# Presentation: 658821

## Compliance Overview		

- Motor Vehicle Diesel Fuel Rule

## Compliance Goals

- Assure compliance with:
- The 15 ppm sulfur standard --  from the refinery through all levels of the distribution system, including at retail outlets and wholesale purchaser-consumer facilities
- Other standards & requirements for 15 ppm motor vehicle diesel fuel -- cetane/aromatics, no dye unless tax exempt
- Refiner/importer 15 ppm volume requirements (80% of motor vehicle diesel fuel meets 15 ppm sulfur standard)

## Compliance Goals (cont.)

- Assure Compliance With:
- Temporary compliance option, Small refiner options, GPA, and hardship provisions
- 500 ppm motor vehicle diesel standards
- Downgrading limitations & recordkeeping
- Credit generation, transfer and use
- Additive standards & use
- Diesel fuel pump stand labels
- Recordkeeping and reporting requirements

## Compliance Goals (cont.)

- Prevent:
- Misfueling & Misdeliveries
- Contamination of 15 ppm fuel
- Use of used motor oil in MY 2007 and later vehicles
- Use of kerosene not meeting standards

## Sulfur Standards

| Level | Standard |
| --- | --- |
| Refiner and importer | 15 ppm  |
| Downstream  				 | 15 ppm but with negative 2 ppm test result adjustment 
(§ 80.580(a)(4)). |
| Temporary Compliance Option & Small Refiners | 500 ppm--only for pre-MY 2007 vehicles
 |

## Other Standards and Dye Requirements

- Current cetane/aromatics standards also apply to 15 ppm mvdf
- Refiner or importer must continue to dye nonroad diesel (“visible evidence”)
- Internal Revenue Code dye requirements are not changed

## EPA Inspections and Audits

- EPA will monitor compliance through:
- Sampling and testing mvdf at all levels of the distribution system
- Auditing refiners, importers and other parties (e.g., temporary compliance option, GPA option, credits, downgrading limitations)
- Inspecting reports, records, PTDs, commercial documents

## Pump Labels and Vehicle Labels

- Diesel fuel pump stands must be labeled as prescribed by § 80.570
- 15 ppm:  “LOW-SULFUR DIESEL FUEL”
- 500 PPM: “HIGH-SULFUR DIESEL FUEL”
- Nonroad: “NONROAD DIESEL FUEL – WARNING
-    May damage or destroy highway engines and their emission controls.  Federal law prohibits use in any highway vehicle”
- MY 2007 vehicles:  “Low-Sulfur Diesel Fuel Only”   (near fuel inlet and on dashboard)

## Implementation Dates 

| Location | Date |
| --- | --- |
| Refiner compliance with 15 ppm standard | June 1, 2006 |
| Downstream locations except retail, wp-c | July 15, 2006 |
| Retail/Wp-c: | Sept. 1, 2006 |
| End of production or import of 500 ppm fuel by all refiners and importers | June 1, 2010 |
| 15 ppm sulfur only for downstream parties except retailers & wpc’s | Oct. 1, 2010 |
| 15 ppm sulfur only for retailers & wpc’s | Dec. 1, 2010 |

## Additives 

- Additives Blended Downstream
- Must have and maintain PTDs;
- Must meet 15 ppm std.; or
- May exceed 15 ppm if <1% of total volume of fuel and PTD provides specified warnings; must not be used by consumers
- If additive causes diesel fuel to exceed 15 ppm, downstream blender liable
- Additives for Consumer Use Only
- Container must state whether complies with 15 ppm sulfur standard; OR
- Does not comply with 15 ppm sulfur std. and may not be used in MY 2007 and later vehicles

## Winter Kerosene Blending

- Kerosene must meet the 15 ppm sulfur standard if it is blended into fuel distributed as 15 ppm mvdf
- PTD to blender must indicate the kerosene meets the 15 ppm standard; OR
- The blender must have test results showing that the kerosene complies with the 15 ppm standard

## Exemptions (§§ 80.602 and 80.501)

- Fuel for use in vehicles having an EPA  National Security Exemption
- Fuel for use in tactical military vehicles under limited conditions
- Exported fuel with PTD identifying it for export

## Credit Use & Transfers

- Credits generated under this rule may not be used for any purpose other than meeting the mvdf volume requirements
- Generation and use in same CTA
- Transfers only permitted between refiners/importers
- One extra transfer permitted after initial transfer
- Non-refiners/importers cannot take title

## Refiner Hardship Waivers & Enforcement Discretion 

- Extreme hardship - refiner may petition Agency to allow delayed compliance with the 15 ppm standard if cannot produce 15 ppm fuel on time despite best efforts (§ 80.560)
- Force Majeure - refiner or importer may petition Agency to exercise enforcement discretion (§ 80.561)
- Extreme, unusual and unforeseen circumstances
- Substantial conditions provided in § 80.561
- In both cases, fuel exceeding 15 ppm sulfur content can only be used in pre MY 2007 vehicles

## Violations and Liability 

- Violation of prohibited acts or requirements are subject to penalties
- Presumptive liability scheme like other fuels programs (RFG, Volatility, Gasoline sulfur)
- Liability for selling, transferring, etc. nonconforming fuel at your own facility
- Liability for downstream violations
- “Vicarious” liability for branded refiners

## Defenses

- In general, defense elements to presumptive liability include:
- Did not cause
- PTDs account for product and show product in compliance when in custody of the party
- Quality assurance program including sampling and testing
- Truck carriers who do not take title may have alternative oversight in lieu of testing
- Retailers/Wp-c’s are not required to sample and test
- If downstream blender blends additive with sulfur content > 15 ppm into motor vehicle fuel, as part of defense must test every batch of fuel after blended

## Foreign Refiner Provisions

- Importer cannot earn volume credits for Certified DFR Diesel produced by foreign refiner