EPA releases proposal to streamline existing fuels regulations

By Erin Voegele | April 13, 2020

The U.S. EPA released a proposed rule on April 13 that aims to streamline and modernize the agency’s existing fuels regulations. In the rulemaking, the EPA said it is proposing “some slight modifications to the Renewable Fuel Standard,” but indicated it does not plan to make substantive changes to the RFS as part of this rulemaking.

A fact sheet published by the EPA explains the rulemaking proposes to “update the agency’s existing gasoline, diesel and other fuels programs in 40 CFR part 80 to improve overall compliance assurance and maintain environmental performance, while reducing compliance costs for industry and EPA.”

According to the EPA, the rulemaking would streamline existing fuel quality regulations by removing expired provisions, eliminating redundant compliance provisions, such as duplicative registration requirements that are required by every EPA fuels program, and remove unnecessary and out-of-date requirements. These regulations would be replaced with a single set of provisions and definitions in a new 40 CFR part 1090 that would apply across all gasoline, diesel and other fuel quality programs currently regulated under 40 CFR part 80, with the exception of the RFS. The EPA said the rulemaking does not propose to change the stringency of the existing fuel quality standards, nor does it propose any new standards on fuels or remove any statutory requirement for fuels specified in the Clean Air Act.

The fact sheet outlines three key elements that are to be included in part 1090. First, the updated regulations would simplify the reformulated gasoline (RFG) summer volatile organic compound (VOC) standards. Second, the regulations would consolidate the regulatory requirements across the part 80 fuel quality programs. Third, the regulations would improve oversight through the leveraging of third parties to ensure in-use fuel quality.

“The nature of this proposal is generally administrative or technical and includes amendments for parties that produce and distribute fuels, fuel additives, and regulated blendstocks,” said the EPA in the fact sheet. “These amendments include the elimination of hundreds of pages of obsolete or redundant regulations.”

Regarding the RFS, the rulemaking proposes some slight modifications in subpart M of part 80. The agency said these changes are primarily for administrative purposes that follow from the proposed changes to its other fuel programs. “These subpart M regulations are mostly unique to the RFS program, and therefore do not need to be consolidated with other part 80 fuel standard regulations,” the EPA said in the proposed rule. “One of the goals of this action is to help ensure consistency in how parties comply with our regulatory requirements and report information to EPA. Since the RFS program uses similar, if not the same, reporting systems and compliance mechanisms for parties to demonstrate compliance, we are proposing changes to help ensure that this consistency is maintained or enhanced as a result of this action. We will treat public comments received suggesting substantive changes to the RFS program as outside the scope of this rulemaking.”

In the rulemaking, the EPA proposes to allow regulated parties with existing approvals under part 80 to maintain those approvals under part 1090. “For example, parties registered under part 80 would not need to reregister under part 1090,” the agency said in the proposed rule. Any new requests or updates to approvals currently necessary under part 80, however, would have to meet the new proposed regulatory requirements of part 1090.

For existing approvals under part 80, the EPA said regulated parties would not need to update a previously approved submission under part 1090. “For example, we have approved alternative E15 labels under part 80,” the EPA said in the proposed rule. “Parties would not need to have those labels reapproved in order to use them under part 1090.” The EPA, however, said one notable exception is for in-line blending waivers. “We are proposing significant changes to the in-line blending waiver provisions for RFG (mostly to remove provisions related to parameters that would no longer need to be reported) and for [conventional gasoline (CG)], which are designed to make consistent with the proposed RFG in-line blender waiver provisions,” the agency said in the rule. “As such, we are proposing to require resubmission of all in-line blending waiver requests to ensure that they meet the new requirements.”

According to the EPA, the proposed rule also aims to make streamlined regulations more accessible by establishing subpart B, a roadmap for regulated parties that directs them to the subparts that are most likely to affect them and their businesses. The EPA indicated the roadmap could be of value to retailers who are typically small businesses that have greater difficultly affording consultants to help them understand their regulatory requirements. “By identifying the generally applicable requirements that apply to all retailers, these small businesses could more easily identify those regulatory requirements that apply to them, helping them to more easily comply with our fuel quality regulations,” the EPA said in the proposed rule.

Gasoline standards would be consolidated into part 1090 subpart C. “We are not proposing to change the lead, phosphorous, sulfur, benzene standards or the RVP gasoline standards in the summer, nor are we proposing to change the standards for oxygenates (including denatured fuel ethanol), certified ethanol denaturant, gasoline additives, and standards for certified butane and pentane,” the EPA said in the rulemaking. “These standards are simply being moved and consolidated into subpart C. Any comments on these standards will be treated as beyond the scope of this rulemaking.”

The rulemaking does, however, proposed to make changes in the form of RFG VOC performance standards. The rulemaking proposes to translate the RFG standard from the demonstration of the VOC performance standard via the complex model into an equivalent RVP per-gallon standard, which the agency said would allow it to simplify the compliance demonstration requirements for RFG. The rule also proposes to consolidate the two grades of butane and the two grades of pentane into a single grade each of certified butane and certified pentane. In addition, the EPA has proposed that certain regulations related to summer gasoline, as well as procedures for states to relax the federal 7.8 psi RVP standard.

Regarding the reformulated gasoline volatility standard, the EPA said it is proposing to replace the existing compliance mechanism used for RFG batch certification with a summer RVP maximum per-gallon standard and apply that same single RVP standard to all RFG gasoline nationwide and provide greater flexibility for blending of oxygenates (ethanol and biobutanol) in E0 in RFG areas.

The rulemaking would also consolidate various exemption programs into one general hardship provision for unforeseeable circumstances such as natural disasters for refinery fires. The change would not affect the RFS program and “any exemptions available under [the RFS] would similarly remain unaffected.”

The proposed rule addresses downstream oxygenate accounting. The new regulations propose to require gasoline manufacturers to use “hand blends” when accounting for oxygenate added downstream. “We are also proposing to require that oxygenate blenders follow instructions for the type(s) and amount(s) of oxygenated from the BOB manufacturer,” the EPA said. According to the agency, the utilization of the proposed hand blend approach would allow gasoline manufacturers to adjust hand blends to adopt to market changes almost immediately, for example to increased demands for E0 or E15.

The proposed rule also addresses proposed third-party survey provisions. The rulemaking explains that the EPA currently has four in-use survey programs under part 80, including those related to ethanol content and E15 labeling. “We are proposing a national survey program in part 1090 that would consolidate the four programs into a single national survey in-use retail program,” the EPA said in the proposal. Two survey programs are included under part 1090, including a national survey program of retail outlets that offer gasoline and diesel, and a voluntary national sampling and testing oversight program that is intended to help ensure gasoline manufacturers collect samples for testing in a consistent manner for purposes of compliance of applicable standards. According to the EPA, the national survey program would “continue to ensure E15 pump labeling compliance at retail stations.”

“We are not proposing any revisions to the existing survey for fuel and fuel additive manufacturers that make E15 or ethanol for use in making E15, which is the only one of the current surveys that is mandatory,” the EPA said in the proposal.

Under current EPA regulations, fuel and fuel additive manufacturers that make E15 or ethanol for use in making E15 must participate in a compliance survey that ensure E15 pump dispensers are labeled appropriately. There are two options to satisfy the compliance survey condition: a geographically focused survey or a national survey. “Under part 1910, we are proposing that participation in the national survey program would satisfy the national survey option for purposes of compliance with the E15 waiver conditions,” the EPA said in the proposed rule. “The E15 waiver conditions would allow E15 fuel and fuel additive manufacturers to continue using a geographically focused option instead if they so desired, and part 1090 includes provisions to facilitate such a program. However, we expect that fuel and fuel additive manufacturers would elect to participate in the national survey program due to significant amount of cost savings associated with participating in it.”

The Renewable Fuels Association plans to submit comments to the EPA on the proposed rule. “RFA is carefully reviewing the proposal released today and we will submit detailed written comments to EPA once the comment period opens,” said an RFA spokesperson. “While this a highly complex and technical proposal, EPA has been discussing many of these proposed changes with stakeholders, including RFA, for the past few years. Many of these proposed changes will have little or no impact on ethanol producers, but we are evaluating several provisions of potential interest to the ethanol industry. For example, it appears EPA’s proposal to streamline fuel program compliance surveys—including the unnecessary E15 survey—could result in reduced cost and regulatory burden for ethanol producers.”

The proposed rule spans more than 500 pages and includes a wide variety of other provisions that impact the EPA’s fuels regulations. The agency will open a 60-day public comment period on proposed rule following its publication in the Federal Register. A pre-publication version of the rulemaking can be downloaded from the EPA website