The Environmental Protection Agency (EPA) finalized a rule that would streamline and consolidate a number of fuel regulations. While much of the final rule is only marginally relevant in practice, the regulation fundamentally alters the RFG /RVP regulatory regime.
Specifically, the rule simplifies the RFG standards by translating the current summer RFG volatile organic compound standard into a RVP per-gallon cap of 7.4 psi for summer gasoline and a 7.4 psi limit for RFG nationwide during the summer. It also allows the commingling of RFG gasoline during the winter season. These changes are effective in 2021.
The rule also removes the red dye restriction for ultra-low sulfur diesel (ULSD). (Red dye indicates the fuel is not subject to excise tax and thus is not permitted to be present in diesel sold for on-road use, e.g., heating oil is marked with red dye). Through this change, EPA will enhance product fungibility by permitting fuel marketers to re-designate ultra-low sulfur heating oil to ULSD without recertification.
This is especially important when supplies of highway diesel fuel are constricted, as with hurricanes.
Finally, the rule consolidates fuel quality programs (i.e., benzene, volatility, sulfur, etc.) into a single, national fuel quality program with unified annual reporting and reduces the minimum butane purity level for certified butane to 85 percent.
NATSO is generally supportive of the rule. NATSO filed comments to EPA, and the agency was generally responsive to those comments. Most notably, the final rule clarifies that downstream blenders that add additional oxygenate to a product above what is specified in a PTD will neither incur deficits nor need to submit additional reports or arrange for an additional audit.
EPA also is considering announcing a proposed rule as soon as this week to modify E15 labeling requirements. Although it is unclear what this rule will look like, or whether EPA will ever actually propose it, NATSO anticipates that if it is proposed it would consider either (a) modifying the E15 labeling requirement to make it more "E15 friendly" (i.e., less "scary" for drivers, more flexibility for retailers, etc.) or (b) eliminating the E15 labeling requirement entirely. The proposal may also include some provisions to lessen some of the compatibility restrictions in the UST regulations to make E15 easier to market.
None of these rules, if they are proposed, could be finalized until 2021, and thus how this entire rulemaking plays out will depend on a number of factors, including the election.
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