.
    Finally, we are proposing certain regulations related to summer
gasoline, as well as procedures for states to relax the federal 7.8 psi
RVP standard. These changes are discussed more thoroughly in the
following sections.\14\
---------------------------------------------------------------------------

    \14\ The proposed changes to the transmix provisions for
gasoline and diesel fuel are addressed in Section XIII.E.
---------------------------------------------------------------------------

2. Reformulated Gasoline Volatility Standard
    The RFG program was created by EPA in the 1990s in response to a
directive from Congress in the CAA Amendments of 1990 with the express
purpose of providing cleaner burning gasoline to the most polluted
metropolitan areas of the country. The program was very successful in
that regard. However, since that time, a series of additional fuel
quality standards and other market changes have resulted in CG meeting
or exceeding most of the performance requirements for RFG, with the
primary difference between CG and RFG now being only the lower RVP of
the RFG during the summer months. At the same time, the extensive RFG
regulations remain, constraining gasoline fungibility, increasing
costs, complicating compliance oversight, and limiting the sale of
certain biofuel blends. Consequently, we are proposing to: (1) Replace
the existing compliance mechanism used for RFG batch certification--the
Complex Model--with a summer RVP maximum per-gallon standard; (2) apply
that same single RVP standard to all RFG nationwide; (3) provide
greater

flexibility for blending of oxygenates (ethanol and biobutanol) and E0
in RFG areas; and (4) remove a number of other restrictions that now
create a distinction without a difference between RFG and CG.
    We intend these proposed changes to maintain the stringency of all
standards associated with RFG while alleviating unnecessary compliance
mechanisms by simplifying the recordkeeping and reporting requirements.
We acknowledge that the CAA requires the existence of RFG in specified
nonattainment areas \15\ and certification procedures to certify RFG as
complying with the requirements.\16\ This action proposes to simplify
and translate those requirements while still maintaining the same level
of VOC emissions reductions as currently required. This would be
accomplished by translating the current VOC emissions reductions
demonstrated through the Complex Model into an RVP standard that would
be used to demonstrate RFG VOC compliance in lieu of the Complex
Model.\17\
---------------------------------------------------------------------------

    \15\ CAA section 211(k)(1).
    \16\ CAA section 211(k)(4)(A).
    \17\ Currently, refiners use the Complex Model to demonstrate
compliance with the RFG provisions. We are proposing that refiners
instead could demonstrate compliance by testing the RVP of the fuel,
along with benzene and sulfur as currently required.
---------------------------------------------------------------------------

    CAA section 211(k)(3)(B) provides that during the high ozone
season, ``the aggregate emissions of ozone forming volatile organic
compounds from baseline vehicles when using the reformulated gasoline
shall be 15 percent below the aggregate emissions of ozone forming
[VOCs] from such vehicles when using baseline gasoline.'' This section
also provides for increasing stringency beginning in 2000 of at least
25 percent, based on technological feasibility and costs. We are
achieving that demonstration through the use of an RVP standard.
    The proposed RFG summer RVP standard of 7.4 psi was specifically
chosen in order to maintain the summer VOC performance required by the
statute,\18\ and this RVP is currently observed in the RFG fuel pool;
this approach also aligns the RFG compliance provisions with the much
simpler and more easily enforced provisions currently in place for CG.
In doing so, we are also acting on the Energy Policy Act of 2005
(EPAct) directive to consolidate the RFG VOC Regions into a single set
of RFG standards by applying the southern RFG requirements (VOC control
region 1) to all RFG areas, as discussed further in Section V.A.2.d.
This consolidation of RFG VOC Regions, along with other proposed
changes in this action, would provide greater fungibility in the RFG
pool and eliminate antiquated restrictions in order to provide greater
flexibility to fuel manufacturers and distributors, reduce cost for
those parties, and reduce compliance and enforcement oversight costs.
---------------------------------------------------------------------------

    \18\ The VOC performance standard specifies that reductions are
as compared to baseline vehicles using baseline gasoline. CAA
section 211(k)(10) defines ``baseline vehicles'' as representative
of 1990 vehicles and ``baseline gasoline'' as those with parameters
specified in Table V.A.2.a-1. Our proposed translation of the VOC
performance standard uses the statutorily specified points of
comparison (i.e., 1990 vehicle technology using baseline gasoline as
specified in the CAA).
---------------------------------------------------------------------------

    Additional benefits from this proposed action are potentially wide
reaching and could create opportunities for broader availability of
fuels and reduced consumer costs. With the introduction of a summer RVP
standard for RFG, in situations of fuel shortage in RFG areas, gasoline
from other RFG areas or from state low-RVP fuel programs could now be
moved to affected areas without recertification so long as the RFG RVP
standard is observed. This increase in gasoline fungibility should
serve to reduce scarcity and promote lower prices for consumers in
affected areas. Additionally, the desire for ethanol-free gasoline for
marine use in RFG areas has regularly been expressed by both citizens
and elected officials of areas where RFG is required. Under the current
RFG compliance provisions in part 80, it is difficult for distributors
to provide ethanol-free gasoline to consumers in RFG areas. Under part
1090, it would be easier for distributors to provide ethanol-free
gasoline to consumers in these areas.
a. Review of RFG
    The definition and use of RFG is stipulated in CAA section 211(k).
The RFG program was established in response to exceedances of the
National Ambient Air Quality Standards (NAAQS) for ozone being
experienced in many metropolitan areas across the U.S. in the late
1980s.\19\ Gasoline motor vehicle emissions were and continue to be a
major contributor to the inventory of air pollutants in metropolitan
areas. The RFG program is implemented through a set of gasoline
standards demonstrated to reduce emissions from vehicles of that
era.\20\ The demonstration of emissions reductions was predicated on
changing fuel properties from a baseline fuel composition used in the
baseline vehicle fleet. The 1990 statutory baseline fuel and fleet
codified in the RFG regulations in part 80 are presented in Table
V.A.2.a-1.
---------------------------------------------------------------------------

    \19\ See ``National Air Quality and Emissions Trends Report,
1988,'' EPA-450/4-90-002, March 1990.
    \20\ Gorse, R.A. et al. (1997). Auto/Oil Air Quality Improvement
Research Program Final Report. 10.13140/RG.2.2.20882.35521.

          Table--V.A.2.a-1--Statutory Baseline Fuel Composition
------------------------------------------------------------------------
                                           Summer            Winter
------------------------------------------------------------------------
RVP (psi)...........................               8.7              11.5
Benzene (vol%)......................              1.53              1.64
Aromatics (vol%)....................              32.0              26.4
Olefins (vol%)......................               9.2              11.9
Sulfur (ppm)........................               339               338
E200 (%)............................              41.0              50.0
E300 (%)............................              83.0              83.0
Oxygen (wt%)........................               0.0               0.0
------------------------------------------------------------------------
Summer = June 1-September 15.

    The compliance of RFG in comparison to the baseline fuel was
originally demonstrated by refiners using the Simple Model.\21\ An
improved version of the compliance model was created and designated the
Phase II Complex Model after the initial phase of the RFG program. The
Complex Model has been used by refiners to certify RFG

under the Phase II RFG program and to meet the emission reduction
standards outlined in Table V.A.2.a-2.
---------------------------------------------------------------------------

    \21\ See 40 CFR 80.42.

   Table V.A.2.a-2--Phase II Standards and Requirements for Compliance
------------------------------------------------------------------------

------------------------------------------------------------------------
                Phase II Complex Model Averaged Standards
------------------------------------------------------------------------
VOC Emission Performance Reduction (%):
    Region 1 standard.................................           >= 29.0
    Region 1 per-gallon standard......................           >= 27.5
    Region 2 standard.................................           >= 27.4
    Region 2 per-gallon standard......................           >= 25.9
    Region 2 (Chi/Milw) standard......................           >= 25.4
    Region 2 (Chi/Milw) per-gallon standard...........           >= 23.9
Toxic Air Pollutants Emission Performance Reduction              >= 21.5
 (%)..................................................
NOX Emission Performance Reduction (%):
    Gasoline designated as VOC-controlled.............            >= 6.8
    Gasoline not designated as VOC-controlled.........            >= 1.5
Benzene (vol%):
    Standard..........................................           <= 0.95
    Per-gallon maximum................................           <= 1.30
------------------------------------------------------------------------

    The Complex Model required refiners to sample and test RFG for 11
parameters that would then be entered into the model. Refiners could
either demonstrate compliance on a per-gallon basis or on an average
basis across the year. Despite the added flexibility associated with
the Complex Model over the Simple Model, refiners tended to focus
changes on just a few parameters. To comply with the VOC emissions
performance standard, refiners primarily lowered the RVP of their RFG
as was anticipated at the time of the rule. For the NOX
standard, refiners primarily lowered the sulfur content of RFG, and to
comply with the toxics standard, benzene and aromatics content was
reduced in their RFG. Additionally, there have been three different RFG
VOC regions designated under the Phase II standards; each with slightly
different required levels of VOC emissions reduction as compared to the
baseline fuel. The RFG program operated under these standards and
resulted in a gasoline composition that was vastly different from CG
when the program was phased in from 1995 through 2000.
b. Gasoline Regulation Changes
    Since 2000, however, through a series of gasoline regulations and
marketplace changes, the environmental performance of CG has improved
to equal that of RFG in all respects except for summer VOC emission
performance (as estimated using the Complex Model).
    We established the Tier 2 gasoline sulfur program to limit the
average sulfur content in gasoline to 30 ppm beginning in 2004,\22\
with an 80 ppm per-gallon maximum standard (95 ppm at any location
downstream of a refinery or import facility).\23\ A reduction in fuel
sulfur would reduce NOX emissions on its own accord (as
expressed in the Complex Model), but fuel sulfur reduction was also
paramount to protecting the exhaust aftertreatment systems necessitated
by the more stringent vehicle emission standards established as part of
the same Tier 2 program rulemaking. By the end of 2007, after the
conclusion of all early credit, small refinery hardship extensions, and
other program flexibilities, the sulfur level of all gasoline was
reduced to less than 30 ppm in-use. The Tier 2 gasoline sulfur
standards reduced VOC, NOX, and air toxics emissions, and
brought down RFG and CG sulfur levels to a low enough level that the
NOX emission performance standard determined using the
Complex Model were met and exceeded for any compliant RFG.
Consequently, the NOX emission performance standard was
thereafter deemed met for both RFG and Antidumping (i.e., CG) if the
Tier 2 gasoline sulfur standard was met. This represented the first
time that gasoline standard for CG exceeded an RFG performance standard
(the NOX performance standard in this case) on average, but
it also heralded the convergence in gasoline quality between CG and RFG
that would continue to occur over the next decade.
---------------------------------------------------------------------------

    \22\ See 65 FR 6698 (February 10, 2000).
    \23\ See 40 CFR 80.195 and 40 CFR 80.210, respectively.
---------------------------------------------------------------------------

    In 2007, EPA revised the original Mobile Source Air Toxics (MSAT)
Rule with the MSAT2 Gasoline Benzene Program.\24\ This rulemaking
established an annual average standard of 0.62 volume-percent benzene
on refiners and importers of gasoline.\25\ This standard took effect
starting January 1, 2011, for non-small refiners and January 1, 2015,
for small refiners. The standard was fully phased-in on January 1,
2018. The result was that the air toxics performance standards for RFG
were surpassed by the MSAT2 benzene standards for CG. Consequently,
fuels that met MSAT2 benzene standards were deemed compliant with the
air toxics emission performance standard otherwise calculated using the
Complex Model. The rationale held, as with Tier 2, that any fuel
meeting the new standard would meet or exceed the reductions required
by the statute. The MSAT2 rulemaking also eliminated the NOX
emissions performance reduction demonstration in the Complex Model as a
result of the gasoline sulfur program.\26\
---------------------------------------------------------------------------

    \24\ See 72 FR 8428 (February 26, 2007).
    \25\ See 40 CFR 80.815.
    \26\ See 40 CFR 80.41(e)(2) and 72 FR 8428, 8498 (February 26,
2007).
---------------------------------------------------------------------------

    The combined effect of the sulfur and benzene gasoline standards
has been that the use of the Complex Model has been narrowed to only
demonstrating compliance with the summer VOC emission performance
standard for RFG. While all of the Complex Model fuel parameters
(except benzene) play a role in determining VOC emission performance,
by far the primary lever for refiners to use to comply with the VOC
emission performance standard is RVP.\27\ Given that the changes to all
the

other fuel parameters are dictated by other vehicle standards and
market requirements, refiners today primarily only lower RVP to the
degree necessary (due to cost reasons) in order to meet the VOC
emission performance standard of RFG. However, the degree to which
refiners have needed to reduce the RVP of RFG to demonstrate compliance
using the Complex Model has relaxed slightly over time with other
changes, mandated and market, to gasoline.
---------------------------------------------------------------------------

    \27\ The VOC performance standard is made up of two components:
Non-exhaust and exhaust VOCs. Under the Complex Model, 100 percent
of the non-exhaust VOCs are calculated using RVP, which also plays a
significant role in determining exhaust VOC reductions under the
Complex Model. In both non-exhaust and exhaust VOCs, the Complex
Model estimates an increase in performance of the fuel on 1990
vehicle technology relative to the 1990 baseline gasoline
specifications.
---------------------------------------------------------------------------

    In 2014, EPA finalized the Tier 3 gasoline sulfur program to
further limit the average sulfur content in gasoline to 10 ppm
beginning in 2017.\28\ All refineries and importers, including small
refiners and small volume refineries, must comply with the 10 ppm Tier
3 sulfur standard starting January 1, 2020. The Tier 3 sulfur standard
resulted in further reductions in VOC, NOX, and air toxics
emissions predicted by the Complex Model.
---------------------------------------------------------------------------

    \28\ See 40 CFR 80.1603.
---------------------------------------------------------------------------

    Beginning in the early 2000s, the amount of gasoline blended with
10 percent ethanol also increased markedly as a result of MTBE bans,
rising crude oil prices, tax incentives, and the Renewable Fuel
Standard (RFS) mandates. The addition of ethanol reduced the aromatic,
olefin, T50, and T90 levels of gasoline, which together with the oxygen
content reduced the VOC, NOX, and air toxics emissions
predicted by the Complex Model. Similarly, since about 2009, reduced
natural gas prices brought on by the proliferation of hydraulic
fracturing technology has allowed refiners to more economically back
off on gasoline reforming, continuing to reduce gasoline aromatic
levels and in turn reducing VOC, NOX, and air toxics
emissions predicted by the Complex Model.
    The progression in gasoline sulfur, benzene, and aromatic content,
RVP, distillation, and other Complex Model parameters is documented in
the Fuel Trends Report released by EPA in 2017.\29\ The evolution of
these other Complex Model parameters over the past decade has allowed
for a slight increase in RVP, as seen in Figure V.A.2.b-1.
---------------------------------------------------------------------------

    \29\ See ``Fuel Trends Report: Gasoline 2006--2016,'' EPA-420-R-
17-005, October 2017.
[GRAPHIC] [TIFF OMITTED] TP14MY20.000

    RVP is the only one of the Complex Model parameters that affects
evaporative emissions; the other fuel parameters (except benzene and
including RVP) impact VOC exhaust emissions under the Complex Model. As
a result, there are limits to the extent that these other fuel
parameters can impact VOC emissions performance under the Complex Model
and corresponding limits to the extent that RVP can be increased within
the Complex Model and still result in a compliant RFG.\30\ Figure
V.A.2.b-2 shows the 95th percentile of RVP levels from the batch
compliance data EPA receives.
---------------------------------------------------------------------------

    \30\ In the RFG final rule, we found that a fuel with an RVP of
7.2 would meet the Region 1 VOC performance standards. See 59 FR
7716, 7721 (February 16, 1994).

---------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TP14MY20.001

c. Proposed RVP Standard for VOC Performance Determination
    With the importance of RVP in the Complex Model for VOC emissions
performance and the combination of MSAT2 and Tier \2/3\ for reducing
benzene and sulfur, respectively, RFG compliance is now almost
completely determined by the RVP of the fuel. Consequently, an
opportunity for greatly simplifying the certification process for RFG
has presented itself. The 11 parameters required to certify RFG under
the Complex Model could be reduced to just three (sulfur, benzene, and
RVP) if a summer RVP standard were adopted along with the existing
sulfur and benzene content standards.\31\ Therefore, we are proposing
that any RFG batch meeting a summer RVP standard of 7.4 psi RVP would
be deemed in compliance with the RFG VOC emission performance reduction
standard. Along with RVP, benzene concentration for MSAT2 compliance,
and sulfur content for Tier 3 compliance would also be reported to EPA.
Thus, all three of the emission reduction standards for RFG would be
covered by just three parameters: RVP, benzene, and sulfur. This would
reduce the compliance and reporting burden for fuel manufacturers by
reducing the number of parameters they need to test and report from 11
to as few as three in the summer.\32\
---------------------------------------------------------------------------

    \31\ As discussed in Section IX, manufacturers that certify
batches of oxygenated gasoline would need to test for oxygenates,
while manufacturers of BOBs would need to follow hand blending
procedures for batch certification.
    \32\ As discussed in sections VIII and IX, manufacturers would
need to sample, test, and report for additional fuel.
---------------------------------------------------------------------------

    In Section V.A.2.e, we lay out the process and rationale for the
proposed summer RVP per-gallon standard of 7.4 psi for RFG. The primary
intent in proposing to translate the VOC performance standards into an
RVP maximum per-gallon standard is to maintain the status quo and to
ensure that the emission reduction targets for RFG would continue to be
achieved. During the selection process of the proposed summer RVP
standard, we operated under the statutory constraints that were, and
remain, present for the formulation of the Complex Model--namely, the
1990 baselines for both fuel composition and vehicle technology. Thus,
the proposed 7.4 psi RVP standard for RFG would maintain the gasoline
quality and its associated emission performance as calculated
consistent with the statutory requirements and the Complex Model.
    Although it will no longer be required for demonstration of RFG
batch compliance, the Complex Model will be retained by EPA for
compliance oversite purposes in conjunction with the proposed national
fuel survey program. Continued adherence to the VOC emission
performance reduction standard will be monitored through samples
collected from RFG areas as part of the survey. This oversite function
will help ensure that the emission reductions the Complex Model was
intended to certify at the refinery gate are being maintained in use.
d. Consolidation of RFG Areas
    Translating the VOC emissions performance standard into a summer
RVP standard would enable EPA to simplify the RFG program
significantly. Additionally, the creation of a single summer RVP
standard for all RFG areas would further simplify the RFG program and
automatically consolidate the VOC regions as required under section
1504(c) of EPAct.\33\ Section 1504(c) directs EPA to revise the RFG
regulations to consolidate the regulations for the VOC-Control Regions
by eliminating the less stringent requirements.
---------------------------------------------------------------------------

    \33\ EPA ``shall . . . revise the [RFG] regulations . . . to
consolidate the regulations applicable to VOC-Control Regions 1 and
2 . . . by eliminating the less stringent requirements applicable to
gasoline designated for VOC-Control Region 2 and instead applying
the more stringent requirements applicable to gasoline designated
for VOC-Control Region 1.'' See Energy Policy Act of 2005, Public
Law 109-58, 119 Stat. 1079. See also USEPA Office of Transportation
and Air Quality. Assessing the Effect of Five Gasoline Properties on
Exhaust Emissions from Light-Duty Vehicles Certified to Tier 2
Standards: Analysis of Data from EPAct Phase 3 (EPAct/V2/E-89):
Final Report. EPA-420-R-13-002. Assessment and Standards Division,
Ann Arbor, MI. April 2013.
---------------------------------------------------------------------------

    In practice, there have been three sets of VOC emission performance
standards for the VOC Regions of the RFG program: VOC-Control Regions 1
and 2, along with the adjustment to Region 2 provided for the Chicago/
Milwaukee areas. To date, EPA has not taken action to consolidate the
VOC regions as directed by EPAct. However, the creation of a single
summer RVP standard provides both an opportunity and a mechanism by
which to act on this requirement. A benefit of this consolidation would
be the increased fungibility of RFG amongst historically distinct VOC-
control regions.
    We find that the EPAct language provides EPA with an additional
source of authority to take this action to

translate the VOC performance standard into a single RVP standard.
e. Translating the VOC Performance Standard to a Summer RVP Standard
    In order to translate the VOC performance standard into an RVP cap,
we utilized the Complex Model and the 1990 baseline fuels and vehicles
to determine the corresponding RVP. In accordance with EPAct, the VOC-
Control Region 1 emission reduction standards were used to establish
the consolidated RVP standard. More specifically, the per-gallon
reduction requirements for VOC-Control Region 1 from 40 CFR 80.41 were
used as the basis for determining the summer RVP standard. Given that
we are proposing a per-gallon standard, it was deemed the most
appropriate point of reference for determining the required VOC
reduction from the statute. We recognize that the current RFG summer
VOC performance standards under part 80 allow for refiners and
importers to meet either a per-gallon summer VOC performance standard
or an annual average summer VOC performance standard. We are proposing
to replace all RFG summer VOC performance standards with a maximum RVP
per-gallon standard translated from the RFG Region 1 summer VOC
performance per-gallon standard. Under this proposal, fuel
manufacturers would no longer comply through an annual average standard
and must instead demonstrate compliance on a per-gallon basis during
the summer.
    The intention of this proposed action is to maintain the level of
stringency observed in the RFG pool while transitioning away from using
the Complex Model to demonstrate compliance to instead demonstrate
compliance with a summer RVP standard. To that end, the starting point
for our analysis was the batch reports submitted to EPA in the course
of certifying batches of RFG. Several years were evaluated, but the
most recent full year of data at the time the analysis was carried out
was 2018. Summary statistics, based upon volumetrically weighting the
batches, for the Complex Model parameters for this data are presented
in Table V.A.2.e-1.

                                                    Table V.A.2.e-1--Summary Statistics for 2018 RFG
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Volume
                                                            Weighted 5%    Weighted 25%      Weighted      Weighted 75%    Weighted 95%      weighted
                                                                                median                                          average
--------------------------------------------------------------------------------------------------------------------------------------------------------
Oxygen (wt%)............................................            3.37            3.46            3.51            3.57            3.65            3.52
Sulfur (ppm)............................................               4              10              18              26              42            19.3
Aromatics (vol%)........................................             6.2            12.7            16.3              20            26.6            16.3
Olefins (vol%)..........................................             1.5             5.9            10.9            14.3            17.8           10.25
Benzene (vol%)..........................................            0.19            0.38             0.5            0.67            0.93            0.53
Ethanol (vol%)..........................................            9.23            9.46            9.61            9.77              10            9.62
E200 (%)................................................            41.7            45.7            48.5            50.7            55.4            48.4
E300 (%)................................................            81.4            84.1            86.5            88.9            92.6            86.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    There are only eight fuel parameters reported in Table V.A.2-5
because the remaining three parameters in the Complex Model (MTBE,
ETBE, and TAME) have become negligible in the past 15 years, in part
due to the removal of the RFG minimum oxygenate content requirement.
The reported eight fuel parameters were then used to statistically
construct ``percentile'' fuels based on how each of the eight
parameters affected VOC performance in the Complex Model. For instance,
the ``5th'' percentile is comprised of the 5th percentile values of
Ethanol, E200, and E300 along with the 95th percentile values for
aromatics, olefins, sulfur, and benzene. This combination results in
the strictest set of parameters for RVP control and consequently the
lowest, or ``5th'' percentile of allowable RVP. The parameter values
for the 5th, 50th, and 95th percentile \34\ RFG are reported in Table
V.A.2.e-2, along with the volume-weighted average for each of the
parameters for 2018 RFG.
---------------------------------------------------------------------------

    \34\ We chose the 5th and 95th percentile to exclude cases of
misreporting or reported non-compliance from affecting the analysis.

                                       Table V.A.2.e-2--Meeting the Phase II VOC Performance Standard for 2018 RFG
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Aromatics
                  Fuel                     Oxygen (wt%)    Sulfur (ppm)       (vol%)      Olefins (vol%)  Benzene (vol%)    E200 (vol%)     E300 (vol%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5th.....................................            3.37              42            26.6            17.8            0.93            41.7            81.4
50th....................................            3.51              18            16.3            10.9             0.5            48.5            86.5
95th....................................            3.65               4             6.2             1.5            0.19            55.4            92.6
Average.................................            3.51            19.3            16.3            10.3            0.53            48.4            86.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Each of the four fuel compositions in Table V.A.2.e-2 was then
exercised in the Complex Model in order to solve for the maximum
allowable RVP while still meeting the VOC emissions reduction
requirement. The maximum allowable RVP was calculated for both the
average and per-gallon standards for VOC-Control Region 1 and are
reported for each of the four compositions in Table V.A.2-7.

   Table V.A.2.e-3--Maximum Allowable RVP Level in the Complex Model for 2018 RFG Percentile Fuel Compositions
----------------------------------------------------------------------------------------------------------------
                                                                  Percentile
                                               ------------------------------------------------  Volume-weighted
                                                      5th            50th            95th            average
----------------------------------------------------------------------------------------------------------------
                                VOC-Control Region 1 Maximum Allowable RVP Level
----------------------------------------------------------------------------------------------------------------
Average Standards.............................             6.7            7.14            7.24              7.12
Per-Gallon Standards..........................            6.90            7.30            7.40              7.29
----------------------------------------------------------------------------------------------------------------

    As would be expected, the volume-weighted average allowable RVP of
7.12 is nearly identical to the 7.11-7.14 range that was observed in
the 2012-2017 batch report data presented in Figure V.A.2.b-1. This
reflects the widespread use of the average standards by most RFG fuel
manufacturers under the current program. The per-gallon standards would
have theoretically allowed for a ~0.15 psi higher RVP across the
average RFG fuel pool, but fuel manufacturers have predominantly used
the average standards. The percentile fuel compositions demonstrate
that there is the potential for approximately a half-pound variation in
RVP for a compliant RFG fuel depending on the balance of the other fuel
parameters. However, there are two important results from this
analysis: (1) Solving for maximum allowable RVP for the volume-weighted
average fuel yields a very similar RVP as observed in the batch reports
(~7.1 psi); and (2) the per-gallon standards would have allowed for a
pool average RVP of nearly 7.3 psi with no changes to RFG fuel
composition.
    Therefore, we believe that the proposed 7.4 psi RVP standard for
RFG is appropriate.\35\ The proposed standard equates to a 27.5 percent
reduction in VOC emissions performance as compared to baseline gasoline
used in baseline vehicles (i.e., 1990 vehicles) using the Complex
Model. We seek comment on the proposed 7.4 psi RVP standard.
---------------------------------------------------------------------------

    \35\ The data used for this analysis was based on the most
current information available to EPA at the time (i.e., the 2018
gasoline batch information). Should new information become
available, we intend to perform the same analysis using the updated
information, which may result in a small change in the standard.
---------------------------------------------------------------------------

f. Conventional Gasoline Batch Data Analysis
    In order to translate the existing RFG VOC performance standard as
an RFG summer RVP maximum per-gallon standard, it is necessary to
evaluate how RVP per-gallon maximum standards are treated in practice.
In order to evaluate the treatment of an RVP per-gallon maximum
standard, we examined the RVP levels in relation to the 9.0 psi
standard for CG in 2016.\36\ To conduct the analysis, the batch reports
were submitted to thorough quality control and assurance in order to
ensure that only batches adhering to the 9.0 psi standard (boutique,
federal 7.8 psi, etc. were all removed) and that contained less than
one percent ethanol were considered.\37\ The summary statistics for the
2016 summer CG batches are presented in Table V.A.2.f-1.
---------------------------------------------------------------------------

    \36\ 2016 was the most recent year for which clean, batch report
data was available at the time of analysis. We intend to update this
analysis with the most recent data available for the final rule.
    \37\ The presence of ethanol can result in an increase in the
RVP of the gasoline-ethanol blended fuel. The purpose of this
analysis is to evaluate how refiners make fuels relative to the 9.0
psi RVP maximum per-gallon standard without the addition of ethanol.

                       Table V.A.2.f-1--CG Summary Statistics From the 2016 Batch Reports
----------------------------------------------------------------------------------------------------------------
                                                    Summer CG
-----------------------------------------------------------------------------------------------------------------
                        Percentile                                 RVP          Volume above      Volume below
----------------------------------------------------------------------------------------------------------------
5th.......................................................              7.32    27,187,626,247     1,420,043,309
50th......................................................              8.67    12,984,692,750    15,622,976,806
95th......................................................              8.99     1,194,383,604    27,413,285,952
Mean......................................................              8.47    18,762,397,380     9,845,272,176
Standard..................................................               9.0       489,040,207    28,118,629,349
----------------------------------------------------------------------------------------------------------------

    The CG batch data is represented in histogram form in Figure
V.A.2.f-1. The graduations of 0.1 psi on the x-axis allow for a clearer
representation of where the bulk of the fuel resides in relation to the
9.0 psi RVP standard.

[GRAPHIC] [TIFF OMITTED] TP14MY20.002

    The data from the CG batch reports show that the median RVP (8.67
psi) is approximately 0.3 psi below the 9.0 psi RVP standard. As would
be expected, there is variability in the fuel batches, but the mode of
the data is 0.2 psi below the standard and more than 95% of the CG fuel
volume is below the standard. For CG, the mode fell 0.2 psi below the
standard and the median fell 0.3 psi below the standard. This
information was taken along with the average RVP of 7.12 psi for 2018
RFG discussed in Section V.A.2.e to conclude that a summer RVP standard
for RFG of 7.4 psi would meet the goal of preserving the current
environmental performance of RFG, while imposing little to no
additional industry burden based upon the batch reports for CG. We seek
comment on whether there would be additional industry burden associated
with the proposed 7.4 psi RVP RFG standard.
g. Additional Changes Related to RFG
    We are also proposing regulations intended to allow for greater
compliance flexibility and increased gasoline fungibility for the RFG
program. Specifically, in Section VIII.G we are proposing to address
several provisions regarding fuel certification and recertification
that are now commonplace due to the gasoline quality standards
implemented since the onset of the RFG program. For instance, RFG is
statutorily required to be used in certain ozone nonattainment or
maintenance areas in both summer and winter. The differences between
RFG and CG that require the respective fuels to be segregated in the
summer (i.e., RFG and CG must meet different standards in the summer)
are not present during the winter season, where RFG and CG must meet
identical standards under part 80. However, a similar prohibition on
co-mingling RFG and CG in the winter exists.
    To address this situation, we are proposing to allow all winter
gasoline to be used in RFG areas without recertification. Distributors
of gasoline would be allowed to designate winter gasolines without
recertification as RFG or CG to comport with state or pipeline
specifications, which may require those distinctions. We are also
proposing provisions to allow California manufacturers and distributors
the flexibility to ship California gasoline and diesel fuel to the rest
of the U.S. due to their state specifications meeting or exceeding
EPA's standards. Lastly, new recertification standards are being
proposed to facilitate end-of-season recertification, emergency fuel
waivers, and allow greater downstream flexibility. These provisions are
discussed in more detail in Section VIII.G. We seek comment on the
proposed approach.
3. Certified Butane and Pentane
    We are proposing to streamline the provisions for gasoline blending
manufacturers that blend butane and pentane of certified quality
(certified butane and certified pentane, respectively) into PCG.\38\
Under part 80, these flexibilities allow gasoline blending
manufacturers to rely on test results by the butane or pentane producer
rather than testing each batch of butane or pentane received as would
otherwise be required of a gasoline blender manufacturer to demonstrate
compliance with EPA standards. This approach would be maintained in
part 1090.
---------------------------------------------------------------------------

    \38\ See 40 CFR 80.82 and 80.85, respectively.
---------------------------------------------------------------------------

    We are proposing to combine these grades into single grades of
``certified butane'' and ``certified pentane.'' Part 80 currently has
two grades of butane and pentane (commercial and noncommercial) that
can be used by gasoline blender manufacturers under these provisions.
During the rule development process, many stakeholders highlighted the
burden of demonstrating compliance with the part 80 butane and pentane
blending provisions. We believe that, coupled with other changes to the
specifications for certified butane and certified pentane described in
this section, there is an opportunity to consolidate the grades of
butane and pentane. This would allow for a streamlining of the
compliance demonstrations needed for certified butane and certified
pentane blenders to produce gasoline using certified butane and
certified pentane.

    The current standards in part 80 for commercial and noncommercial
grades of butane and pentane contain specifications on the maximum
sulfur, benzene, olefin, and aromatics content. Consistent with the
proposed changes to RFG certification,\39\ we are proposing to remove
the maximum olefin and aromatics standards from the specifications for
certified butane and certified pentane as we are proposing to no longer
require those parameters for the certification of gasoline, as
discussed in Section V.A.2, and because we do not expect issues to
occur with other regulated parameters. Both certified butane and
pentane would be subject to a maximum 10 ppm sulfur standard and
maximum 0.03 volume percent benzene standard as are the commercial and
noncommercial grades of butane and pentane today. The sulfur and
benzene specifications are still needed to ensure that certified butane
and certified pentane blenders do not increase the amount of sulfur and
benzene in the national gasoline pool.
---------------------------------------------------------------------------

    \39\ See Section V.A.2.
---------------------------------------------------------------------------

    Under part 80, commercial grade pentane is subject to both 95
volume percent pentane purity specification and a maximum 5 volume
percent C6 \40\ and higher carbon number hydrocarbons
specification.\41\ Non-commercial grade pentane is subject to 95 volume
percent pentane purity specification but is not subject to
specifications on the amount of C6 and higher carbon number
hydrocarbons that may be present. We are proposing to not include a
standard on C6 and higher hydrocarbon content in part 1090 for
certified pentane given that compliance with the proposed 95 volume
percent pentane purity specification would ensure that no more than 5
volume percent C6 and higher hydrocarbons are present.
---------------------------------------------------------------------------

    \40\ C6 refers to a hydrocarbon molecule that contains six
carbon atoms.
    \41\ Pentane has 5 hydrocarbons (i.e., it is C5).
---------------------------------------------------------------------------

    Unlike the current standard for non-commercial grade pentane, the
current standards for commercial and non-commercial grade butane do not
include a specification on minimum butane purity. With the proposed
removal of the maximum olefin and aromatics specifications for
certified butane, it is appropriate to propose controls on the purity
of certified butane that are consistent with the purity specification
for certified pentane. During the rule development process, we
requested input from industry on applying a 95 volume percent purity
specification to certified butane similar to the proposed purity
specification for certified pentane. Butane blenders stated that
implementing a minimum 95 percent purity specification would cause
unnecessary additional processing costs to remove pentane that is often
present. They noted that the presence of pentane would not be an
environmental concern because of the clean burning properties of
pentane and the lower volatility of pentane compare to butane. Butane
blenders suggested that implementing a minimum 92 volume percent purity
specification for certified butane would accomplish our intended goal
of ensuring that undesirable chemical species do not contaminate
certified butane while providing the necessary flexibility. We agree
that a 92 volume percent purity specification would not result in
increased emissions from the use of certified butane compared to a 95
volume percent purity specification and would reduce the burden to
industry; therefore, we are proposing a minimum 92 volume percent
purity specification for certified butane. We request comment on
whether the proposed 92 volume percent purity specification for
certified butane would provide sufficient flexibility to allow for the
presence of pentane in certified butane while still preserving gasoline
quality or whether a more or less stringent purity specification would
be appropriate.
    We are also proposing to simplify the quality assurance
requirements for certified butane and pentane blenders. Under part 80,
butane and pentane blenders are required to conduct periodic quality
assurance testing of the batches of butane or pentane they receive. For
butane, the current frequency of sampling and testing for the butane
received from each butane supplier must be one sample for every 500,000
gallons of butane received, or one sample every three months, whichever
is more frequent. For commercial-grade pentane, the sampling and
testing frequency is once for every 350,000 gallons of pentane, or one
sample every three months, whichever is more frequent. Noncommercial-
grade pentane is currently subject to a more frequent sampling and
testing frequency of once every 250,000 gallons or one sample every
three months, whichever is more frequent.
    To simplify these quality assurance requirements, we are proposing
to require the same sampling and testing frequency for certified butane
and pentane of once every 500,000 gallons of butane or pentane
received, or one sample every three months, whichever is more frequent.
We believe that a more frequent sampling and testing is not needed for
certified pentane versus certified butane given that they are subject
to similar standards. To the extent that there may be heightened
concern with the potential presence of high boiling range hydrocarbons
that are typically only found in full boiling range gasoline (such as
C7-C20 hydrocarbons) in certified pentane versus certified butane due
to difference in manufacturing processes,\42\ we believe that such
concerns are adequately mitigated by the existing registration
requirements for certified pentane producers.
---------------------------------------------------------------------------

    \42\ Pentane that is produced from NGLs historically has been
the bottom distillation cut from the NGL fractionation process, and
hence contains all heavier hydrocarbons as well as pentane. Since
butane is more volatile than pentane, butane produced by
distillation from NGLs is unlikely to contain heavy hydrocarbons
that may be a concern with respect to increased emissions.
---------------------------------------------------------------------------

4. State and Local Fuel Standards
a. Overview
    We are transferring and consolidating the part 80 regulations that
relate to RVP, RFG, and other summer gasoline requirements to part
1090. For example, we are removing outdated provisions and making it
easier to identify the RVP standard that applies in a given location.
We are also proposing changes that are intended to update and simplify
existing regulations and reflect our experience in implementing these
provisions in partnership with states and industry. For example, we are
proposing procedures for states that request a relaxation of the
federal RVP limit of 7.8 psi. This is similar to the existing
procedures used for RFG opt-out by states. We are not proposing any
regulatory revisions for current fuel programs that apply in several
states. The following sections detail the changes we are proposing.
    We are also using this action to announce that an updated boutique
fuel list is currently posted on our website.\43\ Section 1541(b) of
EPAct requires EPA to remove any fuel from the published list if the
fuel either ceases to be included in a state implementation plan (SIP)
or is identical to a federal fuel.\44\ Several fuels have ceased to be
included in SIPs since the boutique fuel list was originally published
in 2006.\45\ The boutique fuel list on our website, however, provides
up-to-date information on where such fuels are currently used.
---------------------------------------------------------------------------

    \43\ See http://www.epa.gov/gasoline-standards/state-fuels.
    \44\ See CAA section 211(c)(4)(C)(v)(III).
    \45\ See 71 FR 78195 (December 28, 2006).
---------------------------------------------------------------------------

b. Consolidating Gasoline Volatility Standards
    We are transferring summer gasoline requirements related to RVP
limits that

are currently in part 80 to part 1090. Summer gasoline for use in the
continental U.S. must comply with either the federal maximum RVP limit
of 9.0 psi or the more stringent RVP limit of 7.8 psi, unless it is
either a federal RFG covered area, is subject to California's RFG
regulations, or EPA has waived preemption and approved a state request
to adopt a more stringent RVP into a SIP.46 47 48 The
proposed regulatory text would simplify and clarify regulatory text
currently in 40 CFR 80.27(a) and 80.70, and would not change the
current federal RFG and summer gasoline RVP requirements nationwide.
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    \46\ Some states where the federal low RVP standard is required
have chosen instead to apply federal RFG or another state fuel
regulation that limits RVP to less than 7.8 psi. Such a practice is
consistent with the CAA. If a state with such an area decided to
remove its fuel program, the state should work closely with EPA to
ensure that the state's SIP demonstration also supports removal of
multiple fuel programs, if desired. See Section V.A.4.g for more
information.
    \47\ California has set requirements for gasoline sold
throughout the entire state, and these requirements include limits
on the gasoline RVP. See Title 13, sections 2250-2273.5 of the
California Code of Regulations. These standards apply in lieu of
federal RVP standards.
    \48\ In the absence of California's RFG regulation, either
federal RVP standards or federal RFG would apply in California. Some
areas would be federal RFG covered areas because either they were
among the original nine RFG covered areas or they were reclassified
to Severe nonattainment for an ozone NAAQS. See CAA section
211(k)(10)(D).
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c. Reformatting the List of Areas Where Federal Low RVP Standard
Applies
    We are also transferring the current RVP standards in 40 CFR
80.27(a)(2), which sets out the current federal RVP limits to part
1090. Areas subject to the federal 7.8 psi RVP limit are listed in a
table in 40 CFR 1090.215(a)(1), describing the geographic areas subject
to the 7.8 psi RVP limit. The regulatory text specifies that any
gasoline that is not subject to a lower RVP limit is subject to the
federal 9.0 psi RVP limit. We are not proposing any changes or
revisions to applicable RVP limits. Specifically, we are:
     Removing the regulatory text in 40 CFR 80.27(a)(1) because
it is outdated and has not applied since 1991.
     Replacing the regulatory text, table, and footnotes that
are currently in 40 CFR 80.27(a)(2) with a reformatted table in part
1090 that lists the areas where the federal 7.8 psi RVP limit for
summer gasoline currently applies.
    The table in 40 CFR 1090.215(a)(1) includes the name of the area
and the county or counties in the area where the federal 7.8 psi RVP
limit applies, rather than the current table in part 80 that dates back
to the initial one-hour ozone standard, is overly complex and has
caused confusion among states and industry. The new table would also
include a description of the boundaries for areas that include partial
counties where RVP standards are currently in effect. Under the current
regulations in part 80, interested parties must search 40 CFR part 81
in order to identify these specific boundaries of the area where the
7.8 psi RVP limit applies. As previously noted, this action does not
change any existing requirements.
d. Reformatting Federal RFG Applicability and Covered Areas
    As part of transferring part 80 requirements relating to federal
RFG to part 1090, we are reformatting how the information on current
RFG covered areas is presented. Specifically, in 40 CFR 1090.270 we are
presenting the description of RFG covered areas in a table format and
grouping the covered areas by the process under which the area became a
covered area. There are four ways in which an area could have become an
RFG covered area:
     It was included in the original RFG covered areas under
CAA section 211(k)(10)(D) because its 1987-1989 ozone design value was
among the nine highest design values and its 1980 population was
greater than 250,000;
     It was subsequently reclassified to Severe for an ozone
NAAQS;
     It was a classified ozone nonattainment area that opted
into the RFG program; or
     It was an attainment area in the ozone transport region
that opted into the RFG program.
    The tables in part 1090 list the areas in each of these groups. As
previously explained, we are not changing the geographic applicability
of federal RFG.
    We are also transferring the existing regulatory processes by which
an area may become a federal RFG covered area in the future, which are
if: (1) An area is reclassified to Severe nonattainment for an ozone
NAAQS; (2) a governor requests that a classified ozone nonattainment
area become a covered area; or (3) a governor requests that an
attainment area in the ozone transport region be included as a federal
RFG covered area.
    We are also including two California areas on the list of covered
areas in part 1090 because the areas became federal RFG covered areas
when they were reclassified as Severe ozone nonattainment areas.\49\
The two areas are the Sacramento Metro area and the San Joaquin Valley
area.\50\ We have provided information on these RFG covered areas on
our website but had not previously included them in the list of covered
areas in 40 CFR 80.70. This does not impact California's regulations
that require the sale of California RFG in these areas, but should
California's regulations no longer apply in the future, the federal RFG
regulations would still apply in keeping with the CAA.
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    \49\ See CAA section 211(k)(10)(D).
    \50\ The Sacramento Metro area was reclassified as a severe
ozone nonattainment area on June 1, 1995 and became a federal RFG
covered area on June 1, 1996. See 60 FR 20237 (April 25, 1995). The
San Joaquin Valley area was reclassified as a severe ozone
nonattainment area on December 10, 2001 and became a federal RFG
covered area on December 10, 2002. See 66 FR 56476 (November 8,
2001).
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e. Continuation of Federal RFG Requirements in Covered Areas When
Revised Ozone NAAQS Are Implemented
    In the Phase 2 Implementation Rule for the 1997 Ozone NAAQS, we
stated that areas that became RFG covered areas pursuant to CAA section
211(k)(10)(D) would remain RFG covered areas at least until they were
redesignated to attainment for the 1997 ozone NAAQS. We also stated
that areas that became covered areas because they opted into RFG would
remain covered areas until they opt out of RFG pursuant to our opt-out
regulations. We also included regulatory text in 40 CFR 80.70(m),\51\
parts of which are now outdated and unnecessary because they were
specific to the transition from the 1-hour ozone NAAQS to the 1997
ozone NAAQS and to redesignations to attainment for the 1-hour ozone
NAAQS. Both the 1-hour and 1997 ozone NAAQS have been revoked.
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    \51\ See 70 FR 71684-9 (November 29, 2005).
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    We are maintaining and clarifying in this action our intention and
existing practice with regard to applicable RFG requirements for the
implementation of revised ozone NAAQS. Our intention is consistent with
our past approach and fuel program implementation to date.
Specifically, for purposes of implementing revised ozone NAAQS, RFG
will continue to apply in all covered areas (i.e., both areas that
opted into RFG under CAA section 211(k)(6) and covered areas under CAA
section 211(k)(10)(D)). As previously explained, this is consistent
with how the federal RFG program has been implemented during the
transition to the 1997, 2008, and 2015 ozone NAAQS. As also previously
explained, part 1090 includes procedures for either removing a
prohibition on or opting out of RFG requirements, consistent with CAA
requirements; thus, states should be able

to change their RFG programs under certain cases.
f. Clarifying When Mandatory RFG Covered Nonattainment Areas Can Be
Removed From the List of Covered Areas
    In the Phase 2 Implementation Rule for the 1997 Ozone NAAQS, we
reserved for future consideration the continued applicability of RFG
requirements in mandatory RFG covered areas pursuant to CAA section
211(k)(10)(D) (i.e., they were among the areas with the nine highest 1-
hour ozone design values from 1987-1989 or they have been reclassified
to Severe for an ozone NAAQS) in the future.\52\
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    \52\ See 70 FR 71687 (November 29, 2005).
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    We are proposing a new provision in part 1090 that would allow
mandatory RFG covered area pursuant to CAA section 211(k)(10)(D) to
remove the applicability of the RFG program if certain requirements are
met. Under this proposed provision, a state could request the removal
of its RFG program if the RFG area was either redesignated to
attainment for the most stringent ozone NAAQS in effect at the time or
initially designated as attainment for the most stringent ozone NAAQS
in effect. For example, the 2015 ozone NAAQS of 70 ppb is currently the
most stringent ozone NAAQS. Therefore, in order for a mandatory RFG
area to remove its RFG program, it would have to be either redesignated
to attainment for the 2015 ozone NAAQS (if had initially been
designated as attainment for that NAAQS) or be initially designated as
an attainment area for the 2015 ozone NAAQS. If the area is initially
designated as an attainment area for the most stringent ozone NAAQS in
effect, under the proposed requirement the area would have to be
redesignated to attainment for the prior ozone NAAQS before the RFG
program could be removed. For example, under this proposal an area
would either have been designated as an attainment area for the 2015
ozone NAAQS with an approved maintenance plan for the 2008 ozone NAAQS
or be redesignated to attainment for the 2015 NAAQS to be eligible for
consideration for removal of the RFG program. In either case, we are
proposing to require that any request to remove the federal RFG
requirements must include an approved maintenance plan that
demonstrates maintenance of the ozone NAAQS throughout the period of
time addressed by the maintenance plan without the emission reductions
from the federal RFG program. Additionally, the proposed provision
would require a state to also demonstrate that the removal of the
requirement for the federal RFG program would not interfere with
reasonable further progress requirements or attainment or maintenance
of any other NAAQS or interfere with any other CAA requirement.\53\ We
seek comment on this proposed requirement.
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    \53\ See CAA section 110(l).
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    We are proposing to allow states with current mandatory RFG covered
areas to remove those programs in the future when all ozone NAAQS are
attained and maintained. Although the CAA requires RFG in certain ozone
nonattainment areas, it is important that states can use limited
resources for programs that are necessary for attainment, rather than
require the implementation of RFG indefinitely simply because such a
covered area had the highest ozone design values 30 years ago or were
reclassified as Severe for a prior ozone NAAQS. This proposal is
premised on our view that once a covered area attains the most
stringent ozone NAAQS, states should be able to determine whether an
emission reduction strategy should either continue or be removed.
    We believe that a mandatory RFG covered area should have the
ability to determine if it is necessary to continue as an RFG covered
area once it has attained the most stringent ozone NAAQS that is in
effect and can demonstrate maintenance of the ozone NAAQS without the
emissions reductions attributable to RFG in the approved CAA section
175A maintenance plan for the area. Requiring that an area attain the
most stringent ozone NAAQS and demonstrate maintenance of the ozone
NAAQS without the emissions reductions from RFG provides adequate
safeguards with respect to protecting air quality improvements and
public health, while providing states with the flexibility to determine
the best course for maintaining the ozone NAAQS.
    This proposed provision is in addition to the current RFG opt-out
procedures that apply to areas that opted-in to RFG under CAA section
211(k)(6)(A) or (B) unless an opt-in area under CAA section
211(k)(6)(A) has been reclassified as a Severe ozone nonattainment
area. These procedures, which were established in 1996 and 1997, are
currently in 40 CFR 80.72 and are also being transferred to part
1090.\54\ We are not changing them except for removing obsolete
regulatory text and minor clarifications, such as requirements that
applied for specific periods of time that are now in the past.
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    \54\ See 61 FR 35673 (July 8, 1996) and 62 FR 54552 (October 20,
1997).
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g. Providing Streamlined Procedures for Areas Relaxing the Federal Low
RVP Standard
    We are proposing to include a new streamlined process for state
requests to relax the federal 7.8 psi RVP standard for gasoline sold
between June 1st and September 15th of each year. This action would
provide procedures similar to those that are currently used when states
opt out of the RFG program.\55\
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    \55\ The current RFG opt-out procedures apply to areas that
opted into RFG under CAA section 211(k)(6)(A) or (B) unless an area
that opted in under CAA section 211(k)(6)(A) has been reclassified
as Severe. These procedures are currently in 40 CFR 80.72 and were
established in 1996 and 1997. See 61 FR 35673 (July 8, 1996) and 62
FR 54552 (October 20, 1997). We are not changing these RFG opt-out
procedures except for removing obsolete regulatory text and minor
clarifications.
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    The current federal 7.8 psi RVP limit took effect in 1992 and was
initially required in certain 1-hour ozone NAAQS nonattainment areas.
We have also allowed for state relaxation requests and since 2014 we
have approved relaxations of the federal 7.8 psi RVP standard for 12
areas in the states of Alabama, Florida, Georgia, Louisiana, North
Carolina, and Tennessee.\56\ As discussed in Section V.A.4.c, we are
providing a new table in part 1090 that sets out where the federal 7.8
psi RVP standards currently applies.
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    \56\ For more information on EPA's actions, see www.epa.gov/gasoline-standards/federal-gasoline-regulations.
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    Under our current regulations, the process for accomplishing low
RVP relaxation requires two EPA approval actions before a state's
request can be effective. First, the EPA Regional Office needs to
approve a state's revision to an area's SIP, such as a maintenance
plan, for the relevant ozone NAAQS. After that rulemaking is completed,
a second rulemaking by EPA Headquarters is necessary to remove the
subject area(s) from the federal low RVP regulations in 40 CFR
80.27(a)(2).\57\ The current process of requiring both of these
approval actions before a state's request is effective is cumbersome
and time consuming given the number of linear steps involved. There is
also an element of confusion and uncertainty to states, local
businesses, industry, and the

public concerning the effective date of an RVP relaxation.
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    \57\ In some circumstances, a revision to an approved
maintenance plan has not been necessary because the subject area was
beyond the period of time covered by any approved ozone maintenance
plan under either CAA section 110(a) or 175A. For an example, refer
to the RVP relaxation for several parishes in Louisiana (82 FR
60886, December 26, 2017).
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