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Electronic Code of Federal Regulations

e-CFR Data is current as of December 18, 2014

Title 40Chapter ISubchapter CPart 80 → Subpart H


Title 40: Protection of Environment
PART 80—REGULATION OF FUELS AND FUEL ADDITIVES


Subpart H—Gasoline Sulfur


Contents

General Information

§§80.180-80.185   [Reserved]
§80.190   Who must register with EPA under the sulfur program?

Gasoline Sulfur Standards

§80.195   What are the gasoline sulfur standards for refiners and importers?
§80.200   What gasoline is subject to the sulfur standards and requirements?
§80.205   How is the annual refinery or importer average and corporate pool average sulfur level determined?
§80.210   What sulfur standards apply to gasoline downstream from refineries and importers?
§80.211   What are the requirements for treating imported gasoline as blendstock?
§80.212   What requirements apply to oxygenate blenders?
§80.213   What alternative sulfur standards and requirements apply to transmix processors and transmix blenders?
§80.214   [Reserved]

Geographic Phase-In Program

§80.215   What is the scope of the geographic phase-in program?
§80.216   What standards apply to gasoline produced or imported for use in the GPA?
§80.217   How does a refiner or importer apply for the GPA standards?
§80.218   [Reserved]
§80.219   Designation and downstream requirements for GPA gasoline.
§80.220   What are the downstream standards for GPA gasoline?

Hardship Provisions

§80.225   What is the definition of a small refiner?
§80.230   Who is not eligible for the hardship provisions for small refiners?
§80.235   How does a refiner obtain approval as a small refiner?
§80.240   What are the small refiner gasoline sulfur standards?
§80.245   How does a small refiner apply for a sulfur baseline?
§80.250   How is the small refiner sulfur baseline and volume determined?
§80.255   Compliance plans and demonstration of commitment to produce low sulfur gasoline.
§80.260   What are the procedures and requirements for obtaining a hardship extension?
§80.265   How will the EPA approve or disapprove a hardship extension application?
§80.270   Can a refiner seek temporary relief from the requirements of this subpart?

Allotment Trading Program

§80.271   How can a small refiner obtain an adjustment of its 2004-2007 per-gallon cap standard?
§80.275   How are allotments generated and used?

Averaging, Banking and Trading (ABT) Program—General Information

§80.280   [Reserved]
§80.285   Who may generate credits under the ABT program?
§80.290   How does a refiner apply for a sulfur baseline?

ABT Program—Baseline Determination

§80.295   How is a refinery sulfur baseline determined?
§80.300   [Reserved]

ABT Program—Credit Generation

§80.305   How are credits generated during the time period 2000 through 2003?
§80.310   How are credits generated beginning in 2004?

ABT Program—Credit Use

§80.315   How are credits used and what are the limitations on credit use?
§§80.320-80.325   [Reserved]

Sampling, Testing and Retention Requirements for Refiners and Importers

§80.330   What are the sampling and testing requirements for refiners and importers?
§80.335   What gasoline sample retention requirements apply to refiners and importers?
§80.340   What standards and requirements apply to refiners producing gasoline by blending blendstocks into previously certified gasoline (PCG)?
§80.345   [Reserved]
§80.350   What alternative sulfur standards and requirements apply to importers who transport gasoline by truck?
§80.355   [Reserved]

Recordkeeping and Reporting Requirements

§80.360   [Reserved]
§80.365   What records must be kept?
§80.370   What are the sulfur reporting requirements?
§§80.371-80.373   [Reserved]

Exemptions

§80.374   What if a refiner or importer is unable to produce gasoline conforming to the requirements of this subpart?
§80.375   What requirements apply to California gasoline?
§80.380   What are the requirements for obtaining an exemption for gasoline used for research, development or testing purposes?
§80.382   What requirements apply to gasoline for use in American Samoa, Guam and the Commonwealth of the Northern Mariana Islands?

Violation Provisions

§80.385   What acts are prohibited under the gasoline sulfur program?
§80.390   What evidence may be used to determine compliance with the prohibitions and requirements of this subpart and liability for violations of this subpart?
§80.395   Who is liable for violations under the gasoline sulfur program?
§80.400   What defenses apply to persons deemed liable for a violation of a prohibited act?
§80.405   What penalties apply under this subpart?

Provisions for Foreign Refiners With Individual Sulfur Baselines

§80.410   What are the additional requirements for gasoline produced at foreign refineries having individual small refiner sulfur baselines, foreign refineries granted temporary relief under §80.270, or baselines for generating credits during 2000 through 2003?

Attest Engagements

§80.415   What are the attest engagement requirements for gasoline sulfur compliance applicable to refiners and importers?

Source: 65 FR 6823, Feb. 10, 2000, unless otherwise noted.

General Information

§§80.180-80.185   [Reserved]

§80.190   Who must register with EPA under the sulfur program?

(a) Refiners and importers who are registered by EPA under §80.76 are deemed to be registered for purposes of this subpart.

(b) Refiners and importers subject to the standards in §80.195 who are not registered by EPA under §80.76 must provide to EPA the information required by §80.76 by November 1, 2003, or not later than three months in advance of the first date that such person produces or imports gasoline, whichever is later.

(c) Refiners with any refinery subject to the small refiner standards under §80.240, or refiners subject to the geographic phase-in area (GPA) standards under §80.216, who are not registered by EPA under §80.76 must provide to EPA the information required under §80.76 by December 31, 2000.

(d) Any refiner who plans to generate credits or allotments under §80.305 or §80.275 in any year prior to 2004 who is not registered by EPA under §80.76 must register under §80.76 no later than September 30 of the year prior to the first year of credit generation. Any refiner who plans to generate credits in 2000 who is not registered by EPA under §80.76 must register under §80.76 no later than May 10, 2000.

Gasoline Sulfur Standards

§80.195   What are the gasoline sulfur standards for refiners and importers?

(a)(1) The gasoline sulfur standards for refiners and importers, excluding gasoline produced by small refiners subject to the standards at §80.240, and gasoline designated as GPA gasoline under §80.219(a), are as follows:

  Gasoline sulfur standards for the
averaging period
beginning:
January 1, 2004 January 1, 2005 January 1, 2006 and
subsequent
Refinery or Importer Average(1)30.0030.00
Corporate Pool Average120.0090.00(1)
Per-Gallon Cap30030080

1Not applicable.

(2) The sulfur standards and all compliance calculations for sulfur under this subpart are in parts per million (ppm) and volumes are in gallons.

(3) The averaging period is January 1 through December 31 of each year.

(4) The standards under this paragraph (a) for all imported gasoline shall be met by the importer.

(b)(1) The refinery or importer annual average gasoline sulfur standard is the maximum average sulfur level allowed for gasoline produced at a refinery or imported by an importer during each calendar year starting January 1, 2005.

(2) The annual average sulfur level is calculated in accordance with §80.205.

(3) The refinery or importer annual average gasoline sulfur standard may be met using credits as provided under §80.275 or §80.315.

(4) In 2005 only, the refinery or importer annual average sulfur standard may be met using allotments or credits as provided under §80.275, or credits as provided under §80.315. The same allotments used to demonstrate compliance with the corporate pool average standard may be used by a refinery in the corporate pool toward a demonstration of compliance with the refinery average standard, or by an importer for demonstration of compliance with the importer average standard. Alternatively, some of the allotments may be used toward a demonstration of compliance with the refinery average standard by one refinery in the corporate pool and the remainder used by another refinery or refineries in the corporate pool.

(c)(1) The corporate pool average gasoline sulfur standards applicable in 2004 and 2005 are the maximum average sulfur levels allowed for a refiner's or importer's gasoline production from all of the refiner's refineries or all gasoline imported by an importer in a calendar year. The corporate pool average standards for a party that is both a refiner and an importer are the maximum average sulfur levels allowed for all the party's combined gasoline production from all refineries and imported gasoline in a calendar year.

(2) The corporate pool average is calculated in accordance with the provisions of §80.205.

(3) The corporate pool average standard may be met using sulfur allotments under §80.275.

(4) The corporate pool average standards do not apply to approved small refiners subject to the gasoline sulfur standards under §80.240.

(5)(i) Joint ventures, in which two or more parties collectively own and operate one or more refineries, will be treated as a separate refiner under this section.

(ii) One partner to a joint venture may include one or more joint venture refineries in its corporate pool for purposes of complying with the corporate pool average standards. The joint venture will be in compliance for such joint venture refinery(ies) if the partner's corporate pool average meets the corporate pool average standards. The joint venture entity must demonstrate compliance with the corporate pool average standards for any refinery(ies) owned by the joint venture that are not included in one partner's corporate pool.

(iii) In the case of a refinery that is owned by a two or more parties that is not a joint venture under this paragraph (c)(5), the business entity consisting of the joint owners is the refiner of that refinery. One of the owners of such a refinery may include the refinery in its corporate pool for purposes of complying with the corporate pool average standards under this section, with the same requirements and limitations that apply under paragraph (c)(5)(ii) of this section.

(6)(i) A parent company is the refiner of any refinery facilities owned by the parent company's wholly-owned subsidiaries for purposes of compliance with the corporate pool average standards under this section.

(ii) A parent company must include in its corporate pool all of the gasoline produced at any refineries owned by the parent company and any refineries owned by the parent company's wholly-owned subsidiaries; or

(iii) A parent company may be deemed in compliance with the corporate pool average standards if the parent company includes in its corporate pool the gasoline produced by any refineries owned by the parent company, and each wholly-owned subsidiary of the parent company individually complies with the corporate pool average standards for the gasoline produced at the refineries owned by the wholly-owned subsidiary.

(d)(1) The per-gallon cap standard is the maximum sulfur level allowed for each batch of gasoline produced or imported starting January 1, 2004.

(2) In 2004 only, a refiner or importer may produce or import gasoline with a per-gallon sulfur content greater than 300 ppm, to a maximum of 350 ppm, provided the following conditions are met:

(i) The refinery or importer becomes subject to an adjusted per-gallon cap standard in 2005, calculated using the following formula:

ACS=300−(Smax−300)

Where:

ACS=Adjusted cap standard.

Smax=Maximum sulfur content of any gasoline produced at a refinery or imported by an importer during 2004.

(ii) The adjusted cap standard calculated under paragraph (d)(2)(i) of this section applies to all gasoline produced at a refinery or imported by an importer during 2005.

(iii) The refinery or importer remains subject to the 30.00 average standard under paragraph (a) of this section for 2005.

(iv) The provisions of this paragraph (d)(2) apply to gasoline designated as GPA gasoline under §80.219(a).

(v) The provisions of this paragraph (d)(2) do not apply to small refiners as defined in §80.225.

[65 FR 6823, Feb. 10, 2000; 65 FR 10598, Feb. 28, 2000, as amended at 67 FR 40181, June 12, 2002]

§80.200   What gasoline is subject to the sulfur standards and requirements?

For the purpose of this subpart, all reformulated and conventional gasoline and RBOB, collectively called “gasoline” unless otherwise specified, is subject to the standards and requirements under this subpart, with the following exceptions:

(a) Gasoline that is used to fuel aircraft, racing vehicles or racing boats that are used only in sanctioned racing events, provided that:

(1) Product transfer documents associated with such gasoline, and any pump stand from which such gasoline is dispensed, identify the gasoline either as gasoline that is restricted for use in aircraft, or as gasoline that is restricted for use in racing motor vehicles or racing boats that are used only in sanctioned racing events;

(2) The gasoline is completely segregated from all other gasoline throughout production, distribution and sale to the ultimate consumer; and

(3) The gasoline is not made available for use as motor vehicle gasoline, or dispensed for use in motor vehicles, except for motor vehicles used only in sanctioned racing events.

(b) California gasoline as defined in §80.375.

(c) Gasoline that is exported for sale outside the U.S.

§80.205   How is the annual refinery or importer average and corporate pool average sulfur level determined?

(a) The annual refinery or importer average and corporate pool average gasoline sulfur level is calculated as follows:

eCFR graphic er10fe00.007.gif

View or download PDF

Where:

Sa = The refinery or importer annual average sulfur level, or corporate pool average level, as applicable.

Vi=The volume of gasoline produced or imported in batch i.

Si=The sulfur content of batch i determined under §80.330.

n=The number of batches of gasoline produced or imported during the averaging period.

i=Individual batch of gasoline produced or imported during the averaging period.

(b) All annual refinery or importer average or corporate pool average calculations shall be conducted to two decimal places.

(c) A refiner or importer may include oxygenate added downstream from the refinery or import facility when calculating the sulfur content, provided the following requirements are met:

(1) For oxygenate added to conventional gasoline, the refiner or importer must comply with the requirements of §80.101(d)(4)(ii).

(2) For oxygenate added to RBOB, the refiner or importer must comply with the requirements of §80.69(a).

(d) Refiners and importers must exclude from compliance calculations all of the following:

(1) Gasoline that was not produced at the refinery;

(2) In the case of an importer, gasoline that was imported as Certified Sulfur-FRGAS;

(3) Blending stocks transferred to others;

(4) Gasoline that has been included in the compliance calculations for another refinery or importer; and

(5) Gasoline exempted from standards under §80.200.

(e)(1) A refiner or importer may exceed the refinery or importer annual average sulfur standard specified in §80.195 for a given averaging period for any calendar year through 2010, creating a compliance deficit, provided that in the calendar year following the year the standard is not met, the refinery or importer shall:

(i) Achieve compliance with the refinery or importer annual average sulfur standard specified in §80.195; and

(ii) Use additional sulfur credits sufficient to offset the compliance deficit of the previous year.

(2) No refiner or importer may have a compliance deficit in any year after 2010. Any deficit that exists in 2010 must be made up in 2011.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40182, June 12, 2002]

§80.210   What sulfur standards apply to gasoline downstream from refineries and importers?

The sulfur standard for gasoline at any point in the gasoline distribution system downstream from refineries and import facilities, including gasoline at facilities of distributors, carriers, oxygenate blenders, retailers and wholesale purchaser-consumers (“downstream location”), shall be determined in accordance with the provisions of this section.

(a) Definition. S-RGAS means gasoline that is subject to the standards under §80.240 or §80.270, including Certified Sulfur-FRGAS as defined in §80.410, except that no batch of gasoline may be classified as S-RGAS if the actual sulfur content is less than the applicable per-gallon refinery cap standard specified in §80.195.

(b) Standards for gasoline that does not qualify for S-RGAS downstream standards. The following standards apply to any gasoline that does not qualify for S-RGAS downstream standards under in paragraph (d) of this section:

(1) Starting February 1, 2004 the sulfur content of gasoline at any downstream location other than at a retail outlet or wholesale purchaser-consumer facility, and starting March 1, 2004 the sulfur content of gasoline at any downstream location, shall not exceed 378 ppm.

(2) Except as provided in §80.220(a), starting February 1, 2005 the sulfur content of gasoline at any downstream location other than at a retail outlet or wholesale purchaser-consumer facility, and starting March 1, 2005 the sulfur content of gasoline at any downstream location, shall not exceed 326 ppm.

(3) Except as provided in §80.220(a), starting February 1, 2006 the sulfur content of gasoline at any downstream location other than at a retail outlet or wholesale purchaser-consumer facility, and starting March 1, 2006 the sulfur content of gasoline at any downstream location, shall not exceed 95 ppm.

(c) Standards for gasoline that qualifies for S-RGAS downstream standards. In the case of any gasoline that qualifies for S-RGAS downstream standards under paragraph (d) of this section, the sulfur standard shall be the downstream standard for the gasoline calculated under paragraph (f) of this section. In the case of mixtures of gasoline that qualify for different S-RGAS downstream standards, the sulfur standard shall be the highest downstream standard applicable to any of the S-RGAS in the mixture.

(d) Gasoline that qualifies for S-RGAS downstream standards. Gasoline qualifies for S-RGAS downstream standards if all of the following conditions are met:

(1) The gasoline must be comprised in whole or part of S-RGAS.

(2) Product transfer documents applicable to the gasoline when received at that location must represent that the gasoline contains S-RGAS.

(3) Except as provided in paragraph (d)(4) of this section, the gasoline must have been sampled and tested at that location subsequent to the most recent receipt of gasoline at that location, and the test result must show a sulfur content greater than:

(i) 350 ppm starting February 1, 2004;

(ii) 300 ppm starting February 1, 2005; and

(iii) 80 ppm (or in the GPA, 300 ppm) starting February 1, 2006.

(4) This sampling and testing condition does not apply for gasoline at any retail outlet, wholesale purchaser-consumer facility, or contained in any transport truck.

(e) Product transfer document information for S-RGAS. (1) On each occasion when any refiner or importer of S-RGAS transfers custody or title to such gasoline, the refiner or importer shall provide to the transferee documents that include the following information:

(i) Identification of the gasoline as being S-RGAS; and

(ii) The downstream standard applicable to the batch of gasoline under paragraph (f) of this section.

(2) Where gasoline in whole or part is classified as S-RGAS when received by the transferor, and where the gasoline transferred meets the conditions under paragraph (d) of this section, the transferor shall provide to the transferee, on each occasion when custody or title to gasoline is transferred, documents that include the following information:

(i) Identification of the gasoline as S-RGAS; and

(ii) The applicable downstream standard under paragraph (c) of this section. This does not apply when gasoline is sold or dispensed for use in motor vehicles at a retail outlet or wholesale purchaser-consumer facility.

(3) No person shall classify gasoline as being S-RGAS except as provided in paragraphs (e)(1) and (e)(2) of this section.

(4) Product codes may be used to convey the information required by paragraphs (e)(1) and (e)(2) of this section if such codes are clearly understood by each transferee.

(5) Gasoline from a terminal tank containing S-RGAS that is combined with gasoline from a terminal tank containing non-S-RGAS for the purpose of blending mid-grade gasoline in a transport truck may be classified on product transfer documents as S-RGAS, provided that the S-RGAS was combined with non-S-RGAS for the sole purpose of producing midgrade gasoline.

(6) Where S-RGAS is being delivered into a terminal storage tank containing non-S-RGAS which is simultaneously supplying gasoline to a transport truck, the terminal may identify the gasoline as S-RGAS before the delivery into the terminal tank is complete without performing the tests required in paragraph (d)(3) of this section. Upon completion of the delivery of S-RGAS into the terminal tank, the terminal may classify the gasoline as S-RGAS only if it meets the criteria for S-RGAS following testing in accordance with the requirements of paragraph (d)(3) of this section.

(7) The information relating to S-RGAS required to be included in product transfer documentation under this paragraph (e) must be included in the product transfer documents which accompany the transfer of custody of the gasoline. Product transfer documents that transfer title of the gasoline may fulfill the requirements under this paragraph (e) by indicating that the required information relating to S-RGAS is contained in the product transfer documents which accompany the transfer of custody of the gasoline.

(f) Downstream standards applicable to S-RGAS when produced or imported. (1) The downstream standard applicable to any gasoline classified as S-RGAS when produced or imported shall be calculated using the following equation:

D=S+105×((S+2)/104)0.4

Where:

D=Downstream sulfur standard.

S=The sulfur content of the refiner's batch determined under §80.330.

(2) Where more than one S-RGAS batch is combined, prior to shipment, at the refinery or import facility where the S-RGAS is produced or imported, the downstream standard applicable to the mixture shall be the highest downstream standard, calculated under paragraph (f)(1) of this section, for any S-RGAS contained in the mixture.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40182, June 12, 2002]

§80.211   What are the requirements for treating imported gasoline as blendstock?

An importer may treat imported gasoline (as defined in §80.2(c)) as gasoline treated as blendstock, or GTAB, under the provisions of §80.83 for purposes of compliance with this subpart H.

[70 FR 74578, Dec. 15, 2005]

§80.212   What requirements apply to oxygenate blenders?

Effective January 1, 2004, oxygenate blenders who blend oxygenate into gasoline downstream of the refinery that produced the gasoline or the import facility where the gasoline was imported, are not subject to the requirements of this subpart applicable to refiners for this gasoline, but are subject to the requirements and prohibitions applicable to downstream parties and the prohibition specified in §80.385(e).

§80.213   What alternative sulfur standards and requirements apply to transmix processors and transmix blenders?

Transmix processors and transmix blenders, as defined in §80.84(a), may comply with the following requirements instead of the requirements and standards otherwise applicable to a refiner under subpart H of this part.

(a) Any transmix processor who recovers transmix gasoline product (TGP), as defined in §80.84(a), from transmix through transmix processing under §80.84(c) must show through sampling and testing, using the methods in §80.330, that the TGP meets the applicable sulfur standards under §80.210 or §80.220, prior to the TGP leaving the transmix processing facility.

(1) The applicable sulfur standard is the standard in §80.210(b); or

(2) If the TGP sulfur is greater than the standard in §80.210(b), and the transmix processor has product transfer documents that prove the TGP was originally produced by a small refiner, hardship refiner, or for use in the GPA, the applicable sulfur standard for the TGP is the downstream sulfur standard corresponding to the original gasoline.

(b) The sampling and testing required under paragraph (a) of this section shall be conducted following each occasion TGP is produced.

(c) Any transmix processor who produces gasoline by adding blendstock to TGP must, for such blendstock, comply with all requirements and standards that apply to a refiner under subpart H of this part, and must meet the applicable downstream sulfur standards under §80.210 or §80.220 for the gasoline produced by blending blendstock and TGP, prior to the gasoline leaving the transmix processing facility.

(d) Any transmix processor who produces gasoline by blending blendstock into TGP may meet the sampling and testing requirements of subpart H of this part as follows:

(1)(i) Sample and test the blendstock when received at the transmix processing facility, using the methods specified in §80.330, to determine the volume and sulfur content, and treat each volume of blendstock that is blended into a volume of TGP as a separate batch for purposes of calculating and reporting compliance with the applicable annual average and per-gallon cap sulfur standards in §80.195 or §80.216, as applicable; or

(ii) Use sulfur test results of the blendstock supplier provided that the following requirements are met:

(A) Sampling and testing by the blendstock supplier is performed using the methods specified in §80.330;

(B) Testing for the sulfur content of the blendstock in the supplier's storage tank must be conducted subsequent to the last receipt of blendstock into the supplier's storage tank from which the transmix processor is supplied;

(C) The transmix processor must obtain a copy of the blendstock supplier's test results, at the time of each transfer of blendstock to the transmix processor, that reflect the sulfur content of each load of blendstock supplied to the transmix processor;

(D) The transmix processor must conduct a quality assurance program of sampling and testing for each blendstock supplier. The frequency of blendstock sampling and testing must be one sample for every 500,000 gallons of blendstock received or one sample every 3 months, whichever results in more frequent sampling; and

(E) If any of the requirements of this paragraph (d)(1)(ii) are not met, in whole or in part, for any blendstock blended into TGP, that blendstock is deemed in violation of the gasoline sulfur standards in §80.195.

(2) Sample and test each batch of gasoline produced by blending blendstock into TGP, using the methods specified in §80.330, to determine the sulfur content of the batch.

(3) The sulfur content of each batch of gasoline produced by blending blendstock into TGP must be no greater than the downstream sulfur standard under §80.210 or §80.220 applicable to the designation of the TGP; and

(4) Gasoline produced by blending blendstock into TGP must be properly identified on product transfer documents in accordance with the provisions of §80.210 or §80.220, as applicable.

(e) Any transmix blender who produces gasoline by blending transmix, or mixtures of gasoline and distillate fuel described in §80.84(e), into previously certified gasoline under §80.84(d) must meet the applicable downstream sulfur standards under §80.210 or §80.220 for the gasoline produced by blending transmix and previously certified gasoline.

(f) Any transmix processor or transmix blender who adds feedstocks to their transmix other than gasoline, distillate fuel, or gasoline blendstocks from pipeline interface must meet all requirements and standards that apply to a refiner under subpart H of this part, other than §80.213, for all gasoline they produce during a compliance period.

[71 FR 31963, June 2, 2006]

§80.214   [Reserved]

Geographic Phase-In Program

§80.215   What is the scope of the geographic phase-in program?

(a) Geographic phase-in area. (1) The following states comprise the geographic phase-in area (GPA) subject to the provisions of the geographic phase-in program: North Dakota, Montana, Idaho, Wyoming, Utah, Colorado, New Mexico, and Alaska.

(2) In addition, the following counties within the states identified in paragraph (a)(2)(i) of this section and the following Federal Indian reservations in paragraph (a)(2)(ii) of this section are included in the GPA:

(i) The list of counties follows:

Arizona

Apache   Greenlee
Coconino   Navajo
Gila 

Nebraska

Banner   Keith
Box Butte   Kimball
Cheyenne   Morrill
Dawes   Scotts Bluff
Deuel   Sheridan
Garden   Sioux

Nevada

Elko   Lander
Eureka   Lincoln
Humboldt   White Pine

Oregon

Baker   Morrow
Crook   Sherman
Gilliam   Umatilla
Grant   Union
Harney   Wallowa
Malheur   Wheeler

South Dakota

Bennett   Lawrence
Butte   Meade
Corson   Mellette
Custer   Pennington
Dewey   Perkins
Fall River   Shannon
Haakon   Stanley
Harding   Todd
Jackson   Ziebach
Jones 

Washington

Adams   Kittitas
Asotin   Klickitat
Benton   Lincoln
Chelan   Okanogan
Columbia   Pend Oreille
Douglas   Spokane
Ferry   Stevens
Franklin   Walla Walla
Garfield   Whitman
Grant   Yakima

(ii) The list of Federal Indian reservations follows: Burns Paiute, Cheyenne River, Colville, Duck Valley, Ely Colony, Fort Apache, Fort McDermitt, Goshute, Haulapai, Havasupai, Hopi, Kalispel, Navajo, Pine Ridge, Rosebud, Yakama, San Carlos, Spokane, Standing Rock, Summit Lake, Te-Moak, Umatilla, Winnemucca.

(3) Contiguous tribal reservations of a particular tribe are included in the GPA if a portion of the tribal reservation is within the GPA state or county.

(4) Any dispensing facility located partially within a GPA county or tribal reservation land shall be considered fully within the GPA for purposes of this program.

(b) Duration of the program. (1) The geographic phase-in program applies to the 2004, 2005, and 2006 annual averaging periods, except as provided in paragraph (b)(2) of this section.

(2) Subject to the provisions of §80.540, the geographic phase-in program shall also apply to the 2007 and 2008 annual averaging period for refiners approved for GPA standards in 2007 and 2008 under §80.540.

(c) Persons eligible. Any refiner or importer who produces or imports gasoline for use in the geographic area under paragraph (a) of this section is eligible to apply for the geographic phase-in program. The provisions of the geographic phase-in program shall apply to imported gasoline through the importer.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 5136, Jan. 18, 2001; 66 FR 19306, Apr. 13, 2001; 70 FR 70509, Nov. 22, 2005]

§80.216   What standards apply to gasoline produced or imported for use in the GPA?

(a) The refinery or importer annual average sulfur standard for gasoline produced or imported for use in the geographic phase-in area under §80.215, and designated as GPA gasoline under §80.219(a), shall be 150.00 ppm.

(b) The per-gallon cap standard for gasoline produced or imported for use in the GPA under paragraph (a) of this section shall be 300 ppm, except as specified in §80.195(d).

(c) The refinery or importer annual average sulfur level is calculated in accordance with the provisions of §80.205.

(d) The refinery or importer annual average standard under paragraph (a) of this section may be met using sulfur allotments or credits as provided under §§80.275 and 80.315.

(e) Gasoline produced by approved small refiners subject to the standards under §80.240 is not subject to the standards under paragraphs (a) and (b) of this section.

(f)(1) A refiner or importer whose gasoline production or volume of imported gasoline in 2004 or 2005 is comprised of more than 50 percent of gasoline designated as GPA gasoline under §80.219(a) shall not be required to meet the corporate pool average standards under §80.195 for its gasoline production or imported gasoline during the applicable averaging period.

(2) A refiner or importer whose gasoline production or volume of imported gasoline in 2004 or 2005 is comprised of less than 50 percent of gasoline designated as GPA gasoline under §80.219(a) must meet the corporate pool average standards under §80.195 for all the refiner's gasoline production or the importer's volume of imported gasoline, including GPA gasoline, during the applicable averaging period.

(g) The provisions for compliance deficits under §80.205(e) do not apply to gasoline subject to the standards under paragraphs (a) and (b) of this section.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19306, Apr. 13, 2001; 67 FR 40182, June 12, 2002]

§80.217   How does a refiner or importer apply for the GPA standards?

(a) To apply for the GPA standards under §80.216, a refiner or importer must submit an application in accordance with the provisions of §80.290.

(b) Applications under paragraph (a) of this section must be submitted by May 1, 2001.

(c)(1) If approved, EPA will notify the refiner or importer of each refinery's or the importer's annual average sulfur standard for gasoline produced for use in the GPA for the 2004 through 2006 annual averaging periods.

(2) If disapproved, the refiner or importer must comply with the standards in §80.195 for gasoline produced for use in the GPA.

(d) If EPA finds that a refiner or importer provided false or inaccurate information on its application under this section, upon notice from EPA, the refiner's or importer's application will be void ab initio.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19306, Apr. 13, 2001]

§80.218   [Reserved]

§80.219   Designation and downstream requirements for GPA gasoline.

The requirements and prohibitions specified in this section apply during the period January 1, 2004 through December 31, 2006.

(a) Designation. Any refiner or importer shall designate any gasoline produced or imported that is subject to the standards under §80.216 as “GPA” gasoline.

(b) Product transfer documents. (1) On each occasion that any person transfers custody or title to gasoline designated as GPA gasoline, other than when gasoline is sold or dispensed for use in motor vehicles at a retail outlet or wholesale purchaser-consumer facility, the transferor shall provide to the transferee documents that include the following information:

(i) Identification of the gasoline as being GPA gasoline;

(ii) A statement that the gasoline may not be distributed or sold for use outside the geographic phase-in area.

(2) Except for transfers to truck carriers, retailers and wholesale purchaser-consumers, product codes may be used to convey the information required by paragraph (b)(1) of this section if such codes are clearly understood by each transferee.

(3) The requirements under paragraph (b)(1) of this section are in addition to the requirement under §80.210(e), where appropriate, to identify gasoline as being S-RGAS.

(c) GPA gasoline use prohibitions. (1) All parties in the distribution system, including refiners, importers, distributors, carriers, oxygenate blenders, retailers and wholesale purchaser-consumers, are prohibited from:

(i) Selling, offering for sale, dispensing, distributing, storing or transporting GPA gasoline for use outside the geographic phase-in area; and

(ii) Commingling GPA gasoline with gasoline not designated as GPA gasoline unless the mixture is classified as GPA gasoline.

(2) Gasoline not designated as GPA gasoline may be distributed or sold for use in the geographic phase-in area.

§80.220   What are the downstream standards for GPA gasoline?

(a) GPA gasoline. (1) During the period February 1, 2004 through January 31, 2005, the sulfur content of GPA gasoline at any downstream location other than at a retail outlet or wholesale purchaser-consumer facility, and during the period March 1, 2004 through February 28, 2005, the sulfur content of GPA gasoline at any downstream location shall not exceed 378 ppm.

(2) During the period February 1, 2005 through January 31, 2007, the sulfur content of GPA gasoline at any downstream location other than at a retail outlet or wholesale purchaser-consumer facility, and during the period March 1, 2005 through February 28, 2007, the sulfur content of GPA gasoline at any downstream location shall not exceed 326 ppm.

(b) GPA gasoline mixed with S-RGAS. Notwithstanding the requirements in paragraph (a) of this section, the sulfur standard applicable to a mixture of GPA gasoline and S-RGAS gasoline at a downstream location shall be the greater of the standard under paragraph (a) of this section or the standard determined under §80.210.

(c) Notwithstanding paragraph (a) of this section, the sulfur content standard of 326 ppm at any downstream location may be extended as provided under §80.540(m).

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 5136, Jan. 18, 2001]

Hardship Provisions

§80.225   What is the definition of a small refiner?

(a) A small refiner is defined as any person, as defined by 42 U.S.C. 7602(e), who: (1)(i) Produces gasoline at a refinery by processing crude oil through refinery processing units;

(ii) Employed an average of no more than 1,500 people, based on the average number of employees for all pay periods from January 1, 1998, to January 1, 1999; and

(iii) Had an average crude capacity less than or equal to 155,000 barrels per calendar day (bpcd) for 1998.

(2) For the purpose of determining the number of employees and crude capacity under paragraph (a)(1) of this section, the refiner shall include the employees and crude capacity of any subsidiary companies, any parent company and subsidiaries of the parent company, and any joint venture partners. A subsidiary under this paragraph means any subsidiary in which the refiner or parent company has a 50% or greater ownership interest.

(b) The definition under paragraph (a) of this section applies to domestic and foreign refiners. For any refiner owned by a governmental entity, the number of employees as specified in paragraph (a) of this section shall include all employees of the governmental entity.

(c) If, without merger with, or acquisition of, another business unit, a company with approved small refiner status under §80.235 exceeds 1,500 employees, or a corporate crude capacity of 155,000 bpcd after January 1, 1999, it will be considered a small refiner for the duration of the small refiner program.

(d) Notwithstanding the definition in paragraph (a) of this section, refiners who acquire a refinery after January 1, 1999, or reactivate a refinery that was shutdown or was non-operational between January 1, 1998, and January 1, 1999, may apply for small refiner status in accordance with the provisions of §80.235.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19306, Apr. 13, 2001; 67 FR 38340, June 3, 2002; 67 FR 40182, June 12, 2002]

§80.230   Who is not eligible for the hardship provisions for small refiners?

(a) The following are not eligible for the hardship provisions for small refiners:

(1) Refiners with refineries built after January 1, 1999;

(2) Refiners who exceed the employee or crude oil capacity criteria under §80.225(a) on January 1, 1999, but who meet these criteria after that date, regardless of whether the reduction in employees or crude capacity is due to operational changes at the refinery or a company sale or reorganization;

(3) Importers; and

(4) Refiners who produce gasoline other than by processing crude oil through refinery processing units.

(b)(1)(i) Refiners who qualify as small under §80.225 and subsequently cease production of diesel fuel from processing crude oil through refinery processing units, or employ more than 1,500 people or exceed the 155,000 bpcd crude oil capacity limit after January 1, 2004 as a result of merger with or acquisition of or by another entity, are disqualified as small refiners, except this shall not apply in the case of a merger between two previously approved small refiners. If disqualification occurs, the refiner shall notify EPA in writing no later than 20 days following this disqualifying event.

(ii) Except as provided under paragraph (b)(1)(iii) of this section, any refiner whose status changes under this paragraph shall meet the applicable standards of §80.195 within a period of up to 30 months of the disqualifying event for any of its refineries that were previously subject to the small refiner standards of §80.240(a). However, such period shall not extend beyond December 31, 2007, or, for refineries for which the Administrator has approved an extension of the small refiner gasoline sulfur standards under §80.553(c), December 31, 2010.

(iii) A refiner may apply to EPA for an additional six months to comply with the standards of §80.195 if more than 30 months will be required for the necessary engineering, permitting, construction, and start-up work to be completed. Such applications must include detailed technical information supporting the need for additional time. EPA will base its decision to approve additional time on the information provided by the refiner and on other relevant information. In no case will EPA extend the compliance date beyond December 31, 2007, or, for refineries for which the Administrator has approved an extension of the small refiner gasoline sulfur standards under §80.553(c), December 31, 2010.

(iv) During the period of time up to 30 months provided under paragraph (b)(1)(ii) of this section, and any extension provided under paragraph (b)(1)(iii) of this section, the refiner may not generate gasoline sulfur credits under §80.310.

(2) Any refiner who qualifies as a small refiner under §80.225 may elect to meet the standards under §80.195 by notifying EPA in writing no later than November 15 prior to the year that the change will occur. Any refiner whose status changes under this paragraph (b)(2) shall meet the standards under §80.195 beginning with the first averaging period subsequent to the status change.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19307, Apr. 13, 2001; 69 FR 39167, June 29, 2004]

§80.235   How does a refiner obtain approval as a small refiner?

(a) Applications for small refiner status must be submitted to EPA by December 31, 2000, except for applications submitted pursuant to §80.225(d), which must be submitted by June 1, 2002.

(b) Applications for small refiner status must be sent to: U.S. EPA, Attn: Sulfur Program (6406J), 1200 Pennsylvania Ave., NW., Washington, DC 20460. For commercial delivery: U.S. EPA, Attn: Sulfur Program (6406J), 501 3rd Street, NW, Washington, DC 20001.

(c) The small refiner status application must contain the following information for the company seeking small refiner status, plus any subsidiary companies, any parent company and subsidiaries of the parent company, and any joint venture partners:

(1)(i) A listing of the name and address of each location where any employee worked during the 12 months preceding January 1, 1999; the average number of employees at each location based upon the number of employees for each pay period for the 12 months preceding January 1, 1999; and the type of business activities carried out at each location; or

(ii) In the case of a refiner who acquires a refinery after January 1, 1999, or reactivates a refinery that was shutdown between January 1, 1998, and January 1, 1999, a listing of the name and address of each location where any employee of the refiner worked since the refiner acquired or reactivated the refinery; the average number of employees at any such acquired or reactivated refinery during each calendar year since the refiner acquired or reactivated the refinery; and the type of business activities carried out at each location.

(2) The total corporate crude oil capacity of each refinery as reported to the Energy Information Administration (EIA) of the U.S. Department of Energy (DOE), or, in the case of a foreign refiner, a comparable reputable source, such as a professional publication or trade journal. The information submitted to EIA or the comparable reputable source is presumed to be correct. In cases where a company, domestic or foreign, disagrees with this information, the company may petition EPA with appropriate data to correct the record within 60 days after the company submits its application for small refiner status.

(3) A letter signed by the president, chief operating or chief executive officer of the company, or his/her designee, stating that the information contained in the application is true to the best of his/her knowledge.

(4) Name, address, phone number, facsimile number and E-mail address (if available) of a corporate contact person.

(d) For joint ventures, the total number of employees includes the combined employee count of all corporate entities in the venture.

(e) For government-owned refiners, the total employee count includes all government employees.

(f) Approval of small refiner status for refiners who apply under §80.225(d) will be based on all information submitted under paragraph (c) of this section. The information submitted must show that the refiner employed an average of no more than 1500 people and had an average crude oil capacity less than or equal to 155,000 bpcd. Where appropriate, the employee and crude oil capacity criteria for such refiners will be based on the most recent 12 months of operation.

(g) EPA will notify a refiner of approval or disapproval of small refiner status by letter.

(1) If approved, EPA will notify the refiner of each refinery's applicable annual average sulfur standard, baseline volume, and per-gallon cap standard under §80.240 for the 2004-2007 averaging periods.

(2) If disapproved, the refiner must comply with the standards in §80.195.

(h) If EPA finds that a refiner provided false or inaccurate information on its application for small refiner status, upon notice from EPA the refiner's small refiner status will be void ab initio.

(i) Upon notification to EPA, an approved small refiner may withdraw its status as a small refiner. Effective on January 1 of the year following such notification, the small refiner will become subject to the standards at §80.195.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19307, Apr. 13, 2001]

§80.240   What are the small refiner gasoline sulfur standards?

(a) The gasoline sulfur standards for an approved small refiner are as follows:

Refinery baseline sulfur level Temporary sulfur standards for small refiners applicable from January 1, 2004 through December 31, 2007
Annual average Per gallon cap
0 to 3030.00300
31 to 200Baseline level300
201 to 400200.00300
401 to 60050% of baselineFactor of 1.5 times the average standard.
601 and above300.00450

(b) The refinery annual average sulfur standards must be met on an annual calendar year basis for each refinery owned by a small refiner. The refinery annual average sulfur level is calculated in accordance with the provisions of §80.205.

(c)(1) The refinery annual average standards specified in paragraph (a) of this section apply to the volume of gasoline produced by a small refiner's refinery up to the lesser of:

(i) 105% of the baseline gasoline volume as determined under §80.250(a)(1); or

(ii) The volume of gasoline produced at that refinery during the averaging period by processing crude oil.

(2) If a refiner exceeds the volume limitation in paragraph (c)(1) of this section during any averaging period, the annual average sulfur standard applicable to the refiner for that averaging period is calculated as follows:

eCFR graphic er10fe00.008.gif

View or download PDF

Where:

Ssr=Small refiner annual average sulfur standard.

Vb=Applicable volume under paragraph (c)(1) of this section.

Va=Averaging period gasoline volume.

Sb=Small refiner sulfur baseline as determined under §80.250.

AF=Adjustment factor (120 in 2004; 90 in 2005; and 30 in 2006 and thereafter).

(3) The small refiner average standards under paragraph (a) of this section may be met using sulfur allotments or credits as provided under §80.275 or §80.315.

(4) The provisions for compliance deficits under §80.205(e) do not apply to small refiners subject to the standards under this section.

(d) In the case of any refiner with small refiner status who generates sulfur allotments or credits pursuant to §80.275(a) or §80.305, the baseline applicable to that refiner's refinery for purposes of establishing the standard for the refinery under paragraph (a) of this section beginning in 2004 shall be the lowest annual average sulfur content for any year during the period in which the refiner generated allotments or credits.

(e) Notwithstanding paragraph (a) of this section, the temporary sulfur standards for small refiners may be extended as provided under §80.553.

(f)(1) In the case of a refiner without approved small refiner status who acquires a refinery from a refiner with approved small refiner status under §80.235, the applicable small refiner standards under paragraph (a) of this section will apply to the acquired small refinery for a period up to 30 months from the date of acquisition of the refinery, but no later than December 31, 2007, or, for a refinery for which the Administrator has approved an extension of the small refiner gasoline sulfur standards under §80.553(c), December 31, 2010, after which time the standards of §80.195 shall apply to the acquired refinery.

(2) A refiner may apply to EPA for an additional six months to comply with the standards of §80.195 for the acquired refinery if more than 30 months will be required for the necessary engineering, permitting, construction, and start-up work to be completed. Such applications must include detailed technical information supporting the need for additional time. EPA will base its decision to approve additional time on information provided by the refiner and on other relevant information. In no case will EPA extend the compliance date beyond December 31, 2007, or, for a refinery for which the Administrator has approved an extension of the small refiner gasoline sulfur standards under §80.553(c), December 31, 2010.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 5136, Jan. 18, 2001; 69 FR 39167, June 29, 2004]

§80.245   How does a small refiner apply for a sulfur baseline?

(a) Any refiner seeking small refiner status must apply for a refinery sulfur baseline by the deadline under §80.235 for each of the refiner's refineries by providing the following information:

(1) A sulfur baseline and baseline volume for every refinery calculated in accordance with §80.250.

(2) The following information for each batch of gasoline produced in 1997-1998:

(i) Batch number assigned to the batch under §80.65(d) or §80.101(i);

(ii) Volume; and

(iii) Sulfur content.

(3) For any refiner that acquires and/or reactivates a refinery that was shut down or non-operational between January 1, 1997, and December 31, 1998, the average sulfur level and average volume of gasoline produced during each annual averaging period that the refinery was in operation after the refinery was acquired and/or reactivated. EPA will evaluate all of the information and data submitted by the refiner in determining the appropriate sulfur baseline for the refinery. Where EPA concludes that the data submitted reasonably reflects current sulfur levels, the refinery's baseline will be determined based on the average sulfur content of gasoline produced by the refinery during the most recent annual averaging period in which the refinery was in operation.

(b) The sulfur baseline application must be submitted to the address specified in §80.235(b).

(c)(1) Foreign refiners who do not have an approved individual refinery baseline under §80.94 must follow the procedures specified in §80.410(b).

(2) Foreign refiners who have an approved individual refinery baseline under §80.94, but one that was not in effect for purposes of anti-dumping compliance during the 1997-1998 annual averaging periods, must comply with the requirements of this section for the gasoline produced at the refinery and imported into the United States during each of the annual averaging periods in which the refinery was subject to its individual anti-dumping baseline. EPA will evaluate all of the information and data submitted under this section in determining the foreign refinery's sulfur baseline pursuant to this paragraph. Where EPA concludes that the data submitted reasonably reflects current sulfur levels, the refinery's baseline will be determined based on the annual average sulfur level and volume of gasoline produced by the foreign refinery and imported into the U.S. during the most recent annual averaging period in which the refinery was subject to its individual anti-dumping baseline.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19307, Apr. 13, 2001]

§80.250   How is the small refiner sulfur baseline and volume determined?

(a)(1) The small refiner baseline volume is determined for each refinery as follows:

eCFR graphic er10fe00.009.gif

View or download PDF

Where:

VB=Baseline volume.

VI=Volume of gasoline batch i.

n = Total number of batches of gasoline produced from January 1, 1997, through December 31, 1998 (or the total number of batches of gasoline pursuant to §80.245(a)(3); or, for a foreign refinery, the total number of batches of gasoline produced and imported into the U.S. from January 1, 1997, through December 31, 1998, or the total number of batches of gasoline produced and imported into the U.S. pursuant to §80.245(c)(2)).

i = Individual batch of gasoline produced from January 1, 1997, through December 31, 1998 (or individual batch of gasoline pursuant to §80.245(a)(3); or, for a foreign refinery, individual batch of gasoline produced and imported into the U.S. from January 1, 1997, through December 31, 1998, or individual batch of gasoline produced and imported into the U.S. pursuant to §80.245(c)(2)).

(2) The small refiner sulfur baseline is determined for each refinery as follows:

eCFR graphic er10fe00.010.gif

View or download PDF

Where:

Sb=Small refiner sulfur baseline.

Vi=Volume of gasoline batch i.

Si=Sulfur content of batch i.

n=Total number of batches of gasoline produced from January 1, 1997, through December 31, 1998 (or the total number of batches of gasoline pursuant to §80.245(a)(3); or, for a foreign refinery, the total number of batches of gasoline produced and imported into the U.S. from January 1, 1997, through December 31, 1998, or the total number of batches of gasoline produced and imported into the U.S. pursuant to §80.245(c)(2)).

i=Individual batch of gasoline produced from January 1, 1997, through December 31, 1998 (or individual batch of gasoline produced pursuant to §80.245(a)(3); or, for a foreign refinery, individual batch of gasoline produced and imported into the U.S. from January 1, 1997, through December 31, 1998, or individual batch of gasoline produced and imported into the U.S. pursuant to §80.245(c)(2)).

(3) Any refiner who, under §80.69 or §80.101(d)(4), included oxygenate blended downstream in compliance calculations for 1997-1998 must include this oxygenate in the baseline calculations for sulfur content under this section.

(4) Sulfur baseline calculations under this section shall be conducted to two decimal places.

(b) [Reserved]

(c) If at any time a small refinery baseline is determined to be incorrect, the corrected baseline applies ab initio and the annual average standards and cap standards are deemed to be those applicable under the corrected information.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19307, Apr. 13, 2001]

§80.255   Compliance plans and demonstration of commitment to produce low sulfur gasoline.

The requirements of this section apply to any refiner approved for small refiner standards who wishes to be eligible for a hardship extension under §80.260.

(a) Compliance commitment. By no later than June 1, 2004, any refiner who is approved for small refinery standards must submit a preliminary report to EPA which outlines the refiner's timeline for compliance and a project plan which discusses permits, capital commitments and engineering plans for making the necessary modifications to produce gasoline that meets the 30 ppm refinery average and 80 ppm per-gallon cap sulfur standards under §80.195 on or before January 1, 2008. Documents showing activities and progress in these areas should be provided, if available.

(b) Demonstration of Progress. (1)(i) By no later than June 1, 2005, the small refiner must submit a report to EPA that states in detail the progress toward compliance with the 30 ppm refinery average and 80 ppm cap sulfur standards to date based on their timeline and project plan. The report must include:

(A) Copies of approved permits for construction of the equipment, or the permit application if approval is still pending;

(B) Copies of contracts for design and construction; and

(C) Any available evidence of having secured the necessary financing to complete the required construction;

(ii) If the refiner anticipates any difficulties in meeting its compliance commitments under this section, the refiner must submit a detailed report of all efforts made to date and the factors that may cause delay, including costs, specification of engineering or other design work needed and reasons for delay, specification of equipment needed and any reasons for delay, potential equipment suppliers and history of negotiations, and any other relevant information. If unavailability of equipment is a factor, the report must include a discussion of other options considered and the reasons these other options are not feasible.

(2) By no later than June 1, 2006, the small refiner must submit to EPA evidence that on-site construction has begun and that, absent unforeseen difficulties, the small refiner will be producing complying gasoline by January 1, 2008. If construction has not begun, the refiner must demonstrate that it has made all reasonable efforts to begin construction, that substantial progress is being made to begin construction as soon as possible, and that construction can be completed in time to begin production of gasoline that complies with the standards of §80.195 by January 1, 2008.

(c) Additional information. The Administrator may request any additional information necessary to determine a refiner's commitment and/or progress toward meeting the standards in §80.195 by 2008.

(d) Failure to comply with requirements. Any small refiner who fails to submit the progress reports required under this section will not be eligible for a hardship extension under §80.260.

§80.260   What are the procedures and requirements for obtaining a hardship extension?

(a) An approved small refiner who has filed the reports specified in §80.255 may apply to EPA for a hardship extension of the small refiner standards for calendar years 2008 and 2009. The application must be submitted in writing no later than January 1, 2007, to U.S. EPA, Attn: Sulfur Program (6406J), 1200 Pennsylvania Ave., NW., Washington, DC 20460. For commercial (non-postal) delivery: U.S. EPA, Attn: Sulfur Program, 501 3rd Street NW, Washington, DC 20001.

(b) The application must specify the factors that demonstrate a significant economic hardship and must provide a detailed discussion regarding the inability of the refinery to produce gasoline meeting the requirements of §80.195. Such an application must include, at a minimum, the following information:

(1) Documentation of efforts made to obtain necessary financing, including:

(i) Copies of loan applications for the necessary financing of the construction of appropriate sulfur reduction technology and other equipment procurements or improvements; and

(ii) If financing has been disapproved or is otherwise unsuccessful, documents supporting the basis for that disapproval and evidence of efforts to pursue other means of financing;

(2) A detailed analysis of the reasons the refinery is unable to produce gasoline meeting the standards of §80.195 in 2008, including costs, specification of equipment still needed, potential equipment suppliers, and efforts already completed to obtain the necessary equipment;

(3) If unavailability of equipment is part of the reason for the inability to comply, a discussion of other options considered, and the reasons these other options are not feasible;

(4) If relevant, a demonstration that a needed or lower cost technology is immediately unavailable, but will be available in the near future, and full information regarding when and from what sources it will be available;

(5) Schematic drawings of the refinery configuration as of January 1, 1999, and as of the date of the hardship extension application, and any planned future additions or changes;

(6) If relevant, a demonstration that a temporary unavailability exists of engineering or construction resources necessary for design or installation of the needed equipment;

(7) If sources of crude oil lower in sulfur than what the refiner is currently using are available, full information regarding the availability of these different crude sources, the sulfur content of those crude sources, the cost of the different crude sources over the past five years, and an estimate of gasoline sulfur levels achievable by the refinery if the lower sulfur crude sources were used;

(8) A discussion of any sulfur reductions that can be achieved from current levels;

(9) The date the refiner anticipates compliance with the standards in §80.195 can be achieved at its refinery;

(10) An analysis of the economic impact of compliance on the refiner's business (including financial statements from the last 5 years, or for any time period up to 10 years, at EPA's request); and

(11) Any other information regarding other strategies considered, including strategies or components of strategies that do not involve installation of equipment, and why meeting the standards in §80.195 beginning in 2008 is infeasible.

(c) The hardship extension application must contain a letter signed by the president or the chief operating or chief executive officer of the company, or his/her designee, stating that the information contained in the application is true to the best of his/her knowledge.

§80.265   How will the EPA approve or disapprove a hardship extension application?

(a) EPA will evaluate each application for hardship extension on a case-by-case basis. The factors considered for a hardship extension may include: The refiner's financial position and efforts to obtain capital funding; the refiner's efforts to procure necessary equipment, obtain design and engineering services and construction contractors; the availability of desulfurization equipment; and any other relevant factor. An extension will be granted for a refinery for the 2008 averaging period if the small refiner who owns the refinery adequately demonstrates that severe economic hardship would result if compliance with the standards in §80.195 is required in 2008, or that compliance with the standard in 2008 is not feasible for reasons beyond the refiner's control, and that the refiner has made the best efforts possible to achieve compliance with the national standards by January 1, 2008. Upon reapplication by the refiner, if EPA determines that further relief is appropriate, EPA may grant a further extension through the 2009 averaging period. In no case will a further extension for the 2009 averaging period be granted unless the refiner demonstrates conclusively that it has financing in place and that it will be able to complete construction and meet the national gasoline sulfur standards no later than December 31, 2009.

(b) EPA may request more information, if necessary, for evaluation of the application. If requested information is not submitted within the time specified in EPA's request, or any extensions granted, the application may be denied.

(c) EPA will notify the refiner of approval or disapproval of hardship extension by letter.

(1) If approved, EPA will also notify the refiner of the date that full compliance with the standards specified at §80.195 must be achieved or what interim sulfur levels or schedules apply, if any.

(2) If disapproved, beginning January 1, 2008, the refinery is subject to the requirements in §80.195. Refiners who receive an extension for the 2008 averaging period shall meet the standards in §80.195 beginning on January 1, 2009, unless EPA grants an extension of the hardship relief for an additional year. If such an additional extension is granted, the refiner shall meet the standards in §80.195 on January 1, 2010.

(d) Refiners who receive a hardship extension may be required to meet more stringent standards than those which apply to them during 2007, and/or could be required to offset excess sulfur levels. EPA may impose reasonable conditions on an extension, such as requiring segregation of the small refiner's gasoline or requiring the gasoline to be sold for use in older vehicles only.

§80.270   Can a refiner seek temporary relief from the requirements of this subpart?

(a) EPA may permit a refiner to produce and distribute gasoline which does not meet the requirements of this subpart if the refiner demonstrates that:

(1) Unusual circumstances exist that impose extreme hardship and significantly affect ability to comply by the applicable date; and

(2) It has made best efforts to comply with the requirements of this subpart (including making efforts to obtain credits and/or allotments).

(b) Applications must be submitted to EPA by September 1, 2000. Relief may be granted from some or all of the requirements of this subpart, at EPA's discretion; however, EPA reserves the right to deny applications for appropriate reasons, including unacceptable environmental impact. Approval to distribute gasoline which does not meet the requirements of this subpart may be granted for such time period as EPA determines is appropriate, but shall not extend beyond January 1, 2008.

(c)(1) Applications must include a plan demonstrating how the refiner will comply with the requirements of this subpart as expeditiously as possible. The plan shall include a showing that contracts are or will be in place for engineering and construction of desulfurization equipment, a plan for applying for and obtaining any permits necessary for construction, a description of plans to obtain necessary capital, and a detailed estimate of when the requirements of this subpart will be met.

(2) Applications must include a detailed description of the refinery configuration and operations, including, at a minimum, the following information:

(i) The portion of gasoline production that is produced using an FCC unit;

(ii) The refinery's hydrotreating capacity;

(iii) The refinery's total reformer unit throughput capacity;

(iv) The refinery's total crude capacity;

(v) Total crude capacity of any other refineries owned by the same entity;

(vi) Total volume of gasoline production at the refinery;

(vii) Total volume of other refinery products; and

(viii) Geographic location(s) in which gasoline will be sold.

(3) Applications must include, at a minimum, the following information:

(i) Detailed description of efforts to obtain capital for refinery investments;

(ii) Bond rating of entity that owns the refinery; and

(iii) Estimated capital investment needed to comply with the requirements of this subpart by the applicable date.

(4) Applicants must also provide any other relevant information requested by EPA.

(d) EPA may impose any reasonable conditions on waivers granted under this section.

Allotment Trading Program

§80.271   How can a small refiner obtain an adjustment of its 2004-2007 per-gallon cap standard?

(a) EPA may in its discretion adjust the small refiner per-gallon cap sulfur standard established for a refinery under §80.240(a) (the established small refiner per-gallon standard) if the refiner demonstrates that the burden of complying with the established small refiner per-gallon standard would effectively prevent the refiner from participating in the small refiner relief provided in §80.240. No refiner will be eligible for an adjustment of its established per-gallon standard above 450 ppm. The refinery annual average sulfur standards in §80.240(a) are not affected by this section.

(b) A refiner wishing to apply for such an adjustment of its established small refiner per-gallon sulfur standard under §80.240(a) must send a letter to Gasoline Sulfur Program, U.S. EPA, Office of Transportation and Air Quality, 2000 Traverwood Dr., Ann Arbor, MI 48105 no later than January 1, 2003. Such application must include the following information:

(1) A detailed description of the nature of the difficulty that the per-gallon cap creates;

(2) The refiner's proposed adjusted per-gallon cap standard and the proposed duration for the adjustment, including an explanation of how a lower per-gallon cap standard or shorter duration would not address the hardship;

(3) The refiner's expected actual annual average sulfur level (i.e., prior to the use of any credits or allotments) for each year that the adjustment would be in effect;

(4) The refiner's estimate of the number of gallons of gasoline it produces that will exceed the established small refiner per-gallon standard under §80.240(a) for each year that the adjusted per-gallon cap would apply; and

(5) The number of sulfur credits or allotments that the refiner estimates will be required under paragraph (d) of this section for each year that the adjusted per-gallon cap would apply and a plan for obtaining this number of credits or allotments.

(6) Other relevant information that EPA requests.

(c) EPA will evaluate each application for an adjusted per-gallon cap sulfur standard on a case-by-case basis. EPA may impose any reasonable conditions on adjustments granted under this section. EPA may in its discretion set forth the duration of the adjusted per-gallon cap sulfur standard but in no case shall it extend beyond December 31, 2007.

(d)(1) A small refiner with an adjusted per-gallon sulfur cap standard under paragraph (a) of this section must obtain and use sulfur credits or allotments to offset the amount that the adjusted standard exceeds the established small refiner per-gallon standard under §80.240(a). The number of sulfur credits or allotments needed for each year that the adjusted per-gallon cap would apply is calculated on a per-batch basis according to paragraph (d)(2) of this section and summed over the averaging period.

(2) The formula for determining the number of sulfur credits or allotments that such a small refiner is required to use for any batch of gasoline exceeding the established small refiner per-gallon standard under §80.240(a) is as follows:

CRb = Vb × (Sb−Sc)

Where:

CRb = number of sulfur allotments or sulfur credits needed for the gasoline batch (ppm-gallons)

Vb = Volume of the gasoline batch (gallons)

Sb = Sulfur level of the gasoline batch (ppm)

Sc = Small refiner per-gallon cap standard established for that refinery under §80.240(a), in ppm.

(3) Sulfur credits or allotments used when a small refiner exceeds an established per-gallon cap sulfur standard under §80.240(a) must be separate from and in addition to credits or allotments used for any other purposes provided under §80.275 or §80.315.

(e) The approving official for an adjustment under this section is the Director of the Office of Transportation and Air Quality in the EPA Office of Air and Radiation.

[67 FR 40182, June 12, 2002]

§80.275   How are allotments generated and used?

(a) Generation of allotments and credits in 2003. (1) During 2003 only, any domestic or foreign refiner who produces gasoline from crude oil may have the option to generate credits in accordance with the provisions of §80.305 or generate allotments and credits under paragraph (a)(2) of this section.

(2) If the average sulfur content of the gasoline produced at a refinery is less than the refinery's baseline as determined under §80.295 and is 60 ppm or less, allotments and credits may be generated using the following procedures. This paragraph (a) does not apply to importers.

(i) If the average sulfur content of the gasoline produced at a refinery is less than or equal to 30, and the refinery's sulfur baseline is greater than 120, the following procedures apply:

SATypeB = (30 − Sa) × V

SATypeA = V × 90

CR = (SBase − 120) × V

(ii) If the average sulfur content of the gasoline produced at a refinery is less than or equal to 30, and the refinery's sulfur baseline is greater than 30 but less than or equal to 120, the following procedures apply:

SATypeB = (30 − Sa) × V

SATypeA = (SBase − 30) × V

(iii) If the average sulfur content of the gasoline produced at a refinery is less than or equal to 30, and the refinery's sulfur baseline is less than or equal to 30, the following procedures apply:

SATypeB = (SBase − Sa) × V

(iv) If the average sulfur content of the gasoline produced at a refinery is greater than 30, and the refinery's sulfur baseline is greater than 120, the following procedures apply:

SATypeA = ((120 − Sa) × V) × 0.8

CR = (SBase − 120) × V

(v) If the average sulfur content of the gasoline produced at a refinery is greater than 30, and the refinery's sulfur baseline is less than or equal to 120, the following procedures apply:

SATypeA = ((SBase − Sa) × V) × 0.8

(vi) For purposes of the equations under paragraphs (a)(2)(i) through (v) of this section, the following definitions apply:

SATypeB = Type B sulfur allotments generated.

SATypeA = Type A sulfur allotments generated.

CR = Credits generated.

SBase = Refinery's sulfur baseline value under §80.295.

Sa = Average sulfur content of the gasoline produced at the refinery during 2003 (or for a foreign refinery, all gasoline produced during 2003 that was imported into the U.S.).

V = Volume of gasoline produced at the refinery during 2003 (or for a foreign refinery, all gasoline produced during 2003 that was imported into the U.S.).

(b) Generation of allotments in 2004 and 2005. During 2004 and 2005 only, refiners and importers that have corporate pool average sulfur levels below the corporate pool average standards under §80.195 may generate sulfur allotments separately for each year using the following procedures.

(1) If the average sulfur content of the gasoline produced or imported is less than 30 the following procedures apply:

SATypeB = (30 − Sa) × Va

SATypeA = (SPS − 30) × Va

(2) If the average sulfur content of the gasoline produced or imported is equal to or greater than 30 the following procedures apply:

SATypeA = (SPS − Sa) × Va

(3) For purposes of the equations under paragraphs (b)(1) and (2) of this section, the following definitions apply:

SATypeB = Type B sulfur allotments generated.

SATypeA = Type A sulfur allotments generated.

Sa = Corporate pool average sulfur level for the year.

SPS = Corporate pool average standard (120 in 2004; 90 in 2005).

Va = Total volume of gasoline produced and/or imported during the year.

(4) Oxygenate blenders may not generate allotments under this section.

(c) Use of sulfur allotments to meet standards. (1) Refiners and importers may use Type A and Type B sulfur allotments to meet the corporate pool average standards under §80.195, except that if allotments generated in 2003 or 2004 are used to meet the corporate pool standard in 2005 the allotments generated in 2003 or 2004 shall be reduced in value by 50%.

(2)(i) Small refiners subject to the standards under §80.240, and refiners and importers of gasoline designated as GPA gasoline under §80.219(a), may use sulfur allotments to meet their annual average refinery or importer standards.

(ii) Small refiners subject to the standards under §80.240 and that have received an adjustment of their per-gallon cap sulfur standards pursuant to §80.271(a) may also use sulfur allotments to meet the requirements of §80.271(d)(1) for any refinery that has received such an adjustment.

(d) Transfers of sulfur allotments. Sulfur allotments generated under this section may be transferred, provided that:

(1) No allotment may be transferred more than twice: The first transfer by the refiner or importer who generated the allotment may only be made to a refiner or importer who intends to use the allotment; if the transferee cannot use the allotment, it may make the second, and final, transfer only to a refiner or importer who intends to use the allotment. In no case may an allotment be transferred more than twice before being used or terminated.

(2) The allotment transferor must apply any allotments necessary to meet the transferor's corporate pool average standard before transferring allotments to any other refiner or importer or before converting allotments into credits.

(3) The transferor must supply to the transferee records indicating the year of generation and type of the allotments, the identity of the refiner or importer who generated the allotments, and the identity of the transferring party, if it is not the same part that generated the allotments.

(4) The transferor must inform the transferee whether any transferred allotments are Type A allotments or Type B allotments, as defined in paragraphs (a) and (b) of this section.

(5) In the case of allotments that have been calculated or created improperly, or are otherwise determined to be invalid, the following provisions apply:

(i) Invalid allotments cannot be used to achieve compliance with the transferee's corporate pool average standard or be converted to credits, regardless of the transferee's good faith belief that the allotments were valid.

(ii) The refiner or importer who used the allotments, and any transferor of the allotments, must adjust their allotment records and reports and sulfur calculations as necessary to reflect the proper allotments.

(iii) Any allotments remaining after correcting for the improperly created allotments must first be applied to correct the invalid transfers before the transferor may transfer any other allotments or before converting allotments into credits.

(e) Conversion of allotments into credits. A refiner or importer may convert allotments into credits using the following procedures:

(1) Type A allotments may be converted into credits with the same requirements and limitations on use that apply under §80.315 to credits generated in 2000 through 2003.

(2) Type B allotments may be converted into credits with the same requirements and limitations on use that apply under §80.315 to credits generated in 2004 and later, based on the year of creation of the allotment.

(3) Allotments generated in 2003 or 2004 which are carried over to 2005 are discounted by 50 percent. The discounted allotments may be used to demonstrate compliance with the corporate pool average standard in 2005, or they may be converted into credits for use in demonstrating compliance with the refinery average standard in 2005, or in a subsequent averaging period, in accordance with the provisions of this paragraph (e). Any allotments generated in 2003 or 2004 that are converted into credits before being carried over to 2005 are not discounted. Any allotments generated in 2003 or 2004 that are converted into credits before being carried over to 2005 may be reconverted into allotments for use in demonstrating compliance with the corporate pool average standard in 2005, but such reconverted allotments are discounted by 50 percent.

(f) Small refiners. Small refiners subject to the standards under §80.240 may not generate sulfur allotments under paragraph (b) of this section.

(g) GPA gasoline. GPA gasoline that is included in the refiner's or importer's corporate pool average under §80.216(f)(2) must be included in the calculations under paragraph (b) of this section. No refiner or importer may generate allotments in 2004 or 2005 who is not required to meet the corporate pool average standards.

(h) Allotments and credits under this program are in units of “ppm-gallons”.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40183, June 12, 2002]

Averaging, Banking and Trading (ABT) Program—General Information

§80.280   [Reserved]

§80.285   Who may generate credits under the ABT program?

(a) Credit generation in 2000 through 2003. (1) Credits may be generated in 2000 through 2003 under §80.305 by refiners who produce gasoline from crude oil, and are:

(i) Refiners who establish a sulfur baseline under §80.295 for a refinery;

(ii) Foreign refiners for refineries with an approved baseline under §80.94, or refineries with baselines established in accordance with §80.290(d); or

(iii) Small refiners for any refinery subject to the standards under §80.240, using their small refiner baseline established under §80.250 for that refinery.

(2) Importers and oxygenate blenders may not generate credits under §80.305.

(b) Credit generation beginning in 2004. (1) Credits may be generated beginning in 2004 under §80.310 by:

(i) Refiners for any refinery, and importers subject to the standards under §80.195;

(ii) Refiners and importers of gasoline designated as GPA gasoline under §80.219, using the least of 150.00 ppm, or the refinery's or importer's 1997-98 baseline calculated under §80.295 plus 30.00 ppm, or the refinery's lowest annual average sulfur level for any year from 2000 through 2003 during which the refinery generated credits or allotments plus 30.00 ppm (for any party generating credits under both paragraphs (b)(1)(i) of this section and this paragraph (b)(1)(ii), such credits must be calculated separately); or

(iii) Small refiners for any refinery subject to the standards under §80.240, using refinery's standard established under §80.240.

(2) Generation of credits under §80.310 for all imported gasoline shall be through the importer.

(3) Oxygenate blenders may not generate credits under §80.310.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19307, Apr. 13, 2001; 67 FR 40183, June 12, 2002; 71 FR 54912, Sept. 20, 2006]

§80.290   How does a refiner apply for a sulfur baseline?

(a) The refiner must submit an application to EPA which includes the information required under paragraph (c) of this section no later than September 30 of the year in which the refiner plans to begin generating credits, or the refiner or an importer plans to sell gasoline in the geographic phase-in area in accordance with §80.217.

(b) The sulfur baseline request must be sent to: U.S. EPA, Attn: Sulfur Program (6406J), 1200 Pennsylvania Ave., NW Washington, DC 20460. For commercial (non-postal) delivery: U.S. EPA, Attn: Sulfur Program, 501 3rd Street NW., Washington, DC 20001.

(c) The sulfur baseline application must include the following information:

(1) A listing of the names and addresses of all refineries owned by the corporation for which the refiner is applying for a sulfur baseline.

(2) The annual average gasoline sulfur baseline for gasoline produced in 1997-1998, for each refinery for which the refiner is applying for a sulfur baseline, calculated in accordance with §80.295.

(3) A letter signed by the president, chief operating or chief executive officer, of the company, or his/her delegate, stating that the information contained in the sulfur baseline determination is true to the best of his/her knowledge.

(4) Name, address, phone number, facsimile number and E-mail address of a corporate contact person.

(5) The following information for each batch of gasoline produced in 1997-1998:

(i) Batch number assigned to the batch under §80.65(d) or §80.101(i);

(ii) Volume; and

(iii) Sulfur content.

(6) For any refiner that acquires and/or reactivates a refinery that was shut down or non-operational between January 1, 1997, and December 31, 1998, the average sulfur level of gasoline produced during each annual averaging period that the refinery was in operation after the refinery was acquired and/or reactivated. EPA will evaluate all of the data submitted by the refiner in determining the appropriate sulfur baseline for the refinery. Where EPA concludes that the data submitted reasonably reflects current sulfur levels, the refinery's baseline will be determined based on the average sulfur content of the refinery's gasoline production during the most recent annual averaging period the refinery was in operation.

(d)(1) Foreign refiners who do not have an approved refinery baseline under §80.94 must follow the procedures specified in §80.410(b).

(2) Foreign refiners who have an approved individual refinery baseline under §80.94, but one that was not in effect for purposes of anti-dumping compliance during the 1997-1998 annual averaging periods, must comply with the requirements of this section for the gasoline produced at the refinery and imported to the U.S. during each annual averaging period in which the refinery was subject to its individual anti-dumping baseline. EPA will evaluate all of the information and data submitted under this section in determining a foreign refinery's sulfur baseline pursuant to this paragraph (d). Where EPA concludes that the data submitted reasonably reflects current sulfur levels, a foreign refinery's baseline sulfur level under this paragraph will be determined based on the average sulfur level of gasoline produced by the foreign refinery and imported to the U.S. during the most recent annual averaging period in which the refinery was subject to its individual anti-dumping baseline.

(e) Within 60 days of receipt of an application under this section, EPA will notify the refiner of approval of the refinery's baseline or of any deficiencies in the application.

(f) If at any time the baseline submitted in accordance with the requirements of this section is determined to be incorrect, EPA will notify the refiner of the corrected baseline.

(g) Any refiner that seeks temporary relief under §80.270 shall apply for a refinery sulfur baseline in accordance with the provisions of this section and §80.295, and if applicable, §80.410(b), no later than September 1, 2000.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19308, Apr. 13, 2001]

ABT Program—Baseline Determination

§80.295   How is a refinery sulfur baseline determined?

(a) A refinery's gasoline sulfur baseline for the purpose of generating credits during years 2000 through 2003 is calculated using the following equation:

eCFR graphic er10fe00.011.gif

View or download PDF

Where:

SBase=Sulfur baseline value.

Vi=Volume of gasoline batch i.

Si=Sulfur content of gasoline batch i.

n = Total number of batches of gasoline produced during January 1, 1997 through December 31, 1998 (or the total number of batches of gasoline pursuant to §80.290(c)(6); or, for a foreign refinery, the total number of batches of gasoline produced and imported into the U.S. during January 1, 1997 through December 31, 1998, or, the total number of batches of gasoline produced and imported into the U.S. pursuant to §80.290(d)(2)).

i = Individual batch of gasoline produced during January 1, 1997 through December 31, 1998 (or individual batch of gasoline produced pursuant to §80.290(c)(6); or, for a foreign refinery, individual batch of gasoline produced and imported into the U.S. during January 1, 1997 through December 31, 1998, or, individual batch of gasoline produced and imported into the U.S. pursuant to §80.290(d)(2)).

(b) Any refiner who, under §80.69 or §80.101(d)(4), included oxygenate blended downstream in compliance calculations for 1997-1998 for a refinery must include this oxygenate in the baseline calculations for sulfur content for that refinery under paragraph (a) of this section.

(c) Sulfur baseline calculations under this section shall be conducted to two decimal places.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19308, Apr. 13, 2001]

§80.300   [Reserved]

ABT Program—Credit Generation

§80.305   How are credits generated during the time period 2000 through 2003?

(a) Credits must be calculated as follows:

CRa=Va × (SBase − Sa)

Where:

CRa=Credits generated for the averaging period.

Va = Total volume of gasoline produced during the averaging period at the refinery (or for a foreign refinery, the total volume of gasoline produced during the averaging period at the refinery that was imported into the U.S. in accordance with the requirements of §80.410)

SBase=Sulfur baseline value for the refinery established under §80.250 or §80.295.

Sa = Actual annual average sulfur level, calculated in accordance with the provisions of §80.205, for gasoline produced during the averaging period by the refinery, exclusive of any credits, (or for a foreign refinery, the actual average sulfur level, calculated in accordance with the provisions of §80.205, for gasoline produced during the averaging period at the refinery that was imported into the U.S., in accordance with the requirements of §80.410, exclusive of any credits.)

(b) The refiner may include any oxygenates included in its RFG or conventional gasoline volume under §§80.65 and 80.101(d)(4), respectively, for the purpose of generating credits.

(c) Credits under this program are in units of “ppm-gallons”.

(d) Refiners may generate credits for gasoline produced during an averaging period for a refinery only if the annual average sulfur level for the gasoline produced at that refinery during the averaging period is less than 0.90 of the refinery's baseline under §80.250 or §80.295.

(e) Credits generated in accordance with paragraph (a) of this section must be identified by the year of creation.

(f) For gasoline produced during the year 2000, the averaging period for credits generated in accordance with paragraph (a) of this section may be less than the full calendar year. Such partial-year averaging period will begin with the first full month for which all applicable sampling, testing, and documentation requirements are met.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19308, Apr. 13, 2001; 67 FR 40183, June 12, 2002]

§80.310   How are credits generated beginning in 2004?

(a) A refiner for any refinery, or an importer, may generate credits in 2004 and thereafter if the annual average sulfur level for gasoline produced or imported for the averaging period is less than 30.00 ppm; or, for refiners that are subject to the small refiner standards in §80.240, the small refiner annual average sulfur standard applicable to that refinery; or, for refiners and importers subject to the GPA standards in §80.216, the least of 150.00 ppm, or the refinery's or importer's 1997-1998 sulfur level calculated under §80.295 plus 30.00 ppm, or the refinery's lowest annual average sulfur level for any year from 2000 through 2003 during which the refinery generated credits or allotments plus 30.00 ppm.

(b) Credits are calculated as follows:

CRa = Va × (SCredit − Sa)

Where:

CRa = Credits generated for the averaging period.

Va = Total annual volume of gasoline produced at a refinery or imported during the averaging period.

SCredit = 30.00 ppm; or the sulfur standard for a small refinery established under §80.240; or, for gasoline designated as GPA gasoline under §80.219, the least of 150.00 ppm, or the refinery's or importer's 1997-1998 sulfur level calculated under §80.295 plus 30.00 ppm, or the refinery's lowest annual average sulfur level for any year from 2000 through 2003 during which the refinery generated credits or allotments plus 30.00 ppm.

Sa = Actual annual average sulfur level, calculated in accordance with the provisions of §80.205, for gasoline produced at a refinery or imported during the averaging period, exclusive of any credits.

(c) Credits generated in accordance with this section must be identified by the year of creation.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19308, Apr. 13, 2001; 67 FR 40184, June 12, 2002; 71 FR 54912, Sept. 20, 2006]

ABT Program—Credit Use

§80.315   How are credits used and what are the limitations on credit use?

(a) Credit use. Credits may be used to meet the applicable refinery or importer annual average sulfur standards under §80.195, §80.216, or §80.240, or may be used to meet the offset requirement under §80.271(d)(1) for any refinery with an adjustment of itsper-gallon cap standard pursuant to §80.271(a), provided that:

(1) Sulfur credits used were generated pursuant to the requirements of this subpart; and

(2) The requirements of paragraphs (b) and (c) of this section are met.

(b) Credit transfers. (1) Credits obtained from other persons may be used to meet the annual average standards specified in §80.195, §80.216, or §80.240, or may be used to meet the offset requirement under §80.271(d)(1) for any refinery with an adjustment of itsper-gallon cap standard pursuant to §80.271(a), if all the following conditions are met:

(i) The credits are generated and reported according to the requirements of this subpart.

(ii) The credits are used in compliance with the limitations regarding the appropriate periods for credit use in this subpart.

(iii) Any credit transfer takes place no later than the last day of February following the calendar year averaging period when the credits are used.

(iv) No credit may be transferred more than twice: The first transfer by the refiner or importer who generated the credit may only be made to a refiner or importer who intends to use the credit; if the transferee cannot use the credit, it may make the second, and final, transfer only to a refiner or importer who intends to use the credit. In no case may a credit be transferred more than twice before being used or terminated.

(v) The credit transferor must apply any credits necessary to meet the transferor's applicable average standard before transferring credits to any other refiner or importer.

(vi) No credits may be transferred that would result in the transferor having a negative credit balance.

(vii) Each transferor must supply to the transferee records indicating the years the credits were generated, the identity of the refiner or importer who generated the credits, and the identity of the transferring party, if it is not the same party that generated the credits.

(2) In the case of credits that have been calculated or created improperly, or are otherwise determined to be invalid, the following provisions apply:

(i) Where a refiner's baseline has been determined to be incorrect under §80.250(c) or §80.290(f), any credits generated, banked, used or traded must be adjusted to reflect the corrected baseline.

(ii) Invalid credits cannot be used to achieve compliance with the transferee's averaging standard, regardless of the transferee's good faith belief that the credits were valid.

(iii) The refiner or importer who used the credits, and any transferor of the credits, must adjust their credit records and reports and sulfur calculations as necessary to reflect the proper credits.

(iv) Any properly created credits existing in the transferor's credit balance after correcting the credit balance, and after the transferor applies credits as needed to meet the average standard at the end of the compliance year, must first be applied to correct the invalid transfers before the transferor trades or banks the credits.

(c) Limitations on credit use. (1) Credits generated prior to 2004 may only be used for demonstrating compliance with the refinery or importer annual average standards under §80.195 during the 2005 and 2006 averaging periods. Such credits may be used to demonstrate compliance with the standards under §80.216 during the 2004 through 2006 averaging periods, and with the standards under §80.240 during the 2004 through 2007 averaging periods, and the 2008 and 2009 averaging periods, if allowed under the terms of a hardship extension under §80.265.

(2) Credits generated in 2004 or later may only be used for demonstrating compliance with standards during an averaging period within five years of the year of generation.

(3) A refiner or importer possessing credits must use all credits prior to falling into compliance deficit under §80.205(e).

(4) Credits may not be used to meet corporate pool average standards under §80.195.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40184, June 12, 2002]

§§80.320-80.325   [Reserved]

Sampling, Testing and Retention Requirements for Refiners and Importers

§80.330   What are the sampling and testing requirements for refiners and importers?

(a) Sample and test each batch of gasoline. (1) Refiners and importers shall collect a representative sample from each batch of gasoline produced or imported and test each sample to determine its sulfur content for compliance with requirements under this subpart prior to the gasoline leaving the refinery or import facility, using the sampling and testing methods provided in this section.

(2) Except as provided in paragraph (a)(3) of this section, the requirements of this section apply beginning January 1, 2004, or January 1 of the first year of allotment or credit generation under §80.275 or §80.305, whichever is earlier.

(3) Prior to January 1, 2004:

(i) Any refiner may release gasoline from the refinery prior to obtaining the test results required under paragraph (a)(1) of this section.

(ii) Any refiner of conventional gasoline may combine samples of gasoline from more than one batch of gasoline or blendstock prior to analysis and treat such composite sample as one batch of gasoline or blendstock pursuant to the requirements of §80.101(i)(2).

(4)(i) Beginning January 1, 2004, any refiner who produces gasoline using computer-controlled in-line blending equipment is exempt from the requirement of paragraph (a)(1) of this section to obtain the test results required under paragraph (a)(1) of this section prior to the gasoline leaving the refinery, provided that the refiner obtains an exemption from this requirement from EPA. To obtain such exemption, the refiner must:

(A) Have been granted an in-line blending exemption under §80.65(f)(4); or

(B) If the refiner has not been granted an exemption under §80.65(f)(4), submit to EPA all of the information required under §80.65(f)(4)(i)(A). A letter signed by the president, chief operating or chief executive officer of the company, or his/her designee, stating that the information contained in the submission is true to the best of his/her belief must accompany any submission under this paragraph (a)(4)(i)(B).

(ii) Refiners who seek an exemption under paragraph (a)(4)(i) of this section must comply with any request by EPA for additional information or any other requirements that EPA includes as part of the exemption.

(iii) Within 60 days of EPA's receipt of a submission under paragraph (a)(4)(i)(B) of this section, EPA will notify the refiner if the exemption is not approved or of any deficiencies in the refiner's submission, or if any additional information is required or other requirements are included in the exemption pursuant to paragraph (a)(4)(ii) of this section. In the absence of such notification from EPA, the effective date of an exemption under paragraph (a)(4)(i) of this section for refiners who do not hold an exemption under §80.65(f)(4) is 60 days from EPA's receipt of the refiner's submission under paragraph (a)(4)(i)(B) of this section.

(iv) EPA reserves the right to modify the requirements of an exemption under paragraph (a)(4)(i) of this section, in whole or in part, at any time, if EPA determines that the refiner's operation does not effectively or adequately control, monitor or document the sulfur content of the refinery's gasoline production, or if EPA determines that any other circumstances exist which merit modification of the requirements of an exemption, such as advancements in the state of the art for in-line blending measurement which allow for additional control or more accurate monitoring or documentation of sulfur content. If EPA finds that a refiner provided false or inaccurate information in any submission required for an exemption under this section, upon notification from EPA, the refiner's exemption will be void ab initio.

(b) Sampling methods. For purposes of paragraph (a) of this section, refiners and importers shall sample each batch of gasoline by using one of the following methods:

(1) Manual sampling of tanks and pipelines shall be performed according to the applicable procedures specified in one of the two following methods:

(i) American Society for Testing and Materials (ASTM) method D 4057-95, entitled “Standard Practice for Manual Sampling of Petroleum and Petroleum Products.”

(ii) Samples collected under the applicable procedures in ASTM method D 5842-95, entitled “Standard Practice for Sampling and Handling of Fuels for Volatility Measurement,” may be used for measuring sulfur content if there is no contamination present that could affect the sulfur test result.

(2) Automatic sampling of petroleum products in pipelines shall be performed according to the applicable procedures specified in ASTM method D 4177-95, entitled “Standard Practice for Automatic Sampling of Petroleum and Petroleum Products.”

(c) Test method for measuring sulfur content of gasoline.

(1) For purposes of paragraph (a) of this section, refiners and importers shall use the method provided in §80.46(a)(1) or one of the alternative test methods listed in §80.46(a)(3) to measure the sulfur content of gasoline they produce or import through December 31, 20. Beginning January 1, 2016, for purposes of paragraph (a) of this section, refiners and importers shall use an approved method in §80.47.

(2) Except as provided in §80.350 and in paragraph (c)(1) of this section, any ASTM sulfur test method for liquefied fuels may be used for quality assurance testing under §80.400, or to determine whether gasoline qualifies for a S-RGAS downstream standard, if the protocols of the ASTM method are followed and the alternative method is correlated to the method provided in §80.46(a)(1).

(d) Test method for sulfur in butane. (1) Refiners and importers shall use the method provided in §80.46(a)(2) through December 31, 2015 to measure the sulfur content of butane when the butane constitutes a batch of gasoline. Beginning January 1, 2016, refiners and importers shall use an approved method in §80.47 to measure the sulfur content of butane when the butane constitutes a batch of gasoline.

(2) Except as provided in paragraph (d)(1) of this section, any ASTM sulfur test method for gaseous fuels may be used for quality assurance testing under §§80.340(b)(4) and 80.400, if the protocols of the ASTM method are followed and the alternative test method is correlated to the method provided in §80.46(a)(2) through December 31, 20, or in §80.47 beginning January 1, 2016.

(e) Incorporations by reference. ASTM standard practices D 4057-95, D 4177-95 and D 5842-95 are incorporated by reference. These incorporations by reference were approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from the American Society for Testing and Materials, 100 Barr Harbor Dr., West Conshohocken, PA 19428. Copies may be inspected at the Air Docket Section (LE-131), room M-1500, U.S. Environmental Protection Agency, Docket No. A-97-03, 1200 Pennsylvania Ave., NW., Washington, DC 20460, or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19308, Apr. 13, 2001; 68 FR 57820, Oct. 7, 2003; 79 FR 23652, Apr. 28, 2014]

§80.335   What gasoline sample retention requirements apply to refiners and importers?

(a) Sample retention requirements. Beginning January 1, 2004, or January 1 of the first year allotments or credits are generated under §§80.275 and 80.305, whichever is earlier, any refiner or importer shall:

(1) Collect a representative portion of each sample analyzed under §80.330(a), of at least 330 ml in volume;

(2) Retain sample portions for the most recent 20 samples collected, or for each sample collected during the most recent 21 day period, whichever is greater, not to exceed 90 days for any given sample;

(3) Comply with the gasoline sample handling and storage procedures under §80.330(b) for each sample portion retained; and

(4) Comply with any request by EPA to:

(i) Provide a retained sample portion to the Administrator's authorized representative; and

(ii) Ship a retained sample portion to EPA, within 2 working days of the date of the request, by an overnight shipping service or comparable means, to the address and following procedures specified by EPA, and accompanied with the sulfur test result for the sample determined under §80.330(a).

(b) Sample retention requirement for samples subject to independent analysis requirements. (1) Any refiner or importer who meets the independent analysis requirements under §80.65(f) for any batch of reformulated gasoline or RBOB will have met the requirements of paragraph (a) of this section, provided the independent laboratory meets the requirements of paragraph (a) of this section for the gasoline batch.

(2) For samples retained by an independent laboratory under paragraph (b) of this section, the test results required to be submitted under paragraph (a) of this section shall be the test results determined under §80.65(e).

(c) Sampling compliance certification. Any refiner or importer shall include with each annual report filed under §80.370, the following statement, which must accurately reflect the facts and must be signed and dated by the same person who signs the annual report:

I certify that I have made inquiries that are sufficient to give me knowledge of the procedures to collect and store gasoline samples, and I further certify that the procedures meet the requirements of the ASTM procedures required under 40 CFR 80.330.

(d) Prior to January 1, 2004, for purposes of complying with the requirements of this section, refiners who analyze composited samples under §80.330(a)(3) must retain portions of the composited samples. Portions of samples of each batch comprising the composited samples are not required to be retained.

(e) For purposes of complying with the requirements of this section for RBOB, a sample of each RBOB batch produced plus a sample of the ethanol used to conduct the handblend testing pursuant to §80.69 must be retained.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19309, Apr. 13, 2001]

§80.340   What standards and requirements apply to refiners producing gasoline by blending blendstocks into previously certified gasoline (PCG)?

(a) Any refiner who produces gasoline by blending blendstock into PCG must meet the requirements of §80.330 to sample and test every batch of gasoline as follows:

(1)(i) Sample and test to determine the volume and sulfur content of the PCG prior to blendstock blending.

(ii) Sample and test to determine the volume and sulfur content of the gasoline subsequent to blendstock blending.

(iii) Calculate the volume and sulfur content of the blendstock, by subtracting the volume and sulfur content of the PCG from the volume and sulfur content of the gasoline subsequent to blendstock blending. The blendstock is a batch for purposes of compliance calculations and reporting. For purposes of this paragraph (a), compliance with the applicable cap standard under §80.195(a) shall be determined based on the sulfur content of the gasoline subsequent to blendstock blending.

(2) In the alternative, a refiner may sample and test each batch of blendstock when received at the refinery to determine the volume and sulfur content, and treat each blendstock receipt as a separate batch for purposes of compliance calculations for the annual average sulfur standard and for reporting. This alternative applies only if every batch of blendstock used at a refinery during an averaging period has a sulfur content that is equal to, or less than, the applicable per-gallon cap standard under §§80.195 or 80.216.

(b) Refiners who blend only butane into PCG may meet the sampling and testing requirements by using sulfur test results of the butane supplier, provided that the following requirements are also met:

(1) The sulfur content of the butane received from the butane supplier must not exceed the following sulfur standards on a per-gallon basis as follows:

(i)(A) 120 ppm in 2004;

(B) 30 ppm from January 1, 2005 through December 31, 2016; and

(C) 10 ppm on or after January 1, 2017.

(ii) Except that the per-gallon sulfur content of butane blended to PCG that is designated as GPA gasoline shall not exceed 150 ppm from January 1, 2004, through December 31, 2006.

(2) The refiner obtains test results from the butane supplier that demonstrate that the sulfur content of each load of butane supplied does not exceed the applicable per-gallon sulfur standard under paragraph (b)(1) of this section through test results of samples of the butane contained in the storage tank from which the butane blender is supplied.

(i) Testing for the sulfur content of the butane by the supplier must be subsequent to each receipt of butane into the supplier's storage tank, or the testing must be immediately before transfer of butane to the butane blender.

(ii) The testing must be performed by the method specified in §80.46(a)(2) or by the alternative method specified in §80.46(a)(4).

(iii) The butane blender must obtain a copy of the butane supplier's test results, at the time of each transfer of butane to the butane blender, that reflect the sulfur content of each load of butane supplied to the butane blender.

(3) The sulfur content and volume of each batch of gasoline produced is that of the butane the refiner blends into gasoline for purposes of calculating compliance with the standards in §§80.195 and 80.216.

(4) The refiner must conduct a quality assurance program of sampling and testing for each butane supplier that demonstrates the butane sulfur content does not exceed the applicable per-gallon sulfur standard in paragraph (b)(1) of this section. The frequency of butane sampling and testing, for each butane supplier, must be one sample for every 500,000 gallons of butane received, or one sample every 3 months, whichever results in more frequent sampling.

(5) If any of the requirements of this section are not met, in whole or in part, for any butane blended into gasoline, that butane is deemed in violation of the gasoline sulfur standards in §80.195 or §80.216, as applicable.

(c) The procedures in §§80.65(i) and 80.101(g)(9) may be applied for purposes of demonstrating compliance with the sulfur standards under this subpart.

(d) Refiners who blend only blender-grade pentane into PCG pursuant to the requirements of §80.85 may meet the sampling and testing requirements by using sulfur test results of the pentane supplier pursuant to the requirements §80.85, provided that the following requirements are also met:

(1) The sulfur content and volume of each batch of gasoline produced is that of the blender-grade pentane the refiner blends into gasoline for purposes of calculating compliance with the standards in §§80.195 and 80.216.

(2) If any of the requirements of this section are not met, in whole or in part, for any pentane blended into gasoline, that pentane is deemed in violation of the gasoline sulfur standards in §80.85, or §80.86, §80.195, §80.216 as applicable.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 67108, Dec. 28, 2001; 68 FR 57820, Oct. 7, 2003; 79 FR 23652, Apr. 28, 2014]

§80.345   [Reserved]

§80.350   What alternative sulfur standards and requirements apply to importers who transport gasoline by truck?

Importers who import gasoline into the United States by truck may comply with the following requirements instead of the requirements to sample and test every batch of gasoline under §80.330, and the annual sulfur average and per-gallon cap standards otherwise applicable to importers under §§80.195 and 80.216:

(a) Alternative standards. The imported gasoline must comply with the standards in paragraph (a)(1) or (a)(2) of this section as follows:

(1) The applicable average standards, corporate average standards and per-gallon standards under §80.195(a)(1), except that imported gasoline designated for use in the geographic phase-in area from January 1, 2004, through December 31, 2006 must comply with an average standard of 150 ppm and a per-gallon standard of 300 ppm; or

(2) In 2004, a per-gallon standard of 120 ppm, and in 2005 and subsequent years a per-gallon standard of 30 ppm, except that imported gasoline designated for use in the geographic phase-in area from January 1, 2004, through December 31, 2006 must comply with a per-gallon standard of 150 ppm.

(b) Terminal testing. The importer may use test results for sulfur content testing conducted by the terminal operator, for gasoline contained in the storage tank from which trucks used to transport gasoline into the United States are loaded, for purposes of demonstrating compliance with the standards in paragraph (a) of this section, provided the following conditions are met:

(1) The sampling and testing shall be performed after each receipt of gasoline into the storage tank, or immediately before each transfer of gasoline to the importer's truck.

(2) The sampling and testing shall be performed using the methods specified in §80.330(b) and §80.46(a)(1) or one of the alternative test methods listed in §80.46(a)(3), respectively.

(3) At the time of each transfer of gasoline to the importer's truck for import to the U.S., the importer must obtain a copy of the terminal test result that indicates the sulfur content of the truck load.

(c) Quality assurance program. The importer must conduct a quality assurance program, as specified in this paragraph, for each truck loading terminal.

(1) Quality assurance samples must be obtained from the truck-loading terminal and tested by the importer, or by an independent laboratory, and the terminal operator must not know in advance when samples are to be collected.

(2) The sampling and testing must be performed using the methods specified in §§80.330(b) and 80.46(a)(1), respectively.

(3) The quality assurance test results for sulfur must differ from the terminal test result by no more than the ASTM reproducibility of the terminal's test results, as determined by the following equation:

R = 105× ((S+2)/104)0.4

Where:

R = ASTM reproducibility.

S = Sulfur content based on the terminal's test result.

(4) The frequency of the quality assurance sampling and testing must be at least one sample for each fifty of an importer's trucks that are loaded at a terminal, or one sample per month, whichever is more frequent.

(d) Party required to conduct quality assurance testing. The quality assurance program under paragraph (c) of this section shall be conducted by the importer. In the alternative, this testing may be conducted by an independent laboratory that meets the criteria under §80.65(f)(2)(iii), provided the importer receives, no later than 21 days after the sample was taken, copies of all results of tests conducted.

(e) Assignment of batch numbers. The importer must treat each truck load of imported gasoline as a separate batch for purposes of assigning batch numbers and maintaining records under §80.365, and reporting under §80.370.

(f) EPA inspections of terminals. EPA inspectors or auditors, and auditors conducting attest engagements under §80.415, must be given full and immediate access to the truck-loading terminal and any laboratory at which samples of gasoline collected at the terminal are analyzed, and must be allowed to conduct inspections, review records, collect gasoline samples, and perform audits. These inspections or audits may be either announced or unannounced.

(g) Certified Sulfur-FRGAS. This section does not apply to Certified Sulfur-FRGAS.

(h) Reporting requirements. Any importer who elects to comply with the alternative standards in paragraph (a) of this section shall comply with the following requirements:

(1) All importer recordkeeping and reporting requirements under §§80.365 and 80.370, except as provided in paragraph (h)(2) of this section.

(2) An importer who elects to comply with the alternative standards in paragraph (a)(2) of this section must certify in the annual report whether it is in compliance with the applicable per-gallon batch standard set forth in paragraph (a)(2) of this section, in lieu of providing the information required by §80.370(a) regarding annual average sulfur content and compliance with the average standard under §80.195.

(i) Effect of noncompliance. If any of the requirements of this section are not met, all gasoline imported by the truck importer during the time any requirements are not met is deemed in violation of the gasoline sulfur average and per-gallon cap standards in §80.195 or §80.216, as applicable. Additionally, if any requirement is not met, EPA may notify the importer of the violation and, if the requirement is not fulfilled within 10 days of notification, the truck importer may not in the future use the sampling and testing provisions in this section in lieu of the provisions in §80.330.

[38 FR 1255, Jan. 10, 1973, as amended at 68 FR 57820, Oct. 7, 2003]

§80.355   [Reserved]

Recordkeeping and Reporting Requirements

§80.360   [Reserved]

§80.365   What records must be kept?

(a) Records that must be kept. Beginning January 1, 2004, any person who produces, imports, sells, offers for sale, dispenses, distributes, supplies, offers for supply, stores, or transports gasoline, shall keep records that contain the following information:

(1) The product transfer document information required under §§80.77, 80.106, 80.210 and 80.219; and

(2) For any sampling and testing for sulfur content required under this subpart:

(i) The location, date, time and storage tank or truck identification for each sample collected;

(ii) The name and title of the person who collected the sample and the person who performed the test;

(iii) The results of the test as originally printed by the testing apparatus, or where no printed result is produced, the results as originally recorded by the person who performed the test; and

(iv) Any record that contains a test result for the sample that is not identical to the result recorded under paragraph (a)(2)(iii) of this section.

(b) Additional records that refiners and importers must keep. Beginning January 1, 2004, or January 1 of the first year allotments or credits are generated under §80.275 or §80.305, whichever is earlier, any refiner for each of its refineries, and any importer for the gasoline it imports, shall keep records that include the following information:

(1) For each batch of gasoline produced or imported:

(i) The batch volume;

(ii) The batch number assigned under §80.65(d)(3) and the appropriate designation under paragraph (b)(1)(i) of this section; except that if composite samples of conventional gasoline representing multiple batches produced subsequent to December 31, 2003, are tested under §80.101(i)(2) for anti-dumping compliance purposes, for purposes of this subpart a separate batch number must be assigned to each batch using the batch numbering procedures under §80.65(d)(3);

(iii) The date of production or importation; and

(iv) If appropriate, the designation of the batch as GPA gasoline under §80.219, California gasoline under §80.375, exempt gasoline for research and development under §80.380, or for export outside the United States.

(2) Information regarding credits and allotments, separately kept for credits and for allotments; separately kept according to the year of creation for the credits and for the allotments; and for credit generation or use starting in 2004, separately kept for GPA gasoline and other gasoline. Information shall be kept separately for different types of allotments and credits generated under §§80.275(e)(1), 80.275(e)(2), 80.305 and 80.310:

(i) The number in the refiner's or importer's possession at the beginning of the averaging period;

(ii) The number generated;

(iii) The number used;

(iv) If any were obtained from or transferred to other parties, for each other party its name, its EPA refiner or importer registration number, and the number obtained from, or transferred to, the other party;

(v) The number that expired at the end of the averaging period;

(vi) The number of allotments, by type, that were converted into credits under §80.275(e);

(vii) The number in the refiner's or importer's possession that will carry over into the subsequent averaging period; and

(viii) Contracts or other commercial documents that establish each transfer of credits and allotments from the transferor to the transferee.

(3) The calculations used to determine the applicable refiner baseline under §80.250 or §80.295.

(4) The calculations used to determine compliance with the applicable sulfur average standards of §80.195, §80.216, §80.240, or §80.270.

(5) The calculations used to determine the number of credits or allotments generated under §80.305, §80.310 or §80.275.

(6) The calculations used to determine any applicable adjusted cap standard under §80.195(d).

(7) A copy of all reports submitted to EPA under §80.370.

(8) In the case of parties who process transmix, records of any sampling and testing required under §80.213.

(c) Additional records importers must keep. Any importer shall keep records that identify and verify the source of each batch of certified Sulfur-FRGAS and non-certified Sulfur-FRGAS imported and demonstrate compliance with the requirements for importers under §80.410(o).

(d) Length of time records must be kept. The records required in this section shall be kept for five years from the date they were created; except that:

(1) Transfers of credits and allotments. Records relating to credit and allotment transfers, except as provided in paragraph (d)(2) of this section, shall be kept by the transferor for 5 years from the date the credits or allotments are transferred, and shall be kept by the transferee for 5 years from the date the credits or allotments were transferred, used or terminated, whichever is later.

(2) Early credits and allotments. (i) Where the party generating the credits or allotments does not transfer the credits or allotments, records must be kept for 5 years from the date of creation, use, or termination, whichever is later.

(ii) Where early credits or allotments are transferred, records relating to such credits or allotments shall be kept by both parties for 5 years from the date the credits or allotments were transferred, used, or terminated, whichever is later.

(e) Make records available to EPA. On request by EPA the records required in paragraphs (a), (b) and (c) of this section shall be provided to the Administrator's authorized representative. For records that are electronically generated or maintained the equipment and software necessary to read the records shall be made available, or if requested by EPA, electronic records shall be converted to paper documents which shall be provided to the Administrator's authorized representative.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40184, June 12, 2002; 71 FR 31964, June 2, 2006]

§80.370   What are the sulfur reporting requirements?

Beginning with the 2004 averaging period, or the first year credits or allotments are generated under §80.275 or §80.305, whichever is earlier, and continuing for each averaging period thereafter, any refiner or importer shall submit to EPA annual reports that contain the information required in this section, and such other information as EPA may require.

(a) Refiner and importer annual reports. Any refiner, for each of its refineries, and any importer for the gasoline it imports, shall submit a report for each calendar year averaging period that includes the following information, and in the case of a refiner or importer producing or importing both GPA gasoline and other gasoline, the information shall be separately reported:

(1) The EPA importer, or refiner and refinery facility registration numbers;

(2) The applicable baseline, average standard, and adjusted cap standard as follows:

(i) For the years 2000 through 2003, the applicable baseline under §80.250 or §80.295.

(ii) For the 2004 averaging period and subsequent averaging periods:

(A) All applicable average standards under §80.195, §80.216, §80.240 or §80.270;

(B) All applicable adjusted cap standards under §80.195(d), with the 2005 report identifying both the 2004 and 2005 applicable adjusted cap standards;

(3) The total volume of gasoline produced or imported;

(4) The annual average sulfur level of the gasoline produced or imported;

(5) The annual average sulfur level after inclusion of any credits and allotments;

(6) Information, separately provided, for credits and allotments, and separately by year of creation, as follows:

(i) The number of credits and allotments at the beginning of the averaging period;

(ii) The number of credits and allotments generated;

(iii) The number of credits and allotments used;

(iv) If any credits or allotments were obtained from or transferred to other parties, for each other party its name and EPA refiner or importer registration number, and the number of credits or allotments obtained from or transferred to the other party;

(v) The number of credits and allotments that expired at the end of the averaging period;

(vi) The number of credits and allotments that will carry over into the subsequent averaging period; and

(vii) The number of each type of allotments converted to credits;

(7) For each batch of gasoline produced or imported during the averaging period:

(i) The batch number assigned under §80.65(d)(3) and the appropriate designation under §80.365; except that if composite samples of conventional gasoline representing multiple batches produced subsequent to December 31, 2003, are tested under §80.101(i)(2) for anti-dumping compliance purposes, for purposes of this subpart a separate batch number must be assigned to each batch using the batch numbering procedures under §80.65(d)(3);

(ii) The date the batch was produced;

(iii) The volume of the batch; and

(iv) The sulfur content of the batch, along with identification of the test method used to measure the sulfur content of the batch, as determined under §80.330; and

(v) For any batch of small refiner gasoline produced by any refinery with an adjustment of its per-gallon cap standard under §80.271(a), the number of sulfur credits or allotments required under paragraph (d)(1) of this section, the number of credits or allotments used, and the source(s) of these credits or allotments.

(8) When submitting reports under this paragraph (a), any importer shall exclude certified Sulfur-FRGAS.

(b) Additional reporting requirements for importers. Any importer shall report the following information for Sulfur-FRGAS imported during the averaging period:

(1) The EPA refiner and refinery registration numbers of each foreign refiner and refinery where the certified Sulfur-FRGAS was produced; and

(2) The total gallons of certified Sulfur-FRGAS and non-certified Sulfur-FRGAS imported from each foreign refiner and refinery.

(c) Corporate pool average reports. (1) Annual reports filed under this section for the 2004 and 2005 averaging periods must include the party's corporate pool average as determined under §80.205.

(2) If the party submitting the annual report under paragraph (c)(1) of this section is a refiner with more than one refinery or is a refiner who also imports gasoline, then for the purposes of this paragraph, the party shall report the information required for individual refineries and for importers under paragraph (a) of this section, also in the aggregate for all the gasoline produced and imported during the calendar year.

(3) Refiners and importers exempted from corporate pool standards under §80.216 or §80.240 are exempt from reporting the information required under paragraphs (c)(1) and (c)(2) of this section.

(4) A parent company must identify in the corporate pool average reports required under paragraph (c)(1) of this section any refinery facilities owned by the parent company, any subsidiaries wholly-owned by the parent company, and any refinery facilities of the parent company's wholly-owned subsidiaries, except as provided in paragraph (c)(5) of this section.

(5) Where the wholly-owned subsidiaries of a parent company comply with the corporate pool average standards individually pursuant to §80.195(c)(6)(ii):

(i) The corporate pool average reports required under paragraph (c)(1) of this section must be submitted by each wholly-owned subsidiary of the parent company;

(ii) Each wholly-owned subsidiary of the parent company must identify in the corporate pool average reports required under paragraph (c)(1) of this section the subsidiary's parent company and any refinery facilities of the subsidiary; and

(iii) The parent company must submit the corporate pool average reports required under paragraph (c)(1) of this section for any refinery facilities owned by the parent company which are not the refinery facilities of the parent company's wholly-owned subsidiaries.

(d) Report submission. Any annual report required under this section shall be:

(1) Signed and certified as meeting all of the applicable requirements of this subpart by the owner or a responsible corporate officer of the refiner or importer; and

(2) Submitted to EPA by March 31 for the prior calendar year averaging period.

(e) [Reserved]

(f) Attest reports. Attest reports for refiner and importer attest engagements required under §80.415 shall be submitted to the Administrator by June 1 of each year for the prior calendar year averaging period.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40184, June 12, 2002; 79 FR 23652, Apr. 28, 2014]

§§80.371-80.373   [Reserved]

Exemptions

§80.374   What if a refiner or importer is unable to produce gasoline conforming to the requirements of this subpart?

In appropriate extreme and unusual circumstances (e.g., natural disaster or Act of God) which are clearly outside the control of the refiner or importer and which could not have been avoided by the exercise of prudence, diligence, and due care, EPA may permit a refiner or importer, for a brief period, to distribute gasoline which does not meet the requirements of this subpart provided the refiner or importer meets all the criteria, requirements and conditions contained in §80.73 (a) through (e).

§80.375   What requirements apply to California gasoline?

(a) Definition. For purposes of this subpart California gasoline means any gasoline designated by the refiner as for use in California.

(b) California gasoline exemption. California gasoline that complies with all the requirements of this section is exempt from all other provisions of this subpart.

(c) Requirements for California gasoline. The requirements are:

(1) Each batch of California gasoline must be designated as such by its refiner or importer;

(2) Designated California gasoline must be kept segregated from gasoline that is not California gasoline, at all points in the distribution system;

(3) Designated California gasoline must ultimately be used in the State of California and not used elsewhere;

(4) In the case of California gasoline produced outside the State of California, the transferors and transferees must meet the product transfer document requirements under §80.81(g); and

(5) Gasoline that is ultimately used in any part of the United States outside of the State of California must comply with the standards and requirements of this subpart, regardless of any designation as California gasoline.

(d) Use of California test methods and off site sampling procedures. In the case of any gasoline that is not California gasoline and that is either produced at a refinery located in the State of California or is imported from outside the United States into the State of California, the refiner or importer may, with regard to such gasoline:

(1) Use the sampling and testing methods approved in Title 13 of the California Code of Regulations instead of the sampling and testing methods required under §80.330; and

(2) Determine the sulfur content of gasoline at off site tankage as permitted in §80.81(h)(2).

§80.380   What are the requirements for obtaining an exemption for gasoline used for research, development or testing purposes?

Any person may request an exemption from the provisions of this subpart for gasoline used for research, development or testing (“R&D”) purposes by submitting to EPA an application that includes all the information listed in paragraph (b) of this section.

(a) Criteria for an R&D exemption. For an R&D exemption to be granted, the proposed test program must:

(1) Have a purpose that constitutes an appropriate basis for exemption;

(2) Necessitate the granting of an exemption;

(3) Be reasonable in scope; and

(4) Have a degree of control consistent with the purpose of the program and EPA's monitoring requirements.

(b) Information required to be submitted. To demonstrate each of the four elements in paragraphs (a)(1) through (4) of this section, the application required under this section must include the following information:

(1) A statement of the purpose of the program demonstrating that the program has an appropriate R&D purpose.

(2) An explanation of why the stated purpose of the program cannot be achieved in a practicable manner without performing one or more of the prohibited acts under §80.385.

(3) To demonstrate the reasonableness of the scope of the program:

(i) An estimate of the program's beginning and ending dates;

(ii) An estimate of the maximum number of vehicles and engines involved in the program, and the number of miles and engine hours that will be accumulated on each;

(iii) The sulfur content of the gasoline expected to be used in the program; and

(iv) The quantity of gasoline that exceeds the applicable sulfur standard that is expected to be used in the program.

(4) With regard to control, a demonstration that the program affords EPA a monitoring capability, including at a minimum:

(i) A description of the technical and operational aspects of the program;

(ii) The site(s) of the program (including street address, city, county, State, and ZIP code);

(iii) The manner in which information on vehicles and engines used in the program will be recorded and made available to EPA;

(iv) The manner in which results of the program will be recorded and made available to EPA;

(v) The manner in which information on the gasoline used in the program (including quantity, sulfur content, name, address, telephone number and contact person of the supplier, and the date received from the supplier), will be recorded and made available to EPA;

(vi) The manner in which distribution pumps will be labeled to insure proper use of the gasoline where appropriate;

(vii) The name, address, telephone number and title of the person(s) in the organization requesting an exemption from whom further information on the application may be obtained; and

(viii) The name, address, telephone number and title of the person(s) in the organization requesting an exemption who is responsible for recording and making available the information specified in paragraphs (b)(4)(iii), (iv) and (v) of this section, and the location in which such information will be maintained.

(c) Additional requirements. (1) The product transfer documents associated with R&D gasoline must identify the gasoline as such, and must state that the gasoline is to be used only for research, development, or testing purposes.

(2) The R&D gasoline must be designated by the refiner or importer as exempt R&D gasoline.

(3) The R&D gasoline must be kept segregated from non-exempt gasoline at all points in the distribution system of the gasoline.

(4) The R&D gasoline must not be sold, distributed, offered for sale or distribution, dispensed, supplied, offered for supply, transported to or from, or stored by a gasoline retail outlet, or by a wholesale purchaser-consumer facility, unless the wholesale purchaser-consumer facility is associated with the R&D program that uses the gasoline.

(d) Memorandum of exemption. The Administrator will grant an R&D exemption upon a demonstration that the requirements of this section have been met. The R&D exemption will be granted in the form of a memorandum of exemption signed by the applicant and the Administrator (or delegate), which may include such terms and conditions as the Administrator determines necessary to monitor the exemption and to carry out the purposes of this section, including restoration of motor vehicle emissions control systems. Any violation of such a term or condition of the exemption or any requirement under this section will cause the exemption to be void ab initio.

(e) Effects of exemption. Gasoline that is subject to an R&D exemption under this section is exempt from other provisions of this subpart provided that the gasoline is used in a manner that complies with the memorandum of exemption granted under paragraph (d) of this section.

§80.382   What requirements apply to gasoline for use in American Samoa, Guam and the Commonwealth of the Northern Mariana Islands?

The gasoline sulfur standards of §§80.195 and 80.240(a) do not apply to gasoline that is produced, imported, sold, offered for sale, supplied, offered for supply, stored, dispensed, or transported for use in the Territories of Guam, American Samoa or the Commonwealth of the Northern Mariana Islands, provided that such gasoline is:

(a) Designated by the refiner or importer as high sulfur gasoline only for use in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands;

(b) Used only in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands;

(c) Accompanied by documentation that complies with the product transfer document requirements of §80.365; and

(d) Segregated from non-exempt high sulfur fuel at all points in the distribution system from the point the fuel is designated as exempt fuel only for use in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, while the exempt fuel is in the United States but outside these Territories.

[71 FR 78093, Dec. 28, 2006]

Violation Provisions

§80.385   What acts are prohibited under the gasoline sulfur program?

No person shall:

(a) Averaging violation. Produce or import gasoline that does not comply with the applicable sulfur average standard under §80.195, §80.216 or §80.240.

(b) Cap standard violation. Produce, import, sell, offer for sale, dispense, supply, offer for supply, store or transport gasoline that does not comply with the applicable sulfur cap standard under §80.195, §80.216, §80.210, §80.220, §80.240, or does not comply with an adjusted cap standard approved for a small refiner under §80.271.

(c) Causing an averaging, cap standard, or geographic phase-in area (GPA) use violation. Cause another person to commit an act in violation of paragraph (a), (b), or (f) of this section.

(d) Causing violating gasoline to be in the distribution system. Cause gasoline to be in the distribution system which does not comply with an applicable sulfur cap standard under §80.195, §80.210, §80.216, §80.220 or §80.240; a sulfur average standard under §80.195, §80.216 or §80.240; or a GPA use prohibition under §80.219(c).

(e) Denatured fuel ethanol violation. (1) Through December 31, 2016, blend into gasoline any denatured fuel ethanol with a sulfur content higher than 30 ppm.

(2) Beginning January 1, 2017 and thereafter, blend into gasoline any denatured fuel ethanol with a sulfur content higher than 10 ppm.

(f) GPA use violation. Produce, import, sell, offer for sale, dispense, supply, offer for supply, store or transport gasoline that does not comply with a GPA use prohibition under §80.219(c).

(g) Failure to use sufficient sulfur credits or allotments to offset a per-gallon cap adjustment. For a small refiner that has an approved adjustment of its per-gallon cap sulfur standard for a refinery under §80.271, to fail to obtain (or generate) and use the required number of sulfur credits or allotments to offset the revised per-gallon cap sulfur standard under §80.217(d).

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40184, June 12, 2002; 79 FR 23653, Apr. 28, 2014]

§80.390   What evidence may be used to determine compliance with the prohibitions and requirements of this subpart and liability for violations of this subpart?

(a) Compliance with the sulfur standards of this subpart shall be determined based on the sulfur level of the gasoline, measured using the methodologies specified in §§80.330(b) and 80.46(a). Any evidence or information, including the exclusive use of such evidence or information, may be used to establish the sulfur level of gasoline if the evidence or information is relevant to whether the sulfur level of gasoline would have been in compliance with the standards if the appropriate sampling and testing methodology had been correctly performed. Such evidence may be obtained from any source or location and may include, but is not limited to, test results using methods other than those specified in §§80.330(b) and 80.46(a), business records, and commercial documents.

(b) Determinations of compliance with the requirements of this subpart other than the sulfur standards, and determinations of liability for any violation of this subpart, may be based on information obtained from any source or location. Such information may include, but is not limited to, business records and commercial documents.

§80.395   Who is liable for violations under the gasoline sulfur program?

(a) Persons liable for violations of prohibited acts—(1) Averaging violation. Any refiner or importer who violates §80.385(a) is liable for the violation.

(2) Causing an averaging violation. Any refiner, importer, distributor, reseller, carrier, retailer, wholesale purchaser-consumer, or oxygenate blender who causes another party to violate §80.385(a), is liable for a violation of §80.385(c).

(3) Cap standard violation. Any refiner, importer, distributor, reseller, carrier, retailer, wholesale purchaser-consumer, or oxygenate blender who owned, leased, operated, controlled or supervised a facility where a violation of §80.385 (b) occurred, is deemed in violation of §80.385(b).

(4) Causing a cap standard violation. Any refiner, importer, distributor, reseller, carrier, retailer, wholesale purchaser-consumer, or oxygenate blender who produced, imported, sold, offered for sale, dispensed, supplied, offered for supply, stored, transported, or caused the transportation or storage of gasoline that violates §80.385(b), is deemed in violation of §80.385(c).

(5) GPA use violation. Any refiner, importer, distributor, reseller, carrier, retailer, wholesale purchaser-consumer, or oxygenate blender who owned, leased, operated, controlled or supervised a facility where a violation of §80.385(f) occurred, is deemed in violation of §80.385(f).

(6) Causing a GPA use violation. Any refiner, importer, distributor, reseller, carrier, retailer, wholesale purchaser-consumer, or oxygenate blender who produced, imported, sold, offered for sale, dispensed, supplied, offered for supply, stored, transported, or caused the transportation or storage of gasoline that violates §80.385(f), is deemed in violation of §80.385(c).

(7) Branded refiner/importer liability. Any refiner or importer whose corporate, trade, or brand name, or whose marketing subsidiary's corporate, trade, or brand name appeared at a facility where a violation of §80.385(b) or (f) occurred, is deemed in violation of §80.385(b) or (f), as applicable.

(8) Causing violating gasoline to be in the distribution system. Any refiner, importer, distributor, reseller, carrier, or oxygenate blender, who owned, leased, operated, controlled or supervised a facility from which gasoline was released into the distribution system which does not comply with an applicable sulfur cap standard, a sulfur averaging standard, or a GPA use prohibition, is deemed in violation of §80.385(d).

(9) Carrier causation. In order for a carrier to be liable under paragraph (a)(2), (4), (6), or (8) of this section, EPA must demonstrate, by reasonably specific showing by direct or circumstantial evidence, that the carrier caused the violation.

(10) Denatured ethanol violation. Any oxygenate blender who violates §80.385(e) is liable for the violation.

(11) Parent corporation liability. Any parent corporation is liable for any violations of this subpart that are committed by any of its wholly-owned subsidiaries.

(12) Joint venture and joint owner liability. Each partner to a joint venture, or each owner of a facility owned by two or more owners, is jointly and severally liable for any violation of this subpart that occurs at the joint venture facility or facility owned by the joint owners, or is committed by the joint venture operation or any of the joint owners of the facility.

(13) Failure to use credits violation. Any small refiner that has an approved adjustment of its per-gallon cap under §80.271 and that does not obtain (or generate) and use the required number of sulfur credits or allotments under §80.271(d) by the time it submits its annual report under §80.370 is deemed in violation of §80.385(g).

(b) Persons liable for failure to meet other provisions of this subpart. (1) Any refiner, importer, distributor, reseller, carrier, wholesale purchaser-consumer, retailer, or oxygenate blender who fails to meet a provision of this subpart not addressed in paragraph (a) of this section is liable for a violation of that provision.

(2) Any refiner, importer, distributor, reseller, carrier, wholesale purchaser-consumer, retailer, or oxygenate blender who caused another person to fail to meet a requirement of this subpart not addressed in paragraph (a) of this section, is liable for causing a violation of that provision.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40184, June 12, 2002]

§80.400   What defenses apply to persons deemed liable for a violation of a prohibited act?

(a) Any person deemed liable for a violation of a prohibition under §80.395 (a)(3) through (8), will not be deemed in violation if the person demonstrates that:

(1) The violation was not caused by the person or the person's employee or agent; and

(2) The person conducted a quality assurance sampling and testing program, as described in paragraph (d) of this section. A carrier may rely on the quality assurance program carried out by another party, including the party who owns the gasoline in question, provided that the quality assurance program is carried out properly. Retailers and wholesale purchaser-consumers are not required to conduct quality assurance programs.

(b) In the case of a violation found at a facility operating under the corporate, trade or brand name of a refiner or importer, or a refiner's or importer's marketing subsidiary, the refiner or importer must show, in addition to the defense elements required under paragraphs (a)(1) and (2) of this section, that the violation was caused by:

(1) An act in violation of law (other than the Clean Air Act or this part 80), or an act of sabotage or vandalism;

(2) The action of any refiner, importer, retailer, distributor, reseller, oxygenate blender, carrier, retailer or wholesale purchaser-consumer in violation of a contractual agreement between the branded refiner or importer and the person designed to prevent such action, and despite periodic sampling and testing by the branded refiner or importer to ensure compliance with such contractual obligation; or

(3) The action of any carrier or other distributor not subject to a contract with the refiner or importer, but engaged for transportation of gasoline, despite specifications or inspections of procedures and equipment which are reasonably calculated to prevent such action.

(c) Under paragraph (a) of this section for any person to show that a violation was not caused by that person, or under paragraph (b) of this section to show that a violation was caused by any of the specified actions, the person must demonstrate by reasonably specific showing, by direct or circumstantial evidence, that the violation was caused or must have been caused by another person and that the person asserting the defense did not contribute to that other person's causation.

(d) Quality assurance and testing program. To demonstrate an acceptable quality assurance and testing program under paragraph (a)(2) of this section, a person must present evidence of the following:

(1) A periodic sampling and testing program to ensure the gasoline the person sold, dispensed, supplied, stored, or transported, meets the applicable sulfur standard; and

(2) On each occasion when gasoline is found not in compliance with the applicable sulfur standard:

(i) The person immediately ceases selling, offering for sale, dispensing, supplying, offering for supply, storing or transporting the non-complying product; and

(ii) The person promptly remedies the violation and the factors that caused the violation (for example, by removing the non-complying product from the distribution system until the applicable standard is achieved and taking steps to prevent future violations of a similar nature from occurring).

(3) For any carrier who transports gasoline in a tank truck, the quality assurance program required under this paragraph (d) need not include periodic sampling and testing of gasoline in the tank truck, but in lieu of such tank truck sampling and testing, the carrier shall demonstrate evidence of an oversight program for monitoring compliance with the requirements of this subpart relating to the transport or storage of gasoline by tank truck, such as appropriate guidance to drivers regarding compliance with the applicable sulfur standard and product transfer document requirements, and the periodic review of records received in the ordinary course of business concerning gasoline quality and delivery.

§80.405   What penalties apply under this subpart?

(a) Any person liable for a violation under §80.395 is subject to civil penalties as specified in section 205 of the Clean Air Act for every day of each such violation and the amount of economic benefit or savings resulting from each violation.

(b) Any person liable under §80.395(a)(1) or (2) for a violation of the applicable sulfur averaging standard or causing another party to violate that standard during any averaging period, is subject to a separate day of violation for each and every day in the averaging period. Any person liable under §80.395(b) for a failure to fulfill any requirement for credit or allotment generation, transfer, use, banking, or deficit correction, is subject to a separate day of violation for each and every day in the averaging period in which invalid credits or allotments are generated or used.

(c)(1) Any person liable under §80.395(a)(3), (4), (5), or (6) for a violation of an applicable sulfur per gallon cap standard under §80.195, §80.210, §80.216, §80.220 or §80.240, a GPA use prohibition under §80.219(c), or of causing another party to violate a cap standard or a GPA use prohibition, is subject to a separate day of violation for each and every day the non-complying gasoline remains any place in the gasoline distribution system.

(2) Any person liable under §80.395(a)(8) for causing gasoline to be in the distribution system which does not comply with an applicable sulfur cap standard, a sulfur averaging standard, or a GPA use prohibition, is subject to a separate day of violation for each and every day that the non-complying gasoline remains any place in the gasoline distribution system.

(3) For purposes of paragraph (c) of this section, the length of time the gasoline in question remained in the gasoline distribution system is deemed to be twenty-five days, unless a person subject to liability or EPA demonstrates by reasonably specific showings, by direct or circumstantial evidence, that the non-complying gasoline remained in the gasoline distribution system for fewer than or more than twenty-five days.

(d) Any person liable under §80.395(b) for failure to meet, or causing a failure to meet, a provision of this subpart is liable for a separate day of violation for each and every day such provision remains unfulfilled.

(e) Any person liable under §80.395(a)(13) for failing to obtain (or generate) and use the total required number of sulfur credits or allotments under §80.271(d) for a calendar year is subject to a separate day of violation for each day until the required number of credits or allotments is used.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40185, June 12, 2002]

Provisions for Foreign Refiners With Individual Sulfur Baselines

§80.410   What are the additional requirements for gasoline produced at foreign refineries having individual small refiner sulfur baselines, foreign refineries granted temporary relief under §80.270, or baselines for generating credits during 2000 through 2003?

(a) Definitions. (1) A foreign refinery is a refinery that is located outside the United States, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (collectively referred to in this section as “the United States”).

(2) A foreign refiner is a person who meets the definition of refiner under §80.2(i) for a foreign refinery.

(3) A small foreign refiner is a refiner that meets the definition of a small refiner under §80.225.

(4) “Sulfur-FRGAS” means gasoline produced at a foreign refinery that has been assigned an individual refinery sulfur baseline under §§80.250 or 80.295, or has been granted temporary relief under §80.270, and that is imported into the United States.

(5) “Non-Sulfur-FRGAS” means gasoline that is produced at a foreign refinery that has not been assigned an individual refinery sulfur baseline, gasoline produced at a foreign refinery with an individual refinery sulfur baseline that is not imported into the United States, and gasoline produced at a foreign refinery with an individual sulfur baseline during a year when the foreign refiner has opted to not participate in the Sulfur-FRGAS program under paragraph (c)(3) of this section.

(6) “Certified Sulfur-FRGAS” means Sulfur-FRGAS the foreign refiner intends to include in the foreign refinery's sulfur compliance calculations under §80.205 pursuant to §80.240 or §80.270 or credit calculations under §§80.305 or 80.310 and allotment calculations under §80.275(a), and does include in these compliance calculations when reported to EPA.

(7) “Non-Certified Sulfur-FRGAS” means Sulfur-FRGAS that is not Certified Sulfur-FRGAS.

(b) Baseline establishment. Any foreign refiner who does not have an approved refinery baseline under §80.94 may submit a petition to the Administrator for an individual refinery sulfur baseline pursuant to §§80.245 and 80.250, a baseline for generating credits or allotments under §§80.290 and 80.295, or a baseline for temporary refinery relief under §§80.270 and 80.295.

(1) The refiner shall follow the procedures specified in §§80.91 through 80.93 to establish the volume and sulfur content of gasoline that was produced at the foreign refinery and imported into the United States during 1997 and 1998 for purposes of establishing baselines under §80.250 or §80.295.

(2) In making determinations for foreign refinery baselines EPA will consider all information supplied by a foreign refiner, and in addition may rely on any and all appropriate assumptions necessary to make such determinations.

(3) Where a foreign refiner submits a petition that is incomplete or inadequate to establish an accurate baseline, and the refiner fails to cure this defect after a request for more information, EPA will not assign an individual refinery sulfur baseline.

(c) General requirements for foreign refiners with individual refinery sulfur baselines. A foreign refiner of a refinery that has been assigned an individual sulfur baseline under §80.250 or §80.295 must designate all gasoline produced at the foreign refinery that is exported to the United States as either Certified Sulfur-FRGAS or as Non-Certified Sulfur-FRGAS, except as provided in paragraph (c)(3) of this section.

(1) In the case of Certified Sulfur-FRGAS, the foreign refiner must meet all provisions that apply to refiners under this subpart H.

(2) In the case of Non-Certified Sulfur-FRGAS, the foreign refiner shall meet all the following provisions, except the foreign refiner shall substitute the name Non-Certified Sulfur-FRGAS for the names “reformulated gasoline” or “RBOB” wherever they appear in the following provisions:

(i) The designation requirements in this section;

(ii) The recordkeeping requirements under §80.365;

(iii) The reporting requirements in §80.370 and this section;

(iv) The product transfer document requirements in this section;

(v) The prohibitions in this section and §80.385; and

(vi) The independent audit requirements under §80.415, paragraph (h) of this section, §§80.125 through 80.127, §80.128(a),(b),(c),(g) through (i), and §80.130.

(3)(i) Any foreign refiner that generates sulfur credits under §80.305 during the period 2000 through 2003, or allotments under §80.275(a) during 2003, and any small refiner generating credits under §80.310, shall designate all Sulfur-FRGAS as Certified Sulfur-FRGAS for any year that such credits are generated.

(ii) Any foreign refiner that has been assigned an individual sulfur baseline for a foreign refinery under §80.250 or §80.295 may elect to classify no gasoline imported into the United States as Sulfur-FRGAS, provided the foreign refiner notifies EPA of the election no later than November 1 of the prior calendar year.

(iii) An election under paragraph (c)(3)(ii) of this section shall:

(A) Apply to an entire calendar year averaging period, and apply to all gasoline produced during the calendar year at the foreign refinery that is used in the United States; and

(B) Remain in effect for each succeeding calendar year averaging period, unless and until the foreign refiner notifies EPA of a termination of the election. The change in election shall take effect at the beginning of the next calendar year.

(d) Designation, product transfer documents, and foreign refiner certification. (1) Any foreign refiner of a foreign refinery that has been assigned an individual sulfur baseline must designate each batch of Sulfur-FRGAS as such at the time the gasoline is produced, unless the refinery has elected to classify no gasoline exported to the United States as Sulfur-FRGAS under paragraph (c)(3)(ii) of this section.

(2) On each occasion when any person transfers custody or title to any Sulfur-FRGAS prior to its being imported into the United States, it must include the following information as part of the product transfer document information in this section:

(i) Identification of the gasoline as Certified Sulfur-FRGAS or as Non-Certified Sulfur-FRGAS; and

(ii) The name and EPA refinery registration number of the refinery where the Sulfur-FRGAS was produced.

(3) On each occasion when Sulfur-FRGAS is loaded onto a vessel or other transportation mode for transport to the United States, the foreign refiner shall prepare a certification for each batch of the Sulfur-FRGAS that meets the following requirements:

(i) The certification shall include the report of the independent third party under paragraph (f) of this section, and the following additional information:

(A) The name and EPA registration number of the refinery that produced the Sulfur-FRGAS;

(B) The identification of the gasoline as Certified Sulfur-FRGAS or Non-Certified Sulfur-FRGAS;

(C) The volume of Sulfur-FRGAS being transported, in gallons;

(D) In the case of Certified Sulfur-FRGAS:

(1) The sulfur content as determined under paragraph (f) of this section; and

(2) A declaration that the Sulfur-FRGAS is being included in the compliance calculations under §80.205 or credit calculations under §80.305 or allotments under §80.275(a) for the refinery that produced the Sulfur-FRGAS.

(ii) The certification shall be made part of the product transfer documents for the Sulfur-FRGAS. Prior to 2004, the information required under paragraph (d)(3)(i)(D)(1) of this section may be omitted from the product transfer documents that accompany the gasoline, provided that such information is provided to the United States importer prior to collection of the representative sample required under paragraph (o)(3)(ii)(A) of this section.

(e) Transfers of Sulfur-FRGAS to non-United States markets. The foreign refiner is responsible to ensure that all gasoline classified as Sulfur-FRGAS is imported into the United States. A foreign refiner may remove the Sulfur-FRGAS classification, and the gasoline need not be imported into the United States, but only if:

(1)(i) The foreign refiner excludes:

(A) The volume of gasoline from the refinery's compliance calculations under §80.205; and

(B) In the case of Certified Sulfur-FRGAS, the volume and sulfur content of the gasoline from the compliance calculations under §80.205 or credit calculations under §80.305.

(ii) The exclusions under paragraph (e)(1)(i) of this section shall be on the basis of the sulfur content and volumes determined under paragraph (f) of this section; and

(2) The foreign refiner obtains sufficient evidence in the form of documentation that the gasoline was not imported into the United States.

(f) Load port independent sampling, testing and refinery identification. (1) On each occasion Sulfur-FRGAS is loaded onto a vessel for transport to the United States a foreign refiner shall have an independent third party:

(i) Inspect the vessel prior to loading and determine the volume of any tank bottoms;

(ii) Determine the volume of Sulfur-FRGAS loaded onto the vessel (exclusive of any tank bottoms present before vessel loading);

(iii) Obtain the EPA-assigned registration number of the foreign refinery;

(iv) Determine the name and country of registration of the vessel used to transport the Sulfur-FRGAS to the United States; and

(v) Determine the date and time the vessel departs the port serving the foreign refinery.

(2) On each occasion Certified Sulfur-FRGAS is loaded onto a vessel for transport to the United States a foreign refiner shall have an independent third party:

(i) Collect a representative sample of the Certified Sulfur-FRGAS from each vessel compartment subsequent to loading on the vessel and prior to departure of the vessel from the port serving the foreign refinery;

(ii) Prepare a volume-weighted vessel composite sample from the compartment samples, and determine the value for sulfur in accordance with the methodology and requirements specified in §80.330, by:

(A) The third party analyzing the sample; or

(B) The third party observing the foreign refiner analyze the sample;

(iii) Review original documents that reflect movement and storage of the certified Sulfur-FRGAS from the refinery to the load port, and from this review determine:

(A) The refinery at which the Sulfur-FRGAS was produced; and

(B) That the Sulfur-FRGAS remained segregated from:

(1) Non-Sulfur-FRGAS and Non-Certified Sulfur-FRGAS; and

(2) Other Certified Sulfur-FRGAS produced at a different refinery.

(3) The independent third party shall submit a report:

(i) To the foreign refiner containing the information required under paragraphs (f)(1) and (2) of this section, to accompany the product transfer documents for the vessel; and

(ii) To the Administrator containing the information required under paragraphs (f)(1) and (2) of this section, within thirty days following the date of the independent third party's inspection. This report shall include a description of the method used to determine the identity of the refinery at which the gasoline was produced, assurance that the gasoline remained segregated as specified in paragraph (n)(1) of this section, and a description of the gasoline's movement and storage between production at the source refinery and vessel loading.

(4) The independent third party must:

(i) Be approved in advance by EPA, based on a demonstration of ability to perform the procedures required in this paragraph (f);

(ii) Be independent under the criteria specified in §80.65(f)(2)(iii); and

(iii) Sign a commitment that contains the provisions specified in paragraph (i) of this section with regard to activities, facilities and documents relevant to compliance with the requirements of this paragraph (f).

(g) Comparison of load port and port of entry testing. (1)(i) Except as described in paragraph (g)(1)(ii) of this section, any foreign refiner and any United States importer of Certified Sulfur-FRGAS shall compare the results from the load port testing under paragraph (f) of this section, with the port of entry testing as reported under paragraph (o) of this section, for the volume of gasoline and the sulfur value.

(ii) Where a vessel transporting Certified Sulfur-FRGAS off loads this gasoline at more than one United States port of entry, and the conditions of paragraph (g)(2)(i) of this section are met at the first United States port of entry, the requirements of paragraph (g)(2) of this section do not apply at subsequent ports of entry if the United States importer obtains a certification from the vessel owner, that meets the requirements of paragraph (s) of this section, that the vessel has not loaded any gasoline or blendstock between the first United States port of entry and the subsequent port of entry.

(2)(i) The requirements of this paragraph (g)(2) apply if:

(A) The temperature-corrected volumes determined at the port of entry and at the load port differ by more than one percent; or

(B) The sulfur value determined at the port of entry is higher than the sulfur value determined at the load port, and the amount of this difference is greater than the reproducibility amount specified for the port of entry test result by the American Society of Testing and Materials (ASTM).

(ii) The United States importer and the foreign refiner shall treat the gasoline as Non-Certified Sulfur-FRGAS, and the foreign refiner shall exclude the gasoline volume and properties from its gasoline sulfur compliance calculations under §80.205.

(h) Attest requirements. The following additional procedures shall be carried out by any foreign refiner of Sulfur-FRGAS as part of the applicable attest engagement for each foreign refinery under §80.415:

(1) The inventory reconciliation analysis under §80.128(b) and the tender analysis under §80.128(c) shall include Non-Sulfur-FRGAS in addition to the gasoline types listed in §80.128(b) and (c).

(2) Obtain separate listings of all tenders of Certified Sulfur-FRGAS, and of Non-Certified Sulfur-FRGAS. Agree the total volume of tenders from the listings to the gasoline inventory reconciliation analysis in §80.128(b), and to the volumes determined by the third party under paragraph (f)(1) of this section.

(3) For each tender under paragraph (h)(2) of this section where the gasoline is loaded onto a marine vessel, report as a finding the name and country of registration of each vessel, and the volumes of Sulfur-FRGAS loaded onto each vessel.

(4) Select a sample from the list of vessels identified in paragraph (h)(3) of this section used to transport Certified Sulfur-FRGAS, in accordance with the guidelines in §80.127, and for each vessel selected perform the following:

(i) Obtain the report of the independent third party, under paragraph (f) of this section, and of the United States importer under paragraph (o) of this section.

(A) Agree the information in these reports with regard to vessel identification, gasoline volumes and test results.

(B) Identify, and report as a finding, each occasion the load port and port of entry parameter and volume results differ by more than the amounts allowed in paragraph (g) of this section, and determine whether the foreign refiner adjusted its refinery calculations as required in paragraph (g) of this section.

(ii) Obtain the documents used by the independent third party to determine transportation and storage of the Certified Sulfur-FRGAS from the refinery to the load port, under paragraph (f) of this section. Obtain tank activity records for any storage tank where the Certified Sulfur-FRGAS is stored, and pipeline activity records for any pipeline used to transport the Certified Sulfur-FRGAS, prior to being loaded onto the vessel. Use these records to determine whether the Certified Sulfur-FRGAS was produced at the refinery that is the subject of the attest engagement, and whether the Certified Sulfur-FRGAS was mixed with any Non-Certified Sulfur-FRGAS, Non-Sulfur-FRGAS, or any Certified Sulfur-FRGAS produced at a different refinery.

(5)(i) Select a sample from the list of vessels identified in paragraph (h)(3) of this section used to transport certified and Non-Certified Sulfur-FRGAS, in accordance with the guidelines in §80.127, and for each vessel selected perform the following:

(ii) Obtain a commercial document of general circulation that lists vessel arrivals and departures, and that includes the port and date of departure of the vessel, and the port of entry and date of arrival of the vessel. Agree the vessel's departure and arrival locations and dates from the independent third party and United States importer reports to the information contained in the commercial document.

(6) Obtain separate listings of all tenders of Non-Sulfur-FRGAS, and perform the following:

(i) Agree the total volume of tenders from the listings to the gasoline inventory reconciliation analysis in §80.128(b).

(ii) Obtain a separate listing of the tenders under paragraph (h)(6) of this section where the gasoline is loaded onto a marine vessel. Select a sample from this listing in accordance with the guidelines in §80.127, and obtain a commercial document of general circulation that lists vessel arrivals and departures, and that includes the port and date of departure and the ports and dates where the gasoline was off loaded for the selected vessels. Determine and report as a finding the country where the gasoline was off loaded for each vessel selected.

(7) In order to complete the requirements of this paragraph (h) an auditor shall:

(i) Be independent of the foreign refiner;

(ii) Be licensed as a Certified Public Accountant in the United States and a citizen of the United States, or be approved in advance by EPA based on a demonstration of ability to perform the procedures required in §§80.125 through 80.130, §80.415 and this paragraph (h); and

(iii) Sign a commitment that contains the provisions specified in paragraph (i) of this section with regard to activities and documents relevant to compliance with the requirements of §§80.125 through 80.130, §80.415 and this paragraph (h).

(i) Foreign refiner commitments. Any foreign refiner shall commit to and comply with the provisions contained in this paragraph (i) as a condition to being assigned an individual refinery sulfur baseline.

(1) Any United States Environmental Protection Agency inspector or auditor will be given full, complete and immediate access to conduct inspections and audits of the foreign refinery.

(i) Inspections and audits may be either announced in advance by EPA, or unannounced.

(ii) Access will be provided to any location where:

(A) Gasoline is produced;

(B) Documents related to refinery operations are kept;

(C) Gasoline or blendstock samples are tested or stored; and

(D) Sulfur-FRGAS is stored or transported between the foreign refinery and the United States, including storage tanks, vessels and pipelines.

(iii) Inspections and audits may be by EPA employees or contractors to EPA.

(iv) Any documents requested that are related to matters covered by inspections and audits will be provided to an EPA inspector or auditor on request.

(v) Inspections and audits by EPA may include review and copying of any documents related to:

(A) Refinery baseline establishment, including the volume and sulfur content, and transfers of title or custody, of any gasoline or blendstocks, whether Sulfur-FRGAS or Non-Sulfur-FRGAS, produced at the foreign refinery during the period January 1, 1997 through the date of the refinery baseline petition or through the date of the inspection or audit if a baseline petition has not been approved, and any work papers related to refinery baseline establishment;

(B) The volume and sulfur content of Sulfur-FRGAS;

(C) The proper classification of gasoline as being Sulfur-FRGAS or as not being Sulfur-FRGAS, or as Certified Sulfur-FRGAS or as Non-Certified Sulfur-FRGAS;

(D) Transfers of title or custody to Sulfur-FRGAS;

(E) Sampling and testing of Sulfur-FRGAS;

(F) Work performed and reports prepared by independent third parties and by independent auditors under the requirements of this section and §80.415 including work papers; and

(G) Reports prepared for submission to EPA, and any work papers related to such reports.

(vi) Inspections and audits by EPA may include taking samples of gasoline or blendstock, and interviewing employees.

(vii) Any employee of the foreign refiner will be made available for interview by the EPA inspector or auditor, on request, within a reasonable time period.

(viii) English language translations of any documents will be provided to an EPA inspector or auditor, on request, within 10 working days.

(ix) English language interpreters will be provided to accompany EPA inspectors and auditors, on request.

(2) An agent for service of process located in the District of Columbia will be named, and service on this agent constitutes service on the foreign refiner or any employee of the foreign refiner for any action by EPA or otherwise by the United States related to the requirements of this subpart H.

(3) The forum for any civil or criminal enforcement action related to the provisions of this section for violations of the Clean Air Act or regulations promulgated thereunder shall be governed by the Clean Air Act, including the EPA administrative forum where allowed under the Clean Air Act.

(4) United States substantive and procedural laws shall apply to any civil or criminal enforcement action against the foreign refiner or any employee of the foreign refiner related to the provisions of this section.

(5) Submitting a petition for an individual refinery sulfur baseline, producing and exporting gasoline under an individual refinery sulfur baseline, and all other actions to comply with the requirements of this subpart H relating to the establishment and use of an individual refinery sulfur baseline constitute actions or activities that satisfy the provisions of 28 U.S.C. section 1605(a)(2), but solely with respect to actions instituted against the foreign refiner, its agents and employees in any court or other tribunal in the United States for conduct that violates the requirements applicable to the foreign refiner under this subpart H, including conduct that violates Title 18 U.S.C. section 1001 and Clean Air Act section 113(c)(2).

(6) The foreign refiner, or its agents or employees, will not seek to detain or to impose civil or criminal remedies against EPA inspectors or auditors, whether EPA employees or EPA contractors, for actions performed within the scope of EPA employment related to the provisions of this section.

(7) The commitment required by this paragraph (i) shall be signed by the owner or president of the foreign refiner business.

(8) In any case where Sulfur-FRGAS produced at a foreign refinery is stored or transported by another company between the refinery and the vessel that transports the Sulfur-FRGAS to the United States, the foreign refiner shall obtain from each such other company a commitment that meets the requirements specified in paragraphs (i)(1) through (7) of this section, and these commitments shall be included in the foreign refiner's baseline petition.

(j) Sovereign immunity. By submitting a petition for an individual foreign refinery baseline under this section, or by producing and exporting gasoline to the United States under an individual refinery sulfur baseline under this section, the foreign refiner, its agents and employees, without exception, become subject to the full operation of the administrative and judicial enforcement powers and provisions of the United States without limitation based on sovereign immunity, with respect to actions instituted against the foreign refiner, its agents and employees in any court or other tribunal in the United States for conduct that violates the requirements applicable to the foreign refiner under this subpart H, including conduct that violates Title 18 U.S.C. section 1001 and Clean Air Act section 113(c)(2).

(k) Bond posting. Any foreign refiner shall meet the requirements of this paragraph (k) as a condition to being assigned an individual refinery sulfur baseline.

(1) The foreign refiner shall post a bond of the amount calculated using the following equation:

Bond = G × $ 0.01

where:

Bond = amount of the bond in U. S. dollars.

G = the largest volume of gasoline produced at the foreign refinery and exported to the United States, in gallons, during a single calendar year among the most recent of the following calendar years, up to a maximum of five calendar years: the calendar year immediately preceding the date the baseline petition is submitted, the calendar year the baseline petition is submitted, and each succeeding calendar year.

(2) Bonds shall be posted by:

(i) Paying the amount of the bond to the Treasurer of the United States;

(ii) Obtaining a bond in the proper amount from a third party surety agent that is payable to satisfy United States administrative or judicial judgments against the foreign refiner, provided EPA agrees in advance as to the third party and the nature of the surety agreement; or

(iii) An alternative commitment that results in assets of an appropriate liquidity and value being readily available to the United States, provided EPA agrees in advance as to the alternative commitment.

(3) If the bond amount for a foreign refinery increases, the foreign refiner shall increase the bond to cover the shortfall within 90 days of the date the bond amount changes. If the bond amount decreases, the foreign refiner may reduce the amount of the bond beginning 90 days after the date the bond amount changes.

(4) Bonds posted under this paragraph (k) shall:

(i) Be used to satisfy any judicial judgment that results from an administrative or judicial enforcement action for conduct in violation of this subpart H, including where such conduct violates Title 18 U.S.C. section 1001 and Clean Air Act section 113(c)(2);

(ii) Be provided by a corporate surety that is listed in the United States Department of Treasury Circular 570 “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and Acceptable Reinsuring Companies” (Available from the U.S. Department of the Treasury, Financial Management Service, Surety Bond Branch, 3700 East-West Highway, Room 6A04, Hyattsville, Md. 20782. Also available on the internet at http://www.fms.treas.gov/c570/c570.html); and

(iii) Include a commitment that the bond will remain in effect for at least five (5) years following the end of latest averaging period that the foreign refiner produces gasoline pursuant to the requirements of this Subpart H.

(5) On any occasion a foreign refiner bond is used to satisfy any judgment, the foreign refiner shall increase the bond to cover the amount used within 90 days of the date the bond is used.

(l) [Reserved]

(m) English language reports. Any report or other document submitted to EPA by any foreign refiner shall be in English language, or shall include an English language translation.

(n) Prohibitions. (1) No person may combine Certified Sulfur-FRGAS with any Non-Certified Sulfur-FRGAS or Non-Sulfur-FRGAS, and no person may combine Certified Sulfur-FRGAS with any Certified Sulfur-FRGAS produced at a different refinery, until the importer has met all the requirements of paragraph (o) of this section, except as provided in paragraph (e) of this section.

(2) No foreign refiner or other person may cause another person to commit an action prohibited in paragraph (n)(1) of this section, or that otherwise violates the requirements of this section.

(o) United States importer requirements. Any United States importer shall meet the following requirements:

(1) Each batch of imported gasoline shall be classified by the importer as being Sulfur-FRGAS or as Non-Sulfur-FRGAS, and each batch classified as Sulfur-FRGAS shall be further classified as Certified Sulfur-FRGAS or as Non-certified Sulfur-FRGAS.

(2) Gasoline shall be classified as Certified Sulfur-FRGAS or as Non-Certified Sulfur-FRGAS according to the designation by the foreign refiner if this designation is supported by product transfer documents prepared by the foreign refiner as required in paragraph (d) of this section, unless the gasoline is classified as Non-Certified Sulfur-FRGAS under paragraph (g) of this section.

(3) For each gasoline batch classified as Sulfur-FRGAS, any United States importer shall perform the following procedures:

(i) In the case of both Certified and Non-Certified Sulfur-FRGAS, have an independent third party:

(A) Determine the volume of gasoline in the vessel;

(B) Use the foreign refiner's Sulfur-FRGAS certification to determine the name and EPA-assigned registration number of the foreign refinery that produced the Sulfur-FRGAS;

(C) Determine the name and country of registration of the vessel used to transport the Sulfur-FRGAS to the United States; and

(D) Determine the date and time the vessel arrives at the United States port of entry.

(ii) In the case of Certified Sulfur-FRGAS, have an independent third party:

(A) Collect a representative sample from each vessel compartment subsequent to the vessel's arrival at the United States port of entry and prior to off loading any gasoline from the vessel;

(B) Prepare a volume-weighted vessel composite sample from the compartment samples; and

(C) Determine the sulfur value using the methodologies specified in §80.330, by:

(1) The third party analyzing the sample; or

(2) The third party observing the importer analyze the sample.

(4) Any importer shall submit reports within thirty days following the date any vessel transporting Sulfur-FRGAS arrives at the United States port of entry:

(i) To the Administrator containing the information determined under paragraph (o)(3) of this section; and

(ii) To the foreign refiner containing the information determined under paragraph (o)(3)(ii) of this section.

(5)(i) Any United States importer shall meet the requirements specified in §80.195 for any imported gasoline that is not classified as Certified Sulfur-FRGAS under paragraph (o)(2) of this section.

(p) Truck imports of Certified Sulfur-FRGAS produced at a small refinery. (1) Any refiner whose Certified Sulfur-FRGAS is transported into the United States by truck may petition EPA to use alternative procedures to meet the following requirements:

(i) Certification under paragraph (d)(5) of this section;

(ii) Load port and port of entry sampling and testing under paragraphs (f) and (g) of this section;

(iii) Attest under paragraph (h) of this section; and

(iv) Importer testing under paragraph (o)(3) of this section.

(2) These alternative procedures must ensure Certified Sulfur-FRGAS remains segregated from Non-Certified Sulfur-FRGAS and from Non-Sulfur-FRGAS until it is imported into the United States. The petition will be evaluated based on whether it adequately addresses the following:

(i) Provisions for monitoring pipeline shipments, if applicable, from the refinery, that ensure segregation of Certified Sulfur-FRGAS from that refinery from all other gasoline;

(ii) Contracts with any terminals and/or pipelines that receive and/or transport Certified Sulfur-FRGAS, that prohibit the commingling of Certified Sulfur-FRGAS with any of the following:

(A) Other Certified Sulfur-FRGAS from other refineries;

(B) All Non-Certified Sulfur-FRGAS; or

(C) All Non-Sulfur-FRGAS;

(iii) Procedures for obtaining and reviewing truck loading records and United States import documents for Certified Sulfur-FRGAS to ensure that such gasoline is only loaded into trucks making deliveries to the United States; and

(iv) Attest procedures to be conducted annually by an independent third party that review loading records and import documents based on volume reconciliation, or other criteria, to confirm that all Certified Sulfur-FRGAS remains segregated throughout the distribution system and is only loaded into trucks for import into the United States.

(3) The petition required by this section must be submitted to EPA along with the application for small refiner status and individual refinery sulfur baseline and standards under §80.240 and this section.

(q) Withdrawal or suspension of a foreign refinery's baseline. EPA may withdraw or suspend a baseline that has been assigned to a foreign refinery where:

(1) A foreign refiner fails to meet any requirement of this section;

(2) A foreign government fails to allow EPA inspections as provided in paragraph (i)(1) of this section;

(3) A foreign refiner asserts a claim of, or a right to claim, sovereign immunity in an action to enforce the requirements in this subpart H; or

(4) A foreign refiner fails to pay a civil or criminal penalty that is not satisfied using the foreign refiner bond specified in paragraph (k) of this section.

(r) Early use of a foreign refinery baseline. (1) A foreign refiner may begin using an individual refinery baseline before EPA has approved the baseline, provided that:

(i) A baseline petition has been submitted as required in paragraph (b) of this section;

(ii) EPA has made a provisional finding that the baseline petition is complete;

(iii) The foreign refiner has made the commitments required in paragraph (i) of this section;

(iv) The persons who will meet the independent third party and independent attest requirements for the foreign refinery have made the commitments required in paragraphs (f)(4)(iii) and (h)(7)(iii) of this section; and

(2) In any case where a foreign refiner uses an individual refinery baseline before final approval under paragraph (r)(1) of this section, and the foreign refinery baseline values that ultimately are approved by EPA are more stringent than the early baseline values used by the foreign refiner, the foreign refiner shall recalculate its compliance, ab initio, using the baseline values approved by EPA, and the foreign refiner shall be liable for any resulting violation of the conventional gasoline requirements.

(s) Additional requirements for petitions, reports and certificates. Any petition for a refinery baseline under §80.250 or §80.295, any alternative procedures under paragraph (p) of this section, and any certification under paragraph (d)(3) of this section shall be:

(1) Submitted in accordance with procedures specified by the Administrator, including use of any forms that may be specified by the Administrator; and

(2) Be signed by the president or owner of the foreign refiner company, or by that person's immediate designee, and shall contain the following declaration:

I hereby certify: (1) that I have actual authority to sign on behalf of and to bind [insert name of foreign refiner] with regard to all statements contained herein; (2) that I am aware that the information contained herein is being certified, or submitted to the United States Environmental Protection Agency, under the requirements of 40 CFR. Part 80, subpart H, and that the information is material for determining compliance under these regulations; and (3) that I have read and understand the information being certified or submitted, and this information is true, complete and correct to the best of my knowledge and belief after I have taken reasonable and appropriate steps to verify the accuracy thereof.

I affirm that I have read and understand the provisions of 40 CFR Part 80, subpart H, including 40 CFR 80.410 [insert name of foreign refiner]. Pursuant to Clean Air Act section 113(c) and Title 18, United States Code, section 1001, the penalty for furnishing false, incomplete or misleading information in this certification or submission is a fine of up to $10,000, and/or imprisonment for up to five years.

[65 FR 6823, Feb. 10, 2000, as amended at 66 FR 19309, Apr. 13, 2001; 67 FR 40185, June 12, 2002; 70 FR 74578, Dec. 15, 2005]

Attest Engagements

§80.415   What are the attest engagement requirements for gasoline sulfur compliance applicable to refiners and importers?

In addition to the requirements for attest engagements that apply to refiners and importers under §§80.125 through 80.130, and §80.410, the attest engagements for importers and refiners must include the following procedures and requirements each year.

(a) Baseline. (1) Obtain the EPA sulfur baseline approval letter for the refinery to determine the refinery's applicable sulfur baseline and baseline volume under §§80.250 or 80.295.

(2) If the year being reviewed is 2004 through 2006 (2007 for refineries with small refiner status) and the refinery or importer produced or imported any GPA gasoline under §80.216 or the refiner has approved status for a small refinery:

(i) Obtain the refinery's annual sulfur reports for 2000 through 2003; and

(ii) Determine whether the annual average sulfur level for any year credits were generated for 2000 through 2003 was less than the baseline level under paragraph (a)(1) of this section.

(iii) If the annual average sulfur level for any year in which credits were generated for 2000 through 2003 was less than the baseline level under paragraph (a)(1) of this section, for small refiners report as a finding the lowest annual sulfur level as the new baseline value for purposes of establishing the small refiner standards under §80.240, and for GPA gasoline report as a finding the lowest annual sulfur level plus 30.00 ppm as the new sulfur level for purposes of credit generation under §80.310, if lower than 150.00 ppm.

(iv) If the refinery being reviewed is a small refinery and the annual volume under paragraph (b)(2) of this section is greater than the baseline volume, calculate the applicable standard in accordance with §80.240(c).

(3) Obtain a written representation from the company representative stating the sulfur value that the company used as its baseline and agree that number to paragraphs (a)(1) and (a)(2) of this section and to the reports to EPA.

(b) EPA reports. (1) Obtain and read a copy of the refinery's or importer's annual sulfur reports filed with EPA for the year.

(2) Agree the yearly volume of gasoline reported to EPA in the sulfur reports with the inventory reconciliation analysis under §80.128.

(3) For the years 2004 through 2006, calculate the annual volume and average sulfur level for gasoline classified as GPA gasoline under §§80.216 and 80.219, and calculate the annual volume and average sulfur level for gasoline not classified as GPA gasoline, and agree these values with the values reported to EPA.

(4) Except as provided in paragraph (b)(3) of this section, calculate the annual average sulfur level for all gasoline and agree that value with the value reported to EPA.

(5) Obtain and read a copy of the refinery's or importer's sulfur credit report.

(6) Agree the information in the refinery's or importer's batch reports filed with EPA under §§80.75 and 80.105, and any laboratory test results, with the information contained in the annual sulfur report required under §80.370.

(c) Credit generation before 2004. In the case of a refinery that only generates credits during 2000 through 2003:

(1) Obtain a written representation from the company representative stating the refinery produces gasoline from crude oil.

(2) Compute and report as a finding the sulfur baseline from paragraph (a) of this section multiplied by 0.9.

(3) Obtain the annual average sulfur level from paragraph (b)(4) of this section.

(4) If the sulfur value under paragraph (c)(3) of this section is less than the sulfur value under paragraph (c)(2) of this section, compute and report as a finding the difference between the annual average sulfur level and the refinery's sulfur baseline from paragraph (a) of this section.

(5) Compute and report as a finding the total number of sulfur credits generated by multiplying the value in paragraph (c)(4) of this section by the volume of gasoline in paragraph (b)(2) of this section, and agree this value with the value reported to EPA.

(d) Credit generation in 2004 and thereafter. The following procedures shall be completed for a refinery or importer that generates credits in 2004 and thereafter:

(1) Obtain the annual average sulfur level for gasoline not classified as GPA from paragraph (b)(3) of this section.

(2) If the sulfur value under paragraph (d)(1) of this section is less than 30 ppm, compute and report as a finding the difference between the sulfur level under paragraph (d)(1) of this section and 30 ppm.

(3) Compute and report as a finding the total number of sulfur credits generated by multiplying the value calculated in paragraph (d)(2) of this section by the volume of gasoline not classified as GPA in paragraph (b)(3) of this section, and agree this number with the number reported to EPA.

(4) Obtain the annual average sulfur level for gasoline classified as GPA from paragraph (b)(3) of this section.

(5) If the sulfur value under paragraph (d)(4) of this section is less than the applicable level under §80.310, compute and report as a finding the difference between the sulfur level under paragraph (d)(4) of this section and the appropriate level in §80.310 .

(6) Compute and report as a finding the total number of sulfur credits generated by multiplying the value calculated in paragraph (d)(5) of this section by the volume of gasoline classified as GPA in paragraph (b)(3) of this section, and agree this number with the number reported to EPA.

(7) If the refiner has an approved status as a small refinery, obtain the annual average sulfur level for gasoline from paragraph (b)(4) of this section.

(8) If the sulfur value under paragraph (d)(7) of this section is less than the applicable standard under §80.240, compute and report as a finding the difference between the sulfur level under paragraph (d)(7) of this section and the appropriate standard under §80.240.

(9) Compute and report as a finding the total number of sulfur credits generated by multiplying the value calculated in paragraph (d)(8) of this section by the volume of gasoline in paragraph (b)(4) of this section, and agree this number with the number reported to EPA.

(e) Credit purchases and sales. The following attest procedures shall be completed for a refinery or importer that is a transferor or transferee of credits during an averaging period:

(1) Obtain contracts or other documents for all credits transferred to another refinery or importer during the year being reviewed; compute and report as a finding the number and year of creation of credits represented in these documents as being transferred away; and agree with the report to EPA.

(2) Obtain contracts or other documents for all credits received during the year being reviewed; compute and report as a finding the number and year of creation of credits represented in these documents as being received; and agree with the report to EPA.

(f) Credits required for non-GPA gasoline. The following attest procedures shall be completed for refineries and importers in 2005 and thereafter (2004 and thereafter for refineries having standards under §80.240):

(1) Obtain the annual average sulfur level for gasoline not classified as GPA from paragraph (b)(3) of this section.

(2) If the value in paragraph (f)(1) of this section is greater than 30 ppm (or greater than the small refinery standard), compute and report as a finding the difference between 30 ppm (or the standard under §80.240) and the value in paragraph (f)(1) of this section.

(3) Compute and report as a finding the total sulfur credits required by multiplying the value in paragraph (f)(2) of this section times the volume of gasoline not classified as GPA in paragraph (b)(3) of this section, and agree with the report to EPA.

(4) Obtain the refiner's or importer's representation as to the portion of the deficit under paragraph (f)(3) of this section that was resolved with credits, the portion that was resolved with allotments in 2005 only or that was carried forward as a deficit under §80.205, and agree with the report to EPA (refineries subject to standards under §80.240 cannot carry deficits forward).

(g) Credits required for GPA gasoline. The following attest procedures shall be completed in 2004 through 2006 for a refinery or importer that produces gasoline subject to the geographic phase-in area standards under §80.216:

(1) Obtain the annual average sulfur level for the refinery's or importer's GPA gasoline from paragraph (b)(3) of this section.

(2) If the value in paragraph (g)(1) of this section is greater than the refinery's or importer's baseline plus 30 ppm under §80.216, as determined in paragraph (a) of this section or 150 ppm, whichever is less, compute and report as a finding the difference between the annual average sulfur level and the baseline level plus 30 ppm, or 150 ppm, whichever is less.

(3) Compute and report as a finding the total sulfur credits and/or allotments required by multiplying the value in paragraph (g)(2) of this section times the volume of GPA gasoline from paragraph (b)(3) of this section.

(4) Obtain the refiner's or importer's representation as to the portion of the deficit under paragraph (g)(3) of this section that was resolved with credits, or the portion that was resolved with allotments in 2004 or 2005 only (compliance deficits for GPA gasoline cannot be carried forward).

(h) Credit expiration. The following attest procedures shall be completed for a refinery or importer that possesses credits during an averaging period:

(1) Obtain a list of all credits in the refiner's or importer's possession at any time during the year being reviewed, identified by the year of creation of the credits.

(2) If the year being reviewed is 2006 and thereafter, except in the case of gasoline produced for use in the GPA and gasoline produced by small refiners, determine whether any credits identified in paragraph (h)(1) of this section or Type A sulfur allotments created under paragraph (i) of this section and converted to credits were created before 2004, and if so, report as a finding this number of expired credits.

(3) If the year being reviewed is 2008 and thereafter, determine whether any credits identified in paragraph (h)(1) of this section or Type B sulfur allotments created under paragraph (i) of this section and converted to credits were created more than 5 years before the year being reviewed, and if so, report as a finding this number of expired credits (for example, unused credits created during the 2004 averaging period expire at the end of the 2009 averaging period).

(i) Optional credit and allotment generation in 2003. The following requirements apply to any refinery that generates credits and allotments in 2003 under §80.275(a):

(1) Obtain a written representation from the company representative stating the refinery produces gasoline from crude oil.

(2) Obtain the refinery baseline value from paragraph (b)(1) of this section, the annual volume from paragraph (b)(2) of this section and the annual average sulfur level from paragraph (b)(4) of this section.

(3) Based on the annual sulfur level and refinery baseline, determine which equation under §80.275(a)(2) applies.

(4) Using the applicable equations under §80.275(a)(2), recalculate the sulfur allotments, by type, and credits and report as a finding.

(j) Credit reconciliation. The following attest procedures shall be completed each year credits were in the refiner's or importer's possession at any time during the year:

(1) Obtain the credits remaining or the credit deficit from the previous year from the refiner's or importer's report to EPA for the previous year.

(2) Compute and report as a finding the net credits remaining at the conclusion of the year being reviewed by totaling:

(i) Credits remaining from the previous year; plus

(ii) Credits generated under paragraphs (c), (d) and (i) of this section; plus

(iii) Allotments generated under paragraph (i) of this section which are converted to credits; plus

(iv) Credits purchased under paragraph (e) of this section; minus

(v) Credits sold under paragraph (e) of this section; minus

(vi) Credits used under paragraphs (f) and (g) of this section; minus

(vii) Credits expiring under paragraph (h) of this section; minus

(viii) Credit deficit from the previous year.

(3) Agree the credits remaining or the credit deficit at the conclusion of the year being reviewed with the report to EPA.

(4) If the refinery or importer had a credit deficit for both the previous year and the year being reviewed, report this fact as a finding.

(k) Sulfur allotments in 2004 and 2005. The following requirements apply to any refinery or importer that is subject to corporate pool average standards under §80.195:

(1) Corporate pool average. (i) Obtain the annual average sulfur level for the refiner or importer from the sulfur report filed with EPA for all gasoline subject to corporate pool standards (all gasoline produced and imported, except that if 50% or greater of the gasoline volume was GPA gasoline the refiner or importer is not subject to the corporate pool average).

(ii) Compute and report as a finding the company's gasoline volume subject to corporate pool standards and average sulfur level for gasoline subject to corporate pool standards, and agree with the values reported to EPA.

(2) Allotment generation. (i) For 2004, if the corporate pool average is less than 120 ppm, compute and report as a finding the number and type of sulfur allotments generated in accordance with the applicable provisions under §80.275(b).

(ii) For 2005, if the corporate pool average is less than 90 ppm, compute and report as a finding the number and type of sulfur allotments generated in accordance with the applicable provisions under §80.275(b).

(iii) If the refiner or importer produced and imported 50% or more of its gasoline for GPA use in 2004 or 2005, no allotments can be generated in that year.

(3) Allotment purchases and sales. (i) Obtain contracts or other documents for all allotments transferred to another company during the year being reviewed; compute and report as a finding the number of allotments represented in these documents as being transferred away; and agree with the report to EPA.

(ii) Obtain contracts or other documents for all allotments received during the year being reviewed; compute and report as a finding the number of allotments represented in these documents as being received; and agree with the report to EPA.

(4) Allotments required. (i) For 2004, if the corporate pool average is greater than 120 ppm, compute and report as a finding the number of allotments required by multiplying the amount the corporate pool average is above 120 ppm times the corporate pool volume, and agree with the report to EPA.

(ii) For 2005, if the corporate pool average is greater than 90 ppm, compute and report as a finding the number of allotments required by multiplying the amount the corporate pool average is above 90 ppm times the corporate pool volume, and agree with the report to EPA.

(iii) Obtain the number of allotments used to meet standards for GPA gasoline determined in paragraph (g) of this section.

(5) Allotment reconciliation. (i) Compute and report as a finding the net allotments remaining at the conclusion of the year being reviewed by totaling allotments:

(A) Generated under paragraphs (i)(4) and (k)(2) of this section; plus

(B) Purchased under paragraph (k)(3) of this section; minus

(C) Sold under paragraph (k)(3) of this section; minus

(D) Used under paragraph (k)(4) of this section for demonstrating compliance with the corporate pool average.

(ii) Report as a finding any allotments generated in 2003 or 2004 that are used to meet the corporate pool standards in 2005 that were not reduced to 50% of their original value.

(iii) If the company's net allotments remaining are less than zero, report this fact as a finding.

[65 FR 6823, Feb. 10, 2000, as amended at 67 FR 40185, June 12, 2002; 71 FR 54912, Sept. 20, 2006]



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