Ja~~Ep ST~TfS 

2 A 

o y 3e 

It PROSEG~`v 

MEMORANDUM 

OFFICE OF 

AIR QUALITY PLANNING 

AND STANDARDS 

SUBJECT: Removal of Stage II Vapor Recovery in Situations Where Widespread Use of 

Onboard Refueling Vapor Recovery is Demonstrated 

DEC 12 2006 

FROM . Stephen D. Page, Director ~~-

Office of Air Quality Planfung fd Standa~ds 

Margo Tsirigotis Oge, Director 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

RESEARCH TRIANGLE PARK, NC 27711 

Office of Transportation and Air Q 

T0 : Regional Air Division Directors 

The purpose of this memorandum is to provide guidance to States concerning the 

removal of Stage II gasoline vapor recovery systems, where States demonstrate to EPA that 

widespread use of onboard refueling vapor recovery (ORVR) has occurred in specific 

portions of the motor vehicle fleet . The specific fleets addressed here include : 

1 . initial fueling of new vehicles at automobile assembly plants 

2 . refueling of rental cars at rental car facilities 

3 . refueling of flexible fuel vehicles at E85 dispensing pumps 

Background 

Stage 11 vapor recovery systems are required to be used at gasoline dispensing 

facilities located in serious, severe, and extreme non-attainment areas for ozone under section 

182(b)(3) of the Clean Air Act (CAA). States have included these control measures in their 

federally-approved state implementation plans (SIPs) in the form of generally applicable 

regulatory requirements governing all gasoline dispensing facilities that exceed the relevant 

gasoline dispensing throughput criteria . However, section 202(a)(6) of the CAA allows EPA 

to revise or waive the section 182(b)(3) Stage 11 requirement for these ozone non-attainment 

areas after the Agency determines that ORVR is in widespread use throughout the motor 

vehicle fleet . 

CAA section 202(a)(6) does not specify which motor vehicle fleet must be the subject 

of a widespread use determination before EPA may revise or waive the section 182(b)(3) 

Stage II requirement . Nor does the CAA identify what level of ORVR use in the motor 

vehicle fleet must be reached before it is "widespread ." EPA expects the possibility of 

IntemetAddress (URL) " http ://www .epa .gov 

Recycled/Recyclable . Printed with Vegetable 011 Based Inks on Recycled Paper (Minimum 25% Postconsumer) 
different rates of the implementation of ORVR across different geographic regions and 

among different types of motor vehicle fleets within any region . Given this, EPA does not 

believe that CAA section 202(a)(6) must be read narrowly to allow a widespread use 

determination and waiver of the Stage II requirement for a given area or area's fleet only if 

ORVR use has become widespread throughout the entire United States, or only if ORVR use 

has reached a definite level in each area. Rather, EPA believes that section 202(a)(6) allows 

the Agency to apply the widespread use criterion to either the entire motor vehicle fleet in a 

State or non-attainment area, or to special segments of the overall fleet for which ORVR use 

is shown to be sufficiently high, and to base widespread use determinations on differing 

levels of ORVR use, as appropriate. Moreover, a single national rulemaking is not needed to 

grant such a waiver for a specific area. Instead, EPA believes that the Act allows the Agency 

to use an area-specific rulemaking approving a SIP revision to issue the section 202(a)(6) 

waiver for a relevant fleet in a non-attainment area, where a State meets the recommended 

criteria discussed below. 

Various metrics have been studied for demonstrating widespread use of ORVR in 

motor vehicle fleets . One metric focuses on the percentage of vehicles in service that are 

ORVR-equipped. Based on our preliminary analysis, this metric seems to track fairly closely 

with the percentage of vehicle miles traveled (VMT) from ORVR-equipped vehicles, and 

with the percentage of gasoline sold which is dispensed to ORVR-equipped vehicles . In fact, 

since newer vehicles tend to be driven more miles than older models, VMT traveled by 

ORVR-equipped vehicles and gasoline dispensed to ORVR-equipped vehicles may exceed 

95 percent in a 95 percent ORVR-equipped fleet. 

Another metric that EPA considered is when VOC emissions resulting from the 

application of ORVR controls alone equal the VOC emissions when both Stage II vapor 

recovery systems and ORVR controls are used, after accounting for incompatibility excess 

emissions. The incompatibility excess emissions factor relates to losses in control efficiency 

when certain types of Stage II and ORVR are used together . Studies conducted in three 

northeastern states indicate that when the percentages of motor vehicles in service with 

ORVR, vehicle miles traveled by ORVR-equipped vehicles, or gasoline dispensed to ORVRequipped vehicles are above 95 percent, then the widespread use metric based on comparable 

VOC emissions will likely have been reached. For this reason, EPA believes that if 95 

percent of the vehicles in a fleet have ORVR, then widespread use will likely have been 

demonstrated . 

1 . Initial Fueling at Automobile Assembly Plants 

Based on our preliminary analysis, EPA expects that if a State's submission of a SIP 

revision shows that 95 percent of the new vehicles fueled at an automobile assembly plant 

are equipped with ORVR, and that this level of ORVR use would not decrease, the Agency 

can determine that widespread use of ORVR has been achieved for the fleet of motor 

vehicles that are fueled at that facility. 

Since model year 2000, all passenger cars have been required to have ORVR. Also 

since 2006, all light duty trucks, SUVs and medium duty vehicles are required to be equipped 
with ORVR. There may be a few situations, such as the chassis for motorized mobile homes, 

which still do not have ORVR. However, the number of these would be small. It is apparent 

that at most automobile assembly plants greater than 95 percent of the vehicles manufactured 

would have ORVR. Many assembly plants manufacture 100 percent ORVR equipped 

vehicles . Only such new vehicles are expected to be fueled at the automobile assembly 

plants . 

States desiring to remove the Stage II requirement for these facilities would need to 

submit a SIP revision that EPA would evaluate through notice and comment rulemaking. 

The SIP would need to demonstrate that the widespread use benchmark has been achieved 

and provide assurance that any facility wishing to remove Stage II equipment maintains its 

eligibility for its motor vehicle fleet. Any EPA SIP approval would also be subject to the 

CAA section 110(1) requirement that the revision not interfere with any applicable 

requirement concerning attainment and reasonable further progress, or any other requirement 

of the CAA. 

2. Refueling of Rental Cars at Rental Car Facilities 

Similarly, EPA expects that if a SIP revision submission demonstrates that 95 percent 

of the vehicles in an automobile rental fleet refueling at a rental car facility are equipped with 

ORVR and that this level of ORVR use would not decrease, then widespread use of ORVR 

could be found for the motor vehicle fleet refueling at that facility . Most large rental car 

companies rent current model vehicles that would all have ORVR. There may be truck rental 

companies which have older vehicles which do not have ORVR and that would not be able to 

demonstrate widespread use of ORVR for their fleets . As discussed above, any SIP revision 

would be subject to CAA section 110(1) and other applicable requirements, and State and 

local agencies should consider any potential transportation conformity impacts if Stage II is 

currently included in a SIP's on-road motor vehicle emissions budget. 

3 . Refuel ing Flexible Fuel Vehicles at E85 Dispensing Pumps 

E85 is a motor vehicle fuel that is a blend of as little as 15 percent gasoline and up to 

85 percent ethanol. (In wintertime applications, the ratio may be 30 percent gasoline and 70 

percent ethanol.) Ethanol is ethyl alcohol, a type of alcohol which can be produced from 

renewable resources such as corn. Based on the agency's survey of existing SIPs, EPA 

believes that most States have defined "gasoline" (for purposes of controlling emissions of 

VOC from refueling activities) to include gasoline/alcohol blends that have the same 

volatility as E85. EPA's guidance for States in developing their Stage II SIN in the early 

1990s suggested that States use the same definition of "gasoline" as the one found in EPA's 

Standards of Performance for Bulk Gasoline Terminals at 40 C.F .R. 60 .501, which includes 

"any petroleum distillate or petroleum distillate/alcohol blend having a Reid vapor pressure 

of 27 .6 kilopascals (kPa) or greater which is used as a fuel for internal combustion engines." 

EPA recommended using this definition to most broadly reach situations in which refueling 

of motor vehicles results in evaporative VOC emissions that contribute to ozone nonattainment concentrations, and to avoid a narrow interpretation of what is "gasoline" that 
would allow significant VOC emissions from motor vehicle refueling activities in nonattainment areas to go uncontrolled . 

E85 can only be used in specially designed flexible fuel vehicles (FFVs), which have 

mostly been manufactured since 1998. Since these are newer vehicles, most of them are 

equipped with ORVR, and every FFV built today has ORVR. Thus, most vehicles refueling 

at E85 dispensing pumps are already having their evaporative emissions captured, as in the 

cases of late model rental cars refueling at rental car facilities and newly manufactured cars 

being fueled for the first time at automobile assembly plants . EPA estimates that 59 percent 

of FFVs in current use are equipped with ORVR. The percentage. of FFVs with ORVR will 

continue to climb as older vehicles are taken out of service and new models join the fleet. 

Across different ozone non-attainment areas and between States, these percentages may vary. 

EPA believes that encouraging the use of E85 as a motor vehicle fuel reduces 

emissions of other air pollutants such as CO and benzene, a known human carcinogen, and 

reduces emissions of greenhouse gases. In addition, based on available information, the 

Agency is concerned that there is currently a lack of certified Stage 11 equipment for E85 

(which may require different materials of construction than conventional Stage II 

equipment), and that the timing for when certified E85-compatible equipment will become 

widely available is uncertain. This may unnecessarily hinder E85 distribution in areas that 

now require Stage II . 

Unlike in the cases of automobile assembly plants and rental car facilities, EPA is not 

recommending a specific percentage of the FFV fleet that should have ORVR before 

widespread use could be determined. This is because most E85 compatible vehicles are 

already equipped with ORVR and this percentage is increasing over time, whereas for 

automobile assembly plants and car rental facilities very high percentages of ORVR use have 

in most cases already been reached and are not expected to further increase significantly. 

The general use of ORVR in FFVs, instead, is expected to significantly increase, as are the 

miles driven by and amount of fuel dispensed to recent ORVR-equipped FFVs compared to 

those manufactured before 2000 without ORVR. 

Moreover, we believe that in determining whether widespread use of ORVR has been 

demonstrated, it is reasonable under section 202(a)(6) to consider the VOC emissions 

impacts of removing Stage II, and that those impacts may inform the percentage of ORVRequipped vehicles that would need to be achieved for a specific motor vehicle fleet or in a 

specific non-attainment area. EPA expects that the air quality impact of allowing E85 

refueling facilities to operate without Stage II controls would likely be minimal in most nonattainment areas. FFVs currently comprise about 2 percent of the total US fleet. Non-ORVR 

FFVs are less 1 percent of the total U.S . vehicle fleet. EPA estimates that non-ORVR FFVs 

participate in only about 0.5 percent of all refueling events . Furthermore, because of the 

relatively small number of stations that offer E85 (around 1,000 out of 170,000 total 

refueling stations) EPA believes that very few of these non-ORVR refueling events actually 

occur at E85 pumps . 
Considering the factors discussed above, if an area can demonstrate that any increase 

in emissions caused by operating E85 fueling facilities without Stage II controls is so small 

as to clearly not interfere with attainment of the ozone standard or reasonable further 

progress or any other applicable CAA requirement, then EPA expects it could find that 

ORVR is in widespread use for FFVs when refueling at E85 facilities in this area. These 

areas could then allow E85 facilities to operate without Stage II controls, after modifying 

their SIPs such that E85 is not included within the definition of "gasoline" for purposes of 

Stage II vapor recovery controls (or after taking other necessary SIP revision action). As 

discussed above, States would need to submit SIP revisions affecting this change to their 

current Stage II SIPs, which EPA would evaluate through notice and comment rulemaking, 

subject to the provisions of CAA section 110(1) . In addition, State and local agencies should 

consider if there are any transportation conformity impacts related to removing Stage II, if 

emissions reductions from Stage II are included in a SIP's on-road motor vehicle emissions 

budget. Due to the expected rapid growth of E85 installations, EPA will explore the 

development of ways to expedite the SIP revision process for States which are dealing with 

the E85 issue. 

General Exclusions from Widespread Use Determinations 

States in the ozone transport region (OTR) are still required to apply Stage II, or a 

comparable measure, in all areas under 184(b)(2) of the CAA. This requirement is not 

affected by any widespread use determination or waiver of the section 182(b)(3) requirement 

granted under section 202(a)(6). For the independent section 184(b)(2) "comparable 

measure" requirement to not prevent an appropriate removal of Stage II controls, OTR States 

may want to revisit their previously approved comparable measure SIPs to consider 

substituting available non-Stage II measures for the Stage II controls they currently require. 

Also, some States have chosen to add Stage II vapor recovery system requirements in 

their SIPs for ozone nonattainment areas that are classified in a category lower than 

"serious ." While it is not necessary for States to demonstrate ORVR is in widespread use in 

moderate or cleaner ozone non-attainment areas, a revision of previously adopted SIP 

requirements to specifically waive Stage II requirements in such areas would need to comply 

with the provisions of CAA section 110(1) and, as described above, consider any 

transportation conformity impacts as applicable. 

This guidance for widespread use determinations for special sectors would not 

necessarily apply to widespread use determinations for the general motor vehicle fleet. 

Within the overall motor vehicle fleet, the rate of penetration of ORVR-equipped vehicles 

has not advanced at the same rapid rates as for the fleets discussed in this memorandum. 

EPA is still considering the possible criteria for determining widespread use for the general 

fleet.