40 CFR Part 80 - REGULATION OF FUELS AND FUEL ADDITIVES

EPA is amending the requirements under EPA's diesel sulfur program related to the sulfur content of locomotive and marine (LM) diesel fuel produced by transmix processors and pipeline facilities. These amendments will reinstate the ability of locomotive and marine diesel fuel produced from transmix by transmix processors and pipeline operators to meet a maximum 500 parts per million (ppm) sulfur standard outside of the Northeast Mid-Atlantic Area and Alaska and expand this ability to within the Northeast Mid-Atlantic Area provided that: the fuel is used in older technology locomotive and marine engines that do not require 15 ppm sulfur diesel fuel, and the fuel is kept segregated from other fuel. These amendments will provide significant regulatory relief for transmix processors and pipeline operators to allow the petroleum distribution system to function efficiently while continuing to transition the market to virtually all ultra-low sulfur diesel fuel (ULSD, i.e. 15 ppm sulfur diesel fuel) and the environmental benefits it provides.

EPA is issuing a supplemental rule associated with the Renewable Fuel Standard (RFS) program. This final rule contains a lifecycle GHG analysis for grain sorghum ethanol and a regulatory determination that grain sorghum ethanol qualifies as a renewable fuel under the RFS Program. EPA's analysis indicates that ethanol made from grain sorghum at dry mill facilities that use natural gas for process energy meets the lifecycle greenhouse gas emissions reduction threshold of 20 percent compared to the baseline petroleum fuel it would replace, and therefore qualifies as renewable fuel. It also contains our regulatory determination that grain sorghum ethanol produced at dry mill facilities using specified forms of biogas for both process energy and most electricity production, has lifecycle GHG emission reductions of more than 50 percent compared to the baseline petroleum fuel it would replace, and that such grain sorghum ethanol qualifies as an advanced biofuel under the RFS Program.

EPA published a direct final rule on October 9, 2012 to amend the definition of heating oil in 40 CFR 80.1401 in the Renewable Fuel Standard (“RFS”) program under section 211(o) of the Clean Air Act. The direct final rule also amended requirements under EPA's diesel sulfur program related to the sulfur content of locomotive and marine diesel fuel produced by transmix processors, and the fuel marker requirements for 500 ppm sulfur locomotive and marine (LM) diesel fuel to allow for solvent yellow 124 marker to transition out of the distribution system. Because EPA received adverse comments on the heating oil definition and transmix amendments, we are withdrawing those portions of the direct final rule. Because EPA did not receive adverse comments with respect to the yellow marker amendments, those amendments will become effective as indicated in the direct final rule.

EPA is issuing this direct final rule to amend the definition of heating oil in the Renewable Fuel Standard (“RFS” or “RFS2”) program under section 211(o) of the Clean Air Act. This amendment will expand the scope of renewable fuels that can generate Renewable Identification Numbers (RINs) as heating oil to include fuel oil produced from qualifying renewable biomass that will be used to generate heat to warm buildings or other facilities where people live, work, recreate, or conduct other activities. Fuel oils used to generate process heat, power, or other functions will not be included in the amended definition. Producers or importers of fuel oil that meets the amended definition of heating oil will be allowed to generate RINs, provided that the fuel oil meets the other requirements specified in the RFS regulations. This amendment will not modify or limit fuel included in the current definition of heating oil. EPA is also amending the requirements under EPA's diesel sulfur program related to the sulfur content of locomotive and marine diesel fuel produced by transmix processors. These amendments will allow locomotive and marine diesel fuel produced by transmix processors to meet a maximum 500 parts per million (ppm) sulfur standard provided that; the fuel is used in older technology locomotive and marine engines that do not require 15 ppm sulfur diesel fuel, the fuel is used outside of the Northeast Mid-Atlantic Area, and the fuel is kept segregated from other fuel. These amendments will provide significant regulatory relief for transmix processors while having a neutral or net positive environmental impact. EPA is also amending the fuel marker requirements for 500 ppm sulfur locomotive and marine (LM) diesel fuel to address an oversight in the original rulemaking where the regulations failed to incorporate provisions described in the rulemaking preamble to allow for solvent yellow 124 marker to transition out of the distribution system.

Under the Clean Air Act Section 211(o), the Environmental Protection Agency is required to determine the applicable volume of biomass-based diesel to be used in setting annual percentage standards under the renewable fuel standard program for years after 2012. We proposed an applicable volume requirement for 2013 of 1.28 billion gallons on July 1, 2011. In order to sufficiently evaluate the many comments on the proposal from stakeholders as well as to gather additional information to enhance our analysis, we did not finalize this volume requirement in the January 9, 2012, rulemaking setting the 2012 percentage standards. In this action we are finalizing an applicable volume of 1.28 billion gallons of biomass-based diesel for calendar year 2013.

Under section 211(o) of the Clean Air Act, the Environmental Protection Agency is required to set the renewable fuel standards each November for the following year. In general the standards are designed to ensure that the applicable volumes of renewable fuel specified in the statute are used. However, the statute specifies that EPA is to project the volume of cellulosic biofuel production for the upcoming year and must base the cellulosic biofuel standard on that projected volume if it is less than the applicable volume set forth in the Act. EPA is today proposing a projected cellulosic biofuel volume for 2013 that is below the applicable volume specified in the Act. EPA is proposing that the applicable volumes of advanced biofuel and total renewable fuel would remain at the statutory levels for 2013. Finally, today's action also proposes annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that would apply to all gasoline and diesel produced or imported in year 2013.

On October 31, 2012 the EPA published a request for comments on a Regulatory Flexibility Act section 610 review titled, Section 610 Review of NPDES Permit Regulation and Effluent Limitations Guidelines Standards for Concentrated Animal Feeding Operations (CAFOs). As initially published in the Federal Register , written comments were to be submitted to the EPA on or before December 31, 2012 (a 60-day public comment period). Since publication, the EPA has received a request for additional time to submit comments. Therefore, the EPA is extending the public comment period for 60 days until March 1, 2013.

EPA is amending the requirements under EPA's diesel sulfur program related to the sulfur content of locomotive and marine (LM) diesel fuel produced by transmix processors and pipeline facilities. These amendments will reinstate the ability of locomotive and marine diesel fuel produced from transmix by transmix processors and pipeline operators to meet a maximum 500 parts per million (ppm) sulfur standard outside of the Northeast Mid-Atlantic Area and Alaska and expand this ability to within the Northeast Mid-Atlantic Area provided that: the fuel is used in older technology locomotive and marine engines that do not require 15 ppm sulfur diesel fuel, and the fuel is kept segregated from other fuel. These amendments will provide significant regulatory relief for transmix processors and pipeline operators to allow the petroleum distribution system to function efficiently while continuing to transition the market to virtually all ultra-low sulfur diesel fuel (ULSD, i.e. 15 ppm sulfur diesel fuel) and the environmental benefits it provides.

EPA is issuing a supplemental rule associated with the Renewable Fuel Standard (RFS) program. This final rule contains a lifecycle GHG analysis for grain sorghum ethanol and a regulatory determination that grain sorghum ethanol qualifies as a renewable fuel under the RFS Program. EPA's analysis indicates that ethanol made from grain sorghum at dry mill facilities that use natural gas for process energy meets the lifecycle greenhouse gas emissions reduction threshold of 20 percent compared to the baseline petroleum fuel it would replace, and therefore qualifies as renewable fuel. It also contains our regulatory determination that grain sorghum ethanol produced at dry mill facilities using specified forms of biogas for both process energy and most electricity production, has lifecycle GHG emission reductions of more than 50 percent compared to the baseline petroleum fuel it would replace, and that such grain sorghum ethanol qualifies as an advanced biofuel under the RFS Program.

EPA published a direct final rule on October 9, 2012 to amend the definition of heating oil in 40 CFR 80.1401 in the Renewable Fuel Standard (“RFS”) program under section 211(o) of the Clean Air Act. The direct final rule also amended requirements under EPA's diesel sulfur program related to the sulfur content of locomotive and marine diesel fuel produced by transmix processors, and the fuel marker requirements for 500 ppm sulfur locomotive and marine (LM) diesel fuel to allow for solvent yellow 124 marker to transition out of the distribution system. Because EPA received adverse comments on the heating oil definition and transmix amendments, we are withdrawing those portions of the direct final rule. Because EPA did not receive adverse comments with respect to the yellow marker amendments, those amendments will become effective as indicated in the direct final rule.

This notice announces that EPA will review three regulatory actions pursuant to section 610 of the Regulatory Flexibility Act. Those three actions are: Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements (Heavy-Duty 610 Review); NESHAP: Reinforced Plastic Composites Production (Plastics 610 Review); and NPDES Permit Regulation and Effluent Limitations Guidelines Standards for CAFOs (CAFO 610 Review). As part of this review, EPA will consider and solicit comments on the following factors: The continued need for the rules; the nature of complaints or comments received concerning the rules; the complexity of the rules; the extent to which the rules overlap, duplicate, or conflict with other Federal, State, or local government rules; and the degree to which the technology, economic conditions or other factors have changed in areas affected by the rules.

Under the Clean Air Act Section 211(o), the Environmental Protection Agency is required to determine the applicable volume of biomass-based diesel to be used in setting annual percentage standards under the renewable fuel standard program for years after 2012. We proposed an applicable volume requirement for 2013 of 1.28 billion gallons on July 1, 2011. In order to sufficiently evaluate the many comments on the proposal from stakeholders as well as to gather additional information to enhance our analysis, we did not finalize this volume requirement in the January 9, 2012, rulemaking setting the 2012 percentage standards. In this action we are finalizing an applicable volume of 1.28 billion gallons of biomass-based diesel for calendar year 2013.