During this time period, we will not be able to rely upon the measurement of sulfur content alone to enforce the segregation requirements for LM fuel and NR 500 ppm sulfur fuel outside of the Northeast/ Mid Atlantic Area and Alaska, and are therefore requiring that LM fuel produced or imported for use outside of the Northeast/ Mid Atlantic Area and Alaska be marked before it leaves the terminal by the addition of 6 mg/ L of SY 124. Fuel containing more than 0.1 mg/ L of the marker will be deemed to be either LM fuel or heating oil and may not be used as nonroad fuel. Fuel containing the marker that meets a 500 ppm sulfur standard will be deemed to be LM fuel, whereas fuel containing the marker with a sulfur content above 500 ppm will be deemed to be heating oil.

As discussed in section IV above, small refiners will be able to continue to produce 500 ppm sulfur nonroad fuel, through May 31, 2014. Other refiners may use credits through May 31, 2014 to continue to produce fuel to the 500 ppm sulfur nonroad diesel fuel standard. Nonroad diesel fuel meeting a 500 ppm sulfur standard may also be produced due to interface mixing in the distribution system. 153 In any case, 15 ppm sulfur diesel fuel must be segregated from 500 ppm sulfur NRLM diesel fuel throughout the distribution system including the end user, such that it maintains its designation, or it must be redesignated and labeled to its downgraded specification. 154 Because of the sulfur sensitivity of the expected engine emission control systems beginning in model year 2011 for nonroad diesel engines, it is imperative that the distribution system segregate nonroad diesel fuel subject to the 15 ppm sulfur standard from higher sulfur distillate products, such as 500 ppm sulfur LM fuel, 500 ppm sulfur nonroad diesel fuel produced by small refiners or through the use of credits, heating oil, and jet fuel. End users are required to use only the fuel grades identified as appropriate for use on the label affixed to their NR and LM equipment. 155 Allowing four months for the LM fuel distribution system to sufficiently purge itself of marked fuel is consistent with the time allowed for LM diesel fuel to comply with a 500 ppm sulfur standard after the refinery gate 15 ppm sulfur standard for LM fuel becomes effective.

289 We are also concerned about potential misfueling of engines requiring 15 ppm sulfur fuel at retail or wholesale purchaser consumer facilities ( as defined under this program), or other end user facilities, even when segregation of 15 ppm sulfur fuel from the higher sulfur grades of diesel fuel has been maintained in the distribution system. Thus, downstream compliance and enforcement provisions of this rule are aimed at both preventing contamination of nonroad diesel fuel subject to the 15 ppm sulfur standard ( i. e., fuel represented to meet that standard) and preventing misfueling of new nonroad equipment.

c. The Period From June 1, 2012 through May 31, 2014 Beginning June 1, 2012, all fuel used in locomotive and marine equipment must meet a 15 ppm sulfur standard except for 500 ppm sulfur fuel produced or imported under the hardship, small refiner, and credit provisions, or downstream flexibility provisions. As discussed in section IV above, small refiners will be able to continue to produce 500 ppm sulfur LM fuel, through May 31, 2014. Other refiners may use credits through May 31, 2014 to continue to produce fuel to the 500 ppm sulfur LM diesel fuel standard. Locomotive, and marine diesel fuel meeting a 500 ppm sulfur standard may also be produced due to interface mixing in the distribution system indefinitely.

The marker requirement for 500 ppm sulfur LM diesel fuel expires on June 1, 2012. After June 1, 2012, only heating oil must continue to be marked and any LM diesel fuel distributed from the terminal must not contain the marker. To allow marked LM diesel fuel distributed prior to June 1, 2012 to be consumed by end users, the downstream prohibition against LM fuel containing the marker will not become effective until October 1, 2012. Beginning October 1, 2012, LM diesel fuel at any location must contain no more that 0.1 mg/ L of the marker. 155 We believe that allowing four months for downstream parties to blend down their stocks of marked LM diesel fuel with receipts of unmarked LM diesel fuel will be sufficient for such parties to comply with the prohibition against possessing LM fuel with a marker concentration greater than 0.1 mg/ L.

The requirements that became effective for fuel used in nonroad equipment on June 1, 2010, will remain effective until May 31, 2014.

d. After May 31, 2014 After the small refiner, credit, and off specification fuel flexibilites have expired, the remaining sulfur grades of diesel fuel will be 15 ppm sulfur highway and NRLM fuel, 500 ppm sulfur LM diesel fuel ( produced due to interface mixing in the distribution system outside of the Northeast/ Mid Atlantic Area and Alaska), and heating oil, some of which may meet a 500 ppm sulfur standard. Product transfer documents are required to accompany the batches of such fuels 156 In the highway diesel rule, the term " high sulfur" means diesel fuel with a sulfur level greater than 15 ppm, whereas in this rule it means diesel fuel with a sulfur level greater than 500 ppm. In the highway diesel rule, the term " low sulfur" means diesel fuel with a sulfur level less than or equal to 15 ppm, whereas in this rule it means diesel fuel with a sulfur level less than or equal to 500 ppm. In addition, the term " nonroad" as used in the highway diesel rule means " non highway" ( i. e., all fuel that is not highway fuel), but the term " nonroad" as used in this rule does not include locomotive diesel, marine diesel and heating oil.

290 which must contain the specified identifying information. Highway and NRLM diesel fuel meeting a 15 ppm sulfur specification must be segregated from 500 ppm sulfur LM diesel fuel, and heating oil. Today's rule contains provisions for the fungible shipment of LM diesel fuel with any heating oil meeting a 500 ppm sulfur cap up to the point where the fuel leaves the terminal that are similar to the provisions that allow the fungible shipment of high sulfur NRLM diesel fuel and high sulfur heating oil discussed in the previous section. Under such circumstances the designate and track and heating oil account balance requirements must be satisfied.

2. Diesel Fuel Pump Labeling to Discourage Misfueling For any multiple fuel program like the two step program we are finalizing today, we believe that the clear labeling of nonroad diesel fuel pumps is vital so that end users can readily distinguish between the several grades of fuel that may be available at fueling facilities, and properly fuel their nonroad equipment. Section III. N above describes the labels that manufacturers are required to place on nonroad equipment, and the information that must be provided to nonroad equipment owners. Section VI discusses the likely benefit for many nonroad engines to utilize 500 ppm sulfur diesel fuel as soon as it becomes available in 2007. Today's final rule includes requirements for labeling fuel pump stands used to fuel NRLM equipment and highway diesel vehicles.

To help prevent misfueling of nonroad, locomotive and marine engines, and to thus ensure that the environmental benefits of the program are realized, we are finalizing pump labeling requirements similar to those adopted in the highway diesel rule ( 40 CFR § 80.570). Today's pump dispenser labeling requirements are discussed separately according to the date they become effective: June 1, 2006, June 1, 2007, June 1, 2010, and June 1, 2014.

Today's final rule also amends the pump dispenser labeling language in the highway diesel regulations for consistency with the NRLM program. Because existing highway diesel regulations prohibit highway diesel fuel with sulfur levels above 500 ppm, the highway diesel final rule and this program have different meanings for the terms " low sulfur" and " high sulfur," and the highway diesel final rule does not use the term " ultra low sulfur." Further, because the highway diesel final rule did not need to categorize the different uses of non highway diesel fuel, the highway diesel final rule and this program have different meanings for the term " nonroad." 156 The amendments to 291 the highway pump dispenser labeling language finalized by today's rule are meant to avoid confusion at the fuel pumps caused by labels that would have different meanings depending on whether the pump is dispensing highway or non highway diesel fuel. Today's final rule adds effective dates to each paragraph of the labeling provisions of the highway diesel rule for consistency with the additional pump labeling sections of this program, and to distinguish the nonhighway labeling requirement effective June 1, 2006 under the highway diesel rule from the nonhighway labeling requirements of this rule that are effective in 2007.

Alternate labels to those specified in today's rule may be used if they are approved by the Administrator.

Today's rule also finalizes labeling requirements for pumps in Alaska that dispense NRLM diesel fuel and heating oil which is exempt from the red dye and fuel marker requirements which differ from the labeling requirements discussed in this section. Please refer to § 69.52( e) of the regulatory text to today's rule for these pump labeling requirements applicable in Alaska.

a. Pump Labeling Requirements that Become Effective June 1, 2006 The pump labeling requirements described in this section become effective June 1, 2006.

i. Pumps Dispensing Highway Diesel Fuel Subject to the 15 ppm Sulfur Standard The label on pumps dispensing highway diesel fuel subject to the 15 ppm sulfur standard must read as follows:

ULTRA LOW SULFUR HIGHWAY DIESEL FUEL ( 15 ppm Sulfur Maximum) Required for use in all model year 2007 and later highway diesel vehicles and engines. Recommended for use in all diesel vehicles and engines.

The above labeling requirement for 15 ppm sulfur highway diesel fuel continues through May 31, 2010, after which time different pump label requirements for this fuel become effective as described in section V. C. 2. c. 3. of this preamble.

ii. Pumps Dispensing Highway Diesel Fuel Subject to the 500 ppm Sulfur Standard The label on pumps dispensing highway diesel fuel subject to the 500 ppm sulfur standard must read as follows:

LOW SULFUR HIGHWAY DIESEL FUEL ( 500 ppm Sulfur Maximum) WARNING Federal law prohibits use in model year 2007 and later highway vehicles and engines. Its use may damage these vehicles and engines. 292 Dispensing highway diesel fuel that has a sulfur content above 15 ppm is prohibited into any highway vehicle after September 30, 2010. Hence no pumps may display the above label after September 30, 2010.

iii. Pumps Dispensing Diesel Fuel for Non Highway Equipment that Does not Meet the Standards for Motor Vehicle Diesel Fuel The label on pumps dispensing diesel fuel for non highway equipment that does not meet the standards for motor vehicle diesel fuel must read as follows:

NON HIGHWAY DIESEL FUEL ( May Exceed 500 ppm Sulfur) WARNING Federal law prohibits use in any highway vehicle or engine Its use may damage these vehicles and engines.

This labeling requirement is effective until May 31, 2007, after which high sulfur nonhighway diesel fuel must be labeled according to the provisions described in section V. C. 2. b. iii and 500 ppm sulfur non highway diesel fuel must be labeled according to the provisions described in section V. C. 2. b. 1. of today's preamble.

b. Pump Labeling Requirements that Become Effective June 1, 2007 As discussed in section IV, between June 1, 2007 and September 30, 2010, end users are not always required to dispense fuel meeting the 500 ppm sulfur standard into nonroad, equipment, locomotives or marine vessels. During this time period, small refiner fuel and fuel produced under the credit provisions with sulfur levels exceeding 500 ppm will continue to exist in the distribution system. During this time period, there will also be nonroad equipment with engines certified as meeting the Tier 4 emission standards ( i. e., engines equipped with emission controls that allow them to meet the Tier 4 standards earlier than required). Some of this equipment is expected to be equipped with sulfur sensitive technology that will need to operate on fuel with a sulfur content of 500 ppm or less to function properly. For this reason, it is important that NRLM end users be able to know the sulfur level of the fuel they are purchasing and dispensing. Therefore, fuel pump dispensers for the various sulfur grades must also be properly labeled. The following pump labeling requirements become effective from June 1, 2007:

i. Pumps Dispensing NRLM Diesel Fuel Subject to the 500 ppm Sulfur Standard The label on pumps dispensing 500 ppm ( maximum) sulfur content diesel fuel for use in NRLM engines must read as follows: 157 The IRS requires that 15 ppm sulfur non highway diesel fuel must contain red dye after it leaves the terminal.

293 LOW SULFUR NON HIGHWAY DIESEL FUEL ( 500 ppm Sulfur Maximum) WARNING Federal law prohibits use in any highway vehicle or engine The above labeling requirement remains effective until May 31, 2010, after which it is superceded by the requirements described below.

ii. Pumps Dispensing NRLM Diesel Fuel Subject to the 15 ppm Sulfur Standard It is also likely that prior to June 1, 2010 some 15 ppm sulfur ( maximum) diesel fuel will be introduced into the nonroad market early. Both the engine and fuel credit provisions envision such early introduction of 2011 compliant engines and 15 ppm sulfur diesel fuel. Thus, it is important that nonroad end users be able to know when they are purchasing diesel fuel with 15 ppm or less sulfur. 157 The label on pumps dispensing 15 ppm sulfur diesel fuel for use in NRLM engines must read as follows:

ULTRA LOW SULFUR NON HIGHWAY DIESEL FUEL ( 15 ppm Sulfur Maximum) Required for use in all model year 2011 and newer nonroad diesel engines. Recommended for use in all nonroad, locomotive and marine diesel engines. WARNING Federal law prohibits use in any highway vehicle or engine The above labeling requirement continues until May 31, 2014, after which it is superceded by the labeling provisions described in section V. C. 2. e. i of today's preamble.

iii. Pumps Dispensing Diesel Fuel with a Sulfur Content Greater than 500 ppm for Use in Older NRLM Equipment The label on pumps dispensing diesel fuel having a sulfur content greater than 500 ppm ( for use in older nonroad, locomotive, and marine diesel engines) must read as follows:

HIGH SULFUR NON HIGHWAY DIESEL FUEL ( May Exceed 500 ppm Sulfur) WARNING Federal law prohibits use in highway vehicles or engines May damage nonroad, diesel engines required to use low sulfur or ultra low sulfur diesel fuel. 158 Production of 500 ppm sulfur fuel under the credit provisions is allowed until June 1, 2012,

but small refiner fuel subject to the 500 ppm sulfur standard can continue to be produced until June 1,

2014 and will be available to end users until September 1, 2014.

294 The above labeling requirement remains effective until Sept 30, 2010. After Sept 30, 2010 no pump may display this label.

iv. Pumps Dispensing Heating Oil As discussed in section IV. B. 2. b, it is necessary to segregate heating oil from NRLM diesel fuel to ensure that the fuel used in nonroad, locomotive, and marine equipment is compliant with the sulfur standards in today's rule. The label on pumps dispensing non highway diesel fuel for use other than in nonroad, locomotive or marine engines, such as for use in stationary diesel engines or as heating oil, must read as follows:

HEATING OIL ( May Exceed 500 ppm Sulfur) WARNING Federal law prohibits use in highway vehicles or engines, or in nonroad, locomotive, or marine engines. Its use may damage these diesel engines.

The above labeling will remain effective indefinitely.

c. Pump Labeling Requirements that Become Effective June 1, 2010 Beginning October 1, 2010, all diesel fuel introduced into highway diesel vehicles, regardless of the year of manufacture, must meet the 15 ppm sulfur standard. Furthermore, with certain exceptions, fuel introduced into any nonroad engine must meet the 15 ppm sulfur standard. The exceptions are fuel allowed to meet the 500 ppm sulfur standard for use only in pre model year 2011 nonroad engines and locomotive and marine engines, for example, small refiner nonroad diesel fuel and credit nonroad diesel fuel, as well as downgraded 15 ppm sulfur diesel fuel from the distribution system. This use of 500 ppm sulfur diesel fuel in nonroad engines will continue through September 30, 2014,158 after which all nonroad diesel fuel must meet the 15 ppm sulfur standard. The following pump labeling requirements become effective June 1, 2010:

i. Pumps Dispensing NRLM Diesel Fuel Subject to the 500 ppm Sulfur Standard The label on pumps dispensing 500 ppm ( maximum) nonroad, locomotive, and marine diesel fuel, as discussed in section IV. B. 3. b, must read as follows: 295 LOW SULFUR NON HIGHWAY DIESEL FUEL ( 500 ppm Sulfur Maximum) WARNING Federal law prohibits use in all model year 2011 and newer nonroad engines. May damage model year 2011 and newer nonroad engines. Federal Law Prohibits Use in any Highway Vehicle or Engine. Recommended for use in all locomotive and marine equipment.

The above labeling requirement remains effective until September 30, 2014. After September 30, 2014, no pump may display this label.

ii. Pumps Dispensing Marked LM fuel The label on pumps dispensing 500 ppm sulfur locomotive, and marine diesel fuel, as discussed in section IV. B. 3. b., must read as follows:

LOW SULFUR LOCOMOTIVE AND MARINE DIESEL FUEL ( 500 ppm Sulfur Maximum) WARNING Federal law prohibits use in nonroad engines or in highway vehicles or engines.

The above labeling requirement remains effective until September 30, 2012. After September 30, 2012, no pump may display this label.

iii. Pumps Dispensing Highway Diesel Fuel Subject to the 15 ppm Sulfur Standard The label on pumps dispensing highway diesel fuel subject to the 15 ppm sulfur standard of § 80.520( a)( 1) must read as follows:

ULTRA LOW SULFUR HIGHWAY DIESEL FUEL ( 15 ppm Sulfur Maximum) Required for use in all highway diesel vehicles and engines. Recommended for use in all diesel vehicles and engines.

The above labeling requirement for 15 ppm sulfur highway diesel fuel continues indefinitely.

d. Pump Labeling Requirements that Become Effective June 1, 2014 Beginning October 1, 2014, all nonroad fuel distributed to end users is required to meet the 15 ppm sulfur standard, without exception. Locomotive and marine fuel downstream of the refinery or importer is still subject to the 500 ppm sulfur standard. The pump labels for heating oil will continue to be the same as for the period 2010 through 2014. The following pump labeling requirements become effective beginning June 1, 2014: 296 i. Pumps Dispensing NRLM Diesel Fuel Subject to the 15 ppm Sulfur Standard For pumps dispensing nonroad diesel fuel the label must read as follows:

ULTRA LOW SULFUR NON HIGHWAY DIESEL FUEL ( 15 ppm Sulfur Maximum) Required for use in all nonroad diesel engines. Recommended for use in all locomotive and marine diesel engines. WARNING Federal law prohibits use in any highway vehicle or engine.

The above labeling requirement continues indefinitely.

ii. Pumps Dispensing Locomotive and Marine Diesel Fuel Subject to the 500 ppm Sulfur Standard For pumps dispensing locomotive or marine diesel fuel, the label must read as follows:

LOW SULFUR LOCOMOTIVE OR MARINE DIESEL FUEL ( 500 ppm Sulfur Maximum) WARNING Federal law prohibits use in nonroad engines or in highway vehicles or engines. Its use may damage these engines.

The above labeling requirement will remain effective indefinitely.

f. Nozzle Size Requirements or other Requirements to Prevent Misfueling Like the highway diesel fuel program, the NRLM diesel fuel program does not include a nozzle size requirement. In part this is because we are not aware of an effective and practicable scheme to prevent misfueling through the use of different nozzle sizes or shapes, and in part because we do not believe that improper fueling will be a significant enough problem to warrant such an action. In the preamble to the highway diesel fuel rule, we stated our belief that the use of unique nozzles, color coded scuff guards, or dyes to distinguish the grades of diesel fuel may be useful in preventing accidental use of the wrong fuel. ( See 66 FR 5119, January 18, 2001.) However, we did not finalize any such requirements, for the reasons described in the RIA for that final rule ( section IV. E).

Similar reasoning applies to the NRLM diesel fuel program. For example, 15 ppm sulfur diesel fuel will be the dominant fuel in the market by 2010, likely comprising more than 80 percent of all number 2 distillate. Further, we believe that 500 ppm sulfur diesel fuel will have limited availability between 2010 and 2014. High sulfur distillate for heating oil uses will remain, but will 297 only exist in significant volumes in certain parts of the country. In addition, as with highway diesel engines, there is currently no standardization of fuel tank openings and filler necks that would allow for a simple, inexpensive, standardization of nozzles. In any event, we believe that most owners and operators of new nonroad diesel engines and equipment will not risk voiding the general warranty and the emissions warranty by misfueling.

Although in the highway diesel fuel rule we did not finalize any provisions beyond fuel pump labeling requirements, we recognized that some potential for misfueling could still exist. Consequently, we expressed a desire to continue to explore with industry simple, cost effective approaches that could further minimize misfueling potential such as color coded nozzles/ scuff guards. Since the highway diesel rule was promulgated, we have had discussions with fuel retailers, wholesale purchaser consumers, vehicle manufacturers, and nozzle manufacturers, and continue to examine different methods for preventing accidental or intentional misfueling under the highway diesel fuel sulfur program. To date, the affected stakeholders, including engine and truck manufacturers, truck operators, fuel retailers, and fuel nozzle manufacturers have not reached any common view that the concerns over misfueling warrant any additional prevention measures.

3. Prohibition Against the Use of Used Motor Oil in New Nonroad Diesel Equipment We understand that used motor oil is sometimes blended with diesel fuel today for use as fuel in nonroad diesel equipment. Such practices include blending used motor oil directly into the equipment fuel tank, blending it into the fuel storage tanks, and blending small amounts of motor oil from the engine crank case into the fuel system as the equipment is operated.

However, motor oil normally contains high levels of sulfur. Thus, the addition of used motor oil to nonroad diesel fuel could substantially impair the sulfur sensitive emissions control equipment expected to be used by engine manufacturers to meet the emissions standards in today's final rule. Depending on how the oil is blended, it could increase the sulfur content of the fuel by as much as 200 ppm sulfur. As a result, we believe blending used motor oil into nonroad diesel fuel could render inoperative the expected emission control technology and potentially cause driveability problems. Consequently, it would violate the tampering prohibition in the Act. See CAA sections 203( a)( 3), and 213( d).

Therefore, like the highway diesel rule, today's rule prohibits any person from introducing or causing or allowing the introduction of used motor oil, or diesel fuel containing used motor oil, into the fuel delivery systems of nonroad equipment engines manufactured in model year 2011 and later. The only exception to this will be where the engine was explicitly certified to the emission standard with used motor oil added and the oil was added in a manner consistent with the certification. Furthermore, as discussed in section IV, today's rule includes certain sunset dates when all NRLM diesel fuel in the distribution system must meet the applicable sulfur standard, and before that date any NRLM designated, classified, or labeled as 15 ppm sulfur fuel must meet that sulfur standard. Blending of used motor oil into NRLM could cause these standards to be exceeded in violation of today's rule. Any party who causes the sulfur content of nonroad diesel 298 fuel subject to the 15 ppm sulfur standard to exceed 15 ppm by blending motor oil into nonroad diesel fuel, or by using motor oil as nonroad diesel fuel, is subject to liability for violating the sulfur standard. Similarly, parties who cause the sulfur level of nonroad diesel fuel subject to the 500 ppm sulfur nonroad diesel fuel standard to exceed that standard by blending motor oil into the fuel, are also be subject to liability.

4. Use of Kerosene in Diesel Fuel As we discussed in the highway diesel final rule, kerosene is commonly added to diesel fuel to reduce fuel viscosity in cold weather ( see 66 FR 5120, January 18, 2001). This final rule does not limit this practice with regard to 15 ppm sulfur or 500 ppm sulfur NRLM diesel fuel. However the resulting blend will still be subject to the 15 ppm sulfur or 500 ppm sulfur standard. Kerosene that is used, intended for use, or made available for use as, or for blending with, 15 ppm sulfur or 500 ppm sulfur diesel fuel is itself required to meet the 15 ppm sulfur or 500 ppm sulfur standard.

As a general matter, any party who blends kerosene, or any blendstock, into NRLM diesel fuel, or who produces NRLM diesel fuel by mixing blendstocks, will be treated as a refiner and will be subject to the requirements and prohibitions applicable to refiners under today's rule. For example, the fuel that they manufacture must meet the sulfur standards established in this rule, and represented on the PTD. However, in deference to the longstanding and widespread practice of blending kerosene into diesel fuel at downstream locations, downstream parties who only blend kerosene into NRLM and highway diesel fuel will not be subject to the requirements applicable to other refiners, provided that they do not alter the fuel in any other way, and do not violate the volume balance requirements discussed in section IV. D. For example, they will not need to meet the 80/ 20 requirements under the highway diesel program. This activity is treated the same way under the final highway diesel rule. Parties that blend kerosene into diesel fuel are subject to the downstream designate and track provisions applicable to other downstream parties.

In order to ensure the continued compliance of 15 ppm sulfur fuel with the 15 ppm sulfur standard, downstream parties choosing to blend kerosene into 15 ppm sulfur NRLM diesel fuel are required to either have a PTD for that kerosene indicating compliance with the 15 ppm sulfur standard, or to have test results for the kerosene establishing such compliance. Further, downstream parties choosing to blend kerosene into 15 ppm sulfur NRLM diesel fuel are entitled to the two ppm adjustment factor discussed in section V. D. 2. for both the kerosene and the diesel fuel into which it is blended at downstream locations, provided that the kerosene had been transferred to the party with a PTD indicating compliance with that standard. Sulfur test results from downstream locations of parties who do not have such a PTD for their kerosene will not be subject to this adjustment factor, either for the kerosene itself, or for the NRLM diesel fuel into which it is blended.

Any party who causes the sulfur content of NRLM diesel fuel represented as meeting the 15 ppm sulfur standard to exceed 15 ppm sulfur by blending kerosene into NRLM diesel fuel, or by using greater than 15 ppm sulfur kerosene as NRLM diesel fuel, is subject to liability for 159 Diesel fuel additives are used at concentrations commonly expressed in parts per million.

Diesel fuel additives can include specially formulated polymers and other complex chemical components.

Kerosene is used at much higher concentrations, expressed in volume percent. Unlike diesel fuel additives, kerosene is a narrow distillation fraction of the range of hydrocarbons normally contained in diesel fuel.

299 violating the sulfur standard. Similarly, parties who cause the sulfur level of NRLM diesel fuel subject to the 500 ppm sulfur diesel fuel standard to exceed that standard by blending kerosene into the fuel, are also be subject to liability.

Today's rule does not require refiners or importers of kerosene to produce or import kerosene meeting the 15 ppm sulfur standard. However, we believe that refiners will produce ultra low sulfur kerosene in the same refinery processes that they use to produce ultra low sulfur diesel fuel, and that the market will drive supply of ultra low sulfur kerosene for those areas where, and during those seasons when, the product is needed for blending with NRLM, as well a highway, diesel fuel.

As discussed in section IV. D, kerosene blending also factors into the designate and track provisions finalized today from June 1, 2006 until June 1, 2010. During this time period it is possible, and in fact likely, that kerosene meeting the 15 ppm sulfur standard will instead be designated as No. 1 highway diesel fuel, and will simply need to meet all of the requirements of highway diesel fuel. It is also possible, though less likely that kerosene meeting the 500 ppm sulfur standard will be designated as No. 1 highway diesel fuel. However, if it is, it would also merely need to comply with all the requirements applicable to highway diesel fuel.

5. Use of Diesel Fuel Additives Diesel fuel additives include lubricity improvers, corrosion inhibitors, cold operability improvers, and static dissipaters. Use of such additives is distinguished from the use of kerosene or biodiesel by the low concentrations at which they are used ( defined to be one percent or less) and their relatively more complex chemistry. 159 The suitability of diesel fuel additives for use in diesel fuel meeting a 500 ppm sulfur specification has been well established due to the existence of 500 ppm sulfur highway diesel fuel in the marketplace since 1993. The suitability of additives for use in 15 ppm sulfur diesel fuel was first addressed by EPA in the highway diesel program, which requires highway diesel fuel to meet a 15 ppm sulfur standard beginning in 2006. At the time of the finalization of the highway diesel final rule and during our development of the proposed NRLM diesel rule, our review of data submitted by additive and fuel manufacturers to comply with EPA's Fuel and Fuel Additive Registration requirements indicated that additives to meet every purpose, 160 See Chapter IV. D. of the RIA for the highway diesel fuel rule for more information on diesel fuel additives, EPA Air docket A 99 06, docket item V B 01. Also See 40 CFR part 79.

161 Most diesel fuel additives are added at the terminal to bulk fuel volumes before sale to the consumer. These additives are referred to as bulk additives. End users and wholesale purchaser consumers sometimes also add additives to diesel fuel by hand blending into the vehicle fuel tank or fleet fuel storage tanks. Such additives are referred to as aftermarket additives. As discussed at the end of this section, today's rule contains different requirements regarding the use of aftermarket additives.

300 including static dissipation, are currently in common use which meet a 15 ppm cap on sulfur content. 160 a. Additives Used in 15 ppm Sulfur Diesel Fuel Similar to the highway diesel rule, today's rule allows the bulk addition of diesel fuel additives with a sulfur content greater than 15 ppm in NRLM diesel fuel under certain circumstances. 161 However, NRLM diesel fuel containing such additives will continue to be subject to the 15 ppm sulfur cap. We believe that it is most appropriate for the market to determine how best to accommodate increases in fuel sulfur content from the refinery gate to the end user, while maintaining the 15 ppm sulfur cap, and whether such increases result from contamination in the distribution system or bulk diesel additive use. By providing this flexibility, we anticipate that market forces will encourage an optimal balance between the competing demands of manufacturing fuel lower than the 15 ppm sulfur cap, limiting contamination in the distribution system, and limiting the bulk additive contribution to fuel sulfur content.

Thus, as in the highway diesel program, additive manufacturers that market bulk diesel additives with a sulfur content higher than 15 ppm and blenders that use them in nonroad diesel have additional requirements to ensure that the 15 ppm sulfur cap for NRLM diesel fuel is not exceeded.

The 15 ppm sulfur cap on highway diesel fuel that becomes effective in 2006 may encourage the gradual retirement of additives that do not meet a 15 ppm sulfur cap. The 15 ppm sulfur cap for NR fuel in 2010 and for LM fuel in 2012 may further this trend. However, we do not anticipate that this will result in disruption to additive users and producers or a significant increase in cost. Additive manufacturers commonly reformulate their additives on a periodic basis as a result of competitive pressures. We anticipate that any reformulation that might need to occur to meet a 15 ppm sulfur cap, will be accomplished prior to the implementation of the 15 ppm sulfur cap on highway diesel fuel in 2006.

Like the highway diesel fuel rule, this rule will limit the continued use in 15 ppm sulfur fuel of a bulk additive that exceeds 15 ppm sulfur to a concentration of less than one volume percent. We believe that this limitation is appropriate and will not cause any undue burden because the 301 diesel fuel additives for which this flexibility was included are always used today at concentrations well below one volume percent. Further, one volume percent is the threshold above which the blender of an additive becomes subject to all the requirements applicable to a refiner. See 40 CFR § 79.2( d)( 1) and 40 CFR part 80.

The specific requirements regarding the use of bulk diesel fuel additives in NRLM fuel subject to the 15 ppm sulfur standard are as follows:

 Bulk additives that have a sulfur content at or below 15 ppm must be accompanied by a PTD that states: " The sulfur content of this additive does not exceed 15 ppm."

 Bulk additives that exceed 15 ppm sulfur could continue to be used in diesel fuel subject to the 15 ppm sulfur standard provided that they are used at a concentration of less than one volume percent and their transfer is accompanied by a PTD that lists the following: 1) a warning that the additive's sulfur content may exceed 15 ppm and that improper use of the additive may result in non complying fuel 2) the additive's maximum sulfur concentration 3) the maximum recommended concentration for use of the additive in diesel fuel, and 4) the contribution to the sulfur level of the fuel that would result if the additive is used at the maximum recommended concentration.

We proposed that the affirmative defenses to presumptive liability for blenders of bulk additives with a sulfur content greater than 15 ppm must include periodic sulfur tests after the addition of the additive showing that the finished fuel does not exceed the 15 ppm sulfur cap. We are adopting this proposed requirement for additives other than static dissipater additives.

b. Static Dissipater Additives Comments from diesel fuel distributors and additive manufactures stated that static dissipater additives are unique among the various types of diesel fuel additives in that there are currently none available with a sulfur content below 15 ppm which are fully effective. Considering the lack of static dissipater additives meeting a 15 ppm sulfur cap, and the inability to add static dissipater ( S D) additives prior to shipment by pipeline, commenters stated that the prohibitive cost of testing fuel batches after the addition of static dissipater additives could discourage their use. To avoid the potential adverse impact on the safety of the fuel distribution industry which could result, commenters requested that we provide an alternative method for use in demonstrating their affirmative defense to presumptive liability when they use static dissipater additives with a sulfur content above 15 ppm. Manufacturers of static dissipater additives stated that due to very low treatment rates that are needed for such additives, their use will raise the sulfur content of the finished fuel by no more than 0.02 ppm. Commenters stated that because of the extremely low potential contribution to the sulfur level of the finished diesel fuel which might result from the use 162 All additives must be registered with EPA Fuel and Fuel Additive Database prior to their use in motor vehicle diesel fuel.

302 of static dissipater additives, there was little risk that use of such additives would result in noncompliance with the 15 ppm sulfur cap.

We contacted all of the additive manufactures that have registered static dissipater additives in EPA's Fuel and Fuel Additive Database. 162 All of these manufactures stated that there are no fully effective static dissipater additives available that have a sulfur content below 15 ppm. They further stated that sulfur is an essential component in static dissipater additives, and that it is currently unclear how to formulate a static dissipater additive that would have a sulfur content below 15 ppm. Because of this input, we now recognize that static dissipater additives are in a unique category with respect to the ability to comply with a 15 ppm sulfur cap. Additive manufactures stated that reformulation of static dissipater additives to meet a 15 ppm sulfur cap will likely be a lengthy undertaking.

It is unclear which of the naturally occurring components in diesel fuel act to dissipate static electricity. However, certain batches of fuel are periodically found which do not have adequate static dissipating qualities. In such cases, static dissipater additives are necessary to prevent a static discharge from occurring during the transfer of fuel into a storage tank which might cause an explosion. Therefore, it is essential that today's rule is structured in such a way so as to not impede the use static dissipater additives. Because of the lack of static dissipater additives meeting a 15 ppm sulfur specification, the unique difficulty in reformulating them to meet a 15 ppm sulfur standard, the fact that they are essential to the safety of the fuel distribution system, and the impracticability for them to be added at the refinery, today's rule includes special affirmative defense provisions to reduce the sulfur testing burden associated with the use of static dissipater additives that have a sulfur content greater than 15 ppm.

Commenters suggested an alternative mechanism to demonstrate an affirmative defense to presumptive liability for blenders of static dissipater ( S D) additives which would avoid the need to test every batch of fuel at the terminal after additization. Under this approach, blenders of S D additives would be required to provide volume accounting reconciliation ( VAR) records similar to those under EPA's deposit control additive rule ( 40 CFR part 80, subpart G) which would show whether the S D additive is being added at the appropriate rate on average over a course of a monthly accounting period. Today's rule finalizes the approach suggested by commenters with certain modifications. In cases where a violation of the 15 ppm sulfur cap for diesel fuel is discovered on a batch of fuel downstream of a blender of S D additives that have a sulfur content above 15 ppm, the S D additive blender must provide the following information to EPA in order to meet their affirmative defense to presumptive liability regarding the potential that the use of S D additive might have caused or contributed to the violation:

° A sulfur test on the diesel batch prior to the addition of the S D additive package that indicates that the additive, when added, will not cause the fuel to exceed 15 ppm 303 ° A product transfer document that accompanied the transfer of the S D additive package to the additive blender which contains the following:  A statement that the S D additive package exceeds 15 ppm in sulfur content and that special requirements apply if it is to be used in diesel fuel subject to the 15 ppm sulfur cap  The maximum sulfur level of the S D additive package including other additive components such as diesel detergents and carrier fluid to the extent that they are part of the package. Each component of the additive package other than the S D additive itself must comply with the 15 ppm sulfur cap.  The maximum recommended concentration for the S D additive package.  The contribution to the final sulfur content of a finished fuel when the additive is added at the maximum recommended concentration. The maximum recommended concentration must result in a potential increase in the sulfur content of the finished fuel of no more than 0.05 ppm. ° Monthly volume accounting reconciliation ( VAR) records that include:  the amount of S D additive package used during the month  the volume of the fuel into which the additive was injected during the month  the measured sulfur level of each fuel batch prior to injection of the additive which shows that the contribution to the sulfur level of the finished diesel fuel from the use of the additive at the treatment level at which it was injected would not cause any such batch of fuel to exceed the 15 ppm sulfur specification ° Quality assurance records which show that the precision of the additive injection equipment has been maintained in such a manner as to prevent malfunctions which could result in the injection of the S D additive at a higher concentration than that reported.

The additive blender must also be able to meet its normal diesel fuel defense elements: that the additive blender fuel distributor did not cause the violation; that PTDs account for all the fuel and show apparent compliance; and that quality assurance sampling and testing has occurred, as modified by the discussion above.

In addition, the ratio of the amount of additive used to the amount of fuel into which the additive was injected over any given monthly VAR period must not exceed the maximum treatment rate which could be added to any batch of fuel additized during the period. If not, the blender could be liable for any batch of diesel fuel found that exceeded the 15 ppm sulfur cap which had been in their possession. The above provisions are only relevant for establishing affirmative defense to presumptive liability regarding the potential that the use of S D additives might have caused a violation. Under no circumstances may an additive blender cause the sulfur level of any batch of finished fuel to exceed the 15 ppm sulfur cap. Blenders of S D additives must meet all other requirements for distributors of 15 ppm sulfur diesel fuel. Regardless of the cause of a violation of the 15 ppm sulfur standard, any party that had custody or title of off specification fuel is potentially liable and responsible for their affirmative defense elements. 163 Phone conversation with Eon McMullen, Octel additives, February 12, 2004.

304 These provisions may only be used for static dissipater additives which have the potential to raise the sulfur content of the finished fuel by no more than 0.050 ppm when used at their maximum recommended treatment level. Based on the input from additive manufacturers noted above, this will allow the use of S D additives that are fully effective for this purpose. The use of S D additives that might have a higher contribution to the sulfur content of the finished fuel, therefore, is unnecessary. To establish affirmative defense to presumptive liability, blenders that use S D additives that could contribute more than 0.050 ppm to the sulfur content of a finished fuel subject to the 15 ppm sulfur specification when used at the maximum recommended treatment level are required to conduct a sulfur test on the fuel batch after the addition of the additive. Blenders of additives other than S D additives which have a sulfur content greater than 15 ppm into diesel fuel subject to the 15 ppm sulfur standard are also required to conduct a sulfur test on the fuel batch after the addition of the additive for affirmative defense purposes.

EPA may require additive manufactures to supply samples of the additive packages ( or the components additives in such packages) that are used in 15 ppm sulfur diesel fuel, or may sample from additive batches already in the distribution system. In such cases, we may test the sulfur content of these additives to evaluate whether they are in compliance with the information provided on the PTDs or other relevant documentation. In cases where a violation is discovered, any party in the distribution system that had custody of the additive batch found to be in violation may be held presumptively liable for the violation.

Today's rule amends the highway diesel regulation so that the provisions finalized today regarding the use of S D additives with a sulfur content above 15 ppm in NRLM diesel fuel also apply to the use of such additives in highway diesel fuel subject to a 15 ppm sulfur standard. However, we continue to be concerned about the use of additives having a sulfur content greater than 15 ppm. We will continue to monitor this issue and may initiate an additional rulemaking in the future to consider further limiting or prohibiting the use of greater than15 ppm sulfur additives in diesel fuel subject to a 15 ppm sulfur cap.

The special provisions for static dissipater additives finalized in today's rule will ensure that the unique challenges regarding the manufacture and use of such additives do not present a barrier to their continued use. Additive manufactures have stated that they are working on reformulation of their S D additives to meet a 15 ppm sulfur limit.

We recently learned that industry is beginning to develop a standardized test to quantify the concentration of static dissipater additives in finished fuel. 163 If such a test were available, it might be useful for establishing an additive blender's affirmative defense to presumptive liability in place of some of the VAR provisions described above. If a batch of fuel was found to exceed the 15 ppm sulfur cap, the use of such a test would allow for the measurement of the contribution to the sulfur level of the finished fuel which resulted from the addition of the static dissipater additive. If the contribution was below the permissible level given the sulfur measurements on each batch of 164 The 500 ppm sulfur highway diesel final rule contains the requirement that highway diesel fuel not exceed 500 ppm sulfur at any point in the fuel distribution system including after the blending of additives. Fuel Quality Regulations for Highway Diesel Fuel Sold in 1993 and Later Calendar Years,

Final Rule, 55 FR 34120, August 21, 1990.

305 fuel additized with the greater than15 ppm S D additive, it might be useful in association with other blender records to demonstrate that the additive blender was not at fault for the violation. If such a standardized test becomes available, EPA will work with the appropriate industry parties to evaluate its applicability for affirmative defense purposes, and conduct a rulemaking if appropriate to amend the elements required to establish affirmative defense to presumptive liability under the NRLM and highway diesel programs.

c. Additives Used in 500 ppm Sulfur Diesel Fuel The 1993 and 2007 highway diesel programs did not contain any requirements regarding the maximum sulfur content of additives used in highway diesel fuel subject to a 500 ppm sulfur cap. 164 Our experience under the highway program indicates that application of the 500 ppm sulfur cap throughout the distribution system to the end user has been sufficient to prevent the use of additives from jeopardizing compliance with the 500 ppm sulfur standard. The potential increase of several ppm in the sulfur content of diesel fuel which might result from the use of some diesel additives raises substantial concerns regarding the impact on compliance with a 15 ppm sulfur cap. However, this is not the case with respect to the potential impact on compliance with a 500 ppm sulfur cap. The current average sulfur content of highway diesel fuel of 340 ppm provides ample margin for the minimal increase in the fuel sulfur content which might result from the use of additives. We expect that this will also be the case for NRLM fuel subject to the 500 ppm sulfur standard. Therefore, we are not finalizing any requirements regarding the sulfur content of additives used in NRLM fuel subject to the 500 ppm sulfur standard. We believe that the requirement that NRLM fuel comply with a 500 ppm sulfur cap throughout the distribution system to the end user will be sufficient to ensure that entities who introduce additives into such fuel take into account the potential increase in fuel sulfur content.

d. Aftermarket Additives We believe that more stringent requirements are needed for aftermarket additives than for bulk additives due to the lack of practical safeguards to ensure that the use of such additives do not cause a violation of the sulfur standards in today's rule. Also, the presence of multiple grades of aftermarket additives, some suitable for use in engines equipped with sulfur sensitive emissions control equipment as well as pre control engines, and some suitable for use only in pre control engines would raise significant concerns regarding the misuse. The misuse of a high sulfur additive in an engine with sulfur sensitive emissions control equipment could damage this equipment. Therefore, today's rule requires that all aftermarket additives sold for use in nonroad, locomotive, and marine equipment must meet a 500 ppm sulfur cap beginning June 1, 2007, and 306 that all aftermarket additives sold for use in nonroad equipment must meet a 15 ppm sulfur specification beginning June 1, 2010. After June 1, 2010, aftermarket additives with a sulfur content less than 500 ppm may continue to be used in locomotive and marine engines. This approach is consistent with that taken in the highway diesel rule which requires all aftermarket additives to meet a 15 ppm sulfur specification beginning June 1, 2006.

6. End User Requirements In light of the importance of ensuring that the proper fuel is used in nonroad, locomotive, and marine engines covered by this program, any person is prohibited from fueling such an engine with fuel not meeting the applicable sulfur standard.

Specifically: 1) No person may introduce, or permit the introduction of fuel containing the heating oil marker into nonroad, locomotive, marine or highway diesel engines;

2) No person may introduce, or permit the introduction of, fuel that exceeds 15 ppm sulfur content into nonroad equipment with a model year 2011 or later engine;

3) Beginning December 1, 2010, no person may introduce, or permit the introduction of any fuel exceeding 500 ppm sulfur content into any nonroad, locomotive, and marine engine; and 4) Beginning December 1, 2014, no person may introduce, or permit the introduction of any fuel exceeding 15 ppm sulfur content into any nonroad diesel engine regardless of year of manufacture.

D. Diesel Fuel Sulfur Sampling and Testing Requirements 1. Testing Requirements Today's action provides a new approach for fuel sulfur measurement. The details of this approach are described below, followed by a description of who will be required to conduct fuel sulfur testing as well as what fuel must be tested. The diesel fuel sulfur sampling and testing provisions described below are similar to those that were proposed. Adjustments we made to the proposed provisions were in response to comments we received during the public comment period. 307 a. Test Method Approval, Record keeping, and Quality Control Requirements 165 Other EPA fuels regulations have allowed downstream parties conducting periodic quality assurance testing for defense purposes to use methods other than the designated method, so long as the method is an ASTM method appropriate for testing for the applicable fuel property, and so long as the instrument is correlated to the designated method.

308 Most current and past EPA fuel programs designated specific analytical methods which refiners, importers, and downstream parties165 use to analyze fuel samples at all points in the fuel distribution system for regulatory compliance purposes. Some of these programs have also allowed certain specific alternative methods which may be used as long as the test results are correlated to the designated test method. The highway diesel rule ( 66 FR 5002, January 18, 2001), for example, specifies one designated test method and three alternative methods for measuring the sulfur content of highway diesel fuel subject to the 15 ppm sulfur standard. The rule also specifies one designated method and three alternative methods for measuring the sulfur content of highway diesel fuel subject to the 500 ppm sulfur standard. 309 Table V. H 1.   Designated and Alternative Sulfur Test Methods Allowed Under the Highway Diesel Program Sulfur Test Method 500 ppm 15 ppm ASTM D 2622 03, as modified, Standard Test Method for Sulfur in Petroleum Products by Wavelength Dispersive X ray Fluorescence Spectrometry Designated Alternative ASTM D 3120 03a, Standard Test Method for Trace Quantities of Sulfur in Light Liquid Petroleum Hydrocarbons by Oxidative Microcoulometry Alternative ASTM D 4294 03, Standard Test Method for Sulfur in Petroleum and Petroleum Products by Energy Dispersive X ray Fluorescence Spectrometry Alternative ASTM D 5453 03a, Standard Test Method for Determination of Total Sulfur in Light Hydrocarbons, Motor Fuels and Motor Oils by Ultraviolet Fluorescence Alternative Alternative ASTM D 6428 99, Test Method for Total Sulfur in Liquid Aromatic Hydrocarbons and Their Derivatives by Oxidative Combustion and Electrochemical Detection. Alternative Designated The highway diesel fuel rule also announced the Agency's intention to adopt a performance based test method approach in the future, as well as our intention to continue working with the industry to develop and improve sulfur test methods. Today's action adopts such a performance based test method approach for both highway and NRLM diesel fuel subject to the 15 ppm and 500 ppm sulfur standards. In addition, the current approach for measuring the sulfur content of diesel fuel subject to the 500 ppm sulfur standard, i. e., using the designated sulfur test method or one of the alternative test methods with correlation will remain applicable.

Under the performance based approach, a given test method can be approved for use in a specific laboratory by meeting certain precision and accuracy criteria specified in the regulations. The method can be approved for use by that laboratory as long as appropriate quality control procedures are followed. Properly selected precision and accuracy values allow multiple methods and multiple commercially available instruments to be approved, thus providing greater flexibility in method and instrument selection while also encouraging the development and use of better 166 These are standard setting organizations, like ASTM, and ISO that have broad representation of all interested stakeholders and make decisions by consensus.

167 Sulfur Repeatability of Diesel by Method at 15 ppm, ASTM Report on Low Level Sulfur Determination in Gasoline and Diesel Interlaboratory Study  A Status Report, June 2002.

310 methods and instrumentation in the future. Under today's rule, there is no designated sulfur test method as specified under previous regulations.

Since any test method that meets the specified performance criteria may qualify, this type of approach does not conflict with the " National Technology Transfer and Advancement Act of 1995" ( NTTAA), section 12( d) of Public Law 104 113, and the Office of Management and Budget ( OMB) Circular A  119. Both of these are designed to encourage the adoption of standards developed by " voluntary consensus standards bodies" ( VCSB) 166 and to reduce reliance on government unique standards where such consensus standards would suffice. Under the performance criteria approach in today's rule, methods developed by consensus bodies as well as methods not yet approved by a consensus body qualify for approval provided they meet the specified performance criteria as well as the record keeping and reporting requirements for quality control purposes.

i. How Can a Given Method be Approved?

A given test method can be approved for use under today's program by meeting certain precision and accuracy criteria. Approval applies on a laboratory/ facility specific basis. If a company chooses to employ more than one laboratory for fuel sulfur testing purposes, then each laboratory must separately seek approval for each method it intends to use. Likewise, if a laboratory chooses to use more than one sulfur test method, then each method must be approved separately. Separate approval is not necessary for individual operators or laboratory instruments within a given laboratory facility.

The specific precision and accuracy criteria were derived from existing sulfur test methods that are either required or allowed under the highway diesel fuel sulfur program. The first criterion, precision, refers to the consistency of a set of measurements and is used to determine how closely analytical results can be duplicated based on repeat measurements of the same material under prescribed conditions. To demonstrate the precision of a given sulfur test method under the performance based approach, a laboratory facility must perform 20 repeat tests over 20 days on samples taken from a homogeneous supply of a commercially available diesel fuel. Based on the comments we received on this issue, we are also clarifying that the test results must in general be a sequential record of the analyses with no omissions. A laboratory facility may exclude a given sample or test result only if 1) the exclusion is for a valid reason under good laboratory practices and 2) it maintains records regarding the sample and test results and the reason for excluding them. Using the test results167 of ASTM D 3120 for diesel fuel subject to the 15 ppm sulfur standard, the 168 0.72 ppm is equal to 1.5 times the standard deviation of ASTM D 3120, where the standard deviation is equal to the repeatability of ASTM D 3120 ( 1.33) divided by 2.77. 9.68 ppm is equal to 1.5 times the standard deviation of ASTM D 2622, where the standard deviation is equal to the repeatability of ASTM D 2622 ( 17.88) divided by 2.77. In the proposal, we stated that the repeatability of ASTM D 2622 was 26.81. While that reported value was incorrect due to either a typographical or a computational error, the resulting precision value that we are finalizing today was correctly calculated and reported as 9.68 ppm. The " sample standard deviation" should be used for this purpose. By its use of N 1 in the denominator, this measure applies a correction for the small sample bias and provides an unbiased estimate of the standard deviation of the larger population from which the sample was drawn. Since the conditions of the precision qualification test admit more sources of variability than the conditions under which ASTM repeatability is determined ( longer time span, different operators, environmental conditions,

etc.) the repeatability standard deviation derived from the round robin was multiplied by what we believe to be a reasonable adjustment factor, 1.5, to compensate for the difference in conditions.

169 0.54 and 7.26 are equal to 0.75 times the precision values of 0.72 for 15 ppm sulfur diesel and 9.68 for 500 ppm sulfur diesel, respectively.

311 precision must be less than 0.72 ppm. 168 Similarly, using the test results of ASTM D 2622 for diesel fuel subject to the 500 ppm sulfur standard, the precision must be less than 9.68 ppm.

The second criterion, accuracy, refers to the closeness of agreement between a measured or calculated value and the actual or specified value. To demonstrate the accuracy of a given test method under the performance based approach, a laboratory facility is required to perform 10 repeat tests on a standard sample, the mean of which for diesel fuel subject to the 15 ppm sulfur standard can not deviate from the Accepted Reference Value ( ARV) of the standard by more than 0.54 ppm and for diesel fuel subject to the 500 ppm sulfur standard can not deviate from the ARV of the standard by more than 7.26 ppm169. These tests must be performed using commercially available gravimetric sulfur standards. Ten tests are required using each of two different sulfur standards. For 15 ppm fuel, one must be in the range of 1   10 ppm sulfur and the other in the range of 10   20 ppm sulfur. For 500 ppm fuel, one must be in the range of 100   200 ppm sulfur and the other in the range of 400   500 ppm sulfur for 500 ppm sulfur diesel fuel. Therefore, a minimum of 20 total tests is required for sufficient demonstration of accuracy for a given sulfur test method at a given laboratory facility. As with the requirement for precision demonstration described above, the test results must be a sequential record of the analyses with no omissions. Finally, any known interferences for a given test method must be mitigated.

Some commenters remarked that the ARV of the standards does not account for any uncertainty given that all commercially available standards have an uncertainty associated with the certified value. The commenters added that EPA should specify what maximum value in the uncertainty associated with the ARV is allowed. 312 These requirements are not intended be overly burdensome. Indeed, we believe these requirements are equivalent to what a laboratory would do during the normal start up procedure for a given test method. In addition, we believe this approach will allow regulated entities to know that they are measuring diesel fuel sulfur levels accurately and within reasonable site reproducibility limits.

ii. What Information Must Be Reported to the Agency?

For test methods that have already been approved by a VCSB, such as ASTM or the International Standards Organization ( ISO), each laboratory facility must report to the Agency the precision and accuracy results as described above for each method for which it is seeking approval. Such submissions to EPA, as described elsewhere, are subject to the Agency's review for 90 days, and the method will be considered approved in the absence of EPA comment. Laboratory facilities are required to retain the fuel samples used for precision and accuracy demonstration for 90 days. While we proposed a 30 day sample retention period, commenters stated that the sample retention period for fuel samples that are used for precision and accuracy demonstrations should be equivalent to the length of EPA's review period ( i. e., 90 days). We agree with the commenters and are thus finalizing a 90 day sample retention period in today's rule. This sample retention requirement also applies to non VCSB methods which are described below.

For test methods that have not been approved by a VCSB, full test method documentation, including a description of the technology/ instrumentation that makes the method functional, as well as subsequent EPA approval of the method is also required. These submissions will also be subject to the Agency's review for 90 days, and the method will be considered approved in the absence of EPA comment. Submission of VCSB methods is not required since they are available in the public domain. In addition, industry and the Agency will likely have had substantial experience with such methods.

As described above, federal government and EPA policy is to use standards developed by voluntary consensus bodies when available. The purpose of the NTTAA, at least in part, is to foster consistency in regulatory requirements, to take advantage of the collective industry wisdom and wide spread technical evaluation required before a test method is approved by a consensus body, and to take advantage of the ongoing oversight and evaluation of a test method by the consensus body that results from wide spread use of an approved method e. g., the ongoing roundrobin type analysis and typical annual updating of the method by the consensus body. These goals are not met where the Agency allows use of a non consensus body test method in perpetuity. Moreover, it is not possible to realize many of the advantages that result from consensus status where a test method is used by only one or a few companies. It will not have the practical scrutiny that comes from ongoing wide spread use, or the independent scrutiny of the consensus body and periodic updating. In addition, EPA does not have the resources to conduct the degree of initial scrutiny or ongoing scrutiny that are practiced by consensus bodies. Nevertheless, EPA believes it is appropriate to allow limited use of a proprietary test method for a limited time, even though the significant advantages of consensus test methods are absent, because EPA can evaluate the initial 170 1.44 ppm is equal to two times the precision value of 0.72 ppm for 15 ppm diesel and 19.36 is equal to two times the precision value of 9.68 ppm for 500 ppm diesel.

313 quality of a method and a company may have invested significant resources in developing a method. However, if after a reasonable time a test method fails to gain consensus body approval, EPA believes approval of the method should be withdrawn because of the absence of ongoing consensus oversight. Accordingly, a non VCSB method will cease to be qualified five years from the date of its original approval by EPA in the absence of VCSB approval.

To assist the Agency in determining the performance of a given sulfur test method, non VCSB methods, in particular, we reserve the right to send samples of commercially available fuel to laboratories for evaluation. Such samples are intended for situations in which the Agency has concerns regarding a test method and, in particular, its ability to measure the sulfur content of a random commercially available diesel fuel. Laboratory facilities are required to report their results from tests of this material to the Agency.

iii. What Quality Control Provisions are Required?

We are requiring ongoing Quality Control ( QC) procedures for sulfur measurement instrumentation. These are procedures used by laboratory facilities to ensure that the test methods they have qualified and the instruments on which the methods are run are yielding results with appropriate accuracy and precision, e. g., that the results from a particular instrument do not " drift" over time to yield unacceptable values. It is our understanding that most laboratories already employ QC procedures, and that these are commonly viewed as important good laboratory practices. Laboratories will be required, at a minimum, to abide by the following QC procedures for each instrument used to test batches of diesel fuel under these regulations even where a laboratory elects to use the test method used to establish the precision and accuracy criteria finalized in today's rule:

1) Follow the mandatory provisions of ASTM D 6299 02, Standard Practice for Applying Statistical Quality Assurance Techniques to Evaluate Analytical Measurement System Performance. Laboratories are required to construct control charts from the mandatory QC sample testing prescribed in paragraph 7.1, following the guidelines under A 1.5.1 for individual observation charts and A 1.5.2 for moving range charts.

2) Follow ASTM D 6299 02 paragraph 7.3.1 ( check standards) using a standard reference material. Check standard testing is required to occur at least monthly and should take place following any major change to the laboratory equipment or test procedure. Any deviation from the accepted reference value of the check standard greater than 1.44 ppm for diesel fuel subject to the 15 ppm sulfur standard and 19.36 ppm for diesel fuel subject to the 500 ppm sulfur standard170 must be investigated. 314 3) Upon discovery of any QC testing violation of A <IP_ADDRESS> or A <IP_ADDRESS> or check standard deviation greater than 1.44 ppm and 19.36 ppm for 15 ppm sulfur diesel and 500 ppm sulfur diesel, respectively, as provided in item 2 above, any measurement made while the system was out of control must be tagged as suspect and an investigation conducted into the reasons for this anomalous performance. Refiners and importers are required to retain batch samples for 30 days or the period equal to the interval between QC sample tests, whichever is longer. If an instrument is found to be out of control, all of the retained samples since the last time the instrument was shown to be in control must be retested.

4) QC records, including investigations under item 3 above must be retained for five years and must be provided to the Agency upon request.

b. Requirements to Conduct Fuel Sulfur Testing Given the importance of assuring that NRLM diesel fuel designated to meet the 15 ppm sulfur standard in fact meets that standard, we are requiring that refiners, importers, and transmix processors test each batch of NRLM diesel fuel designated to meet the 15 ppm sulfur standard and maintain records of such testing. Requiring that refiners, importers, and transmix processors test each batch of fuel subject to the 15 ppm sulfur NRLM standard assures that compliance can be confirmed through testing records, and even more importantly, assures that diesel fuel exceeding the 15 ppm standard is not introduced into commerce as fuel for use in nonroad equipment having sulfur sensitive emission control devices. Batch testing was not required under the highway diesel fuel rule. Instead, such testing was expected to be performed to establish a defense to potential liability. However, for the same reasons discussed above, today's rule extends this batch testing requirement to15 ppm sulfur highway diesel fuel beginning in 2006.

In order to address situations where refiners produce NRLM diesel fuel using computercontrolled inline blending equipment and do not have storage tanks from which to withdraw samples, we are including in today's final rule a provision to allow refiners to test a composited sample of a batch of diesel fuel for its sulfur content after the diesel fuel has been shipped from the refinery. This inline blending provision is similar to the provision that exists under the reformulated gasoline and gasoline sulfur programs and applies to both highway and NRLM diesel fuel under today's action.

Today's rule does not require downstream parties to conduct every batch testing. However, we believe that most downstream parties will voluntarily conduct " periodic" sampling and testing for quality assurance purposes if they want to establish a defense to presumptive liability, as discussed in section V. H. below. 171 65 FR 6833 34 ( Feb. 10, 2000). Today's rule also provides that these methods be used under the RFG and CG rules. See 62 FR 37337 et seq. ( July 11, 1997).

315 2. Two Part Per Million Downstream Sulfur Measurement Adjustment We believe that it is appropriate to recognize sulfur test variability in determining compliance with the 15 ppm sulfur NRLM diesel fuel standards downstream of a refinery or import facility. Thus, today's rule provides that for all 15 ppm sulfur NRLM diesel fuel at locations downstream of a refinery or import facility, sulfur test results can be adjusted by subtracting two ppm. In the same manner as finalized for 15 ppm sulfur highway diesel fuel, the sole purpose of this downstream compliance provision is to address test variability concerns ( see the highway diesel fuel rule). We received comments suggesting that a higher downstream test tolerance is needed based on the current values for test method variability. However, we anticipate that the reproducibility of sulfur test methods is likely to improve to two ppm or even less by the time the 15 ppm sulfur standard for highway diesel fuel is implemented   four years before implementation date of the 15 ppm standard for NRLM diesel fuel. With this provision, we anticipate that refiners will be able to produce diesel fuel with an average sulfur level of approximately 7 8 ppm and some contamination could occur throughout the distribution system, without fear of causing a downstream violation due solely to test variability. As test methods improve in the future, we will reevaluate whether two ppm is the appropriate allowance for purposes of this compliance provision. We also received comments that a test tolerance should be provided in determining compliance with the 500 ppm sulfur standards for NRLM fuel. We believe that such a tolerance is not needed for fuels subject to a 500 ppm sulfur standard because of the flexibility that refiners possess to produce fuel with a sufficiently low sulfur content to accommodate test variability.

3. Sampling Requirements Today's rule adopts the same sampling methods adopted by the highway diesel rule ( 66 FR 5002, January 18, 2001). These sampling methods are American Society for Testing and Materials ( ASTM) D 4057 95 ( manual sampling) and D 4177 95 ( automatic sampling from pipelines/ in line blending). The requirement to use these methods becomes effective for NRLM diesel fuel on June 1, 2007. These same methods were also adopted for use in the Tier 2/ Gasoline Sulfur rule. 171 4. Alternative Sampling and Testing Requirements for Importers of Diesel Fuel Who Transport Diesel Fuel by Tanker Truck We understand that importers who transport diesel fuel into the U. S. by tanker truck are frequently relatively small businesses that could be subject to a substantial burden if they were required to sample and test each batch of NRLM or highway diesel fuel imported by truck, especially where a trucker imports many small loads of diesel fuel. Therefore, today's rule provides that truck importers may comply with an alternative sampling and testing requirement, involving a sampling and testing program of the foreign truck loading terminal, if certain conditions are met. For an importer to be eligible for the alternative sampling and testing requirement, the 172 Heating oil sold inside the Northeast/ Mid Atlantic Area adopted under today's rule and Alaska does not need to contain a marker ( see section IV. D.).

316 terminal must conduct sampling and testing of the NRLM or highway diesel fuel immediately after each receipt into its terminal storage tank but before loading product into the importer's tanker truck storage compartments or immediately prior to loading product into the importer's tanker truck if it hasn't tested after each receipt. Moreover, the importer will be required to conduct periodic quality assurance testing of the terminal's diesel fuel, and the importer will be required to assure EPA that we will be allowed to make unannounced inspections and audits, to sample and test fuel at the foreign terminal facility, to assure that the terminal maintained sampling and testing records, and to submit such records to EPA upon request.

E. Selection of the Marker for Heating Oil As discussed in section IV. D, to ensure that heating oil is not shifted into the NRLM market, we need a way to distinguish heating oil from high sulfur or 500 ppm sulfur NRLM diesel fuel produced under the small refiner and credit provisions in today's rule. Currently, there is no differentiation today between fuel used for NRLM uses and heating oil. Both are typically produced to the same sulfur specification, and both are required to have the same red dye added prior to distribution from downstream of the terminal. Based on recommendations from refiners, in the NPRM, we concluded that the best approach to differentiate heating oil from NRLM diesel fuel would be to require that a marker be added to heating oil at the refinery gate. Since the proposal we received additional information which allows us to rely upon record keeping and reporting provisions to differentiate heating oil from NRLM up to the point where it leaves the terminal ( see section IV. D). Therefore, today's rule requires that a marker be added to heating oil before it leaves the terminal gate rather than the refinery gate as proposed. 172 Section IV. D of today's preamble also discusses the need to distinguish 500 ppm sulfur locomotive and marine fuel produced by refiners and imported from 2010   2012 from 500 ppm sulfur nonroad diesel fuel produced during this time frame under the small refiner, credit, and downstream flexibility provisions in today's rule. Without this ability, it would be possible for 500 ppm sulfur LM diesel fuel to be shifted into the nonroad market during this time period outside of the Northeast/ Mid Atlantic Area and Alaska. Therefore, today's rule requires that from June 1, 2010 through May 31, 2012, the same marker added to heating oil must also be added to 500 ppm sulfur LM diesel fuel produced by a refiner or imported for use outside of the Northeast/ Mid Atlantic Area and Alaska before the fuel leaves the terminal. Nonroad diesel fuel meeting a 500 ppm sulfur standard produced under the small refiner or credit provisions, and 500 ppm sulfur NRLM diesel fuel generated under the downstream flexibility provisions in today's rule could be sold into the LM market outside of the Northeast/ Mid Atlantic Area and Alaska. Such 500 ppm sulfur NRLM diesel fuel does not need to be marked. Therefore, both marked and unmarked 500 173 Inside the Northeast/ Mid Atlantic Area, 500 ppm sulfur fuel produced from transmix or segregated interface could be sold into the LM or heating oil markets from 2010 2012, and could only be sold into the heating oil market after 2012. Outside of the Northeast/ Mid Atlantic Area, such fuel could be sold into the NRLM market from 2010  2012, and into the LM market thereafter.

317 ppm sulfur diesel fuel could be used in locomotive and marine diesel equipment outside of the Northeast/ Mid Atlantic Area and Alaska from 2010 through 2012.173 As discussed in section IV. D., use of the same marker in heating oil and 500 ppm sulfur LM fuel is feasible because the underlying goal is the same, i. e., keeping 500 ppm sulfur diesel fuel produced as heating oil or LM fuel from begin shifted into the nonroad diesel market from 2010 through 2012. We will be able to determine whether heating oil with a sulfur content greater than 500 ppm has been shifted into the LM market downstream of the terminal by testing the sulfur content of LM. 500 ppm fuel initially designated as heating oil can be later shifted into the LM market, since the sulfur standard for LM diesel fuel during this period is 500 ppm.

Terminal operators suggested that we might be able to rely on record keeping and reporting downstream of the terminal as well as above the terminal level, thereby eliminating any need for a fuel marker. However, we believe such record keeping and reporting mechanisms would be insufficient to keep heating oil out of the NRLM market and 500 ppm sulfur LM fuel produced by a refiner or imported out of the nonroad market downstream of the terminal under typical circumstances. We can rely on such measures before the fuel leaves the terminal because it is feasible to require all of the facilities in the distribution system to report to EPA on their fuel transfers. As discussed in section IV. D., these electronic reports can be compared by EPA to identify parties responsible for shifting heating oil into the NRLM market from 2007  2014, 500 ppm sulfur LM fuel into the nonroad market from 2010  2012, and heating oil into the LM market beginning 2014. Downstream of the terminal the parties involved in the fuel distribution system become far too numerous for such a system to be implemented and enforced ( including jobbers, bulk plant operators, heating oil dealers, retailers, and even end users with storage tanks such as farmers. Reporting errors for even a small fraction would require too many resources to track down and correct and would eliminate the effectiveness of the system.

Our proposal envisioned that a fuel marker would be required in heating oil from June 1, 2006 through May 31, 2010, and that the same marker would be required in locomotive and marine fuel from June 1, 2010 through May 31, 2014. As a consequence of finalizing the 15 ppm sulfur standard for locomotive and marine fuel in 2012, we no longer need to require that LM diesel fuel be marked after June 1, 2012. The 2010 2012 marking requirement for 500 ppm sulfur LM diesel fuel does not apply to 500 ppm sulfur LM fuel produced by a refiner or imported in the Northeast/ Mid Atlantic Area or in Alaska. There is an ongoing need to require the continued use of the marker in heating oil indefinitely ( see section IV of today's preamble). 174 See section IV. D of today's preamble for a discussion of the provisions for the Northeast/ Mid Atlantic Area and Alaska.

175 Opinion on Selection of a Community wide Mineral Oils Marking System, (" Euromarker"),

European Union Scientific Committee for Toxicity, Ecotoxicity and the Environment plenary meeting,

September 28, 1999.

318 We proposed that beginning June 1, 2007 SY 124 must be added to heating oil in the U. S. at a concentration of 6 milligrams per liter ( mg/ L). Today's rule adopts this requirement except for heating oil used in the Northeast/ Mid Atlantic Area and Alaska. 174 The chemical composition of SY 124 is as follows: N ethyl N[ 2[ 1( 2 methylpropoxy) ethoxyl] 4 phenylazo] benzeneamine. 175 This concentration is sufficient to ensure detection of SY 124 in the distribution system, even if diluted by a factor of 50. Any fuel found with a marker concentration of 0.1 milligrams per liter or more will be presumed to be heating oil. Below this level, the prohibition on use in highway, nonroad, locomotive, or marine applications would not apply.

There are a number of other types of dyes and markers. Visible dyes are most common, are inexpensive, and are easily detected. Using a second dye in addition to the red dye required by IRS in all non highway fuel for segregation of heating oil based on visual identification raises certain challenges. The marker that we require in heating oil and 500 ppm sulfur LM diesel fuel must be different from the red dye currently required by IRS and EPA and not interfere with the identification of red dye in distillate fuels. Invisible markers are beginning to see more use in branded fuels and are somewhat more expensive than visible markers. Such markers are detected either by the addition of a chemical reagent or by their fluorescence when subjected to near infrared or ultraviolet light. Some chemical based detection methods are suitable for use in the field. Others must be conducted in the laboratory due to the complexity of the detection process or concerns regarding the toxicity of the reagents used to reveal the presence of the marker. Nearinfra red and ultra violet flourescent markers can be easily detected in the field using a small device and after brief training of the operator. There are also more exotic markers available such as those based on immunoassay, and isotopic or molecular enhancement. Such markers typically need to be detected by laboratory analysis.

We selected SY 124, however, for a number of reasons: 1) There is considerable data and experience with it which indicates there are no significant issues with its use; 2) It is compatible with the existing red dye; 3) Test methods exist to quantify its concentration, even if diluted by a factor of 50 to one; 4) It is reasonably inexpensive; and 5) It can be produced and provided by a number of sources. 176 The European Union marker legislation, 2001/ 574/ EC, document C( 2001) 1728, was published in the European Council Official Journal, L203 28.072001.

177 The color of distillate fuel can range from near water white to a dark blackish brown but is most frequently straw colored.

319 Effective in August 2002, the European Union ( EU) enacted the requirement that SY 124 be added at 6 mg/ L to diesel fuel that is taxed at a lower rate in all EU member states. 176 Solvent yellow 124 is referred to as the " Euromarker" in the EU. The EU has found this treatment rate to be sufficient for their enforcement purposes while not interfering with the identification of the various different colored dyes required by different EU member states ( including the same red dye that is required in the U. S.). Despite its name, SY 124 does not impart a strong color to diesel fuel when used at a concentration of 6 mg/ L. Most often it is reportedly nearly invisible in distillate fuel given that the slight yellow color imparted is similar to the natural color of many distillate fuels. 177 In the presence of red dye, SY 124 can impart a slight orange tinge to the fuel. However, it does not interfere with the visual identification of the presence of red dye or the quantification of the concentration of red dye in distillate fuel. Thus, the use of SY 124 at 6 mg/ L in diesel fuel would not interfere with the use of the red dye by IRS to identify non taxed fuels.

Solvent yellow 124 is chemically similar to other additives used in gasoline and diesel fuel, and has been registered by EPA as a fuel additive under 40 CFR part 79. Therefore, we expect that its products of combustion would not have an adverse impact on emission control devices, such as a catalytic converter. Extensive evaluation and testing of SY 124 was conducted by the European Commission. This included combustion testing which showed no detectable difference between the emissions from marked and unmarked fuel. Norway specifically evaluated the use of distillate fuel containing SY 124 for heating purposes and determined that the presence of the Euromarker did not cause an increase in harmful emissions from heating equipment. Based on the European experience with SY 124, we do not expect that there would be concerns regarding the compatibility of SY 124 in the U. S. fuel distribution system or for use in motor vehicle engines and other equipment such as in residential furnaces.

Our evaluation of the process conducted by the EU in selecting SY 124 for use in the EU convinced us that SY 124 was also the most appropriate marker to propose for use in heating oil under today's program. We received a number of comments expressing concern about the use of SY 124 in heating oil. Based on our evaluation of these comments ( summarized below and in the S& A), we continue to believe that SY 124 is the most appropriate marker to specify for use in heating oil and 500 ppm sulfur LM diesel fuel under today's rule. Therefore, today's rule requires that beginning June 1, 2007, SY 124 be added to heating oil, and that from June 1, 2010 through May 31, 2012, SY 124 be added to 500 ppm sulfur LM diesel fuel produced by a refiner or imported at a concentration of 6 mg/ L before such fuel leaves the terminal except in the Northeast/ Mid Atlantic Area and Alaska. 178 See the Summary and Analysis of Comments for a more detailed discussion of our response to concerns about the possible contamination of jet fuel with the marker prescribed for use in heating oil and 500 ppm sulfur LM fuel under today's rule.

320 The concerns regarding the use of SY 124 in heating oil primarily pertained to: the potential impact on jet engines if jet fuel were contaminated with SY 124; the potential health effects of SY 124 when used in fuel for heating purposes, particularly for unvented heaters; the potential cost impact on fuel distributors and transmix processors; and the potential conflict with IRS red dye requirements.

The American Society of Testing and Materials ( ASTM), the Coordinating Research Council ( CRC), and the Federal Aviation Administration ( FAA) requested that we delay finalizing the selection of a specific marker for use in heating oil in today's rule. They requested that selection of a specific marker should be deferred until testing could be conducted regarding the potential impact of SY 124 on jet engines. The Air Transport Association stated that EPA should conduct an extensive study regarding the potential for contamination, determine the levels at which the marker will not pose a risk to jet engines, and seek approval of SY 124 as a jet fuel additive. Other parties including the Department of Defense ( DoD) also stated that EPA should refrain from specifying a heating oil marker under today's rule until industry and other potentially affected parties can recommend an appropriate marker. Representatives of the heating oil industry stated that they were concerned that EPA had not conducted an independent review regarding the safety/ suitability of SY 124 for use in heating oil.

We met and corresponded with numerous and diverse parties to evaluate the concerns expressed regarding the use of SY 124, and to determine whether it might be more appropriate to specify a different marker for use in heating oil. These parties include IRS, FAA, ASTM, CRC, various marker/ dye manufacturers, European distributors of fuels containing the Euromarker, marker suppliers, and members of all segments in the U. S. fuel distribution system.

We believe that concerns related to potential jet fuel contamination have been sufficiently addressed for us to finalize the selection of SY 124 as the required heating oil marker in today's rule. 178 As discussed in section IV. D of today's preamble, changes in the structure of the fuel program finalized in today's rule from that in the proposed program have allowed us to move the point where the marker must be added from the refinery gate to the terminal. The vast majority of concerns regarding the potential for contamination of jet fuel with SY 124 pertained to the shipment of marked fuel by pipeline. All parties were in agreement that nearly all of the potential for marker contamination of jet fuel would disappear if the point of marker addition was moved to the terminal. We spoke with terminal operators, both large and small, who confirmed that they maintain strictly segregated distribution facilities for red dyed fuel and jet fuel because of jet fuel contamination concerns. The same type of segregation practices will apply to the handling of marked heating oil, marked 500 ppm sulfur LM diesel fuel, and jet fuel since the marker will only be present in heating oil and locomotive and marine fuel when red dye is also present. Therefore, 321 these practices will be equally effective in limiting contamination of jet fuel with SY 124. Downstream of the terminal, the only other chance for marker contamination of jet fuel pertains to bulk plant operators and jobbers that handle marked heating oil and jet fuel. For the most part, these parties also currently maintain strict segregation of the facilities used to transport jet fuel and heating oil. The one exception is that small bulk plant operators that supply small airports sometimes use the same tank truck to alternately transport jet fuel and heating oil. In such cases, they flush the tank compartment prior to transporting jet fuel to remove any residual heating oil left behind after the tank is drained. Since few, if any bulk plants handle LM fuel, it is unlikely that the same tank trucks will be used to alternately transport LM fuel and jet fuel. Thus, we expect that there will be even less chance for LM fuel containing the marker to contaminate jet fuel.

Today's rule requires that heating oil and locomotive and marine fuel which contains the marker must also contain visible evidence of red dye. Therefore, the " white bucket" test that distributors currently use to detect red dye contamination of jet fuel can also be relied upon to detect marker contamination of jet fuel. Based on the above discussion, we concluded that the required addition of the marker to heating oil and 500 ppm sulfur locomotive and marine fuel from 2010   2012 would not significantly increase the likelihood of jet fuel contamination, and that when such contamination might occur, it could be readily identified without the need for additional testing. Our finalization of the Northeast/ Mid Atlantic Area in ( see section IV. D) also minimizes potential concerns regarding the potential that jet fuel may become contaminated with the marker, since no marker is required in this area. Furthermore, there is expected to be little heating oil used outside of the Northeast/ Mid Atlantic Area, the locomotive and marine market outside of the Northeast/ Mid Atlantic Area is limited. We anticipate that the distribution of marked LM diesel fuel will primarily be by segregated pathways, and the duration of the marker requirement for 500 ppm sulfur LM diesel fuel produced by refiners or imported for use outside of the Northeast/ Mid Atlantic Area and Alaska is only two years. On the whole, we actually expect that today's rule will reduce the potential for jet fuel to become contaminated with the azo dyes such as the IRSrequired red dye and SY 124 since visual evidence will no longer be required leaving the refinery gate in 500 ppm NRLM fuel beginning June 1, 2007, and will no longer be required in any offhighway diesel fuel beginning June 1, 2010.

This final rule requires addition of the marker at the terminal rather than the refinery gate as proposed. Based on this change, ASTM withdrew its request to delay the finalization of the marker requirements in today's rule. However, ASTM stated that some concern remains regarding jet fuel contamination downstream of the terminal ( due to the limited use of the same tank wagons to alternately transport jet fuel and heating oil discussed above). Nevertheless, ASTM related that these concerns need not delay finalization of the marker requirements in this rule. ASTM intends to support a CRC program to evaluate the compatibility of markers with jet fuel. The Federal Aviation Administration is also undertaking an effort to identify fuel markers that would be compatible for use in jet fuel. We commit to a review of the use of SY 124 in the future based on the findings of the CRC and the FAA, experience with the use of SY 124 in Europe, and future input from ASTM or other concerned parties. If alternative markers are identified that do not raise 322 concerns regarding the potential contamination of jet fuel, we will initiate a rulemaking to evaluate the use of one of these markers in place of SY 124.

Since the NPRM, no new information has been provided which indicates that the combustion of SY 124 in heating equipment would result in more harmful emissions than when combusted in engines, or would result in more harmful emissions than combustion of unmarked heating oil. The European experience with the use of SY 124 and the evaluation process it underwent prior to selection by the EU, provides strong support regarding the compatibility of SY 124 in the U. S. fuel distribution system, and for use in motor vehicle engines and other equipment such as in residential furnaces and nonroad, locomotive, and marine engines. We believe that concerns regarding the potential health impacts from the use of SY 124 do not present sufficient cause to delay finalization of the requirement for it's use that is contained in today's rule.

The European Union intends to review the use of SY 124 after December 2005, but may undertake the review earlier if any health and safety or environmental concerns about its use are raised. We intend to keep abreast of such activities and may initiate our own review of the use of SY 124 depending on the European Union's findings, or other relevant information. There will be nearly four years of accumulated field experience with the use of SY 124 in Europe at the time of the review by the EU and nearly 5 years by the implementation of the marker requirement under today's rule. This will provide ample time for any potential unidentified issues with SY 124 to be identified, and for us to choose a different marker if warranted.

Commenters stated that potential health concerns regarding the use of SY 124 might be exacerbated with respect to its use in unvented space heaters. Commenters further stated that there are prohibitions against the dyeing of kerosene ( No. 1 diesel) used in such heaters. No information was provided to support these concerns, however, and we have no information to suggest any health concerns exist regarding the use of SY 124 in unvented heaters. Nevertheless, even if there were such concerns, today's rule will not require SY 124 to be used in the fuel used in unvented heaters. Furthermore, today's rule, does not require that SY 124 be added to kerosene. This resolves most of what concern might remain regarding this issue, since kerosene is the predominate fuel used in unvented heaters. However, the DoD stated that No. 2 diesel fuel is sometimes used in its tent heaters and expressed concern regarding the presence of SY 124 in fuel used for this purpose. We understand that to simplify the DoD fuel distribution system, it is DoD policy to use a single fuel called JP 8 for multiple purposes where practicable, including space heating. JP 8 used for such a purpose would not be subject to today's fuel marker requirement. In cases where JP 8 might not be available for space heating, DoD could avoid the use of SY 124 containing fuel by using kerosene in their space heaters.

We believe that the concerns expressed regarding the potential impact on distributors and transmix processors from the presence of SY 124 in heating oil and 500 ppm sulfur LM fuel have been addressed by moving the point of marker addition to the terminal. Terminal operators stated that they desire the flexibility to blend 500 ppm diesel fuel from 15 ppm diesel fuel and heating oil. This practice would have been prevented by the proposed addition of the marker at the refinery 179 Terminals that manufacture 500 ppm diesel fuel by blending 15 ppm and high sulfur fuel are treated as a refiner under today's rule. They must also comply with all applicable designate and track requirements, anti downgrading provisions, and the other applicable requirements in today's rule ( see section IV. D of today's preamble).

180 We do not expect that there will be sufficient demand for 500 ppm sulfur LM diesel fuel produced by refiners or importers to justify its shipment by pipeline after 2010.

323 gate. Under today's rule, terminal operators will have access to unmarked high sulfur fuel with which to manufacture 500 ppm diesel fuel by blending with 15 ppm diesel fuel. 179 Transmix processors stated that the presence of a marker in transmix would limit the available markets for their reprocessed distillates. The feed material for transmix processors primarily consists of the interface mixing zone between batches of fuels that abut each other during shipment by pipeline where this mixing zone can not be cut into either of the adjacent products. If marked heating oil and locomotive and marine fuel was shipped by pipeline, the source material for transmix processors fed by pipelines that carry marked fuel could contain SY 124.180 Transmix processors stated that it would be prohibitively expensive to segregate pipeline generated transmix containing the marker from that which does not contain the marker prior to processing, and that they could not economically remove the marker during reprocessing. Thus, in cases where the marker would be present in a transmix processor's feed material, they would be limited to marketing their reprocessed distillate fuels into the heating oil market. Since today's final rule requires that the marker be added at the terminal gate ( rather than at the refinery gate), the feed material that transmix processors receive from pipelines will not contain the marker. Hence, they will not typically need to process transmix containing the fuel marker prescribed in today's rule, and today's marker requirement is not expected to significantly alter their operations. There is little opportunity for marker contamination of fuels that are not subject to the marker requirements to occur at the terminal and further downstream. In the rare instances where this might occur, the fuel contaminated would likely also be a distillate fuel, and thus could be sold into the heating oil market without need for reprocessing.

We do not expect that the fuel marker requirements will result in the need for additional fuel storage tanks or tank trucks in the distribution system. As discussed in section VI. A of today's preamble, the implementation of the NRLM sulfur standards in today's rule is projected to result in the need for additional storage tanks and tank truck de manifolding at a limited number of bulk plant facilities. The marker requirement does not add another criteria apart from the sulfur content of the fuel which would force additional product segregation. As discussed above, industry has expressed concern about the use of the same tank trucks to alternately transport heating oil and jet fuel. We do not expect that the addition of marker to heating oil and 500 ppm sulfur LM diesel fuel will exacerbate these concerns. However, depending on the outcome of the aforementioned CRC program, the addition of marker to heating oil may hasten the current trend to avoid the use of tank trucks to alternately transport jet fuel and heating oil. To the extent that 181 Phone conversation between Carl Dalton and Rick Stiff, IRS and Jeff Herzog and Paul Machiele, EPA, February 19, 2004.

182 ibid.

324 this does occur, we do not expect that it would result in substantial additional costs since few tank truck operators currently use the same tank truck compartments to alternately transport heating oil and jet fuel.

Through our discussions with the IRS, we have confirmed that the presence of SY 124 will not interfere with enforcement of their red dye requirement. 181 Although, SY 124 may impart a slight orange tint to red dyed diesel fuel, this will not complicate the identification of the presence of the IRS red dye. In fact, IRS has determined that the presence of SY 124 may even enhance enforcement of their fuel tax program. 182 However, as identified in the comments, the implementation of today's marker requirement for heating oil arguably may be in conflict with IRS regulations at 26 CFR § 48.4082 1( b) which state that no dye other than the IRS specified red dye must be present in untaxed diesel fuel. IRS is evaluating what actions might be necessary to clarify that the addition of SY 124 to heating oil would not be in violation of IRS regulations.

IRS also related that they are investigating new markers for potential use either to supplement or to replace red dye under their diesel tax program which might be compatible with jet fuel. IRS stated that it might result in a reduced burden on industry if EPA were to adopt one of the markers from the family of markers that they are investigating. Given the changes to our program in today's final rule, the marker provisions will not impose a significant burden. However, if the IRS program were to develop an alternate marker that would be compatible with jet we will initiate a rulemaking to evaluate the use of one of these markers in place of SY 124 ( see section VIII. H.).

Commenters also expressed concerns regarding the proprietary rights related to the manufacture and use of SY 124, and stated that EPA should adopt a nonproprietary marker if possible. The proprietary rights related to SY 124 expire several months after the implementation of the marker requirements finalized in today's rule. Therefore, we do not expect that the current proprietary rights regarding SY 124 are a significant concern. Commenters also stated that our estimated cost of SY 124 in the NPRM ( 0.2 cents per gallon of treated fuel) was high compared to other markers that cost hundredths of a cent per gallon. Since the proposal we have obtained more accurate information which indicates that the current cost of bulk quantities of SY 124 is approximately 0.03 cents per gallon of treated fuel ( see section VI. A.). Based on conversations with various marker manufacturers, this cost is comparable to or less than other fuel markers.

F. Fuel Marker Test Method As discussed in section V. E above, today's rule requires the use of SY 124 at a concentration of 6mg/ L in heating oil beginning in 2007, and in 500 ppm sulfur LM diesel fuel 183 Memorandum to the docket entitled " Use of a Visible Spectrometer Based Test Method in Detecting the Presence and Determining the Concentration of Solvent Yellow 124 in Diesel Fuel."

184 Today's rule requires that red dye be present in heating oil which contains the marker.

325 produced by a refiner or importer from 2010 through 2012, except for such fuels that used in the Northeast/ Mid Atlantic Area and Alaska. There is currently no industry standard test procedure to quantify the presence of SY 124 in distillate fuels. The most commonly accepted method is based on the chemical extraction of the SY 124 using hydrocloric acid solution and cycloxane, and the subsequent evaluation of the extract using a visual spectrometer to determine the concentration of the marker. 183 This test is inexpensive and easy to use for field inspections. However, the test involves reagents that require some safety precautions and the small amount of fuel required in the test must be disposed of as hazardous waste. Commenters expressed concerns about the use of a test procedure which involves a hazardous reagent ( hydrochloric acid) and which generates a waste product that must be disposed of as hazardous waste. Nevertheless, we continue to believe that such safety concerns are manageable here in the U. S. just as they are in Europe and that the small amount of waste generated can be handled along with other similar waste generated by the company conducting the test, and that the associated effort and costs will be negligible.

Changes made in today's final rule from the proposal will mean that few parties in industry will need to test for the marker, thereby minimizing concerns about the burden of such testing. Much of the testing for the fuel marker that was envisioned by industry was associated with detecting marker contamination in other fuels. By moving the required point of marker addition downstream to the terminal, today's rule virtually eliminates these concerns. Where such concerns continue to exist, the presence of the red dye will provide a visual means of detecting marker contamination. 184 Therefore, we expect that the instances where parties will need to test for marker contamination will be rare. Also, the Northeast/ Mid Atlantic Area provisions finalized in today's rule will exempt the vast majority of heating oil used in the U. S. from the marker requirement. Based on the above discussion, we believe that the vast majority of testing for the presence of the fuel marker that will be conducted will be that by EPA for enforcement purposes.

Similar to the approach proposed regarding the measurement of fuel sulfur content discussed in section V. H above, we are finalizing a performance based procedure to measure the concentration of SY 124 in distillate fuel. Section V. H above describes our rationale for finalizing performance based test procedures. Under the performance based approach, a given test method can be approved for use in a specific laboratory or for field testing by meeting certain precision and accuracy criteria. Properly selected precision and accuracy values allow multiple methods and multiple commercially available instruments to be approved, thus providing greater flexibility in method and instrument selection while also encouraging the development and use of better methods and instrumentation in the future. For example, we are hopeful that with more time and effort a simpler test can be developed for SY 124 that can avoid the use of reagents and the generation of hazardous waste that is by product of the current commonly accepted method. 185 Memorandum to the docket entitled " Use of a Visible Spectrometer Based Test Method in Detecting the Presence and Determining the Concentration of Solvent Yellow 124 in Diesel Fuel."

186 Technical Data on Fuel/ Dye/ Marker & Color Analyzers, as downloaded from the Petroleum Analyzer Company L. P. website at http:// www. petroleum analyzer. com/ product/ PetroSpec/ lit_ pspec/ DTcolor. pdf.

326 Under the performance criteria approach, methods developed by consensus bodies as well as methods not yet approved by a consensus body will qualify for approval provided they meet the specified performance criteria as well as the record keeping and reporting requirements for quality control purposes. There is no designated marker test method.

1. How Can a Given Marker Test Method be Approved?

A marker test method can be approved for use under today's program by meeting certain precision and accuracy criteria. Approval will apply on a laboratory/ facility specific basis. If a company chooses to employ more than one laboratory for fuel marker testing purposes, then each laboratory will have to separately seek approval for each method it intends to use. Likewise, if a laboratory chooses to use more than one marker test method, then each method will have to be approved separately. Separate approval will not be necessary for individual operators or laboratory instruments within a given laboratory facility. The method will be approved for use by that laboratory as long as appropriate quality control procedures were followed.

In developing the precision and accuracy criteria for the sulfur test method, EPA drew upon the results of an inter laboratory study conducted by the American Society for Testing and Materials ( ASTM) to support ASTM's standardization of the sulfur test method. Unfortunately, there has not been sufficient time for industry to standardize the test procedure used to measure the concentration of SY 124 in distillate fuels or to conduct an inter laboratory study regarding the variability of the method. Nevertheless, the European Union has been successful in implementing its marker requirement while relying on the marker test procedures which are currently available, as noted above. We used, the most commonly used marker test procedure to establish the precision and accuracy criteria on which a marker test procedure would be approved under the today's rule. 185 There has been substantial experience in the use of this reference market test method since the August 2002 effective date of the European Union's marker requirement. However, EPA is aware of only limited summary data on the variability of the reference test method from a manufacturer of the visible spectrometer apparatus used in the testing. 186 The stated resolution of the test method from the materials provided by this equipment manufacturer is 0.1 mg/ L, with a 187 Repeatability and reproducibility are terms related to test variability. ASTM defines repeatability as the difference between successive results obtained by the same operator with the same apparatus under constant operating conditions on identical test materials that would, in the long run, in the normal and correct operation of the test method be exceeded only in one case in 20. Reproducibility is defined by ASTM as the difference between two single and independent results obtained by different operators working in different laboratories on identical material that would, in the long run, be exceeded only in one case in twenty.

188 See section V. H of this proposal for a discussion of the methodology used in deriving the proposed precision and accuracy values for the sulfur test method.

327 repeatability of plus or minus 0.08 mg/ L and a reproducibility of plus or minus 0.2 mg/ L. 187 Given the lack of more extensive data, we have decided to use these available data as the basis of the precision and accuracy criteria for the marker test procedure under today's rule ( as discussed below). EPA may initiate a review of the precision and accuracy criteria finalized in today's rule should additional test data become available.

Using a similar methodology to that employed in deriving the sulfur test procedure precision value results in a precision value for the marker test procedure of 0.043 mg/ L ( see section V. H). 188 However, we are concerned that the use of this precision value, because it is based on very limited data, might preclude the acceptability of test procedures that would be adequate for the intended regulatory use. In addition, the lowest measurement of marker concentration that will have relevance under the regulations is 0.1 mg per liter. Consequently, today's rule requires that the precision of a marker test procedure will need to be less than 0.1 mg/ L for it to qualify.

To demonstrate the accuracy of a given test method, a laboratory facility will be required to perform 10 repeat tests, the mean of which can not deviate from the Accepted Reference Value ( ARV) of the standard by more than 0.05 mg/ L. We believe that this accuracy level is not overly restrictive, while being sufficiently protective considering that the lowest marker level of regulatory significance would be 0.1 mg/ L. Ten tests will be required using each of two different marker standards, one in the range of 0.1 to 1 mg/ L and the other in the range of 4 to 10 mg/ L of SY 124. Therefore, a minimum of 20 total tests will be required for sufficient demonstration of accuracy for a given marker test method at a given laboratory facility. Finally, any known interferences for a given test method will have to be mitigated. These tests must be performed using commercially available SY 124 standards. Since the European Union's marker requirement will have been in effect for nearly 5 years by the implementation date of today's marker, we believe that such standards will be available by the implementation date for today's rule.

These requirements are not overly burdensome. To the contrary, these requirements are equivalent to what a laboratory would do during the normal start up procedure for a given test 189 These are standard setting organizations, like ASTM, and ISO that have broad representation of all interested stakeholders and make decisions by consensus.

328 method. In addition, we believe the performance based approach finalized in today's rule will allow regulated entities to know that they are measuring fuel marker levels accurately and within reasonable site reproducibility limits.

2. What Information Would Have To Be Reported to the Agency?

As noted above, the European Union's ( EU) marker requirement will have been in effect for nearly five years prior to the effective data for the proposed marker requirements and we expect the EU requirement to continue indefinitely. Thus, we anticipate that the European testings standards community will likely have standardized a test procedure to measure the concentration of SY 124 in distillate fuels prior to the implementation of the marker requirement in today's final rule. The United States testing standards community may also enact such a standardized test procedure. To the extent that marker test methods that have already been approved by a voluntary consensus standards body189 ( VCSB), such as the International Standards Organization ( ISO) or the American Society for Testing and Materials ( ASTM), each laboratory facility would be required to report to the Agency the precision and accuracy results as described above for each method for which it is seeking approval. Such submissions to EPA, as described elsewhere, will be subject to the Agency's review for 30 days, and the method will be considered approved in the absence of EPA comment. Laboratory facilities are required to retain the fuel samples used for precision and accuracy demonstration for 30 days.

For test methods that have not been approved by a VCSB, full test method documentation, including a description of the technology/ instrumentation that makes the method functional, as well as subsequent EPA approval of the method is also required. These submissions are subject to the Agency's review for 90 days, and the method will be considered approved in the absence of EPA comment. Submission of VCSB methods is not required since they are available in the public domain. In addition, industry and the Agency will likely have had substantial experience with such methods.

To assist the Agency in determining the performance of a given marker test method ( non VCSB methods, in particular), we reserve the right to send samples of commercially available fuel to laboratories for evaluation. Such samples are intended for situations in which the Agency has concerns regarding a test method and, in particular, its ability to measure the marker content of a random commercially available diesel fuel. Laboratory facilities are required to report the results from tests on this material to the Agency.

G. Requirements for Record keeping, Reporting, and PTDs 190 " Subsidiary" here covers entities of which the parent company has 50 percent or greater ownership.

329 1. Registration Requirements As discussed in section IV. D, by December 31, 2005, or six months prior to handling fuels subject to the designation requirements of today's rule, each entity in the fuel distribution system, up through and including the point where fuel is loaded onto trucks for distribution to retailers or wholesale purchaser consumers, must register each of its facilities with EPA.

An entity's registration must include the following information:

° Corporate name and address  Contact name, telephone number, and e mail address ° For each facility operated by the entity:  Type of facility ( e. g. refinery, import facility, pipeline, terminal)  Facility name  Physical location  Contact name, telephone number, and e mail address 2. Applications for Small Refiner Status An application of a refiner for small refiner status must be submitted to EPA by December 31, 2004 and shall include the following information:

° The name and address of each location at which any employee of the company, including any parent companies, subsidiaries, or joint venture partners190 worked From January 1, 2002 until January 1, 2003;

° The average number of employees at each location, based on the number of employees for each of the company's pay periods from January 1, 2002 until January 1, 2003;

° The type of business activities carried out at each location; and ° The total crude oil refining capacity of the corporation. We define total capacity as the sum of all individual refinery capacities for multiple refinery companies, including any and all subsidiaries, and joint venture partners as reported to the Energy Information Administration ( EIA) for 2002, or in the case of foreign refiners, a comparable reputable source, such as professional publication or trade 191 We will evaluate each foreign refiner's documentation of crude oil capacity on an individual basis.

330 journal. 191 Refiners do not need to include crude oil capacity used in 2002 through a lease agreement with another refiner in which it has no ownership interest.

The crude oil capacity information reported to the EIA is presumed to be correct. However, in cases where a company disputes this information, we will allow 60 days after the company submits its application for small refiner status for that company to petition us with detailed data it believes shows that the EIA's data was in error. We will consider this data in making a final determination about the refiner's crude oil capacity.

Finally, applications for small refiner status must also include information on which small refiner option the refiner expects to use at each of its refineries.

3. Applications for Refiner Hardship Relief As discussed above in section IV. C, a refiner seeking general hardship relief under today's program will apply to EPA and provide several types of financial and technical information, such as internal cash flow data and information on bank loans, bonds, and assets as well as detailed engineering and construction plans and permit status. Applications for general hardship relief are due June 1, 2005.

4. Pre Compliance Reports for Refiners We believe that an early general understanding of the refining industry's progress in complying with the requirements in today's rule will be valuable to both the industry and EPA. As with the highway diesel program, we are requiring that each refiner and importer provide annual reports on the progress of compliance and plans for compliance for each of their refineries or import facilities. These pre compliance reports are due June 1 of each year beginning in 2005 and continuing through 2011, or until the production of 15 ppm sulfur NR and LM diesel fuel commences, whichever is later.

EPA will maintain the confidentiality of information submitted in pre compliance reports to the full extent authorized by law. We will report generalized summaries of this data following receipt of the pre compliance reports. We recognize that plans may change for many refiners or importers as the compliance dates approach. Thus, submission of the reports will not impose an obligation to follow through on plans projected in the reports.

Pre compliance reports can, at the discretion of the refiner/ importer, be submitted in conjunction with the annual compliance reports discussed below and/ or the pre compliance and annual compliance reports required under the highway diesel program, as long as all of the information that is required in all reports is clearly provided. Based on experience with the first 331 pre compliance reports for the highway diesel program, we are clarifying the information request for the pre compliance reports as shown below. This should provide responses in a more standardized format which will allow for better aggregation of the data, as well as eliminate reporting of unnecessary information.

Pre compliance reports must include the following information:

° Any changes in the basic corporate or facility information since registration; ° Estimates of the average daily volumes ( in gallons) of each sulfur grade of highway and NRLM diesel fuel produced ( or imported) at each refinery ( or facility). These volume estimates must be provided both for fuel produced from crude oil, as well as any fuel produced from other sources, and must be provided for the periods of June 1, 2010  December 31, 2010, calendar years 2011 13, January 1, 2014  May 31, 2014, and June 1, 2014  December 31, 2014; ° For entities expecting to participate in the credit program, estimates of numbers of credits to be earned and/ or used; ° Information on project schedule by known or projected completion date ( by quarter) by the stage of the project. For example, following the five project phases described in EPA's June 2002 Highway Diesel Progress Review report ( EPA420 R 02 016): 1) Strategic planning, 2) planning and front end engineering, 3) detailed engineering and permitting, 4) procurement and construction, and 5) commissioning and startup. ° Basic information regarding the selected technology pathway for compliance ( e. g., conventional hydrotreating vs other technologies, revamp vs grassroots, etc.); ° Whether capital commitments have been made or are projected to be made ; and ° The pre compliance reports in 2006 and later years must provide an update of the progress in each of these areas.

5. Compliance Reports for Refiners, Importers, and Distributors of Designated Diesel Fuel a. Designate and Track Reporting Requirements i. Quarterly Reports From June 1, 2007 and through September 1, 2010, all entities who are required to maintain records must report the following information by facility to EPA on a quarterly basis:

° The total volume in gallons of each type of designated diesel fuel for which custody was transferred by the entity to any other entity, and the EPA entity and facility identification number( s), as applicable, of the transferee; and 332 ° The total volume in gallons of each type of designated diesel fuel for which custody was received by the entity from any other entity and the EPA entity and facility identification number( s), as applicable, of the transferor.

If a facility receives fuel from another facility that does not have an EPA facility identification number then that batch of fuel must be designated and reported as 1) heating oil if it is marked, 2) highway diesel fuel if taxes have been assessed, 3) NRLM diesel fuel if the fuel is dyed but not marked.

Terminals must also report the results of all compliance calculations including the following: ° The total volumes received of each fuel designation required to be reported over the quarterly compliance period; ° The total volumes transferred of each fuel designation required to be reported over the quarterly compliance period; ° Beginning and ending inventories of each fuel designation required to be reported over the quarterly compliance period; ° Calculations showing that the volume of highway diesel fuel distributed from the facility relative to the volume received did not increase since June 1, 2007; and ° Calculations showing that the volume of high sulfur NRLM diesel fuel did not increase by a greater proportion than the volume of heating oil over the quarterly compliance period ( not applicable in the Northeast/ Mid Atlantic Area or Alaska).

The quarterly compliance periods and dates by which the reports are due for each period are as follows.

Table V. G 1. Quarterly Compliance Periods and Reporting Datesa Quarterly Compliance Period Report Due Date July 1 through September 30 November 30 October 1 though December 31 February 28 January 1 through March 31 May 31 April 1 through June 30 August 31 Notes: a The first quarterly reporting period will be from June 1, 2007 though September 30, 2007 and the last quarterly compliance period will be from April 1, 2010 through May 31, 2010.