SUPPLEMENTAL RFG/ANTI-DUMPING QUESTIONS AND ANSWERS

                             JANUARY 22, 1996

                               PROHIBITIONS

[Note: The following is an update of Question 1, Prohibitions Section, 

from the October 31, 1995 Question and Answer document, which 

describes a modified approach for early use of the complex model.  

This update changes the classification of the gasoline under this 

modified early complex model approach from complex model gasoline to 

simple model gasoline.  In addition, this update provides additional 

guidance for issues involving the valid range of the complex model, 

and for reporting requirements for gasoline produced under the 

modified early complex model approach.]

1.  Question:  Under section section 80.78(a)(9), early use of complex 

model gasoline is limited by the requirement that all such gasoline be 

segregated throughout the distribution system from the point of 

production to the point of final sale or use.  Because this 

restriction severely limits the fungibility of the product, in most 

situations, early use complex model gasoline is not economically 

viable.  However, if an reformulated gasoline manufacturer were to 

produce early use complex model gasoline meeting all of the early use 

complex model requirements, and also meet all the simple model 

requirements applicable to refinery compliance, other than the 

requirements for sulfur, olefins and T90, would it still be necessary 

to segregate early use complex model gasoline?

     Answer:

1.  Background.

     The requirements for segregating early use complex model gasoline 

throughout the system, under section 80.78(a)(9), is based upon 

concerns regarding enforcement of standards downstream, e.g., at 

retail stations, and the effect complex model gasoline would have on 

the compliance survey.  If complex model and simple model gasoline 

were freely mixed, or if early complex model gasolines from different 

refineries were mixed, downstream enforcement would be severely 

complicated since commingled complying gasolines might not meet all of 

the standards that are enforced downstream.  Furthermore, it would not 

be apparent against which standards such gasoline should be judged for 

compliance.  Similarly, with the compliance survey, it is required 

that a complex model survey component and a simple model survey 

component be performed.  If simple and complex model gasolines were 

commingled, survey results could not be appropriately judged against 

either complex or simple model standards.  Both the enforcement 

concerns and the compliance survey concerns relate, in part, to the 

possibility that complex model gasoline may not meet the downstream 

simple model standards specified in sections 80.41(a) and (b).

2.  Alternative simple model compliance approach.

       Certain of the advantages of the early complex model may be 

obtained without creating the problems associated with commingling 

simple and complex gasoline, however, and without compromising the 

environmental benefits intended for reformulated gasoline, in the case 

of reformulated gasoline that meets a combination of certain of the 

simple model standards and the early complex model standards.  In 

particular, reformulated gasoline certified under the simple model 

that meets all of the simple model standards except the standards for 

sulfur, T-90 and olefins, and that also meets all the early complex 

model standards, would not create the enforcement and survey 

difficulties anticipated by section 80.78(a)(9).  In effect, this 

would be simple model gasoline for which an alternative approach is 

used for showing compliance with the simple model standards for 

sulfur, T-90 and olefins.

     Reformulated gasoline produced under this alternative simple 

model compliance approach would be fungible with other simple model 

reformulated gasoline downstream of the refinery, because the simple 

model standards for sulfur, T-90 and olefins are not included in the 

calculation of any other simple model standards.  The environmental 

benefits associated with the simple model standards for sulfur, T-90 

and olefins would be achieved through compliance with the early 

complex model standards for VOC, toxics and NOx emissions performance.  

Reformulated gasoline that meets all early use complex model standards 

would be at least as environmentally clean, and possibly cleaner than, 

comparable simple model gasoline.  

     Provided that a refiner or importer has completed the 

notification and reporting requirements discussed below, and has met 

all other requirements discussed in this Answer, the party would have 

the option at the conclusion of an averaging period of showing 

compliance with either (1) all of the simple model standards, 

including the standards for sulfur, T-90 and olefins, or (2) all of 

the simple model standards except the standards for sulfur, olefins 

and T90 and all early complex model standards.    The party must show 

compliance through one of these options, and may use only one of these 

options for all reformulated gasoline produced at a refinery, or 

imported by an importer, during the calendar year averaging period.

     Under section 80.41(h)(2)(iii) a refiner that operates more than 

one refinery must meet the simple model standards for sulfur, T-90 and 

olefins using the same refinery aggregations that are elected for 

conventional gasoline compliance under section 80.101(h).  As a result 

of this grouping requirement, a refiner who operates refineries that 

are aggregated under section 80.101(h) must make the same election 

regarding the alternative simple model compliance approach discussed 

in this Answer for each refinery in an aggregation.  For example, 

consider a refiner who operates refineries A, B and C and who elects 

under section 80.101(h) to aggregate refineries A and B.  If this 

refiner elects to use the alternative simple model compliance approach 

for refinery A this same election also must be made for refinery B.  

The refiner could make a different election for refinery C, however.

3.   Standards under the alternative approach.

     The simple model standards are specified in sections 80.41(a) and 

(b) (for oxygen, benzene and toxics emissions performance, and RVP in 

the case of VOC-controlled reformulated gasoline) and in section 

80.41(h)(2)(i) (for sulfur, T-90 and olefins).  Under the alternative 

simple model compliance approach only the standards for oxygen, 

benzene, RVP and toxics emissions performance must be met.

      The Phase I complex model includes standards for oxygen and 

benzene that are identical to the simple model standards for these 

parameters, and standards for VOC, toxics and NOx emissions 

performance.  Under early use complex model, however, the VOC, toxics 

and NOx emissions reduction levels specified in sections 80.41 (c) and 

(d) are not used.  Instead, under section 80.41(j) refinery- or 

importer-specific reduction levels for these emissions performances 

are calculated using, in part, the refinery- or importer-specific 

baseline values for sulfur, E-300 and olefins.

     Under section 80.65(c) a refiner or importer must elect to meet 

the early complex model VOC, toxics and NOx standards either on 

average or on a per-gallon basis.  This election also applies under 

the alternative approach to simple model compliance.  The per-gallon 

versus average election must be made by importers, and by refiners 

separately for each refinery. Moreover, this election must be made 

separately for each of the three emissions performance requirements.  

In the case of a refiner or importer opting for average compliance for 

VOC or NOx emissions performance, each batch of reformulated gasoline 

would be subject to the per- gallon minimum standards that are set in 

conjunction with the average standards.  There is no per-gallon 

minimum associated with the toxics emissions performance average 

standard.  In the case of a refiner or importer opting the per-gallon 

standards for either VOC, toxics or NOx emissions performance, each 

batch of reformulated gasoline would be subject to the per- gallon 

standard.

     Under section 80.41(j) the early complex model standards for VOC, 

toxics and NOx emissions performance are calculated separately for the 

per-gallon and average standards, and for the per-gallon minimum 

associated with the average standard.  These calculations are based 

on:

     The per-gallon standards for oxygen, benzene and RVP under section

     80.41(a) (in the case of standards that are met on a per-gallon

     basis), the average and per-gallon minimum/maximum standards for

     oxygen, benzene and RVP under section 80.41(b) (in the case of

     standards that are met on average);

     The applicable aromatics value, as specified at section 80.41(j)(2);

     and

     The refinery's or importer's baseline values for sulfur, E-300 and

     olefins.

     Under section 80.67(a) a refiner or importer may meet the 

reformulated gasoline standards on average only if the survey 

requirements of section 80.68 are met.  Nevertheless, a refiner or 

importer using the alternative simple model compliance approach could 

elect to be subject to the average early complex model standards for 

VOC, toxics or NOx emissions performance without having met the survey 

requirements.  This departure from the requirements of section 

80.67(a) is appropriate because the gasoline produced under the 

alternative simple model compliance approach is classified as simple 

model gasoline for purposes of the gasoline quality surveys, and no 

separate complex model surveys would result from operation of this 

approach.  

     If during any averaging period, including the 1995 averaging 

period, any batch of reformulated gasoline produced at a refinery or 

imported by an importer failed to meet the per-gallon or minimum VOC, 

toxics or NOx emissions performance standards discussed above, that 

refinery or importer would be ineligible for the alternative simple 

model compliance approach for that averaging period.

     The approach discussed in this Answer would not change the manner 

in which oxygen or benzene credits are created, transferred or used.  

Oxygen and benzene credits are used only to show compliance with the 

oxygen and benzene standards, and compliance with all other standards 

must be shown on the basis of the quality of gasoline produced or 

imported exclusive of any credit transfers. 

4.  Testing requirements under the alternative approach.

     Under section 80.65(e) a refiner or importer is required to 

determine certain properties for reformulated gasoline prior to the 

gasoline leaving the refinery or import facility.  In the case of 

reformulated gasoline subject to the simple model standards, these 

parameters are limited to oxygen and benzene, and RVP for 

VOC-controlled reformulated gasoline.  In contrast, reformulated 

gasoline subject to the complex model standards must, prior to 

release, be analyzed for the full slate of properties specified under 

section 80.65(e).  Any reformulated gasoline produced under the 

alternative simple model compliance approach is classified as simple 

model gasoline, and, in consequence, the refiner or importer is 

required only to meet the simple model pre-release sampling and 

testing requirements.  This approach is appropriate because the 

purpose of the pre-release sampling and testing is to ensure 

compliance with the downstream standards, and only the simple model 

downstream standards apply under the alternative simple model 

compliance approach.

5.  Application of model valid range limits.

     Since under the alternative approach to simple model compliance 

reformulated gasoline must meet all the requirements of the early-use 

complex model as well as all the standards under the simple model 

(except for the caps on sulfur, olefins, and T90), every batch of 

reformulated gasoline produced or imported under this approach must 

meet the valid range limits specified for the simple model in section 

80.42(c) and those specified for the complex model in section 

80.45(f)(1)(i).  These valid range limits delineate the range of 

values within which the compliance models may be used, and outside of 

which they may not be used.  Therefore, the more stringent valid range 

limits would apply to every batch.  For example, for aromatics content 

the simple model valid range limits are 0 through 55 vol%, while the 

complex model valid range limits are 0 through 50 vol%.  Thus, no 

batch of reformulated gasoline produced under the alternative simple 

model compliance approach could have an aromatics content greater than 

50 vol%.

     As discussed above, under the early-use complex model a refiner 

or importer must determine the VOC, toxics and NOx standards with 

which its reformulated gasoline must comply according to section 

80.41(j), based in part on a refinery's or importer's individual 

baseline levels for sulfur, olefins and E-300.  It is possible, 

however, that a refinery's or importer's baseline values for one or 

more of these three parameters may fall outside the valid range limits 

given in section 80.45(f)(1)(i).  If this is the case the refiner or 

importer nevertheless may use the alternative simple model compliance 

approach by substituting the section 80.45(f)(1)(i) valid range limit 

for the baseline parameter outside the valid range.  Thus, for 

example, if a refiner has a baseline olefins level that is greater 

than the 25 vol% limit under section 80.45(f)(1)(i), the refiner may 

use a value of 25 vol% for purposes of calculating the early complex 

model standards under section 80.41(j).  Note that this flexibility 

does not apply to any batch of reformulated gasoline produced under 

this alternative simple model compliance approach; every batch of 

reformulated gasoline must have fuel parameters which fall within the 

complex model range limits specified in section 80.45(f)(1)(i).

6.  Implications of alternative approach for conventional gasoline.

     Any reformulated gasoline for which compliance is achieved under 

this alternative approach is classified as simple model reformulated 

gasoline, as described above.  As a result, under sections 

80.41(i)(1)(ii)(A) and 80.101(c)(1)(i) any conventional gasoline 

produced at the same refinery or imported by the same importer also 

must comply with the simple model standards under section 

80.101(b)(1).  Consequently, the complex model valid range limits, 

discussed above, are not relevant to the conventional gasoline 

produced or imported under this approach.  The approach discussed in 

this Answer would not, however, alter the opportunity for a refiner or 

importer who produces no reformulated gasoline to produce conventional 

gasoline in compliance with the optional complex model standards under 

section 80.101(b)(2).

7.  Notification and reporting.

     Any refiner or importer who intends to have the option of using 

this alternative simple model compliance approach for any calendar 

year averaging period must notify EPA of this intent with the first 

quarterly report for that year (due on May 31 of each year).  This 

notification must be made as part of the annual compliance 

designation, and also must specify, separately for VOC, toxics and NOx 

emissions performance, whether the early complex standard will be met 

on a per-gallon basis or on average.  In addition, the party must 

include in all batch reports the information necessary to show 

compliance with both the simple model standards and the early complex 

model standards.  This reporting requirement is discussed more fully 

below.

     In the case of the 1995 averaging period, however, a party could 

not have satisfied this notification requirement.  Therefore, a party 

who otherwise qualifies may use the alternative simple model 

compliance approach provided that an updated designation report is 

submitted with the report for the fourth quarter of 1995 (due on 

February 29, 1996), and batch reports for all batches produced or 

imported during the 1995 averaging period are resubmitted at that time 

to include the necessary information, specified below.  EPA will 

release a revised Annual Compliance Designation form prior to that 

time. 

     EPA will modify its "Reformulated Gasoline and Anti-Dumping 

Electronic Data Interchange Technical Guideline" by adding the code 

"AS" (alternative approach simple model) to code list 07 (section 

8.3.1) for use in properly designating gasoline produced under this 

method in batch reports submitted via EDI.  Parties who will use this 

approach for 1995 and who have previously filed batch reports during 

1995 via electronic data interchange (EDI) must resubmit all such 

batch reports with the correct designation no later than February 29, 

1996.  Only the compliance method (simple model, complex model, 

alternative approach simple model) may be changed in these 

resubmissions.

     The paper batch report will not be modified because the 

designation of simple or complex is not currently required on that 

report (it is covered by the designation form).  If at the end of 1996 

or 1997, after designating the alternative compliance method for the 

year, a party wishes to use the simple model standards specified in 

the regulations, the party may either resubmit the Annual Compliance 

Designation form or resend all EDI batch reports with the proper 

designation, and subject to the conditions laid out below, no later 

than the last day of February immediately following the reporting 

year.

     Any party intending to use the approach discussed in this Answer 

must submit to EPA batch reports with all of the information required 

to demonstrate compliance with both simple model and early use complex 

model standards, as discussed above.   This requirement applies to 

batches of reformulated gasoline or RBOB produced in 1994 or 1995 

(which must be resubmitted) and to batches produced in 1996 and 1997.  

Reports previously submitted by independent laboratories need not be 

resubmitted, however.  In addition, in the case of a sample collected 

by an independent laboratory during the fourth quarter of 1995 which 

was not analyzed for complex model parameters, if the sample is no 

longer available the independent laboratory may report only the simple 

model parameters for that sample.

     Additionally, since parties using this alternative approach are 

making early use of the complex model, they must submit to EPA, at the 

time of designation, a letter stating the calculated early-use complex 

model VOC, toxics and NOx emissions performance standards applicable 

to each refinery, or to each importer, which will use this method.  

The calculation and reporting of these standards is detailed above, 

and in sections 80.41(j) and 80.75(k).  On their batch reports, 

refiners and importers must then report their VOC, NOx and toxics 

emissions performance as a percent reduction from these emission 

standards rather than from the statutory baseline emission standards.  

     Consider, for example, a refiner whose refinery's calculated 

early-use complex model per-gallon emissions standards are 1036.82 

mg/mi for VOC, 38.4311 mg/mi for toxics and 691.6079 mg/mile for NOx.  

This refiner has elected to meet the early complex model standards on 

a per-gallon basis.  A batch of gasoline produced shows emissions 

results from the complex model of 1007.53 mg/mile of VOC, 37.0122 

mg/mile of toxics and 697.3742 mg/mile of NOx.  The refiner would 

report emissions reductions of 2.8% for VOC (29.29 mg/mi below the 

applicable standard), 3.7% for toxics (1.4189 mg/mi below the 

standard) and -0.8% for NOx (5.7663 mg/mi above the standard).  This 

batch would be in violation of the early-use complex model NOx 

standard, because the NOx emissions performance shows a 0.8% increase 

in NOx emissions (a -0.8% reduction) relative to the refinery s early 

complex model NOx standard.