[Federal Register Volume 74, Number 120 (Wednesday, June 24, 2009)]
[Rules and Regulations]
[Pages 29948-29952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14849]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA EPA-HQ-OAR-2005-0161; FRL-8922-6]
RIN 2060-AO80
Regulation of Fuels and Fuel Additives: Modifications to
Renewable Fuel Standard Program Requirements
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is finalizing amendments to the Renewable Fuel Standard
program requirements. Following publication of the May 1, 2007, final
rule promulgating the Renewable Fuel Standard regulations, EPA
discovered a number of technical errors and areas within the
regulations that could benefit from clarification or modification. In
parallel proposed and direct final rules published on October 8, 2008,
EPA proposed to amend the regulations to make the appropriate
corrections, clarifications and modifications. However, EPA received
adverse comment on several provisions in the parallel proposed and
direct final rules and, on November 26, 2008, withdrew those provisions
from the direct final rule that drew adverse comment. In today's
action, EPA is addressing the comments received on the portions of the
direct final rule that were withdrawn and is finalizing those withdrawn
provisions with minor clarifying changes.
DATES: This final rule is effective on August 24, 2009.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2005-0161. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through http://www.regulations.gov or in hard copy at the Air and Radiation Docket, ID
No. EPA-HQ-OAR-2005-0161, EPA West, Room 3334, 1301 Constitution Ave.,
NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air and Radiation Docket is (202) 566-9744.
FOR FURTHER INFORMATION CONTACT: Meg McCarthy, Compliance and
Innovative Strategies Division, Office of Transportation and Air
Quality (6406J), Environmental Protection Agency, 1200 Pennsylvania
Avenue, NW., 20460; telephone number: (202) 343-9968; fax number: (202)
343-2802; e-mail address: [email protected].
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does This Action Apply to Me?
Entities potentially affected by this action include those involved
with the production, importation, distribution and sale of gasoline
motor fuel or renewable fuels such as ethanol and biodiesel. Regulated
categories and entities affected by this action include:
[[Page 29949]]
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NAICS codes Examples of potentially
Category \a\ SIC codes \b\ regulated parties
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Industry...................................... 324110 2911 Petroleum refiners, importers.
Industry...................................... 325193 2869 Ethyl alcohol manufacturers.
Industry...................................... 325199 2869 Other basic organic chemical
manufacturers.
Industry...................................... 424690 5169 Chemical and allied products
merchant wholesalers.
Industry...................................... 424710 5171 Petroleum bulk stations and
terminals.
Industry...................................... 424720 5172 Petroleum and petroleum products
merchant wholesalers.
Industry...................................... 454319 5989 Other fuel dealers.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could be potentially regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your entity is regulated by this action, you should carefully examine
the applicability criteria of part 80, subpart K of title 40 of the
Code of Federal Regulations. If you have any question regarding
applicability of this action to a particular entity, consult the person
in the preceding FOR FURTHER INFORMATION CONTACT section above.
II. Renewable Fuel Standard Program Amendments
EPA issued final regulations implementing the Renewable Fuel
Standard Program on May 1, 2007. EPA subsequently identified a number
of technical errors and ambiguities in the regulations and, in parallel
proposed and direct final rules published on October 2, 2008, proposed
to amend the regulations to correct these deficiencies. EPA received
adverse comment on certain of the proposed changes, so, on November 26,
2008, formally withdrew the portions of the direct final rule that were
the subject of adverse comment. Those provisions consisted of
amendments to 40 CFR 80.1129(b)(1) and 80.1129(b)(8) (providing that a
party with a small refinery or small refiner exemption may only
separate RINs that have been assigned to a volume of renewable fuel
that the party blends into motor vehicle fuel), 40 CFR 80.1129(b)(4)
(providing that any party may separate the RINs from renewable fuel
that it produces or markets for use in motor vehicles, or uses in motor
vehicles without further blending), and 40 CFR 80.1131(a)(8) and
80.1131(b)(4) (changing the location in the RFS regulations of a
provision stating that a RIN that is transferred to two or more parties
is considered an invalid RIN unless EPA in its sole discretion
determines that some portion of these RINs is valid). EPA published a
parallel proposed rule (73 FR 57274) on the same day as the direct
final rule. The proposed rule invited comment on the substance of the
direct final rule and indicated that a second comment period would not
be offered on the proposal in the event that portions of the direct
final rule were withdrawn in response to adverse comment. In this
action, we are responding to the comments received on the portions of
the direct final rule that were withdrawn, and we are finalizing the
proposed technical corrections with minor clarifying changes.
A. Separating RINs: Parties With Small Refiner or Small Refinery
Exemption
EPA proposed the addition of 40 CFR 80.1129(b)(8) and a conforming
change to 80.1129(b)(1) to clarify that a party with a small refinery
or small refiner exemption may only separate Renewable Identification
Numbers (RINs) that have been assigned to a volume of renewable fuel
that the party blends into motor vehicle fuel.
In response to this proposed amendment, EPA received a comment
which stated that the proposed 80.1129(b)(8) would result in the
provision being overly broad. The comment further articulated a concern
that EPA has mistakenly concluded that all refiners who have received
either a small refiner exemption under 40 CFR 80.1142 or a small
refinery exemption under 40 CFR 80.1141 are not obligated parties under
the RFS program, and therefore, that those refiners may only separate
RINs that have been assigned to volumes of renewable fuel that the
refiner blends into motor vehicle fuel. Refiners who have received the
small refinery exemption either are not obligated parties because they
do not operate other non-exempt refineries or they are obligated
parties because they do operate other non-exempt refineries. The
commenter argued that the proposed technical amendment to add 40 CFR
80.1129(b)(8), as written, applies to both groups, but that it should
apply only to the former group of refiners and not the latter.
EPA agrees with the comment and has added a clause to the final
amendment to 40 80.1129(b)(8) to clarify our intention. Thus, the final
rule states that it applies only to parties that have received a small
refinery or small refiner exemption and who are ``not otherwise
obligated parties.''
B. Separating RINs for Renewable Fuel Designated for Use as Motor
Vehicle Fuel and Used as Motor Vehicle Fuel
EPA proposed changes to 40 CFR 80.1129(b)(4) in order to clarify
that any party, not just renewable fuel producers or importers, may
separate the RINs from renewable fuel when it designates that fuel for
use in motor vehicles and the renewable fuel is used in motor vehicles
in that designated form.
EPA received a comment on 80.1129(b)(4) which stated that that
regulation should clarify that EPA intends the provision to apply to
motor vehicle fuel used in its neat form, deposited directly into a
motor vehicle fuel supply tank as motor vehicle fuel. In response, EPA
confirms that the provision was originally meant to apply to neat
renewable fuel that is designated for use as motor vehicle fuel, and is
used as motor vehicle fuel in its designated form. In other words, the
provision applies to neat renewable fuel that is directly used as motor
vehicle fuel and is not blended any further. For purposes of the RFS
program, ``neat renewable fuel'' is defined in 80.1101(p) as ``a
renewable fuel to which only de minimis amounts of conventional
gasoline or diesel have been added.'' Under the RFS program, denatured
ethanol is considered neat renewable fuel, as is denatured ethanol with
only an additional de minimis quantity of gasoline added. In the case
of biodiesel, a biodiesel producer would be authorized under
80.1129(b)(4) to separate RINs for B100 or B99 that it designates as
motor vehicle fuel, providing that the fuel is in fact used that way.
[[Page 29950]]
In contrast, any party that blends ethanol with more than a de
minimis additional amount of gasoline beyond what is used for
denaturing, or blends biodiesel with 20 volume percent or more of
conventional diesel must separate any RINs assigned to that volume of
renewable fuel, as required under 80.1129(b)(2). Biodiesel blends in
which conventional diesel constitutes less than 20 volume percent and
more than one percent are ineligible for RIN separation under any
circumstances, as specified in 80.1129(b)(2) and (b)(5). As noted in
the preamble to the final RFS regulations, it is EPA's understanding
that in the vast majority of cases, biodiesel is blended with diesel in
biodiesel concentrations of 80 volume percent or less. Therefore, EPA
did not anticipate that this restriction would operate to significantly
restrict biodiesel blending for fuel production, while it would afford
some measure of protection against the possibility that renewable fuel
producers could hold back RINs from obligated parties for the purpose
of driving up their price. However, we may revisit this issue in a
future RFS rulemaking since circumstances may change such that
biodiesel blends of 81 percent or greater begin to be used more
commonly as motor vehicle fuel.
In the proposed technical amendments, EPA proposed to expand the
parties eligible to separate RINS for neat renewable fuel to include
any party that produces, imports, owns, sells or uses such fuel. EPA is
finalizing the proposed change to 80.1129(b)(4) and, in response to
comment, is clarifying that this section applies only to neat renewable
fuel.
In addition, EPA is making conforming amendments to 80.1151(b)(5)
and 80.11129(b)5)(ii) to reflect the expanded applicability of
80.1129(b)(4).
C. Duplicate RINs
EPA proposed changes to 40 CFR 80.1131(a)(8) and 80.1131(b)(4),
which consisted of changing the location in the RFS regulations of a
provision stating that a RIN that is transferred to two or more parties
is considered an invalid RIN unless EPA in its sole discretion
determines that some portion of these RINs is valid.
EPA received a comment which stated that EPA should not invalidate
all duplicate RINs, but, rather, the party transferring duplicate RINs
should be required to take appropriate actions such as notifying all
parties who have received the duplicate RINs, determine which RINs are
valid and which are invalid, and transfer replacement RINs to those
parties that received invalid RINs.
In response, EPA believes that if duplicate RINs are not made
automatically invalid, problems associated with the duplicate RINs may
be compounded downstream from the original duplication. For example,
additional downstream transfers of duplicate RINs could occur if
transferees are confused about which RINs are valid and which are not.
EPA believes this type of confusion is minimized by automatically
invalidating all RINs for which duplicates have been identified, and
giving EPA sole discretion to determine if any of the duplicate RINs
are valid. Since EPA received no comment on its proposed relocation of
this provision within the RFS program regulations, EPA is finalizing
the technical amendments to 40 CFR 80.1131(a)(8) and 80.1131(b)(4) as
proposed.
III. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this action is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review. This final rule simply makes minor
technical changes to the RFS regulations and modifies certain
requirements to make them less burdensome for regulated parties.
B. Paperwork Reduction Act
This action does not impose any new information collection burden.
This action makes minor technical corrections to the regulations and
modifies certain requirements to lessen the burden on related parties
while maintaining the overall goals of the program. None of the changes
in the rule require any additional information collection burdens. The
Office of Management and Budget (OMB) has previously approved the
information collection requirements contained in the existing
regulations 40 CFR part 80, subpart K, under the provisions of the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB
control number 2060-0600. The OMB control numbers for EPA's regulations
in 40 CFR are listed in 40 CFR part 9.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business as defined
by the Small Business Administration's (SBA) regulations at 13 CFR
121.201; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
In determining whether a rule has a significant economic impact on
a substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, or otherwise has a positive economic effect
on all of the small entities subject to the rule. This action
[[Page 29951]]
makes minor technical corrections to the regulations and modifies
certain requirements to lessen the burden on regulated parties. Thus,
after considering the economic impacts of today's final rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
D. Unfunded Mandates Reform Act
This rule does not contain a Federal mandate that may result in
expenditures of $100 million or more for State, local, and tribal
governments, in the aggregate, or the private sector in any one year.
This action makes minor technical corrections to the RFS regulations
and modifies certain provisions to lessen the requirements for
regulated parties. As a result, this rule will have the overall effect
of reducing the burden of the RFS regulations on regulated parties.
Thus, this rule is not subject to the requirements of sections 202 or
205 of UMRA.
This rule is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. It only applies to
gasoline and renewable fuel producers, importers, distributors and
marketers and makes minor corrections and modifications to the RFS
regulations.
E. Executive Order 13132 (Federalism)
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.''
``Policies that have Federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This final rule does not have Federalism implications. It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This action makes minor
technical corrections and certain modifications that lessen the burden
on related parties. Thus, Executive Order 13132 does not apply to this
rule.
F. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
This final rule does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). It applies to
gasoline and renewable fuel producers, importers, distributors and
marketers. This action makes minor corrections and modifications to the
RFS regulations, and does not impose any enforceable duties on
communities of Indian tribal governments. Thus, Executive Order 13175
does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying
only to those regulatory actions that concern health or safety risks,
such that the analysis required under section 5-501 of the EO has the
potential to influence the regulation. This action is not subject to EO
13045 because it does not establish an environmental standard intended
to mitigate health or safety risks.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This rule is not subject to Executive Order 13211 (66 FR 18355 (May
22, 2001)), because it is not a significant regulatory action under
Executive Order 12866.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This action does not involve technical standards. Therefore, EPA
did not consider the use of any voluntary consensus standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. These technical amendments do not relax the control
measures on sources regulated by the RFS regulations and therefore will
not cause emissions increases from these sources.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
List of Subjects in 40 CFR Part 80
Environmental protection, Fuel additives, Gasoline, Imports, Motor
vehicle pollution, Reporting and recordkeeping requirements.
Dated: June 18, 2009.
Lisa P. Jackson,
Administrator.
0
40 CFR Part 80 is amended as follows:
[[Page 29952]]
PART 80-REGULATION OF FUEL AND FUEL ADDITIVES
0
1. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7542, 7545, and 7601(a).
0
2. Section 80.1129 is amended as follows:
0
a. By revising paragraph (b)(1).
0
b. By revising paragraph (b)(4).
0
c. By revising paragraph (b)(5)(ii).
0
d. By adding paragraph (b)(8).
Sec. 80.1129 Requirements for separating RINs from volumes of
renewable fuel.
* * * * *
(b) * * *
(1) Except as provided in paragraphs (b)(6) and (b)(8) of this
section, a party that is an obligated party according to Sec. 80.1106
must separate any RINs that have been assigned to a volume of renewable
fuel if they own that volume.
* * * * *
(4) Any party that produces, imports, owns, sells or uses a volume
of neat renewable fuel may separate any RINs that have been assigned to
that volume of neat renewable fuel if the party designates the neat
renewable fuel as motor vehicle fuel, and the neat renewable fuel is
used as a motor vehicle fuel.
(5) * * *
(ii) This paragraph (b)(5) shall not apply to any party meeting the
requirements of paragraph (b)(4) of this section.
* * * * *
(8) For a party that has received a small refinery exemption under
Sec. 80.1141 or a small refiner exemption under Sec. 80.1142, and who
is not otherwise an obligated party, during the period of time that the
small refinery or small refiner exemption is in effect the party may
only separate RINs that have been assigned to volumes of renewable fuel
that the party blends into motor vehicle fuel in accordance with
paragraph (b)(2) of this section.
* * * * *
3. Section 80.1131 is amended by adding paragraph (a)(8) and
removing paragraph (b)(4) to read as follows:
Sec. 80.1131 Treatment of invalid RINs.
(a) * * *
(8) In the event that the same RIN is transferred to two or more
parties, all such RINs will be deemed to be invalid, unless EPA in its
sole discretion determines that some portion of these RINs is valid.
* * * * *
4. Section 80.1151 is amended by revising paragraph (b)(5) to read
as follows:
Sec. 80.1151 What are the recordkeeping requirements under the RFS
program?
* * * * *
(b) * * *
(5) Records related to the production, importation, ownership, sale
or use of any volume of neat renewable fuel that any party designates
as motor vehicle fuel and uses as motor vehicle fuel.
* * * * *
[FR Doc. E9-14849 Filed 6-23-09; 8:45 am]
BILLING CODE 6560-50-P